Gifts are treated as income under the Income Tax Act. If the value of the gift exceeds certain limits, it may be taxed as “Income from Other Sources”. However, there are certain exemptions available if gifts are received from certain persons or on certain occasions. Gifts received within a value of Rs. 50,000 is always exempt. What is a Gift as per the Income Tax Act?As per Section 56 of the Income-tax Act,1961 gifts received by any person or persons are taxed in the hands of the recipient under the head ‘Income from other sources’ at normal tax rates.

Long Term Capital Gains (LTCG) arise from sale of capital assets like stocks, properties etc., held for a period of more than 24 months. The tax rate on Long Term Capital Gains is 12.5% for all capital assets. However, for listed equity shares, equity-oriented funds, and units of business trusts, Rs. 1.25 lakhs can be claimed as an exemption.Budget 2026 UpdateIt has been proposed to tax buyback of shares as Capital Gains Income. What is Long-term Capital Gain (LTCG)?Capital gains or profits arising from the transfer of Long-Term Capital Assets is referred to as Long-Term Capital Gains or LTCG. An asset held for more than 24 months is termed as a long term capital asset.For listed equity shares, equity oriented funds, and units of business trust, the holding period is 12 months. (if held for more than 12 months, they are considered long term capital assets)Long-term Capital Gain (LTCG) Tax Rate The following tax rates are applicable to long-term capital gains:Asset TypeHolding period (LTCA if held for more than the specified period)Tax RateIndexationExemptionListed Equity Shares12 months12.50%NoRs 1.25 lakhEquity Mutual Funds12 months12.50%NoRs 1.25 lakhProperty (land/building)24 months12.50%No*NilGold / Gold ETF24 months12.50%NoNilDebt Mutual Funds (post Apr 2023)Any holding periodAs per slabNoNil* - Indexation benefits available for resident individuals and HUFs whose assets were purchased before 23rd July 2024.Calculation of LTCG TaxTo calculate the long-term capital gains accurately, follow the steps mentioned below:Step 1: Determine the Full value of considerationThe total amount received from the transfer of capital assets.

The taxpayers are required to file an Income Tax Return (ITR) disclosing their income earned and discharge their tax liabilities for the previous year. The Income Tax Department has notified specific due dates to file ITR and pay taxes. Failure to furnish the tax return within the applicable due date will attract penalty and interest under Section 234F and Section 234A respectively. Budget 2026 UpdateThe due date to file ITR-3 and ITR-4 for non-audit case taxpayers has been extended to 31st August as proposed in the Budget. The due date to file a revised return has been extended to 31st March from the existing 31st December.  The Due Date For Filing ITR For AY 2026-27For the Financial Year 2025-26 (AY 2026-27), the due date for return filing Income Tax Return (ITR) for different cases are as follows:Sr. No.Particulars Due Date1ITR-1 & ITR-231st July 20262ITR-3 & ITR-4 (Non-Audit)31st August 20263ITR-3 & ITR-4 (Tax Audit)31st October 20264ITR filing for taxpayers covered under transfer pricing30th Nov 20265Belated Return 31st Dec 20266Revised Return31st March 2027Section 234F of The Income Tax ActSection 234F of the Income Tax Act imposes penalty for late filing of ITR.

TCS stands for Tax Collected at Source. TCS refers to the tax payable by a seller which he collects from the buyer at the time of sale of goods. The provisions related to TCS are covered under section 206C of the act.TCS is levied on specified goods like alcohol (1% - 5%), on specified leasing activities (2%), on sale of high value motor vehicles (1%) , and specified remittances under Liberalized Remittance Scheme (LRS) of RBI (2% - 20%). In this article, we will discuss the different transactions on which TCS has to be collected, TCS due dates, late payment interest and penalties.Budget 2026 UpdateThe TCS rate on LRS for health and education has been reduced to 2%.TCS rate on LRS for overseas tour package is proposed to be reduced to 2%  without any stipulated amount from the existing 5% and 20%.What is Tax Collected at Source (TCS)?Tax collected at source (TCS) is the tax payable by the seller which he collected from the buyer on sale. It should be deposited with the tax authorities within the applicable due dates. Section 206C of the Income-Tax Act governs provisions related to TCS. Such persons must have the Tax Collection Account Number (TAN) to be able to collect TCS.Seller is responsible only for collecting the tax and depositing it to the government.

