I'm a chartered accountant, well-versed in the ins and outs of income tax, GST, and keeping the books balanced. Numbers are my thing, I can sift through financial statements and tax codes with the best of them. But there's another side to me – a side that thrives on words, not figures. Writing has always been a passion. Maybe it's the desire to explain complex financial concepts in a clear, understandable way, or perhaps it's the joy of crafting a compelling narrative. Whatever the reason, I've recently started putting pen to paper (or rather, fingers to keyboard) and creating articles and blog posts that make the world of finance less intimidating for everyday people.
I'm a chartered accountant, well-versed in the ins and outs of income tax, GST, and keeping the books balanced. Numbers are my thing, I can sift through financial statements and tax codes with the best of them. But there's another side to me – a side that thrives on words, not figures. Writing has always been a passion. Maybe it's the desire to explain complex financial concepts in a clear, understandable way, or perhaps it's the joy of crafting a compelling narrative. Whatever the reason, I've recently started putting pen to paper (or rather, fingers to keyboard) and creating articles and blog posts that make the world of finance less intimidating for everyday people.
Kisan Vikas Patra (KVP) is a certificate scheme from the Indian post office. It doubles a one-time investment in a period of approximately 9.5 years (115 months). For instance, a Kisan Vikas Patra for Rs.5,000 will get you a corpus of Rs.10,000 post-maturity. In this article, we will explore the features and potential of this scheme.What is Kisan Vikas Patra?India Post introduced the Kisan Vikas Patra (KVP) as a small saving certificate scheme in 1988. Its primary objective is to encourage long-term financial discipline in people.
The Budget 2020 introduces a new regime under Section 115BAC giving individuals and HUF taxpayers an option to pay income tax at lower rates with fewer exemptions and deductions to claim. Keep reading to learn more about Section 115BAC of the Income-tax Act, 1961.What is Section 115BAC – The New Tax Regime?Section 115BAC - the new tax regime system came into force from FY 2020-21 (AY 2021-22). The new tax regime introduced concessional tax rates with reduced deductions and exemptions. Section 115BAC was amended in the Budget 2023, and the new regime was made the default regime from FY 2023-24. This Section was further amended with revised tax rates in Budget 2024.
Sports rewards and prize money are financial benefits given to athletes for their achievements in competitions. These rewards include cash, gifts, or other benefits and are provided by governments, sports organisations, or private companies. For example, athletes who win medals in the Olympics or cricket tournaments often receive cash prizes or luxury items. Is there a Tax on Sports Rewards? Yes, most sports rewards are taxable in India. However, there are exceptions. If the prize or award is given by the central or state government, it is often tax-free. However, some conditions must be met to get an exception.
The Budget 2023 caused a lot of confusion among taxpayers regarding the choice between the old and new tax regimes. The government introduced various incentives in the 2023 Budget and 2024 Budget to encourage the adoption of the new regime. These changes show that the government intends to have taxpayers transition to the new regime and eventually phase out the old one. Though the new regime is now the default tax regime, the old tax regime will continue to exist.Budget 2024 Updates Financial Minister Nirmala Sitharaman has proposed changes in the tax structure under the new tax regime. The new tax regime has been updated as follows -Comparison of pre-budget and post-budget tax slab Tax Slab for FY 2023-24Tax Rate Tax Slab for FY 2024-25Tax RateUpto ₹ 3 lakh NilUpto ₹ 3 lakh Nil₹ 3 lakh - ₹ 6 lakh5%₹ 3 lakh - ₹ 7 lakh5%₹ 6 lakh - ₹ 9 lakh 10%₹ 7 lakh - ₹ 10 lakh 10%₹ 9 lakh - ₹ 12 lakh 15%₹ 10 lakh - ₹ 12 lakh 15%₹ 12 lakh - ₹ 15 lakh20%₹ 12 lakh - ₹ 15 lakh20%More than 15 lakh30%More than 15 lakh30%Budget 2024 has increased the standard deduction under the new tax regime to ₹ 75,000. The family pension deduction has also been increased from ₹ 15,000 to ₹ 25,000.
