Income Tax

Individuals who engage in a certain transaction listed in Rule 114B of the Income-tax Rules, 1962 but do not possess a PAN are required to file Form 60 as a declaration.  Form 60 is a declaration form used in India for individuals who do not have a Permanent Account Number (PAN) but need to carry out certain financial transactions. It serves as an alternative to providing a PAN when conducting specific transactions or opening certain accounts. It’s important to note that while Form 60 income tax allows individuals to carry out financial transactions without a PAN, it does not exempt them from tax liabilities. The individual is still responsible for fulfilling their tax obligations. What is Form 60? Form 60 is the declaration that is required to be filed by an individual or a person (except companies and firms) who does not have a permanent account no. (PAN) while entering into some specified transactions as per Rule 114B of the Income Tax Rules, 1962. If your total income (other than agriculture) is more than the basic exemption limit, then in such cases, form 60 format is not acceptable. In such a case, you can use Form 60 only if you have already applied for PAN, and you must also mention the date of application in column 21 of the form. When is Form 60 of Income Tax Required? When you decide to enter into any transaction with a banking institution or deal in some sort of asset, a PAN card is the basic identity proof required. But, there are still several people who do not possess PAN, or they might have already applied for PAN and are waiting for an allotment. Form 60 can be used in many cases instead of furnishing PAN by such people. Other than tax authorities, PAN or Form 60 PAN card, is required for a variety of transactions such as Nature of Transaction, Value of Transaction Sale or purchase of Motor Vehicle [other than two-wheeled vehicles], Irrespective of value / Any Value Opening a Bank account(other than basic savings deposit account) Irrespective of value Getting new Debit or Credit card Irrespective of value Opening DEMAT account Irrespective of value Payment to hotel or restaurant at one time Cash payment exceeding Rs 50,000 Travelling expenses to a foreign country or buying foreign currency at one time Cash payment exceeding Rs 50,000 Buying Mutual funds Amount exceeding Rs 50,000 Acquiring bonds or debentures Amount exceeding Rs 50,000 Acquiring bonds issued by RBI Amount exceeding Rs 50,000 Depositing money with(a) Bank(b) Post Office Cash exceeding Rs 50,000 in one day Purchasing Bank Draft/ pay order/ banker’s cheque Cash exceeding Rs 50,000 in one day Time deposit (FD) with(a) Bank(b) Post Office(c) NBFC(d) Nidhi company Exceeding Rs 50,000 at a time or Rs 5,00,000 in a financial year Life Insurance Premium If the amount exceeds Rs 50,000 in an FY Trading in securities Amount Exceeding Rs 1,00,000 per transaction Trading in shares of unlisted company Amount Exceeding Rs 1,00,000 per transaction Sale or purchase of any immovable property If the amount or registered value is Rs 10,00,000 or more Buying and selling of goods and services Exceeding Rs 2,00,000 per transaction How to Download Form 60 PDF? Step 1 – Visit the official website of the Income Tax Department Step 2 – Click on ”Forms/Download” on the top navigation menu Step 3 – In the drop-down menu, select ”Income Tax Forms” Step 4 – You will be redirected to a page with a list of different forms for income tax Step 5 – Scroll down the list until you reach “Form No.60.” Step 6 – Select the document, and it will get automatically downloaded to your system. Information Required to Fill Form 60 Your complete name Date of Birth Full address Telephone Number / Mobile Number Amount of Transaction Date of transaction Mode of transaction Aadhaar number If PAN is applied, then the application and acknowledgment number Disclosures of income Sign and mention the date and place. Documents Required to Submit with Form 60 Aadhaar Card Driving license Bank Pass Book (having photograph) Elector’s Photo ID Ration Card Passport Pensioner Photo card Proof of address Telephone bill and electricity bill copies Communication or document issued by Central or State Government or local bodies Domicile Certificate Kisan passbook Arm’s License etc How to Submit PAN Form 60? The online procedure to file Form 60 with the Income Tax Department shall follow as under The electronic verification can be done through this website- https://report.insight.gov.in/reporting-webapp/portal/homePage It can also be done using certain Aadhaar specified Authentications: Through OTP on your Aadhaar-linked mobile number or mail ID. Through Biometric modalities, i.e., either through iris (scanning your eye) or fingerprint. Two-way authentication, i.e., OTP + biometric modalities Or Use of OTP & fingerprint & iris altogether. What Should be Done if a Minor is Entering into a Transaction that Requires a PAN? Rule 114B of the Income Tax Act 1961 expressly provides that if a minor enters into any of the above-specified transactions and he does not have income chargeable to tax, then the Minor can quote the PAN of his Father, Mother, or Guardian while entering into such contracts. Whether NRI Needs to Submit Form 60? As per Rule 114B, Non Residents are required to quote PAN or file Form 60 only for a limited number of transactions, which are as under: Nature of Transaction Value of Transaction Sale or purchase of Motor Vehicle Irrespective of value / Any Value Opening a Bank account Irrespective of value Opening DEMAT account Irrespective of value Buying Mutual funds Amount exceeding Rs 50,000 Buying bonds or debentures Amount exceeding Rs 50,000 Depositing money with(a) Bank(b) Post Office Cash exceeding Rs 50,000 in one day Time deposit (FD) with(a) Bank(b) Post Office(c) NBFC(d) Nidhi company Exceeding Rs 50,000 at a time or Rs 5,00,000 in a financial year Life Insurance Premium If amount exceeds Rs 50,000 in a FY Trading in securities Amount Exceeding Rs 1,00,000 per transaction Trading in shares of unlisted company Amount Exceeding Rs 1,00,000 per transaction

Income from Other Sources plays a vital role in India’s taxation system. It refers to the income that does not fall under the other four heads of income, namely Salary, House Property, Business/Profession, and Capital Gains. Such income is taxed as per the provisions of the Income Tax Act, 1961. Heads of Income Income from Salary: This includes earnings from employment, such as basic salary, allowances, bonuses, commissions, and any other benefits received from an employer. Income from House Property: This head includes income generated from owning and renting out a house property, whether residential or commercial. Rental income and deemed rental income from self-occupied properties are considered under this head. Income from Business or Profession: This head includes income earned from running a business or carrying out a profession, such as consulting, freelancing, or any trade-related activities. Income from Capital Gains: Capital gains arise when there is a profit or loss from the sale of capital assets like property, stocks, mutual funds, or other investments. Income from Other Sources: This head encompasses all residual income sources that do not fall under the other four heads. It includes interest income, dividends, lottery winnings, and any other income not covered elsewhere. Savings Account Interest earned on a savings account is a common type of income under the head ‘Income from Other Sources’. This income is taxable as per the income tax slab rates applicable to the individual. It is important to note that the bank or financial institution where the savings account is held deducts tax at source (TDS) on the interest earned on the savings account if the interest earned exceeds Rs.5,000 for individuals and Rs. 40,000 for senior citizens per year. Individuals are required to report the interest earned on their savings account while filing their income tax returns. The interest earned on a savings account can be easily calculated by referring to the bank statement or by checking the passbook