Car Lease vs Direct Car Purchase: How Employees Can Save ₹6+ Lakhs in Tax (FY 2026-27 Guide

🚗

🏦 FY 2026-27 Tax Planning

Car Lease vs
Direct Purchase
Save Big on Tax

Discover how structuring your car through a Company Lease Policy can legally save you lakhs in income tax every single year.

₹6,19,200

Total savings over 4 years

✨

📋 Understanding the Concept

What is a Car Lease Policy?

A Car Lease Policy allows employees to get a car through their employer as part of their CTC. The employer leases the car, and the rental is deducted from the employee's pre-tax salary.

Instead of paying EMI from post-tax income, you pay lease rentals before tax — the government taxes only a small fixed perquisite value, not the full lease amount. This is perfectly legal and government-notified.

📊 Official Tax Rules

Perquisite Value – FY 2026-27

💡 Tax is calculated ONLY on this fixed perquisite value — not on your actual lease rental. That's the entire magic of this strategy!

Category	Monthly Perquisite Value
🚙 Car up to 1600cc	₹5,000 / month
🚕 Car above 1600cc	₹7,000 / month
🧑‍✈️ Car with Driver	Up to ₹10,000 / month

🔍 Real Numbers Comparison

See the Difference Clearly

₹15L

Car Cost

₹35,000

Monthly Rental/EMI

30%

Tax Slab

>1600cc

Engine Size

❌

Direct Car Purchase

EMI (post-tax)₹35,000

Pre-tax income needed₹50,000

Tax paid / month₹15,000

Annual tax burden₹1,80,000

✅

Car Lease Policy

Lease rental₹35,000

Taxable perquisite₹7,000

Tax paid / month₹2,100

Annual tax burden₹25,200

💰 Your Net Annual Tax Saving

₹1,54,800

Every single year — completely legally

₹25,200

Tax under Lease Policy

₹6,19,200

Total 4-Year Savings

🎯 Additional Benefits

More Reasons to Choose a Lease

💸

Lower Effective Car Cost

Save 25–40% on your car's actual cost if you're in the 30% tax bracket.

⛽

Fuel & Maintenance

Both can be structured tax-efficiently within the corporate lease arrangement.

🔄

Buy at Depreciated Value

Car transfers to you at book value after lease — much lower than market price.

🏦

Better Cash Flow

No large upfront payment. Your pre-tax salary handles the lease seamlessly.

📈

Zero Down Payment

Unlike a car loan, no need to block your savings or investments.

🛡️

100% Legal

Fully compliant with Income Tax Act. Backed by government-notified perquisite rules.

🏆 Final Verdict

A Car Lease Policy can reduce your effective car cost by 25% to 40% if you are in the 30% tax bracket. It is one of the most powerful salary structuring tools available to salaried employees in India — and most people don't even know about it!

📞 Get Expert Help

Want to Structure Your Salary Smartly?

Get CA-guided, professional assistance to design your tax-efficient compensation and start saving today.

WhatsApp Me Now 📲 Call: +91 77602 52581

🧾 CA-Guided Tax Planning

Professional salary structuring & tax efficiency

📱 WhatsApp / Call: +91 77602 52581

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© 2026 · Tax Upadesh · CA-Guided Tax Planning · For informational purposes only. Consult your CA for personalised advice.

💼 Leave Encashment Tax Relief up to ₹25 Lakhs – Are You Claiming It Correctly?

 

Leave Encashment Tax Relief up to ₹25 Lakhs

Are You Claiming Your Retirement Benefits Correctly?

Many employees unknowingly pay excess tax on leave encashment received at the time of retirement or resignation. Under Section 10(10AA) of the Income Tax Act, you are entitled to significant tax exemptions that can save you lakhs of rupees.

New Update: The lifetime exemption limit for private-sector employees has been enhanced to ₹25,00,000.

Eligibility & Exemptions

🏛️ Gov. Employees

100% Tax-Free: Leave encashment received at retirement is fully exempt from tax without any upper limit.

