November 6, 2024

Section 44AB of the Income-tax Act, 1961, states the regulations for the tax audit of a firm or entity. The tax audit ensures that the taxpayer has provided complete and accurate information regarding his income, deductions, and taxes. This is to be conducted by a Chartered Accountant. The entity has to maintain proper books of accounts to be audited by a Chartered Accountant. The books of accounts should comply with the rules and regulations of the Income Tax Act 1961. Section 44AB of Income Tax Act, 1961 defines the rules and regulations for the tax audit of an entity or a firm. This tax audit is conducted to ensure that the taxpayer has offered all the required details about his income, taxes, deductions, etc. Note, this tax audit is run by a Chartered Accountant (CA). What is a Tax Audit There are various kinds of audits being conducted under different laws such as company audit/statutory audit conducted under company law provisions, cost audit, stock audit etc. Similarly, income tax law also mandates an audit of certain taxpayers called as ‘Tax Audit’. As the name itself suggests, tax audit is an examination or review of accounts of any business or profession carried out by taxpayers from an income tax viewpoint. It makes the process of income computation for filing of return of income easier. Objectives of Tax Audit Ensure proper maintenance and correctness of books of accounts and certification of the same by a Chartered Accountant(tax auditor) Reporting observations/discrepancies noted by the tax auditor after a methodical examination of the books of account To report prescribed information such as tax depreciation, compliance of various provisions of income tax law, etc. Computation of tax and deductions becomes easy with auditing. The major role is to verify the information filed in the income tax return regarding income, tax, and deductions by the taxpayer. What is Section 44AB of Income Tax Act The Income Tax Act 1961 defines the regulations and provisions associated with tax audits under section 44AB. This section outlines the specific regulations for maintaining proper books of accounts and essential financial records by the taxpayer. This section is useful for recording complete information about a taxpayer’s income, tax, deductions, etc. Once the audit is completed by a Chartered Accountant, he forwards the audit report to the income tax department. Applicability of Sec44AB of Income Tax Act (i) the aggregate of all amounts received, including the amount received for sales, turnover, or gross receipts during the previous year, in cash, does not exceed 5% of the said amount; and (ii) Aggregate of all payments made, including amount incurred for expenditure, in cash, during the previous year does not exceed 5% of the said payment: Threshold limit would be 10 crores instead of Rs 1 crore (from 1 April 2021, for Financial Year 2021-22 – Rs 5 crores) A person in a certain profession with a gross receipt of more than Rs 50 lakhs during the previous year An individual who has opted for Sections 44ADA and Section 44AD but claims his income is lower than the profits calculated under presumptive taxation and income is more than the taxable amount An individual who has opted for Sections 44AE, 44BB, 44BBB but claims that his/her income is lower than the profits calculated under the said sections in any previous year. Who is Required to do an Income Tax Audit under Section 44AB Category of Person Threshold for Tax Audit Business   Carrying on a Business (not opting for a presumptive taxation scheme) Total sales, turnover or gross receipts exceed Rs. 1 crore in the Financial Year (or) If cash transactions are up to 5% of total gross receipts and payments, the threshold limit of turnover for a tax audit is increased to Rs 10 crores (w.e.f. Financial Year 2020-21) Carrying on business eligible for presumptive taxation under Section 44AE, 44BB or 44BBB Claims profits or gains lower than the prescribed limit under the presumptive taxation scheme Carrying on business eligible for presumptive taxation under Section 44AD Declares taxable income below the limits prescribed under the presumptive tax scheme and has income exceeding the basic threshold limit Carrying on business and not eligible to claim presumptive taxation under Section 44AD due to opting out for presumptive taxation in any one financial year of the lock-in period (i.e., 5 consecutive years from when the presumptive tax scheme was opted) If income exceeds the maximum amount not chargeable to tax in the subsequent 5 consecutive tax years from the financial year when the presumptive taxation was not opted for. Carrying on business which is declaring profits as per presumptive taxation scheme under Section 44AD If the total sales, turnover, or gross receipts do not exceed Rs. 2 crore in the financial year, then tax audit will not apply to such businesses. Profession   – Carrying on profession Total gross receipts exceed Rs. 50 lakh in the FY. – Carrying on the profession eligible for presumptive taxation under Section 44ADA 1. Claims profits or gains lower than the prescribed limit under the presumptive taxation scheme. 