entries. Deduction on Interest Income Under Section 80TTA Individuals can claim a deduction on the interest income earned from savings accounts under section 80TTA of the Income Tax Act. The deduction under section 80TTA is available for interest earned on savings accounts held with a bank, cooperative society, or post office. The maximum deduction that can be claimed under this section is Rs. 10,000 in a financial year. If the interest earned on the savings account exceeds Rs. 10,000 in a financial year, then the excess amount will be considered as taxable income under the head ‘Income from Other Sources’. It is important to note that the deduction under section 80TTA is not available on interest earned on fixed deposits, recurring deposits, or any other type of deposits. Tax on Fixed Deposits Interest earned on fixed deposits is considered as income under the head ‘Income from Other Sources’ and is taxable as per the individual’s income tax slab rate. The bank or financial institution where the fixed deposit is held deducts tax at source (TDS) on the interest earned on fixed deposits if the interest earned exceeds Rs. 5000 (for individuals) and Rs.40,000 (for senior citizens) per year. Senior citizens can enjoy an income tax exemption of upto Rs 50,000 on the interest income they receive from fixed deposits with banks, post offices, etc., under Section 80TTB. It is important to note that TDS is deducted on the total interest earned on fixed deposits during the year exceeds the specified threshold. However, even if the interest earned on a fixed deposit is less than the specified threshold individuals are required to report the interest earned while filing their income tax returns before the last date to file ITR. What is Income from Other Sources? According to section 56(1) of the Income Tax (IT) Act, 1961, Income from other sources includes all income you earn from other sources. In simple words, if any income can not be declared under any other income head. it will come under this head. Income from Other Sources is a category of income that includes all types of income that cannot be classified under any other head of income, such as salary, house property, business or profession, and capital gain. Some common examples of income from other sources are: Interest earned on the savings account, fixed deposits, recurring deposits, and other financial instruments Rental income earned from a property owned by an individual Dividend income earned from shares and mutual funds Income earned from winning lotteries, races, card games, other games like gambling or betting. Income earned from letting out machinery or equipment Any gift received that exceeds Rs. 50,000 in a financial year. What is income from other sources? Interest Income: Interest income is a common component of Income from Other Sources. It includes interest earned on savings accounts, fixed deposits, recurring deposits, and other financial instruments. The interest income is added to the taxpayer’s total income and taxed at the applicable slab rates. Rental Income: Rental income from letting out properties is another significant part of Income from Other Sources. Whether you own residential or commercial property, the rent received is subject to taxation after deducting standard deductions and municipal taxes. Dividends and Mutual Funds: Income earned from dividends and mutual funds is considered under this head. While dividends from domestic companies are tax-free, those from foreign companies are taxable. Additionally, capital gains from mutual funds are also accounted for under this category. Family Pension: Pension received by family members after the taxpayer’s demise is taxable under Income from Other Sources. The taxable amount is determined based on the pension rules and the individual’s relationship with the deceased. Lottery and Gambling Winnings: Any winnings from lotteries, card games, betting, or gambling are subject to taxation under this head. The tax rate is typically higher for such earnings, and TDS (Tax Deducted at Source) is often deducted by the payer. Gifts and Cash Prizes: Gifts and cash prizes exceeding a specified limit are treated as taxable income under Income from Other Sources. However, certain gifts from relatives and on specific occasions may be exempted. Income from Royalties: Authors, artists, and creators who receive royalties for

Tax deducted to the account of the Central Government, what if there is any inadvertent mistake while making payment such as choosing the wrong assessment year, choosing the wrong major head code, entering the wrong amount, or wrong PAN / TAN etc and challan is already generated? Such errors lead to no tax credit situation for the deductee. The tax department does understand that such clerical errors are unavoidable and has provided a mechanism to correct such errors.  If a taxpayer has made an unintentional mistake while paying tax, there is a way to fix the challan details which have already been generated with the inaccurate data. It is very important because, In the presence of such errors, the taxpayers will not be able to get the tax credit. Before knowing the process of rectifying all the mistakes we should first know about the types of mistakes. Major Mistakes People Make in TDS Challan TAN Number Assessment Year Major Head code Minor Head Code Nature of Payment Total Amount Name TDS Challan Correction Offline – Physical Challan A new challan correction mechanism for the correction of physical challans has been prescribed for payments made on or after 1st September 2011. We have provided below a list of challan corrections that can be carried out and who is authorised for such corrections:   SI No. Fields in which corrections are to be made Authority to correct The time limit for correction through the bank 1 PAN/TAN Concerned assessing officer in case of online challans. Collecting bank* / assessing officer in case of physical challan Within 7 days from the challan deposit date 2 Assessment Year Within 7 days from the challan deposit date 3 Major Head code Within 3 months from the challan deposit date 4 Minor Head code Within 3 months from the challan deposit date 5 Nature of payment Within 3 months from the challan deposit date 6 Total Amount Within 7 days from the challan deposit date 7 Name Concerned assessing officer in case of both online and physical challans NA *Challan correction by the bank is subject to the following conditions: Name correction cannot be carried out by the bank Any combination of correction of Minor Head and Assessment Year together is not allowed PAN/TAN correction will be allowed only when the name in the challan matches the name as per the new PAN/TAN The change of amount is permitted only when the amount so corrected is not different from the amount actually received by the bank and credited to the Government Account Correction is allowed only once for a single challan for a particular field. For example, where the first correction request is made only for the amount, a second correction request will be allowed for correction in other fields. There will be no partial acceptance of change correction request, i.e. either all the requested changes will be allowed, if they pass the validation, or no change will be allowed if any one of the changes fails the validation test Procedure to Rectify the Mistake in TDS Challan TAN Number: If the taxpayer has deposited the tax in any other TAN then he is not able to rectify the challan. There are two modes available for correction which are mentioned below:- S.no Tax Deposit Method Authority to Correct 1 Online challan Deposit (e -payment) Involved Assessing Officer (AO) 2 Physical challan deposit in the bank Bank-If rectification request is received within 7 days from challan deposit     After 7 days – Concerned Assessing Officer (AO) Steps to Submit an Application to the Concerned Assessing Officer for TAN correction: In case the challan is paid via online mode, the taxpayer can approach their respective Assessing Officer of the I-T Department. Write an application to the concerned Assessing Officer on the taxpayer’s