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Tag: income tax department

  • Tax implication for money present from a good friend in a single’s HUF

    I perceive that I can’t have any tax legal responsibility if my good friend offers a single money present of three lakh rupees to my HUF as a result of after preliminary exemption of fifty thousand rupees out there for items obtained, the taxable quantity remaining could be solely two lakhs and fifty thousand rupees upto which earnings of an HUF is exempt. Is my understanding appropriate?

    No, your understanding is just not appropriate. In case mixture worth of all items obtained through the yr doesn’t exceeds fifty thousand rupees, these items are totally tax free within the arms of the recipient however as soon as the combination of all items by a recipient crosses the edge of fifty thousand rupees entire of the quantity of the items obtained grow to be taxable with none exemption. 

    So there isn’t a preliminary exemption for items in case the edge is breached and the complete worth of three lakhs of the items can be handled as earnings of your HUF. After preliminary exemption of two.50 lakhs rupees, you’ll have to pay tax on steadiness fifty thousand rupees. Please notice that the earnings tax division can ask you to show the credentials of the individual like id, functionality of the giving the present to look at the genuineness of the transaction failing which the quantity of present can be taxed at flat charge of 60% along with surcharge and penalty and curiosity.

    Moreover, there’s extra to the transaction perceived by you. As per the earnings tax provisions an individual can not settle for money greater than two lakhs in respect of any transaction failing which a penalty equal to the quantity obtained in money will be levied by the tax officer. So trying on the above information, it’s advisable to not take the present in money even when the present is real and you might be keen to pay tax on the quantity past the exemption quantity.

    Balwant Jain is a tax and funding professional and will be reached on [email protected] and @jainbalwant on his Twitter deal with.

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  • Income tax division points I-T refund price ₹47,318 crore. Details right here

    The earnings tax division has issued earnings tax refund price over ₹47,318 crore to greater than 22.61 lakh taxpayers. The Central Board of Direct taxes (CBDT) issued this I-T refund between 1st April 2021 to ninth August 2021.

    “CBDT issues refunds of over Rs. 47,318 crore to more than 22.61 lakh taxpayers between 1st April, 2021 to 09th August, 2021. Income tax refunds of Rs. 14,241 crore have been issued in 21,38,375 cases & corporate tax refunds of Rs. 33,078 crore have been issued in 1,22,511 cases,” earnings tax division mentioned from its official twitter deal with.

    CBDT points refunds of over Rs. 47,318 crore to greater than 22.61 lakh taxpayers between 1st April, 2021 to 09th August, 2021. Income tax refunds of Rs. 14,241 crore have been issued in 21,38,375 circumstances & company tax refunds of Rs. 33,078 crore have been issued in 1,22,511 circumstances.— Income Tax India (@IncomeTaxIndia) August 14, 2021

    Earlier, PTI had reported that earnings tax division will refund the surplus rate of interest and late payment paid by taxpayers because of the error in division software program whereas submitting their ITR for FY2020-21. However, the earnings tax division knowledgeable that error in software program has been rectified and no such error will occur once more.

    “Taxpayers have been advised to use the latest version of the ITR preparation software or file online. If, by any chance, someone has already submitted the ITR with such incorrect interest or late fee, the same will be correctly calculated while processing at CPC-ITR and the excess amount paid, if any, will be refunded in the normal course,” the earnings tax division mentioned.

    The earnings tax division has prolonged the final date for ITR submitting until thirtieth September 2021 on consideration of difficulties reported by taxpayers and different stakeholders in digital submitting of sure earnings tax Forms.

    On consideration of difficulties reported by taxpayers & different stakeholders in digital submitting of sure Forms beneath the IT Act,1961, CBDT has additional prolonged the due dates for digital submitting of such Forms vide Circular No.15/2021 dated 03.08.2021. pic.twitter.com/muJncamY5V— Income Tax India (@IncomeTaxIndia) August 3, 2021

    Earlier, PTI had reported that earnings tax division will refund the surplus rate of interest and late payment paid by taxpayers because of the error in division software program whereas submitting their ITR for FY2020-21. However, the earnings tax division knowledgeable that error in software program has been rectified and no such error will occur once more.

    “Taxpayers have been advised to use the latest version of the ITR preparation software or file online. If, by any chance, someone has already submitted the ITR with such incorrect interest or late fee, the same will be correctly calculated while processing at CPC-ITR and the excess amount paid, if any, will be refunded in the normal course,” the earnings tax division mentioned.