🏢 Private Sector

Up to ₹25 Lakhs: Exemption available for non-government employees at the time of retirement or resignation.

How is Exemption Calculated?

The exempt amount is the least of the following four factors:

Criteria	Description
Actual Received	The total amount paid by your employer.
Statutory Limit	Max limit of ₹25,00,000 (Lifetime).
Average Salary	Last 10 months' average basic salary + DA.
Earned Leave	Cash equivalent of leave balance (Max 30 days/year).

⚠️ Critical Tax Warnings

• During Employment: Any leave encashed while still in service is fully taxable.
• Cumulative Limit: The ₹25 Lakh limit is a lifetime ceiling across all employers.
• Timing Matters: Exemption applies only during Retirement, Resignation, or Termination.

Don't Lose Money to Incorrect Tax Filing

We provide expert tax optimization and accurate calculations for retirees and salaried professionals.

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📞 Get Professional Tax Help

Residential Status and Its Impact on Tax Liability

 

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.

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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

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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

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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

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Additional Conditions for ROR

To become ROR, BOTH must be satisfied:

• Resident in at least 2 out of last 10 years
• Stay in India ≥ 730 days in last 7 years

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Taxability Based on Residential Status

Income Type	ROR	RNOR	NR
Indian Income	Taxable	Taxable	Taxable
Foreign Income	Taxable	Not Taxable*	Not Taxable

*Except income from business controlled in India

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Special Benefit for Returning NRIs

RNOR Status provides major tax benefit:

• Foreign Income not taxable
• No foreign asset disclosure
• Huge tax saving opportunity

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Residential Status of Other Assessees

• Company: Resident if POEM in India
• Firm: Resident if control in India
• HUF: Resident if management in India

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Importance in Tax Planning

✔ NRI Tax Planning
✔ Foreign Salary Taxability
✔ DTAA Benefit
✔ Avoid tax notices

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Conclusion

Residential Status is the most critical factor in determining tax liability. Proper determination helps:

• Save tax legally
• Avoid penalties
• Ensure compliance

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Need Help with NRI or Residential Status Taxation?

Get Professional Advisory Support

📞 +91 77602 52581

📍 Bangalore

🌍 Residential Status Decides Your Tax in India – Not Your Citizenship!

 

Many taxpayers wrongly assume that staying abroad means no tax in India. In reality, your Residential Status under the Income Tax Act, 1961 determines whether your global income or only Indian income is taxable.

Here is what every NRI, returning professional, and foreign income earner must know:

━━━━━━━━━━━━━━━━━━━

📌 Three Residential Status Categories

🔹 Resident and Ordinarily Resident (ROR)
✔ Tax on global income
✔ Mandatory disclosure of foreign assets

🔹 Resident but Not Ordinarily Resident (RNOR)
✔ Tax only on Indian income
✔ Foreign income generally not taxable
✔ Major tax saving opportunity for returning NRIs

🔹 Non-Resident (NR)
✔ Tax only on income earned or received in India
✔ Foreign income fully exempt in India

━━━━━━━━━━━━━━━━━━━

📊 Why this is Critical

✔ Avoid unnecessary tax on foreign income
✔ Proper tax planning when returning to India
✔ Correct income tax return filing
✔ Compliance with foreign asset reporting
✔ Avoid penalties and scrutiny

━━━━━━━━━━━━━━━━━━━

💡 Special Advantage for Returning NRIs

Returning individuals can legally enjoy RNOR status, where foreign income remains non-taxable in India for a limited period, subject to conditions.

Proper planning can result in significant tax efficiency.

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⚠ High-Risk Areas Where Professional Guidance is Essential

• NRI Tax Filing
• Returning to India Planning
• Foreign Salary Taxability
• DTAA Benefit Claim
• Foreign Asset Disclosure

━━━━━━━━━━━━━━━━━━━

🤝 Get Expert Guidance on Your Residential Status and Tax Liability

Accurate determination can help you:

✔ Save tax legally
✔ Avoid notices
✔ Ensure full compliance

📞 Contact: +91 77602 52581
📍 Visit: https://share.google/aOzL0ZYXlgKBzSjib

━━━━━━━━━━━━━━━━━━━

Plan your Residential Status. Plan your Taxes Smartly.

