Expert Advice

Income Tax Queries

The Government of India has put in place a information based tax assessment of the tax returns filed by any person. Huge amount of information is being collected at transaction level at each stage relating to cross border and domestic transactions both. An exclusive “Insight” portal is already working with the revenue authorities which is collecting information from various sources relating to 360-degree view of any person. In this scenario, there are many questions which may come into one’s mind. We are here for you to answer all your obvious tax related questions to plan and manage any of your provable tax problems before it becomes too big to manage. We are ready with the answer of all your questions such as.

No, not all receipts are taxable. Receipts that are considered as income are taxable.

Yes, a record of all receipts should be maintained. Records can include receipts, invoices, bank statements, and any other documents that can provide evidence of income.

Books of accounts such as cash book, journal, ledger, and financial statements are required to be maintained by a person carrying on any business/profession in India.

No, not everybody needs to file an income tax return. However, it is mandatory for individuals and entities whose income exceeds the basic exemption limit to file an income tax return.

Yes, any income received in the form of winnings from lotteries, crossword puzzles, races including horse races, card games and other games of any sort or from gambling or betting of any form is taxable.

No, if the individual is a resident in India and his/her income is taxable in India as well as in another country, then he/she will have to pay tax on global income.

Residential status determines the tax liability of an individual. It is classified into three categories: Resident, Non-Resident and Resident but Not Ordinary Resident. The residential status is determined based on the number of days an individual has stayed in India in a financial year.

If an individual has excess TDS (tax deducted at source) deducted, he/she can claim a refund of the same by filing an income tax return. The refund will be processed by the Income Tax Department and credited to the individual’s bank account.

No, Advance tax is not the same as normal tax liability. Advance tax is the payment of tax in advance, while normal tax liability is the tax that is due at the end of the financial year.

Yes, some special benefits are available to non-residents in their tax liability. These include lower tax rates for specific types of income, tax exemptions for certain types of income, and deductions for specific expenses.

NRIs have to file their income tax return in ITR-2 or ITR-3 form, depending on their income sources and type of income.

Yes, it is mandatory for NRIs to pay advance tax if their estimated tax liability for the financial year exceeds Rs. 10,000.

Tax liability is determined based on an individual’s income, deductions, exemptions, and tax slabs applicable for that financial year.

NRIs are allowed deductions for expenses incurred for earning the income such as rent, interest on housing loan, health insurance premiums, and donations made to specified funds.

NRIs have to pay tax on the income they earn in India. They are also liable to pay tax on any income that arises or accrues in India.

The ITR Forms applicable to an NRI depend on the nature and source of income earned during the financial year. Generally, NRIs can file ITR-2 or ITR-3, depending on their sources of income.

Taxpayers can claim an income tax refund by filing their income tax return and providing details of the tax paid and tax liability. If the tax paid exceeds the tax liability, the taxpayer is entitled to a refund.

NRIs can claim a credit for the foreign taxes paid on their income earned abroad in their Indian income tax return. This can be claimed as per the provisions of the Double Taxation Avoidance Agreement (DTAA) between India and the country where the income was earned.

Taxpayers can choose between the new tax regime or the old tax regime based on their income level and the tax deductions they are eligible for. The new tax regime offers lower tax rates but fewer deductions, while the old tax regime has higher tax rates but more deductions.

Minimum Alternate Tax (MAT) is a tax levied on companies and Alternate Minimum Tax (AMT) is a tax levied on individuals. Both taxes are calculated on the basis of a percentage of book profits or adjusted total income, respectively, and are levied when the tax payable by the company or individual is lower than the MAT or AMT amount.

No, employee benefit expenses such as PF and ESI contributions cannot be claimed as a deduction if they are paid after the due date.

No, income tax cess cannot be claimed as an expense in the income tax return.

Section 115BAB and Section 115BAA are both tax provisions introduced in the Union Budget 2019 to provide relief to domestic companies. However, they differ in terms of the applicability of tax rates and eligibility criteria. Section 115BAB allows for a lower tax rate of 15% for companies established on or after 1st October 2019 and engaged in manufacturing or production, subject to certain conditions. On the other hand, Section 115BAA allows for a lower tax rate of 22% for domestic companies not availing certain specified deductions or incentives, with effect from Assessment Year 2020-21.

The new tax regime, introduced in the Union Budget 2020, offers taxpayers lower tax rates but at the cost of foregoing certain deductions and exemptions. However, certain deductions are still available under the new tax regime. These include standard deduction, deduction under Section 80CCD(2) (employer’s contribution to NPS), deduction under Section 80JJAA (for employment of new employees), deduction under Section 80EEA (for interest on home loan for affordable housing), and deduction under Section 80EEB (for interest on electric vehicle loan). Taxpayers can choose to opt for the new tax regime or continue with the existing tax regime based on their tax planning strategies

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