The income tax is a direct tax which follows a progressive slab rate, where the rate of tax increases as the taxpayer's income rises. The Income-tax Act, 1961 provides for two tax regimes: the old regime, which allows various deductions and exemptions, and the new regime, which offers lower tax rates without exemptions. In this article, we will learn about:Income Tax Slabs under the old regimeIncome Tax Slabs under the new regimeComparison of Tax slabs under both the regimesHow to calculate income tax under both tax regimesMeaning of Surcharge Consequences of not filing ITR within the due dateWhat is an Income Tax Slab?In India, the Income Tax applies to individuals based on a slab system, where different tax rates are assigned to different income ranges. As the person's income increases, the tax rates also increase. This type of taxation allows for a fair and progressive tax system in the country. The income tax slabs are revised periodically, typically during each budget.
Section 33AB of the Income Tax Act of 1961, is a provision that aims to promote reinvestment in India's tea, coffee, and rubber sectors. It allows businesses engaged in these sectors to claim deductions on profits allocated to specific development accounts. In this article, we will discuss Section 33AB of the Act, including eligibility, conditions, and the amount specified. Eligibility CriteriaTo qualify for deductions under Section 33AB, an assessee must: Be engaged in both the cultivation and manufacturing of tea, coffee, or rubber in India. Deposit the eligible amount into designated accounts under schemes approved by the Tea Board, Coffee Board, or Rubber Board, in accordance with the Central Government’s guidelines. Designated Accounts for Deposits Permissible Accounts Deposits eligible for deduction under Section 33AB must be made into the following:Special Account with NABARD: As per the approved scheme. Deposit Account: Under a scheme approved by the Tea Board, Coffee Board, or Rubber Board and sanctioned by the Central Government. Quantum of Deduction The deduction allowable is the lesser of: The actual amount deposited in the designated account(s). 40% of the profits from the eligible business, calculated under the head ‘Profits and Gains of Business or Profession’ before considering this deduction. Example: If a taxpayer deposits ₹1,20,000 into the designated account and the profit from the business is ₹2,00,000, the deduction allowable would be ₹80,000 (i.e., 40% of ₹2,00,000), as it is less than the deposited amount. Timeframe for Deposits Deposits must be made on or before the earlier of: Six months from the end of the financial year. The due date for filing the income tax return for that year. Example: For the financial year 2023–24, if the due date for filing the return is July 31, 2024, and six months from the end of the financial year is September 30, 2024, the deposit should be made by July 31, 2024. Utilization and Withdrawal of Funds The withdrawal and utilization of funds is allowed only if the:Funds must be utilized for specified purposes under the development schemes, such as purchasing new machinery, conducting R&D, or upgrading facilities. Withdrawals for non-business or unspecified purposes will be treated as income and taxed accordingly in the year of withdrawal. Tax Implications for Non-Compliance Un-utilized withdrawn amounts for specific purposes as specified in the development scheme or where assets acquired with these funds are sold within eight years of their purchase then such un-utilized amount or the cost at which the asset was purchased will be taxed.Audit Requirements To claim deductions under Section 33AB, an assessee must: Ensure their accounts are audited by a qualified Chartered Accountant before the specified due date. Submit the audit report in Form No. 3AC along with their income tax return. Benefits The following are the benefits of the Section 33AB:Reduced Tax Liabilities: It helps businesses lower their taxable income. Industry Development: It encourages development in the tea, coffee and rubber industries.Conclusion Section 33AB allows businesses in the tea, coffee, and rubber industries to lower their tax liabilities while supporting growth in these sectors. By following the required deposit timelines and using the funds as intended, businesses can make the most of this opportunity.
The deduction of tax at source (TDS) has been very helpful in collecting taxes in the country by targeting the source of income itself. TDS eases the taxpayer’s burden of paying tax when it is time to file their income tax returns. That is because, at the time of filing income tax return they can take the credit for the taxes deducted at source. One of the most important and common types of payments that a business entity makes is towards professional fees or fees for technical services. Some examples of professional fees are fees paid to a lawyer, doctor, engineer, architect, chartered accountant, interior decorator, advertisers, etc. Technical services would include the rendering of managerial, technical or consultancy services.