💰 Save Tax on Gold & Silver Gains — Legally & Smartly!

 

If you have invested in Gold ETFs, Silver ETFs, or Gold Mutual Funds (FoFs), you may be eligible to pay ZERO tax on Long-Term Capital Gains up to ₹1.25 lakh every financial year, subject to conditions.

Proper planning before 31 March can help you lock in gains and reduce future tax liability.

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📊 Correct Taxation of Gold & Silver Funds

Gold & Silver ETFs

• Held more than 12 months → LTCG taxed @ 12.5%
• Held up to 12 months → STCG taxed at slab rate

Gold Mutual Funds (FoFs)

• Held more than 24 months → LTCG taxed @ 12.5%
• Held up to 24 months → STCG taxed at slab rate

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✅ When You Can Claim ₹1.25 Lakh LTCG Exemption

You can claim this exemption only if:

✔ You sell the investment and realise Long-Term Capital Gain

✔ The gain is Long-Term
(ETF > 12 months / Gold Fund > 24 months)

✔ Total LTCG during the financial year is up to ₹1.25 lakh → Tax = NIL

✔ If LTCG exceeds ₹1.25 lakh → Tax applies only on the excess

✔ This limit is available every financial year

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💡 Smart Tax Planning Strategy (Tax Harvesting)

You can:

• Book gains up to ₹1.25 lakh → Pay ZERO tax
• Reinvest immediately
• Increase your cost base
• Reduce future tax burden
• Continue your investment without interruption

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🎯 Who Should Review Immediately

This is highly relevant for taxpayers who:

• Have profit in Gold or Silver ETFs
• Have profit in Gold Mutual Funds
• Are long-term investors
• Want to optimise tax before financial year end

---

⚠ Professional Execution is Important

Correct planning ensures:

✔ Maximum tax exemption
✔ Compliance with tax law
✔ Improved post-tax returns

---

📞 Get Your Tax Saving Review Done

Avoid unnecessary tax outflow. Use available exemptions efficiently.

CA Ramakrishna Sanjay
Contact: +91 77602 52581

Plan before 31 March. Save tax legally. Grow wealth smarter.
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🌍 FAST-DS 2026: Big Relief for Foreign Asset Non-Disclosure | Budget 2026

 

The Government has introduced the Foreign Assets of Small Taxpayer Disclosure Scheme (FAST-DS), 2026, providing a one-time compliance window to regularise undisclosed foreign assets with reduced penalties and immunity from prosecution.

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👤 Who Should Consider This?

✔ Returning NRIs with foreign bank accounts
✔ Employees holding ESOPs / RSUs abroad
✔ Students / professionals with overseas accounts
✔ Residents who missed reporting in Schedule FA
✔ Individuals with small foreign investments

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📊 Two Relief Categories

🔴 Category A – Asset & Income Not Disclosed
• Applicable if asset / income not reported at all
• Eligibility: Asset value up to ₹1 crore
• Pay: 30% tax + 30% additional charge (Total 60%)
• 🎯 Benefit: Full immunity from prosecution

🟢 Category B – Income Disclosed, Asset Not Reported
• Technical non-disclosure in Schedule FA
• Eligibility: Asset value up to ₹5 crore
• Pay: Flat ₹1 lakh only
• 🎯 Benefit: No penalty, No prosecution, Complete closure

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⚖ Major Advantage vs Black Money Act

Under normal law:
• Penalty up to 120% of asset value
• Plus prosecution risk

Under FAST-DS:
• Reduced financial burden
• Permanent compliance closure
• Immunity from legal consequences

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⏳ Limited Time Opportunity

This scheme will be available only for a 6-month window. Post closure, authorities will rely on global information exchange (CRS) to detect undisclosed assets.