    The earnings tax division has prolonged the final date for ITR submitting until thirtieth September 2021 on consideration of difficulties reported by taxpayers and different stakeholders in digital submitting of sure earnings tax Forms.

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    The CBDT knowledgeable about this in a tweet and mentioned, “On consideration of difficulties reported by taxpayers & other stakeholders in electronic filing of certain Forms under the IT Act,1961, CBDT has further extended the due dates for electronic filing of such Forms vide Circular No.15/2021 dated 03.08.2021.”

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  • Income tax: Charged late price for submitting ITR? Tax division to refund quantity

    Several taxpayers who filed their earnings tax return (ITR) for FY2020-21 after 31 July have been charged curiosity and late charges regardless of the extension of the deadline. The final date for submitting ITR for the final monetary 12 months has been prolonged until 30 September 2021, from July 31 to present taxpayers compliance reduction throughout the pandemic.

    “The due date of submitting ITR for FY2020-21 (AY 2021-22) is thirtieth September 2021 (prolonged from thirty first July). Therefore, late submitting charges and curiosity u/s 234A as much as a sure extent shall be relevant solely after the due date which is thirtieth September 2021. However, resulting from a technical glitch on the Income-tax portal, late submitting charges & extra curiosity have been levied in few circumstances filed after thirty first July which is wrong, so the division will difficulty a refund of late charges & extra curiosity paid by the taxpayers,” stated Abhishek Soni, Co-Founder & CEO, Tax2win

    The Income Tax Department has stated it should refund the surplus curiosity and late price paid by taxpayers resulting from software program error whereas submitting ITR for 2020-21.

    The division in a tweet stated the ITR software program was rectified on August 1 itself to take away the error resulting from incorrect computation of curiosity underneath part 234A and late price underneath part 234F of the Income Tax Act.

    “Taxpayers have been advised to use the latest version of the ITR preparation software or file online. If by any chance, someone has already submitted the ITR with such incorrect interest or late fee, the same will be correctly calculated while processing at CPC-ITR and the excess amount paid, if any, will be refunded in the normal course,” the I-T division tweeted.

    Generally, taxpayers are required to file ITR by July 31 of any 12 months (until prolonged by the federal government). This 12 months, the Central Board of Direct Taxes (CBDT) has prolonged the final date for submitting ITR for FY2020-21 (AY2021-22) to September 2021 in view of the COVID-19 pandemic.

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  • Want to promote home. It nonetheless not registered however have builder purchaser settlement.

    I’m promoting off my home which remains to be not registered however I’ve the Builder Buyer Agreement. For ease of succession, I had included my spouse within the settlement however the entire property has been paid by me alone. Now the customer is paying me in two names- in my title and one other in my spouse’s title. I’ve requested them pay the total quantity on my title solely as have paid for the property. The purchaser says this may have authorized problems later if my spouse later says that she has not obtained her share.

    I shall deposit each the cheques in our joint account. Would there be any problem from tax division later? is it OK to just accept half the cash in my spouse’s title and half in my title from the customer? I additionally need to perceive how do I declare the TDS which the customer will deduct because the settlement worth is 1.25 Crores?

    If the customer is apprehensive about any problem arising in future, each of you may execute an indemnity bond in favour of the customer with a promise to indemnify the customer if the whole consideration is paid to you. Alternatively, you may have a particular clause within the sale settlement mentioning the truth that the property was absolutely funded by you and the spouse was made a joint proprietor for the aim of succession solely. Since your spouse can even signal the settlement, she can not declare in a while that she didn’t obtain her share within the sale consideration.

    However even when the customer doesn’t comply with it, you may nonetheless go forward with the deal and deposit the total cost in your joint checking account. There wouldn’t be any downside from earnings tax division so long as you’ll be able to show that the property was absolutely funded by you and title of your spouse was included for the aim of succession. Since you’re together with full capital positive factors in your earnings, there isn’t a purpose for the earnings tax division to object to it. As far as credit score for tax is worried, there’s provision within the ITR kind the place you may declare the credit score for tax deducted within the title of your spouse and is reflecting in her kind no, 26AS.

