Income Tax Articles

India’s startup ecosystem has become a force to be reckoned with. The domestic technology landscape has gone a drastic change in the past few years with the country emerging to be the third fastest growing startup hub globally with over 4,200 startups creating more than 80,000 job opportunities.<.....

In 2018 alone, India produced 11 unicorns. Unicorns are startups that have a valuation of $1 billion or more. Last year, startups raised nearly $12.68 billion in equity funding, in addition to $1.14 billion raised in debt funding, taking the total to a whopping $13.88 billion. The year 2018 was a.....

India has the largest section of the youth population in the world. By the year 2020, India will have a median age of 28, compared to 37 of the US and China, 45 of Western Europe, 49 of Japan. Such a dynamic shift in the nature of the workforce would inevitably stir the market, as it had with Chi.....

Now, India sees a similar advantage of the economic dividend where its working-age population has grown to be larger than its dependent population. This proportion .....

When it comes to broadband services, Indians prefer mobile broadband over fixed-line services. The total subscriber base for fixed-line broadband services in the country is only 18.42 million, according to the Telecom Regulatory Authority of India. To put things into perspective, 532 million peop.....

The entry of Mukesh Ambani-backed Reliance Jio Infocomm in September.....

On October 2, 2016, India became the 62nd country to ratify the Paris Agreement. The agreement requires every ratifying member country to come up with a national plan to curb carbon emissions and rising temperatures. India has set a goal of generating 40% of its electricity from renewable energy .....

India has set for itself an ambitious target of generating 175 GW of power from renewable sources by 2022. Of this capacity, 100 GW comprises solar projects. Now, 40 GW from this capacity has been slated for rooftop solar panels on buildings.

The lofty target assumes greate.....

Education is one of the most critical aspects of the development of an individual. It enhances one’s skills, knowledge, intelligence, and opens up many doors to gathering knowledge, analysing and rationalising. Having an education makes it easier to have an informed opinion, which in the larger p.....

The Indian education system at its tertiary level has over 50,000 institutions, housing more than 35 million students. For a number so significant, the quality of education in these institutions needs to be of a world-class level so that the students can compete with the emerging workforce of the.....

Indian labour laws are a set of legal provisions which regulate the relationship between the employers and the employees in India. These laws aim to protect the rights of the workers, ensure fair wages, provide social security, prevent exploitation, and maintain equality at the workplace. They al.....

29 Indian labour codes which haven’t undergone any changes since India’s independence have now been codified into some new labour laws. These are: Occupational Safety, Health, and Working Conditions Code, Social Security Code, Code on Wages, and Industrial Relations Code.

T.....

India started 2018-19 on a strong footing, clocking a growth rate of 8.2% in the first quarter. However, the economy gradually decelerated to 5.8% in the last quarter, ending FY19 with an overall growth rate of 6.2% as against 7.2% in the previous fiscal year. The economic slump is probably more .....

Automobile sales have been falling consecutively for the last nine months. The growth in the volume of FMCG companies ha.....

What happens when one of the wheels of a vehicle comes off? It could lead to a catastrophic accident. If India is the vehicle, the automobile sector is one of the wheels. The Rs 4.8-lakh-crore auto industry employs 37 million people and single-handedly contributes 7.5 percent to the country’s GDP.....

The Indian auto sector had been growing at a rapid pace. With sales of over 4 million cars and commercial vehicles, India had surpassed Germany to become the fourth largest automobile market in the world last year. All that seems like a dream now with companies reporting a double-digit decline in.....

India was the sixth-largest economy in 2017, pushing France to the seventh spot. It was in striking distance of fifth-placed UK. In 2018, however, France and UK surged ahead, largely due to currency fluctuation, but also due to softening growth in India. The Indian economy has been battling a mar.....

The inflation-adjusted or ‘real’ GDP growth rate witnessed gradual deceleration in 2018-19. Starting with 8.2 percent in the first quarter, growth declined slightly to 7.1 percent in the second quarter. The country’s GDP growth rate slipped to 6.6 percent in the third quarter and further deterior.....

The government needs resources to pay its employees, fund welfare schemes and develop infrastructure. How does the government raise resources? There are several sources, but the primary source is direct and indirect taxes. Taxes that are levied directly on individuals or entities such as income t.....