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💡 Professional Insight

This is a strategic compliance opportunity for taxpayers to regularise foreign assets at significantly lower cost and risk.

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📞 For advisory and compliance support:

CA Ramakrishna Sanjay
+91 77602 52581

Zero Tax on NRI Mutual Fund Capital Gains

 

ITAT Ruling: No Tax on NRI Mutual Fund Capital Gains – Professional Analysis

The Mumbai ITAT has held that capital gains earned by an NRI resident of Singapore from sale of Indian mutual fund units are not taxable in India, based on the India–Singapore DTAA. This is a significant precedent with broader implications for treaty-resident NRIs.

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Key Technical Reasoning of ITAT

1. Mutual Fund Units ≠ Shares

• Mutual Funds in India are structured as trusts under SEBI Regulations, not companies.

• DTAA provisions dealing with taxation of “shares” do not automatically apply to mutual fund units.

• Since the treaty did not explicitly cover MF units, India lost taxing rights.

Conclusion: Gains taxable only in the country of residence (Singapore), not India.

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2. DTAA Overrides Domestic Law (Section 90(2))

Even though Indian domestic law taxes:

Type	Tax Rate (NRI)
STCG Equity MF	20%
LTCG Equity MF	12.5%

DTAA benefit prevails if more beneficial.

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3. Taxing Rights Shifted to Country of Residence

Under India-Singapore DTAA:

• Capital gains taxable in country of residence, unless specifically covered.

• Mutual fund units not specifically covered → India cannot tax.

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Critical Compliance Requirement: TRC Mandatory

To claim DTAA benefit, NRI must have:

✔ Tax Residency Certificate (TRC)
✔ Form 10F
✔ No PE (Permanent Establishment) in India
✔ Beneficial ownership

Without TRC → DTAA benefit denied.

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Practical Implications for NRIs

Positive Impact Countries

This principle may apply to NRIs resident in:

• Singapore

• UAE

• Mauritius

• Portugal

• UK

• Germany

• France

• Australia

• Hong Kong

Subject to specific DTAA wording.

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Important Caveat – Not Universal Exemption

This ruling:

• Is case-specific

• Depends entirely on:

  • DTAA language

  • Facts of case

  • Residency proof

Not automatic blanket exemption.

Department may appeal in High Court.

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Professional Advisory View (Strategic Interpretation)

Structuring Opportunity

NRIs in favourable DTAA countries may achieve:

• Zero capital gains tax in India

• Taxable only in residence country

• Potential tax arbitrage if residence country exempts

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Technical Position under Indian Law (Current)

Particular	Resident	NRI (without DTAA)	NRI (with favourable DTAA)
Mutual Fund LTCG	Taxable	Taxable	Possibly Not Taxable
Mutual Fund STCG	Taxable	Taxable	Possibly Not Taxable

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Conclusion

This ITAT ruling creates major tax planning opportunity for NRIs, but it is not a blanket exemption. Proper treaty analysis and documentation are critical.

---

CA Ramakrishna Sanjay
+91 7760252581

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 Mumbai Income Tax Appellate Tribunal (ITAT) ruled in favour of Anushka Sanjay Shah, a Singapore-based NRI

Enhanced Rebate u/s 87A – Budget 2025-26

💰 Major Tax Relief for Middle Class – Income up to ₹12 Lakhs Tax-Free*

The Budget 2025-26 has significantly enhanced the rebate under Section 87A, making the New Tax Regime more beneficial than ever.

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📊 Key Highlights

✅ 1. Tax-Free Income Limit Increased

• Earlier: ₹7,00,000

• Now: ₹12,00,000

• Result: Zero tax liability up to ₹12 lakhs (subject to conditions)

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✅ 2. Rebate Amount Increased

• Earlier rebate: ₹25,000

• Now increased to: ₹60,000

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✅ 3. Marginal Relief Available

• If income slightly exceeds ₹12 lakhs,

• Additional tax will not exceed the extra income earned

• Prevents sudden tax burden

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⚠️ 4. Important Restriction

Rebate NOT available on special rate incomes like:

• Capital Gains (Shares, Property, etc.)