If you are sending money abroad, you may have to pay foreign remittance tax in India, also known as TCS on foreign remittance. Under Section 206C(1G) of the Income Tax Act, banks and authorised dealers collect Tax Collected at Source (TCS) when you transfer funds overseas.Budget 2026 UpdateTCS on LRS for health and education is proposed to be reduced to 2% from the existing 5%.TCS on LRS of overseas tour packages is proposed to reduce to 2% without any limit from existing 5% and 20%.  What is TCS on Foreign Remittance?Tax on foreign remittance applies when an Indian resident transfers money abroad under the RBI’s Liberalised Remittance Scheme (LRS). The remitter pays a percentage of the amount as TCS, which is deposited with the government.The deducted TCS reflects in your Form 26AS.You can adjust it against your final tax liability while filing ITR.If you have no tax liability, you can claim a refund of the deducted TCS.However, this is to be noted that this TCS is applicable only for foreign outward remittance, the situation wherein you send money outside India. Inward remittances (receiving remittances from abroad) are not governed under this provision.Latest TCS Rates on Foreign Remittance (Effective April 2025)Type of RemittanceNew TCS rate (with effect from 1st April 2026)Education (loan from financial institution u/s 80E)NILEducation / Medical (self-funded or (other than financed by loan)Nil up to Rs. 10 lakhs2% in excess of Rs.

The direct tax code (DTC)  will be aimed at simplifying and modernising the existing direct tax law i.e. the Income-tax Act, 1961. The DTC will also be in-line with the global standards making the taxation simpler for both residents and non-resident taxpayers. In this article, we will explain in detail the expectations and differences between the DTC and the Income-tax Act.Budget 2026 UpdateThe Income Tax Act 2025 will come into effect from 1st April 2026 and will be applicable for FY 2026-27 and onwards. The Income Tax Act 1961 will still be applicable for FY 2025-26 (AY 2026-27)What is the Direct Tax Code 2025?The Direct Tax Code aims to simplify, streamline, and standardise the existing complex income tax laws for everyone. The government intends to increase the number of taxpayers contributing to the income tax and hence wants to simplify the tax laws for the enhancing their participation.

The new act is effective from 1st April 2025. The Income Tax Act 2025 was introduced by Finance Minister Nirmala Sitharaman in the Lok Sabha on 13th February 2025 aims to replace the existing Income Tax Act 1961.Budget 2026 UpdateThe provisions of The Income Tax Act 2025 will be effective from 1st April 2026 for incomes earned in FY 2026-27 and onwards. When will the Income Tax Act 2025 be Applicable?The provisions of the Income Tax Act 2025 will be applicable after it is passed by both the houses of the parliament and is assented by the President of India. The Act comes into effect from 1st April 2026.What is “Tax Year”?“Tax Year” means a period of 12 months commencing from 1st April and ending on 31st March of the following year.What is the Slab Rate in Income Tax Act 2025?The Slab Rates are the rates at which the income of the taxpayer will be taxed. India follows a progressive tax rate scheme i.e., the slab rate of tax increases with an increase in the income. This ensures that the individuals earning higher income pay higher taxes.There are two tax regimes in India; The New Tax Regime (Default Tax Scheme)The Old Tax Regime (Optional Tax Scheme)The New Tax Regime (Default Tax Regime)The Income Tax Slab Rates for The New Tax Regime is provided under section 202 of the Income Tax Act 2025 as follows:Income Tax SlabsTax RateUp to Rs.