The direct tax system, however, remains out of sync with the modern economy. India had a tax-to-GDP ratio of 6% in 2017-18, which is decent when compared to other developing economies. When one digs deeper, then the anomaly in direct tax collection numbers come to light. The respectable figure is.....

Wealth refers to the basket of assets such as cash, land, property, gold, shares, and bonds. In any economy, wealth is created over time by investing in these assets with an expectation that the price will rise further in the future. This rise in price over a period of time leads to wealth creati.....

In India, wealth creation isn’t possible without nurturing private enterprises and entrepreneurs, investors and consumers - which are significant wealth creators. Conducive business ecosystem and supportive regulatory climate go a long way in ensuring sustained wealth creation in the country.

Every year when the budget is presented, people wait for new announcements on income tax. A lower tax outgo doesn’t harm anyone. Either the government is expected to increase the income slab rate that is exempted from paying taxes or offer more tax deductions. The government allows several types .....

When the date to file income tax returns nears, a mad scramble for tax-saving begins. An annual income of Rs 5 Lakhs is effectively tax-free in the country. After the limit is breached the best way to save taxes is to use deductions, which decreases the taxable income. 

For youngsters attempting tax planning for the first time, understanding income tax basics can be quite confusing. Most people hire a tax advisor or a CA to for tax planning and to invest in tax saving instruments, especially at the last minute. However, that’s not the only way out. In this age w.....

Unit Linked Insurance Plans merge the protective cover of an insurance plan with the wealth-appreciation possibilities of investments.

A portion of your regular premium is reserved for funding your insurance policy, while the rest of your premium is dedicated to various investment instruments. The policy-holder can choose between high-risk, low-risk or medium risk instruments. Policyholders can choose between investments in equi.....

When you do not have any of the investments or the expenses under Section 80C, can you still save tax? The answer is yes. There are many tax-saving options other than 80C included in the Act.

Here is an overview:

In India, capital gains refer to profits earned from the sale of assets. The Union Budget of 1956–1957 established capital gains tax as a permanent fixture in the country’s taxation system. 

The tax is levied on both short-term and long-term capital gains, with several.....

Based on the timeline of holding an asset, capital gains against investment can be categorised into two types:

1. Short-term Capital Assets (STCA)

Any asset held for less than 36 months is known as a short-term capital asset. For instance, if you sell a property after 27 months .....

Taxpayers are often advised to start early with their tax planning. The key to tax saving is understanding the right investment strategies for an individual, and where one can claim deductions. Furthermore, it is also imperative for taxpayers to have a long-term, planned approach towards taxes, a.....

However, we often find ourselves with a limited amount of time for tax planning, which sometimes leads to trusting unscrupulous tax advisors or paying a higher amount in taxes. Here are some last minute tax planning hacks that will help you in making effective last-minute decisions.

As time passes, your income tax planning strategies may need to be adjusted to reflect changes in your financial situation and tax laws. Income tax planning refers to the process of organising your finances and making strategic decisions to optimise your tax outgo. 

Yo.....

Here are some tax planning tips that you can start in your 20s:

• Invest in Tax-saving Schemes

You can invest in tax-saving schemes like Equity-linked Saving Schemes (ELSS), Public Provident Fund (PPF), or tax-saver FDs. These schemes help in tax planning f.....

Life is inherently unpredictable. The best we can do is battle the ups and downs bravely as they arise. Planning wisely to save your hard-earned money is one such way to prepare for unforeseen circumstances.

One of the most important aspects of financial planning is tax saving. You can perform effective tax saving by investing in tax saving investments, as specified under t.....

Income tax is the most direct form of tax applicable on Indian citizens. Salaried individuals pay it in accordance with the income they earn and the tax slab they fall under. However, apart from salary, many people also earn income from a variety of other sources. To facilitate and ease the proce.....

According to section 56 of the Income Tax (IT) Act, 1961, ‘Income from Other Sources’ is the means of earnings which can not be declared under any other income heads. This section also comprises a list of different incomes which are to be declared under this head when computing the tax dues by us.....

For individuals who are unsure of what TDS is and are asking themselves, "What is TDS?," it is the income tax that is subtracted from an amount during a certain payment. The Income Tax Act of India, 1961, states that if an individual or organization's income exceeds the predetermined th.....

The TDS amount can be computed by using the Form 26AS on the income tax portal. It is a tax credit statement with a detailed report of TDS deducted during a financial year. Here is a step-by-step guide to know the deducted TDS amount.

