Tax Liability

In a recent case of the Director of Income Tax, New Delhi’s. M/s. Mitsubishi Corporation, the Supreme Court (SC) ruled that for times previous to the financial time 2012-13, the taxpayer is entitled to reduce the quantum of income duty that would be deductible or collectable at source (TDS or TCS) when calculating the advance duty liability, even though the taxpayer entered the full quantum without any deduction. As a result, the Supreme Court ruled that in similar cases, interest obligation for a space in advance duty payment (due to the incapability of the duty deductor to abate duty) would not crop.

Data of the case

The taxpayer is a non-resident establishment formed in Japan that does business in India. Through its liaison services in India, it engages in trading conditioning in carbon crude canvas, LPG, ferrous goods, artificial ministry, mineral, non-ferrous essence and products, fabrics, vehicles, and so on.

During Assessment Years (AY) 1998-99 to 2004-05, the duty officer, after rejecting the taxpayer’s contentions, calculated the income attributable to the taxpayer’s Indian operations and, as a result, levied interest for the space in payment of advance duty. About the duty of interest on space in the payment of advance duty, the taxpayer appealed with the Commissioner of Income- duty (Appeals) (CIT (A)). The CIT (A) determined that the taxpayer must pay advance duty indeed though no TDS was subtracted by the payer. As a result, it determined that interest would be applicable in the current situation.

Following that, the Income Tax Appellate Tribunal (ITAT) (1) ruled in favour of the taxpayer, citing the Special Bench decision in the matter of Motorola Inc as well as earlier High Court (HC) opinions. The duty department brought the case to the High Court. The High Court addressed the legal question of whether the charge of interest for a space in TDS payment is needed and leviable automatically. It also addressed the question of “ when a payer fails to abate TDS in a sale and transfers the full consideration inclusive of TDS to the payee/ assessee, can the payee assessee abate the quantum, therefore, entered from the advance duty outstanding by it?”

The High Court cited numerous High Court precedents to find that TDS should be disregarded/ barred when calculating the advance duty liability. Likewise, the High Court stated that a taxpayer can not be punished for a failure on the side of the duty deductor. The duty department has later taken the matter before the Supreme Court (SC).

Contentions of the duty department

The contentions made by the income duty department before the Supreme Court were as follows

The responsibility to pay advance duty is distinct from the demand of the deductor to abate TDS.
Interest is levied to repay the government for the detention in the recovery of levies.
When there are two options for duty collection, one from the taxpayer and one from the duty deductor, the duty department’s decision can not be limited.
It was claimed that the vittles concerned with interest calculation (under the Income Tax Act) are stand-alone. As a result, the language employed in laws dealing with advance duty calculation can not be incorporated into sections dealing with interest calculation.
The Profit submitted that the term deductible would relate to the TDS that was d or collected and that the Payee/ Assessee would be entitled to abate TDS from the Advance duty only after the payer had transferred the proceeds of the sale to the Payee/ Assessee after abating the TDS.
Amusement on this supposition, the Profit claimed interest from the assessee under Section 234B of the Act for short payment of advance duty.

Contentions of the assessee

The contentions of the taxpayer before the Supreme Court were as follows

The taxpayer contended that the rules governing the manner of calculating interest under the Income Tax Act can not be interpreted in isolation from the vittles governing the calculation of advance duty liability.
Away from the cases cited by the HC, the taxpayer reckoned on the Supreme Court’s decision in the matter of Ian Peter Morris. TDS and direct payment of duty, it was contended, are two distinct mechanisms of duty recovery under the Act. As a result, the taxpayer can not be punished for the failure of the duty deductor to misbehave.
It was asserted that a prospective obligation to pay advance duty and a consequent failure to do so should be proved tourist liability. These prerequisites haven’t been met in this case.
The Assessee contended that the term “ deductible” must be demonstrated literally, and hence whether or not the TDS was subtracted by the payer was immaterial. In any situation, the Payee/ Assessee would be allowed to abate sum from the advance duty liability of the assessee.
The Assessee further claimed that under Section 201 of the Income Tax Act of 1961, the Profit might pursue the Payer for failure to abate TDS, and hence the Payee shouldn’t be obliged to pay any interest under Section 234B of the Income Tax Act.