2. Income exceeds the maximum amount not chargeable to income tax. Business Loss   In case of loss from carrying on business and not opting for a presumptive taxation scheme Total sales, turnover or gross receipts exceed Rs. 1 crore. If the taxpayer’s total income exceeds the basic threshold limit but he has incurred a loss from carrying on a business (not opting for a presumptive taxation scheme) Carrying on business (opting for presumptive taxation scheme under section 44AD) and having a business loss but with income below the basic threshold limit Tax audit not applicable Carrying on business (presumptive taxation scheme under section 44AD applicable) and having a business loss but with income exceeding the basic threshold limit Declares taxable income below the limits prescribed under the presumptive tax scheme and has income exceeding the basic threshold limit FAQs Who can conducts income tax audits? A practising chartered accountant (CA) or relevant authorities can do

The Government of India affirmed the testimonials of the Commission directed to some alterations. These recommendations by the committee regarding the Payment of Bonus Act Ordinance, 1965 was proclaimed on 29th May 1965 and to restore the said Ordinance the Payment of Bonus Bill was presented in the Parliament. The Payment of Bonus Bill was relinquished by both the Houses of Parliament but the bill secured the assent of the President on 25th September 1965.  What are bonus payments? Bonus payments are additional pay given to employees apart from their salary. It is given by the employers as a remuneration for their dedication towards the company and work, which in turn helped the company achieve its business goals.  The underlying purpose of offering a bonus is to distribute the benefit received by the company to the employees. This added perk helps improve employee morale and productivity. It also encourages them to efficiently work towards their goals, thereby helping the company reach newer heights. What is the Payment of Bonus Act? The Payment of Bonus Act 1965 is applicable to all factories and companies who have 20 or more employees employed anytime with them during an accounting year. Also, as per the act, the bonus should be awarded on the basis of profit earned by the company or the productivity of an individual. If the number of employees in the company registered under this act drops below 20, they are still required to pay a bonus. The act states that a minimum bonus of 8.33% and a maximum bonus of 20% of wages can be awarded as a bonus to employees. Applicability of Payment of Bonus Act Companies that are well-defined under clause 2 of the companies act 194b  Organisations with 20 or greater than 20 employees anytime during an accounting year Some factories or companies in public sectors  Part-time employees Eligibility for bonus payments The Bonus Act is relevant for workers who draw wages/salary which is up-to 10,000/- per month. Also, only those workers are authorized for availing the bonus, who has served for at least 30 working days or more in an accounting year. Rate of Bonuses under the Payment of Bonus Act, 1965 The rate of bonus under the Bonus act accounted for 8.33% of the salary or wages of the employees in a year or Rs. 100, whichever is higher. In case the allowed bonus exceeds the expense of provision then the employer shall pay a maximum bonus. This must not surpass 20% of the salary or wages accounted for by employees. FAQs Are there deductions from bonus payments? If an employee has been a part of any misconduct during a financial year and if this has resulted in any financial loss to the employer, the amount of loss suffered can be deducted from the amount of bonus payable by the employer or the company and balance after such deductions shall be paid to the employee. What are the provisions related to start-ups or new establishments? Under the act, start-ups and new establishments are exempted from bonus payments for the first five years. Employers are eligible to pay statutory bonus only in the year in which they derive profit after the commencement of operations.