    Balwant Jain is a tax and funding professional and may be reached at [email protected]

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  • Honest taxpayers need to be recognised for paying due share of taxes: Nirmala Sitharaman

    Finance Minister Nirmala Sitharaman on Saturday stated sincere taxpayers need to be recognised for dutifully paying their due share of taxes and appreciated the Income Tax Department for profitable implementation of varied reforms.
    In her message to the I-T Department on the 161st anniversary of Income Tax Day, she complimented the division for persevering with to work in the direction of simplifying its procedures and processes, and making its functioning hassle-free, truthful and clear.
    “The minister observed that the honest taxpayers deserve to be recognized for the contribution they are making to the progress of the nation by dutifully paying their due share of taxes… She also lauded taxpayers for discharging their compliance obligations despite the difficulties caused by the pandemic,” an official assertion stated.
    Minister of State for Finance Pankaj Chaudhary noticed that a lot of the processes and compliance necessities have been shifted to on-line platforms and the necessity for taxpayers to bodily go to tax places of work has been eradicated or minimized.

    He highlighted the truth that the interplay with taxpayers is now characterised by a spirit of belief and respect, relying extra on voluntary compliance.
    Revenue Secretary Tarun Bajaj additionally complimented the division for having finished properly in adapting itself to the emergent adjustments within the economic system and having been in a position to obtain a wholesome development in tax collections.
    He additionally appreciated the initiatives undertaken by the division to reorient its method in the direction of income assortment, making its functioning trust-based and taxpayer-centric.

    Central Board of Direct Taxes (CBDT) Chairman J B Mohapatra lauded the tax officers for his or her collective efforts and successfully fulfilling their twin position because the income incomes arm of the nation and supplier of taxpayer providers.
    Referring to the bigger and far-reaching coverage measures like ‘Honouring the Honest’, Faceless Regime and adoption of the Taxpayers’ Charter, he famous that these initiatives have made the departmental functioning extra clear, goal and taxpayer-friendly.

  • Income Tax Day: Dy. FM hails dept for bringing transparency by way of digital instruments

    Income Tax Day: The Minister of State for Finance Dr. Bhagwat Kishanrao Karad has praised the revenue tax division for bringing transparency by proactively adopting digital instruments like information analytics. The Deputy Minister on the Ministry of Finance stated that the transfer is in keeping with the Indian authorities’s imaginative and prescient of bringing ease of revenue tax compliance for the Indian residents. Dr. Karad shared these views whereas delivering his finest needs to the revenue tax division on the 161st Income Tax Day.

    The revenue tax division shared the greetings of the MoS Finance from its official twitter deal with the place the minister was discovered citing, “In line with the concept of ease of living of the citizenry as envisioned by our Hon’ble Prime Minister, the Department has sought and achieved transparency and simplification while proactively adopting digital tools like data analytics. Ensuring ease of compliance and delivering quality taxpayer services.”

    Recognising the revenue tax division’s function in nation constructing Dr. Bhagwat Karad stated, “The income Tax Department has been of services to the cause of national building in its role as the agency responsible for taxation. Taxes are not just a source of revenue for the government but also an effective instrument for providing a nudge in the goal to achieve socio-economic objectives in line with the Constitution.”

    Dr. Karad went on so as to add that the revenue tax division has proved itself to be a strong and able to evolving with the necessity of the instances, most lately seen within the evolution of the initiatives undertaken up to now 12 months within the type of a faceless tax regime for evaluation, appeals and penalty.

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  • Income tax profit on house mortgage beneath inexpensive housing defined

    Home mortgage rates of interest coming all the way down to the tune of round 7 per cent (SBI house mortgage rate of interest begins at 6.70 per cent each year) is nice information for house patrons as it could result in decrease month-to-month EMI. However, if a house purchaser is shopping for unit, which is priced beneath ₹45 lakh, then she or he would have the ability to declare an extra ₹1.5 lakh earnings tax exemption on house mortgage curiosity cost beneath Section 80EEA. This earnings tax profit can be given along with ₹2 lakh house mortgage curiosity cost beneath Section 24(b) of the earnings tax act 1961. However, the query is, will the brand new inexpensive house mortgage borrower will have the ability to declare earnings tax exemption to its most restrict of ₹3.5 lakh? According to tax and funding specialists, the reply is ‘no’ as ₹45 lakh higher restrict cap on house mortgage quantity does not permit a brand new house mortgage borrower to assert the utmost ₹3.5 lakh exemption restrict at present house mortgage rates of interest regime.

    Home mortgage EMI calculation

    Highlighting the mismatch between ₹45 lakh house mortgage higher restrict in inexpensive housing and present house mortgage rates of interest Amit Gupta Co-founder & MD at SAG Infotech stated, “To take advantage of the tax benefit to the fullest i.e. ₹3.5 lakhs, it is necessary for the home buyers to take 90 percent loan on a residential property that is valued at ₹45 lakh for a period of 20 years at the interest rate of 9 per cent. Then only the new home loan borrower will be able to use up completely the limit of ₹3.5 lakh deduction.”

