https://www.pdicai.org/Docs/Notification-No-117-2024_21102024144452724.pdf
The income tax department on Saturday extended the deadline for filing income tax returns by corporates by 15 days till November 15 for assessment year 2024-25. In a circular, the Central Board of Direct Taxes (CBDT) said the deadline will be extended from the earlier target date of October 31. The new deadline for Assessment Year 2024-25 (for furnishing tax returns for fiscal 2023-24) is November 15. Nangia Andersen LLP Tax Partner Sandeep Jhunjhunwala said this extension would not apply to the Tax Audit Report, transfer pricing certification in Form 3CEB and other income tax forms like Form 10DA, for which the deadline would remain October 31, 2024. AMRG & Associates Senior Partner Rajat Mohan said the CBDT's decision to extend the deadline for filing income tax returns for AY 2024-25, though not accompanied by an official explanation, seems aligned with the upcoming festive season. "By extending the deadline to November 15, 2024, taxpayers and professionals alike can prioritise accuracy and compliance without the stress of last-minute filings amidst celebrations," Mohan said.
The central board of direct taxes (CBDT) has set monetary limitations for waiver or Reduction of Interest on Tax Payments with riders. According to the circular issued late night Monday, principal chief commissioners of Income Tax can waive up to Rs. 50 lakhs, chief commissioners or director generals of Income Tax can waive between Rs. 50 lakhs and Rs. 1.5 crores, and principal chief commissioners of Income Tax can waive interest above Rs. 1.5 crores. The notification will be effective Tuesday. The interest waiver or reduction will be considered if payment of the amount would cause genuine hardship to the taxpayer, or if default was due to circumstances beyond their control, the circular said. Taxpayers must also co-operate in assessment or recovery proceedings, the circular added.
The Central Board of Direct Taxes (CBDT), under the Department of Revenue, Ministry of Finance, has recently released updated regulations outlining the process for granting condonation of delays in submitting income tax returns (ITRs) that include claims for refunds or carrying forward losses. These latest directives effectively override any prior guidelines or instructions that were in place. Here are the top points: 1. The authority to approve or deny claims based on amounts are allocated as follows: • Claims up to Rs 1 crore will be decided by Principal Commissioners of Income Tax (Pr. CsIT). • Claims falling between Rs 1 crore and Rs 3 crore are within the jurisdiction of Chief Commissioners (CCsIT). • Claims exceeding Rs 3 crore will be handled by Principal Chief Commissioners (Pr. CCsIT). 2. Time limits for submission of condonation applications: Taxpayers are required to submit condonation applications within five years from the conclusion of the assessment year for refunds or losses claims. This regulation is applicable to applications submitted post October 1, 2024. Authorities must aim to process these applications within six months. 3. Approval Criteria In order to be approved, the taxpayer must show a legitimate justification for the delay and prove that they experienced difficulties in meeting the deadline for filing. If necessary, the authorities may assign a local tax officer to look into the matter. 4. Special Cases: In instances where a refund is issued due to a court order, the five-year limit for refund claims does not include the time the case was under court consideration. Taxpayers are allowed six months from the date of the court order to request condonation. Additional refund claims, known as supplementary refund claims, may be reviewed according to these guidelines. 5. Late refund claims: No interest will be paid on late refund claims; taxpayers filing for delayed refunds should take note of this policy.
The deadline for submitting income tax audit reports using Form 10B/10BB has been extended for certain taxpayers. The new deadline for this category of taxpayers to submit their tax audit reports is November 10, 2024. This extension was announced by the Ministry of Finance through the Central Board of Direct Taxes (CBDT) in an order dated October 7, 2024. Which taxpayers will enjoy the extended deadline to submit tax audit report According to the order by the Ministry of Finance, these taxpayers will benefit from this extended deadline: Trusts, institutions, funds, and Others who are liable to file a tax audit report using Form 10B/10BB. Individuals with business or professional income who are subject to a tax audit under section 44AB need to submit their audit report using Form 3CD, 3CA, and 3CB. The extended deadline for these taxpayers was October 7, 2024. It has been brought to the notice of the CBDT that in some cases, such trusts/institutions/funds, could not file the audit report in the correct prescribed form The CBDT in exercise of the powers conferred under section 119 of the Act, hereby further allows such trusts / institutions/ funds to furnish such audit report in the applicable Form No. 1OB / 10BB on or before 10 November, 2024," said CBDT in the said order under section 119.
