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Tag: Income Tax

  • Crorepati Taxpayers In India Increased 5 Times To 2.2 Lakh In Last 10 I-T Assessment Years | Personal Finance News

    New Delhi: The number of crorepati taxpayers in India increased five times to 2.2 lakh in the income tax assessment year (AY) 2024, compared to AY 2014, according to a new report. In the last 10 assessment years, while the total number of taxpayers increased by 2.3 times to 8.62 crore in AY24, the growth is quite fascinating in the income group more than Rs 10 lakh, according to a research report from the economic department of State Bank of India (SBI).

    Granular analysis indicates the shifting of the middle class in India from an income range of Rs 1.5–Rs 5 lakh in AY14 to Rs 2.5–Rs 10 lakh in AY24. Total income tax returns filed during AY24 increased to 8.6 crore from 7.3 crore in AY22. Of these, total 6.89 crore or 79 per cent of the returns were filed on or before the due date.

    “For AY25, 7.3 crore ITRs have been filed by the due date and another 2.0 crore returns are expected to be filed in the remaining financial year till March 2025, thereby taking the total number close to/over 9 crore,” the report mentioned. For AY25, the share of IT returns filed after the due date may drop to around 18-19 per cent.

    “This reveals the discipline among tax-payers along with the simplification of IT forms and processes driven by constant efforts of CBDT to build an efficient, digital-heavy filing, verification and return architecture sans hassles,” said the SBI report.

    Overall, there have been 5.1 crore more ITRs filed in AY24 over AY15, with the maximum increase registered in Maharashtra, followed by Uttar Pradesh, Gujarat, Rajasthan and Tamil Nadu. “In terms of per cent growth, smaller states of Manipur, Mizoram and Nagaland have registered more than 20 per cent increase in ITR filed during the last nine years, showed the report.

    The estimates show that female tax filers are around 15 per cent of the individual tax filers. Certain states such as Kerala, Tamil Nadu, Punjab and West Bengal have a higher share of female tax filers.

  • Income Tax Audit Report Deadline Extended For AY 2024-25: Check New Date, Penalty, And How To Submit Online | Personal Finance News

    Income Tax Audit Report Deadline: The Central Board of Direct Taxes (CBDT) has extended the deadline for submitting tax audit reports for the assessment year 2024-25, offering relief to those required to comply with this obligation. The original deadline of September 30, 2024, has now been extended to October 7, 2024.

    This extension comes in response to difficulties faced by taxpayers during electronic submissions under the Income Tax Act, particularly due to problems with the e-filing portal. The new deadline specifically applies to assessees covered under section 139 of the Income Tax Act, 1961. 

    What Is Tax Audit? 

    It is an examination or review of accounts of any business or profession carried out by taxpayers from an income tax viewpoint. It makes the process of income computation for filing of return of income easier. 

    Penalty If You Delay In Filing Tax Audit Report 

    If a taxpayer is required to undergo a tax audit but fails to do so, a penalty may be imposed. The penalty would be the lesser of 0.5% of the total sales, turnover, or gross receipts, or Rs 1,50,000. However, if the taxpayer give a reasonable cause for failing to complete the audit, no penalty will be levied under section 271B. 

    Who Needs To Submit A Tax Audit Report?

    -Businesses making more than Rs 1 crore in total sales. 

    -Professionals earning over Rs 50 lakh in a year.

    -Companies, no matter how much they earn.

    Other specific cases are mentioned in tax rules, like those using the presumptive taxation scheme but not meeting certain conditions. These taxpayers must get their accounts checked by a Chartered Accountant, who will prepare an audit report (Form 3CA/3CB and Form 3CD) for them to submit. 

    How To Submit Income Tax Audit Report

    Step 1: Ensure your auditor completes the audit, verifying all details for accuracy and correctness.

    Step 2: Log in to the income tax e-filing portal using your credentials to access your account.

    Step 3: Navigate to the appropriate section for uploading audit reports within the portal.

    Step 4: Select the correct assessment year for which the audit report is being submitted.

    Step 5: Follow the instructions to upload the completed audit report, including Forms 3CA/3CB and 3CD.

