NRI client recd a notice under Section 148A(b) on the grounds tht he had purchased a property during AY 2020-21.
The Department appears to hv treated the entire value of the property as income for the year & sought an explanation. F
AIR ENOUGH JUSTIFICATION REQD In response detailed submissions was made along with all supporting evidence.. It was clearly explained tht the client was NRI during the relevant year & continues to hold NRI status.
It was also specifically stated tht since the assessee had no income chargeable to tax in India total income did not exceed the maximum amount not chargeable to tax he was not required to furnish return of income under section 139(1).
Now the twist – a fresh notice under Section 129 has now been issued providing another opportunity of being heard to the NRI taxpayer … A simple question arises:- why does the Department continue to treat an invts made during the year as income for the year without properly considering the facts evidence & submissions already placed on record???
When the initial response clearly establishes tht there was no taxable income & substantiates the source of investment with documentary evidence the proceedings ought to be dropped instead of being prolonged unnecessarily.
Such repetitive proceedings result in a significant waste of time and resources for both the taxpayer and the Department.
At a time when NRIs are contributing valuable foreign exchange to the Indian economy through investments and remittances, subjecting them to avoidable compliance burdens in respect of genuine investments sends an unfortunate message and increases unnecessary litigation.
WHEN OUR SUBMISSION ARE NOT CONSIDERED THEN Y INCOME TAX DEPT IS AGAIN AND AGAIN ISSUING THE NOTICE.. DIRECTLY PASS THE ORDER..
Donald Trump’s interest in acquiring Greenland is not just a whimsical notion; it stems from crucial considerations surrounding national security, military positioning, and Arctic strategy. As global powers set their sights on this strategic island, understanding its location and resources has become central to U.S. foreign policy debates.
The White House’s Confirmation: Exploring Options for Greenland
On a recent Tuesday, the White House confirmed that President Donald Trump is actively exploring options to acquire Greenland. This move is framed as part of a broader foreign policy objective linked to national security. The announcement was met with a swift and firm response from Denmark, with Prime Minister Mette Frederiksen stating that Greenland, an autonomous territory of Denmark, is not for sale.
Prime Minister Frederiksen cautioned that any military aggression from the U.S. towards Greenland could jeopardize the NATO military alliance. This renewed focus on Greenland highlights the island’s strategic significance and the implications of Trump’s interest.
Greenland’s Strategic Location and Military Importance
Greenland’s geographic location has long secured its status as a military asset. Once a Danish colony, it now serves as an autonomous province of Denmark, strategically placed in the North Atlantic Ocean between Europe and North America, just across the Baffin Bay from Canada.
The island’s importance surged during the Cold War when the United States established a notable military presence, including the Pituffik Space Base—formerly known as Thule Air Base. This base plays a critical role in American defense infrastructure, enabling the U.S. to track and intercept missile threats from nations like Russia, China, and North Korea. Furthermore, it provides the U.S. with a forward position to deploy missiles and naval forces efficiently toward both Asia and Europe.
Beyond its strategic military importance, Greenland is rich in natural resources, covering an area of 836,000 square miles filled with significant deposits of rare earth minerals. These minerals are essential for manufacturing technologies ranging from mobile phones and electric vehicles to advanced weaponry.
Currently, China holds a dominant position in the global supply chain of rare earth minerals, using this influence to apply pressure on the United States. Though Greenland banned uranium mining in 2021, its resource potential remains significant. As global warming accelerates and Arctic ice melts, new waterways are emerging, making Greenland’s mineral reserves more accessible to interested global powers.
Despite previously belittling the climate crisis, the Trump administration considers the evolving Arctic landscape a strategic concern. The U.S. is motivated to prevent Russia and China from expanding their presence in Greenland and surrounding regions.
Conflicting Narratives: Trump and His Advisers
While Trump has publicly downplayed the critical importance of Greenland’s natural resources, contrasting views have surfaced among his advisors. In January 2024, former national security adviser Mike Waltz remarked that the U.S. government’s interest in Greenland involves “critical minerals” and “natural resources,” emphasizing economic considerations alongside security aspects.
Rising Tensions and International Response
Tensions surrounding Greenland intensified after Trump reiterated the U.S. aim to control the island from a national security standpoint, especially following recent U.S. actions in Venezuela. Stephen Miller, the White House deputy chief of staff for policy, echoed these sentiments, heightening focus on the Arctic territory.
During a flight on Air Force One, Trump stressed Greenland’s strategic importance, suggesting that the region was increasingly occupied by Russian and Chinese vessels and that Denmark might lack the capability to secure the island.
In a notable response, leaders from the UK, Germany, France, Poland, Italy, Spain, and Denmark collectively supported Denmark and Greenland, emphasizing that Arctic security must be maintained collaboratively within NATO. They affirmed that “Greenland belongs to its people,” and decisions about the island rest solely with Denmark and its inhabitants.
Conclusion: The Global Implications of Trump’s Interest in Greenland
Donald Trump’s interest in acquiring Greenland reflects vital security priorities, evolving Arctic strategies, and the larger context of global power rivalry. This situation has drawn strong pushback from Denmark and needed support from European allies, setting the stage for ongoing geopolitical discussions surrounding this strategically significant territory.
By understanding the intricacies of this situation, one can appreciate the broader implications of Trump’s interest in Greenland as it relates to national security and global dynamics.
Earlier in the Union Budget for 2024-25, the government announced the elimination of the indexation benefit for the sale of immovable property. However, this decision was subsequently reversed through an amendment to the Finance Bill 2024.
The amendment reinstated the indexation benefit for properties acquired before July 23, 2024. Consequently, individuals and Hindu Undivided Families (HUFs) who purchased residential or commercial real estate prior to this date now have two options for calculating their long-term capital gains (LTCG) tax: they can choose to pay a 12.5% tax on LTCG without indexation benefits or a 20% tax with indexation benefits.
Insights into capital gains tax calculations for land sales reveal the complexities involved. Understanding these calculations and the recent changes in indexation rules is essential for accurately determining tax liabilities and making informed investment decisions.
Previously, long-term capital gains were adjusted for inflation through indexation. Under Budget 2024, the indexation benefit for LTCG was removed, and the tax rate for LTCG was reduced from 20% to 12.5%. However, the government has offered taxpayers the option to compute taxes on real estate transactions involving properties purchased before July 23, 2024, using either the new 12.5% rate without indexation or the previous 20% rate with indexation.
Example Calculation for LTCG:
If a property is sold for Rs 10,00,000 during FY 2024-25 and was purchased for Rs 2,00,000 in June 2001, here’s how the tax would be computed:
Comparison of LTCG with and without Indexation as per Budget 2024:
With Indexation Benefit:
Sale Consideration: Rs 10,00,000
Cost of Acquisition (Adjusted for Inflation): Rs 7,26,000 (calculated as Rs 2,00,000 multiplied by 363/100)
Long-Term Capital Gains (LTCG): Rs 2,74,000 (sale price Rs 10,00,000 minus adjusted cost of acquisition Rs 7,26,000)
Tax: Rs 54,800 (20% of LTCG)
Without Indexation Benefit:
Sale Consideration: Rs 10,00,000
Cost of Acquisition: Rs 2,00,000 (original purchase price)
Long-Term Capital Gains (LTCG): Rs 8,00,000 (sale price Rs 10,00,000 minus original cost Rs 2,00,000)
Tax: Rs 1,00,000 (12.5% of LTCG)
In summary, opting for indexation results in a lower tax amount, but requires using a 20% rate. Conversely, without indexation, the tax is higher at a rate of 12.5%.
Tax Query Section
I am a home maker. I earn small amounts by buying and selling shares for the short term (after holding for one or two months). I don’t have any other income. Do I need to pay any tax on the profit earned from these transactions? Since my income is below the taxable limit of ₹7 lakh, I think it is not taxable. Kindly advise.
In simple terms, unlimited liability means that when faced with financial and legal obligations, your responsibility extends beyond just your business — your personal assets are also at risk. This concept becomes even more significant concerning taxes. This article discusses unlimited liability for tax regarding LLPs, Private Companies, and Partnership Firms, as specified in particular sections of the Income Tax Act. A crucial question arises: Why does the law focus on unlimited liability only for tax purposes in these sections? The answer lies within the following points:
Existing Acts delineate general liability: The extent of liability for LLPs, Private Companies, and Partnership Firms is already defined under their relevant governing laws.
Government’s interest in tax recovery: Taxes are a vital revenue source, and ensuring their collection is critical for public funding.
The following three key sections in the Income Tax Act of 1961 address the liabilities of partners and directors concerning their entities’ tax obligations:
Section [167C](javascript:void(0);): Liability of partners in limited liability partnerships (LLP) during liquidation.
Section [188A](javascript:void(0);): Joint and several liability of partners for the firm’s tax payable.
Section 167C: Liability of Partners in Limited Liability Partnerships (LLP) during Liquidation
Relevant Provision:
Notwithstanding any provisions in the Limited Liability Partnership Act, 2008, if any tax due from an LLP for any previous year, or from another person during which that person was an LLP, cannot be recovered, every person who was a partner at any time in that relevant previous year shall be jointly and severally liable for that tax unless they can prove that the non-recovery is not due to:
Section 167C applies only to tax payment dues and not to other debts, such as those owed to creditors or lenders.
Partners are liable to pay only if tax recovery from the LLP is impossible, as the wording indicates “cannot be recovered.
All partners are jointly and severally liable for tax payments, whether they are designated or non-designated partners.
Interestingly, although the title of this section includes the term “in liquidation,” there’s no specific mention of liquidation in the text. This raises the question of whether Section 167C applies only during liquidation or in other scenarios as well. This topic will be addressed later in the article with rationale.
FAQs Related to Section 167C:
FAQ (1)
Can a partner in an LLP avoid liability by stating in the LLP agreement that they shall not be liable for any statutory pending dues?
No, a partner cannot evade legal liabilities set forth in the section by specifying this in the LLP agreement, as agreements cannot override legal provisions. If tax authorities pursue unpaid taxes and the partner is found to have participated in the non-payment or failed to ensure tax payment, they may still be held liable under Section 167C.
FAQ (2)
Mr. Farziraam was a partner in an LLP for only one month in 2023. The LLP defaulted in tax payments for that year. Will Section 167C apply to him?
Section 179: Liability of Directors of Private Companies
Relevant Provision:
Notwithstanding any provisions in the Companies Act, 1956, if tax due from a private company for any previous year cannot be recovered, every person who was a director during that year shall be jointly and severally liable for the payment of that tax unless they can prove that the non-recovery is not due to any gross neglect, misfeasance, or breach of duty regarding the company’s affairs.
Each director is jointly and severally liable for tax in previous years they served.
Section 179 applies solely to tax payment dues and not any other financial obligations.
Amendment in the Section 179 of the Act
The key aspects of Sections 179 (for companies) and 167C (for LLPs) are quite similar. However, Section 179’s title does not refer to “in liquidation.” Before the Finance Act, 2022, the title for Section 179 was “Liability of directors of private company in liquidation.
Amendment Highlights:
Section 179 allows tax authorities to recover unpaid taxes from directors when not collectible from the company, rendering them jointly and severally liable, with specific conditions.
The title was amended to remove ambiguity, clarifying it to just “Liability of directors of private company.”
Thus, there was a previous uncertainty in the title, which was resolved.
Likewise, Section 167C isn’t strictly related to liquidation, and it’s plausible that lawmakers overlooked updating its title. The phrase “fees” was also added without updating Section 167C.
FAQs Related to Section 179:
FAQ (1)
Mr. Makhi Das is a director of “Apna Paisa Limited.” If the company defaults on tax payments, will he be liable under Section 179?
As Section 179 pertains exclusively to private companies, it does not apply to public companies like Apna Paisa Limited; thus, Mr. Makhi Das is not liable under Section 179.
Section 188A: Joint and Several Liability of Partners for Firm’s Tax Payable
Provisions in Section 188A apply to partners even if recovery is possible from the firm, as it states “along with the firm,” differing from phrases in other sections like “cannot be recovered.
Every partner holds joint and several liability for the tax of the previous year during which they were serving.
Legal representatives of deceased partners are also liable.
FAQs Related to Section 188A:
FAQ (1)
Mr. Baburao, a partner in “Phir Hera Pheri,” is approached for tax dues after the firm defaults. Can he argue against liability by saying the non-payment wasn’t due to his gross neglect or breach of duty?
No, Mr. Baburao cannot use this defense, as Section 188A does not provide exceptions for partners.
Conclusion
In summary, unlimited liability within the Income Tax Act underscores the significant responsibility of individuals, whether partners, directors, or legal representatives, concerning tax payments for their businesses. While laws governing LLPs, private companies, and partnership firms define the extent of liability, the Income Tax Act extends that responsibility to personal assets. Sections 167C, 179, and 188A hold individuals jointly and severally liable when tax dues are uncollectible, serving society’s interest in tax collection.
New SOP Guidelines for Correcting Personal Details in EPF Accounts
The Employees’ Provident Fund Organisation (EPFO) recently released new standard operating procedure (SOP) guidelines for correcting personal details of Employees’ Provident Fund (EPF) members in their provident fund accounts. The revised guidelines, outlined in a circular issued on July 31, 2024, aim to enhance the process of updating and correcting member profiles, while ensuring the prevention of impersonation, identity theft, or other fraudulent activities.
Joint Declaration for Member Profile Updation
The updated SOP, version 3.0, introduces stringent measures for joint declaration requests and mandates a more rigorous due diligence process to prevent potential cases of impersonation or identity theft. A joint declaration, which needs to be authenticated by the employer, allows EPF members to request modifications or additions to their basic profile parameters. These parameters include the member’s name, gender, date of birth, father’s name, mother’s name, spouse’s name, marital status, date of joining, reason for leaving, date of leaving, nationality, and Aadhaar number.
The circular categorizes profile changes as major and minor, and emphasizes the requirement of documentary proof for all such change correction requests. For minor changes, at least two necessary documents must be provided along with the joint declaration request. On the other hand, major changes necessitate the submission of at least three required documents. In cases related to changes in Aadhaar information, an Aadhaar card or E-Aadhaar card linked with an active mobile number is considered sufficient documentation.
