Publisher:FILE ITR-1 (SAHAJ) ONLINE FAQS - ACADEMY TAX4WEALTH
Dec 09,2021
File ITR-1 (Sahaj) Online FAQs
1. Who is Eligible to File ITR-1 for AY 2021-22?
ITR-1 can be filed by a Resident Individual whose:
The total financial gain doesn't fifty hundred thousand throughout the FY
Income is from regular payment, one house property, family pension financial gain, agricultural financial gain (up to ₹5000/-), and different sources, that include:
Interest from Savings Accounts
Interest from Deposits (Bank / Post workplace / Cooperative Society)
Interest from taxation Refund
Interest received on increased Compensation
Any different Interest income
Family Pension
Income of spousal equivalent (other than those coated below the Portuguese Civil Code) or Minor is clubbed (only if the supply of income is at intervals within the required limits as mentioned above).
The ITR Filing Courses have prescribed 7 kinds of structures - ITR-1, ITR-2, ITR-3, ITR-4, ITR-5, ITR-6, and ITR-7 and the relevance of the structure will rely upon the nature and measure of pay and the sort of citizen.
2. Who is not eligible to file ITR-1 for AY 2021-22?
ITR-1 Cannot be Filed by a Person Who:
is a Resident Not Ordinarily Resident (RNOR), and Non-Resident Indian (NRI)
has total income exceeding Rs 50 lakh
has agricultural income exceeding Rs 5000/-
has financial gain from the lottery, racehorses, legal gambling, etc.
has taxable capital gains (short term and long term)
has invested in unlisted equity shares
has financial gain from business or profession
is a director in an exceeding company
has write-off below section 194N of the taxation Act
has delayed taxation on ESOP received from the leader being AN eligible start-up
owns and has financial gain from over one house property
is not covered under the eligibility conditions for ITR-1
3. What are The Changes in ITR-1 as Compared to Previous Years?
In ITR-1 for AY 2021-22, there's an addition of section 115BAC. If you would like to pick the new tax regime below section 115BAC, choose YES within the new ITR kind, or else choose No. Please note that the choice for the new tax regime u/s 115BAC is going to be out there solely until the day of the month of filing of come u/s 139(1).
4. What Documents do I Want to File ITR-1?
You would want form 16, house rent receipt (if applicable), and investment payment premium receipts (if applicable). However, ITRs are annexure-less forms, thus you're not needed to connect any document (like proof of investment, TDS certificates) in conjunction with your return (whether filed manually or electronically). However, you would like to stay these documents for situations wherever they have to be created before tax authorities like assessment, inquiry, etc.
5. What Precautions Ought I Take When Filing The Return of Income?
Download Form 26AS (Annual info Statement) and check the particular TDS / TCS / tax paid. If you see any discrepancy, you must reconcile it with the leader / Tax Deductor / Bank.
Compile and carefully study the documents to be said once filing your ITR, like bank statement/passbook, interest certificates, receipts to assert exemptions or deductions, Form 16, kind 26AS (Annual info Statement), investment proofs, etc.
Ensure details like PAN, permanent address, contact details, checking account details, etc. are correct within the pre-filled information.
Identify the proper return for you (from ITR-1 to ITR-7). Offer all the small details within the return like total financial gain, deductions (if any), interest (if any), taxes paid/collected (if any), etc. No documents are to be connected in conjunction with ITR-1.
e-File the return of financial gain on or before the day of the month. The results of delay in filing returns embody late filing fees, losses not obtaining carried forward, deductions, and exemptions not being out there.
After e-Filing the return, e-Verify it. If you would like to manually verify your return, send the signed physical copy of ITR-V Acknowledgement (by standard post or speed post) at intervals of 120 days of filing the return to the Centralized Process Center, Taxation Department, Bengaluru 560500 (Karnataka).
6. How do I know The ITR I Want to File?
Different tax returns are prescribed for filing by individual taxpayers betting on their supply of income and residential status. To determine the proper ITR to file, you'll be able to use the Help me decide which ITR Form to file option. You can then proceed based on queries exhibited to confirm the proper ITR to file.
7. What is Form 26 AS (Annual Information Statement)?
Form 26AS is an annual info statement that shows varied details including Tax subtracted / Collected at Source, Advance Tax / Self-Assessment Tax, Specified Financial Transactions Demand / Refund Pending/ completed Proceedings for a taxpayer's PAN as per ITD's information.
A Taxpayer May Pay Tax in Any of The Subsequent Forms:
• Tax Deducted at Source (TDS)
• Tax Collected at Source (TCS)
• Advance Tax or Self-Assessment Tax
The taxation department maintains information on the whole tax paid by all taxpayers, which is termed tax credit within the taxpayer's account. The ITD usually permits taxpayers to assert the credit of taxes as reflected in their Form 26AS.
8. What Ought I do if There are Errors and Omissions in My Form 26AS (Annual info Statement)?
Errors or omissions in your Form 26AS (Annual info Statement) may happen due to many reasons, such as:
Non-filing of TDS returns by Deductor
Non-payment of TDS by Deductor
Quoting of wrong AY or wrong PAN (or no PAN)
Incorrect challan details within the TDS returns submitted
Challan details wrong quoted within the TDS come by Deductor or details uploaded by the bank
You Can Take The Following Action to Correct The Main Points in Your Form 26AS:
• Provide a correction statement (via the NSDL website) for those records that need correction.