    Step 6: After uploading the report, confirm that the submission has been successful and received by the system. 

  • Income Tax Clearance Certificate Mandatory For All Indians? CBDT Clarifies New Rule | Personal Finance News

    The income tax return filing season has now entered the penalty phase where those who failed to file their returns by July 31 are now needed to pay fine to fill their returns. The Income Tax Department said earlier this month that timely compliance by taxpayers and tax professionals has led to a significant increase in the filing of Income-tax Returns (ITRs), setting a new record for ITRs filed by July 31, 2024. The total number of ITRs filed for the Assessment Year (AY) 2024-25 exceeded 7.28 crore, marking a 7.5% increase compared to the 6.77 crore ITRs filed by the same date for AY 2023-24.

    Claims Being Made Online/Offline

    Now, with crores of taxpayers filing their returns, the Income Tax department has made several changes to its website to make the user experience a smooth affair. Amid this, it was claimed that all Indians including those travelling abroad need an Income Tax Clearance Certificate. It was claimed that those opting for foreign travel must possess the Income Tax Clearance Certificate. The tax department has earlier made a statement in this regard but today, the Central Board of Direct Taxes (CBDT) came out with another statement to make the rules clear to everyone and clarify the misinformation being spread online and offline. 

    CBDT Fresh Statement

    “There appears to be misinformation about the said amendment emanating from incorrect interpretation of the amendment. It is being erroneously reported that all Indian citizens must obtain income-tax clearance certificate (ITCC) before leaving the country. This position is factually incorrect,” said the CBDT.

    CBDT issues clarification in respect of Income-tax clearance certificate (ITCC).

    It is being erroneously reported that all Indian citizens must obtain ITCC before leaving the country. This position is factually incorrect.

    Vide Finance (No.2) Act, 2024, Black Money… pic.twitter.com/tadFVQr99F
    — Income Tax India (@IncomeTaxIndia) August 20, 2024

    What Rules Say

    Section 230 (1A) of the Income-tax Act, 1961(the ‘Act’) relates to obtaining of a tax clearance certificate, in certain circumstances, by persons domiciled in India. The said provision, as it stands, came on the statute through the Finance Act, 2003 w.e.f. 1.6.2003. The Finance (No.2) Act, 2024 has made only an amendment in Section 230(1A) of the Act, vide which, reference of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (the ‘Black Money Act’) has been inserted in the said Section. This insertion has been made to also cover the liabilities under the Black Money Act in the same manner as the liabilities under the Income-tax Act,1961 and other Acts dealing with direct taxes for the purpose of Section 230(1A) of the Income-tax Act,1961.

    As per section 230 of the Act, every person is not required to obtain a tax clearance certificate. Only certain persons, in respect of whom circumstances exist which make it necessary to obtain a tax clearance certificate, are required to obtain the said certificate. This position has been in the statute since 2003 and remains unchanged even with the amendments vide Finance (No. 2) Act, 2024.

    “The CBDT, vide its Instruction No. 1/2004, dated 05.02.2004, has specified that the tax clearance certificate under Section 230(1A) of the Act, may be required to be obtained by persons domiciled in India only in the following circumstances: (a) where the person is involved in serious financial irregularities and his presence is necessary in the investigation of cases under the Income-tax Act or the Wealth-tax Act and it is likely that a tax demand will be raised against him, or, (b) where the person has direct tax arrears exceeding Rs 10 lakh outstanding against him which have not been stayed by any authority,” said the CBDT.

    How To Get Tax Clearance Certificate?

    According to the CBDT, a person can be asked to obtain a tax clearance certificate only after recording the reasons for the same and after getting approval from the Principal Chief Commissioner of Income-tax or Chief Commissioner of income tax. Those persons mandated to require the certificate can obtain the same from the Income Tax Department by making a written request online or offline.

  • Net Direct Tax Collection Grows 22 Per Cent To Rs 6.93 Lakh Crore | Economy News

    New Delhi: Net direct tax collection grew 22.48 per cent to about Rs 6.93 lakh crore as of August 11 this fiscal, government data showed on Monday.
    The mop-up includes personal income tax collection of Rs 4.47 lakh crore and corporate tax collection of Rs 2.22 lakh crore.