Major Changes in Personal Details of EPF Members
Member Name:
Phonetic changes in the name, irrespective of the number of alphabets changed
Change involving 3 or more alphabets
Expansion of the name
Date of Birth:
Changes exceeding three years
Father’s Name:
Phonetic changes in the name, irrespective of the number of alphabets changed
Change involving 3 or more alphabets
Expansion of the name
Insertion of the name for the first time
Mother’s Name:
Phonetic changes in the name, irrespective of the number of alphabets changed
Change involving 3 or more alphabets
Expansion of the name
Insertion of the name for the first time
Spouse Name:
Phonetic changes in the name, irrespective of the number of alphabets changed
EPF members can submit joint declaration requests for corrections via the Member e-Sewa portal. It’s important to note that changes can only be made for EPF accounts maintained by the present employer, and employers do not have modification rights for EPF accounts from other/previous establishments. Additionally, there are limitations on the number of times changes in personal details are allowed, ensuring a streamlined and controlled correction process.
These updated SOP guidelines by the EPFO aim to facilitate efficient and secure handling of EPF member profile corrections, ensuring accuracy and preventing unauthorized activities within the system. It’s crucial for EPF members and employers to adhere to these guidelines to ensure smooth and secure processing of profile corrections and updates.
For further details or for submitting a joint declaration request, EPF members can access the Member e-Sewa portal or connect with their employer to initiate this process.
How much cash can a person keep inside his/her house? What are the income tax rules about keeping cash? What will happen if the income tax officials catch you with a lot of cash? Here are the income tax rules that you have to follow to file keeping cash at home.
If the income tax department or other authorities catch up with a lot of cash, you will have to tell them about the source of the money. You should also have valid documents to show the income. You should also make sure you have filled your proper income tax returns.
According to the Central Board of Direct Taxes, if you are not able to show the source of the money, the department can impose a fine equal to 137 percent of the recovered money.
Here are some important things you have to keep in mind while storing cash.
There can be a fine if you do a cash transaction more than Rs 20 lakh in a financial year. If you have to deposit or withdraw more than Rs 50,000, you need to furnish your PAN details to the bank.
If a person deposits more than Rs 1,20,000, he/she would have to submit PAN and Aadhaar cards.
You can’t spend more than Rs 2 lakh in cash. If you buy something that is more expensive than Rs 2 lakh, you will have to furnish your PAN card and Aadhaar card.
A person who pays more than Rs 1 lakh using credit-debit cards may come under income tax scanner.
Under the rule, you musn’t take cash more than Rs 2 lakh from your friend or relatives. If you do, you will have to use the bank’s channels.
You will have to pay TDS if you withdraw more than Rs 2 crore in cash from any bank.
New Section 269ST has been added to the Income Tax Act as a result of the measures taken by the Finance Act 2017 to curb black money. A cash transaction was restricted by Section 269ST and was only allowed to be worth up to Rs. 2 Lakh per day. No one will receive any sum of ₹2,00,000 or more, according to Section 269ST.
In total from an individual in a day
In relation to a single purchase
In relation to transactions from a person regarding a single event or occasion.
However, it has been made clear by the Central Board of Direct Taxes (CBDT) that withdrawals from banks and post offices are exempt from this cash withdrawal limit.Consequently, the following situations are exempt from the requirements of section 269ST:
Money received through the use of an electronic clearing system (ECS) out through bank account, an account payee bank draught, or a cheque made payable to an account payee.
any payment received from the federal government, a bank, a post office savings bank, or a cooperative bank.
transactions that fall under the definition of “nature” in section 269ST.
Such additional individuals, groups of individuals, or receipts as the Central Govt may specify by notification in the Official Gazette.
Post Office Withdrawal
Department of India-operated post offices with the help of an ATM, Post enables withdrawals from Post Office savings accounts.
A post office or ATM will only allow you to withdraw a total of ₹25,000 in cash in a single day, with a maximum of ₹10,000 per withdrawal.
Five transactions, both financial and non-financial, are allowed at no cost each month by the post office. Further than the free transactions, there is a GST-compliant fee of ₹20.
It is acceptable to withdraw money from ATMs of other banks; in metro areas, this is limited to three free withdrawals; in non-metro areas, this is limited to five withdrawals. For transactions above those that are free, a fee of ₹20 plus GST is imposed.
Bank Withdrawal
The deposited amount may be taken out of both the savings account and the bank account using a chequebook, a withdrawal slip, or an automated teller machine that accepts debit cards. The maximum cash withdrawal amount is adjusted from different banks and is also based on the card type being used.
It varies depending on the bank from ₹10,000 to ₹50,000 per day. The State Bank of India did, however, provide the transactional information listed below.
The majority of banks have set a limit on cheque book withdrawals at 60 per half-year.
The maximum amount that can be deducted from the current account each week is ₹1,000,000, while a total of ₹ 24,000 can be withdrawn from the savings account each week.
For salary accounts, ATM withdrawals allow a daily limit of ₹10,000 and unlimited free transactions, compared to 3 withdrawals from other ATMs that incur a fee of ₹20 plus GST per month.
Income Tax Cash Transaction Limit
The principal sections of income tax that deal with the cash transaction limit are as follows:
Sections 40A(3) and 43 – Affects Cash Payment
Concerns Cash Receipts: Sections 269SS and 269ST
Reimbursement of Certain Loans and Deposits is Affected by Section 269T
Income Tax Section 40A(3)
The Income Tax Act’s Section 40A(3) addresses the maximum amount of cash that can be exchanged in a transaction. According to Section 40A(3), the Tax Act of India will disallow any expenditure over ₹10,000 that is paid for in cash. It is crucial that all taxpayers use banking methods like a debit, account transfer, check, or demand draft when making any payments for expenses that total more than ₹10,000.
Income Tax Section 43
If a taxpayer spends more than ₹10,000 to purchase an asset in cash, section 43 of the Income Tax Act states that the expenditure is disregarded when calculating the asset’s actual cost. It is crucial that all taxpayers who purchase assets send the seller all payments through banking channels.
Income Tax Section 269SS
A taxpayer is not permitted to accept or take loans, deposits, or payments in cash totaling more than ₹20,000 under Section 269SS. More than ₹20,000 in loans or deposits must always be obtained through a banking channel.
To the contrary, when accepting a loan or deposit from one of the following individuals or organisations, Section 269SS of something like the Income Tax Act is indeed not applicable:
The Government
Any bank, co-operative bank, or post office savings institution;
Any business that was created by a federal, state, or provincial law
Any government-related organisation as defined by clause (45) of section 2 of the Companies Act of 2013.
a group of institutions, organisations, or bodies that the central government has officially announced inside the official gazette.
Last but not least, the clauses of Section 269SS would not apply if both the person making the credit or deposit and the person accepting it have agricultural income nor had any other income subject to taxation under the Income Tax Act.
Section 269SS-Related Fines
A penalty equivalent to the value of the loan, deposit, or specified total amount accepted could be imposed if section 269SS requirements are not followed.
Act on Income Taxes, Section 269ST
No person is permitted to receive in cash an amount equal to ₹2 Lakh or more, according to Section 269ST of said Tax Act of India.
In regards to a single transaction,
in total from a person in a day,
in regards to transactions from a person pertaining to a single event or occasion.
When receiving cash from any of the following sources totalling more than ₹2 lakh, Section 269ST’s provisions are not applicable:
Administration
any bank, co-operative bank, or post office savings institution;
an organisation, association, body, or group of organisations that the Central Government has announced within the official gazette.
Section 269ST Penalty
In accordance with section 271DA, a fine equal to the value of the receipt is due if the requirements of section 269ST are not followed.
Income Tax Act, Section 269T
According to Section 269T, a branch of a bank, a cooperative society, a business, or another individual is prohibited from repaying a loan or deposit in any other way than with a check or bank draft made out in the borrower’s name. This prohibition applies in the following situations:
The line of credit or deposit is at least ₹20,000 when interest is added, or
The sum of all loans or deposits that person has on hand, whether they are in his name alone or together with another person, are at least ₹20,000 when interest is added.
Section 269T Penalty
According to section 271E, a penalty equal to the loan or deposit amount repaid is due in cases where the requirements of section 269T are not met.
Government of India has provided several income tax deductions to encourage people to buy health insurance and to take care of their health. If you opt for the old tax regime, you can use these deductions to reduce your tax outgo in 2023-24.
Section 80D of the Income Tax Act, 1961, provides tax deductions to individuals for the amount paid towards health insurance premiums, and medical expenses. The following are the different deductions available under section 80D for Indian taxpayers:
Health insurance premium
“An individual can claim a deduction for the amount paid towards health insurance premiums for themselves, their spouse, dependent children, and parents. The maximum deduction allowed is ₹25,000 per annum. If the insured person is a senior citizen (above 60 years of age), the maximum deduction allowed is ₹50,000 per annum,” says Venkatesh Naidu, chief executive officer, Bajaj Capital Insurance Broking.
An additional deduction for parents’ insurance premium paid is available to the extent of ₹25,000 if they are less than 60 years of age, or ₹50,000 if your parents are aged above 60. In case both you and your parents are over 60 years old, a maximum deduction of ₹1 lakh can be claimed.
Preventive health check-ups
An additional deduction of a maximum of ₹5,000 is permitted for the payment made towards preventive health check-ups for oneself, spouse, children who depend on them, and parents.
Medical expenses for senior citizens
An additional deduction of up to ₹50,000 annually is permitted for medical expenditures paid for senior citizens who do not have coverage under any health insurance plan.
Deduction in case of single-premium health insurance policy
“Budget 2018 has introduced a new provision for claiming a deduction regarding single-premium health insurance policies. Under the new provision, where a taxpayer has made a lump sum premium payment in a single year for a policy valid for more than one year, she can claim a deduction equal to the appropriate fraction of the amount under section 80D,
The appropriate fraction is arrived at by dividing the lump sum premium paid by the number of years of the policy. However, this would again be subject to the limits of ₹25,000 of ₹50,000, as the case may be.
Keep in mind
There are a few things one needs to keep in mind when claiming deduction under section 80D.
Maximum deduction
Check the maximum deduction allowed under Section 80D, based on your circumstances.
Let us take an example. Preeti is aged 40 years, and her father is aged 70 years. Preeti has taken medical cover for herself and her father, for which she pays insurance premiums of ₹28,000 and ₹40,000, respectively. She can claim ₹25,000 for the premium paid under her own policy. For the premium paid for her father’s policy, Preeti can claim up to ₹50,000. So in all, she can claim a deduction of ₹65,000.
Also, to claim the deduction, the premium must be paid through a banking channel such as cheque, credit card or net banking. Cash payments are not eligible for deductions under this section.
Goods and Services Tax (GST) rules for businesses with an annual turnover of over ? 100 crore have come into effect from today, May 1, 2023. These new rules aim to simplify the GST compliance process and improve tax administration. Here’s what you need to know about the changes:
Monthly Returns: Businesses with an annual turnover of over ?100 crore will now be required to file monthly GST returns, instead of the current quarterly returns.
Auto-population of Returns: The new rules also require the auto-population of certain details in the GST return, such as the details of the outward supplies, input tax credit, and liability.
HSN Code: The Harmonised System of Nomenclature (HSN) code will now be mandatory for businesses with an annual turnover of over ?100 crore while furnishing the invoice details in their GST returns.
E-invoicing: The e-invoicing system, which was previously only mandatory for businesses with an annual turnover of over ?500 crore, will now also be mandatory for businesses with an annual turnover of over ?100 crore.
QR code: A QR code will now be required on all B2C invoices issued by businesses with an annual turnover of over ?100 crore.
Late Fees: The late fee for non-filing or delayed filing of GST returns has been reduced to ?25 per day, for both CGST and SGST, subject to a maximum of ?5,000.
Penalty: The penalty for fraudulent input tax credit has been increased to 100% of the tax amount claimed.
These changes are expected to significantly reduce the compliance burden on businesses while also improving the efficiency of the GST system. However, businesses will need to ensure that they comply with the new rules to avoid any penalties or fines.
Institute of Chartered Accountants of India (ICAI) has recently taken action against four Chartered Accountants (CAs) for professional misconduct and failure to pay fines within the stipulated time. One CA in Lucknow was removed from the register of members for a year and fined Rs. 1,00,000 for violating items 6, 7, and 8 of Part I of the Second Schedule to the Chartered Accountants Act, 1949. The Appellate Authority upheld the Disciplinary Committee’s decision, resulting in the CA’s name being removed from the register of members
In Durgapur, another CA was fined Rs. 3,00,000 for professional misconduct under Clause 1 of Part II of the Second Schedule to the Chartered Accountants Act, 1949. Failure to pay the penalty within a month resulted in the CA’s name being removed for a month under the Chartered Accountants Regulations, 1988.
Mangalore-based CA was also fined Rs. 5,00,000 for professional misconduct under Clause 1 of Part II of the Second Schedule to the Chartered Accountants Act, 1949. Failure to pay the penalty within three months resulted in the CA’s name being removed for a month.
In Delhi, another CA was fined Rs. 1,00,000 and had their name removed from the register of members for three months for violating Clause 11 of Part I and Clause 2 of Part IV of the First Schedule read with Section 22 of the Chartered Accountants Act, 1949. The Board of Discipline’s decision was upheld by the Appellate Authority, resulting in the CA’s name being removed from the register of members for three months.
April 30 is the last date for the following filings which you must know.
TDS Payment Due Date for March 2023
TDS is the tax deducted at source. It means TDS is deducted from income at its source, including bank deposit interest, rents, consultation fees, commissions, cryptocurrency or virtual digital assets, and stamp duty, among others. It is deposited with the government.
The normal TDS rate can be as low as 1 per cent on various incomes and investments, and it can be as high as 30 per cent (like in the case of gains on cryptocurrency).
The TDS payment due date for March 2023 is April 30, 2023.