• Lottery income

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🎯 Practical Impact

Income	Tax under New Regime
₹8,00,000	NIL
₹10,00,000	NIL
₹12,00,000	NIL
₹12,10,000	Small marginal tax only

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📌 Strategic Insight

✔ Strong push towards New Tax Regime
✔ Major benefit for salaried & professionals
✔ Significant increase in disposable income
✔ Simplifies tax planning (less dependency on deductions)

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🧾 Conclusion

This amendment is a game-changing tax relief, making ₹12 lakh income effectively tax-free (excluding special incomes). 

Proper structuring of salary and income can help maximise this benefit.

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📍 Gururaaja Sanjay & Co, Chartered Accountants
📞 +91 77602 52581
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💡 ULIP Taxation After Budget 2025 – What is Exempt and What is Taxable?

📌 Overview

Unit Linked Insurance Plans (ULIPs) combine life insurance + market-linked investment. Budget 2025 has clarified taxation, dividing ULIPs into Tax-Free and Taxable categories.

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✅ Tax-Free ULIPs (Exempt u/s 10(10D))

Maturity proceeds remain fully exempt, if conditions below are satisfied:

1️⃣ Policies issued from 01-04-2003 to 31-03-2012

• Premium ≤ 20% of Sum Assured

2️⃣ Policies issued from 01-04-2012 to 31-01-2021

• Premium ≤ 10% of Sum Assured

3️⃣ Policies issued on or after 01-02-2021

Must satisfy BOTH:
• Premium ≤ 10% of Sum Assured
• Premium ≤ ₹2.5 lakh per year

📍 If these limits are met → Entire maturity amount is tax-free

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❌ Taxable ULIPs (Now treated like Mutual Funds)

If above conditions are not met → ULIP becomes Taxable Capital Asset

Tax treatment:

📈 Equity ULIPs (Equity ≥ 65%)

• LTCG (>12 months):
→ 12.5% tax (above ₹1 lakh exemption)

• STCG (≤12 months):
→ 20% tax

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📉 Debt ULIPs (Equity < 65%)

• STCG → Taxed as per slab
• LTCG → 20% with indexation

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🎯 Practical Impact

✔ Old compliant ULIPs → Still tax-free

✔ High premium ULIPs → Now taxable

✔ ULIPs and Mutual Funds → Similar tax treatment

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🏁 Conclusion

Budget 2025 has removed blanket tax exemption and made high-premium ULIPs taxable, improving fairness and aligning them with other investment products.

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CA RAMAKRISHNA SANJAY
+91 7760252581
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🏠 HRA CLAIMS: NEW DISCLOSURE RULE UNDER DRAFT INCOME-TAX RULE 205

 

⚠️ Major compliance tightening for salaried taxpayers claiming House Rent Allowance (HRA).

The Draft Income-tax Rules, 2026 introduce a critical new disclosure requirement that could significantly impact HRA claims—especially when rent is paid to relatives.

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📋 What is the New Requirement?

Under proposed Rule 205 & new Form 124, employees must now disclose:

✅ Landlord’s PAN (existing requirement)
✅ Relationship with the landlord (NEW mandatory disclosure)

This applies particularly where rent is paid to:

• Parents 👨‍👩‍👦
• Spouse
• Relatives
• Related parties

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🔍 Why This Change is Important

The Income Tax Department will now use data analytics to verify:

📊 Whether landlord reported rental income in ITR
🏠 Whether landlord actually owns the property
💳 Whether rent is paid through proper banking channels

This shifts compliance from self-declaration → system-based verification

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⚖️ Risk of Penalty for Incorrect Claims

If HRA claim is found to be artificial or misreported:

🚨 Penalty up to 200% of tax under Section 270A

Earlier, such arrangements were difficult to track. Now scrutiny will be automated.