letterhead for correction of TAN number in the challan submitted. Document required to attach with the application No objection Certificate (NOC) Affidavit Tan Number Certificate Copy of challan Id proof of the taxpayer Then submit the application with all required documents to the concerned Assessing Officer of the I-T Department. Steps to Request Bank for TAN Correction: The taxpayer has to submit a request form to their respective bank. This request must be made within 7 days of Challan’s submission. Bank will reject any rectification request submitted by the taxpayer after the time limit specified above. Attach a copy of the original challan. If there is more than one challan, a separate request form has to be submitted for each challan. If the taxpayer is other than an individual then the authorization letter of the authorized person should be enclosed with a seal. The form for correction in the TDS challan will be provided by your respective bank. Assessment Year, Major Head, Minor Head, Nature of Payment If the taxpayer selects the wrong assessment year, major head, minor head, nature of payment while depositing tax, he/she will also be able to make corrections through the TRACES portal. Please follow the steps given below to make corrections in the challan. Visit the website https://www.tdscpc.gov.in/ Login TRACES id After logging in, click on the Statement/Payments tab and select Request for OLTAS Challan Correction, and proceed. After proceeding you have to enter the challan details for which OLTAS correction is to be submitted. Challan Detail must Cover – BSR Code Date of Deposit Challan Serial Number Challan Amount Fill in the required details of the challan and proceed. From tabs select the type of correction and make the required modification with drop-down and then click on submit button. Now, you will gain a request number to track the status of the correction submitted. Your correction requests will be processed in a day. Total Amount and Name If the total amount or name on the challan has been entered incorrectly by the bank at the time of submission of the challan, the bank can rectify the same within 7 days at the request of the taxpayer. It is only

The Income Tax Act, 1961, Chapter VIA discusses the deductions that must be made in order to calculate total income. It is divided into three parts- A-   General B-   Deductions in respect of certain Payments C-   Deductions in respect of certain Incomes Section 80JJAA comes under Deductions in respect of certain Incomes.According to this chapter, an assessee entire income is allowed from his gross total income, and the total amount of deductions is never allowed to exceed the assessee gross total income.1Tax deductions are claims made to lower taxable income resulting from a taxpayer’s various investments and costs. As a result, income tax deductions lower taxpayer’s overall tax payment. It is a type of tax incentive that allows taxpayers to save money. However, how much tax one can save is determined by the sort of tax benefit taxpayer’s claims.’Tax Deduction’ and ‘Tax Exemption’ both the terms relate to a reduction in taxable income; they are examples of government-provided tax relief or tax benefits. Tax exemptions, on the other hand, can include full tax relief, lower rates, and taxation on only a selected amount of income. A tax exemption indicates that you do not have to pay taxes on a specific income.Section 80JJAA of the Income Tax Act is referred to as the deduction in which taxpayers can claim payments made to the most recent and incremental employees in the previous year. Any taxpayer who earns income from a business and is subject to tax under Section 44AB of the Income Tax Act of 1961 should take advantage of the same deduction.Section 80JJAA encourages firms to create new jobs in the formal sector and offers qualifying workers employment benefits. The government hopes to lower the unemployment rate in the nation by encouraging firms to recruit more workers by offering a tax exemption. What is Section 80-JJAA? Section 80JJAA, a provision within the Indian Income Tax Act of 1961, aims to provide tax deductions to employers contributing to formal sector employment. This deduction pertains to Income From Business and is applicable to individuals or entities who have hired additional employees in a given fiscal year. WHO IS NOT ELIGIBLE FOR DEDUCTION U/S 80JJAA No deduction under sub-section (1) shall be allowed,— (a) if the business is formed by splitting up, or the reconstruction, of an existing business: Provided that nothing contained in this clause shall apply in respect of a business which is formed as a result of re-establishment, reconstruction or revival by the assessee of the business in the circumstances and within the period specified in section 33B; (b) if the business is acquired by the assessee by way of transfer from any other person or as a result of any business reorganisation; (c) unless the assessee furnishes the report of the accountant, as defined in the Explanation below sub-section (2) of section 288, before the specified date referred to in section 44AB giving such particulars in the report as may be prescribed3. What is meaning of additional employees as per section 80-JJAA? It means an employee who has been employed during the previous year but does not include the following: Employees whose total salary is more than Rs. 25,000/- per month. Employees who were employed for less than 240 days in the previous year (150 days in case of manufacture of apparel or footwear or leather products) Employees who do not participate in Recognised Provident Fund like casual workers, etc. Employees whose entire contribution is paid by the Government under the Employees’ Pension scheme What is the additional employee cost as per section 80-JJAA? There is no increase in the total number of employees, which means the total no of employees joined during the previous year is equal to the total number of employees left during the previous year.Example: Particular No. of Employees Total No. of employees as on 01 April 2019 100 No. of employees joined during the year 20 No. of employees left during the year 20 Total No. of employees as on 31 March, 2020 100 In the above example, there is no increase in the total number of employees, hence not eligible to claim deduction in this case. In the above example, if no. of employees joined was 30, then in that case, a deduction of employee cost for an additional 10 employees will be available. Emoluments are paid otherwise than by A/c payee cheque or account payee draft or any prescribed electronic mode ( like RTGS, NEFT etc). Example: A Ltd incorporated on 01 Apri, 2019 and employed 20 employees. Total emoluments paid during the year amounting Rs. 10 Lakhs, which is paid in cash. In the above case, deduction u/s 80-JJAA is available even if emoluments are paid in cash because A Ltd is a new entity. What is the meaning of emoluments given in section 80-JJAA? a) Any contribution paid or payable by the employer To any pension fund or Provident fund or Any other fund for the benefit of the employee under any law for the time being in force; (b) Any lump-sum payment paid or payable to an employee at the time of Termination of his service or Superannuation or Voluntary retirement What are the conditions to claim deduction u/s 80-JJAA? Section 80JJAA in the Income Tax Act pertains to tax deductions related to business profits and gains. This section enables a deduction of 30% on increased employee expenses for a continuous period of three assessment years. To claim the deduction under this section, following conditions need to be satisfied: The assessee must have Income from the Business Head, and he is liable to get his accounts audited as per the requirement of section 44AB along with a report of a CA in Form 10DA. It should be a new business. It should not be formed by splitting up or reconstruction of an existing business. Business is not acquired by way of transfer from any other person. Deduction should be claimed in the income tax return. What is deduction under Section 80-JJAA?