Compliances of the Supreme Court and its Judgement

The Supreme Court said that the issue, in this case, rests around the meaning of the word deductible or collectable at Source.’

Under the before clauses of section 209 of the Income Tax Act, the quantum of advance duty liability is determined by abating the quantum of income duty that would be deductible or collectible during the financial time from income duty on estimated income. Hence, in the case where the taxpayer receives or pays any quantum (on which the duty was deductible or collectable) without the factual deduction or collection of duty, it has been ruled by the court that he’s not liable to pay the advance duty to the extent the duty is deductible from similar quantum.

And toa taxpayer liable for payment of advance duty about income which has been entered or paid without the factual deduction or collection of duty, the Income Tax Act was amended to change the above-mentioned section to give that if an assessee has attained any income without deduction or collection of duty, also he’ll be liable to pay the advance duty in respect of similar income.

The Supreme Court took notice of the correction made by the Finance Act of 2012. According to the said correction, a taxpayer who receives any income without TDS or TCS is needed to pay advance duty liability on similar income as well. The revision went into effect on April 1, 2012, and it applied to situations of advance duty payment in the financial time 2012-13 and posterior.

In this situation, all of the times are from the forenamed correction. Therefore, counting on an earlier judgement, the Supreme Court emphasised that in dealing with construction issues, unborn legislation may be pertained to for correct interpretation when the earlier Act is vague or nebulous or readily able of further than one meaning. As a result, the Supreme Court ruled that if the income duty department’s interpretation is espoused and accepted in this case, the correction made by the Finance Act 2012 will be rendered empty.

As a result, the SC held that, for the correction to have the willed effect, it must be understood that, for all times before hee financial time 2012-13, the taxpayer is entitled to reduce the quantum of TDS or TCS when calculating the advance duty liability, even though the full quantum without any deduction.

The Supreme Court also rejected the argument of the duty department that vittles dealing with interest calculation must be read in isolation, holding that while the description of‘ assessed duty refers to duty subtracted or collected at source, the pre-condition for attracting interest must inescapably be met.

The Supreme Court decided that the taxpayer couldn’t be held liable for dereliction in the payment advanced quantum of income duty that’s deductible or collectable at source may be subtracted by the taxpayer when calculating the advance duty liability.

Conclusion

This judgement gives important- demanded clarity on the calculation of interest obligation on a space in advance duty payments, where the whole quantum of income was chargeable for TDS. Given the variations made by the Finance Act of 2012, this case may not be useful for FY 2012-13 onwards, but it’ll go a long way towards resolving ongoing controversies about times previous to FY 2012-13.

ITR Form Capital Gains and Tax Exemptions.

Regardless of the amount obtained or lost, capital gains or losses must be disclosed when filing an income tax return. So, what exactly is capital gain, and how does one report capital gains on an ITR? In this post, we’ll discover out.The earnings made from the selling of capital assets are referred to as capital gains. There are two kinds of capital gains: short-term and long-term. Long-term capital assets are retained for at least 36 months, and short-term assets are held for a shorter length of time.

Capital gains occur when you sell a capital asset for a higher price than you paid for it. Capital assets are investment products such as mutual funds, stocks, or real estate products such as land, houses, and so on.

Capital gain refers to an increase in the value of these investment goods when they are sold. Similarly, capital loss is utilised when the asset’s value falls below its acquisition price. A realised capital gain occurs when an asset is sold for a higher price than it was originally purchased for.

Ways to calculate capital gains:-

Capital gains tax on short-term profit

The following formula is used for short-term capital gains:

Short-term capital gain = (cost of purchase + cost of improvement + cost of transfer) – full value consideration

Taxation of long-term capital gains

The following formula is used to calculate long-term capital gains:

Long term capital gain = full value of consideration received/acquired – (indexed cost of acquisition + indexed cost of improvement + cost of transfer), where indexed cost of acquisition = cost of acquisition x cost inflation index of transfer/cost inflation index of acquisition.Indexed cost of improvement = cost of improvement x cost inflation index of transfer year / cost inflation index of improvement year

The capital gains tax rate

The rate at which capital gains in ITR form are computed may differ from year to year. Individuals are taxed at a rate of 20.6 percent on long-term capital gains. There are no deductions available under capital gains tax. It should be emphasised that the short-term capital gains tax is levied based on the tax bracket into which an individual falls.