The Government announced Vivad Se Vishwas Scheme 2.0 in the Budget 2024. This scheme has been introduced to resolve income tax disputes under appeal. It will come into effect on 1st October, 2024. In this article, we will explain about the following:Introduction of Vivad Se Vishwas Scheme 2.0Applicability of Vivad Se Vishwas Scheme 2.0Amount to be paid under the schemeFormsImportant pointsFAQsVivad Se Vishwas Scheme 2.0The Vivad Se Vishwas Scheme 2.0 aims to simplify the process of resolving pending income tax litigation. It allows eligible taxpayers to settle their tax disputes by paying a specified portion of their outstanding dues.Applicability of Direct Tax Vivad Se Vishwas SchemeThe disputes/appeals, including writs, filed by either the taxpayer or the tax authorities which are pending as on 22nd July, 2024:The Supreme Court, High Court, Income Tax Appellate Tribunal, Commissioner/Joint Commissioner(Appeals)The Dispute Resolution Panel(DRP) or where DRP has issued orders but the final assessment order is awaitedRevision application filed under Section 264 of the Income-tax Act,1961.Amount Payable under Vivad se Vishwas Scheme 2.0The amount to be paid by the taxpayers under the Scheme is as follows:Nature of tax arrearAmount payable on or before 31st December 2024Amount payable on or after 1st January 2025Appeal filed after 31st January 2020 but on or before 22nd July 2024Appeal pending at same forum on or before 31st January 2020Appeal filed after 31st January 2020 but on or before 22nd July 2024Appeal pending at same forum on or before 31st January 2020Aggregate amount of disputed tax100% of disputed tax110% of disputed tax110% of disputed tax120% of disputed taxDisputed interest/penalty/fee25% of disputed interest/penalty/fee30% of disputed interest/penalty/fee30% of disputed interest/penalty/fee35% of disputed interest/penalty/feeThe amount payable will be reduced to 50% in the following scenarios:The appeal was filed by tax authoritiesThe appeal was filed before any authority, and an order in favour of the taxpayer was received and a higher authority has not reversed such an order.Note: Where the dispute is related to the reduction of MAT/AMT (Minimum alternative tax/ Alternative Minimum tax) credit or loss or depreciation, the taxpayer will have an option to include the amount of tax related to such tax credit/loss/depreciation in the disputed taxes or carry forward the reduced MAT/AMT credit or loss/depreciation.How to Apply for Vivad Se Vishwas Scheme 2.0Step 1: Review any tax arrears or disputes you wish to resolve under the VSV 2.0 scheme.Step 2: Complete Form-1, which includes all necessary details as notified by the tax authority.
Form 10-IEA is useful for individuals or HUFs to continue utilising the old tax regime in the present financial year. It was presented by the Central Board of Direct Taxes. The Budget 2023 proposes that from FY 2023-24, the new tax regime will be considered the default tax regime. By filling out Form 10-IEA, taxpayers can choose the old tax regime if they wish. They must complete the form before the due date prescribed for filing an income tax return.
The Income Tax Department has a Unified Grievance Management system called e-Nivaran to address taxpayers’ issues. It is an online mode available for making complaints related to filing of taxes. So, if you have any income tax grievance, find out how to submit a complaint and even apply for an escalation, if required.How Do I Submit a Grievance to Income Tax?To submit a grievance to the income tax department, there are two ways. Your choice will depend on whether or not you have registration on the e-filing portal. If you are Registered on the E-filing PortalThese are the steps to follow if you have registration on the e-filing portal:Step 1 – Visit the e-filing portal of the Income Tax Department and log in to your account.Step 2 – Navigate to the grievances tab and select the ‘Submit Grievance’ option.Step 3 – Select the type of grievance and enter the detailsOnce your grievance is updated, you will see a success message and a transaction ID. Moreover, you will also receive an email on your registered e-mail ID. If you are not Registered on the E-filing PortalStep 1 – Go to the e-filing website Step 2 – Locate the Grievance option in the footer of the webpage, it will be under the ‘Contact Us’ sectionStep 3 – Select the ‘I do not have a PAN/TAN’ option and ‘Continue’.Step 4 – Enter all your personal detailsStep 5 – Enter the OTP sent to your phone number and email idStep 6 – Select the type of grievance and enter grievance detailsStep 7 – Enter the Assessment year, Financial year, and PAN/TAN Application numberStep 8 – Write a grievance description (You can also add attachments as proof)Step 9 – Click on Submit GrievanceIn addition, you can also address your issues via the income tax grievance email id which is: webmanager@incometax.gov.in. How Long does it Take to Resolve Grievance in Income Tax?Generally, income tax grievances are rectified within 8 weeks after the petition is received. However, most grievances are addressed within one month from their date of receipt. Furthermore, if a grievance comes from the Prime Minister’s or Finance Minister’s Office or the Central Board of Direct Taxes, the income tax grievance resolution time is of 21 days. What Kind of Grievances are Addressed on e-Nivaran?In the income tax grievance portal, you can file a complaint against the following:Department CategorySub categoryAOMisc.