• Step 1: Visit the income tax e-filing.....

The primary goal while investing your money is to grow the corpus and generate wealth. With a proper plan, investments can accomplish long-term as well as short-term goals. Another goal on the minds of investors is to ensure the highest amount of tax savings possible. 

Numerous investment instruments offer steady returns and tax-saving benefits simultaneously. Find out how to save tax in India with the help of the following avenues: 

When you invest in different instruments or park your savings in a bank account, you generally earn interest. This is termed as interest income and is subject to taxation as per the Income Tax Act. 

Tax on interest income depends on how you earned the interest, i.e., t.....

1. Interest from FDs and RDs

Fixed and recurring deposits are among the most popular investment options. This is due to the rising interest rates resulting in a substantial interest income. However, the interest you earn from these instruments is taxable under Section 194A of the Income.....

Anyone who earns an income in the country is liable to pay income tax. The Income Tax Act comprises of various sections, which separately deal with various aspects of taxation in the country. Furthermore, this Act also provides the taxpayers with various income tax deductions they can claim while.....

The Income Tax Act contains 23 chapters in total, and 298 sections, as per the official website of the income tax department. While it is extremely tedious to go through all the income tax sec.....

Gifts are an integral part of our social culture and are often given as a token of love, gratitude, and appreciation. However, gift tax in India is applicable on certain gifts, while some gifts are free from taxation. The Income Tax Department of India imposes taxes on certain gifts received by i.....

Under Section 56 of the Income Tax Act, the tax on gifts received by an individual is calculated as income under 'Income from Other Sources.' Any gift received in excess of ₹50,000 in a financial year is taxable.

Example: If an individual receives a gift of ₹60,00.....

As per Section 192 of the Income Tax Act, 1961, Tax Deducted at Source (TDS) is deducted from the income earned by an employee. Your employer deducts the TDS on salary based on your net taxable income and deposits it with the Income Tax Department. 

This TDS is reflect.....

Salary refers to the compensation received by an employee from an employer. It encompasses the below-listed variables which are subject to taxation as per the applicable income tax laws: 

• Basic Pay

• Dearness allowance

• EPF contributions

  <.....

Tax Deducted at Source or TDS applies to resident Indians, non-resident Indians, domestic companies, and international companies that operate in India. The TDS percentage can vary between 1% and 30%, based on your income source. In some rare cases, it may even touch 50%.

So.....

TDS is applicable not only on your income but also on your investments and any earnings made on your fixed assets. Hence, you must be aware of TDS rates and applicability while planning your investments. Tax is deductible at source, even on big-ticket purchases like buying a new home. The scope o.....

Tax Identification Number (TIN), in India,  is an unique identification number required for any business entity registered under the Value-Added Tax (VAT) system. Businesses engaged in manufacturing, exporting, trading, and transactions involving goods and services must possess a tax identif.....

Budget 2020 was announced back in February, which introduced us to the new personal income tax regime. The new personal tax regime undoubtedly has grabbed the attention of the million taxpayers in India. So, before we understand the impact of this, let us know what the new income tax regime holds.....

The following table shows a comparison between the traditional income tax regime and the new personal tax regime.

A Tax residency certificate or TRC is a certificate that is issued by the authorities of tax for the non-residents of that country declaring that the non-resident is a resident for that particular tax year for Double Taxation Avoidance Agreement (DTAA) applicability, and is eligible for tax benef.....

An individual’s physical stay is considered for deciding the status of residence in India. An individual who is qualified as a ‘Resident and Ordinarily Resident’ (ROR) is expected to pay taxes for the taxes that he/she has earned abroad. Both his/her foreign as well as Indian income is subject to.....

Tax Deducted at Source (TDS) on rent is applicable when a person is responsible for paying rent to a resident exceeding a specified threshold. Section 194I of the Finance Act, 19.....

According to Section 194I, the person (not an individual or HUF) who has to pay rent is legally obliged to deduct tax at source. The TDS on rent limit for the financial year 2020-2021 was ₹2.40 Lakhs.

For instance, an organisation rents an office for ₹90,000 per month. Since the.....