Gains on the sale of immovable property

Gains from the sale of immovable property within two years after acquisition are termed short term capital gains, whereas gains beyond two years are considered long term capital gains. Long-term capital gains are taxed at a rate of 20% with indexation, whilst short-term capital gains are taxed at the slab rate.

Gold and bonds, as well as jewellery and bullion, are subject to capital gains tax regardless of how they were obtained—self-purchased, gifted, or inherited. If it is sold within three years of the acquisition date, the gains are considered short term capital gains; otherwise, the gains are considered long term capital gains.

Short-term capital gains from the sale of gold are taxed at the slab rate, whereas long-term capital gains are taxed at 20% plus indexation. Gains from the transfer of shares and equity-oriented mutual funds within one year of acquisition are considered short-term capital gains, whereas gains beyond one year are considered long-term capital gains.

Capital Gains Disclosure on ITR Form: Tax Exemptions

The government provides a number of exemptions that can be claimed on capital earnings generated. The list of exclusions that can be claimed with regard to capital asset gains is detailed below.

According to Section 54 of the IT Act[1,] a person is eligible to a tax exemption on profit made if the entire profit amount is utilised to acquire a property. The seller may buy a new house within two years after the sale of his old property, or he may build a new house within three years of the sale.

Section 54 EC exempts an individual from paying taxes if the whole capital gain is invested in bonds issued by the NHAI (National Highway Authority of India) or Rural Electrification Corporation. There is a limit to exemption under Section 54 EC.

Capital gains will not be taxed on the sale of property if the entire amount is invested in the formation of a small or medium-sized enterprise. To qualify for tax breaks, manufacturing tools and machinery must be bought within six months of the sale.

Capital losses can be used to balance the tax effect on capital gains in the computation of tax, although only long-term capital losses can be set off against LTG. Short-term capital losses can be offset against short-term and long-term capital profits.

December 15, 2021December 15, 2021

Brief Description For Online Bihar Business Tax Registration

In India, Professional tax is levied on persons working in the government and non-government sectors, or by the respective state governments in any profession such as chartered accounts, lawyers, doctors, etc. The tax levied in this manner differs from the state: the state due to the difference in tax rates set by the respective state governments. Professional tax collected from a salaried employee is considered a deduction under the Income Tax Act. This article explores various aspects of Bihar commercial tax.

Bihar State Government collects Bihar Professional Tax from persons earning from salary or occupations (e.g. Chartered Accountant, Lawyer etc.) or engaged in business or business, professional tax has to be paid. To pay professional tax, registration has to be done as per the rules laid down by the respective state governments. In this article, we will focus specifically on the registration process for professional tax.

Bihar Professional Tax Act, 2011

The Professional Tax Department, regulated under the Government of Bihar, is responsible for collection of professional tax arrears from professionals in the state. According to the provisions of the Bihar Professional Tax Act, 2011, a provision has been set to impose a business tax of 2500 (as maximum) and a yearly (minimum Rs. 1000) on persons associated with a business or profession.

In India, professional tax is regulated by the respective state governments on persons working in government and non-government sectors or from income from business or business or by profession such as professionals, company secretaries, chartered accountants etc. The professional tax levied on such persons varies. The amount recovered as professional tax from a salaried employee is considered a deduction under the Income Tax Act.

The Professional tax collected by the Bihar State Government is included under the Bihar Professional Tax Act, 2011.The Commercial Tax Department is responsible for collecting professional tax in Bihar. Maximum of Rs. 2500 and a minimum of Rs. 1000 per year can be collected as professional tax. The state government does not charge any application fee for professional tax registration.