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.
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).
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.
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).
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.
Last week in Parliament, the finance minister Nirmala Sitharaman stated that the average time taken to process income tax returns (ITR) has decreased from 93 days in 2013 to 10 days. While this is a commendable achievement for the government, does this mean you can expect faster tax refunds in the future? Read on to find out. Not all ITRs are going to be processed in 10 days The FM mentioned that the 'average' processing time has been reduced to 10 days now. This does not mean that all types of ITRs will get processed in 10 days. The higher the complications of an ITR form, the higher the time it takes to process it. ITR-3 is more complex than ITR-2, and ITR-2 is more complex than ITR-1. "Normally refund claims of ITR-1 gets prioritised followed by ITR-2 and ITR-3 in view of the simple and complex structure of the income returned. Refund claims in ITR-1 without any defect/adjustments generally are received by the taxpayers within a few days from the date of filing returns. However, if returns are filed very close to the last date of filing of ITR there could be delay in processing of returns. Refund claims in ITR-2 and ITR-3 without any defect/adjustments can be expected to be received in a couple of months normally," says Ramakrishnan Srinivasan, former chief commissioner of Income tax.
Non-compete fees received by a taxpayer will be a non-taxable capital receipts up to the financial year 2002-03. The amendment to treat non-compete fees as taxable revenue receipts came into effect only from April 1, 2003 – this was upheld by the Income-tax Appellate Tribunal (ITAT), Mumbai bench in its recent order. The amendment does not have a retrospective effect, held the ITAT bench and declined to set aside the order of the Commissioner (Appeals), who had treated the non-compete fees of Rs.10 crore received by Lyka Labs (a company engaged in manufacture and sale of bulk formulation of pharmaceutical products) as a capital receipt. Lyka Labs had as per an agreement dated March 12, 2002 entered into a non-compete agreement with its joint venture company Lyka Hetro Health Care Limited (LHHCL) for not competing with LHHCL in the marketing, distribution and selling activities of certain formulations for the trade mark which has been registered or used by it. Both Lyka Labs and the Commissioner (Appeals) relied on an earlier order given by the Supreme Court in the case of Guffic Chem. The apex had categorically held that the amendment is only with effect from April 1, 2003 (Assessment year 2004-05 onwards) and does not have a retrospective effect for taxing the non-compete fee received prior to the said period. The Supreme Court in this order had also distinguished the compensation received for termination/loss of agency and a loss of source of business as per a negative covenant where the former would be a ‘revenue receipt’ and the latter a ‘capital receipt’. There is no doubt that the agreement entered into by Lyka Labs and LHHCL was a negative covenant. Accordingly, the ITAT bench dismissed the appeal filed by the I-T department.
Taxpayers had until May 31, 2024, to link their PAN with Aadhaar. Failure to do so will result in a higher Tax Deducted at Source (TDS) being levied on their income. This applies to transactions entered into before March 31st, 2024, with the TDS rate doubling for those with unlinked PANs. "The IT department has given a final deadline for 31st May 2024 for linking PAN with Aadhaar. In case assessee still fail to do so, this will tantamount to PAN being inoperative and will attract section 206AA whereby deduction shall be @ 20%," said Ritika Nayyar, Partner, Singhania & Co. The situation was particularly frustrating for homebuyers who unknowingly purchased property from sellers with unlinked PANs. These buyers faced notices demanding additional tax due to the higher TDS rate. However, a recent CBDT circular provides relief. If the seller links their PAN with Aadhaar by May 31st, the homebuyer will be off the hook for the additional tax. The income tax department in April 2024 provided relief to many homebuyers who were issued tax deduction at source (TDS) notices because the Permanent Account Numbers (PAN) of the property sellers were inoperative. The circular gave the homebuyers a chance to avoid the tax notices as long as the property sellers link their PAN with Aadhaar by May 31.