Preference shares, more commonly referred to as preferred stock, are shares of a company’s stock with dividends that are paid out to shareholders before common stock dividends are issued. If the company enters bankruptcy, preferred stockholders are entitled to be paid from company assets before common stockholders. What is Redemption of Preference Shares? Redemption of preference shares is a process where a company buys back its issued preference shares from shareholders. This usually happens on a predetermined date and often at a pre-agreed price. This process effectively removes preference shares from circulation, and shareholders regain their investment value. Companies use redemption as a financial strategy to adjust their equity structure or to return surplus cash to shareholders, particularly for preference shares with a fixed redemption period. Reasons for Preference Shares Redemption Financial Restructuring: Companies may redeem preference shares to optimize their capital structure. This can include adjusting the debt-to-equity ratio or altering the balance between different types of equity to suit the company’s financial strategy better. Improving Financial Ratios: Redeeming preference shares can improve certain financial ratios, such as earnings per share (EPS), which can make the company more attractive to investors. Tax Efficiency: Sometimes, redemption is driven by tax considerations. Preference dividends may not be tax-deductible, whereas interest on debt is. Thus, converting preference shares to debt can be more tax-efficient. Market Signaling: Redeeming preference shares can signal to the market that the company is confident about its cash flows and financial health, potentially boosting investor confidence and the company’s stock value. Cost Reduction: If the dividend rate on preference shares is high, redeeming them can reduce the company’s cost of capital, especially if they can be replaced with cheaper sources of finance. Contractual Obligations: Some preference shares have a fixed redemption date or condition as part of their issuing terms. Companies must redeem these shares to adhere to these contractual obligations. Excess Cash Utilization: Companies with excess cash reserves might choose to redeem preference shares, using surplus funds effectively and providing value to shareholders. Period of Redeemable Preference Shares In terms of Section 55 (2) of the Act, a limited share company may issue preference shares which must be used for a period not exceeding 20 years from the date of issue. A company that participates in the establishment and management of infrastructure projects may issue preferential shares for more than 20 years but not more than 30 years, subject to at least 10% use of those shares annually from year 21 onwards or earlier, equally, at the discretion of preference shareholders. The term “infrastructure projects” means the infrastructure projects referred to in Schedule VI of the Companies Act, 2013. Procedure for Issuing Preferences Check whether the Articles of Association contain a preferential issuance clause. If not, amend AOA first.  Call a Board Meeting for the following purposes: Increase the budget of the Authorized Preferences, if required; Authorizing the issuance of preferred shares; Calling a General Assembly for the approval of shareholders.  Convene a General Assembly for the following purposes:  To increase the preferred budget allocation, if required; To authorize the issuance of preferred shares in the form of a Special Resolution. File form MGT-14 with the Registrar of Companies within 30 days of shareholder accreditation and a copy of the Special Resolution and Explanatory Statement.  Take the Application Fee for preferred shares through bank channels  Assign preferred shares within 60 days from the date of receipt of the application fee. Assignments may be made by the board or any committee or any other authorized person.  Form PAS-3- file within 15 days or 30 days as the case may be, from the date of distribution. A Share Certificate (Form SH-1) must be issued to potential shareholders within 2 months from the date of allocation. Redemption out of Company Profits When shares of preference are proposed to be used for corporate profits, it will be required, for that benefit, to transfer, an amount equal to the maximum number of shares to be used, the reserve, to be called a Capital Redemption Reserve Account, and the provisions of this Act in regards to share capital reduction apply as if Capital Redemption Reserve Account were paid-up. The capital redemption reserve account may be used by the company, in payment of non-issued company shares which will be provided to company members as fully paid shares. FAQs What are the tax implications for a company when redeeming preference shares? When a company redeems preference shares, it does not face direct tax implications, but the transaction may affect the company’s distributable profits and overall tax liabilities. The dividends paid on preference shares are subject to tax, and the redemption amount could impact the company’s tax filings if it leads to adjustments in capital structure or dividend distributions. How does the redemption of preference shares affect a company’s capital structure? The redemption of preference shares reduces a company’s preference capital and may impact its overall capital structure. It could lead to a decrease in debt-to-equity ratio if the redemption is funded through retained earnings or a new issue of shares. This process affects the company’s financial leverage and could influence investor perception.