Benefits of professional tax registration in Bihar

Benefits for professional tax registration are as follows:

It helps to comply with state laws.
It protects the interests of the employer and the employee or the person engaged in the business / business, or the practice of any profession.
The commercial taxes deducted are in accordance with the slab rates prescribed by the state government in accordance with the applicable regulations and act.

Documents Required for Professional Tax Registration in Bihar

Some essential documents have been prepared for professional tax registration in Bihar, which are as follows:

Filled application form
Address proof of the applicant (which includes telephone, electricity bill or driving license or copy of passport)
Applicant’s ID proof (which includes voter ID card or Aadhaar card or driving license or copy of passport)
PAN card copy or PAN of partner or proprietor or doer or PAN card of employer
Bank account details (including a passbook or copy of bank account details showing bank name and bank account number.)
Two passport size photos

Tax Slab Rate for Bihar Professional Tax

Professional tax slab rates in Bihar are determined according to the Businesses, Trades, Calling and Employees Act, 2011:

S.N.	Class of Taxpayer	Tax Amount Payable
1.	Salaried individuals have income between Rs 3 lakh to Rs 3 lakh per year and range between Rs 5 lakh and Rs 5 lakh per annum. Annual income of more than 10 lakh rupees per year	1000 rupees per year 2000 rupees per year 2500 rupees per year
2.	Dealer registered under Bihar VAT Act, 2005 or registered only under Central Sales Tax Act, 1956: Sales or purchase turnover is up to Rs 10 lakhs, with sales or purchases ranging between Rs 10 lakhs and Rs 20 lakhs. A turnover of Rs 20 lakh per year for sale or purchase, turnover of Rs 20 lakh and annual turnover of sale or purchase is up to Rs 40 lakh. Over 40 lakh rupees per year	Nil (Rs. 1000 per year. 2000 per year. Rs. 2500 per year)
3.	Holding is permitted for transportation under the Motor Vehicles Act, 1988, which can be used for fire or reward, where any person holds a permit for: Bus or truck like any taxi passenger car or any vehicle	Rs 1000 per year Rs 1500 per year
4	Companies registered under the Companies Act, 1956 and engaged in any profession or business or calling	Rs 2500 per year

Process For Professional Tax Regulation in Bihar

Some steps have been made for registration of Bihar professional tax, these steps should be followed:

Step 1: Visit the official website of the Commercial Tax Department of the Government of Bihar.

Step 2: Under e-Services tab, click on e-registration.

Step 3: After that the next page will appear, select the Commercial Tax option.

Step 4: Then the applicant has to fill all the required details and upload the related documents and then click on the add button.

Step 5: Then click on submit.

Step 6: Acknowledgment receipt will be generated and the applicant will need to save the receipt for future reference.

Once the registration is approved through the concerned authority, the applicant is notified via an SMS or email. The registration process is usually 15 days from the date of application and after filling the verification form. The deputy commissioner, assistant commissioner and commercial tax officer are designated as the authority to grant a professional tax registration certificate.

Track Professional Tax Registration in Bihar

The application registration status can be easily checked by visiting the official website and then selecting the registration type. Then enter the application number on the acknowledgment receipt.

Penalty in the case of Professional Tax in Bihar

If a taxpayer fails to pay the professional tax within the specified time, the assessing authority may impose a penalty of 2% of the tax amount for each month until the default continues.

Conclusion

Bihar Professional Tax is applicable to persons who are receiving salary from their employer or engaged in trade / occupation or practice any business. It is clear from the article above that state governments set the tax slab rate to levy professional tax.

August 31, 2021August 31, 2021

Secretarial Audit in India: Process and Benefits

Secretarial Audit is an important method for all organizations. It is a part of total compliance management in an organization. It is an effective tool when it comes to corporate compliance management. In this blog we will discuss in detail about the secretarial audit in India, its process and benefits.

What is the requirement of secretarial audit in India?

It is a process to check compliance to the provisions of law, rules and regulations, maintenance of books etc. by an independent professional to make sure that the company complies with the legal requirements and procedural needs and also follows the due process. It is a mechanism to monitor compliance with the requirement of stated law.