    The Managing Director of the SEBI registered earnings tax resolution supplier firm went on so as to add, “The prevailing rates of home loans mirror the other picture — the present interest rates for affordable housing are nearly 7 per cent or less i.e. about 200 basis points lower than 9 per cent that is the requirement of affordable housing. Consequently, the home buyer cannot use up completely the permissible limit of the income tax concession.”

    What’s the answer

    Highlighting upon the answer required Kartik Jhaveri, Director — Wealth Management at Transcend Consultants stated, “The idea behind giving an additional ₹1.5 lakh income tax benefit under Section 80EEA was to support the Indian housing sector by fueling demand for affordable house. The idea has worked to some extent too but the new home loan borrower needs to understand that lower home loan may result in faster repayment of the principal as lower home loan EMI would allow them to keep the tenure of the loan lower may be 15 years instead of traditional 20 years. They should also remember that the lower home loan regime is not going to last for long and hence for that much time, the Government of India should think of increasing the ₹45 lakh affordable home loan limit so that the loan borrowers get maximum benefit of this lower home loan interest rate scenario.”

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  • Traveling overseas? Buying greenback past this restrict might entice earnings tax discover

    Income tax division has turn out to be extremely vigilant towards the money transactions executed by taxpayers. It has advanced such an efficient system during which, if a taxpayer executes any such money transaction, then it’ll get reported to the division a lot earlier than the taxpayer experiences such transaction. This system is efficient even when you find yourself touring overseas. According to tax and funding consultants, whereas touring overseas, money transaction to purchase US greenback or every other overseas forex is allowed, however going past a sure restrict will get reported to the earnings tax division by the cash changer. This money transaction for getting overseas forex might entice earnings tax discover, if there’s enormous hole between the earnings tax return (ITR) of the taxpayer and the money used for getting overseas forex.

    Speaking on the restrict past which money transaction for getting greenback or every other overseas forex whereas touring overseas Balwant Jain, a Mumbai-based tax and funding knowledgeable mentioned, “While traveling abroad, one can buy US dollar (USD) or any other foreign currency through cash transaction. But, going beyond ₹10 lakh limit will be reported by the money changer to the income tax department of India. If that cash used for buying overseas tender is not in sync with the travelers’ income tax return (ITR) for that financial year, then in that case, the income tax department may send notice to the traveler.”

    On what a taxpayer ought to do after receiving the earnings tax discover, SEBI registered tax and funding knowledgeable Jitendra Solanki mentioned, “Income tax department slapping notice should be taken as a query by taxpayers. After receiving the notice, the taxpayer is advised to go to the income tax department website and reply to the income tax notice by logging in at one’s Form 26AS.”

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  • How to shut HUF with the revenue tax division?

    Hindu Undivided Family (HUF) was a well-liked method for a lot of households to avoid wasting tax. The income-tax division treats HUF as a separate assessee. Therefore, it may well get all tax deductions out there to people, and its returns could be filed individually.

    To be clear, an HUF means a Hindu household, and it comes into existence routinely – it’s not fashioned by way of a authorized course of. There is an choice to file returns for HUF. To do that, the household wants to use for a PAN (everlasting account quantity) with the revenue tax division.

    Many households are transferring away from utilizing HUF to avoid wasting tax because the construction will not be as engaging because it was some years again. If you had been submitting income-tax returns for an HUF individually and need to cease it, the method will not be as simple.

    An HUF includes of a ‘karta’, who, sometimes, is the eldest male within the household. The sons, daughters and grandchildren are coparceners who’ve an equal proper to the property. An HUF can solely be dissolved after the partition of the property. For this, the household should execute a deed of partition and distribute properties amongst the members (karta and coparceners).

    All relations have to be a part of the deed. The deed ought to spell out all of the properties which are a part of the HUF, which relations are dividing amongst themselves. The division of property have to be according to the provisions of the Hindu Succession Act.

    The Income-tax Act doesn’t recognise a partial partition dissolution of HUF. Partition means ‘full partition;. For dissolution of the HUF, a household wants to attract up a deed of full partition and get it registered with the signatures of all members. Once the partition of HUF is full, it can stop to exist.

    If there is no such thing as a partition, the revenue tax division will proceed to evaluate the entity, and the relations might want to file returns.

    Once the partition is over, the relations can write to the assessing officer to give up the PAN.

    (Do you’ve gotten private finance queries? Send them to [email protected] and get them answered by trade specialists)

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