A Partnership forms when two or more individuals make a decision that they will jointly begin a business or a venture by contributing assets in the form of investments, and this partnership is created only with the intention of making profits. In such a scenario, the individuals contributing to jointly begin a business are called partners, and the business is collectively called a partnership firm.  The formation and operations of a partnership firm are governed by the Partnership Act of 1932. The business operations, share of profit and loss, and investments are dictated by way of the partnership deed. The Act further provides for the various types of partnership firms and their partners.  Partnership Firm Partnerships are business organizations where two or more individuals agree to collaborate and share profits and losses. In a partnership, each partner contributes capital, skills, knowledge, or labor to the business, and all partners participate equally in its management and decision-making. Partnership Deed An agreement defining the terms and conditions of a partnership is called a partnership deed, also called a partnership agreement. The partnership deed defines each partner’s rights, duties, obligations, and rules for the partnership’s management, operation, and dissolution. The partnership deed typically includes the following information: Name and address of the partnership Names and addresses of the partners Nature of the partnership business Capital contributions of each partner The profit-sharing ratio among the partners Roles and responsibilities of each partner Rules for decision-making and management of the partnership Procedure for admission and withdrawal of partners Process for dispute resolution among partners Rules for dissolution of the partnership A well-drafted partnership deed can help to prevent disputes and conflicts between partners by clearly defining the terms of the partnership. It can also serve as a legal document that can be used to enforce the rights and obligations of each partner in the event of a dispute or legal proceeding. Types of Partnerships in India General Partnerships – In this type of partnership, every partner has the right to make decisions regarding the operation and management of the firm. However, the partner’s liability is unlimited, which means that under circumstances of financial loss by the partner, their personal assets can be used to make good the debts and clear the creditor’s claims. General Partnerships are further divided into two categories –  Partnership at will – A partnership at will is created without a specific time limit prescribed for its closure. This dissolution of the partnership is based upon the mutual consensus of the partners when and if the need arises. Hence, the dissolution of this type of partnership is not pre-decided. Particular Partnerships – This type of partnership is entered into with the end goal of carrying out a specific undertaking. It is for a particular project of temporary contract-based work or specific business only. Once the objective of the business has been fulfilled, the partnership is dissolved.  However, at the discretion of the partner, they may continue the partnership.  Limited Liability Partnership (LLP) – This type of partnership is different from a general partnership in the aspect that it is a corporate form of business organization. The liabilities of the partners are limited to the extent of their contributions towards the capital.  Hence, the partners are under no obligation to redeem the debts of their business with their personal assets. LLP is governed by the Limited Liability Partnership Act, 2008. Different Types of Partnership Firm These types of partnership firms are governed under the Limited Liability Partnership Act, 2008. The most important aspect of these types of partnership firms is that a partner is not held personally liable to clear the debts of the firm. That is to say that the personal assets of the partner will not be utilized towards clearing the debts of the firm.  The types of partnership firm are distinguished on the basis of their registration. However, it must be noted that registration of these types of partnership firm is not mandatory. Hence, both the registered and unregistered firms will be recognized by law and be valid.  The different types of partnership firm are as follows: – Unregistered Partnership Firm- The unregistered partnership firm is one of the two different types of the partnership firm. It is established by the execution of an agreement between the partners. It allows the partners to carry on a business in a manner that is stated and provided for in the agreement. Registered Partnership Firm- This is the second one in the different types of the partnership firm. This Partnership Firm has to be registered with the Registrar of Firm having jurisdiction over the place where the business is formed and situated. The registration of the firm includes payment of the registration fees to the registrar of firms. FAQs Under which act is a Partnership deed registered? A Partnership deed is always registered under the Indian Registration Act, 1908. What is the primary use of a Partnership deed? he Partnership deed usually serves as evidence in the eyes of the law in case a dispute arises between the partners.