Objective of secretarial audit

Following are the objectives of secretarial audit-

To check and report on the competition of compliances according to provision of law.
To point out the non-compliances.
To safeguard the interest of the stakeholder that includes customers, employees etc.
Compliances are to be followed to avoid any unwarranted legal action or penalties.

Applicability of Secretarial audit in India

The mandatory provision regarding applicability of secretarial audit are-

Every listed company
Every public company having a paid up share capital of Rs. 50 crore or more and having turnover of Rs. 250 crore or more.
Company having outstanding loans or borrowing from banks or public financial institutions of Rs. 100 crore or more.

Scope of Secretarial Audit

Scope comprises verification of the compliances under the following-

Companies Act, 2013 and the rules made there under;
Securities Contracts (Regulation) Act, 1956 and the rules made there under;
Depositories Act of 1996 and the rules made there under;
Foreign Exchange Management Act of 1999
Regulations and guidelines provided under the Securities and Exchange Board of India, Act 1992;
Reporting on the compliance of secretarial standards issued by Institute of Company Secretaries of India; and
Other laws are applicable specifically to the company that means all the laws that are applicable to specific industries.

Appointment of Secretarial auditor

Process of appointment of a secretarial auditor are as follows-

Firstly, consent of the secretarial auditor is required.
Thereafter, a certified copy needs to be filed of the resolution passed in the Board meeting with the Registrar of companies in MGT-14.
Make an appointment of such an auditor in the Board meeting and fix the remuneration in the meeting.

Process of secretarial audit in India

The process are as follows-

Appointment of secretarial auditor.
Communication to earlier incumbent
Primary discussion will take place about the company with secretarial auditor
After the meeting an audit plan is finalized and the staff is briefed.
Testing, interview and analysis
The working papers are prepared
Audit summary for discussions
Finally the secretarial audit will be submitted.

Documents required for secretarial audit

Following are the documents which are required for secretarial auditing-

Charter documents and statutory registers
Birds and general meeting minutes and notices
The audited financial statement as well as last year’s secretarial audit report
Annual performance reports, lease deeds,bonds and return.
Registers maintained under the labour law
Details of remuneration and sitting fees paid to directors
Details of CSR amount
Details of bank account for dividend
ECB returns details

Benefits of secretarial audit

It’s an effective mechanism to ensure the compliance with the procedural and legal requirements;
It promotes the level of confidence to directors and key managerial personnel etc.
It ensures that legal and procedural requirements are met that in turn allows the directors to concentrate on crucial business dealings;
It strengthens the goodwill of the company for their regulators as well for their stakeholders;
It is also an effective governance and compliance risk management tool;
It, further, helps an investor in analyzing the compliance level of companies thereby increasing the reputation also;
It administers professional discipline and also self-regulation;
It may be an effective due diligence performance for the prospective acquirer of the company or a partner of a joint venture; and
It helps to detect any non-compliance and helps in taking corrective action.

Conclusion

Secretarial audit in India is independent and it is beneficial for the companies who follow it as it improves their operations. It can help an organization in completing their objectives.

May 13, 2021May 13, 2021

Income Tax Compliance Deadlines Extended Amid Covid-19

As a major relief for taxpayers, the government has extended compliance deadlines relating to income tax as well as the main tax for Google and service tax. The government has waived late fees to reduce compliance burden amid the second wave of the Covid-19 epidemic. With the rapidly growing Covid-19 cases in the country, experts are of the opinion that the government may need to push the deadline.

Compliance extension Related to Tax, Accordingly Central Board of Direct Taxes

The CBDT said in a statement that due to adverse conditions caused by the Kovid-19 epidemic and after considering multiple requests from taxpayers, tax advisors and other stakeholders across the country, requesting an exemption in compliance dates, the government today announced some Has extended the deadline. .

The Ministry of Finance had received several industry representations from MSMEs (Micro, Small and Medium Enterprises) for up to 3 months of breath taking. The due date is extended in respect of FY 2019-20, GSTR-1 (Sales Return), GSTR-4 (Annual Composition Return), GSTR-3B (Summary Return), filing or amended income tax returns for filing appeals. And payment of taxes. In addition, the rate of interest has been rationalized and late fees have also been waived in many cases.