Transportation tax is another term for TDS on freight charges. Freight charges can be classified as payments made to both owners and non-owners of goods and carriages.  Such payments, including the TDS applicable to them, are regulated under Section 194C of the Income Tax Act, 1961. If contractors or subcontractors have a PAN, a 1% TDS deduction applies to payments made to resident Indians or HUF. However, if they’re not an Indian citizen or HUF, TDS of 2% would be applicable. For payments made to transporters, no TDS shall be deducted. Here, a transport is responsible for m.....

An alternative tax regime under Section 115BAC was announced in the Budget 2020. It introduced concessional tax rates without considering the legal mandates required for exemptions or deductions. You can choose between the old and the new tax rates based on your financial situation.

Any individual or HUF with income from sources apart from their profession is eligible to make claims under Section 115BAC of the Income Tax Act, 1961. However, their declared income must not cover any of the business income. 

The income calculation for this is done wi.....

The introduction of Section 194K of the Income Tax Act shifted the onus of reporting dividends and deducting the applicable tax from companies to the dividend recipients. Section 194K offers a deduction of 10% on the dividend income generated from mutual funds. Remember, a deduction of 20% is app.....

In simple terms, the AMC or fund houses now have to deduct TDS while transferring the income to the payee’s account. Income from the following units is subject to deduction under the Section 194K of the Income Tax:

• Mutual Fund units as per Section 10(23D)

• Unit.....

Section 206C of the Income Tax Act deals with Tax Collection at Source (TCS) levied by sellers on the purchase of certain goods. This section deals with the profits related to alcohol, forest produce, scrap, minerals, etc.

This is a certain percentage of tax that sellers co.....

Here are the goods and services on which sellers are liable to collect TCS, along with their respective rates:

To ensure compliance with taxation laws, the Income Tax Department requires certain taxpayers to audit their books. Section 44AB of the Income Tax Act, 1961, states the threshold limit for businesses or professionals to get their tax accounts audited by a certified Chartered Accountant.

&.....

Not submitting the Income Tax Audit Report under Section 44AB has a penalty of 0.5% on the total annual turnover. The maximum penalty you have to pay is ₹1.5 Lakhs for non-compliance.

For a valid reason for non-compliance with the Income Tax Audit Report, the I-T department.....

Section 194Q of the Income Tax Act, 1961, was introduced by the Central Board of Direct Taxes and made effective from July 1, 2021. Under this section, a 0.1% TDS is applicable if the amount exceeds ₹50 Lakhs when a buyer purchases goods beyond the exemption threshold.

The .....

Under Section 194Q, TDS will be deducted on purchases that have been made after 1st July, 2021. However, the upper limit of purchase of ₹50 Lakhs is to be considered from 1st April, 2021.

Section 194Q applies to sellers in the following cases: 

• When the buyer’s.....

On This Page: What is a Tax Audit? | What is the Recent Tax Audit Limit? | Tax Audit Objectives | Who is Req.....

To simplify tax audit meaning, it is an examination or reviewing of accounts of any business or profession that is carried out by taxpayers from the viewpoint of income tax. This is done to streamline the income computation process and make the

The sale of listed equity shares, equity-oriented mutual funds, and business trusts are subject to Long-term Capital Gains (LTCG) tax under Section 112A. For gains over ₹1 Lakh, these listed assets are subject to a 10% LTCG tax.

Schedule 112A, which must be filled out for e.....

Before Assessment Year 2018–2019, Section 10(38) provided an exemption from LTCG tax on the transfer of equity shares, units of equity-oriented funds, and units of business trust.

When it comes to accessing your funds through a debit card, it's essential to be aware of the cash withdrawal limit. These limits, set by banks, dictate the maximum amount you can withdraw from ATMs within a specified time frame. Typically, daily limits are in place to safeguard your account and .....

Here are some daily withdrawal limits set across different banks in India for debit cards: 

1. State Bank of India (SBI)  

SBI Bank allows its metro city cardholders 3 free withdrawals while users in other cities can enjoy up to 5 free withdrawals. Here are the daily cash withdr.....

In India, there are approximately 63 million Micro, Small, and Medium Enterprises (MSMEs), which contribute nearly 30% percent to the country's GDP, as of 2023. MSMEs also provide employment to thousands of people. Needless to say, the MSME sector is essential to the Indian economy. 

The new MSME classification system is based on business turnover, unlike the previous system, which was based on plant and machinery or equipment investment. Therefore, the classification of MSMEs has been revised to increase the turnover limit for each category and reduce the compliance burden o.....

