In the redevelopment of housing projects, homeowners hand over their rights to the builder, who then redevelops the project to add more units, space or both in the building. Homeowners can receive either cash compensation or extra carpet area in their current homes or both, based on their agreement with the builder. However, in order to save on long term capital gains tax (LTCG) arising from this type of redevelopment projects, homeowners can take advantage of the Section 54 of the Income Tax Provisions. Recently a taxpayer from Bandra, Mumbai did exactly that and even won his case in ITAT Mumbai. He surrendered the old premises and, in exchange, received newly constructed flats along with some cash for hardship and cost adjustments. Plus, he paid separately to the developer for an additional 205 sq. ft. of space. He claimed a tax exemption under the Section 54 for the capital gains from the redevelopment, including the extra area he bought
Read More →1. To ensure correct and accurate reporting of reversed and reclaimed ITC and to avoid clerical mistakes, Electronic Credit Reversal and Re-claimed Statement (Reclaim Ledger) was introduced on the GST portal from August 2023 return period onwards for monthly taxpayers and from July-September 2023 quarter for quarterly taxpayers. This Reclaim Ledger captures the ITC temporarily reversed in Table 4(B)2 and its subsequent reclaim in Table 4(A)5) and 4(D)1. 2. As of now taxpayer get a warning message if a taxpayer attempts to re-claim excess ITC in table 4D(1) than the available ITC reversal balance but the taxpayer is allowed to file its Form GSTR-3B. 3. To the taxpayers multiple opportunities have been given to report their opening balance which was earlier reversed ITC but was not reclaimed till that time, for the newly introduced Reclaim Ledger. 4. This statement can be viewed by the taxpayer by navigating to the Dashboard › Services › Ledger › Electronic Credit Reversal and Re-claimed. 5. To assist taxpayers in correctly reporting Reverse Charge Mechanism (RCM) transactions, another statement called "RCM Liability/ITC Statement" (RCM Ledger) was introduced on the GST Portal from August 2024 onwards for monthly filers and from July-September-2024 period for quarterly filers. The ledger captures and track the RCM liability shown in Table 3.1(d) of GSTR-3B and its corresponding ITC claimed in Table 4A(2) and 4A(3) of GSTR-3B for each return period. 6. A warning message comes to the taxpayer in case the ITC claimed in Table 4(A)2 and 4(A)3 exceed the closing balance of RCM ledger plus the liabilities being reported in Table 3.1(d). 7. To the taxpayers multiple opportunities have been given to report the RCM ITC opening balance and amend the opening balance for both the said statements where any transaction related to excess ITC reversal or excess RCM liability/ITC prior to implementation of the said statements could be declared as opening balance to these statements. 8. This RCM Liability/ITC Statement can be accessed through: Services >> Ledger >> RCM Liability/ITC Statement.
Read More →Tobacco products and pan masala products are set to face a new tax structure from February 1. This comes as the Centre rolls out additional excise duty and a health cess, above the current GST rates. The new structure will replace the compensation cess which is applied on 'sin goods. Tobacco and allied products will now attract an additional excise duty while pan masala will have a Health and National Security Cess. As per a government notification, pan masala, cigarettes, tobacco and similar products will be taxed at 40% under the Goods and Services Tax (GST) regime. Meanwhile, biris will attract an 18% GST rate. These GST rates will continue, but new levies will now be imposed separately.
Read More →The relevant declarations issued vide Notification No. 05/2025 – Central Tax (Rate), dated 16th January 2025, are now made available electronically on the GST Portal. These declarations may be opted for and filed by persons who are applying for registration or are already registered and supplying hotel accommodation services by declaring the premises as “specified premises”. Kindly take note of the following key points: 1. Who may opt and file the declaration • Regular taxpayers (active and suspended) supplying hotel accommodation service who want to declare their premises to be a "specified premises" • Applicants for new GST registration who want to declare their premises to be a “Specified Premises” The facility is not applicable to composition taxpayers, TDS/TCS taxpayers, SEZ units/developers, casual taxpayers, or cancelled registrations. 2. Types of Declarations The following declarations are made available on the portal: 1. Annexure VII: Opt-In Declaration for Registered Person – For existing registered taxpayers opting to declare premises as specified premises for a succeeding financial year. 2. Annexure VIII: Opt-In Declaration for Person Applying for Registration – For persons applying for new registration, to declare premises as specified premises from the effective date of registration. (Annexure IX – Opt-Out Declaration will be made available separately in due course of time.)
Read More →The corporate affairs ministry on Tuesday extended the deadline for filing of financial statements and annual returns under the companies law till January 31, 2026. The extension of the deadline, which was to initially end on December 31, comes against the backdrop of representations from various stakeholders. Many of them were facing issues with the filing system. These filings are for the financial year 2024-25. "...in view of the representations received from stakeholders, the competent authority has decided to allow companies to complete their annual filings [e- Forms MGT7, MGT-7A, -4, C-4 CFS, AOC-4 NBFC (Ind AS), AOC-4 CFS NBFC (Ind AS), AOC4 (XBRL)] pertaining to FY 2024-25 up to 31st January, 2026 without payment of additional fees," the Ministry of Corporate Affairs (MCA) said in a circular on Tuesday.
Read More →A Mumbai-based woman who is a tax resident of Singapore, sold some of her debt and equity mutual fund investments in India and claimed tax exemption on capital gains under Article 13 of the India-Singapore Double Taxation Avoidance Agreement (DTAA). However, the tax department rejected her claim. Thus she challenged the denial before the Dispute Resolution Panel (DRP) which also ruled against her. The taxpayer then approached the Income Tax Appellate Tribunal (ITAT) Mumbai, arguing that in a comparable case under the India- UAE (United Arab Emirates) DTAA, ITAT Cochin had granted capital gains relief to an Indian resident of UAE and the same priciple should also apply to her case. Accepting her argument, ITAT Mumbai examined the India-Singapore DTAA in detail and ruled in her favour, granting the capital gains exemption. The taxpayer was represented before ITAT Mumbai.
Read More →Over the past few days, thousands of taxpayers across India have received an unexpected message from the Income Tax Department. The SMS or email said their refund claim had been “identified under the risk management process” and that processing had been put on hold. For many salaried taxpayers who were expecting routine refunds, the message was unsettling. It did not say what was wrong. It did not say what action was mandatory. And it did not say how long the refund might remain stuck. In the absence of clarity, confusion quickly spread. Screenshots of the message began circulating on social media and taxpayer forums. People asked whether this meant scrutiny, penalties, or a formal notice. For a tax system that has spent years trying to project simplicity and trust, the reaction revealed a deeper unease.
Read More →India's Central Board of Direct Taxes (CBDT) has clarified that exemptions from the Principal Purpose Test (PPT) under Double Taxation Avoidance Agreements (DTAAs) with countries like Mauritius, Cyprus, and Singapore won't interfere with domestic anti-abuse rules. This clarification is significant, especially since India and Mauritius amended their tax treaty in April 2024 to include the PPT. The PPT aims to prevent large companies from avoiding taxes by scrutinizing business arrangements made purely for tax benefits . In January, the CBDT had announced that the PPT wouldn't apply to past investments made under certain tax treaties with countries like Mauritius, Cyprus, and Singapore.
Read More →