CBDT Exemption given to Taxpayers

The list of exemptions granted to taxpayers with tax-related compliance between Kovid-19 is as follows:

The appeal to the Commissioner under Chapter XX of the Income Tax Act has been extended till May 31, 2021 or for the time conferred under that section, whichever is later. Earlier, the deadline was 1 April 2021.

The objection to the Dispute Resolution Panel under Section 144C of the Income Tax Act has been extended till May 31, 2021 or for the time provided under that section, whichever is later. The first filing deadline was 1 April 2021.

In response to a notice under section 148 of the Income Tax Act, the income tax return has been extended till May 31, 2021, or the time allowed under that notice, whichever is later. The first filing deadline was 1 April 2021.

Filing of amended returns under sub-section (4) of sub-section (5) of section 139 of the Income Tax Act for the assessment year 2020-21 and filed under section 139 of the Income Tax Act for the assessment year 2020-21 can go. The provision to be filed on or before 31 March 2021 is certain.

Payment of tax deduction under Section 19-1A, Section 194-1B and Section 194M of Income Tax Act and filing of challan cum statement for deducted tax can now be paid on or before 31 May 2021 and furnished. can be done. Before this it had to be done first. Paid and furnished by 30 April 2021 under Rule 30 of the Income Tax Rules 1962.

Statements in Form 61, details of declarations received in Form 50, can be furnished on or before 30 April 2021.

Extension of GST Compliances

The Ministry of Finance has noted nine changes in GST compliance requirements. Notification has been issued based on the recommendations of the GST Council, which is as follows:

Businessmen with a turnover of more than 5 crores in the preceding financial year waive their late fees when they fail to submit their returns in GST Form-3B within 15 days from the due date for March and April.

Businesses with a turnover of up to Rs 5 crore, delay charges are waived for up to 30 days during two months. Taxpayers have a turnover of up to Rs 5 crore, a 30-day window applicable from January to March.

The date of submission of returns in Form GSTR-4 of CGST Rules, 2017 for the financial year ending 31 March 2021 has now been extended by one month to 31 May 2021.

The government also extended the period of declaration to be submitted in Form GST ITC-04 in respect of goods received from such laborers or such laborers during the period from 1 January to 31 March to 20 May 2021.

The government gave the officers more time to perform their statutory duties in view of the raging epidemic.

Expert Observations Detailing Tax Related Compliance

As you will be aware of the fact that many parts of India are facing some kind of bandh. Tax experts believe that SMEs would have been one of the most affected areas had the tax related compliance deadline not been extended.

Shailesh Kumar, Nangia and company LLP partner, are of the opinion that the government has given much needed compliance relief to the taxpayers, and if the situation in the country does not improve in future, the government may have to push these deadlines. A large number of people reel under the epidemic.

EY’s tax partner Abhishek Jain said that with the unprecedented boom in epidemics and lockdowns in many parts of the country, many industry players will find it difficult to meet the GST compliance deadline. Therefore expansion will provide much needed relief.

Sachin Taparia, president and founder, local circles said the government may have to extend the deadline until June 30, unless the small businesses are prevented from filing, the lockout and ban will continue until May 24.

Also Read : How to file income tax for private limited company ?

Conclusion

Likewise, this is no doubt a much-needed relief for taxpayers and businesses as the deadline for tax related compliance has been extended. The Covid-19 epidemic has caused so much uncertainty in everyone’s mind that it has become mandatory to make informed decisions. The way things are moving, we may see another expansion in the future.

March 12, 2021March 12, 2021

How to save Income Tax through Tax Planning in India

For many people Income tax becomes challenging which could be because of many reasons. Therefore, it is important to do tax planning and to take expert advice over your Income Tax. Proper tax planning can help you in saving tax. In this blog we will discuss how proper tax planning can help you in saving tax.

What is Tax Planning in India?

So basically tax planning is understanding or analysing one’s financial situation from a tax efficiency point of view so as to plan one’s finances in the most optimized manner.