Business management has evolved over the last couple of years with the cut-throat competition compelling businesses to become multifaceted. Today, most organisations are not focused on a single segment but offer a range of products and services under different brand names. It enables businesses t.....

‘Slump sale’ is a sale wherein you sell an undertaking without taking the values of individual liabilities and assets into account. According to Section 2(42C) of Income Tax (IT) Act, 1961, it means to transfer undertakings as an effect of the sale for a huge sum of the sale for a huge sum consid.....

Individual taxpayers must file their Income Tax Returns (ITR) for the Assessment Year 2024-25 (Financial Year 2023-24) by July 31, 2024, unless the department extends the deadline. Failure to comply with these rules incurs penalties outlined in Section 234F for filing your ITR after the deadline......

Every earning resident person of India needs to pay direct taxes if their annual income exceeds the tax-exempt limit. Hence, it is also crucial to know who is required to file these tax returns and when one needs to file an ITR. 

1. Total Annual Income Limit

If you have opt.....

The Indian Government, in 1988, introduced Minimum Alternate Tax (MAT) to ensure that no company avoided paying tax to the government. All zero-tax paying firms must pay the government a specific percentage of their total book profit as taxable income.

Several amendments ha.....

Your company as a taxpayer is liable to pay taxes under the below situations, whichever may be deemed higher:

• Tax Calculations According to the Normal Provisions of the Income Tax Act

According to the regular provisions, companies need to pay a tax .....

Section 115BAA, established through an ordinance in 2019, was brought into existence by the State Government. Also called the ‘Taxation Amendment Ordinance’, this provision took effect from September 20 2019. The central objective of the introduction of this section was to mitigate the tax rates .....

The Income Tax Act, 1961 underwent an amendment to include Section 115BAA, providing a lowered corporate tax rate to domestic corporations. The enterprises can pay the tax at a rate of 22% in addition to the surcharge of 10% and 4% cess under this Section. This implies that these companies can ch.....

Section 44ADA was introduced after Section 44AD of the Income Tax Act of 1961 with effect from the FY 2016-2017. This section has special provisions for calculating the gains and profits of professionals who are mentioned in Section 44AA(1) on a presumptive basis. The total receipts from these pr.....

This section was included in the Income Tax Act as a portion of the presumptive tax regime and does not demand individuals to maintain account books. The profit generated can also be calculated as a part of the total sales made in a financial year.

Mostly salaried employees will.....

Profits resulting from the sale or transfer of capital assets are considered as income under the capital gains heading. Section 48 of Income Tax Act, 1961 accounts for the expenses involved in the acquisition, repair and maintenance of such capital assets. 

As mentioned above, the Section 48 of the Income Tax Act is aimed at computing the real capital gain upon the sale of capital assets. You can arrive at the real capital gain by accounting for the cost spent by the seller in acquiring said capital asset, sales consideration costs and costs associa.....

As property prices continue to rise, home loans are great financial tools to fulfill the dream of owning your own house. To reduce the burden, the Government of India offers tax benefits to individuals against the principal and interest amount paid against these loans. 

The provisions of Section 24 of the Income Tax Act apply in the following circumstances:

• You can compute the income from house property under this section when you have deducted an amount equal to 30% of the annual value

• This is applicable when the property is.....

Section 194IA of the Income Tax Act, 1961, deals with the TDS on the purchase of an immovable property at the time of transaction. Property tax is applicable to owners of the property by the appropriate authorities like a municipality or municipal corporation. 

It.....

The formula that is used for property tax calculation is:

Property tax = Base value x Area built x Type of construction x age factor x category of use x carpet area of the floor

Here are the definitions of these terms:

• Base.....

Section 206AB was introduced with effect from 1st July 2021. This section mandates a higher tax deduction than applicable TDS rates under other sections. So, when you make any payment involving TDS, the tax is deducted at higher rates. However, this new provision of Section 206AB is applicable on.....

With effect from July 1 2021, Section 206AB related to TDS came into existence. Understand this is not a separate new section but is only a new provision implemented in the existing Income Tax Act. 

 Sec. 206AB mandates a higher tax deduction than applicable TDS rates under each.....

It is suggested that every individual must get an insurance policy to cover for any unexpected financial burden. You can buy insurance policies through online websites, agents, or brokers. It is important to note that the commission, remuneration, or reward earned by these agents/brokers are subj.....

