Now ITR filing mandatory if your TDS, TCS is Rs 25,000 or more in a financial year

• Apr 23, 2022
  
  

• The government has now made it mandatory for an individual to file income tax returns if his/her total TDS/TCS during the financial year is Rs 25,000 or more even if the individual's income is below the basic exemption limit. In case of senior citizens this rule will apply if the individual's aggregate TDS/TCS is Rs 50,000 or more in the year, according to Aakanksha Goel, Direct Tax Partner, T R Chadha & Co LLP. Further, an individual whose deposits in a saving bank account are Rs 50 lakh or more in the fiscal will also have to compulsorily file ITR irrespective of his/her income level.

  The seventh proviso to Section 139 was inserted by the Finance Act, 2019, which provided for certain criteria which mandated the filing of income-tax returns even when the individual's income is less than the basic exemption limit. Such criteria include deposition of Rs one crore or more in a current account, expenditure exceeding Rs 2 lakh for foreign travel, or an amount exceeding Rs 1 lakh for electricity consumption during the year. Now, vide Notification No. 37/2022, CBDT has notified a new Rule 12AB which prescribes additional conditions which mandate the filing of Income-tax returns despite the fact that income is below the basic exemption limit, says Ms Goel. These additional criteria are...

Income Tax

Clarity on tax on ESOPs of ex-employees

• Apr 25, 2022
  
  

• Income-tax laws lay out provisions for taxation of notional income on exercise of employee stock options (ESOPs) by characterising the differential between Fair Market Value (FMV) of shares allotted on exercise and strike price as perquisite. Taxation of such perquisites follows a similar course as for taxation of other salary components. Clarity on taxation front begins to turn obscure when ESOPs are exercised and shares allotted, post cessation of employer-employee relationship. Questions surround the discharge of taxes post termination of the employer-employee relationship.

Income Tax

Govt notifies form for filing updated ITRs

• May 02, 2022
  
  

• The Income Tax department has notified a new form for filing updated I-T returns in which taxpayers will have to give the exact reason for filing it along with the amount of income to be offered to tax. The new form (ITR-U) will be available to taxpayers for filing updated income tax returns for 2019-20 and 2020-21 fiscals.
  Taxpayers filing ITR-U, which can be filed within 2 years of the end of the relevant assessment year, will have to give reasons for updating the income -- return previously not filed or income not reported correctly or wrong heads of income chosen or reduction of carried forward loss. The reasons given in the form also include reduction of unabsorbed depreciation or reduction of tax credit u/s 115JB/115JC or wrong rate of tax or any other reasons given by the taxpayers.

Income Tax

Decentralised finance under taxman’s lens: Government set to levy additional taxes

May 03, 2022

Indians earning “interest” on their cryptocurrencies from platforms outside India have come under taxman’s scrutiny, two people familiar with the development said.The tax department is looking to slap additional tax deducted at source (TDS) and equalisation levy on such transactions and interest income generated by Indians, they said.The move comes at a time when decentralised finance (DeFi), which is the financial ecosystem built on blockchain applications and can be used for remitting money or buying insurance or even borrowing money against cryptocurrencies, is fast gaining traction, and many Indians have now taken to earning interest income by depositing cryptocurrencies for a fixed period of time with the platform.

Income Tax

Tax reassessment: Supreme Court sets aside HC orders, revives show-cause notices

• May 05, 2022

  The Supreme Court held that the reassessment notices issued under the unamended Section 148 of the Income Tax Act on or after April 1, 2021, will not be deemed to be invalid just because they were issued under the old law. While modifying the relevant orders of various high courts that quashed the reassessment notices issued under the Section after the cut-off date, the SC said that these notices will be deemed as show-cause notices issued to the respective assessees under the new Section 148A of the Act.

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Income Tax

PAN or Aadhaar made mandatory for cash deposits or withdrawals above Rs 20 lakh

• May 12, 2022
  In a notification issued on May 10, 2022, the government has come out with new rules especially pertaining to those making financial transactions without a Permanent Account Number (PAN) or Aadhaar. The Central Board of Direct Taxes has made new rules, called the Income–tax (Fifteenth Amendment) Rules, 2022.As per the new rules, furnishing PAN or Aadhaar will be compulsory in the following transactions:
  

General

No new show cause notices to small taxpayers: CBDT tells officials

• May 12, 2022
  
  

• The Central Board of Direct Taxes (CBDT) issued on Wednesday extensive guidelines for implementing a Supreme Court (SC) order in reassessment cases. The court had early this month ruled that the thousands of show cause notices the Income Tax department had issued under a previous regime should be treated as ones issued under a new one for reopening assessment cases. The CBDT said that for three years, viz. assessment years (AY) 2013-14, 2014-15 and 2015-16, reassessment notices will not be issued for small taxpayers whose asset is less than Rs 50 lakh. The CBDT also clarified about subsequent years--AY 2016-17 and AY 2017-18--where timeline to issue notices under Section 148, as extended by various Taxation & Other Laws Amendment Acts ('TOLA') till June 30, falls within period of three years. Tax officers, in such cases, will issue show cause notices and provide material/ information to taxpayers for initiating reassessment proceedings, within 30 days--June 2.

Income Tax

I-T dept issues guidelines for selection of tax returns for complete scrutiny

• May 13, 2022
  The income tax department has issued guidelines for selection of I-T returns for complete scrutiny in the current fiscal and said such scrutiny would be applicable in cases where information about tax evasion is available from any other authority. The guidelines for selection for complete scrutiny have also added an additional limb of obtaining prior administrative approval of the Principal Commissioner/ Principal Director/ Commissioner / Director in certain cases, for selection of such cases for complete scrutiny.For instance, cases pertaining to survey, search and seizure and cases where charitable trusts have claimed exemption without a valid approval have been made subject to prior approval before transmission to the National Faceless Assessment Centre (NaFAC) for serving necessary scrutiny notices. Under complete scrutiny, a detailed scrutiny of the return of income is carried out by tax officers to confirm the genuineness of various claims, deductions, etc made by the taxpayer.

Income Tax