Tax planning helps taxpayers to make the best use of tax exemptions, deductions and benefits to minimize his tax liability every year.

Therefore individuals, businesses and organizations with the help of experts or by themselves do tax planning in order to get benefitted from the taxes paid on their annual income and profits.

What are Different Methods of Tax Planning?

Following are the types of Tax planning-

Short term Planning of Income Tax- The tax planning in this method is done closer to the financial year and selecting the best investment method to save tax. However, at last moment people may make hasty decisions while filing ITR.
Long Term Planning of Income Tax- Starting Tax Planning at the start of your financial year is known as long term tax planning.
Purposive Planning of Income Tax- Purposes planning of Income tax means planning the taxes in order to avail benefits by taking right investment decisions through correct selection of investment, replacing the assets, business expansion, programme etc.
Permissive Planning of Income Tax- This means Tax planning is done in order to avail tax concessions, deductions and other exemptions permitted under law.

Tips to Save Income Tax

Here we will discuss about Tips to save Income Tax and they are as follows-

Tax Saving Through Interest Payment on Loan- The Central Government has annonces certain tax benefits if you are repaying some education loan, car loan, home loan and personal loan. There are some investments that are considered under section 80-C. Tax benefits are also provided to individuals if they are paying Life Insurance premium (LIC) or have subscription to units of Mutual Funds equity. This could turn out to be the best tax saving option if it is executed wisely.
Buy a Health Insurance Policy- As per section 80D of the Income Tax Act, premium paid on health Insurance policies are allowed as deduction from total income. Benefit of upto 15000 could be availed. This is also a great option to save tax.
Make a Donation- section 80 G of the Income Tax Act allows tax deductions, if contributions are made to a charitable trust or to Non Governmental organizations. This will not only help you to save tax but also brings some virtue.
Equity Mutual Funds- Investing in Equity Mutual Funds also makes your profits 100% non taxable. However it is advisable not to sell their equity shares before 12 months or one year as income tax could incur on your profits.
House Rent Allowance- If you are staying in a rented accommodation, then you can claim house rent allowance to save tax on house rent.
Medical Bills- You can use the receipts of purchase of medicine which can benefit you in saving tax at the end of year. A specified amount is not taxable for you and your family.
Daily Travel Allowance- You can also avail tax benefits from your company for conveyance. It will help you in saving tax on conveyance allowance. However, it is not required to submit any proof regarding the same.

How can you smoothen your tax benefit at the last minute

Following are the guidelines on how to save taxes at the last minute-

Calculate- Calculate how much you need to invest. Consider various deductions for this that you are eligible for.
The Right Product- If you make a rush, then you may end up making the wrong investment. Therefore always analyze tax saving investment products on parameters like liquidity, lock in, expected return, capital risk and taxation.
Prepare a budget- It is always beneficial to make investment budget for a few months as last minute saving could put more strain on your finances.

Therefore, proper tax planning could also help you to save in your income tax. You can take assistance from financial experts like Chartered Accountants so that they can guide you in a better way on how to invest and where to invest in order to save income tax.

BIAT Consultants provide best financial assistance on how you can save income tax.

November 26, 2020November 26, 2020

Which are Taxable Gifts? Rules Governing Gifts Attracting Cess

Introduction

In India during festive periods a lot of gifts are exchanged among family members, friends etc. Getting and giving gifts are quite usual during the festivals. This is the way Indians show their love and compassion among themselves. Did you get any gifts during the ongoing festive season? In this write up, we will be touching upon the taxes on gifts during the festive season. Gifts can easily warm the cockle of your hearts but they come with certain strings attached. You have to report any income apart from salary (like a gift, the bonus from the employer, prize, lottery etc) to the taxation department in your IT Returns. Several taxpayers generally confront problems while filling particulars of such receipts in ITR. This write up can easily clear any such confusion.

How Gifts are taxed?