Due Date For GSTR-4 (Composition Dealer) for FY 2022-23
GSTR-4 is a return under the goods and services tax regime for those taxpayers who are opting for the composition scheme. It is now filed in a year, as against until FY 2018-19 when the return was filed every quarter.
The last date for filing the annual GSTR-4 return for the financial year 2022-23 is April 30, 2023.
A late fee of Rs 50 per day is levied up to a maximum of Rs 2,000. In the case where the tax liability is zero, the maximum late fee is Rs 500.
The composition scheme is a scheme for payment of GST available to small taxpayers, whose aggregate turnover in the preceding financial year did not cross Rs 1.5 lakh. Those who have opted in can pay a special tax rate of 6 per cent without the input tax credit.
Last Date For Filing 15G and 15H for Q4FY23 (January-March 2023)
you have a deposit in a bank and have earned an interest of over Rs 40,000 in a year, the bank will deduct TDS on it. The limit for senior citizens is Rs 50,000 a year. However, there is a way save TDS on interest income. If you total annual income is below the taxable limit, you can submit self-declaration Form 15G and 15H requesting the bank not to deduct the TDS from the interest income.
The last date for submitting forms 15G and 15H to save TDS on interest income for the January-March 2023 quarter is April 30, 2023.
Before we proceed, let me clarify that it is important to understand the type of income tax notice. It will help to file your reply (if required). Trust me you cannot depend 100% on Tax Consultant. At the end of the day, you know your case better. Don’t take any suggestions/inputs from tax consultant on face value. It is important to do a proper and thorough research. The tax consultant may have vested interest. The more you tangle in tax matters, the better it is for tax consultant 🙂
1. Section 139(9): Defective Income Tax Return
In this case, Assessing Officer is of the opinion that ITR filed by the assessee is defective. The best part is that a proper error description is shared and the AO also suggest a probable solution to rectify the same. The assessee is given an opportunity to respond within 15 days from the date of intimation or before it is assessed. If you don’t respond within 15 days then your return will be rejected by the AO. The defect u/s 139(9) can be the wrong ITR filed, missing information, incomplete return etc.
You may agree or disagree with the observation of the Assessing Officer. In the majority of the cases, without going into the merits, the assessee accept/agree on the defect. This is one of the common mistakes by the assessee. If you do not agree with the error description then you can reply to the income tax notice and share the reasons for the same. The only catch is you should know all the rules.
2. Section 131(1A): Income is concealed or likely to be concealed
If you AO is of the opinion that you are concealing the income or likely to conceal income then you will receive income tax notice u/s 131(1A). This notice is basically an intimation that AO is initiating an enquiry or investigate into the matter. The assessing officer can impound the books of account or other documents by providing reasons for the same. There is NO specific time limit to serve this notice.
3. Section 142(1): Preliminary Enquiry before an assessment
You will get a notice of preliminary enquiry in case the return is not filed on time. Alternatively, if the AO would like to go through the documentary proof to verify your claim in Income Tax Return then he may ask you to furnish the documents for assessment purpose. The time limit to serve the notice u/s 142(1) is before the end of the relevant assessment year. For example, the income tax return filed for AY 2016-17, you can receive notice u/s 142(1) on or before 31st March 2017. This timeline is not valid in case the return is not filed by the assessee.
4. Section 143(2): Follow up to the notice u/s 142(1)
If the AO is not satisfied with the response of the assessee or assessee fail to provide the documents against income tax notice u/s 142(1) as explained in the previous point then you will receive notice u/s 143(2). In this scenario, the case is called for detailed scrutiny. The AO may ask the assessee to either attend his office in person or produce supporting, particulars and evidence in support of his claim. The timeline to serve notice u/s 143(2) is before the expiry of six months from the end of FY in which the return is furnished. For example, return for FY 2015-16 was filed in FY 2016-17 on or before 5th Aug 2016. End of FY 2016-17 is 31st Mar 2017. Six months from the end of FY 2016-17 is 30th Sep 2017. Therefore, notice can be served till 30th Sep 2017.
5. Section 148: Income escaped assessment
To err is human and same holds true for Assessing Officer or If your new AO does not agree with the assessment of previous AO then you can expect notice u/s 148. In short, even after assessment, if the AO is of the opinion that some income of the assessee escaped assessment then income tax notice u/s 148 can be issued. As assessee may be asked to file the income tax return for the relevant assessment, reassessment or recomputation.
The notice can be served within 4 years from the end of the relevant assessment year if the income escaped assessment is Rs 1L or less than that. Otherwise, the notice can be served within 6 years from the end of the relevant assessment year. For example, for a return filed in AY 2016-17, an income tax notice can be served on or before 31st March 2021 (for 1L or less than 1L cases). In the case of more than 1L cases, the income tax notice can be served till 31st March 2023.
6. Section 156: Notice of Demand
If any penalty, tax, fine or any other amount is due from the taxpayer to the income tax department then income tax notice u/s 156 is served. Normally this notice is served after the assessment of ITR. The taxpayer can deposit the amount payable within 30 days from the date of the income tax notice. There is no time limit to serve this notice. Income tax notice under section 143(1) and 200A are also referred as Notice of Demand.
7. Section 245: Refund adjusted against the tax demand
I received this notice that i was referring to. It is basically an intimation from Income Tax department. This notice is issued when the tax refund (full/partial) for an assessment year is adjusted against the tax demand due from the taxpayer. The assessment year of refund and tax demand can be different. There is no time limit to serve or send income tax notice/intimation u/s 245.
In this post, i tried to explain the types of income tax notice in layman terms and simplified language. Some of these notices are complete subject in itself. The objective of this post to share the reason behind each type of income tax notice in concise and summarize format so that taxpayer should not panic. As i shared, a taxpayer can reply to most of the notices on his/her own. Lastly, in the case of doubt, a taxpayer can obtain an advance ruling to avoid tax issues.
Normally the taxpayer gets confused between Income Tax Notice and Assessment Intimation. If you receive intimation u/s 143(1), 143(3), 144 or 147 then these are not income tax notice. Basically, these four are 4 major assessments that i will discuss in my next post to clear the doubts of the readers/taxpayer.
Companies Act, 2013 regulates the incorporation of a company in India. It also regulates the responsibilities of the company, its directors and its dissolution. There are primarily two types of companies in India- Private Limited Company and Public Limited Company- both limited by shares. With Limited Liability the legal responsibility for the debts of the company are limited to the extent of the face value of the shares held and therefore, the liability of the members in the case of winding-up is limited to the amount unpaid and due on the shares held.
Table1: Difference between a Public and a Private Company
Point of differentiation
Private Company
Public Company
Minimum paid up capital
Rs. 1 lakh
Rs. 5 lakh
Minimum number of members
2
7
Maximum number of members
200
No restriction
Number of Directors
At least 2
At least 3
Transferability of shares
Complete restriction
No restriction
Issue of Prospectus
Prohibited
Free
Commencement of business
Immediately after incorporation
Only after commencement of business certificate is obtained
Statutory meeting
Not obligatory
Obligatory
Quorum
At least 2 members
At least 5 members
Managerial remuneration
No restriction
Cannot exceed 11% of Net Profits
Source: The Company Act, 2013
Advantages of a Private Limited company over a Public Limited company
As an entrepreneur or a start-up, working within the structure of a private limited company can yield several benefits. As can be seen in the table, there are several advantages to starting a company as a private company. It is said to be combining the privacy of a partnership with the permanence of the corporate constitution.
To begin with, it can be started with a minimum paid up share capital of Rs. 1, 00, 000, against Rs. 5 lakh for a Public Company. As against the requirement of a minimum of seven persons to incorporate a Public Company, a Private Company can be formed by just two persons. (Section 3(1)(iii))
According to Section 81, a Private Company can issue shares to any person, in any manner as it thinks best, in its own interest. This is especially relevant when Venture Capitalists invest in the company. This provision aids the investment as well as the divestment. As per Section 85-90 a Private Company may issue share capital of any kind, with no stipulations as to the extent of voting rights. A Public Company, on the other hand, has to adhere to provisions regarding the kinds of share capital, proportion of voting rights to paid-up capital, and restrictions on excessive voting rights.
A private Company can commence business immediately subsequent to obtaining the Certificate of Incorporation, which is issued by the Registrar of Companies. The Certificate of Commencement of Business, required by a Public Company is not needed.
Unlike a Public Company, a Private Company is not required to hold statutory meetings or to prepare any statutory reports. The Private Company can itself make provisions in its Articles regarding the length of Notice for calling a General Meeting, content and manner of Service of Notices, Explanatory statements, Chairman and Quorum for meetings, voting rights etc.
When these advantages start seeming like limitations or when the limitations outweigh the advantages-you know that it is time for your Private Limited Company to go public.
Is your Private Limited Company ready for the process required to go Public?
Why do you need an IPO?
When the company plans to acquire, expand or diversify it needs to raise capital. It may also need finances for working capital or to retire an old debt. It could need to give existing shareholders, including venture capitalists, a route to exit the company’s shareholding partially or fully. Or provide promoters an opportunity to dilute their holding.
In each of these cases, the company requires to raise capital by making a public offering. When a company that is not listed at any stock exchange makes a fresh issue of shares and/or makes an offer for sale of its existing shares, to the public, for the first time- it is called an Initial Public Offering (IPO). It is an offer for the sale of shares and for new investors to enter its shareholding family. This IPO is an invitation to offer, which is a precursor to a contract, and must meet the requirements laid down under S.11 of The Indian Contract Act, 1872.
The price of the share is determined, in consultation with its investment bankers, by the promoters of the company. The proceeds of the share issue go to the shareholders- often venture capitalists and promoters- if it is undertaken as a method to let them dilute their holding or to exit the company’s shareholding. If the share issue has been undertaken to raise finance- it is called a fresh issue of capital- and the proceeds of the issue go to the company. When the IPO is completed the company’s shares are listed. Which means that the securities are now admitted to dealings on a recognised stock exchange and can be traded at the designated stock exchange.
Listing has several benefits and it adds to a company’s prestige. It becomes an effective route for the company to raise more capital from both the domestic as well as the overseas markets. It simplifies the process of acquisition since the company can now use shares as currency. And, it lends liquidity to the stock, making it a more viable way to attract top talent by offering employee stock ownership plans. Apart from achieving these objectives of mobilising savings for economic development and providing liquidity met, it is imperative that the interests of the investors are also protected through full disclosures.
How to have an IPO
The Securities and Exchange Board of India (SEBI), established in 1992, was started ‘to protect the interests of investors in securities and to promote the development of, and to regulate the securities market’. The regulations governing the listing of securities are laid down in the SEBI (Disclosure and Investor Protection) Regulations, 2009. It has issued a set of guidelines applicable for public issues by listed and unlisted companies, all offers for sale and rights by listed companies, except rights issues where the average value of the shares offered does not exceed Rs. 50, 00, 000. (Clause 1.4 of the DIP Guidelines)
Your unlisted company is eligible for a public issue if its pre-issue net worth is above Rs. 1 crore in the last 3 years out of the last 5 years. With the minimum net worth having to meet the Rs. 1 crore requirement in the immediately preceding 2 years. And it should have had distributable profits for at least three out of the preceding five years.
As per Clause 1.2.1 of the DIP Guidelines, the net worth is the average value of the paid up equity capital and free reserves, not including the reserves created out of revaluation, minus the average value of the accumulated losses and deferred expenditure not written off. Further, the offer size, through offer document, firm allotment, promoter’s contribution cannot exceed five times its pre-issue net worth.
If your unlisted company does not satisfy the criterion, the IPO can be made only through the Book Building process. In this process, sixty percent of the issue size must be allotted to the Qualified Institutional Buyers (QIBs)-which include public financial institutions, scheduled commercial banks, mutual funds, venture capital investors registered with the SEBI and foreign venture capital investors registered with SEBI. If this is not fulfilled the full subscription money will have to be refunded.
Book Building, as defined by the SEBI Guidelines, is the process undertaken by which a demand for the securities proposed to be issued by a corporate body is elicited and built up. Further, the price of such securities is assessed for the determination of the quantum of such securities to be issued by means of a notice, circular, advertisement, document or information memoranda or offer document.
The minimum post-issue paid-up capital will need to be Rs. 10 crores for IPOs and the minimum issue size would have to Rs. 10 crores. The market capitalisation, which is calculated by multiplying the post-issue paid-up number of equity shares with the issue price, would have to be at least Rs. 25 crores.
Regarding the paid-up capital and market capitalisation, your company would require to include a disclaimer clause which states that the securities would not be listed if the market capitalisation requirement is not met. This disclaimer needs to be part of the offer document.
Your company- the applicant, promoters and/or group companies- should be in compliance with all the requirements of the listing agreement. This will be in addition to compliance with the guidance and regulations applicable to listing from:
Securities Contracts (Regulations) Act 1956
Securities Contracts (Regulations) Rules 1957
Securities and Exchange Board of India Act 1992
Any other circular, clarifications, guidelines issued by the appropriate authority
Companies Act 1956[i]
Your company also has to offer at least 20% of the post issue capital. In case of any issue to the public the minimum contribution of promoters will be locked in for a period of three years. And if the promoters’ contribution in the issue exceeds the minimum contribution, the excess contribution will be locked in for a period of one year.
If your company is seeking listing of its securities on BSE it is required to submit a Letter of Application to all the stock exchanges where it proposes to have its securities listed. This has to be done before filing the prospectus with the Registrar of Companies.
Your company is also required to complete the allotment of securities offered to the public within 30 days of the date of closure of the subscription list. Then, it has to approach the Designated Stock Exchange for approval of the basis of allotment. It needs to be noted that in case of Book Building issues, allotment shall be made not later than 15 days from the closure of the issue. Failing this, interest at the rate of 15% shall be paid to the investors.
