Category: Tax (Page 1 of 3)

new-tax-regime-nirmala-sitharaman-gst-nifty-news-blog

New GST regime from Sept 22: 5% and 18% slabs remain, 40% on luxury goods.

September 8, 2025 / Rohit More / 0 Comments

The 56th meeting of the GST Council, chaired by Finance Minister Nirmala Sitharaman on Wednesday, approved the rationalisation of GST rates, abolishing the 12 per cent and 28 per cent slabs. The new slab structure will come into effect from September 22, the first day of Navaratri.

New Two-Tier Tax Structure with Luxury Goods Slab

The Council cleared a two-tier tax structure with rates of 5 per cent and 18 per cent, along with a new 40 per cent slab for sin and luxury goods. However, tobacco products and cigarettes will continue to attract 28 pc GST, plus compensation cess, till loans are repaid.

“These reforms have been carried out with a focus on the common man. Every tax on the common man’s daily use items has gone through a rigorous review and in most cases the rates have come down drastically. Labour-intensive industries have been given good support. Farmers and the agriculture sector, as well as the health sector, will benefit. Key drivers of the economy will be given prominence,” Sitharaman said after the GST Council meeting.

Cheaper Goods for Mass Consumption

As part of the restructuring, 175 broad items of mass consumption, including milk, paneer, snacks and bread, will become cheaper. Goods such as hair oil, toilet soaps, shampoos, toothbrushes, tableware and kitchenware will now fall under the 5 per cent bracket.

Items like UHT milk, paneer, chenna and all kinds of Indian breads will move from 5 per cent to nil. Spectacles will now be taxed at 5 per cent.

Rationalising Existing Tax Slabs

Around 99 per cent of items currently taxed at 12 per cent will now fall under 5 per cent, including natural menthol, fertilisers, handicrafts and several labour-intensive sectors such as marble and granite blocks. Additionally, 33 life-saving drugs and medicines will move from 12 per cent to nil.

Nearly 90 per cent of goods currently taxed at 28 per cent will shift to 18 per cent. This includes air-conditioning machines, televisions above 32 inches – with all TVs now under 18 per cent – dishwashing machines, cement, and small cars and motorcycles below 300 cc.

Automobiles such as small cars up to 350 cc, buses, trucks, ambulances and auto parts will also move to the 18 per cent slab. Dishwashing machines and bikes will remain in the 18 per cent category.

Correcting the Inverted Duty Structure

The inverted duty structure has also been corrected, with man-made fibre moving from 18 per cent to 5 per cent and man-made yarn from 12 per cent to 5 per cent.

Introduction of 40% GST on Sin and Luxury Goods

The Council also approved a new 40 per cent GST rate for sin and super luxury goods. The higher slab will apply to items such as paan masala, tobacco, cigarettes, bidis, aerated water, carbonated and caffeinated beverages, as well as luxury items like motorcycles exceeding 350 cc, yachts and helicopters.

Importantly, GST will now be levied on the retail sale price (RSP) of paan masala and tobacco instead of the wholesale value.

Relief to Middle Class and Growth Sectors

“All TVs will now be taxed at 18 per cent, and life-saving cancer drugs will be taxed at nil,” Sitharaman added, noting that the reforms were designed to give relief to the middle class and provide a fillip to growth sectors of the economy.

Government’s Vision and Prime Minister’s Response

Prime Minister Narendra Modi welcomed the move, recalling his Independence Day assurance of next-generation reforms in GST.

“The Union Government had prepared a detailed proposal for broad-based GST rate rationalisation and process reforms, aimed at ease of living for the common man and strengthening the economy. Glad to state that the GST Council, comprising the Union and the States, has collectively agreed to the proposals submitted by the Union Government on GST rate cuts and reforms, which will benefit the common man, farmers, MSMEs, middle-class, women and youth. The wide-ranging reforms will improve lives of our citizens and ensure ease of doing business for all, especially small traders and businesses,” he said in a post on X.

Reference: India Today

Read more market news only on NiftyNews.

Guide to choosing the correct ITR form for AY 2025-26 based on income type

Which ITR Form Should You Use for AY 2025-26? Here’s How to Choose the Right One

June 2, 2025 / Rohit More / 0 Comments

Posted on June 2, 2025, by Niftynews

Filing income tax returns accurately isn’t just about reporting your income—it starts with choosing the correct ITR form. Filing under the wrong ITR form may lead to a defective return, delays in refunds, or even penalties.

The Income Tax Department has notified the updated ITR forms for Assessment Year (AY) 2025–26. Here’s a complete guide to help you select the correct form based on your income type and taxpayer category.