Finance Minister Nirmala Sitharaman said on Tuesday that the government will repeal the changes made to Section 43B of the Income Tax Act if MSMEs want to continue operating with uncertainty on payment timelines from their buyers. Interacting with MSMEs and local industries in Ludhiana, Sitharaman said the government added the 45-day payment rule effective since 2008 to the Income Tax Act on the request of MSMEs facing delays in payment from their buyers beyond 45 days. “If MSMEs want relaxation in payment made by their buyers without the 45-day limit, whether over 45 days, 150 days or a year and further, then it is easy to make the changes. We will change it and go back to the original rule,” Sitharaman said. The government in last year’s budget had proposed to add a new clause h under Section 43B of the Income Tax Act to address the challenge of delayed payments faced by MSMEs in the country, hindering the flow of working capital and overall business growth. The clause (h), which came into effect on April 1, 2024, with 2024-25 as the assessment year (that is financial year 2023-24), allows expenses to buyers on invoices from micro and small enterprises only if paid within 45 days (where agreement exists) and within 15 days if there is no agreement in the year of actual payment instead of the year when it was incurred as an expense.
Finance Minister Nirmala Sitharaman on May 28 hinted at the possibility of the government reconsidering changes made to the income tax rules mandating payments to micro, small and medium enterprises (MSMEs) within 45 days, failing which companies will have to pay tax on the amount due. This mandate came into effect on April 1, 2024. She urged MSMEs to send representations on the same, adding that the government will "surely do something about it in the July Budget." Speaking at an event in Ludhiana, Punjab, Sitharaman said the changes mandating the 45-day payment window was introduced as per requests from MSMEs themselves.
The income tax department on Tuesday asked taxpayers to link PAN with Aadhaar by May 31 to avoid tax deduction at a higher rate. As per income tax rules, if a Permanent Account Number (PAN) is not linked with biometric Aadhaar, TDS is required to be deducted at double the applicable rate. Last month, the income tax department issued a circular stating that no action will be taken for short deduction of TDS in case the assessee links his/her PAN with Aadhaar by May 31. "Please link your PAN with Aadhaar before May 31, 2024, if you haven't already, in order to avoid tax deduction at a higher rate," the department posted on X. In a separate post, the I-T department asked reporting entities, including banks, forex dealers, to file SFT by May 31 to avoid penalties.
The Union Finance Minister has noted that the Central Board of Direct Taxes (CBDT) has exempted the Reserve Bank of India from the special provisions of the Income Tax Act, 1961, regarding the tax deducted at source, and the tax collected at source for non-filers of an income-tax return. In a notification, the Finance Ministry said: "In exercise of the powers conferred by clause (ii) of the provison to sub-section (3) of section 206CCA of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies the Reserve Bank of India to be a person referred to in the said clause." The ministry also issued a notification along the same lines under section 206AB of the Income Tax Act. Section 206CCA of the Income Tax Act, 1961, provides tax collection at source (TCS) on amounts received by a specified person at rates higher than specified in the act. Under this, the tax is collected at twice the rate specified in the relevant provision of the Act, or at the rate of 5%, whichever is higher. The tax shall be collected at source (TCS) on higher of the following: > 2 times the rate given in the Income Tax Act or Finance Act or. > 5% If the person provides the PAN but has not filed the return for the last assessment year and the due date for filing has been expired and the aggregate of TDS or TCS in his case is Rs. 50,000 or more then the above rate shall apply. Just to save from this, if he doesn’t provide the PAN then tax shall be collected at 20% or a much higher rate as per section 206CC.