• In cases of an error created by the Deductor (e.g., your employer), you ought to contact the Deductor and request them to:
• File the TDS come if it's still unfinished
• Furnish a revised TDS return if they filed the return with incorrect details/wrong or no PAN
• If there's an error created by the bank (e.g., in tax amount, PAN), you ought to request the bank to rectify it within the challan details uploaded by the bank
Especially in cases of tax amount being wrong, it's mandated that you simply get it corrected – else you'll not get a step-down for deductions that aren't mentioned in type 26AS.
9. There's a Match Between the Details in My Form 26AS and TDS certificates (Form 16 / 16A). What Ought I do?
Some of the common errors leading to a mismatch between type 26AS and type 16 are as follows:
Non-filing of TDS returns by Deductor
Wrong PAN range of the worker quoted by the Deductor
Wrong PAN / TAN of Deductor / AY quoted
Wrong Challan Identification Number (CIN) of TDS payment quoted in TDS Return
Omitted detail of TDS payment
Challan-wise annexure in TDS Statement doesn't mention details of the worker (e.g., name or gender)
False / Excess TDS amount claimed within the return
Compare the figures in Form 26AS therewith of Form 16 and Form 16A. Mismatches between your type 26AS and Form 16 or TDS certificates could result in less refund or a lot of taxes owed. If you discover that any of the above details do not match:
You need to inform the party responsible for deducting TDS from your income (i.e., your employer).
The employer should file a revised TDS return. Ensure that the details are correct within the revised TDS return to avoid another match.
10. I’m a joint owner of a house with my better half. We tend to don't have any further property. Am I able to file ITR-1 in AY 2021-22?
Yes, you can able to file ITR-1 for the AY 2021-22 just in case the subsequent conditions are met:
If you're one or joint owner of one property, you'll be able to file ITR-1 for AY 2021-22
If you own more than one property, you cannot file ITR-1 (even as one owner)
11. What Precautions Ought I Take to Avoid Problems When Filing My ITR?
To avoid problems when filing your return and obtaining your refund, make sure you do the following:
Link Aadhaar and PAN, so it is necessary to know the Consequences of Not Linking a PAN Card with An Aadhaar Card.
Pre-validate your bank account wherever you wish to receive your refund.
Choose the right ITR before filing it; else filed return will be treated as defective and you'll have to be compelled to file a revised ITR exploitation of the right form.
File the return within the specified timelines.
Verify your return and you can opt for e-Verification (recommended choice – e-Verify Now) is the simplest way to verify your ITR.
File the responses for the notices received from the ITD among the desired timelines.
12. What's Advance Tax?
For salaried people, advance tax is generally taken care of through TDS by employers. however different forms of income like interest on savings bank accounts, fixed deposits, income, bonds, or capital gains increase the liabilities. One's liabilities need to be calculable beforehand. If tax amounts to more than ₹10,000/- annually, taxpayers have to be compelled to pay advance tax in quarterly installments (June, September, December, and March).
So those days, it's important to know What is Advance Tax and How is it Calculated?
13. How are Advance Tax and Self-Assessment Tax calculated and paid?
Advance Tax: Advance Tax should be calculated as given below:
a) Just in case of all assesses (other than the eligible assesses as named in sections 44AD and 44ADA of the Income Tax Act):
At least 15%
On or before 15th June
At least 45%
On or before 15th September
At least 75%
On or before 15th December
100%
On or before 15th March
b) In the case of the eligible assesses as named in sections 44AD and 44ADA:
Any tax paid on or before the 31st of March will be treated as Advance Tax paid throughout a similar FY. The deposit of Advance Tax is created through challan ITNS 280 by ticking the relevant column, i.e., Advance Tax.
Self-Assessment Tax: After filling out your ITR form with the TDS and advance tax details (if paid), the system computes your income and checks whether or not tax remains owed. You need to pay it and then fill in the challan details within the return before submitting it.
14. What's the distinction between allowance and perquisite? Are these considered my income?
Allowances are fixed periodic amounts, apart from salary, that is paid by an employer, e.g., conveyance allowance, traveling allowance, uniform allowance, etc. Allowances are considered income and can increase your gross total income on that you'll be taxed. Allowances will be non-exempt, part exempted, and exempted. Perquisites are benefits you receive owing to your official position and are over and on top of your earnings or wage income. These perquisites can be non-exempt or non-taxable depending upon their nature.
15. Are all donations 100% exempted from tax?
No, not all donations qualify for 100% exemption from tax. The categories for a tax deduction, based on whom you donated to (charitable establishment, the fund found out by Government, research project, etc.) are as follows:
• Donations entitled to 100% deduction while not qualifying limit
• Donations entitled to 50% deduction while not qualifying limit
• Donations entitled to 100% deduction subject to qualifying limit
• Donations entitled to 50% deduction subject to qualifying limit
You need to examine the exemption limit on your donation receipt and claim deduction consequently when filing your return.