Your company will also have to get Trading Permission. As per SEBI Guidelines, your company should complete the formalities for trading at all the stock exchanges where the securities are to be listed within 7 working days of finalization of the basis of allotment. Your company should scrupulously adhere to this time limit- as specified in SEBI (Disclosure and Investor Protection) Guidelines 2000- for allotment of all securities and dispatch of allotment letters/share certificates/credit in depository accounts and refund orders and for obtaining the listing permissions of all the exchanges whose names are stated in its prospectus or offer document.
If listing permission to your company had ever been denied by any stock exchange where an application for listing of securities had been made, your company cannot proceed with the allotment of shares. However, the company may file an appeal before SEBI under Section 22 of the Securities Contracts (Regulation) Act, 1956.
Your company would also have to be ready with paying 1% security fee, since companies making public/rights issues are required to deposit 1% of the issue amount with the Designated Stock Exchange. This has to be done before the issue opens. In the event of the company not resolving the complaints of investors- regarding delay in sending refund orders/share certificates, non-payment of commission to underwriters, brokers, etc.- this
Your company would require to pay Listing Fees
Initial Listing Fees
Rs. 20,000/-
2
Annual Listing Fees
(i)
Upto Rs. 5 Crs.
Rs. 15,000/-
(ii)
Rs.5 Crs. To Rs.10 Crs.
Rs. 25,000/-
(iii)
Rs.10 Crs. To Rs.20 Crs.
Rs. 40,000/-
(iv)
Rs.20 Crs. To Rs.30 Crs.
Rs. 60,000/-
(v)
Rs.30 Crs. To Rs.100 Crs.
Rs. 70,000/- plus Rs. 2,500/- for every increase of Rs. 5 crs or part thereof above Rs. 30 crs.
(vi)
Rs.100 Crs. to Rs.500 Crs.
Rs. 125,000/- plus Rs. 2,500/- for every increase of Rs. 5 crs or part thereof above Rs. 100 crs.
(vii)
Rs.500 Crs. to Rs.1000 Crs.
Rs. 375,000/- plus Rs. 2,500/- for every increase of Rs. 5 crs or part thereof above Rs. 500 crs.
(vi)
Above Rs. 1000 Crs.
Rs. 625,000/- plus Rs. 2,750/- for every increase of Rs. 5 crs or part thereof above Rs. 1000 crs.
Note: In case of debenture capital (not convertible into equity shares), the fees will be 75% of the above fees.
includes equity shares, preference shares, Indian depository receipts, fully convertible debentures, partly convertible debentures and any other security convertible into equity shares.
One more aspect that your company would have to be ready for is of the Compliance with the Listing Agreement. Your company would have to enter into an agreement with BSE called the Listing Agreement. Under this you are required to make certain disclosures and perform certain acts, failing which your company may face some disciplinary action, including suspension/delisting of securities.
This Listing Agreement is of great importance and will be executed under the common seal of your company. Under this Listing Agreement, your company would undertake, amongst other things:
to provide facilities for prompt transfer, registration, sub-division and consolidation of securities;
to give proper notice of closure of transfer books and record dates,
to forward 6 copies of unabridged Annual Reports, Balance Sheets and Profit and Loss Accounts to the stock exchange,
to file shareholding patterns and financial results on a quarterly basis;
to intimate promptly to the stock exchange the happenings which are likely to materially affect the financial performance of the Company and its stock prices,
to comply with the conditions of Corporate Governance, etc.
The Listing Department of the stock exchange monitors the compliance by the companies with the provisions of the Listing Agreement. This is especially so with regard to timely payment of annual listing fees, submission of results, shareholding patterns and corporate governance reports on a quarterly basis. Do note that penal action is taken against any defaulting companies.
If you are a start-up, SEBI has shrunk the IPO timeline to 6 days and eased rules for start-ups. Now start-ups will be allowed to raise funds from institutional investors under new rules approved by the regulator. Applications Supported by Blocked Amount (ASBA) will be made mandatory for all classes of IPO investors.
Now according to SEBI, only qualified institutional buyers and non- institutional investors will be allowed to invest in your company through institutional trading platform.
If your company is technology intensive such as intellectual property, biotechnology, nano-technology you will be allowed to list. This is provided 25 per cent of pre-issue capital is through QIB. In case of any other company at least 50 per cent of the pre-issue capital should be held by QIBs.
According to the SEBI rules, the lock-in for the entire pre-issue capital will be for six months. The minimum investment in such companies has been set at Rs 10 lakh.
Also, SEBI has introduced a policy framework which re-classifies promoters in listed firms to public shareholders. Now, if your company becomes professionally managed it will not need to have any identifiable promoter, and no person in the company can hold more than 1 per cent shares of the company. Moreover, an outgoing promoter cannot hold more than 10 per cent of the shares of the company or have any direct or indirect control over the company and possess any special rights.
In the case of an IPO, the promoters must contribute at least twenty percent (20%) of the post issue capital. The term promoter includes any such person(s) who are in overall control of the company; or any person(s) who are instrumental in the formulation of a plan or program pursuant to which the securities are offered to the public; and also persons named in the prospectus as promoters. It must be noted that any person acting as a director or officer of the issuer company merely in a professional capacity is not included in the definition of promoter.
Your company would also have to be ready to adhere to Prospectus Requirements. The offer, or prospectus document would have to contain true and sufficient information to enable the investor to make an informed decision while investing in the offered securities. This is as specified Clause 6.1 of the DIP Guidelines. The prospectus must, inter alia, provide information relating to risk factors, project costs, means of financing, appraisal, issue schedule, details of the managerial personnel, capital structure of the company, terms of the issue, financial information of company and group companies, basis for issue price and details of the products, machinery and technology.
Are you ready to make the IPO feasible?
The first thing any company should consider when thinking about an IPO is this: is an IPO even feasible?
Apart from regulatory guidelines, you must also consider good business sense. This is especially relevant to growth stage entrepreneurs. It must be kept top of mind that going public is by no means the final step to long term success, although it’s certainly a big step in the process.
Timing is key- completing an IPO too early can have disastrous effects on the future health of your business and waiting for too long can allow a competitor to steal your thunder.
Your business requires predictability so ensure that this predictability has been achieved. Although last year your venture capitalist may have been happy when your business hit 97% of the plan, it will be different after an IPO. But when your company goes public if you fall short of analysts’ expectations by even a small margin, your stock will likely plummet. The stakes are higher when your company goes public.
Your business needs to be aware of its underlying growth potential. You should have a game plan for growth after the IPO, else the markets will respond negatively.
You should have undertaken a Risk Analysis and ensured that there is no single point of failure. Appropriate risk mitigation should be in place to ensure that threats, in the form of market forces that can upset the business, are addressed.
Going public can bring numerous benefits to your company. However, before a company starts to prepare for an IPO you should have considered to what extent your company is ready for an IPO. Are there valid strategic objectives it wants to achieve upon choosing the IPO route? Is the company ready to undertake steps required to be perceived favourably by prospective investors? This is vital to be able to operate as a Public Company.
Consider how big the market for your product or service is. The bigger the market, the more likely you are to make money. The more money you can make the faster you can grow. Your company must have a huge market and room to grow. You are answerable to your investors.
Also consider how disruptive your product is. If your product a new way of doing something? The more disruptive your product the better. It helps to make you stand out- to get a larger share of the market.
Consider how predictable your business model is. Public market investors are partial to predictable earnings. If you can prove to investors that your company will succeed, investors will buy your story, but more importantly, your stock.
Finally, consider how much competitive advantage you have. Consider what asset your company controls that will afford it more leverage over rivals as it grows. If you’ve got a real advantage, then you have the final solution to the IPO equation. The more leverage you have or can create, the better it is.
If you have considered all the above aspects and chosen to have an IPO you can be positive that the markets will respond also respond positively- in the short term, the medium term as well as the long term.
Lotteries/crossword puzzles-made in kind/cash not suffice to meet the tax liability and paid before
10000
30
30
194C
Contractor – Single Transaction
30000
1
2
194C
Contractor – During the F.Y.
1 Lakh
1
2
194C
Transporter (44AE) declaration with PAN
–
–
–
194D
Insurance Commission (15G-15H allowed)
15000
5
10
194DA
Life insurance Policy
1 Lakh
1
1
194EE
NSS
2500
10
10
194F
Repurchase Units by MFs
–
20
20
194G
Commission – Lottery
15000
5
5
194H
Commission / Brokerage
15000
5
5
194I(a)
Rent of Plant / Machinery / Equipment
2.40 Lakh
2
2
194I(b)
Rent of Land Building & Furniture
2.40 Lakh
10
10
194IA
Transfer of certain immovable property other than agriculture land
50 Lakh
1
1
194IC
Payment under Specified agreement applicable for F.Y: 2017-18 onwards
–
10
10
194J (a)
Fees-tech srvcs, call centre, royalty for sale etc.
30000
2
2
194J (b)
Fee for professional service or royalty etc.
30000
10
10
194K
Payment of dividend by mutual Funds
5000
10
10
194LA
Compensation on transfer of certain immovable property other than agriculture land
2.50Lakh
10
10
194LA
Immovable Property (TDS exempted under RFCTLARR Act (wef 01.04.2017)
–
–
–
194LA
Immovable Property
2.50Lakh
10
10
194LB
Income by way of interest from infrastructure debt fund(non-resident)
–
5
5
194LBA
Certain income from units of a business trust (applicable from 01.10.2014)
–
10
10
194LBA
Certain income from units of a business trust to non-resident (applicable from 01.10.2014)
–
5
5
194LBB
Income in respect of investment of investment fund
–
10% for residents, 30% for non-residents
10% for residents, 40% for non-residents
194LBC
Income in respect of investment in securitization trust
–
30% for residents, 40% for non-residents, 25% for individual & HUF
30% for residents, 40% for non-residents, 25% for individual & HUF
194LC
Income by way of interest by an Indian specified company to a non-resident/foreign company on foreign currency approved loan/long term infrastructure bond ‘from outside India (applicable from July 1, 2012)
–
5
5
194LD
Interest on certain bonds and Govt. Securities (from 01.06.2013)
5
5
194M
Payment to commission, brokerage etc. by individual & HUF
50 Lakh
5
5
194N
Cash withdrawal in excess of 1 crore during the previous year from 1 or more account with a bank or co-operative society (wef 01.09.2019)
1 Cr
2
2
194NF
Payment of certain amounts in cash to non-filers
2000000
2
2
194NF
Payment of certain amounts in cash to non-filers
10000000
5
5
194O
TDS on e-commerce participants
5 Lakh
1%(01.10.2020)
1% (01.10.2020)
194P
TDS in case of Specified Senior Citizen
Not Applicable
Rates in Force
194Q
TDS on Purchase of Goods exceeding Rs. 50 Lakhs (Applicable From 01-July-2021)
In Excess of Rs. 50 Lakhs
0.1
0.1
194R
Benefits or perquisites of business or profession
20000
10
10
194RP
Benefits or perquisites of business or profession where such benefit is provided in kind or where part in cash is not sufficient to meet tax liability and tax required to be deducted is paid before such benefit is released
20000
10
10
194S
Payment of consideration for transfer of virtual digital asset by persons other than specified persons
10000
1
1
194SP
Payment for transfer of virtual digital asset where payment is in kind or in exchange of another virtual digital asset and tax required to be deducted is paid before such payment is released
10000
1
1
Note: TDS Rates without PAN – 20% flat (if TDS is lower than 20%)
Notes:
1)
The above list covers most of the sections applicable for domestic transactions
2)
Section – 206AA
Notwithstanding anything contained in any other provisions of the Income Tax Act-1961, any person entitled to receive any sum or income or amount, on which tax is deductible under Chapter XVIIB (hereafter referred to as deductee) shall furnish his Permanent Account Number to the person responsible for deducting such tax (i.e. deductor), failing which tax shall be deducted at the higher of the following rates, namely:- (i) at the rate specified in the relevant provision of this Act; or (ii) at the rate or rates in force; or (iii) at the rate of twenty percent: Provided that where the tax is required to be deducted under section 194-O, the provisions of clause (iii) shall apply as if for the words “twenty percent”, the words “five percent” had been substituted. Provided further that where the tax is required to be deducted under section 194Q, the provisions of clause (iii) shall apply as if for the words “twenty percent”, the words “five percent” had been substituted.
3)
Section – 206AB
Notwithstanding anything contained in any other provisions of the Income Tax Act-1961, where tax is required to be deducted at source under the provisions of Chapter XVIIB, other than sections 192, 192A, 194B, 194BB, 194LBC or 194N on any sum or income or amount paid, or payable or credited, by a person to a specified person, the tax shall be deducted at the higher of the following rates, namely:–– (i) at twice the rate specified in the relevant provision of the Act; or (ii) at twice the rate or rates in force; or (iii) at the rate of five per cent. If the provisions of section 206AA is applicable to a specified person, in addition to the provision of this section, the tax shall be deducted at higher of the two rates provided in this section and in section 206AA. For the purposes of this section “specified person” means a person who has not filed the returns of income for both of the two assessment years relevant to the two previous years immediately prior to the previous year in which tax is required to be deducted, for which the time limit of filing return of income under sub-section (1) of section 139 has expired; and the aggregate of tax deducted at source and tax collected at source in his case is rupees fifty thousand or more in each of these two previous years Provided that the specified person shall not include a non-resident who does not have a permanent establishment in India.
Timber obtained under any other mode other than forest lease
2.5
206CP
LRS – Educational Loan – Financial Institution
0.5
Note: TCS Rates without PAN – Double of TCS rate as above or 5%, whichever is higher
Notes:
1)
The above list covers most of the sections applicable for domestic transactions
2)
Section-206CC
Notwithstanding anything contained in any other provisions of the Income Tax Act-1961, any person paying any sum or amount, on which tax is collectible at source under Chapter XVII-BB (herein referred to as collectee) shall furnish his Permanent Account Number to the person responsible for collecting such tax (herein referred to as collector), failing which tax shall be collected at the higher of the following rates, namely:- (i) at twice the rate specified in the relevant provision of this Act; or (ii) at the rate of five per cent. The provisions of this section shall not apply to a non-resident who does not have permanent establishment in India.