The income tax department has notified the cost inflation index (CII) for FY25, relevant to assessment year 2025-26, at 363, which is higher than 348 for FY24, and 331 for FY23. The CII is a tool used to measure inflation for computing long-term capital gains on the sale of assets, including immovable property, securities and jewellery. The CII adjusts the purchase price of assets to reflect current inflation, ensuring that taxpayers are taxed on real gains rather than nominal gains inflated by general price increases. This adjustment is essential for maintaining a fair and reflective tax system. Without it, taxpayers could face disproportionate tax liabilities on gains that are primarily due to inflation rather than actual economic growth, experts say. When selling assets such as immovable property, securities, or jewellery, the profit or gain from these assets tends to be high due to their increased sale price compared to the purchase price. As a result, assessees have to pay higher income tax on these gains. “Taxpayers can use this (CII) to calculate gains for the long term capital assets sold during FY25 and reduce the tax liability accordingly,” said Sandeep Sehgal, partner-tax, AKM Global.
A taxpayer can now know exactly why his/her income tax return (ITR) has been selected for scrutiny (close examination) by the Income Tax Department. This is because the Central Board of Direct Taxes (CBDT) has released guidelines via a circular dated May 3, 2024, which are to be followed for compulsory selection of ITRs for complete scrutiny for FY 2024-25. "Since the last few years, CBDT has issued similar circulars on an annual basis providing criteria for mandatory/ compulsory selection of ITRs for scrutiny and recently this circular was issued for FY 2024-25. These circulars issue guidelines for compulsory selection of ITRs for complete scrutiny as well as for the procedure for compulsory selection in such specified cases," says Dr Suresh Surana, founder, RSM India, a tax and business consultancy group.
Apr 18, 2024 CBDT signs record number of 125 Advance Pricing Agreements in FY24 The Central Board of Direct Taxes (CBDT) has entered into a record 125 Advance Pricing Agreements (APAs) with Indian taxpayers in 2023-24. This includes 86 Unilateral APAs (UAPAs) and 39 Bilateral APAs (BAPAs), the finance ministry said in a statement on Tuesday.
Apr 18, 2024 ITR Filing: How to claim TDS Credit not reflecting in Form 26AS Tax Deducted at Source (TDS) applies to various income sources, including salaries, business income, property sales, and interest on bank deposits. When a payer deducts TDS from your income, they essentially withhold a portion of your tax liability. This deducted amount is then credited to your tax account and is supposed to be reflected when you file your tax return.
The Income Tax Department has enabled the online income tax return forms, ITR-1, ITR-2 and ITR-4, for FY 2023-24 (AY 2024-25) on the e-filing portal. The online ITR forms have been enabled from April 1, 2024. With the availability of income tax return forms, taxpayers eligible to file their tax returns using these ITR forms can now file their ITR for FY 2023-24.
The income tax department has uncovered a scheme involving fraudulent use of Permanent Account Numbers (PAN) by individuals to falsely claim house rent allowance (HRA), despite not being tenants, stated a Times of India (ToI) news report. As per initial findings, around 8,000-10,000 significant cases have been identified, with amounts exceeding Rs 10 lakh in many instances. The investigation began when authorities stumbled upon purported rent receipts totaling approximately Rs 1 crore under an individual's PAN. However, upon questioning, the individual disavowed any knowledge of these transactions. Subsequent inquiry revealed that the individual had not actually received the rent attributed to them.
The Income Tax department on Thursday said ITRs 1, 2, 4 and 6 have been made available on e-filing portal from April 1, 2024, and about 23,000 returns have already been filed for the 2023-24 fiscal year. This is for the first time in recent years that the Income Tax department has enabled taxpayers to file their I-T Returns on the first day of the new financial year and, is a step towards ease of compliance and seamless taxpayer services.
Around 23,000 taxpayers filed their income tax returns (ITR) in the first three days of Assessment Year (AY) 2024-25 (Financial Year 2023-24) after the Income-tax Department for the first time opened return filing utilities on its portal from the first day of the assessment year, that is, April 1, 2024. Last year, even though the returns had been notified early, they became available for filing on the IT portal only in May (for Assessment Year 2023-24 or Financial Year 2022-23). Filing functionalities were available from May 20, 2023 for salaried individuals (ITR-1) and individuals, HUFs, and partnership firms generating an income from a business or profession (ITR-4). The filing utility for individuals and HUFs having income other than income from profits and gains from business or profession was available from May 30 (ITR-2).
