To implement the Budget 2024 announcement regarding the adjustment of TDS and TCS from other sources against salary TDS, the Central Board of Direct Taxes (CBDT) has issued a new form called Form 12BAA. This form will be utilized by employees to report to their employers the tax deductions from sources other than their salaries, such as fixed deposits, insurance commissions, dividends from equity shares, or tax collected while making purchases, like buying a car or foreign currency. Employers typically deduct TDS from salary as per the declaration given by the employee, taking into account investments and expenses eligible for tax deductions. However, employers did not adjust the taxes paid by the employee against other sources. Now, this will change with the newly notified form from the CBDT. By informing their employer about TCS collected and TDS deducted via this new form, the employee can lower their tax deduction from their salary. The move will help the employees deal with cash flow issues and increase their income to spend or save. CBDT notified the new form via a notification issued on October 15, 2024.
Read More →After months of discussion, the National Financial Reporting Authority (NFRA) on Monday decided to move towards the International Standard of Audit 600 (ISA 600) for all listed companies, barring public sector companies and state-run banks and their branches. Separately, the Institute of Chartered Accountants of India (ICAI) also agreed to revise the Standard on Quality Management (SQM), a mechanism for quality management for audits or reviews of financial statements, where public consultations have been completed.
Read More →The National Financial Reporting Authority's ongoing inspections of major audit firms have prima facie revealed some audit quality issues, for which the regulator is in talks with them, NFRA chairman Ajay Bhushan Prasad Pandey has said. The top five audit firms - BSR & Co, Deloitte Haskins & Sells, SRBC & Co, Price Waterhouse Chartered Accountants, and Walker Chandiok & Co LLP - that were inspected last year have introduced some positive changes, but a lot more needs to be done, Pandey told ET's Banikinkar Pattanayak in an interview. Edited excerpts: What is the status of your annual inspection of audit firms this year? Do you notice any change this time around in the standards and processes followed by the auditors you inspected last year? In this round of inspection, we have divided our work into two parts. First, we have taken some firms that were not inspected by us last year as per our rotation policy.
Read More →The Big Five audit firms in India are facing a talent crunch. A regulatory clampdown and a higher number of “relatively safer” career opportunities elsewhere are pulling chartered accountants (CAs) away from the audit profession. A senior partner at a Big Five firm told FE that the auditing verticals in top firms are operating with 20% lower staff than the required strength. At present, the top five firms have around 12,500 people in their audit function. “The amount of work is increasing every year but the staff strength is not growing as fast. Although we need to increase the capacity to handle the additional work and deal with the regulatory oversight, getting the right workforce has certainly become a challenge,” said audit vertical head at a Big Five firm. Another partner in the same firm said that the talent crunch is largely due to heightened regulatory scrutiny and because of the expanding opportunities beyond the traditional audit. “When I completed my CA in 1980s, there were fewer avenues. But young CAs today have a vast number of opportunities, and unless somebody is passionate about auditing, most of them usually land up somewhere else,” he said.
Read More →The Central Board of Direct Taxes (CBDT) has commenced a thorough examination and validation of specific high-value outward foreign remittances to identify any inconsistencies in their reporting in ITR and potential tax avoidance. Experts say that if you are among the identified taxpayers who have been found to have evaded taxes, then you may get a notice under section 133, and/or 131 (1A) and/or, 142(1) and/or, 143 (2), and/or 148, etc. According to a report by The Economic Times, this comprehensive scrutiny and verification of high-value outward foreign remittances is for transactions above Rs 6 lakh. The reason behind this move is that CBDT has noticed many cases where foreign remittances and expenditures did not align with the income declared by individuals. Highlighting the scale of the discrepancy in reporting, an official quoted in The Economic Times news report said an individual with a declared annual income of Rs 5 lakh has been found to have sent Rs 15 lakh abroad in the last three years using three different dealers so that these transactions do not attract the mandatory Tax Collected at Source (TCS).
Read More →In a significant ruling, the Income-Tax Appellate Tribunal's (ITAT) Mumbai bench has held that a gift of Rs 20 lakh received by a taxpayer from his non-resident brother, based in the UAE, is not subject to tax. This judgement underscores that Indian tax laws exempt certain gifts from being taxed, particularly those received from close relatives. Under the Income-Tax Act, gifts exceeding Rs 50,000 are generally taxed as 'income from other sources' at the applicable slab rate, in the hands of the recipient.
Read More →The budget has significantly improved diversification of investment options, simplifying holding periods and taxation, and simplifying understanding across asset classes for investors. Budget 2024 makes a key modification to overseas investments by giving TCS credit (paid at the time of LRS) for TDS deducted from wages. This reduces the tax burden by shortening return delays and preventing excess cash outflow. Girish Lathkar, Partner and CoFounder, Upwisery Private Wealth explains how Budget 2024 impacted TCS deduction while making overseas remittances with an example. After budget 2023, LRS regulations required TCS (tax collected at source) at the rate of 20% for any remittances done above Rs. 7 lakhs in a financial year. The overall LRS limit per individual stands at USD 250,000 (Rs. 2.07 crores approximately).
Read More →In a big relief to real estate industry, Finance Minister Nirmala Sitharaman will move an amendment in the Finance Bill to let taxpayers select either 12.5 per cent LTCG rate without indexation or 20 per cent rate with indexation for property acquired before July 23, 2024. As per the amendments to Finance Bill, 2024, circulated to the Lok Sabha members on Tuesday, individuals or HuF who bought houses before July 23, 2024, can compute his/her taxes under the new scheme [@12.5 per cent without indexation] and old scheme [@20 per cent with indexation] and pay such tax which is lower of the two. The development of Prime Minister Narendra Modi-led government comes after facing backlash from the real estate sector. The stakeholders cautioned the Centre on indexation proposal introduced in Budget 2024 will hurt the growth of the sector.
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