🧾 ITR 1 (Sahaj): For Salaried Individuals With Simple Income

✅ Who can use it?

Resident individuals (not HUFs, NRIs, or RNORs)
Total income ≤ ₹50 lakh
Income sources include:
- Salary or pension
- Income from one house property (no carry-forward loss)
- Other sources (like interest income)
- Agricultural income up to ₹5,000
- Capital gains up to ₹1.25 lakh from equity (Section 112A only)

❌ You cannot use ITR-1 if:

You’re an NRI or RNOR
You own more than one house property
You’ve earned capital gains over ₹1.25 lakh or want to carry forward losses
You’re a company director, hold unlisted equity, or earned income from crypto or digital assets
You have business/professional income

🔍 New Update for AY 2025–26:
You can now report long-term capital gains up to ₹1.25 lakh from shares or mutual funds in ITR 1.

📈 ITR 2: For NRIs, Investors & Those With Capital Gains or Multiple Properties

✅ Use this if you are:

An individual or HUF
Have:
- Salary or pension income
- Income from multiple house properties
- Capital gains of any amount
- Agricultural income above ₹5,000
- Foreign assets or income
- RNOR/NRI status
- Director in a company or holder of unlisted equity
- Clubbing income (e.g., spouse’s income)

❌ You cannot use ITR-2 if:

You have business or professional income

🆕 New Feature:
The Excel utility now allows filing revised returns under Section 139(8A).

🏢 ITR 3: For Business Owners, Freelancers & Partners in Firms

✅ Mandatory if you have:

Income from business or profession (proprietorship)
You are a partner in a partnership firm (not LLP)
Capital gains, including those with carry-forward losses
Unlisted shares
F&O trading income (considered business income)
A mix of salary, rent, or capital gains alongside business income

📌 Important:
If you are opting out of the new tax regime, submission of Form 10-IEA is required.

🔍 Freelancer Tip:

If you’re not under presumptive taxation, file under ITR 3, not ITR 4.

🧮 ITR 4 (Sugam): For Small Businesses & Professionals Using Presumptive Taxation

✅ Eligibility:

Resident individuals, HUFs, or partnership firms (not LLPs)
Total income ≤ ₹50 lakh
Income from:
- Presumptive business income (Sec 44AD/44AE)
- Presumptive profession (Sec 44ADA)
- Salary, pension, one house property
- Other income (not lottery or race winnings)
- Capital gains under Section 112A up to ₹1.25 lakh

❌ Cannot use if:

Income exceeds ₹50 lakh
You are an NRI or RNOR
You hold unlisted equity or directorship in a company
You own foreign assets or earn foreign income
Your business turnover is over ₹2 crore
You want to carry forward capital losses

🤝 ITR 5: For LLPs, AOPs, BOIs, and Co-operative Societies

✅ Applicable to:

LLPs (not individuals/proprietorships)
Association of Persons (AOP), Body of Individuals (BOI)
Co-operative societies, investment funds, estate of deceased/insolvent persons
Business trusts

❌ Not for:

Individuals, HUFs, or companies
Trusts that must file under ITR 7

📌 Note: If opting out of the new tax regime, Form 10-IEA is needed.

⚠️ Common Mistakes to Avoid When Choosing an ITR Form

❗ Filing ITR-1 when you hold unlisted equity

Even if you’ve not sold the shares, just holding unlisted shares disqualifies you from using ITR 1 or 4.

❗ Misreporting capital gains

Earned over ₹1.25 lakh from equities? You must use ITR 2 or ITR 3. Filing ITR 1 or 4 will make your return defective.

❗ Claiming capital loss in ITR 1 or 4

Only ITR 2 and ITR 3 allow carry forward of capital losses. If you file with ITR 1 or 4, those losses will lapse—costing future tax savings.

❗ RNOR or NRI status confusion

If you’ve returned to India recently, you may qualify as RNOR. You’re an RNOR if:

NRI for 9 of last 10 years, or
Stayed in India for ≤ 729 days in last 7 years

RNORs cannot file ITR 1 or ITR 4.

💼 Freelancer & Business Tip: Go Presumptive if Eligible

If you’re a freelancer or small business owner with modest income and within turnover limits (₹2 crore for business, ₹50 lakh for professionals), you can opt for presumptive taxation. File using ITR 4.

Benefits:

Declare income at a fixed percentage
No audit needed
Simplified bookkeeping

But remember: Presumptive is not allowed if your turnover exceeds limits, or if you’re an NRI/RNOR.

🧠 Final Word: Pick the Right ITR to Maximize Tax Benefits & Avoid Errors

Choosing the right ITR form is the first and most important step in filing your income tax return. It impacts:

Refund speed
Validity of your return
Carry-forward of losses
Compliance and audit triggers

Before filing your ITR for AY 2025–26, use this guide to double-check your eligibility and choose wisely. Mistakes can cost you time, money, and peace of mind.