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✅ Action Points for Taxpayers Claiming HRA to Relatives

To ensure compliance and avoid disputes:

✔️ Execute proper rent agreement
✔️ Pay rent only via bank transfer
✔️ Ensure landlord reports rental income in ITR
✔️ Maintain complete documentation

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🎯 Professional Insight

Genuine HRA claims remain fully valid. However, informal or tax-engineered arrangements will face higher scrutiny.

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📞 For professional guidance on salary structuring and tax planning:
📍 https://share.google/aOzL0ZYXlgKBzSjib
📱 +91 77602 52581

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Follow us for practical tax insights and compliance updates.

🟡 Gold Investment: Choose the Right Option & Save Tax

 

Gold prices are rising — but right investment choice decides your real profit.

Here is a simple guide:

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🥇 Sovereign Gold Bonds (Best Option)

✔ Tax-free capital gain on maturity
✔ Extra 2.5% interest
✔ No GST, no storage

Best for long-term wealth

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🥈 Gold ETF (Most Flexible)

✔ Easy buy/sell anytime
✔ No GST or making charges
✔ LTCG tax only 12.5%

Best for liquidity

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🥉 Gold Mutual Funds

✔ Invest without Demat
✔ Easy and convenient

But higher expense

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⚠ Physical Gold (Jewellery / Coins)

❌ GST 3%
❌ Making charges up to 35%
❌ No extra income

Least efficient for investment

---

🎯 Smart Strategy

✔ Long term → SGB
✔ Medium term → Gold ETF
✔ Avoid jewellery for investment

---

Gold can build wealth — if invested smartly.

📞 77602 52581
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🚗 Motor Car Perquisite – Major Revision under New Income-tax Act

 

Employer-provided car? Your taxable salary impact has changed significantly. Here is a clear comparison and taxpayer impact analysis:

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📊 Perquisite Value Comparison – Old vs New

Particulars	Old Income-tax Act, 1961 (Rule 3)	New Income-tax Act (Proposed)	Increase
Car < 1.6 litre engine	₹2,700 per month	₹8,000 per month	🔺 ₹5,300
Car > 1.6 litre engine	₹3,300 per month	₹10,000 per month	🔺 ₹6,700

👉 Increase of almost 3 times

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💼 What this Means for Taxpayers

Earlier (Old Act):

• Perquisite value was nominal

• Tax impact was minimal

• Employer-provided car was highly tax efficient

Now (New Act):

• Higher perquisite value

• Higher taxable salary

• Higher tax liability for employees

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🧾 Practical Example

If employee falls under 30% tax bracket

Earlier tax saved on perquisite:
₹2,700 × 12 × 30% = ₹9,720

Now tax saved:
₹8,000 × 12 × 30% = ₹28,800

🔺 Additional tax saved: ₹19,080 per year

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☕ Professional Advisory

If you are receiving a company car, it is advisable to review your salary structure for tax optimisation.

For personalised tax planning assistance:

📞 +91 77602 52581

🎓 Big Tax Relief Proposed: Children Education & Hostel Allowance – Massive Increase After Decades

The Draft Income-tax Rules propose a substantial revision to allowances that remained unchanged since 1962 under the Income-tax Act, 1961.

📊 Comparison: Old vs Proposed Limits

1️⃣ Children Education Allowance

• Old Limit (Income-tax Act, 1961): ₹100 per month per child
• Proposed Limit: ₹3,000 per month per child
• Eligibility: Maximum 2 children

👉 Annual Exemption
Old: ₹2,400 per year
Proposed: ₹72,000 per year

📈 Increase: 30 Times

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2️⃣ Hostel Expenditure Allowance

• Old Limit (Income-tax Act, 1961): ₹300 per month per child
• Proposed Limit: ₹9,000 per month per child
• Eligibility: Maximum 2 children

