TAX UPADESH

  Residential Status and Its Impact on Tax Liability in India – Complete Guide Residential Status is the foundation for determining tax liability under the Income Tax Act, 1961 . It defines whether your global income or only Indian income is taxable in India . Important: Residential Status depends on your physical stay in India , not your citizenship. Meaning of Assessee As per Section 2(7), an Assessee means a person liable to pay tax under the Income Tax Act. It includes: Individual Company Firm HUF AOP / BOI Types of Residential Status Status Meaning Resident and Ordinarily Resident (ROR) Fully resident in India Resident but Not Ordinarily Resident (RNOR) Partial resident Non Resident (NR) Non resident Basic Conditions to Become Resident An individual is Resident if ANY ONE condition satisfied: ✔ Stay in India ≥ 182 days in Financial Year OR ✔ Stay ≥ 60 days in FY AND 365 days in previous 4 years ...

  A recent development in the India–US trade discussions has drawn attention after the United States quietly revised its official factsheet describing the proposed trade framework. While the change may appear technical, it carries important signals — especially for India’s agriculture sector . Let’s break this down in simple terms. What happened? The US government initially released a document summarising key elements of a proposed trade understanding with India. That document suggested India would reduce tariffs on certain agricultural products, including pulses (like lentils and chickpeas), and would make firm commitments to purchase American agricultural goods. Soon after criticism and public debate, the US revised the factsheet. The updated version removed references to pulses, softened language around purchase commitments, and dropped claims that India would eliminate digital service taxes . Why pulses matter India is the world’s largest producer and consumer of pulses. Mill...

The Government has introduced a long-term tax incentive to make India a global hub for AI and cloud data centres . 👉 What does this mean? • Foreign cloud companies using Indian data centres to serve global customers will get a tax holiday until 2047 . • Services for Indian customers must be routed through an Indian entity . • A fixed profit margin rule reduces tax disputes for related companies. ✅ Why should an ordinary taxpayer care? • More global investment coming into India • Stronger digital infrastructure • Job creation and technology growth • Improved availability of cloud and AI services This move positions India as a long-term digital infrastructure destination. Reach out to us to know more

From 1 April 2026, the Income-tax law will become simpler and fairer. The Government has decided to replace certain penalties with mandatory fees . This reduces disputes, litigation and officer discretion . ━━━━━━━━━━━━━━ 🔍 Why this change? Earlier: ❌ Penalties were discretionary ❌ Officers decided whether to levy penalty ❌ Led to appeals & litigation Now: ✔ Fixed fees ✔ Automatic & predictable ✔ No scope for disputes ━━━━━━━━━━━━━━ 🧾 Major Changes Introduced 1️⃣ Failure to get Tax Audit done Earlier ( Section 446 ): • Penalty up to ₹1.50 lakh or 0.5% of turnover Now (Section 428(c)): • Fixed Fee of ₹75,000 or ₹1,50,000 (depending on delay) ━━━━━━━━━━━━━━ 2️⃣ Failure to submit Accountant’s Report ( Transfer Pricing ) Earlier ( Section 447 ): • Penalty of ₹1,00,000 Now (Section 428(4)): • Fixed Fee of ₹50,000 or ₹1,00,000 (depending on delay) ━━━━━━━━━━━━━━ 3️⃣ Failure to file SFT / Reportable Transactions Earlier ( Section 454 ): • ₹500 per day • ₹1,000 ...

  The amendments in relation to presumptive tax laws in Budget 2023 are a welcome change and have been largely appreciated by the taxpayer community.   Currently, businessmen with annual turnover less than Rupees 2 Crores and specified professionals with annual gross receipts less than Rupees 50 Lakhs are eligible to opt for presumptive taxation under sections 44AD and 44ADA. The limits of sections 44AD and 44ADA have been revised upwards to Rupees 3 Crores and 75 Lakhs respectively.   Section Nature of Income Limit till FY 23 Limit for FY 24 and onwards Section 44AD Business 2 Crores 3 Crores Section 44ADA Profession 50 Lakhs 75 Lakhs           The enhanced limit is applicable only if the entire amount of cash received during the year does not exceed 5% of to...

  1.      Extension of the date of incorporation for eligible start-ups Section 80-IAC of the Income tax act, 1961 provides tax holidays for an eligible start-up engaged in an eligible business. An eligible start-up can claim a deduction of 100% of its profits derived from eligible businesses for 3 consecutive assessment years out of 10 Assessment Years. The 10 assessment years have to be reckoned from the year in which the start-up is incorporated. To be eligible for a deduction under this section, a start-up must have been registered on or after January 4, 2016, but before March 31, 2023. This limitation period has now been increased by an additional year, until 31-03-2024. So, all eligible start-ups registered on or before 31-03-2024 would also be eligible for benefits under this section.   2.      The extension of the time period for carry forward and set-off of losses to 10 years from 7 years at present Under sectio...

The customs duties on goods made of precious metals like gold, silver, and platinum were raised by the Budget 2023. The customs duty rate has gone up from 20% to 25%. Additionally, the rate of duty on imitation jewellery has also been increased in this budget.  The revised customs duties are as below. Capital gains on Gold: It is proposed that the conversion of physical gold into an Electronic Gold Receipt and vice versa would not be considered as a transfer. Hence these transactions will not attract any Capital Gain tax. This move is to encourage investments in digital gold.