According to Section 195 of the Income Tax Act of 1961, an individual living in a house owned by a Non-Resident Indian (NRI) must mandatorily deduct a TDS of 31.2% while paying rent. Upon TDS payment, the tenant needs to submit Form 15CA to the Income Tax Department Are you a Non-Resident Indian (NRI) who has rented out their property in India? Or perhaps, you are planning to rent a property from an NRI landlord? If yes, then you must familiarise yourself with specific guidelines for the same. First, you must verify that your landlord has a designated representative in India to address legal or maintenance matters on their behalf. Second, you must ensure the existence of a comprehensive rental agreement, clearly specifying the terms and conditions of your tenancy. It should encompass details such as monthly rent, security deposit, and other fees or charges involved. Who is an NRI? NRI is an Indian citizen but not a resident of the country. Under section 6, we can determine the residential status of an individual. According to this section 6, the following conditions hold for residents: – During previous years, he/she must have resided in India for at least 182 days. He/she must have resided in India for 60 days during the previous year and for 365 days during the immediately preceding previous years at least. What is TDS on rent for NRIs? TDS stands for Tax Deducted at Source. It is a mechanism used by the Government of India to collect income tax in advance. It involves the deduction of a certain percentage of payments as taxes while making specified payments, such as salary, interest, commission, rent, and other types of income. The person or company responsible for making the payment is known as the ‘deductor’ and the individual receiving the payment is known as the ‘payee’. The deductor deducts the TDS on behalf of the payee, and then, remits the same to the government. As per Section 195 of the Income Tax Act of 1961, a person or entity paying rent or interest to an NRI or a foreign company must deduct a TDS at the time of making the payments. The TDS amount is withheld by the tenant and remitted to the government on behalf of the NRI landlord. As a tenant, you must ensure that the NRI rent TDS is deducted and deposited as per the prescribed rates and timelines to avoid penalties. Provisions for TDS While Renting an NRI property According to Section 195 of the Income Tax Act of 1961, an individual living in a house owned by a Non-Resident Indian (NRI) or a person/entity paying rent or interest to an NRI or a foreign company must mandatorily deduct a TDS of 31.2% while paying rent. Upon TDS payment, the tenant needs to submit Form 15CA to the Income Tax Department For example, suppose Mr. Nair is an NRI who let out his property to Mr. and Mrs. Jhangir for a monthly rent of Rs. 50,000. As per the NRI rent TDS section, Mr. and Mrs. Jhangir have to deduct 31.2% of the rental amount every month while making rental payments to their landlord. So, the actual amount that they would pay is Rs. (50,000 – 31.2% of 50,000), i.e., 34,400. The TDS of Rs. 15,600 has to be deposited with the income tax department. How is Tax Deducted at Source? Firstly tenants must have a TAN. This TAN stands for the tax account number and this can be received via the NSDL website. As soon as you receive the TAN or the tax account number, the tenant can easily deduct tax each month and pay the remaining amount that needs to be paid to the landlord. Also, as per rule, the tax must be paid by the 7th of the following calendar month, and for the month of March, TDS must be paid by 30th April. Exceptions and Exemptions DTAA ProvisionsNRIs can claim the benefits of Double Taxation Avoidance Agreements (DTAA) to reduce their TDS rate. It is a treaty signed between India and different nations to protect NRI taxpayers from paying double taxes on their income in India as well as their residence countries. Lower or Nil TDS CertificateAn NRI can also obtain a lower TDS certificate from the Income Tax Department of India to reduce their TDS rate. This certificate is provided under section 197 to NRIs whose total income in India is below the tax exemption limit. Rental ThresholdIf the annual rental amount is below a specific threshold, the deduction of TDS is not mandatory, even for NRI landlords. This threshold may vary depending on the changes proposed during the annual budget Filing Returns for NRI Rental Income TDS Step 1 – Obtain a TAN number The person deducting TDS on rent payments to an NRI or PIO is required to obtain a Tax Account Number (TAN) from the official website of the Tax Information Network of the Income Tax Department. Step 2 – Deduction of the TDS Once the tenant has obtained their TAN, they can deduct 31.2% TDS for NRI property rent. The TDS amount has to be submitted to the income tax department through TDS returns and the remaining rent can be paid to the NRI property owner. Step 3 – Fill out Form 15CA Upon the deduction of the TDS, the tenant must fill out Form 15CA on the income tax website by the 7th of the subsequent month. Step 4 – Quarterly TDS returns Additionally, the tenant needs to file quarterly TDS returns through Form 26Q and issue TDS certificates to the property owner through Form 16A within the next 15 days. FAQs What is NRI income tax? NRI (Non-Resident Indian) income tax refers to the taxes levied on income earned in India by someone who is considered a non-resident for tax purposes. This typically applies to income from Indian assets, investments, or business activities. Who is considered an NRI for taxation purposes in India? An individual is considered an NRI if

A Limited Liability Partnership is a legal entity and a taxable person (assessee) for all income tax purposes. So, it is mandatory to file income tax return for LLP on or before the 31st of March every assessment year. Filing ITR is mandatory even if the LLP existed for a single day in the financial year for which it is being filed.To file Income Tax Return for LLP, you need to submit Form ITR-5 to the Income Tax Department through the Income Tax e-filing portal. LP or Limited Liability Partnership is a corporate entity formed under the Limited Liability Partnership Act, 2008. LLPs have a separate legal identity and are required to file MCA annual return (Form 8 and Form 11) and income tax return each year. What is the Process of Filing Income ITR of LLP? The process of filing ITR of LLP begins with the preparation of its account statements. These statements have to be prepared according to the provisions of the Income Tax Act, 1961. Upon preparing the statements, you can calculate the taxable income and proceed to its payment. Let us understand each of these steps one by one. Step 1: Prepare Statement of accounts for the LLP” The accounting of the LLP is the first step towards the preparation of the financial statements of the LLP. You should be careful and must comply with the provisions of the Income