TCS full form stands for Tax Collected at Source. The purchaser is responsible for paying the TCS bill, which is collected from the lessee or buyer. Although it is the responsibility of the buyer to pay TCS, the seller is equally liable to collect the TCS duly. To better understand the mechanism, look at an example. If a box of chocolates costs Rs. 100, the customer will pay Rs. 20 in all, with the Rs. 20 representing the tax received at the source. The money is then sent to a specific branch of a bank that has been approved to accept the payments. The seller is only responsible for collecting this tax from the buyer; he or she is not responsible for paying it. The tax is intended to be collected while selling merchandise, making purchases, issuing a cash refund from a customer, or issuing a check or draught, whichever method is paid first. The Income Tax Act of 1961, Section 206C, makes this provision. What is Tax Collected at Source (TCS)? TCS full form is Tax Collected at Source. It is payable by the seller who collects in turn from the lessee or buyer. The goods are as specified under section 206C of the Income Tax Act, 1961. Example for Tax Collected at Source If the purchase value of a box of chocolates is Rs. 100, the buyer ultimately pays Rs. 20 where the Rs. 20 is the tax collected at source. The amount is then given to certain designated branch of banks who have been given the authorization to receive the payments. The seller is only responsible for the collection of this tax from the buyer and actually not paying it himself or herself. The tax is meant to be collected when selling goods, transactions, when issued a receipt of a sum in cash from the buyer or when issuing a cheque or draft, whichever mode is payed by the earliest. TCS Applicability Seller Classifications of TCS  The sellers are known as TCs for the purpose of collecting tax at the source. TCS must be collected only by these vendors. The following is a list of those vendors: Central Government State Government Local Authority Statutory Corporation or Authority Company registered under the Companies Act Partnership firms Co-operative Society Any person or HUF whose accounts are being audited under the Income Tax Act for a specific financial year – Buyer Classifications of TCS A buyer is an individual who acquires goods of a specified nature in any certain sale or avails of a right to receive any such goods by way of a tender, auction, or any other way. A few types of buyers, including vendors, are exempted from paying tax at source to the seller: Public sector companies Central Government State Government Embassy of High Commission Consulate and other Trade Representation of a Foreign Nation Clubs such as sports clubs and social clubs Goods Covered under Tax Collected at Source (TCS) Trading of Goods – Since these goods are subject to duty, TCS collected at source will apply when they are used for trading purposes. Trading simply refers to the act of purchasing items from one party and selling them to another. Manufacturing, Processing, or Producing Other Products – When the above-mentioned goods are used for the purpose of manufacturing, processing, or producing other goods, they are exempt from tax. As a result, no TCS is needed. TCS (Tax Collected at Source) Rates in India for FY 2023-24 (AY 2024-25) Note that the interest charges for late payment of the TCS to the Government, for every month delayed is 1%. Type of Goods Tax % Liquor of alcoholic nature, made for consumption by humans 1.00% Timber wood when collected from a forest that has been leased 2.50% Tendu Leaves 5.00% Timber wood when not collected from a forest that has been leased, but any other mode 2.50% A forest product other than tendu leaves and timber 2.00% Scrap 1.00% Toll Plaza, Parking lot, Quarrying and Mining 2.00% Minerals that include lignite or coal or iron ore 1.00% Bullion that exceeds over Rs. 2 lakhs/ Jewelry that exceeds over Rs. 5 lakhs. 1.00% TCS Due Dates of FY 2023-24 Quarter Period Due Date of Filing 1st Quarter 1st April to 30th June March 31st 2nd Quarter 1st July to 30th September March 31st 3rd Quarter 1st October to 31st December Jan 15th 4th Quarter 1st January to 31st March May 15th Certificate of Tax Collected at Source This certificate must be submitted in Form 27D within a week of the last day of the month in which the tax was paid by individuals or organizations that collect the tax at source. When there are several certificates to be released for a buyer for TCS within the term that ends on September 30 and March 31 for a financial year, a combined certificate will be issued within a month of the last day of the year. The customer would have to order this certificate. If a TCS certificate is misplaced, the agency in charge of tax collection at the source may issue a new certificate that can be written and attested on plain paper that includes all of the relevant information from Form 27D. FAQs What are the repercussions of filing your TCS return late? A fine of Rs. 200 every day that the failure persists must be paid if the person fails to submit the TCS return by the due period specified in the income tax law.  What is the purpose of tax revenue? The revenue from income tax collected in advance by the tax department for a fiscal year corresponds to the tax collected at the source. It is used to improve underprivileged areas of society, educate children, build the nation’s infrastructure, etc.