The Income Tax Act 1961 clarifies every kind of receipts as personal earnings and the same holds true for gifts as well. In case the value of the gifts you get in a fiscal year goes beyond Rs 50,000, the amount comes under the ambit of taxation. The gifts could be of any kind- jewellery, cash, shares, movable/immovable property etc. If you have got any gift (in cash or kind), it has to be reported in the ‘income from other sources’ section in your IT Returns. Such receipts will be levied cess according to the tax slab relevant to you. This apart, 4% of cess will be levied on them. There is no provision of allowance or deduction (u/s 80 C or 80 D) on such an income.

Tax-free Gifts

But, one important thing you need to look into. The above-given regulation is not applicable if you get the gifts from your relative as presents. However, this does not imply that you can address the ‘giver’ as your relative even if he or she happens to be not. To clear the air, there are Income Tax rules that clarifies relatives from whom you can take ‘tax-free’ gifts. These include:

Parents

Spouse

Brothers and sisters of you/ your spouse

Brothers and sisters of your parents

Straight descendants of you/ your spouse

Consider these as well

Assuming that you got a car from your relative for your wedding. It is essential to ensure that the date specified in the gift deed is the date of your marriage or a date in close proximity. Any gift you get due to inheritance (or via a will) cannot be taxed. But, if you happen to produce any rental or other income out of such a gift (property or house), the same can be taxed under the section ‘income from other sources’.

November 18, 2020November 18, 2020

NRIs get no relaxation regarding IT return filing date

Despite Coronavirus providing extension to the residing taxpayers of India, the Non-Resident Indians have not enjoyed similar privilege. In a surprising step, NRIs were not offered any grace period with regard to their Income Tax return filing date. Hence, no relaxation has been given for NRIs in the income tax filing date.

Last day for NRIs to file Income Tax

For NRIs, it’s generally July 31st, after the conclusion of the last fiscal year. Finding out that the date provides sufficient enough relaxation for the Non resident Indians, it is easy to understand why no relaxation was offered to NRIs.

Is it common for NRIs to file Income Tax Returns?

Most people are in doubt regarding NRIs filing Income Tax returns. Well, their doubt is justifiable, as there are only real conditions under which an NRI is needed to file Income tax returns. The Income Tax conditions for an NRI are:

In case the net (taxable) income of the NRI is over INR 2.5 lakhs, then the NRI is legally bound to file the Income tax return.
In case the NRI has put a sum that happens to be over INR 1 Crore in one or more accounts with a bank or cooperative bank of India during the fiscal year, then the NRI in question needs to file the Income tax return.
In case the NRI has coughed up personally or with someone, an amount of over INR 2 lakh for traveling overseas, then the person is legally bound to file Income tax returns.
In case the NRI has consumed over INR 1 lakh via electricity utilization, then during that financial year, the concerned NRI needs to file an Income tax return.

Concluding Thoughts

If you happen to be an NRI (Non-resident Indian) who comes under the categories mentioned above then you don’t have to panic. The income tax filing experts at our disposal will assist you in filing your ITR returns in the prescribed time limit. In case you require any other help, then reach out to our team at any given time without any hesitation.

December 12, 2018

NOTICE UNDER SECTION 142(1) OF INCOME TAX ACT 1961

Notice under section 142(1) of the Income Tax act is issued by a tax authority generally after ITR is filed and before Income tax assessment in the form of Inquiry.

Generally during the course of Assessment the Assessing officer sends the notice for demanding documents , books ,other documents or details for verifications and the Assessee is bound to produce details before assessing authority.

In case of Non- filing of Income tax return also Notice under section 142(1) is received and thereunder time frame is given to file ITR .

PENALTY

In case of non compliance the AO has to power to levy penalty of Rs. 10000/- for each failure under section 271(b)

PROSECUTION

Prosecution under section 276D for non compliance of section 142(10 is imprisonment upto 1 year with or without fine

NOTICE UNDER SECTION 143(2)

Notice under section 143(2) is issued to Assessee when case is taken under scrutiny by Income tax authority.

When notice under section 143(2) is issued and also Notice Under section 142(1) is issued to Assessee , informations as required time to time by assessing authority is submitted to Assessing authority who based on information submitted assess the case and issues final order for assessment.