Section 194D applies to a resident irrespective of whether they are an individual, company, or any other category of persons. The TDS rate under Section 194D is as.....

The Indian government has been trying to transform India into a digital economy. Digital India Campaign and Demonetisation are two of the popular initiatives that were taken to reduce the usage of physical money. Section 194N of the Income Tax Act was introduced to discourage cash payment and to .....

The following entities can deduct TDS under Section 194N:

• Public banks

• Private banks

• Post offices

• Co-operative banks

The following entities have to pay this tax:

• Indiv.....

TDS is deducted from various sources of income as mandated by Section 194 of the Income Tax Act, 1961. Section 194H outlines guidelines about the tax deductions that need to be made on brokerage and commission earnings.  

As per its provisions, taxpayers need to deduct TDS.....

Under Section 194H of the Income Tax Act, the following payments constitute brokerage and commission:

• A payment received by a person on behalf of another person for services not considered “professional services”

• A payment received for any services in bu.....

Section 194J of the Income Tax Act, 1961, deals with the TDS on payments made in the form of professional or technical fees, royalties, remuneration fees, and commissions. As per Sec. 194J provisions, an individual has to deduct the tax either at the rate of 2% or 10% based on the income category.....

As per Section 194J, taxpayers need to deduct TDS in case the below-mentioned payments are made to a resident in a particular financial year: 

• Fees for professional services

• Fees for technical services

• Remuneration/fees/commission to a .....

Section 194A deals with the interest paid on secured and unsecured credit. However, this section does not apply to interest paid on securities. According to Section 194A, payment is made in the form of:

• Interests on recurring deposits

• Interest income earned on.....

  Here are the fundamental provisions of 194A:
  

  • Entities, except HUFs and individuals, making interest payments to residents need to deduct TDS 

  • HUFs or individuals have to deduct TDS if, in the last year, the receipts or turnover exceeds ₹1 Crore (bus.....

Section 17 of the Income Tax Act states the provisions and taxation under three categories of employee benefits provided by an employer. This section addresses taxation on salary, prerequisites and profits in lieu of a salary. 

Section 17(1) addresses salary, Section 1.....

Section 17(3) is a subsection under the Income Tax Act which mentions the profits one earns beyond their regular salaries which are referred to as profits in lieu of salary in income tax. To simply put the profits in lieu of salary meaning, these profits are additional benefits that one earns as .....

Section 17(2) of the Income Tax Act in India pertains to the definition of "Salary" for income tax computation. Section 17(2) enumerates various components that are included in the definition of salary.

• Salary

Includes wages, any annuity, pension, gratuity, fees, commissions, perquisites, profits instead of salary, advance of salary, leave encashment, etc.

• Allowances

Any allowances (except those specifically exempt) are .....

Salary is a frequently used ‘Heads of Income’ while filing returns for income tax. According to the Income Tax Act, 1961, heads of income is the classification of income earned by an individual. This .....

The word ‘salary’ has been established under Section 17( 1) of the Income Tax Act to include perquisites, salary, and profits instead of a salary. Therefore, to calculate the income that comes under the head salaries, perquisites, the total amount of salary, and profits in the place of a salary r.....

According to Section 269SS, individuals are prohibited from receiving deposits, loans, or any cash amount exceeding a specified limit in a single day, except for:

• An account payee cheque

• An account payee bank draft

• An amount of money transfe.....

  The exemptions that you get to enjoy u/s 269SS of the Income Tax Act are as follows:

   

  Any loan, deposit, or specific amount taken from or taken by the following entities is exempted:

  1. The government

  2. Any banking company, post office savings.....

Section 194C states the rules of TDS deduction when any specified person pays a resident contractor for work carried out by them, including labour. 

For the purpose of deduction under this section, a specified person includes the following:

• Central/ S.....

  Here are some important definitions that you need to know:

  1. Work

  To deduct TDS under Section 194C, the definition of work for which a payee can carry out the deduction includes:

  • Carriage of passenger/ goods through transportation modes other than railways

    .....

Section 44AD of the Income Tax Act deals with the presumptive taxation scheme for certain eligible taxpayers. It applies to resident individuals, Hindu Undivided Families (HUFs), and partnerships having a turnover of up to ₹2 Crores in the previous financial year.

Under thi.....