    Securities Transaction Tax (STT) mopped up Rs 21,599 crore, while other taxes (which include equalisation levy and gift tax) earned Rs 1,617 crore. Refunds worth Rs 1.20 lakh crore were issued between April 1 to August 11, a growth of 33.49 per cent.

    On a gross basis, direct tax collection grew 24 per cent to Rs 8.13 lakh crore. The collection includes PIT (personal income tax) of Rs 4.82 lakh crore and corporate tax of Rs 3.08 lakh crore.

    The government has budgeted to collect Rs 22.07 lakh crore in the current fiscal from direct taxes. 

  • No Income Tax! Find Out Why Residents Of THIS State Enjoy Complete Tax Exemption | Personal Finance News

    Residents of Sikkim have a unique advantage that sets them apart from the rest of India. Unlike other states, Sikkim is exempt from income tax under Section 10 (26AAA) of the Indian Income Tax Act.

    Why Doesn’t Sikkim Have to Pay Income Tax?

    When Sikkim merged with India, the government assured the state that it could keep its existing tax system. Before joining India, Sikkim had its own tax rules and residents didn’t have to pay Indian income tax. To honour this, the Government of India granted Sikkim special exemptions from Income Tax.

    What is the Income Tax Exemption for Residents of Sikkim?

    The Sikkim Income Tax exemption is explained in Section 10(26AAA) of the Income Tax Act. It states that any income earned in Sikkim or by Sikkim residents from sources like dividends or interest on securities is exempt from income tax. This exemption applies to people who lived in Sikkim before it became part of India.

    History of the Sikkim Income Tax Exemption

    The Union Budget replaced the Sikkim Tax Act in 2008 and instead granted income tax exemptions to Sikkim’s residents through Section 10 (26AAA) of the Income Tax Act. This change helps maintain Sikkim’s unique status under Article 371(f).

    In 2013, the Association of Old Settlers of Sikkim (AOSS) filed a petition because “old Indian settlers” who had moved to Sikkim before it joined India in 1975 were not included in the tax exemptions. The Supreme Court then ordered an update to Section 10(26AAA) to include all Indian citizens living in Sikkim until April 26, 1975 which granted them tax exemptions as well.

  • ITR Penalty Alert: What Happens If You Miss July 31 ITR Deadline Date For FY 2023-24? ,

    ITR Penalty: For individual taxpayers whose accounts do not require auditing, the deadline for filing income tax returns (ITRs) for the financial year 2023-24 (the assessment year 2024-25) is July 31, 2024. However, the Income Tax Department has begun sending reminders to taxpayers through emails and SMSes to ensure they meet the ITR filing deadline and avoid penalties.

    The last date to file a belated return for the financial year 2023-24 (assessment year 2024-25) is December 31, 2024. Filing your ITR on time is crucial for several reasons. If you miss the July 31 deadline, you can still file a belated return but will face a penalty in addition to the tax due and interest.

    What Is a Belated Tax Return?

    If you miss filing your tax return by July 31, you can still file a belated return. This can be submitted up to three months before the end of the relevant assessment year.

    Disadvantages of Filing a Belated ITR

    Filing a belated income tax return (ITR) comes with certain drawbacks. Beyond incurring a penalty for late submission, you lose several benefits:

    -You cannot carry forward losses from capital gains, business income, and other sources (except for losses from house property).

    -You are not allowed to opt for the new tax regime when filing a late ITR for the Assessment Year 2024-25.

    Penalty for Missing the July 31 Deadline

    Under Section 234F of the Income Tax Act, the penalties for filing a belated return for the financial year 2023-24 (AY 2024-25) are as follows:

    -For individuals with a net taxable income exceeding Rs 5 lakhs, the penalty may be up to Rs 5,000.

    -For taxpayers with a net taxable income of Rs 5 lakhs or less, the maximum penalty is Rs 1,000.