Are you currently a member of a co-operative society, or are you interested in joining one? Whether you're already a part of one or considering becoming a member, it is essential to have a basic understanding of how co-operative societies are taxed. In this article, we will explore the taxation implications for co-operative societies.Budget 2026 UpdateStarting from 1st April 2026, co-operative societies registered under the Multi-State Co-operative Societies Act, 2002, will also be covered under the definition of "co-operative society" for tax purposes.What is meant by a Co-operative Society?A cooperative is an autonomous association of persons who voluntarily cooperate for their mutual social, economic and cultural benefit.As per the Income Tax Act, 1961, a co-operative society is an entity registered under the Co-operative Societies Act, 1912, or any other law for the time being in force in any state for the registration of co-operative societies. What is the Tax Rate for Co-operative Societies?The tax rate for Co-operative societies is as follows:Tax Slab Tax RateUpto Rs. 10,00010%Rs. 10,001 to Rs. 20,00020%More than Rs.

As per the provisions of the Income Tax Act,1961, if the turnover exceeds prescribed threshold limit, the assessee is required to get the books of accounts audited before filing a tax return.Budget 2026 UpdateAmount payable on default of submitting the tax audit report has been converted from penalty to fees. This is intended to reduce litigations.What is a Tax Audit?Tax audit is an examination or review of books of accounts of any business or profession carried out by taxpayers from an income tax viewpoint. There are various kinds of audits being conducted under different laws such as company audit/statutory audit conducted under company law provisions, cost audit, stock audit etc. Similarly, income tax law also mandates an audit of certain taxpayers called ‘Tax Audit’.Tax Audit Due DateThe last date for completion of the tax audit for income tax purposes is 30th September 2026 for the FY 2025-26 (AY 2026-27). In the case of assessees covered by the provisions of transfer pricing audit, the last date for completion of tax audit is 31st October 2026. What are the Objectives of Tax Audit?Tax audit is conducted to achieve the following objectives:Ensure proper maintenance and correctness of books of accounts and certification of the same by a Chartered Accountant (tax auditor).Reporting observations/discrepancies noted by the tax auditor after a methodical examination of the books of accountTo report prescribed information such as tax depreciation, compliance with various provisions of income tax law, etc.Computation of tax and deductions becomes easy with auditing.The major role is to verify the information filed in the income tax return regarding income, tax, and deductions by the taxpayer.These enable tax authorities to verify the correctness of income tax returns filed by the taxpayer. Calculating and verifying total income, claims for deductions, etc., also becomes easier.What is the Turnover Limit for Income Tax Audit?A taxpayer is required to have a tax audit carried out if the turnover or gross receipts of business exceed Rs 1 crore in a financial year or Rs 10 crore in case cash transactions do not exceed 5% of the total transactions (i.e., Cash receipts/payments does not exceed 5% of the total receipts/total payments).

Taxpayers who are regarded as residents for income tax purposes should make appropriate disclosure of their foreign income and assets while filing ITR. Schedule FA, and schedule FSI deal with foreign asset disclosure and foreign income disclosure respectively.Failure to make necessary disclosure can attract penalty up to Rs. 10 lakh.Budget 2026 UpdateThe department has noticed that a section of small taxpayers like former students graduated from abroad, ESOP holders of foreign companies, etc, did not completely comply with the foreign asset disclosure requirements. As a nudging initiative, the CBDT has provided a one-time scheme through which the non-compliant taxpayers can disclose their foreign income and assets, with additional taxes and fees as applicable.Also, non-disclosire of foreign movable assets up to Rs 20 lakh do not attract any penalty. From 1.10.2026, they are also provided immunity from prosecution.What are Foreign Assets?If you’re an Indian resident, foreign assets will comprise of bank accounts in other countries, investments in real estate, stocks, mutual funds and other capital assets outside India, financial interest in any foreign entity, or signing authority over any account located abroad, insurance or annuity contract etc.What is the Importance of Disclosing Foreign Assets in ITR? Disclosure of foreign assets and income in income tax returns is important and ensures compliance with Indian tax laws. Here’s a list of reasons which makes it super important:Legal ComplianceAs per the Black Money Act, 2015, it is mandatory to disclose all foreign assets and income within the Income Tax return in the specified schedules, such as Schedule FA for disclosing foreign assets like a bank account, real estate etc.