Tax Act, 1961. In particular, the following items require special attention while finalizing the accounts of the LLP. Preliminary Expenses TDS on payments of the LLP Consider the provisions of GST on LLP (if applicable) Partners remuneration (Special Treatment) Professional tax Payment of LLP (if applicable) Consider good practices of Tax Planning. Step 2: Income Tax Computation” The computation of taxable income is the most important step in filing an ITR for the LLP. The correctness of the financial statements is very important while doing Tax Computation for your LLP. The income tax laws treat certain expenses differently, and if the expenses do not qualify the law, these are disallowed as an expense and thus increases the taxable income. Step 3: Check for expense disallowance under Income Tax Act/Rules” Well, as said earlier the income tax department recognizes a particular payout as the expense of the LLP only if it follows the rules. Here is an example of common tax disallowances and the reasons relating to the ITR of LLP The preliminary expenses are allowed only up to 1% of capital employed in the LLP All payouts are disallowed as expenses if required TDS is not deducted. Penalty on delayed tax payments like TDS, GST, etc is not allowed Partners Salary is limited to 90% of the profit up to 3 Lakh or 60% after that. Please check the LLP Agreement for the provision of partner remuneration. Consult our specialist CA for further assistance. Step 4: Payment of Income Tax of the LLP” The self-assessment Income Tax for the LLP can be paid online by visiting the Income Tax Portal. On the tax payment portal select Challan Number – 280 and follow the on-screen instruction. The Income Tax can be paid by way of internet banking of almost all the banks. The income tax for the LLP can also be paid by debit cards of some of the banks as listed on the income tax portal. You can also pay Income Tax by visiting your Bank and submit cheque along with Tax Challan 280. Step 5: Create a profile of the LLP on the Income Tax Portal for Filing Returns.” As the LLP Income Tax Return is filed electronically, the LLP is required to register itself for the first time on the Income Tax E-filing Portal. To register the LLP, the mobile and email OTP is required. One designated partner must be registered at the Income Tax Portal as Authorized Signatory. The Digital Signature of the signatory Designated Partner is also registered on the ITR Portal for the purpose of authentication at the time of filing the ITR. Step 6: Filing of Income Tax Return for Your LLP” The Income Tax Return for the LLP can be filed only after payment of self-assessment tax. The LLP ITR can be filed with the use of the digital signature of any designated partner. However, the LLP ITR Can also be verified by way of Aadhar Based OTP of the partner who has been registered on the income tax portal Note 1: Due Date of filing LLP Income Tax Return ITR filing for the LLP has begun since 1st April. The Last Date is 31st July In the case of Tax Audit, the Last Date is 30th September. Tax audit is applicable if the annual turnover has crossed Rs.40 lakhs, or if the capital contribution has crossed Rs.25 lakhs in the concerned financial year In case, the LLP has carried out international transactions or certain Specified Domestic Transactions and has to file Form 3CEB, the last date is 30th November The applicable form is ITR-5 Belated ITR can be filed until the end of the assessment year. Note 2: Consequences of Not Filing LLP ITR The loss of the LLP can be allowed to be carried forward There shall be interest under section 234A Refunds of TDS (if any) shall be delayed You can still file late returns with late Fine under section 234F The late fine is from Rs. 1000 to Rs. 1000 depending on taxable income and delay Non-filing shall have an impact on due diligence of the LLP FAQs What is LLP? A limited liability partnership (LLP) is a body corporate under the Limited Liability Partnership Act, 2008. Furthermore, it is a legally separated entity from that of its partner. Is it mandatory to file return of income? Yes, it is mandatory for every Limited Liability Partnership (‘LLP’). Hence, they need to file the return of income irrespective of amount of income or loss. Practice area’s of B K Goyal & Co LLP Income Tax Return Filing | Income Tax

Once you submit the Income Tax Returns, the next and final step of the e-filing process is verification. The Income Tax Department (IT Department) checks the income declarations and tax paid to see if all these details match.  If the taxes paid are found to be less than what you owe, they will issue you a demand notice. Let us understand how to respond to such a demand notice from the IT Department. In the event of any discrepancies detected in an individual’s or entity’s Income Tax Return (ITR), the Income Tax (IT) department promptly issues notifications that require prompt attention. These notifications may pertain to various issues such as scrutiny of returns, failure to file returns, late filing or submission of defective returns, failure to disclose income accurately, failure to file returns with matching tax credits, or failure to pay self-assessment tax.  Reasons Why You Could Get Income Tax Notice? Inaccurate Information in the Income Tax Return Suppose there is any discrepancy in your personal details or income details. In that case, you shall receive a notice asking you to disclose your income and asset details both within India and outside India. A discrepancy in Declared Income and Actual Income You might also receive a notice from the Income Tax Department if the department suspects that you have not reported all your income. In such a case, you must prepare all your income proofs, paychecks, invoices, and bank statements. Unexpected Changes in Incomes and Investments Any substantial increase or decrease in income levels might attract the attention of the Income Tax Department. If your bank account consists of various high-value transactions, you might receive a notice from the Income Tax Department. Unexpected Inconsistencies in TDS The TDS mentioned at the time of filing the ITR must correspond to the amount mentioned in Form 26AS and 16A. If there is any difference between both the amounts, you can receive an Income Tax notice under section 143(1). For Review and Evaluation You might get a notice under section 143(2) if your ITR is scrutinized. It could be due to discrepancies or incorrect reporting. Ensure you reply as soon as possible, or the department could penalize you. Delayed ITR Filing If you don’t file the ITR by the due date, you might receive a notice from the Income Tax Department for delayed ITR filing. Payments of Refunds Against Outstanding Debts At times, you might forget to include certain interest income. However, the Income Tax Department quickly notices it and sends you a notice stating that any tax due will be deducted from the Income Tax Refund claimed. Tax Evasion in Prior Years If you have evaded taxes in the previous years and not in the current year, you might still receive a notice from the Income Tax Department under section 147 of the Income Tax Act. Types of Income Tax Notices Notice Under Section 142(1) The Income Tax authorities can issue a notice for further clarification on the ITR filed or ask for further details on the ITR under Section 142 (1). You might also receive a notice under this section if you do not file the ITR by the due date. Notice Under Section 139(9) The Income Tax department might send you a notice for a ‘Defective Return.’ In such a case, the AO or assessing officer grants you 15 15-day grace period to correct the ITR under section 139(9). Notice Under Section 148 If the Assessing officer has strong evidence that you have not reported or underreported any income that is chargeable to tax or tries to evade taxes, you might receive an Income Tax notice under Section 148. Notice Under Section 156 The Income Tax Department might send you a notice under section 156 asking you to make the payment of any interest, tax, or penalty due. Generally, the assessee is allowed a window of 30 days to pay the amount asked. Intimation Under Section 143(1) Intimation under Section 143(1) is sent to the assessee when an incorrect claim is made, or any other error in tax calculation is made. The intimation consists of a summary of the details of the ITR submitted by the assessee. Notice Under Section 143(2) and 143 (3) Notice under Section 143(2) is issued when the assessee’s ITR has been selected for scrutiny or detailed checking. The IT Department sends a notice to the assessee stating that their books will be checked to determine the correctness of the claims made. And the scrutiny is conducted under section 143(3). Notice Under Section 131 The Income Tax Officer can summon the assessee in person under section 131 by sending him a notice. If the assessing officer has a strong reason or proof to suspect the evasion of taxes or unreported income, he/she can send a notice to the assessees asking them to be present in person. Notice Under Section 245 Suppose there is any pending tax liability from the previous years. In that case, the Income Tax Department can send you a notice and offset the prior liabilities from the current year’s Income Tax refund. Step-by-Step Guide to Respond to a Demand Notice Step 1: Log in to your e-filing account on  www.incometax.gov.in  with your user ID and password. Step 2: Click on e-proceedings under pending options menu. It consists of notices issued to you with the timeline of response. a timeline of all actions related to the assessment. Step 3:Click on the links sent in the email. All the messages related to the proceedings will be displayed. Step 4:Click ‘Submit response’ after opening the notice. under the ‘Response’ tab for every email that requires you to send a response. Step 5:Depending on the requirement, you can select either ‘full response’ or ‘partial response.’ Step 6:Open the notice received and click on submit response Step 7:Write a description of your response in not more than 4000 words in the textbox in the area near the response/remarks. Step 8:Upload a copy of the cover letter or annexures

Income Tax is levied on a person who was in India for 182 days during the previous tax year or the person who was in India for at least 60 days during the previous tax year and for at least 365 days during the preceding 4 years will be taxed.   Note: Please note that no changes were made to the tax slabs in the Interim Budget presented by the Finance Minister on February 1, 2024. If you earn and draw a salary then a portion of it is going to be taxable. Depending on your annual income and the tax regime selected by you, you can calculate the amount taxable.  It is essential to gather all the details required to file your Income Tax Returns before computing your taxable income on salary. You will then have to calculate your total taxable income, followed by the calculation of final tax refundable or payable. Components of Salary Wages Annuity Pension Gratuity Fees, Commission, Perquisites, Profits in lieu of or in addition to Salary or Wages Advance of Salary Leave Encashment Bonus Salary in lieu of Notice Period Fee and Commission Overtime Payments Wages- Wages are similar to salaries. A wage is considered a monetary compensation paid by an employer to an employee in exchange for work done. Hence, wages are treated just like salary and are taxable on the same basis of salary. Annuity- An Annuity is an annual grant provided by the employer that gets categorized under the head of salaries. This is a voluntary payment made by the employer on a contractual basis. The annuity is treated as follows: When the present employer pays the annuity, it is taxable as salary. If it is received from a former employer, it is taxed as profits instead of salary. If an annuity is granted by an insurance company, it is then considered as “Income from Other Sources” Pension- A pension is a payment made by the employer after the retirement/death of the employee as a reward for the past service. The payment of pension is done on a periodical basis or even as a lump, based on the agreement between the employer and the employee. This process is called ‘Commutation of Pension’. There are two different categories under which the pensions are treated. They are: Un-Commuted Pension- This is otherwise known as ‘periodical pension’ and it is fully taxable in the hands of the employees irrespective of the source – Governmental or Non-Governmental. Commuted Pension- In the case of government employees, employees of local authority and employees of corporations it is fully tax-exempt. Bonus- A bonus is defined as, “A sum of money added to a person’s wages as a reward for good performance”.  Bonus is taxable based on the following: The bonus is taxable on receipt basis. It will be included in the gross salary in the year the bonus was received. Salary in Lieu of Notice Period- The notice period is the time period between the receipt of the letter of dismissal and the end of the last working day. This time period has to be given to an employee by their employer before their employment ends. This salary is completely taxable. Fee and Commission- A fee is a payment made to a professional person or to a professional or public body in exchange for advice or services. The commission is the payment of commission as remuneration for services rendered or products sold is a common way to reward salespeople. All fee and commission payable to an employee are fully taxable. It will be included in gross salary. Irrespective of the fixed amount or a fixed percentage, a commission is fully taxable. Overtime Payment- This payment is given to the employee as a reward for working extra time in the office beyond the stipulated time. Any payment made as ‘overtime payment’ is completely taxable in the hands of the employee. This is also included in the gross salary. The procedure for the calculation of taxable income on salary Calculate Gross Salary Add up all the salary components, along with Form 16 for the previous fiscal year and add every emolument. Deduct Non-taxable Portion of Allowances Subtract the non-taxable portion of partially taxable allowances, such as HRA and LTA. For HRA, use the formula provided by the Income Tax Department to determine the exemption amount.  