The third iteration of the MCA21 site was introduced by the Ministry of Corporate Affairs in March 2022. The major goal of this new version, the V3 Portal, was to improve the delivery of services connected to Limited Liability Partnerships (LLPs). In particular, MCA stated that all LLP filings will move to an online format beginning on March 8, 2022, and continuing thereafter. MCA V3 Portal and MCA V2 portal Forms about companies and LLPs were formally submitted using the MCA V2 site. It’s crucial to remember that LLP services were previously available on the V2 portal but are now available on the MCA V3 platform. Simply said, only the LLP e-filing services will be enhanced and moved to the MCA V3 platform; all other services and forms, such as those about companies, will still be available and submitted through the MCA V2 portal. Users must log in or register on the MCA portal to access the V2 and V3 versions of the MCA Portal. Once signed in, the site provides distinct access points for LLP services (V3) and filings about companies and other matters (V2). The good news is that both V2 and V3 function faultlessly, offering consumers a seamless experience. What is the Method to Login in LLP V3 Portal on MCA? Move the cursor on the top right corner of the homepage Sign in /Sign up option. You are requested to kindly Create an MCA Business/ Registered User ID (if New User*) or login with an existing username and password (if any) enter the captcha and click on ‘LOGIN FOR V3 FILING’. On successful Login, an OTP will be generated and sent to the registered mobile number or Email ID, you are requested to kindly enter the same and proceed with login. After successfully login users would be able to fill LLP forms through utilizing the option MCA Services => LLP e-filling as shown in the screenshot below. The list of forms Name of the Form Web-Based LLP Forms RUN LLP To reserve a name for any new/existing LLP to be incorporated Form FiLLiP Form for Incorporation of Limited Liability Partnership Form 3 Information regarding limited liability partnership agreement and changes, if any, made therein Form 4 Notice of appointment, cessation, change in name/ address/designation of a designated partner or partner. and consent to become a partner/designated partner Form 5 Notice for change of name Form 8 Statement of Account & Solvency Form 11 Annual Return of Limited Liability Partnership (LLP) Form 12 Form for intimating other address for service of documents Form 15 Notice for change of place of registered office Form 22 Notice of intimation of Order of Court/ Tribunal/CLB/ Central Government to the Registrar Form 23 Application for direction to Limited Liability Partnership (LLP) to change its name to the Registrar Form 24 Application to the Registrar for striking off name Form 25 Application for reservation/ renewal of name by a Foreign Limited Liability Partnership (FLLP) or Foreign Company Form 27 Form for registration of particulars by Foreign Limited Liability Partnership (FLLP) Form 28 Return of alteration in the incorporation document or other instrument constituting or defining the constitution; or the registered or principal office; or the partner or designated partner of limited liability partnership incorporated or registered outside India. Form 31 Application for compounding of an offence under the Act Form 32 Form for filing addendum for rectification of defects or incompleteness Form LLP BEN-2 Form for filing declaration of significant beneficial ownership in respect tosection 90 Form 4D Form for filing declaration of beneficial interest in the contribution of LLP FAQs What are LLP Forms? LLP forms are online documents required for various LLP-related filings, such as registration, changes in the partnership, annual returns, and other compliance-related submissions. What is the MCA V3 Portal? The MCA V3 Portal is the official online platform provided by the Ministry of Corporate Affairs (MCA) for various business and compliance-related services. It includes features for registering companies, filing forms, and maintaining compliance with the provisions of the Companies Act, 2013 and Limited Liability Partnership (LLP) Act, 2008.