As the new financial year begins on April 1, 2024, this is the right time look back at your investments made in the past and make plans for the new fiscal year. April holds much importance as it witnesses the implementation of most Budget 2023 proposals regarding income tax. You, therefore, must prepare for the new tax changes that will take place in the financial year 2024-2025. In her last Union Budget speech, Finance Minister Nirmala Sitharaman had outlined various changes set to take effect from this day onward, impacting our finances. Here’s a breakdown of some key changes to be aware of, including expanded basic exemption limits and more.
The Income Tax department on Monday said it has identified mismatches in ITRs filed by some taxpayers and information on dividend and interest income received from third parties. In a statement, the Central Board of Direct Taxes (CBDT) said an on-screen functionality has been made available in the compliance portal of the e-filing website https://eportal.incometax.gov.in for taxpayers to provide their response.The Income Tax Department has identified certain mismatches between the information received from third parties on interest and dividend income, and the Income Tax Return (ITR) filed by taxpayers. In many cases, taxpayers have not even filed their ITRs, it said.
Income Tax Waiver Limits: CBDT Clarifies Rs 1 Lakh Cap, Exempts Future Interest The Central Board of Direct Taxes (CBDT) has established a maximum ceiling limit of Rs 1 lakh for the waiver of eligible income tax demands. However, an exclusion from this calculation, as outlined in the CBDT's order dated February 13, 2024, is future interest, which will not be considered when determining the overall amount of income tax demand. CBDT said, "Consequent to the aforesaid remission and extinguishment of entries of outstanding demand, there shall not be requirement of calculation of interest on account of delay in payment of demand under sub-section (2) of section 220 of the Income-tax Act, 1961 or corresponding provisions of Wealth-tax Act, 1957 and Gift-tax Act, 1958 and therefore, the same shall not be considered for the purpose of determining the ceiling of Rs 1,00,000 (Rupees one lakh)."
The Central Board of Direct Taxes (CBDT) has fixed the maximum ceiling limit as Rs 1 lakh for waiving eligible income tax demands. However, in an order dated February 13, 2024, CBDT said that future interest will not make part of this calculation of the overall amount of income tax demand. CBDT said in the order, "Consequent to the aforesaid remission and extinguishment of entries of outstanding demand, there shall not be requirement of calculation of interest on account of delay in payment of demand under sub-section (2) of section 220 of the Income-tax Act, 1961 or corresponding provisions of Wealth-tax Act, 1957 and Gift-tax Act, 1958 and therefore, the same shall not be considered for the purpose of determining the ceiling of Rs 1,00,000 (Rupees one lakh)."
The Income Tax department has prescribed a ceiling of Rs 1 lakh per assessee for withdrawal of small tax demands till Assessment Year 2015-16, in accordance with a scheme announced in Budget.The Central Board of Direct Taxes (CBDT) has issued an order giving effect to the 2024-25 Budget announcement by Finance Minister Nirmala Sitharaman. The Budget had announced that tax demands for AY 2010-11 of up to Rs 25,000 and for AY 2011-12 to 2015-16 of up to Rs 10,000 will be withdrawn. Tax demands totalling about Rs 3,500 crore will be withdrawn following the announcement.The CBDT order said that such outstanding tax demands pertaining to income tax, wealth tax and gift tax as on January 31, 2024, shall be remitted and extinguished “subject to the maximum ceiling of Rs 1 lakh for any specific taxpayer/assessee”.The limit of Rs 1 lakh would include principal component of tax demand, interest, penalty or fee, cess, surcharge.However, the remission shall not be applicable on the demands raised against the tax deductors or tax collectors under TDS or TCS provisions of the I-T Act.Nangia Andersen India Partner Maneesh Bawa said the directive further specifies that this waiver or cancellation does not entitle taxpayers to any claims for credit or refunds.