👉 Annual Exemption
Old: ₹7,200 per year
Proposed: ₹2,16,000 per year

📈 Increase: 30 Times

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💰 Total Tax-Free Benefit Possible

Combined exemption (Education + Hostel):

Old Limit: ₹9,600 per year
Proposed Limit: ₹2,88,000 per year

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💡 How This Helps You Save Tax

✅ Reduces taxable salary significantly
✅ Higher take-home pay through tax-efficient structuring
✅ Major benefit for parents with children in hostels
✅ Maximum tax saving up to ₹90,000 annually (for 30% tax bracket taxpayers)

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⚠️ Important Note

These benefits will apply when:

• Included properly in salary structure by employer
• Available only under Old Tax Regime
• Subject to final notification of rules

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📌 Professional Insight

This is one of the most impactful relief measures for salaried parents in recent years. Reviewing your salary structure can unlock substantial tax savings.

🤝 For salary restructuring and tax planning assistance reach out to us.

📢 INCOME TAX UPDATE: MAJOR RENNUMBERING OF KEY FORMS UNDER DRAFT RULES 2026

 The Draft Income-tax Rules, 2026 propose a complete restructuring and renumbering of several commonly used compliance forms. While there is no change in core compliance requirement, the form numbers have been rationalised for better system alignment.

🔄 Key Changes You Must Know:

✔️ Form 16 (Salary TDS Certificate) ➜ Now Form 130
✔️ Form 49A (PAN Application) ➜ Now Form 93
✔️ Forms 15G & 15H (Non-deduction of TDS) ➜ Merged into Form 121
✔️ Form 26AS (Tax Credit Statement) ➜ Now Form 168
✔️ Forms 26QB & 26QC (Property Purchase / Rent TDS) ➜ Now Form 141
✔️ Form 27Q (TDS on Non-Residents) ➜ Now Form 144

🎯 Professional Insight:

• This is a structural renumbering, not a new tax levy
• Systems, documentation, and internal processes will need updating
• Taxpayers and businesses must align compliance references
• Transitional phase may require extra caution while filing and reporting

⚠️ Action Point:
Ensure your finance team, payroll, and compliance systems are updated once the rules are formally notified.

#IncomeTax #TaxUpdate #TDS #PAN #TaxCompliance #CharteredAccountant #BusinessUpdate

💳 Draft Income-tax Rules 2026: 5 Key Credit Card Changes You Must Know

The proposed Draft Income-tax Rules, 2026 (effective 1 April 2026, subject to approval) introduce enhanced reporting and compliance norms for credit card users.

Here are the critical updates:

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1️⃣ High-Value Credit Card Payments to be Reported

📌 ₹10 lakh or more (non-cash) in a financial year → Reported by banks/card issuers to the Income-tax Department.
📌 ₹1 lakh or more in cash towards credit card bill → Also reportable.

⚠️ Implication: Large payments will fall under automated financial intelligence tracking.

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2️⃣ PAN Mandatory for Credit Card Application

🪪 PAN is compulsory for applying for a credit card.
Ensures identity validation and financial transparency.

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3️⃣ Credit Cards Allowed for Online Tax Payments

💻 Taxes can be paid using credit cards (along with net banking/debit card).
✔️ Improves liquidity flexibility
✔️ Useful for short-term cash flow management

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4️⃣ Employer-Provided Credit Cards – Perquisite Valuation Rules

If an employer provides a credit card:

✔️ Taxable perquisite = Amount charged
➖ Less: Amount recovered from employee

❗ Not taxable if used exclusively for official purposes, subject to:

• Proper expense records maintained

• Employer certification confirming official usage

Strong documentation will be critical to avoid tax exposure.

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5️⃣ Credit Card Statement as Address Proof

📄 Statement (not older than 3 months) can be used as address proof while applying for PAN.

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📊 Strategic Takeaway

The draft rules indicate:

• Enhanced financial reporting framework

• Greater transparency on high-value transactions

• Increased scrutiny of lifestyle-to-income mismatches

High-spending individuals and business owners should align financial records proactively.