The following are the eligible candidates for Section 44AD: 

• Resident individuals engaged in the business of trading, manufacturing, or eligible professions

• Hindu Undivided Families (HUF) involved in certain professions 

• Partnershi.....

Section 44AE is a provision under the Income Tax Act, 1961 that prescribes the presumptive income scheme for certain small taxpayers who are engaged in the business of leasing, hiring, or plying of goods carriages. 

The goal with Sec. 44AE of Income Tax Act is to:&nbsp.....

All taxpayer categories are subject to the presumptive income scheme u/s 44AE. This scheme is available to all taxpayers, including individuals, HUFs, partnership firms, and registered companies. There are simply no restrictions on any group of taxpayers, in contrast to other schemes like Section.....

Under Section 139(4) of the Income Tax Act, 1961, taxpayers can file belated returns within a period of one year. This can be from the end of the relevant assessment year or prior to the conclusion of the assessment, whichever is earlier.

Income tax authorities provide you .....

As of FY 2022-23, the following situations necessitate the submission of an income tax return: 

• If an individual's total income exceeds ₹2.50 Lakhs

• If over ₹1 Crore is deposited in a current account with a cooperative bank or bank in a fiscal year

.....

As a responsible citizen, submitting your income details to the Income Tax Department is essential. You can declare them by filing your returns accurately. The department verifies your returns for correctness, and this process of examining returns is known as ‘Assessment.’ 

 Under Section 139, you can file your ITR voluntarily or at the request of the  Income Tax Department. The department assesses your ITR and generates an income tax notice or letter of intimation highlighting the errors identified by the system.

This evaluation pri.....

For an easy and hassle-free tax payment experience, the Income Tax (I-T) Department has made several provisions for advance payment of tax. The I-T department has slated four instalments for every quarter of the fiscal year. In case the assessee delays advance tax payment as per the scheduled ins.....

Given below are the due dates for advance tax payment by the assessees. The I-T department treats the tax paid before the 31st of March as advance tax. Failure to pay the advance tax before the stipulated time will result in a penalty being levied.

Introduced during Budget 2017, Section 269ST of the Income Tax Act, 1961, pertains to cash transactions and places restrictions on receiving cash. Under this section, receiving ₹2 Lakhs or more in a single day from one person, for a single transaction or related transactions, is prohibited.

Under this section, parties are prohibited from receiving payments that exceed the threshold under the following scenarios:

1.In a single transaction

You cannot make a cash transaction above ₹2 Lakhs, regardless of whether it is paid in single instalment or spread over days.  

Dearness Allowance or DA is a part of the salary structure in the payroll system of India. It is provided by the Indian government to its pensioners and employees to offset inflation. Effective from January 2024, the DA was raised by 4% to 50% for central government employees. 

&nbsp.....

Under section 92E of Income Tax Act, every person engaged in an international transaction or a specific domestic transaction in the previous year must obtain a report from an accountant and submit it on or before the specified date.

A report of audit from a CA must be furnished .....

A transaction fulfilling the below-mentioned conditions:

• A transaction which is done between two or more enterprises 

• At least one must be a Non-resident of India

Also, the nature of such a transaction must be of:

Section 10 of the Income Tax Act lists the exemptions available to taxpayers. The individual can claim an exemption under this section for various types of incomes that they earn in a particular financial year. Section 10 has multiple subsections that allow exemptions for various types of incomes.....

Section 10 of the IT Act has a maximum limit of Rs.2.5 lakhs for individuals below 60 years of age and Rs.3 lakhs for individuals who fall between the ages of 60 and 80 years, and Rs.5 lakhs for individuals who are above 80 years of age or higher. The upper limit of Rs.3 and 5 lakhs is available .....

Section 54EC of the Income Tax Act, of 1961, helps individuals mitigate their tax liability by claiming exemptions on tax on their long-term capital gains. This is done by investing their capital gains on particular capital gain bonds. It must be noted that the maximum investment limit in such bo.....

You can claim tax deductions under Section 54EC based on the amount of capital gains you invest. Here are the deductions you can claim depending on your investment:

• Full Investment: You can enjoy tax exemption of the full capital gains amount if you invest in bonds with t.....

As per Section 54F of the Income Tax Act, you can claim tax deductions on Long-term Capital Gains (LTCG) earned by selling an asset. However, the condition prevails that these gains must not be made by selling a residential property. 