    -In addition to the late filing fees, interest on any unpaid taxes will accrue from the original due date until the full amount is settled. It’s crucial to note that the penalty applies even if the belated ITR shows zero tax payable. (Also Read: ITR Filing 2024: How To Check Tax Refund Status Online With PAN Card | Refund Timeline Explained)

    Notably, a belated ITR can only be submitted and confirmed if the challan information for paying the late filing fee is included in the ITR form.

  • CBDT Signs Record 125 Pacts To Ease Tax Payments By Big Multinational Firms

    With this, the total number of APAs since the inception of the APA programme has gone up to 641.

  • Those are the important thing tax coverage problems to look forward to throughout the primary GOP presidential debate

    Scott Olson | Getty Photographs

    8 applicants will take the level for the primary Republican presidential debate Wednesday evening — and professionals are staring at carefully for feedback on key tax coverage problems.

    “The 800-pound gorilla within the room is the Tax Cuts and Jobs Act and the expiration of the entire person source of revenue tax provisions slated after 2025,” stated John Buhl, senior communications supervisor on the Tax Coverage Heart.

    Enacted in 2017, former President Donald Trump’s signature tax law ushered in sweeping adjustments to the tax code, together with decrease source of revenue tax brackets, upper usual deductions and a considerably better property tax exclusion, amongst different provisions.

    Trump introduced that he’ll be skipping the GOP debate.

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    Whilst many Republicans wish to see those provisions prolonged, explicit proposals are unclear, in particular amid ongoing debate in regards to the deficit, Buhl stated.

    “Republicans need deficits to be diminished,” he stated. “How do they plan to each do this and handle this $3 trillion albatross?”

    Maximum American citizens may see upper taxes

    One of the vital carefully watched Tax Cuts and Jobs Act provisions is adjustments to the person source of revenue tax brackets.

    The law trimmed many of the federal source of revenue tax brackets, with the very best price falling to 37% from 39.6%, and with out intervention from Congress the decrease charges will sundown in 2026.

    “With none motion, just about all taxpayers would see their taxes move up,” stated Erica York, senior economist and analysis supervisor with Tax Basis’s Heart for Federal Tax Coverage.

    Provisions such because the doubled usual deduction, which reduces the quantity of source of revenue matter to tax, and the larger kid tax credit score have additionally had an important have an effect on on American citizens’ wallets, she stated.

    Whilst main points from the talk level is also slender, York wish to see the place applicants stand on quite a lot of provisions, together with which problems is also prioritized.

    “I do not believe we are going to see a whole extension of the whole lot within the Tax Cuts and Jobs Act,” she stated. “There is almost certainly going to need to be some give-and-take.”

    ‘Tax coverage is at all times about trade-offs’

    Trump’s law additionally incorporated a $10,000 cap at the federal tax spoil for state and native taxes, referred to as SALT, which has been a key factor for some lawmakers in high-tax states equivalent to California, New Jersey and New York.

    Although maximum American citizens do not itemize federal tax deductions, the present SALT prohibit stops itemizers from claiming greater than $10,000 for state source of revenue and assets taxes.

    Whilst the SALT cap is probably not addressed at the debate level, Buhl expects to peer it from state applicants on either side of the aisle.

    “However on the finish of the day, tax coverage is at all times about trade-offs,” he stated. “That is why it is going to be tricky to make substantive adjustments going ahead.”

  • This is how a lot you’ll make and nonetheless pay 0% capital positive factors taxes for 2023

    Marko Geber | DigitalVision | Getty Photographs

    Learn how to calculate your capital positive factors tax bracket

    With upper same old deductions and source of revenue thresholds for capital positive factors, it is much more likely you’ll be able to fall into the 0% bracket in 2023, Lucas mentioned.

    For 2023, you could qualify for the 0% long-term capital positive factors fee with taxable source of revenue of $44,625 or much less for unmarried filers and $89,250 or much less for married {couples} submitting collectively.

    The charges use “taxable source of revenue,” which is calculated through subtracting the better of the usual or itemized deductions out of your adjusted gross source of revenue.

    For instance, if a married couple makes $100,000 in combination in 2023, their taxable source of revenue would possibly simply fall underneath $89,250 after subtracting the $27,700 married submitting collectively same old deduction.