Deduct Professional Tax and Standard Deduction Subtract the professional tax and the standard deduction from your salary. The standard deduction for salaried individuals is Rs. 52,500. Include other Income If you have any other sources of income, such as interest, fees, commission, rental income, or capital gains, add them to the total amount. Calculate Gross Total Income The sum arrived at after step 4 is known as the gross total income. Deduct Tax Deductions From the gross total income, deduct the eligible tax deductions, such as investments under Section 80C, 80D, etc. Calculate Net Taxable Income The result after step 6 is your net taxable income. This is the amount on which you will be liable to pay income tax. FAQs Is pension a part of the salary? Pension is included in your salary. Under the contract of employment pension is covered up and is taxed under the heading of salary. But if the pension is paid out of any insurance product then it is placed under the heading of income from other sources. What does the term perquisites mean and what is the process of taxation? Perquisites are the benefits given to you by your organisation beside your basic pay as a part of your job position. This amount is given beside the salary amount for example vehicle for your commute, accommodation which is rent free etc. Depending on the nature of the perquisites it is decided whether to tax it or not. Rule 3 of the Income tax defines the valuation of perquisites. Practice area’s of B K Goyal & Co LLP Income Tax Return Filing | Income Tax Appeal | Income Tax Notice | GST Registration | GST Return Filing |

Tax Deducted at Source (TDS) deduction amount should be the same in Form 26AS and Form 16/16A. However, there might be inconsistencies in the TDS amount for various reasons, including clerical mistakes. Form 16 and 16A are tax credit statements confirming tax deductions from the income of an individual or company. Form 16 is issued annually on TDS from salary, and Form 16A is issued every three months for TDS on income from other sources. Form 26AS is a government record of the TDS deducted from an individual or company and deposited with the Income Tax (IT) Department. What is a TDS statement? Everybody who makes tax deductible payments must file quarterly TDS returns as applicable. This statement contains information about people who have received payment after tax deduction, or in other words, deductees. It also contains the nature of payment made to him and the tax deducted from his payment. These are called TDS statements. Based on such statements filed, the deductors generate Form 16 (TDS on salary) and Form 16A (TDS on other income) annually and quarterly respectively. What is Form 26AS? Generally, every entity (individual or company) that has deducted taxes must credit that amount to the government via banks. Banks must upload these TDS details into the Tax Information Network (TIN) central system. The deductors, parallely, would file quarterly statements to TIN, providing quarterly TDS details. Based on these details, the TIN central system matches information related to tax payment before converting into a comprehensive ledger for the concerned PAN. This is Form 26AS. Basically, Form 26AS statement provides a consolidated view of the total income earned by you as a deductee from various sources. It also includes the TDS/ TCS amount that has been deducted from your income and credited to Income Tax Department. Apart from tax deductions, you may also pay taxes by way of Advance Tax and Self Assessment Tax. All such tax related information appears in Form 26AS. Tax Collected Source Form 26AS Form 26 AS will equip information considering the tax deducted at source (TDS), tax collected at source (TCS). This form indulges info on tax deducted on your income by deductors, details of the tax collected by collectors, advance tax paid by the taxpayer, self-assessment tax payments, regular assessment tax installed by the taxpayers (Permanent Account Number holders) details of the refund gained by you meanwhile the financial year, and details of the High- value Transactions in order of shares, mutual fund, etc. Mismatch between TDS statement and Form 26AS TDS, or Tax Deducted at Source, is required whether you are a salaried employee or a company owner. Your employer is obligated to deduct TDS from your salary and deposit it with the government depending on the projected tax for the year. Similarly, if you are a company owner, your customer is obligated to deduct TDS and deposit it with the government at the current rates. Individuals and organizations that deduct TDS must have a TAN number, and when they deposit the TDS with the government against your PAN, it appears on your Form 26AS automatically. Technically, your TDS statement on Form 16 or Form 16A should exactly match Form 26AS. However, there may be situations when there is a disparity that causes a concern while submitting your returns. Reasons for TDS mismatch The TDS drawer has not yet submitted a TDS return. Invalid value specified in TDS return. Incorrect PAN number of employee cited by deductor. PAN and incorrect TAN number specified. Invalid Challan Identification Number for TDS Payment quoted in TDS Return. Invalid audit year is specified in the TDS return. Any TDS payment details removed from the TDS update. Challan-wise annexure TDS Statement does not specify employee details such as name or gender. Error TDS value claimed in review. False or excessive TDS return claimed. How the rectification of the TDS mismatches in Form 16 and Form 26AS is done? If the discrepancy is due to your employer’s error, he or she must complete the updated TDS Return with the relevant details. In the event of a tax credit dispute informed by the IT department errors should be corrected online via the IT e-filing portal. The TDS (Source Taxes) should be properly similar to Form 26AS and Form 16 or 16A. However, sometimes there may be inconsistencies for several reasons, including clerical error. Forms 16 and 16A are tax credit statements that confirm tax deductions on an individual or company’s income. Although Form 16 is issued annually by TDS from salary, Form 16A is issued every 3 months to TDS with revenue from other sources. Form 26AS, on the other hand, is a government tax record that is levied on an individual or a company and submitted to the Tax Department. Once TDS or TCS (Tax Collected at Source) has been deducted from your income, the person in charge of