3)
Section-206CCA
Notwithstanding anything contained in any other provisions of the Income Tax Act-1961, where tax is required to be collected at source under the provisions of Chapter XVII-BB, on any sum or amount received by a person (hereafter referred to as collectee) from a specified person, the tax shall be collected at the higher of the following two rates, namely:- (i) at twice the rate specified in the relevant provision of the Act; or (ii) at the rate of five per cent. If the provisions of section 206CC is applicable to a specified person, in addition to the provisions of this section, the tax shall be collected at higher of the two rates provided in this section and in section 206CC. For the purposes of this section “specified person” means a person who has not filed the returns of income for both of the two assessment years relevant to the two previous years immediately prior to the previous year in which tax is required to be collected, for which the time limit of filing return of income under sub-section (1) of section 139 has expired; and the aggregate of tax deducted at source and tax collected at source in his case is rupees fifty thousand or more in each of these two previous years:Provided that the specified person shall not include a non resident who does not have a permanent establishment in India.
The Employees Provident Fund Organisation (EPFO) has released fresh details for scrutiny of information and wage details submitted by the employee and employer for higher pension.
In a circular dated 23rd April 2023, the EPFO said that the applications and joint options for higher pension will be examined by the field office. In case the requirements are complete, the wage details submitted by employers will be verified with the data available with the field offices. In case of data mismatch, employees and employers will be given a one-month time to provide complete information.
“Applications/Joint options will be examined by Field. In case, the requirements are complete, the wage details submitted by the employers will be verified with the data available with the field offices,” the EPFO said.
“The cases where FO details and employers’ details match, the dues will be calculated and an order will be passed by APFC/RPFC-II/RPFC-I for depositing/transferring the dues. The cases where there is a mismatch, the same will be informed to the employer and the employee/pensioner by APFC/RPFC-II. They will be given a time of one month to complete the information,” it added.
When application is not approved by the employer
The EPFO said that in case the submitted application form/join option is not approved by the employer, before any rejection, “an opportunity will be given to the employer for providing any additional proof or evidence or correct any mistakes/errors (including those made by employees/pensioners). Such Opportunity will be for a period of one month and under intimation to the employees/pensioners.”
When submitted information is erroneous
The EPFO further said that in cases where the submitted information is not complete or seems erroneous or any information in application/joint option for needs correction request or not found eligible, “APFC/RPFC-II will seek information from the employers under information to employees/pensioners within one month.
If complete information is received, the case will be processed. However, if the complete information is not received then the APFC/RPFC-II/RPFC-I will pass the order on merit, the EPFO said.
Grievance Redressal
Applicants can register any grievance related to higher pension applications on EPFiGMS after submission of the request form and payment of due contributions, if any.
“The registration of such grievances shall be under specified category of higher pension with reference to Supreme Court judgement dated 01.11.2022. All such grievances shall be monitored by the Office in-Charge of Regional Office and Zonal Office,” the EPFO said.
The provisions contained in Section 194-I of the Income Tax Act, 1961 define how one should deduct TDS on rent. Section 194I imposes an obligation for TDS deduction on persons making rental payments to resident Indians exceeding Rs.2,40,000 in a financial year.
Section 194-I was introduced to bring rent under the purview of TDS provisions as rent is a key source of income that was escaping the tax net.
Where a person, except an individual or HUF, is required to make payment for booking hotel accommodation, which is considered as rent to a resident, such person needs to deduct TDS on such payment to the such hotel.
Meaning of hotel accommodation under Section 194I
As per the circular by Circular No. 715 / 1995 issued by the CBDT, if the hotel accommodation is taken on a regular basis, it would be construed as payment made for rent under Section 194-I.
Where earmarked rooms are let out for a specified period and at a specified rate, they would be considered to be hotel accommodations and construed as payment made for rent under Section 194-I.
Cases where there is a legal obligation for a hotel to reserve certain designated rooms under an agreement would be considered hotel accommodation on a regular basis during the operation of the agreement and will be construed as payment made for rent under Section 194-I.
What is exempted from the deduction of TDS for hotel accommodation under Section 194I?
Tax at source (TDS) won’t be deducted by the payer in the list mentioned below:
Individuals as well as HUFs: This above provision won’t apply to individuals or HUFs. However, it would apply in case the turnover, total sales or gross receipts exceeds: – In the case of business – INR 1 crore, or – In the case of the profession – INR 50 lakhs Note – that such income should have been earned during the financial year immediately preceding the financial year in which payment is made to the hotel.
Business Trust: No tax at source (TDS) would be deducted where Income via rent is credited or paid to the business trust, being a real estate investment trust with respect to any real estate asset, under Section 10 (23FCA) owned directly by such business trust.
Where the aggregate of amounts credited or paid during the financial year by the payer doesn’t exceed INR 2,40,000.
Contracts to provide specified types of hotel rooms at pre-determined rates are merely like rate contracts, and it cannot be construed as accommodation taken on a regular basis hence it is outside the purview of Section 194I.
Any one having a bank account earns some interest on their deposits and this particular income is taxable. Anyone earning an interest income from their bank accounts must know that tax is to be deducted at the time of payment or credit of interest (to any account by whatever name called), whichever is earlier, as per section 194A.
The provisions of tax deducted at source (TDS) presently apply to several payments like salary, interest, commission, brokerage, professional fees, royalty, etc. However, no tax is required to be deducted if aggregate amount of interest credited or paid to the payee in respect of time deposit during the financial year doesn’t exceed RS 40,000. The threshold is Rs 50,000 for senior citizens.
A major respite that taxpayers are eligible for is that if their annual taxable income is less than the tax exemption threshold, they can avoid TDS on incomes such as interest and rent by submitting form 15G or 15H to the appropriate person or organisation.
Forms 15G and 15H come into play when a taxpayer’s interest income in under the limit and want to avoid paying TDS. People under 60 are required to submit Form 15G while those above 60 years of age are needed to submit Form 15H.
The taxpayer who receives declaration in Form No 15G/15H shall be required to upload details of such declarations on quarterly basis on the e-filing site (www.incometax.gov.in) under his digital signature within:
15 days from the end of first, second and third quarter
30 days from the end of fourth quarter.
Important Points to Note
Declaration in Form No. 15G/15H can be made only by an individual resident in India.
Declaration in Form No. 15G/15H can be made, if the annual interest does not exceed the exemption limit (i.e. Rs 2,50,000 or Rs 3,00,000 or Rs 5,00,000, as the case may be).
This condition is not applicable in case of a senior citizen i.e. a resident senior citizen can furnish declaration in form 15H even if annual interest likely to be paid to him exceeds the exemption limit of Rs 2,50,000 or Rs 5,00,000, as the case may be, provided the tax payable on his total income after considering the rebate under section 87A is nil.
The tax payable on total income of the year should be “Nil”.
A case of transfer of TDS – Tax Deducted at Source – amount of Rs.2 crore, in his and his relatives, has come to surface by an outsource employee of Income Tax Department has been unearthed. A case under Section 420, 120-B has been registered at Ferozepur Cantt police station on the complaint of Naresh Kumar Bansal, Income Tax Officer, against Prince Chopra resident of Ferozepur City along with an unidentified person.
Meanwhile, the police have started further action by registering a case against the accused and his other accomplices with appointment of Amandeep Kaur as Investigating Officer. However, the accused is still out of the grip of the police.
In the complaint given to the police, Income Tax Officer Ward No. 3 Naresh Kumar Bansal said that Prince Chopra’s son Pravesh Chopra, resident of Sant Nagar Ichche Wala Road Ferozepur city, along with some of his other colleagues, had looted government departments by falsifying the income tax returns, a scam of about Rs 2 crore has been done. In this, BDPO Ferozepur, EO Nagar Panchayat Mamdot, EO Municipal Council Ferozepur for cheating in income tax returns for the financial years 2020-21 and 2021-22. Prince Chopra, the alleged accused, posted on outsourcing in the Tax Department, attached the said refund to his PAN card and along with the PAN cards of his other acquaintances and got the said amount refunded in their bank accounts.
However, the official said, it is not possible to hoodwink the system since everything is digitized.
New income tax regime will be the default regime in FY2023-24
Budget 2023 has announced that the new income tax regime will be the default tax regime from the financial year 2023-24.
What Budget 2023 announced
“We are also making the new income tax regime the default tax regime. However, citizens will continue to have the option to avail the benefit of the old tax regime,” said Nirmala Sitharaman, Union Finance Minister during her budget 2023 speech.
Can you choose the old tax regime in FY24?
So, the new tax regime will become the default tax regime from the assessment year 2024-25 or the financial year 2023-24. However, the old tax regime will continue.
Old income tax regimes in FY 2023-24
Under the old tax regime, taxpayers can claim various deductions, exemptions, and allowances based on their investments. Some popular exemptions and deductions allowed under the old tax regime are deductions of up to Rs 1.5 lakh under section 80C of the Income-tax Act, 1961 for investments in Public Provident Fund (PPF), Equity Linked Savings Scheme (ELSS), equity-linked savings schemes (ELSS), life insurance premiums, principal repayment of home loans and Sukanya Samriddhi Account, a deduction of up to Rs 2 lakh for the interest paid on their home loans under section 24(b), a standard deduction of Rs 50,000, house rent allowances, leave travel allowances among others.
People, who fall in higher income tax brackets and are eligible for various exemptions and deductions under the old tax regime, typically prefer the old tax regime.
New income tax slabs for AY 2024-25
To make the new income tax regime attractive, Budget 2023 has made significant changes to it. The rebate under section 87A increased to Rs 7 lakh under the new income tax regime. Budget 2023 has also extended a standard deduction of Rs 50,000 to the new income tax regime. Further, the income rates under the new income tax regime have also been tweaked. It will be Rs 0 to Rs 3 lakh – 0% tax rate Rs 3 lakh to 6 lakh – 5% Rs 6 lakh to 9 lakh – 10% Rs 9 lakh to Rs 12 lakh – 15% Rs 12 lakh to Rs 15 lakh – 20% Above Rs 15 lakh – 30%
Can you switch between the old and new income tax regimes?
According to income tax laws, a salaried person can opt for the new tax regime at their convenience in every financial year. In case an individual has a business income, they cannot choose the tax regime as per their convenience every year. If they opt for the new tax regime, they can switch back to the old tax regime only once in their life.
Section 80C is one of the most popular and favourite sections amongst taxpayers as it allows them to reduce taxable income by making tax-saving investments or incurring eligible expenses. It allows a maximum deduction of Rs 1.5 lakh every year from the taxpayer’s total income. The benefit of this deduction can be availed by Individuals and HUFs. Companies, partnership firms, and LLPs cannot avail the benefit of this deduction. Section 80C includes subsections, 80CCC, 80CCD (1), 80CCD (1b) and 80CCD (2).
It is important to note that overall limit including the subsections for claiming deduction is Rs 1.5 lakh except an additional deduction of Rs 50,000 allowed u/s 80CCD(1b)
Section 80C and its subsections
Investment options
Average Interest
Lock-in period for
Risk factor
ELSS funds
12% – 15%
3 years
High
NPS Scheme
8% – 10%
Till 60 years of age
High
ULIP
8% – 10%
5 years
Medium
Tax saving FD
Up to 8.40%
5 years
Low
PPF
7.90%
15 years
Low
Senior citizen savings scheme
8.60%
5years (can be extended for other 3 years)
Low
National Savings Certificate
7.9%
5 years
Low
Sukanya Samriddhi Yojana
8.50%
Till girl child reaches 21 years of age (partial withdrawal allowed when she reached 18 years)
Low
Section 80TTA – Interest on Savings Accounts
If you are an individual or a HUF, you may claim a deduction of a maximum Rs 10,000 against interest income from your savings account with a bank, co-operative society, or post office. Do include the interest from a savings bank account in other income.
Section 80TTA deduction is not available on the interest income from fixed deposits, recurring deposits, or interest income from corporate bonds.
Section 80TTB – Interest From Deposits Held by Senior Citizens
Section 80TTB provides a deduction of up to Rs 50,000 for interest income earned on deposits held by resident senior people (age 60 or more) with a banking firm, a post office, a co-operative, a society engaged in the banking business, and so on. As a result, the maximum for TDS deduction under Section 194A for older citizens has been enhanced to Rs. 50,000. In these instances, however, no deduction under section 80TTA is permitted. It should be noted that senior citizens aged 75 and up who receive just pension and interest income are exempt from ITR filing because tax is deducted at the source by banks.
Section 80GG – Income Tax Deduction on House Rent Paid
a. Section 80GG deduction is available for rent paid when HRA is not received. The taxpayer, spouse or minor child should not own residential accommodation at the place of employment
b. The taxpayer should not have self-occupied residential property in any other place
c. The taxpayer must be living on rent and paying rent
d. The deduction is available to all individuals
Deduction available is the least of the following:
a. Rent paid minus 10% of adjusted total income
b. Rs 5,000/- per month
c. 25% of adjusted total income*
*Adjusted Gross Total Income is arrived at after adjusting the Gross Total Income for certain deductions, exempt income, long-term capital gains and income related to non-residents and foreign companies.
From FY 2016-17 available deduction has been raised to Rs 5,000 a month from Rs 2,000 per month.
Section 80E – Interest on Education Loan
A deduction is allowed to an individual for interest on loans taken for pursuing higher education. This loan may have been taken for the taxpayer, spouse or children or for a student for whom the taxpayer is a legal guardian.
80E deduction is available for a maximum of 8 years (beginning the year in which the interest starts getting repaid) or till the entire interest is repaid, whichever is earlier. There is no restriction on the amount that can be claimed.
Section 80EEA – Interest on Home Loan For First-Time Home Owners
This is Section 80EEA, which provides taxpayers with an extra deduction for paying interest on a house loan. Whereas Section 24 exempted interest on home loans up to Rs 2 lakh, this section exempts home buyers who take out a home loan and pay interest on the loan an additional Rs 1.5 lakhs.