You must reinvest the net consider.....

Here are some details of the exemption you can claim under this section:

• You can claim this deduction if you reinvest the net sales consideration to purchase or construct a residential property

• LTCG will be exempt from taxation if the net consideration from th.....

As a taxpayer, it is mandatory to furnish your income details to the Income Tax Department. You can do this by filing your returns for each financial year. After you duly file your returns in the prescribed format, the Income Tax Department processes them.

It verifies your .....

The Finance Act 2021 has changed the assessment proceedings related to Sec 147 of the Income Tax Act. Furthermore, all Sections from 153A to 153C have been combined under Section 147.

As mentioned, Sec 147 focuses on income escaping assessment. This gives the Assessing Officer (.....

Section 153A of the Income Tax Act of 1961, establishes a mechanism for the assessment of income in the instance of a searched individual. According to this section, the Assessing Officer (AO) has the authority to frame an individual's income for the 6 assessment years which immediately precede t.....

Section 153A permits notices up to the last 10 assessment years if tangible evidence is found during a search or investigation. Here are some instances which could lead to a search: 

• Assets are used to hide income from taxation

• Income Tax exemption, in wh.....

Section 234B of the Income Tax Act, 1961 refers to the interest a taxpayer must pay when they delay the advance tax payment charged to them. Every individual needs to pay this tax in case the total tax that they have to pay goes above ₹10,000 in a fiscal year. 

Interes.....

It would be best if you calculated the interest under Section 234B in the following instances:

• No payment of advance tax even though the individual is liable to do the same

• In case the payment of advance tax is less than 90% of the tax assessed:
  

  .....

Section 28 of the Income Tax Act 1961 defines what income is taxable under the head of ‘Profits and Gains of Business or Profession’. Some of the income that it covers includes:

• Profits from sales or services 

• Salary 

• Commission&nb.....

  Section 2 of the Income Tax Act defines business and profession, helping you understand the difference between the two. 

   

  According to Section 2(13), business refers to companies conducting activities of trade, commerce, manufacture, or the ones including these activities. A key .....

Once you have filed your income tax returns, the Income Tax Department will examine your returns. For this purpose, the Department may issue you an intimation, assessment, or scrutiny notice.

Sections 142(1), 143(1), 143 (2), 148, and 156 of the IT Act vests power in the De.....

As per Section 142(1) of the Income Tax Act, tax authorities can issue a notice for the purpose of assessment of your tax liability. When you receive a notice under the aforementioned section, it is considered a preliminary step for conducting an inquiry into your tax returns. 

.....

The Income Tax Act mandates every taxpayer needs to file Income Tax Returns (ITR) if their income exceeds the minimum taxable income limit. In case of delays or defaults in ITR filing, you will need to pay interest and penalties.

Section 234A of the Income Tax Act outlines .....

Section 234 has multiple subsections, among which 234A/B/C are for interest levied on your tax liability. Since all three are for interest penalty, understanding their differences can help you gauge which section applies to you. 

Check the following table to know when .....

A capital asset can either be a property or security and as per Indian laws, it is mandatory to pay taxes on such assets. Capital gain refers to the profit that you’d make by transferring the ownership of any capital asset. Capital gains are further classified into short-term capital gains and lo.....

A short-term capital gain refers to any profit that you make on selling short-term capital assets. This would also include any gains made on depreciable assets. Here’s an example to help you understand the concept of capital gains a little bit better - let’s assume that you buy a villa for ₹40 La.....

Owning and managing a residential property can get complicated for many. House owners need to spend time calculating house property income tax and tax benefits. 

Let’s understand what classifies as ‘Income from House Property’. Income will be classified as income under.....

The following pointers will give you a clear idea about the computation of income from house property:

• Calculate Gross Annual Value of Property (GAV)

The gross annual value of a house refers to the total rent that can be collected from the house property......

Self-assessment tax, also known as ‘SAT’, is a system under which taxpayers can compute and report their own tax liabilities to the Indian government. This type of tax is applicable where taxpayers have multiple sources of income, such as: 

• Rental income

• .....

  Self-assessment tax (SAT) generally applies when you furnish income tax returns under Sections 115WD, 115WH, 139, 142, 148, 153A, and 153BC. If the taxes that you have paid during the financial year missed any key inclusions, you can include them in this final tax payable.  
  

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