16. Is e-Filing and e-Payment a constant thing?
No. e-Filing is the method of electronically submitting your taxation return on the e-Filing portal and e-payment is the method of electronically paying tax.
17. I created a calculation mistake in my filed ITR. Am I able to correct it and re-submit my return?
Yes, you'll be able to re-submit your return just in case you've got already filed your tax return and later discover that you simply have created a slip-up. This can be referred to as a Revised return. Your return needs to be revised 3 months before the top of the relevant AY. For AY 2021-22, the maturity date for filing a revised come is 31st December 2021.
18. Can I file ITR for the last 3 years now?
No, you can only file Income Tax Return for one AY in the current financial year. Tax filing beyond the last year is only possible when you receive a notice from the Income Tax Department.
19. What happens if I file Income Tax Return after the due date u/s 139(1)?
In case you miss filing the ITR within the due date u/s 139(1), you'll be able to still file your Income Tax Return however you will be needed to pay a late filing fee of up to ₹5000/-. In addition, you'll be needed to pay interest on the liabilities (if any).
20. Do I need to file returns if tax has been subtracted by my employer/bank?
Yes, employers and banks deduct tax at supply on remuneration and interest income severally. You still need to disclose the income on which tax has been subtracted and claim credit for TDS within the taxation return.
21. Can I buy a refund if I even have paid excess tax?
Yes, any excess tax paid by you'll be able to be claimed as a refund by filing your taxation return. When your return is processed, ITD checks and consequently accepts your refund claim, so the quantity is attributable to your checking account. You'll conjointly get a message on your email ID registered on the e-Filing portal.
Publisher:ROLE OF CBDT IN INDIAN TAXATION SYSTEM | ACADEMY TAX4WEALTH
Dec 11,2021
Role of CBDT in Indian Taxation System
Historical Background of Central Board of Direct Taxes (CBDT):
The Central Board of Revenue is the apex body of the Income Tax Department. It is charged with taxes that came into force due to the introduction of the Central Board of Revenue Act, 1924. In the beginning, the board was provided the charge of direct as well as indirect taxes. However, when the administration taxes became complex to handle, then the board was divided into two such as;
1. Central Board of Direct Taxes
2. Central Board of Excise and Customs
Both of the aforesaid boards came into force on 1 January 1964. The separation of the same was introduced by constituting two boards under Section 3 of the Central Board of Revenue Act, 1963.
Also read; CBDT Interim action plan
What is the Central Board of Direct Taxes (CBDT)?
The Central Board of Direct Taxes (CBDT) is a statutory body established under the Central Board of Revenue Act, 1963. It is considered the official financial task force unit of India. The Central Board of Direct Taxes is governed by the Department of Revenue under the guidance of the Ministry of Finance.
Originally, the board was known as the Central Board of Revenue which worked as an apex body of the Income Tax Department. The aforesaid board was established under the Central Board of Revenue Act, 1924. It was governing direct as well as indirect taxes. Later, in the year 1964, the Central Board of Revenue was divided into the following two boards;
1. Central Board of Direct Taxes
2. Central Board of Excise and Customs
What are the structure of the Central Board of Direct Taxes (CBDT)?
The Central Board of Direct Taxes consists of six members and a chairman. They deal with the following aspects;
✅ Administration
✅ Income Tax & Revenue
✅ Audit and Judiciary
✅ Legislation
✅ Investigation
✅ TPS & System
The members of the CBDT are selected from the Revenue Services of India. The members also make the top management of the Income Tax Department.
What are the composition of the Central Board of Direct Taxes (CBDT)?
The CBDT consists of six members and a chairman. The details whereof are furnished below;
✅ Chairman
✅ Member (Administration)
✅ Member (Revenue and Income Tax)
✅ Member (Investigation)
✅ Member (Legislation)
✅ Member (Audit and Judicial)
✅ Member (TPS and System)
What are the Functions of the Central Board of Direct Taxes (CBDT)?
The following are some of the functions of the Central Board of Direct Taxes;
✅ CBDT deals with the matter related to imposition and collection of direct taxes.
✅ It works for the formulation of several policies and principles
✅ CBDT supervises the whole Income Tax Department
✅ CBDT provides suggestions regarding the changes and amendments in the direct tax enactments
✅ CBDT provides suggestions regarding the changes in the rates of taxes
✅ CBDT makes proposals for changes in the taxation structure considering the current government policies.
✅ CBDT also provides an Interim Action Plan for each financial year. The details whereof are provided below.
The Key Result Areas and the prescribed time frame as mentioned in the Interim Action Plan for the financial year 2021-22 dated 10 June 2021 are given as under:
Key Result Areas Time Limit
A. Charges of Assessment, Jurisdictional Assessing Officer, and Exemption Charges
(i)
Verification of Demand:
(i) To check all the demand according to PAN and year from the system, TMS or AST, or any manual demand whichever is remained, and also remove the duplicate entries.