According to the guidelines of the Income Tax Act of 1961, obtaining a home loan can offer chances for tax savings. Provisions in the most recent financial budget improved these advantages even more. Nirmala Sitharaman, the Union Finance Minister, suggested extending the deadline for further deductions on home loan interest payments during her budget speech. After being extended until 31 March 2022, the deadline has been moved to 31 March 2024. Tax Benefits on Home Loan (FY 2023-24) Income Tax Act Maximum Deductible Amount Section 24 Rs.2 lakh per annum Section 80C Rs.1.5 lakh per annum Section 80EE Rs.50,000 New Updates (Union Budget 2023-2024) Eligibility period for claim of additional deduction for interest of Rs.1.5 lakh paid for loan taken for purchase of an affordable house extended till 31 March 2022. Eligibility period for claiming tax holiday for affordable housing project extended by another year. The new deadline is 31 March 2023. A new tax exemption was proposed for the notified Affordable Rental Housing Projects to promote the supply of Affordable Rental Housing for migrant workers. While there were no major changes regarding the deductions under home loans, the only major news worth noting was the allocation of Rs.48,000 crore to the Pradhan Mantri Awas Yojana (PMAY). Deduction for Interest Paid on Housing Loan under Section 24 A loan must be taken for the purchase or construction of a house property to claim a tax deduction. If it is taken for the construction of a house, then construction must be completed within five years from the end of the financial year in which the loan was taken. The interest portion of the home loan EMI for the year can be claimed as a deduction from your total income up to a maximum of Rs 2 lakh under Section 24.  From the assessment year 2018-19 onwards, the maximum deduction for interest paid on self-occupied house property is Rs 2 lakh. For let out property, there is no upper limit for claiming tax exemption on interest, which means that you can claim deduction on the entire interest paid on your home loan.  In case the construction exceeds the stipulated time, i.e. 5 years, you can claim deductions on interest of home loan only up to Rs 30,000 for the financial year. Deduction on Interest Paid Towards Home Loan During the Pre-Construction Period under-construction property and have not moved in yet but you are paying the EMIs. In this case, your eligibility to claim interest on the home loan as a deduction begins only upon completion of construction or immediately if you buy a fully constructed property.  So, does this mean you would not enjoy any tax benefits on the interest paid during the period falling between the borrowing of loan and completion of construction? Yes, it will be available but with some conditions and in future years. Deduction for Stamp Duty and Registration Charges under Section 80C Besides claiming the deduction for principal repayment, a deduction for stamp duty and registration charges can also be claimed under Section 80C but within the overall limit of Rs 1.5 lakh.  Deduction on Principal Repayment under Section 80C The principal paid on the home loan EMI for the year is allowed as a deduction under section 80C. The maximum amount that can be claimed under this section is up to Rs 1.5 lakh. But to claim this deduction, the house property should not be sold within five years of possession. Otherwise, the deduction claimed earlier will be added back to your income in the year of sale. Additional Deduction under Section 80EEA The stamp value of the property does not exceed Rs 45 lakh. The loan must have been sanctioned between 1 April 2019 to 31 March 2022 (extended from 31 March 2021) On the date of loan sanction, the individual does not own any other house, i.e. first time home buyer. The individual should not be eligible to claim a deduction under Section 80EEA if claiming a deduction under Section 80EE. Additional Deduction under Section 80EE Additional deduction under Section 80EE is allowed to the home buyers for a maximum of up to Rs 50,000. To claim this deduction, the following conditions should be met: The amount of loan taken should be Rs 35 lakh or less, and the property’s value shall not exceed Rs 50 lakh. The loan must have been sanctioned between 1st April 2016 to 31st March 2017. And on the date of loan sanction, the individual does not own any other house, i.e. first-time house owner. FAQs How much tax benefit do I get on home loan? The  tax benefit  for a home loan as per different sections in Income Tax Acts is listed below Up to Rs 2 lakh under Section 24(b) for self-occupied home (No limit in case of let out property) Up to Rs 1.5 lakh under Section 80C Are there any tax benefits on second home loan? Yes. When the first home is self-occupied and the second home is vacant, it will be considered as self-occupied. In such a case, a tax deduction can be claimed on the interest paid for both houses. However, it cannot exceed Rs 2 lakh. When the first home is self-occupied, and the second one is given on rent, you have to declare the rental income of the second property. From there you can deduct the standard deduction of 30%, interest on the home loan without any limit and the municipal taxes paid.