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For structured tax planning and compliance advisory:
📞 +91 77602 52581

#IncomeTax #DraftRules2026 #CreditCard #TaxCompliance #FinancialPlanning

📢 CBDT Draft Update — Consolidated Tax Audit Form

CBDT has released Draft Form No. 26 under the proposed Income-tax Rules, 2026 — introducing a single consolidated tax audit report that replaces existing Forms 3CA / 3CB / 3CD.

✅ One unified audit + statement of particulars
✅ Expanded disclosures — GST, TDS & specified transactions
✅ UDIN & CA signature compliance

Action point: Businesses and CAs should review audit templates and prepare for enhanced reporting requirements.

Need a practical checklist to align your audit process? Message us — happy to help.

CA Ramakrishna Sanjay
+91 77602 52581

🏢 PERQUISITES – WHAT’S CHANGED IN THE TAX LAW (Act 1961 → Act 2025 & Rules 2026)

 🏢 PERQUISITES – WHAT’S CHANGED IN THE TAX LAW (Act 1961 → Act 2025 & Rules 2026)

What are Perquisites?

Perquisites are non-cash benefits provided by the employer to the employee and are generally taxable under Section 17(2) of the Income-tax Act. These include employer-provided cars, meals, gifts, loans, education benefits and similar amenities.

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📜 STATUTORY SHIFT — Income-tax Act 1961 → Income-tax Act, 2025

✔ The Income-tax Act, 2025 replaces the old Income-tax Act, 1961 effective 1 Apr 2026 with an updated framework.
✔ Section 17(2) in Act, 1961 continues to govern perquisites and remains a concept in Section 17 of the new Act.
✔ The new Act retains perquisites as taxable income but modernises definitions and simplifies structure of provisions compared to the 1961 law.

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📊 KEY RULE CHANGES — Perquisite Valuation (Rules 1962 → Draft Rules 2026)

The Income-tax Rules 2026 introduce updated perquisite valuation limits, addressing long-pending outdated thresholds in old Rules (1962):

Perquisite Type	Under Old Rules (1962)	Draft Rules 2026
Meal benefits	₹50 per meal exempt	₹200 per meal exempt (→ up to ₹1,05,600/yr if 2 meals × 22 days × 12 mo)
Gifts (non-cash)	₹5,000 p.a.	₹15,000 p.a.
Child education allowance	₹100 /mo per child	₹3,000 /mo per child
Hostel allowance	₹300 /mo per child	₹9,000 /mo per child
Employer-provided car (basic val.)	₹1,800 /mo (≤1.6 L)	₹5,000 /mo (≤1.6 L) + ₹3,000 driver
Medical treatment loans (perq)	Rs 20k limit	Rs 2,00,000 counterpart limit exempt {{with conditions}}

➡ Earlier perquisite ceilings had not been updated for decades; the new proposal aligns benefits with inflation and current cost realities.

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📌 ACT VS RULE INTERPLAY
🔹 The Act (2025) continues to define what counts as a perquisite and retains the key taxation rule under Section 17.
🔹 The Rules (2026 draft) shape how perquisites are valued and set monetary exemption limits — these are administrative details tied to the Act.

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🎯 IMPACT ON SALARIED TAXPAYERS

✔ Higher exempt thresholds: More perquisite benefits will be tax-free or have a higher exemption limit.
✔ Modernised car perq valuation: Car benefit values updated to reflect actual costs, though overall taxable value for some vehicles may rise relative to old rules.
✔ Meal & education perks more meaningful: Substantial uplift in meal, education and hostel exemptions makes salary structuring more tax-efficient.

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📌 KEY TAKEAWAYS

• Income-tax Act, 2025 modernises perquisite provisions without materially altering the concept — perquisites remain taxable income.
• Income-tax Rules 2026 significantly update monetary valuation and exemptions for perks — making several common non-cash benefits more tax-friendly.

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