deducting TDS or TCS must submit the amount collected to the IT Department. In some cases, if the employer did not submit the amount to the department on time, it is possible that the TDS specified in Form 16 or 16A will not comply with Form 26AS. To file your income tax return, the tax credit in Form 26AS and Form 16/16A must be the same. In calculating taxes, it is important to know the TDS already deducted from your salary so that any additional tax on other earnings is determined accordingly. If excess TDS is caught, you may also be liable for a return from the department. If there are differences in Form 26AS and Form 16/16A tax credit calculations, and you have not adjusted them in time, the taxpayer will consider the amount in Form 26AS in the figures. Rectification of TDS mismatch in Form 26AS Intimate the employer responsible for deducting TDS from your income. If the reason for the discrepancy is a mistake on the part of your employer, it is easier and faster for them to make corrections. The employer must complete the updated TDS Return. Make

The due date to file an ITR return is 31st July 2024 for non-audit cases and for cases requiring an audit, the due date is 31st October 2024. The income tax return filing season is over. Are you waiting for your income tax refund?  paid more taxes than your actual liability, you can request a refund for the excess amount. The Income Tax Department offers an online facility for tracking your Income Tax Refund status. You can easily check the progress of your refund by entering your PAN (Permanent Account Number) and the applicable Assessment Year. Tax refunds are initiated by the tax department once you have e-verified your return Typically, it takes 4-5 weeks for the refund to be deposited in your bank account If the refund is not received within this timeframe, you should consider these steps: Check intimation for any discrepancies or errors in your ITR (Log in to e-filing portal > e-File > Income Tax Returns > View filed returns) Check your email for notifications from the Income Tax (IT) department regarding the status of the refund. Check the refund status using the methods provided below What is an income tax refund? When a taxpayer makes an excess payment of income tax to the government against its actual income tax liability for a given year, the income tax department refunds the excess amount paid after due assessment. This refunded amount is known as an ‘Income tax refund’. How to Check your ITR Refund Status for FY 2023-24? You can check your refund status using either of these methods: TIN NSDL website Income tax e-filing portal Refund Status check on TIN NSDL Portal Go to this online refund checking facility Scroll down and enter your PAN, AY, captcha, and then click on ‘Submit’. When can you claim an income tax refund? Excess TDS deducted-  The employer generally deducts taxes after considering various documentary proofs provided to him by an employee pertaining to, say, 80C investments, medical insurance premium under 80D, etc. However, there are instances where an employee cannot furnish proof for a few such investments before the end of a particular financial year. Accordingly, the employer goes ahead with a higher deduction. However, the employee can claim the benefit of such investments while filing their return of income and therefore claim a refund of the higher taxes paid, Certain individuals may not fall within the taxable bracket at all, i.e. their income would be less than Rs 2.5 lakh. Hence, they would not have to pay any taxes. Yet, taxes would have been deducted from their income. This being so, they can claim a refund of the excess tax deducted; Excess TDS was deducted from your interest income- Banks may deduct TDS on interest accrued on FDs or bonds if the amount exceeds the threshold limit specified in the Income Tax Act. Excess advance tax paid- The advance tax paid on the basis of self-assessment was more than the actual tax liability for the given FY. This advance tax can be claimed as a refund while filing ITR. Taxpayers may be called upon to pay additional taxes- The income-tax officers may make certain additions to taxpayer’s income during income tax proceedings. Such additions may be deleted by appeal authorities. Accordingly, the taxpayer will be refunded the taxes he would have paid. In case of income taxable in more than one countries i.e income is doubly taxed– This situation can arise when a person is a citizen of one country but receives income from another country. However, India has entered into a Double Taxation Avoidance Agreement (DTAA) with many countries wherein the agreement allows you to claim a tax refund if you are a non-resident Indian and your income is taxable in other countries. Any payment of excess tax can be claimed as a refund under this DTAA agreement. How to claim an income tax refund? An income tax refund can be claimed simply by filing ITR. Please note that the IT department will process the ITR for refund only if the ITR is verified through any of the online modes or by offline mode (sending a signed copy of ITR-V). Further, the refund from the IT department is subject to assessment/verification by the IT department. A refund is received only if the refund claim is found to be valid and legitimate. Refund Status check on Income Tax e-filing Portal Step 1: Visit the income tax portal and log in to your account Step 2: Click on ‘e-File‘, choose ‘Income Tax Returns’ and then select ‘View Filed Returns’ Step 3: You can see the status of your current and past income tax returns. Step 4: Click on ‘View details’ and you’ll see the status of your income tax refund, like in the picture below. FAQs How long will it take to get the refund? The time taken to receive the income tax refund entirely depends on the Income Tax Department’s internal process. Generally, it takes around 7 to 120 days, with an average time of 90 days after you have e-verified your return. The Income Tax Department implemented a new refund processing system to enable faster refund processing with an expected turnaround of a few days instead of a few months. Consistent with this objective, the average ITR processing duration has been reduced to 10 days for returns submitted in the AY 2023-24, as opposed to 82 days for returns submitted in the AY 2019-20 and 16 days for returns submitted in AY 2022-23. How will I receive the refund? The Income Tax Department will send the refund amount through electronic mode (direct credit to the account) or through a ‘Refund Cheque’. You must enter the correct bank account number and IFSC code with complete address details, including the PIN code, at the time of filing your return to receive refunds. Refunds sent through cheques are dispatched to the address mentioned in the ITR through speed post. Practice area’s of B K Goyal & Co LLP Income Tax Return Filing | Income Tax Appeal | Income Tax Notice | GST Registration | GST Return Filing | FSSAI Registration