(ii) Certification and verification in CPC Financial Accounting System (FAS) in some of the cases which are notified under section 245 as issued by CPC till March 31, 2021
(i) 31.07.2021
(ii) 15.07.2021
(ii)
Redressal for Grievances:
Disposal of CPGRAM and Electronic Nirvana (E-nivaran) exceeding 30 days
30.06.2021
(iii)
Survey Reports Uploading:
To upload all reports of surveys, scanned copies of extracted documents procured during the survey but the same are not impounded to any other document that is relevant to complete and initiate under section 143(3)/148.
31.07.2021
(iv)
The objection of Audit:
To identify and further process;
Final settlement minor and major revenue in 75% and objections in internal audit raised till 31.03.2020
Final settlement of minor and major revenue of 50% and 75% respectively and objections in internal audit raised till 31.03.2021
15.07.2021
31.07.2021
(v)
Effects of Rectification and Appeal:
The applications disposal under Ws 154 submitted by the assesses and accordingly providing the effects of appeal in all eligible cases as on 01.04.2021
31.07,2021
Jurisdictional Assessing Officer
(vi)
To upload the related and case documents for assessment including set aside cases.
Immediate
(vii)
To Identify and process all the cases including the case of 153C, search cases, TR and FT Cases, and Flack money Act cases. These need centralization in the central charges.
30.06,2021
(viii)
Passing of orders in partial set-aside cases that must be at least 25% cases of total pendency till 01.04.2021
31.07.2021
Exemption Units:
(ix)
The cases that are falling under CCIT jurisdiction are still termed as incorrect jurisdiction for identification and transfer to respective CSIT.
As far as possible
(x)
Disposal of petitions that are submitted up to 31.03.2021 to seek condonation for the delay in filing Form 10 & 10B
30.06.2021
(xi)
To complete the consequential rectification made by assessing officers in all cases in which condonation has been provided by the CIT for the delay in filing Form 10 & 10B.
31.07.2021
B. NAFAC
Disposal of penalties and assessment of at least 30% in cases that are barred as on 30.09.2021
31.07.2021
C. TDS Units
(1)
For reduction in TDS demands as of 01.04.2021 which includes demands that are not fallen due by 25%
The collection out of demands of TDS demands as of 01.04.2021 also includes demand not fallen due by 10%
31.07.2021
(ii)
The examination of the first 30 top short payment cases according to the Assessing Officer and also according to the MIS report (SP with unconsumed challans)
(iii)
The reconciliation cases that are brought forward (as of dated 01.04.2021) of TDS as reported by AINs with payment by State through OLTAS and based on the report provided on the TRACES portal.
(iv)
Seminars and awareness campaigns have to be conducted with the help of webinars
(v)
Disposal of applications under section 154 of the Income Tax Act as submitted by the assesses up to 31.03.2021
(vi)
Passing of order under section 201(1)/(IA) for cases that are falling under the TDS survey conduct report conducted up to 31.03.2021
(vii)
The disposition of l pending applications for lower or nil deduction as of 30.06.202 under section u/s 197 and 206C (9) with TDS or TCS certificates
D. CIT(AUs)
(i)
At least 100 draft appellate orders Passing
31.07.2021
(ii)
Appeals for V5V regarding form 5 that is received must be disposed
Within one week from the receiving of the Form
E. CIT(Audit)
(i)
The disposition of pending references in respect of certificates needed for the disposition of reward claims of informants.
31.07.2021
(ii)
To conduct a meeting with the level of Pr. CIT (Audit) and Pr. Director (Audit) to settle the pending objections as soon as possible.
31.07.2021
(iii)
To take action for settlement IAP objections of at least 20% that are raised in the financial year 2020-21
31.07.2021
For more information, Visit us at: https://academy.tax4wealth.com/
Publisher:ELIGIBILITY CRITERIA TO USE ITR 5 FORM | ACADEMY TAX4WEALTH
Jan 10,2022
Who is eligible to use ITR 5 Form and How?
Introduction:
The Income Tax Department has issued various Income Tax Return Forms to be Filed by Body corporates or Individuals. It is Beneficial to attain the knowledge of which ITR Form is related to your source of Income. Hence, As per Income Tax Act, one is required to File ITR Form before the last date of income tax return filing.
In reference, ITR 5 is one of the Income Tax Return Forms eligible for a specific class of Taxpayers. This Form is required to be filed by Bodies such as firms -
✅ Body of Individuals (BOI)
✅ Limited Liability Partnership (LLP)
✅ Association of Persons (AOP)
✅ Artificial Juridical Person (AJP)
The estate of the deceased, the estate of insolvent, investment fund, local authority, business trust, and Co-operative society. Any or every Individual or corporate entity related to the aforementioned categories is eligible for ITR 5 Filing.
However, an Individual who is Obliged to File the Income Tax Return as per section 139(4A) or 139(4B), or 139(4D) shall not File ITR 5.
What is the Procedure for Filing ITR 5?
Form ITR 5 could be filed electronically on the e-filing web portal of the Income-tax Department (https://www.incometax.gov.in/iec/foportal/) which furthermore needs to be verified in any one of the following manners –
✅ Verify Through digital signature, or
✅ Authenticate by way of electronic verification code (EVC) via Bank Account, or
✅ By sending duly signed Acknowledgement of the form ITR-V by Courier post to the Central Processing Centre ( CPC ) of the Income Tax Department but the Acknowledgement Form should reach within 120 days from the date of e-filing the return at the department.