Section 80D – Deduction on Medical Insurance Premium
You (as an individual or HUF) can claim a deduction of Rs.25,000 under section 80D on insurance for self, spouse and dependent children. An additional deduction for insurance of parents is available up to Rs 25,000, if they are less than 60 years of age. If the parents are aged above 60, the deduction amount is Rs 50,000, which has been increased in Budget 2018 from Rs 30,000.
In case, both taxpayer and parent(s) are 60 years or above, the maximum deduction available under this section is up to Rs.1 lakh.
Example: Rohan’s age is 65 and his father’s age is 90. In this case, the maximum deduction Rohan can claim under section 80D is Rs. 100,000.
From FY 2015-16 a cumulative additional deduction of Rs. 5,000 is allowed for preventive health check.
Section 80DD – Deduction for Medical Treatment of a Dependent with Disability
Section 80DD deduction is available to a resident individual or a HUF and is available on:
a. Expenditure incurred on medical treatment (including nursing), training and rehabilitation of handicapped dependent relative
b. Payment or deposit to specified scheme for maintenance of handicapped dependent relative.
i. Where disability is 40% or more but less than 80% – a fixed deduction of Rs 75,000.
ii. Where there is a severe disability (disability is 80% or more) – a fixed deduction of Rs 1,25,000.
To claim this deduction a certificate of disability is required from the prescribed medical authority.
From FY 2015-16 – The deduction limit of Rs 50,000 has been raised to Rs 75,000 and Rs 1,00,000 has been raised to Rs 1,25,000.
Section 80DDB – Deduction for Specified Diseases
a. For individuals and HUFs below age 60
A deduction up to Rs.40,000 is available to a resident individual or a HUF. It is available with respect to any expense incurred towards treatment of specified medical diseases or ailments for himself or any of his dependents. For an HUF, such a deduction is available with respect to medical expenses incurred towards these prescribed ailments for any of the HUF members.
b. For senior citizens and super senior citizens
In case the individual on behalf of whom such expenses are incurred is a senior citizen, the individual or HUF taxpayer can claim a deduction up to Rs 1 lakh. Until FY 2017-18, the deduction that could be claimed for a senior citizen and a super senior citizen was Rs 60,000 and Rs 80,000 respectively. This has now become a common deduction available upto Rs 1 lakh for all senior citizens (including super senior citizens) unlike earlier.
c. For reimbursement claims
Any reimbursement of medical expenses by an insurer or employer shall be reduced from the quantum of deduction the taxpayer can claim under this section.
Also, remember that you need to get a prescription for such medical treatment from the concerned specialist to claim such a deduction. Read our detailed article on Section 80DDB.
Section 80U – Deduction for Disabled Individuals
A deduction of Rs.75,000 is available to a resident individual who suffers from a physical disability (including blindness) or mental retardation. In case of severe disability, one can claim a deduction of Rs 1,25,000.
From FY 2015-16 – Section 80U deduction limit of Rs 50,000 has been raised to Rs 75,000 and Rs 1,00,000 has been raised to Rs 1,25,000.
Section 80G – Income Tax Benefits Towards Donations for Social Causes
The various donations specified in u/s 80G are eligible for deduction up to either 100% or 50% with or without restriction.
From FY 2017-18, any donations made in cash exceeding Rs 2,000 will not be allowed as a deduction. Donations above Rs 2000 should be made in any mode other than cash to qualify for an 80G deduction.
a. Donations with 100% deduction without any qualifying limit
National Defence Fund set up by the Central Government
Prime Minister’s National Relief Fund
National Foundation for Communal Harmony
An approved university/educational institution of National eminence
Zila Saksharta Samiti constituted in any district under the chairmanship of the Collector of that district
Fund set up by a State Government for the medical relief to the poor
National Illness Assistance Fund
National Blood Transfusion Council or to any State Blood Transfusion Council
National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities
National Sports Fund
National Cultural Fund
Fund for Technology Development and Application
National Children’s Fund
Chief Minister’s Relief Fund or Lieutenant Governor’s Relief Fund with respect to any State or Union Territory
The Army Central Welfare Fund or the Indian Naval Benevolent Fund or the Air Force Central Welfare Fund, Andhra Pradesh Chief Minister’s Cyclone Relief Fund, 1996
The Maharashtra Chief Minister’s Relief Fund during October 1, 1993 and October 6,1993
Any fund set up by the State Government of Gujarat exclusively for providing relief to the victims of earthquake in Gujarat
Any trust, institution or fund to which Section 80G(5C) applies for providing relief to the victims of earthquake in Gujarat (contribution made during January 26, 2001 and September 30, 2001) or
Prime Minister’s Armenia Earthquake Relief Fund
Africa (Public Contributions — India) Fund
Swachh Bharat Kosh (applicable from financial year 2014-15)
Clean Ganga Fund (applicable from financial year 2014-15)
National Fund for Control of Drug Abuse (applicable from financial year 2015-16)
b. Donations with 50% deduction without any qualifying limit
Jawaharlal Nehru Memorial Fund
Prime Minister’s Drought Relief Fund
Indira Gandhi Memorial Trust
The Rajiv Gandhi Foundation
c. Donations to the following are eligible for 100% deduction subject to 10% of adjusted gross total income
Government or any approved local authority, institution or association to be utilized for the purpose of promoting family planning
Donation by a Company to the Indian Olympic Association or to any other notified association or institution established in India for the development of infrastructure for sports and games in India or the sponsorship of sports and games in India
c. Donations to the following are eligible for 100% deduction subject to 10% of adjusted gross total income
Government or any approved local authority, institution or association to be utilized for the purpose of promoting family planning
Donation by a Company to the Indian Olympic Association or to any other notified association or institution established in India for the development of infrastructure for sports and games in India or the sponsorship of sports and games in India
d. Donations to the following are eligible for 50% deduction subject to 10% of adjusted gross total income
Any other fund or any institution which satisfies conditions mentioned in Section 80G(5)
Government or any local authority to be utilised for any charitable purpose other than the purpose of promoting family planning
Any authority constituted in India for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns, villages or both
Any corporation referred in Section 10(26BB) for promoting the interest of minority community
For repairs or renovation of any notified temple, mosque, gurudwara, church or other places.
Section 80GGB – Company Donation to Political Parties
Section 80GGB deduction is allowed to an Indian company for the amount contributed by it to any political party or an electoral trust. A deduction is allowed for contributions done in any way other than cash.
Section 80GGC – Deduction on Donations By a Person to Political Parties
Deduction under section 80GGC is allowed to an individual taxpayer for any amount contributed to a political party or an electoral trust. It is not available for companies, local authorities and an artificial juridical person wholly or partly funded by the government. You can avail this deduction only if you pay in any way other than cash.
Section 80RRB – Deduction on Income via Royalty of a Patent
80RRB Deduction for any income by way of royalty for a patent, registered on or after 1 April 2003 under the Patents Act 1970, shall be available for up to Rs.3 lakh or the income received, whichever is less. The taxpayer must be an individual patentee and an Indian resident. The taxpayer must furnish a certificate in the prescribed form duly signed by the prescribed authority.
Section 80TTB – Interest Income on Deposits for Senior Citizens
A new section 80TTB has been inserted vide Budget 2018 in which deductions with respect to interest income from deposits held by senior citizens will be allowed. The limit for this deduction is Rs.50,000.
No further deduction under section 80TTA shall be allowed. In addition to section 80 TTB, section 194A of the Act will also be amended so as to increase the threshold limit for TDS on interest income payable to senior citizens. The earlier limit was Rs 10,000, which was increased to Rs 50,000 as per the latest Budget.
Section 80 Deductions Summary Table
Section
Deduction on
Allowed Limit (maximum) FY 2022-23
80C
Investment in PPF – Employee’s share of PF contribution – NSCs – Life Insurance Premium payment – Children’s Tuition Fee – Principal Repayment of home loan – Investment in Sukanya Samridhi Account – ULIPS – ELSS – Sum paid to purchase deferred annuity – Five year deposit scheme – Senior Citizens savings scheme – Subscription to notified securities/notified deposits scheme – Contribution to notified Pension Fund set up by Mutual Fund or UTI. – Subscription to Home Loan Account scheme of the National Housing Bank – Subscription to deposit scheme of a public sector or company engaged in providing housing finance – Contribution to notified annuity Plan of LIC – Subscription to equity shares/ debentures of an approved eligible issue – Subscription to notified bonds of NABARD
Rs. 1,50,000
80CCC
For amount deposited in annuity plan of LIC or any other insurer for a pension from a fund referred to in Section 10(23AAB)
–
80CCD(1)
Employee’s contribution to NPS account (maximum up to Rs 1,50,000)
–
80CCD(2)
Employer’s contribution to NPS account
Maximum up to 10% of salary
80CCD(1B)
Additional contribution to NPS
Rs. 50,000
80TTA(1)
Interest Income from Savings account
Maximum up to 10,000
80TTB
Exemption of interest from banks, post office, etc. Applicable only to senior citizens
Maximum up to 50,000
80GG
For rent paid when HRA is not received from employer
Least of : – Rent paid minus 10% of total income – Rs. 5000/- per month – 25% of total income
80E
Interest on education loan
Interest paid for a period of 8 years
80EE
Interest on home loan for first time home owners
Rs 50,000
80D
Medical Insurance – Self, spouse, children Medical Insurance – Parents more than 60 years old or (from FY 2015-16) uninsured parents more than 80 years old
– Rs. 25,000 – Rs. 50,000
80DD
Medical treatment for handicapped dependent or payment to specified scheme for maintenance of handicapped dependent – Disability is 40% or more but less than 80% – Disability is 80% or more
– Rs. 75,000 – Rs. 1,25,000
80DDB
Medical Expenditure on Self or Dependent Relative for diseases specified in Rule 11DD – For less than 60 years old – For more than 60 years old
– Lower of Rs 40,000 or the amount actually paid – Lower of Rs 1,00,000 or the amount actually paid
80U
Self-suffering from disability : – An individual suffering from a physical disability (including blindness) or mental retardation. – An individual suffering from severe disability
– Rs. 75,000 – Rs. 1,25,000
80GGB
Contribution by companies to political parties
Amount contributed (not allowed if paid in cash)
80GGC
Contribution by individuals to political parties
Amount contributed (not allowed if paid in cash)
80RRB
Deductions on Income by way of Royalty of a Patent
Communication received u/s 143(1)(a) is communication for proposed adjustment u/s 143(1)(a) received from the income tax department. This notice is issued for the following reasons:
Section
Reason
143(1)(a)(i)
Arithmetical Error in ITR
143(1)(a)(ii)
Incorrect Claim in ITR
143(1)(a)(iii)
Disallowance of loss claimed in ITR
143(1)(a)(iv)
Disallowance of expense claimed in ITR
143(1)(a)(v)
Disallowance of deduction claimed in ITR
143(1)(a)(vi)
Addition of income appearing in Form 26AS, Form 16 or Form 16A
Notice u/s 143(1)(a)(i)
Notice u/s 143(1)(a)(i) is issued when there is an arithmetical error in the filed Income Tax Return. It is sent to the registered email of the assessee. The notice mentions income head, amount reported in ITR, amount as per computation, amount of variance and description of error. The assessee must submit a response to this notice within 30 days from the date of issue.
Notice u/s 143(1)(a)(ii)
Notice u/s 143(1)(a)(ii) is issued when there is an incorrect claim in the filed Income Tax Return. It is sent to the registered email of the assessee. The notice mentions income head, amount reported in ITR, amount as per computation, amount of variance and description of error. The assessee must submit a response to this notice within 30 days from the date of issue.
Incorrect claim means:
An item in the ITR is not consistent with the same item or any other item in the ITR
Information that needs to be reported in the ITR has not been reported
Deduction claimed in the ITR exceeds the specified statutory limit as per the Act
Notice u/s 143(1)(a)(iii)
Notice u/s 143(1)(a)(iii) is issued when the loss has been incorrectly claimed in the ITR filed. It is sent to the registered email of the assessee. The notice mentions income head, amount reported in ITR, amount as per computation, amount of variance and description of error. The assessee must submit a response to this notice within 30 days from the date of issue.
As per the Income Tax Act, the assessee cannot carry forward the loss if he files his income tax return after the prescribed due date. When the return is filed after the due date u/s 139(1) and yet the loss has been claimed, notice u/s 143(1)(a)(iii) is issued to disallow such loss.
Notice u/s 143(1)(a)(iv)
Notice under section143(1)(a)(iv) is issued when an expense has been incorrectly claimed in the ITR filed. It is sent to the registered email of the assessee. The notice mentions income head, amount reported in ITR, amount as per computation, amount of variance and description of error. The assessee must submit a response to this notice within 30 days from the date of issue.
If an expense is disallowed under the audit report but the assessee claims it in the income tax return. Notice under section 143(1)(a)(iv) is issued to disallow such expense.
Notice u/s 143(1)(a)(v)
Notice u/s 143(1)(a)(v) is issued when a deduction has been incorrectly claimed in the ITR filed. It is sent to the registered email of the assessee. The notice mentions income head, the amount reported in ITR, amount as per computation, amount of variance, and description of the error. The assessee must submit a response to this notice within 30 days from the date of issue.
If the assessee files his Income Tax Return after the due date prescribed u/s 139(1). Thus in such case he cannot claim certain specified deductions (Sec10AA and Sec 80H to Sec 80RRB under chapter VI-A). However, if he has claimed such deductions, the tax department would issue a notice u/s 143(1)(a)(v).
Notice u/s 143(1)(a)(vi)
Income Tax Notice u/s 143(1)(a)(vi) is received when there is a mismatch in details of TDS on salary as per Form 26AS or Form 16 or mismatch in TDS as per Form 16A and income details reported in the filed Income Tax Return. The notice communicates the head of income, the amount reported in ITR, amount as per Form 16/26AS/16A, amount of variance, and the description of the error. There can be following 3 possibilities:
Business or Profession Income reported in Schedule BP of ITR does not match with the gross amount in Tax Credit Statement.