Kerala offers incredible experiences to tourists as much as the locals, who enjoy staying there. The famed Keralan backwaters are a thing of beauty that is best witnessed with your own eyes. The tropical state is a good place to live out a peaceful retirement. If you are planning to stay in Kerala for the long term, you would need to know about vehicle ownership (so you can get around independently) and road taxes in Kerala. Kerala Vehicle Tax is levied as excise duty on every motor vehicle used or kept for use in Kerala at the rates specified by the State Government for each type of vehicle. The Government of Kerala has conferred the power of levying vehicle tax under Kerala Motor Vehicles Taxation Act (KMVT) 1976. According to this act, the registered owner or any person having possession control of a motor vehicle has to pay Kerala Vehicle Tax. On payment of Kerala Vehicle Tax, Motor Vehicle Department of Kerala issues a Tax License to the registered owner. Kerala Motor Vehicles Taxation Act 1976 Kerala Motor Vehicles Taxation Act consolidates the laws relating to the levy of tax on motor vehicles and passengers and goods carried by such vehicles in Kerala. According to this KMVT act, no vehicle tax will be levied on a motor vehicle kept by a dealer or a manufacturer of the vehicle for trade and used under the authorization of a trade certificate granted by the registering authority. Kerala Vehicle Tax Schedule (Rate) The Kerala Government will specify the rate of Kerala Vehicle Tax for each type of vehicle. The Kerala Government has powers to increase the rate of vehicle tax from time to time. You can get the Vehicle Tax rate details from the official website of Kerala Motor Vehicle Department. Rate of Additional Vehicle Tax An additional vehicle tax at the rate prescribed on the date of payment will be paid along with the tax on overdue payments. Additional Tax for Motor vehicles for which tax is realized for one year or more Within one month after the prescribed period – 10 % of the tax due for one year have to pay Within three months after the prescribed period – 20 % of the tax due for one year need to be paid Within six months after the prescribed period – 25 % of the tax due for one year In other cases – 50 % of the tax due for one year Additional Tax for motor vehicles for which tax is realised quarterly Within one month after the prescribed period – 10 % of the tax due for a quarter Within three months after the prescribed period – 20 % of the tax due for a quarter Within six months after the prescribed – 25 % of the tax due for a quarter In other cases – 50 % of the tax due for a quarter Kerala Vehicle Tax for a Temporary License In the case of vehicles registered in any other state and entering the state of Kerala and staying therein, then, the vehicle tax payable for such vehicles will be given here: If such vehicle stay does not exceed seven days, one-tenth of the quarterly tax need to be paid. If such stay exceeds seven days but does not exceed 30 days, one-third of the quarterly tax will be payable Kerala Vehicle Tax Online Payment Procedure Step 1: The applicant needs to visit the home page of the Motor Vehicle Department of Kerala. From the main page, you need to click on ‘Vehicle’ option. Step 2: The link will redirect to the new page. Click on e-Tax – Online Tax Payment for make Kerala vehicle tax payment. Step 3: In the new page, enter the Vehicle Number in the given boxes correctly and provide the last five values of Chassis Number. Click on the GO button to proceed. Step 4: The vehicle details will be displayed. You need to add Aadhaar number, mobile number and e-mail. You can see the tax/cess details such as tax to be paid, tax paid from and to and owner details. Step 5: After checking the details, click on the next button. Fill up additional requirements if any asked by the computer. Step 6: Details of tax paid, tax to be paid will be displayed on a new page. If the tax amount shown is correct, click on the confirm button. Step 7: You will be redirected to Kerala e-Treasury page. Here, select the bank and click ‘Proceed for Payment’ to continue the payment or cancel the payment by clicking ‘Cancel’ Button. Step 8: If you select the option Proceed for Payment the new page will appear. Please Note the GRN Number for future reference. Step 9: The corresponding bank webpage will be displayed. You need to Login to the portal for making payment via net banking. FAQs What is Kerala Vehicle Tax? Kerala Vehicle Tax is a road tax levied by the Kerala Motor Vehicles Department on vehicles used within the state. This tax contributes to maintaining and developing road infrastructure and ensuring safe travel. Vehicle owners must pay this tax to legally operate their vehicles in Kerala. Who is required to pay vehicle tax in Kerala? All vehicle owners in Kerala, including those with private, commercial, and two-wheeler or four-wheeler vehicles, are required to pay vehicle tax. Non-Kerala registered vehicles staying in Kerala for an extended period are also subject to vehicle tax in the state.