However, it is mandatory to verify the return electronically via a digital signature in a case where Accounts are to be audited as per section 44AB.
While In the case where an Assessee is required to furnish a report of audit under sections 10AA, 44AB, 44DA, 50B, 80-IA, 80-IB, 80-IC, 80-ID, 80JJAA, 80LA, 92E, 115JB, or 115JC, Must file the report electronically on or before the due date of filing the Income tax return.
For more information, Visit us at: https://academy.tax4wealth.com/
Publisher:TAXATION OF INCOME EARNED FROM SELLING SHARES | TAX4WEALTH
Jan 25,2022
Taxation of Income Earned From Selling Shares
Introduction
It is well known that rental income, business income and income from salary is taxable. However, the question still arises about taxability of the income generated from the sale or purchase of shares. Many retired people and home makers spend their money in buying and selling of shares but on the other hand they are still unaware of the fact that how the income generated from such sale of shares are taxed.
It is to be noted that the income generated from sale of equity shares will fall under the income head "Capital Gains". Under the aforesaid head, the income is again classified into the following two heads;
(i) Long Term Capital Gains
(ii) Short Term Capital Gains
The aforesaid classification has been made as per the holding period of shares. The term "Holding Period" refers to the duration for which the investment is being held. In simple words, the starting date of the acquisition of shares and the date on which the transfer of sale was made.
However, it is also to be noted that the holding period of the securities and shares cannot be same and that they different according to various classes of capital assets. For the purpose of income tax, the holding period of equity mutual funds and equity shares is different from holding period of the debt mutual fund. Accordingly, the taxability of these schemes is also different.
Taxation of Income or Gain Generated from Sale of Equity Shares
Short-Term Capital Gains (STCG)
In case the equity shares are listed on the stock exchange and the same are sold within 12 months of buying, in that case the seller will make short term capital gain or may also incur short term capital loss. Thus, if the seller sells the shares at a higher price than the purchase price, then he will make a short term capital gain.
The calculation of short term capital Gain with the application of the below mentioned formula;
Calculation of short-term capital gain = Selling Price - Sales Expenses - Purchase price
Generally, Short-term capital gains are taxed at rate of 15% per annum. In case the tax slab of 10% or 20% or 30% is applicable. In that case, a special rate of tax i.e. 15 % will be applicable irrespective of the tax slab on the short term capital gain.
Long-Term Capital Gains (LTCG)
In case the equity shares are listed on the stock exchange and the same are sold after 12 months of buying, in that case the seller will make long term capital gain or may also incur long term capital loss. Thus, if the seller sells the shares at a higher price than the purchase price, then he will make a long term capital gain.
Prior to the introducing of the Budget 2018, the long term capital gains made on sale of equity oriented mutual fund units and equity shares was exempted from tax. In simple words, no tax was payable on the income generated from sale of long term equity capitals or investments.
The aforesaid exemption was withdrawn in the financial Budget 2018. Hence, from 2018 onwards, if a seller makes a long term capital gain exceeding Rs. 1 Lakh as a result of sale of equity shares or equity mutual fund units, then the income generated will be subject to tax of 10% per annum including the applicable cess. Apart from that, the indexation benefits are also not provided to the seller. The said provision came into force from 1 April 2018.
The said provisions was introduced prior to the beginning to the financial year i.e. from 1 February 2018, the gains incurred will be subject to tax. This was called as the ‘grandfathering rule’.
Illustration
Abhimanyu bought shares for Rs.200 on 30 July 2017 and sold them for Rs. 220 31 December 2018. The stock value was Rs.210 as of 31 January 2018. Out of the capital gains of Rs.20 (i.e. 220-200), Rs.10 (i.e. 220-210) is not subject to tax. The remaining Rs. 10 is taxable at the rate of 10% without indexation.
Loss incurred from Sale of Equity Shares
Short-term capital loss
Any short-term capital loss incurred from the sale of equity shares can be set-off against the income generated from short term capital gain or long term capital gain. However, there may be possibility that the loss may not be entirely set-off, thus it can be carried forward for at least 8 years and can be adjusted against any long term capital gain or short term capital gain made during the said 8 years.
It is to be noted that the taxpayer can carry forward the losses only if he or she has filed the income tax return as per the due date. Thus, although the total income generated in year which does not exceeds the minimum taxable income, then filing of income tax return is mandatory to carry forward the losses.
Long-Term Capital Loss
Until the introduction of the Finance Budget in 2018, the loss incurred from the sale of long term capital asset was termed as dead loss. As it could neither carry forwarded nor adjusted? This is due to the fact that long terms capital gains are listed equity shares are exempt. Likewise, the losses also cannot be carried forward or set-off.
After the introduction of Finance Budget 2018, some changes and amendments to the laws were made which states that capital gains made exceeding Rs. 1 Lakh will be taxed at 10% per annum. Accordingly, the Government of India notified that the losses made from such equity shares listed on the stock exchanges and mutual funds can be carried forwarded.