    By way of comparability, you will have been within the 0% long-term capital positive factors bracket for 2022 with a taxable source of revenue of $41,675 or much less for unmarried filers and $83,350 or much less for married {couples} submitting collectively.

    Different tax-planning alternatives

    With taxable source of revenue underneath the thresholds, you’ll promote winning belongings with out tax penalties. For some traders, promoting is also a possibility to diversify amid marketplace volatility, Lucas mentioned.

    “It is there, it is to be had and it is a in reality excellent tax-planning alternative,” he added.

    Whether or not you take positive factors or tax-loss harvesting, which makes use of losses to offset earnings, “you in reality need to have a take care of on all of your reportable image,” mentioned Jim Guarino, a CFP, qualified public accountant and managing director at Baker Newman Noyes in Woburn, Massachusetts.

    That comes with estimating year-end mutual fund payouts in taxable accounts — which many traders do not be expecting — and would possibly reason a marvel tax invoice, he mentioned.

    “Some further loss harvesting would possibly make numerous sense if you have got that further capital acquire that is coming down the street,” Guarino mentioned.

    In fact, the verdict hinges in your taxable source of revenue, together with payouts, since you will not have taxable positive factors within the 0% capital positive factors bracket.

  • IRS nonetheless has a large backlog of returns in spite of enhancements, taxpayer suggest says

    Erin M. Collins, Nationwide Taxpayer Recommend

    Supply: IRS

    LAS VEGAS — After a troublesome 3 years for taxpayers, the IRS has made important enhancements. However there may be nonetheless paintings to do, consistent with Nationwide Taxpayer Recommend Erin Collins.

    “This submitting season has most likely been as with reference to customary as conceivable,” she stated, talking on the American Institute of Qualified Public Accountants’ annual convention, held June 3-6 in Las Vegas.

    On the other hand, in spite of customer support boosts, the company continues to be operating thru a large backlog — together with amended returns, filings in suspense and different correspondence, she stated.

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    Collins heads the Taxpayer Recommend Provider, an impartial group inside the IRS that gives one-on-one steerage and works for systemic adjustments. The nationwide taxpayer suggest leads about 80 national places of work for suffering filers, consults inside the IRS, reviews every year to Congress at the company’s greatest issues and items legislative proposals.

    Collins stated the IRS is these days juggling 3.7 million amended returns, 6.8 million “in suspense” with lacking knowledge and 5.3 million items of correspondence. “The ones are beautiful large numbers that the IRS continues to be coping with,” she stated.

    This season, the company has prioritized telephone carrier and replied greater than 85% of calls from key telephone traces in lower than 5 mins.

    “However it did come at a value,” Collins stated, as a result of telephone assistors procedure paper returns throughout downtime from answering calls. “The issue is, we at the moment are again to a backlog of paper correspondence and amended returns, very similar to the place we have been a 12 months in the past,” she stated.

    Considerations about direct submitting machine trying out

    Collins additionally expressed issues in regards to the company’s plans for brand spanking new techniques amid the present backlog.

    In Would possibly, the IRS introduced trying out for a loose on-line direct submitting machine, with a pilot program launching for some taxpayers throughout the 2024 submitting season.

    Just about three-quarters of taxpayers expressed passion in a loose IRS-provided submitting machine, consistent with a 2022 survey cited within the company’s feasibility file.

    We can not pass into the following submitting season with any other backlog.

    Erin Collins

    Nationwide Taxpayer Recommend

    Collins stated that whilst she believes the IRS has the technical capacity to enforce direct submitting, she worries in regards to the timing. “IRS nonetheless isn’t out of the outlet that they have got dug,” she advised CNBC.

    “We can not pass into the following submitting season with any other backlog,” she stated. “We wish to get rid of that phrase from the IRS’ vocabulary.”

    “Not more backlogs,” she added.

    Collins additionally pointed to state tax demanding situations, particularly for greater than 40 states that depend on federal returns for citizens’ state filings. Should you decouple the ones returns, it will reason problems for state tax management, she stated.