Taxable Salary reported in Schedule S of ITR does not match with the gross amount in Tax Credit Statement
Taxable Salary in ITR does not match with the Taxable Salary as per Form 16. This means that an extra deduction has been claimed in the ITR which is not reflected in Form 16
Communication of proposed adjustment u/s 143(1)(a)
How will I receive Communication u/s 143(1)(a)?
Communication on Email
The system auto-generates the communication u/s 143(1)(a) and sends it to the assessee on the email entered while filing the income tax return
The sender of these email is CPC i.e. Central Processing Centre and the sender’s email is intimations@cpc.gov.in
The subject of the email is ‘Communication u/s 143(1)(a) for PAN CDAxxxxx8P for the A.Y. 2019-20‘. The PAN and AY (Assessment Year) would be different in each case
The notice is attached to the email in a pdf format. It is password protected. The password to open is PAN in lower case and the date of birth in DDMMYYYY format. Eg: aagpr1212a02101980 for PAN: AAGPR1212A and DOB: 02/10/1980
Communication on SMS
The system auto-generates the communication u/s 143(1)(a) and communicates to the assessee on the mobile entered while filing the income tax return
The sender of the message is CPC i.e. Central Processing Centre and the sender’s name is VM-ITDCPC
Time Limit for issue of Communication for Proposed adjustment u/s 143(1)(a)
The income tax department can send intimation u/s 143(1)(a) within one year from the end of the financial year in which the return is filed.
Example
Taxpayer files ITR for FY 2018-19 in July 2019 or October 2019 End of financial year in which return is filed – 31st March 2020 One year from end of financial year – 31st March 2021 Therefore, the tax department can send intimation for ITR of FY 2018-19 up to 31st March 2021
If a taxpayer does not receive any intimation within such period, it means that there are no adjustments and changes to the ITR filed. There is no change in tax liability or refund. Thus, the Income Tax Return filed is deemed to be intimation u/s Section 143(1).
Due Date to submit response to notice u/s 143(1)(a)
If you have received a notice under section 143(1)(a), you must file a response within 30 days from the date of issue of notice.
If you Agree to the mismatch in notice – File a Revised Return u/s 139(5)
If you Disagree to the mismatch in notice – Submit a response
When you Partially Agree to the mismatch in notice – File a Revised Return u/s 139(5) and submit a response
How to File Response to Notice u/s 143(1)(a)
Visit the e-Filing portalLogin using valid credentials on the e-Filing portal.
Pending ActionsClick on Pending Actions > e-Proceedings from the dashboard
View NoticesClick on the option to View Notice for adjustment u/s 143(1)
Notice pdf
Click on the Notice/Letter pdf.
Download the notice
You will be able to view the notice issued to you. If you wish to download the notice, click Download.
Respond to Notice
Click on the option to submit response.
Details of the Prima Facie Adjustments
You will be able to view the details of the Prima Facie Adjustments found by CPC in your filed ITR. Click on each variance to provide responses.
Provide Response
On clicking the variance, details of the variance will be displayed. To provide response for the particular variance, click Provide Response.
Response from dropdown
Select the relevant response from the dropdown and click Save after responding to each Prima Facie Adjustment.
Proceed to e-Verify your response
Once all the responses have been provided, click Back. On clicking Back, you will be taken back to the details of Prima Facie Adjustment found by CPC in your filed ITR. After responding to each variance, the responses will be saved. Click Continue. Select the Declaration checkbox and click Proceed to e-Verify.
Successful Verification
On successful e-Verification, a success message is displayed along with a Transaction ID. You will also receive a confirmation message on your email ID registered on the e-Filing portal.
“Check the financial transaction available in AIS tab of your income tax account at Income tax website. If you disagree, raise an objection. We will check with the Source. If the mismatch continue, notice under the e-verification scheme may be issued. In such cases, return of income can be updated u/s139(8A) of the IT Act, 1961, subject to eligibility.”
Where can a taxpayer see financial transactions reported to Income Tax Department Sources/Reporting Entities? The Income Tax Department collects financial transactions such as your TDS/TCS revenues, immovable property acquisition or sale, bank deposits, investment in shares/mutual funds, time deposits, and so on. You can view all of these transactions in the AIS portal of your income tax account beginning with FY 2020-21. The steps are as follows: Step 1: Login to e-filing portal by using the URL https://eportal.incometax.gov.in/
Step 2: Click the tab “Services” Step 3: Select “Annual Information Statement (AIS)” in the menu under the tab “Services”, you will be taken to the AIS portal Step 4: Select the relevant Financial Year and click on “Annual
Information Statement” to view the financial transactions.
How to find a transaction which is incorrectly recorded or which does not pertain to me? As per the e-verification scheme FAQs, As previously said, once you are viewing information under AIS, click on a particular informational item. Once the information details are displayed, a feedback button on the right side allows the taxpayer to submit feedback from the menu selections available.
What happens after I raise my objection to any transaction reported in AIS? In the next 3-4 months, the Income Tax Department will begin contacting the Source/Reporting Entity that reported the information/transaction to ensure the accuracy of the data.
According to the e-verification FAQs, “Once this process is rolled out then: If the Source/Reporting Entity agrees that there has been a mistake, the data will be corrected in due course of time after the Source/Reporting Entity files its corrected statement. This process is done through an automated Information Technology driven procedure. If the Source/Reporting Entity stands by the data and does not support your objection, further explanation/evidence will be called from you under the eVerification Scheme which is explained in the following questions.”
What should I do when I receive notice for e-Verification? The notice issued under Section 133(6) of the Income Tax Act will be visible to you in the Compliance Portal (accessed via https://eportal.incometax.gov.in). Typically, you will also be notified through SMS on your registered mobile phone and via email on your registered email address. The following are the steps required in accessing the notice under Section 133(6) and filing the answer electronically, according to the FAQs.
Step 1: Taxpayer will Login to the e-filing portal by using the URL https://eportal.incometax.gov.in/ Step 2:Go to “Pending Actions” tab, click on “Compliance Portal” and select “eVerification” Step 3: Click on applicable Financial Year Step 4: Click on the ‘DIN’ to download the notice. Step 5: Click on ‘Submit’ link to provide the response. Step 6: Enter the remarks, attach the supporting document and click on “Submit” to submit the response to the notice. Responses have to be filed electronically only.
How to know that notice under e-Verification has been issued to me? The Income Tax Department will issue a notice under Section 133(6) of the Income Tax Act of 1961. This will be available on your e-filing portal account on incometax.gov.in. The notice is also emailed to the most recent email address supplied to the Income Tax Department when filing the income tax return. You will also receive SMS on the most recent mobile number linked with your PAN.
WhatsApp allows users to delete chat messages within 2 days- Have you ever been left wondering what a deleted WhatsApp message said? It can be frustrating to receive a notification for a message only to find out that it’s been deleted by the sender before you could read it. In 2017, WhatsApp introduced the ‘Delete for Everyone’ feature, allowing users to delete messages within 2 days of sending them. While this feature can be helpful in some situations, it can also leave you feeling curious and frustrated when you’re on the receiving end of a deleted message.
Unlike WhatsApp, other social media platforms like Instagram have implemented the ‘delete message’ feature in a more subtle manner. On Instagram, the receiver is never alerted about a deleted message, allowing the sender to avoid any awkward explanations. This feature is intended to let people hide their errors and re-send a corrected version of the message without drawing attention to their mistake. However, WhatsApp’s delete message feature often leaves users feeling curious and frustrated.
If you are also tired of being left in the dark by WhatsApp’s ‘Delete for Everyone’ feature? There is a solution!
Here is a list of different ways through which you can read deleted WhatsApp messages.
Use saved WhatsApp backup to read deleted messages
Another way to recover deleted WhatsApp messages is to regularly back up your data and restore messages from an earlier backup. To do this, go to WhatsApp Settings > Chats > Chat Backup and look for an earlier backup that contains the deleted messages. However, this method can be a hassle as it requires deleting the app and logging in again to run the backup.
How to read deleted WhatsApp Messages on Android
Another safer and more hassle-free option is available for Android users with Android 11. You can read deleted WhatsApp messages by checking the notification history. Here’s how:
– Go to your device’s ‘Settings’.
– Scroll and tap on ‘Apps & Notifications’.
– Select ‘Notifications’.
– Tap on ‘Notification history’.
– Toggle the button next to ‘Use notification history’ to turn it on.
– Once the notification history is turned on, you will be able to see notifications of WhatsApp messages even if they are deleted.
Use third party app to read deleted WhatsApp messages
While it is possible to read deleted WhatsApp messages using third-party data recovery apps available online, it is important to exercise caution when using these tools. These apps come with risks such as data theft, malware, and unauthorized access to your device. Additionally, not all recovery tools are effective and some may even cause permanent data loss. It is important to carefully research and evaluate the risks before using any third-party app to recover deleted WhatsApp messages.
One of the app which you can use is “Get Deleted Messages”.
– To read deleted WhatsApp messages using the ‘Get Deleted Messages’ app, follow these simple steps:
– Install the ‘Get Deleted Messages’ app from the Google Play Store. Grant the necessary permissions to the app. Once done, you’re all set.
– Whenever a message is deleted on WhatsApp, simply open the app to check the deleted message.
Please note that the app will require permission to run in the background. You can change this at any time in your phone’s Settings > Apps & Notifications. Additionally, the app will also ask for permission to access notifications and storage.
How To Restore Your Chat History on Android | WhatsApp
A director identification number (DIN) is a unique identifying number assigned to a person who wishes to become a director or is already a director of a corporation. DIN is obtained by submitting an application in eForm DIR-3, which was originally intended to be a one-time process for anyone wishing to become a director of one or more companies.
However, as a result of an amendment to MCA’s register, all directors with DIN are now required to submit their KYC details in e-Form DIR 3 KYC every year.
Purpose of the Form DIR-3 KYC
As mentioned above, Every director shall inform all the companies in which he/ she is a director, of the DIN allotted to him/her in Form DIR-3B within 30 days of the receipt of intimation of approval of DIN. Similarly, the Secretary and Manager of a company shall inform the company of their Income-tax Permanent Account Number (PAN). The company needs to further information about the DIN of the directors to the Registrar in Form DIR-3C within 15 days of receiving the intimation.
Who is required to submit Form DIR 3 KYC?
Directors are required to submit their KYC details to the MCA if they meet the following conditions, according to recent MCA announcements:
Their Director Identification Number (DIN) was assigned to them by or on March 31, 2018
DIN is in approved status
Note that KYC is also required of disqualified directors.
eForm DIR 3 KYC at a Glance
Any DIN holder who is filing his KYC details for the first time with MCA must file all KYC details only through eForm DIR-3 KYC. There is no option for such a person to access the web service for his KYC.
Further, any DIN holder who wants to update any information of his KYC details must update the same through the filing of eForm DIR-3 KYC only.
Form DIR-3 KYC Web
Any DIN holder who has already submitted eForm DIR-3 KYC in any of the previous financial years and who does not require an update in any of his KYC details as submitted may perform his annual KYC by accessing the DIR-3 KYC web service.
Form DIR-3 KYC WEB is simply to verify the data filled by the DIN holder in his previous year’s eForm DIR-3 KYC.
Applicable Fee for form DIR-3 KYC
If Form DIR-3 KYC, is filed within the due date of the respective financial year, no fee is payable. However, if filed after the due date, for DIN status ‘Deactivated due to non-filing of DIR-3 KYC a Fee of Rs.5000 becomes payable.
E form
Purpose of form
Timeline
Last Date to File
Remark
DIR-3 KYC
KYC of Directors
Annual Compliance
30th Sept 2022
Every individual who holds DIN as of 31st March 2022 and who has not filed DIR 3 KYC form previously or there is a change in email id and mobile number.
DIR-3 KYC Web
KYC of Directors
Annual Compliance
30th Sept 2022
Every individual who has previously filed form DIR-3 KYC and there is no change in email id and mobile number.
Documents Required to File DIR 3 KYC form
The documents required to file reform DIR 3 KYC is as follows:
Details of Nationality
Details of citizenship like gender, date of birth, etc.
Permanent Account Number (PAN)
Passport (compulsory when DIN holder is of foreign nationality)
Driving License
Aadhaar card
Personal Mobile and Email ID
Proof of Residential address.
Voters Identity card
Aside from the aforementioned documents, directors must additionally have the following items on hand:
To file the form, he used his digital signature.
CA, CS, or Cost Accountants who are currently practicing the professional attestation of the above-mentioned documents. In the event of foreign nationals, an attestation by a defined authorized person is required.
A declaration signed by them (applicant/director) and attested by CA, CS, or Cost Accountants in good standing.
The process to file DIR 3 KYC Form
Step 1- Download the form
The first and most important step is to obtain a copy of the DIR-3 KYC form from the MCA’s website.
The DIR 3 KYC form is attached for your reference.
Step 2- Fill in the DIN details
The DIN must be filled in on the KYC form if the status is ‘Approved.’
Directors who have had their DIN deactivated due to non-submission of the KYC Form can reactivate their DIN by filling out the form after the statutory due date and paying late filing fees.
Step 3- Fill out the DIR- 3 KYC Form with the required information
Name and relevant credentials
The applicant must enter his own first and last name, as well as his father’s first and last name. There are a few things to keep in mind:
The director must give his name as it appears on his PAN card.
The address provided in the form will be verified against the PAN database.
Acronyms, single alphabets, and short forms are not permitted.
Nationality
A director needs to declare his nationality
Directors with foreign nationality must declare the nationality mentioned in their passport
Age Declaration
A director’s date of birth (DOB) must be entered in the DD/MM/YYYY Because anyone under the age of 18 is ineligible to file this application, an age declaration is required.
Address
A director’s permanent residential address must be entered and proof of permanent address must be attached. When the current residential address differs from the permanent residential address, the current residential address must be provided.
Note: A foreign pin code can be furnished only when the state selected is “NA”.
Step 4- PAN verification
Verification of the Permanent Account Number (PAN) is required. A director must first input his PAN, after which he must click the ‘Verify income-tax PAN’ button. The system next checks the director’s information using the PAN card number.