Any long-term capital loss incurred from the sale of equity shares can be set-off against the income generated from long term capital gain. However, there may be possibility that the loss may not be entirely set-off, thus it can be carried forward for at least 8 years and can be adjusted against any long term capital gain made during the said 8 years. The aforesaid provisions can be applicable only if the taxpayer has filed the income tax return within the due date.
Securities Transaction Tax (STT)
Securities Transaction Tax is applied on the equity shares when it is purchased or sold on a stock exchange. The said tax implication are applied only of the shares are listed on a stock exchange. It is to be noted that any purchase or sale on the stock exchange is taxable for Securities Transaction Tax.
The Treatment of Income from Sale of Shares as Business Income
Some of the taxpayers treat the income generated from sale of shares as business income, whereas some other treat as it as capital gains. It is a matter of debate once in a while. If someone engaged in share trading activity on a regular basis and generated income for such share trading on a daily basis, then income will be considered as business income. In that case, the taxpayer has file for ITR form 3 as the income will be taxed under the head "Income from Business and Profession".
How to Calculate the Income from Business and Capital Gains
In case of treatment of income generated from sale of shares as business income, a taxpayer can reduce the expenses made in generating such business income. In that case, the profits made will be added to the total income of the particular financial year and accordingly taxed as per charged tax slab.
In case of treatment of income generated from sale of shares as capital gain, the expenses made for such income are eligible for deduction. Apart from that, the long term capital gains from equity more than Rs. 1 Lakh are taxable annually.
New Clarification from Central Board of Direct Taxes (CBDT)
As per the clarification issued by the Central Board of Direct Taxes, Taxpayers are being offered a choice of how they want to treat the income generated from sale of shares. After choosing the option, the taxpayers must adopt the same process for the subsequent years too. However, the said process must be followed until and unless there is some major changes in the matter is made. It is to be noted the choices are provided only for listed shares and securities.
Apart from that, to reduce litigation aspects in such matters, CBDT has also issued some instructions as per CBDT circular no 6/2016 dated 29th February 2016) which are mentioned below;
In case the taxpayer opts to treat the listed shares as inventory, then the income will be treated as business income irrespective of the holding period of the such shares. The Assessing Officer will accept the provided stand as adopted by the taxpayer.
In case the taxpayer opts to treat the income as capital gain, the Assessing Officer will not raise a dispute only if the shares are listed and held exceeding 12 months. However, the said stand, once the taken by taxpayer in an assessment year will be applicable for the subsequent financial years as well.
Treatment of Income Generated from Sale of Unlisted Shares
As per CBDT circular Folio No.225/12/2016/ITA.1I dated the 2nd of May, 2016), In case of income generated from sale of unlisted shares having no formal market for trading will be taxed under the head of income "Capital Gain" irrespective of the holding period to avoid any sort of litigation aspect.
Publisher:BUILD YOUR CAREER WITH INCOME TAX COURSES ONLINE | ACADEMY TAX4WEALTH
Feb 01,2022
Build Your Career with The Best Income Tax Courses Online
Today we are going to talk about a very widely discussed question among Accounting and Taxation professionals: How to Grow your Career with the Income Tax Certification Courses offer excellent Career opportunities for students and professionals in the field of Accounting and Taxation. Commerce graduates and postgraduates, Finance and Accounting professionals will find these Courses in Income Tax very valuable to enhance their knowledge about the subject and build a successful career. Most of these courses are available Online.
Income Tax Law- An Overview
The Income Tax Act 1961 is one of the oldest and most widely studied Laws in our Country. The law was passed by an Act of, the Parliament of India. It was enacted on 1st April 1962. The law allows the Government of India to levy, administer, collect and recover Tax on Income from Resident Indians, HUFs, Companies, Firms, LLPs, Associations, Bodies, Local Authorities, and any other Juridical person, as well as Income earned in India by individuals and entities based outside India. The Income Tax Act segregates Income into five categories, viz. Income from Salary, House Property, Business or Profession, Capital Gains, and Other Sources. A combination of Income from all these categories forms the Total Income of the Individual. The Central Board of Direct Taxes (CBDT) administers the Income Tax Department, which is part of the Ministry of Finance's Department of Revenue. Income tax is a key source of government revenue. The other elements of the Income-tax Law are Income Tax Rules 1962, Annual Finance Act, Judicial Case Laws, and Circulars & Notifications.
Listed below is the best income tax certification course online in India which can help you build and grow your career in the field of Accounting and Taxation.
Also read; 10 Things to Consider Before Joining an Income Tax Course Online.
1. Certificate Course in Presumptive Taxation:-
A person adopting the presumptive taxation course online can declare income at a prescribed rate and, in turn, is relieved from the tedious job of maintenance of books of account and also from getting the accounts audited. To give relief to small taxpayers from the tedious job of maintenance of books of account and from getting the accounts audited, the Income-tax Act has framed the presumptive taxation scheme under sections 44AD, Section 44ADA, and section 44AE. In this part, you can gain knowledge about various provisions of the presumptive taxation scheme of section 44AD, Section 44ADA, and Section 44AE. This course is a must for Small Business owners as well as Self Employed professionals whose turnover is less than 2 crores. Also, taxation professionals working in Small Enterprises will find this Course very useful to manage their Accounts. It will add value to your profile in your organization and make you a more valuable resource for your organization.