  Sections 269SS and 269T deal with limitations on taking out and repaying cash loans that are greater than Rs 20,000 per year. It also stipulates a fine in case a loan transaction in cash is done in excess of Rs. 20,000 per annum. This limit is enhanced to Rs. 2 lakhs per annum in Budget 2023. This enhanced limit is applicable only to Ø Primary agricultural credit society Ø Primary co-operative agricultural Ø Rural development bank   As a result, there won't be any penal consequences under section 269SS if a deposit is accepted by these entities from its members and the amount of the deposit is less than Rs. 2 lakhs per annum. Additionally, if a loan is taken from these entities by its members and the amount of the deposit or loan is less than Rs. 2 lakhs per annum, there won't be any penal consequences under section 269SS.     Furthermore, there won't be any penal consequences under section 269T, if a deposit is repaid back in cash by these ent...

  According to section 194N of the Act, TDS has to be deducted if the aggregate sum of cash withdrawn by a person in FY exceeds Rs. 1 Crores. (This limit is 20 lakhs in case no ITR has been filed for all three previous AYs). TDS will be deducted at 2% of cash withdrawn in excess of the limit(Rs. 1 Crores / Rs. 20 Lakhs) as stated above. Relaxation has been provided to co-operatives with respect to the amount of cash that may be withdrawn with TDS being deducted. This limit is enhanced to Rs. 3 Crores to Co-operatives . Now, Co-operatives may withdraw cash upto Rs. 3 Crores in a Financial Year without TDS being deducted.

It is proposed to bring payments made to micro and small (MSME) businesses under the purview of section 43B of the Income Tax Act 1961. The move is to encourage prompt payments to MSME businesses.  As a result, expenditure can be claimed only when the payments are actually made to MSMEs.  The expenditure can also be claimed on an accrual basis only if the payment is made within the time frame (Usually 45 days from the date of invoice) required by the Micro, Small and Medium Enterprises Development Act, 2006.

  It is now proposed that the New Tax Regime introduced in Finance Act 2020 will serve as the default tax regime. It is applicable to Individuals and HUFs. Additionally, this regime would take over as the default regime for AJP, BOI, and AOP (other than cooperative). Any Individual, HUF, AOP (other than a cooperative), BOI, or AJP may choose to be taxed under the old system if they do not want to be taxed under the new tax regime. Tax rates under new tax regime Total Income Tax Rate Upto Rs. 3 Lakhs NIL From 3 Lakhs to 6 Lakhs 5% From 6 Lakhs to 9 Lakhs 10% From 9 Lakhs to 12 Lakhs 15% From 12 Lakhs to 15 Lakhs 20% Above 15 Lakhs 30%   Tax rates under old tax regime Total Income Tax Rate Upto Rs. 2.5 Lakhs NIL From 2.5 Lakhs to 5 Lakhs 5% ...

KARNATAKA BUDGET 2020 HIGHLIGHTS 1)    Diesel and Petrol costs more: State tax (VAT) on Petrol is proposed increase from 32% to 35% and on Diesel it is proposed to increase from 21% to 24% thereby costing Diesel and Petrol more. Now, travelling seat may not be comfortable to those loving travelling a lot. 2)    Indian Made Liquor costs more: Excise duty on Indian made liquor is proposed to increase by 6%. Therefore, liquor may not taste for the coming year. 3)    Reduction in Stamp Duty: The rate of stamp duty on first time registration of new apartments/flats costing less than Rupees 20 Lakhs is reduced from 5% to 2%. This will surely bring smile on face of many people aspiring to buy new apartments/flats. Practically, no one will for buying apartments/flats in non-metropolitan cities and in Metropolitan cities getting an apartment/flat for Rupees less than 20 Lakhs is a nightmare. 4)    Cheers to Students a)  ...

BUDGET 2020 CAPSULE – 4 HAVE YOU READ THE BUDGET IN BETWEEN THE LINES? 1)    The ‘New Tax Regime’ has been introduced with the reduced rates of taxes. However, one need to forego certain deductions/exemptions to opt for the New Tax Regime. The motto of the new regime is to simplify the Income Tax Compliance of individual/HUF taxpayers but in fact, it has further created confusion among the taxpayers. The optional scheme forces one to Compute the Income Tax liabilities both in New Tax Regime and Old Tax Regime.    2)    Dividend Distribution Taxes (DDT) has been abolished. Now, Companies are not required to pay DDT. However, the Dividend exempted u/s 10(34) in the hands of a receiver (i.e the investor) is taxed now. Earlier, Government could collect 20.56% (Including Cess and Surcharge) for every Rupee of Dividend declared. But now Government can collect up to 42.74% depending upon an assessee’s Total Income. 3)    The due date for ...

BUDGET 2020 CAPSULE – 3 WILL REAL ESTATE SECTOR GETS REJUVENATED BY THE BUDGET MEASURES? REAL ESTATE – The Real wealth creator for any economy. There is a famous saying, “ “ Real estate  cannot be lost or stolen, nor can it be carried away, you can only get benefited. While an individual’s wealth is the reflection of the amount of investment made in Land, building etc. a country’s wealth treasure is the amount of investment made in its infrastructural facilities. The Government has rightly identified need for investment in infrastructural facilities and brought in a mammoth of measures and incentives to kickstart growth in the said sector. SO, WHAT ARE THEY? 1)    INVESTMENT IN INFRASTRUCTUAL FACILITIES IN COUNTRY OF ABOUT 100 LAKHS CRORES OVER A PERIOD OF NEXT 5 YEARS. -   The Government has already launched this ambitious project. In fact, the honourable Finance Minister has already unveiled the project on 31 st December, 2019. So, how...