Note: For successful authentication, the PAN provided in the form must match the PAN indicated in the DSC. When foreign nationals do not have a PAN, the name on the form must match the name on the DSC in order for authentication to be successful.
Step 5- Update contact details and verify OTP
A director must update his contact information by providing his phone number and e-mail address, both of which must be validated using an OTP.
When a director inputs these contact details, he must verify them using an OTP by selecting the ‘Generate OTP’ button once they have been submitted. OTPs are issued to both the mobile number and the email address separately.
Only directors who are not Indian citizens are permitted to use country codes other than +91/91/0.
It should be remembered that an OTP can be issued to the telephone number and email address up to 10 times per day and twice every 30 minutes against one form.
Attested Attachments to be made
An applicant must attest and upload the documents listed above. Any additional attachments must be signed digitally by the applicant.
Step 6- Authentication of e-Form
The e-Form must be validated, which means it must be digitally signed by a Chartered Accountant/Cost Accountant or a Company Secretary who is licensed to practice their profession. The provision of the practicing professional’s information, as well as their digital signature, is a critical responsibility that cannot be overlooked.
After thorough proofreading, click the ‘Submit’ button.
Step 7- SRN Generation
When the e-Form DIR-3 KYC is successfully submitted, an SRN is produced and assigned to the user for future MCA correspondence.
Step 8- Email communication
On his personal email ID, the applicant will receive an email acknowledging receipt of the form. Once the email of approval is received, filing eForm DIR-3 KYC is complete.
Things to keep in mind while filing e-Form DIR-3 KYC
When filling out this e-form, the director must provide their phone number and email address. A One-Time-Password will be used to verify this information (OTP)
This e-Form will require directors to utilize their digital signatures.
Directors must ensure that the e-Form is certified by a practicing Chartered Accountant, Cost Accountant, or Company Secretary.
Procedure to File Form DIR-3 KYC WEB
The procedure to File Form DIR-3 KYC Web is explained in detail below:
The applicant needs to log in to the MCA portal with valid credentials. After login, click on the MCA service option and then select DIN services. From the list of services, select the DIR-3 KYC Web option.
On the new page, Provide the DIN details, mobile number, and email ID that are preloaded will display on the page.
By clicking on the Send OTP option, an OTP will be redirected to the applicant’s mobile number and Mail ID. Furnish the OTP to verify.
Pre-loaded details of the DIN Holder will display, check all the details, and click on submit button.
A zero rupee challan and SRN will be generated if the form is filed on or before 30th September.
“Employee Provident Fund (EPF) is India’s most popular retirement financial planning and investment choice for individual taxpayers. EPF was earlier under the Exempt taxation framework, i.e., EPF was tax-free at:
Investment stage: When a contribution was made, one could claim a deduction under section 80C against the employee’s contribution upto INR 1.5 lakhs and the entire employer’s contribution upto 12% of PF salary was exempt without any ceiling
Accrual stage: When interest is declared on the accumulated balance
Maturity stage: When the amount is withdrawn from the fund subject to meeting exemption criteria
The Indian Government in order to promote the National Pension Scheme and tax High Net-worth Individuals has done away with a few of the above tax benefits by making the following changes according to Preeti Sharma.
Tax rule on EPF contributions
Employee’s contribution to the EPF account is allowed as a deduction under Section 80C but within the overall limit of INR 1.5 lakhs. There is no change in this provision.
Employer’s contribution to the EPF account of an employee is exempt upto 12% of the PF Salary. Effective 1 April 2020, any employer’s contribution to Provident Fund (PF), NPS and superannuation exceeding INR 7.5 lakhs per year is taxable as perquisites in the hands of the employee under the head ‘Income from Salary’.
EPF tax rule on accrual of interest
Effective 1 April 2022, any interest on an employee’s contribution to EPF upto INR 2.5 lakhs per year is tax-free and any interest earned on a contribution over and above INR 2.5 lakhs is taxable in the hands of the employees. The threshold of INR 2.5 lakhs is increased to INR 5 lakhs in case the employer is not contributing towards EPF.
As per the notification issued by the Income Tax department dated 31 August 2021, the Regional Provident Fund Commissioner (RPFC) will maintain the EPF balance of individuals in two separate accounts for taxation purposes. The contribution within the limit of INR 2.5lakhs/5lakhs in one account and the excess contribution along with the interest accrued on it shall be maintained in a separate taxable account. The RPFC shall deduct TDS on such interest paid on the account maintaining taxable contribution.
Further, in addition to the contribution made by the employer in excess of INR 7.5lakhs per year that is taxable as perquisites in the hands of employees, any interest, dividends, etc. earned from such excess contribution will be taxed as well in the hands of the employee.
Rule 3B has been introduced by the Income Tax department to ascertain how interest, dividend, etc. will be calculated on the above contribution. Employers also need to withhold tax on such accruals.
Further, employers also need to provide the details of such accruals and taxes withheld in Form 16 and Form 12BA issued to employees.
Tax rule on withdrawals of EPF
No tax is required to be paid on the contribution amount and accumulated interest in case the accumulated balance in EPF is withdrawn after 5 years of continuous service.
However, in case the accumulated balance is withdrawn prior to the completion of 5 years of continuous service (allowed by the RPFC in case of prescribed circumstances), then the balance and interest won’t be fully exempted from tax. The tax on such withdrawal shall be calculated as follows:
a) Employer’s Contribution and Corresponding Interest
Employer’s contribution and interest on the same is fully taxable in the hands of the employee under the head ‘Income from salary’ in the individual’s Income Tax return.
b) Employee’s Contribution
In cases where deduction under Section 80C is claimed at the time of contributing, the amount of the employee’s contribution shall become taxable as ‘Income from Salary’. In other cases, the amount withdrawn from an employee’s contribution may not be taxable.
c) Interest on Employee’s Contribution
The amount of interest earned on the employee’s contribution to EPF shall be taxable in the hands of the employee as ‘Income from Other Sources’.
The RPFC shall deduct TDS at 10% on the total amount withdrawn (if more than INR 50,000) before the completion of 5 years of continuous service.
Impact and budget expectations
Despite the above changes, EPF still remains the most loved and sought-after retirement planning scheme for the majority of individual taxpayers. The above changes may not affect individuals who are earning a basic salary upto INR 20 lakhs and contributing 12% of their basic salary towards EPF. Most individuals in India fall under this category.
7th Pay Commission: Another good news is coming out for the central employees. Recently, he has already received the gift of 4% dearness allowance. Now the government can also increase the fitment factor till next year. All kinds of updates are coming out regarding this. The government can review the fitment factor of central employees. According to the news, the government can increase it till next year. With this, there will be a tremendous increase in the basic salary of the employees.
Can get benefit next year
If media reports are to be believed then in the year 2024 it can be reviewed and increased. However, no clear information has been given by the government regarding this yet. A new pay commission may also be formed next year. In such a situation, a decision on the fitment factor is also possible at that time.
Know why fitment is important
The fitment factor is considered very important for central employees. On the basis of this, it is decided that how much the minimum salary (Basic Salary) of the employees will increase. According to the recommendations of the 7th Pay Commission, in addition to allowances in the salary of central employees, the fitment factor in basic salary increases only. Last time due to increase in the fitment factor, there was an increase of more than two and a half times in the salary of central employees.
What is Fitment Factor?
According to the recommendations of the 7th Pay Commission, at present the fitment factor is 2.57. The basic salary of central employees is calculated by multiplying the fitment factor of 7th Pay Commission latest update by 2.57. After the implementation of the 7th Pay Commission, the basic pay was made by adding Grade Pay to the Pay Band of the 6th Pay Commission. In this, the salary of the current entry level was calculated by multiplying the fitment factor by 2.57, from which the salary was prepared according to the pay band of the employees.
How much will there be a jump in salary?
Central employees are getting 2.57 fitment factor in the current system. Based on this, the minimum salary (Fitment factor Basic Salary) is Rs.18000. If it is increased to 3 then the basic salary will be Rs.21000. On the other hand, if it can be increased to 3.68, then the salary will be Rs 25,760. The demand of the employees is that their fitment factor should be increased to 3.68. The minimum salary should be kept at Rs 26000.
Online bank scams are not new and have been reported in the past few years. Scammers trick people through fake messages related to KYC, credit card or bank updates. They especially target people who are dealing with urgent cases like PAN updation. Similar to fake PAN update scam, there is a new scam going viral in which scammers are targeting people who are busy completing their income tax returns.
In an ongoing scam, scammers are taking advantage of the ongoing Income Tax Return completion process and are targeting Indian account holders through tax-time smishing campaigns. They are sending fraudulent text messages to bank account holders that appear to be from popular Indian banks, with the aim of tricking users into giving away their personal information.
According to a report of Sophos, cited by TOI, scammers are sending fake text messages claiming that the recipient’s bank account will be blocked and are asking them to update their PAN and AADHAR card information on their accounts. These Text messages also include a link to download an Android Package (APK) file. If installed with the app linked with an APK file, the app looks similar to the real bank application and users are then tricked to enter their banking details in the fake app to steal money.
“This not only abuses recipients but the bank brands. The APK then tries to acquire the recipient’s login, password, debit card number, and ATM pin,” the report reveals.
While fake bank SMS scams have happened before, it is important to be cautious this time as people may mistake them for real SMS while checking their account details through online banking or banking apps during the income tax return filing period.
What is tax-time smishing scam
In cases of tax time smishing scams, scammers targets people during the income tax return filing period. Scammers send fake text messages claiming to be from the recipient’s bank and include a link to download a malicious Android Package (APK) file. Once installed, the APK opens fake bank login pages that look like real ones. If the recipient enters any personal information on these pages, the data is sent to a remote server owned by the attackers instead of the bank. The malicious APK also has the ability to read incoming SMS texts, possibly to extract OTP codes issued by the bank.
So how to prevent falling for these fake SMSs?
How to be safe from tax-time smishing scam
— Be cautious of text messages claiming to be from your bank and asking for personal or financial information. The banks will never contact you through text messages, messaging apps, or social media to share details.
— Be vigilant when receiving unsolicited text messages or attachments and verify the sender’s identity before opening or downloading any files.
— If you receive an unexpected message “from your bank” or other service provider, reach out directly to the bank officials by phone or through the provider’s legitimate, secured website or apps or by visiting the nearest branch.
— If you have received such SMS, you can report the scams by sending the email or a copy of the text/SMS as an attachment to phishing@irs.gov.
Dogecoin was once again in the red on Friday, as Twitter finally removed the doge icon as its logo. The meme coin raced to a four-month high earlier in the week, after the social media giant unexpectedly added a cartoon image of doge on its website. Overall, crypto markets were mostly lower, with xrp a notable exception.
Dogecoin (DOGE)
Dogecoin (DOGE) fell for a fourth consecutive session on Friday, as Twitter finally removed the doge icon as its logo.
DOGE/USD surged to a high of $0.1048 on Tuesday, however as sentiment shifted, the meme coin fell to a low of $0.08185 earlier today.
Bears appear to be pushing doge towards a long-term floor at $0.0780, with prices down by nearly 9% today.
Looking at the chart, the latest drop in price coincided with the 14-day relative strength index (RSI) falling below support at 55.00.
Currently, price strength is tracking at the 52.85 mark, with a lower floor at 50.00 a possible target for sellers.
Despite the recent downward trend, the 10-day (red) moving average continues to trend higher.
XRP
Despite the cryptocurrency market cap trading mostly lower on Friday, XRP, formerly ripple, was a notable exception.
Following a low of $0.4968 the day prior, XRP/USD moved to a peak at $0.5129 earlier today.
As a result of the move, bulls pushed the token away from a recent support point at the $0.4950 mark.
This comes as the RSI also moved away from a floor of its own at 59.00. It is currently tracking at 61.17.
Should this momentum continue into the Easter weekend, the next visible ceiling will be at the 65.00 mark.
If this point is reached, there is a good chance that XRP will be trading above $0.5200.
A unique forgery has come to the fore in Noida, adjacent to Delhi. Its story is also very interesting. Two people named Luke Talwar and Arjun Chaudhary together assured people that they were going to do a ‘World Startup Convention’. From Elon Musk, Sundar Pichai to Nitin Gadkari and Gautam Adani are going to participate in this. He raised a lot of money by selling tickets worth thousands of rupees. While this ‘fake’ event was promoted on social media by people like writer Chetan Bhagat, MBA Chaiwala Prafulla Bilore, will they now have to pay a fine of up to Rs 50 lakh as per government rules?
To save people from cheating on social media, the government had recently issued guidelines for social media influencers. In these guidelines, the government has made a provision for a fine of up to Rs 50 lakh for giving misleading and wrong information.
Chetan Bhagat, MBA chaiwala fined?
The ‘World Startup Convention’ event was promoted on social media as the world’s largest startup funding event. Writers Chetan Bhagat, entrepreneurs Prafulla Bilore (MBA Chaiwala), Ankur Variku and Raj Shamani shared videos related to the event. Asked people to join it and go to it to raise funds.
The Social Media Influencers Guidelines fix the accountability of influencers in such cases. According to this, if a person promotes a brand, then he has to tell the right relation with it. If he does not do this, he has to pay a fine of up to Rs 50 lakh. On the other hand, if the influencers give any kind of misleading information, then they have to pay fine under consumer law. Now it remains to be seen whether in this case all these influencers are fined or not?
The ‘World Startup Convention’ was organized on 24 March at the India Expo Mart in Greater Noida. People were promised that here startups will get a chance to get funding up to Rs 1 lakh crore. More than 9000 angel investors, more than 75 thousand startups will be involved.
Not only this, there was talk of involvement of businessmen and leaders like Elon Musk, Sundar Pichai, Gautam Adani to Nitin Gadkari, Keshav Prasad Maurya, Pushkar Singh Dhami. In the name of this, people were charged from Rs 8,000 to Rs 25,000 for entry fees. So some startups spent up to Rs 50 lakh to set up stalls.
But on March 24, this event got busted. Nothing was found there as promised, even there was no provision of drinking water for the people. At last the police reached there and a lot of controversy was seen on the spot.