2. Income Tax Regime, Old versus New A Comprehensive Study:-
Starting Financial Year 2021, the Government of India announced optional Income Tax Rules for Individuals and HUFs. According to the new Tax Rules, Tax slabs are segregated into 7 categories instead of the previous 4 categories. The Income Tax rates for some categories have been reduced. Also, several deductions which were available in the old Income Tax regime have been withdrawn. This course explains in detail the various provisions of the new Tax Regime and compares it with the old Tax Regime. Every Indian Citizen must study this Course to understand the nuances of the new Income Tax regime.
3. TDS Return Filing Online:-
TDS means Tax Deducted at Source and TCS means Tax Collected at Source. TDS and TCS are discussed in detail in this Course. It throws light upon topics such as when should you File TDS Return. What are the last dates for Filing TDS online with Live Practical Example Penalty for delay in filing returns, interest amount payable for delay in filing returns, etc? This Course is also a must-do for every business person and Self Employed professional. Professionals working in Corporates, as well as SMEs, will also benefit from this Course. TDS Filing is a routine activity for Accounting professionals and thorough knowledge about this subject will help them grow in their organization as well as provide more opportunities for them as a taxation professional.
4. Practical Course about Income Tax Law and Provisions:-
This course includes important provisions of Indian Income Tax which are useful for day-to-day work of Accounting and Audit of a business. The purpose of this course is to teach students about business income provisions under Indian Income-tax within a short duration. This course includes a brief of the following topics: Introduction of Indian Income Tax, Introduction of various Income Tax Returns forms(ITR), Important Tax Saving Investment/Deductions, etc, Calculation of Business Income under Income Tax, Allowed & Disallowed business deductions, Depreciation under Income Tax, Books of Accounts & Documents under Income Tax, Applicability of Audit under Income Tax, Presumptive Taxation scheme for small businessmen/ professionals, All about TDS provisions like Important TDS rates, TDS Returns & Due dates of the TDS returns, etc. This is a comprehensive and excellent Course for all Accounting professionals to gain practical insights to deal with the Income Tax Laws.
5. Diploma in Taxation:-
Some institutes offer a Diploma or Post Graduate Diploma in Taxation. This is an excellent Course for aspirants who want to work as a Tax Consultant or Tax Advisor. It covers topics such as Online Income Tax Filing, Online TDS Return Filing, Online GST Return Filing, etc. The Course is practical oriented and offers to live as well as classroom training.
6. Self Study Course in Income Tax:-
The course covers Income Tax from Basic to Advanced level covering major compliances, Filing of Income Tax Return and TDS forms along with precautions to minimize CASS Scrutiny Selection, Handling Faceless assessments, Income tax Health Check-up, etc. The Course is Comprehensive in nature and covers many practical aspects of the Income Tax Law. It also teaches professionals to protect their clients and employers from the vagaries of the Income Tax Department.
7. Certified Tax Professional:-
This Course includes taxation of Self Employed persons and Businesses, GST Taxes and return filing, Self Employed Business Excise Taxes and return filing, ITR 5, ITR 6 & ITR 7 Return filing, Assessment of Companies & Firm, Assessment of Trusts, Partnership Business GST, Excise Returns Filing and Procedures, Partnership ITR 5 Filing, Corporate Business GST, Excise Returns Filing and Procedures, Corporate ITR 6 & ITR 7 Filing. They teach you to handle very challenging individual tax situations as well as tax returns for businesses or professions, partnerships, companies, corporations, trusts & societies, and sole proprietorships. The syllabus is comprehensive and offers good employment and growth prospects for students who complete the Course, especially as Tax Consultants.
8. Advance Income Tax Certification Course:-
Similar to some of the Courses mentioned above, this Course teaches you about all major topics relevant to Income Tax law. The Course is divided into 13 sessions for a total of 36 hours duration. Separate batches of the Course are available on Weekdays and on Weekends. This is a Live Online Course. New batches are scheduled after the completion of existing batches.
Many of the Courses mentioned above are comprehensive in nature. Some of them deal specifically with certain portions of the Income Tax law. The above Courses offer a great starting point for a Career in Accounting and Taxation, especially when accompanied by a Certification in GST.
Complementary Courses:-
To add value to your CV, you must also complete a comprehensive GST Certification Course.
Further Education:-
Students who are inclined to higher education can also complete a Master’s Degree in Commerce with Income Tax as a subject. Under the Job Guaranteed Courses, A structure Combination of certified corporate accountant course that included online course on GST, Income Tax, Tally, and Company Law and the best skilled education will also do wonders for your Career in Taxation or accounting.
Publisher:COMPREHENSIVE ANALYSIS OF TAX AUDIT | ACADEMY TAX4WEALTH
Feb 16,2022
Comprehensive Analysis of Tax Audit
Introduction:-
The rules of income tax provided that a few taxpayers should get their books of account audited under the provisions of Section 44AB of the Income Tax Act, 1961. From the financial year 2021-22, the threshold limit for a tax audit has been increased from Rs. 1 crore to Rs. 5 crores. Further, with effect from the assessment year 2022-23 the threshold limited again increased to Rs. 10 crores. In case a taxpayer has cash receipts that are limited to 5% of the gross turnover and the cash payments are limited to 5% of the aggregate payment.
What is Tax Audit ?
Tax audit refers to cross-examination of the books of account of a taxpayer in a particular financial year by a Certified Charted Accountant under the provisions of the Income Tax Act, 1961. Section 44AB of the Income Tax Act, 1961 provides the conditions under which tax audit has become compulsory for the taxpayers. The main objective of the tax audit is to verify the authenticity and accuracy of the books of accounts and financial records of the taxpayer in order to avoid any sort of tax evasion and fraud.
Tax Audit Report :-
A Tax Audit Report refers to the document containing the details of findings of the audit conducted in a prescribed audit form as laid by the Income-tax department. A person who is engaged in conducting a tax audit has to provide the tax audit report. Section 44AB of the Income Tax Act, 1961 provides the forms 3CA and 3CB. Apart from these forms, the auditor is also required to provide form 3CD.
Audit Forms:-
The following are the types of forms either of which has to be furnished by the auditor;
(i) Form 3CA
(ii) Form 3CB
Form 3CA:-
With regard to the taxpayer carrying on a profession or business and is already compulsorily required to get his books of accounts audited under any law other than the Income Tax Act, 1961. For example, a company is needed to get its books of account audited mandatorily under the provisions of the Companies Act, 2013 and thus it will furnish Form 3CA accordingly.
Form 3CB:-
With regard to the taxpayer carrying on a profession or business and is already compulsorily not required to get his books of accounts audited under any law other than the Income Tax Act, 1961.
In case of a partnership firm or a sole proprietorship having an annual turnover exceeding Rs. 1 crore and has not opted for a presumptive income scheme, then it is required to get its books of accounts audited under any law other than income tax law. Thus, it will furnish form 3CB.
Particulars of Form 3CA:-
The following are some of the particulars of the Form 3CA:-
Step 1:-
✅ Address and name of the taxpayer along with PAN
✅ Auditor Name ( firm or individual as the case may be)
✅ Name of the law under which books of accounts have been audited (for example Companies Act).
✅ Audit Report Date
✅ Income & Expenditure Account or Period of Profit & Loss Account with starting and ending date
✅ Balance Sheet Date
Step 2:-
✅ A Declaration as attached to Form 3CD and Audit report.
Step 3:-
✅Qualifications and Audit Observations must be provided in the detail related to Form 3CD.
Step 4:-
✅ Date and Place of signing the audit report
✅ Auditor's Name, Address, and Membership Number must be mentioned
✅ Auditor's Stamp or Seal
Particulars of Form 3CB:-
The following are some of the particulars of the Form 3CB;
Step 1:-
✅ Balance Sheet Date
✅ Address and name of the taxpayer along with Permanent Account Number
✅ Income & Expenditure Account or Period of Profit & Loss Account with starting and ending date
Step 2:-
✅ Address of the books of accounts of where it is kept
✅ Branch offices Addresses (in case the books of accounts are also kept in branch offices).
Step 3(a):-
✅ Qualification or Comments or Audit Observations or Discrepancies.
Step 3(b):-
✅ Declaration must be provided by the auditor regarding–
✅ All the information obtained and the explanation provided is necessary for the audit.
✅ Assuring that the company including its branch offices has been maintaining proper books of accounts.
✅ Assuring that the Profit and Loss Account and Balance Sheet are giving a fair and true view.
Step 4:-
✅ A Declaration of attached with Form 3CD and the audit report.
Step 5:-
✅ Audit discrepancies and audit observations noticed or found in details provided in Form 3CD.
Step 6:-
✅ Date and Place of signing the audit report
✅ Auditor's Name, Address, and Membership Number must be mentioned
✅ Auditor's Stamp or Seal
Particulars of Form 3CD:-
Form 3CD is referred to as a detailed statement of particulars having 41 points or steps. All of the details related to the different aspects of the business and its transactions must be filled in the required place. Detailed analysis and explanation in each section or step of Form 3CD can be seen.
Particulars of Form 3CE:-
This form is meant for non-resident taxpayers. The following are some of the particulars of the Form 3CE;
Step 1:-
✅ Address and name of the non-resident taxpayer along with PAN (Permanent Account Number)
✅ Mention the Financial year for which the audit has been conducted
Step 2:-
✅ Declaration regarding the information and explanation obtained during an audit is necessary,
Step 3:-
✅ Certification regarding the aspect of permanent establishment and mentioning the fact that the business fixed place of business in India.
Step 4:-
✅ Declaration of the income earned in the form of royalty or fees for technical services provided under Section 44DA of the Income Tax Act, 1961 for the particular assessment year.
Step 5:-
✅ Name and Signature of the Auditor along with stamp or seal
Due Date for Obtaining the Audit Report:-
A taxpayer must obtain the audit report on or before 30th September of the particular assessment year until and unless it is extended.
For more information, Visit us at: https://academy.tax4wealth.com/blog