Avoid ITR Filing Before June 15: 5 Critical Reasons Explained

May 28, 2025 / Rohit More / 0 Comments

Posted on May 28, 2025, by Niftynews

ITR Filing Before June 15 may seem like a proactive move, but tax experts strongly advise waiting. Though the Income Tax Return (ITR) forms for FY 2024–25 (AY 2025–26) are available, key data sources and system updates aren’t yet finalized. Filing too early could result in errors, missed credits, and even tax notices.

Here’s why you should avoid filing your income tax return before June 15, and what could go wrong if you rush it.

🗓️ ITR Filing Before June 15: Why Timing Matters

Although the Income Tax Department has notified the ITR forms earlier this year, the actual utilities (online software/tools) required for submission were only released in late April. Moreover, essential tax documents and data updates — like Form 16, 16A, AIS, and Form 26AS — are only fully available by mid-June.

Let’s dive into the five key reasons you should wait until after June 15 to file your ITR.

📄 1. TDS Certificates (Form 16 & 16A) Are Due by June 15

Per tax laws, TDS certificates such as:

Form 16 (for salary)
Form 16A (for other incomes like interest or rent)

must be issued by the payer (employer, bank, tenant, etc.) by June 15.

🧾 These certificates confirm the tax deducted and help cross-verify your income. Filing without them could result in reporting mistakes or missed deductions.

📊 2. Final Form 26AS May Not Be Updated Yet

Form 26AS is your tax credit statement that reflects:

TDS/TCS details
Advance tax paid
Refunds received
High-value financial transactions

If the payer files the TDS return on May 31, it takes 3–5 days to reflect in Form 26AS. Filing before these details are updated can cause:

Mismatch errors
Denial of TDS credit
Potential tax demands

Waiting until at least mid-June ensures all credits are properly captured.

📁 3. Annual Information Statement (AIS) Gets Finalized in June

The AIS shows income and financial transactions reported by banks, mutual funds, and other institutions.

Examples include:

Credit card spending
Fixed deposits
Share transactions
Mutual fund investments

These are filed by May 31 but take 5–10 days to appear in the portal. Filing your return before AIS is updated could lead to:

Incomplete reporting
Red flags for non-disclosure
Potential scrutiny or tax notices

🛠️ 4. Early ITR Utilities May Have Technical Glitches

Chartered Accountants warn that early ITR utilities often suffer from:

Data validation errors
Miscalculated tax figures
Incomplete auto-fill features

These glitches can complicate your return or lead to incorrect filings. Waiting a few weeks allows the software to stabilize, reducing the risk of system-based errors.

⚠️ 5. Filing ITR Before June 15 Can Trigger Compliance Issues

If your Form 26AS, Form 16, or AIS data is missing or mismatched:

The Centralized Processing Centre (CPC) may deny TDS credit
You could receive a notice or demand
You may need to file a revised return, delaying refunds and increasing compliance work

While revising an ITR is allowed until December 31, it’s better to get it right the first time by waiting until all tax documents are in place.

💡 Expert Insights on ITR Filing Before June 15

🧑‍💼 Chartered Accountant Prakash Hegde:

“Waiting until June 15 gives enough time for TDS and AIS data to be updated, ensuring complete and accurate filing.”

👨‍💼 CA Tarun Kumar Madaan:

“Early filing often leads to mismatches and refund delays. Unless urgently needed for loans or visas, patience pays off.”

🧾 What You Should Do Instead

Until June 15, use the time to:

Gather documents (bank interest, dividend details, capital gains)
Link PAN with Aadhaar (if not already done)
Reconcile advance tax or self-assessment tax paid
Review previous year’s ITR for any carry-forward loss
Use the ITR utility to draft your return — but don’t submit it yet

📌 Filing Timeline for ITR FY 2024–25 (AY 2025–26)

Category	Last Date to File ITR
Individuals (No Audit)	July 31, 2025
Tax Audit Required	October 31, 2025

There’s no tax benefit to filing early — but there’s plenty to lose by doing it wrong.

✅ Conclusion: Patience Now, Peace Later

While the Income Tax Department allows early filing, most salaried individuals and small taxpayers should wait until after June 15 for complete, error-free data. Filing too early may create problems that take months to resolve.

🎯 Unless you need your ITR urgently for loan approval or visa purposes, it’s best to wait a few more days to file your return safely, accurately, and stress-free.

Old vs New Tax Regime FY 2025-26 – Compare Income Tax Options for Maximum Savings

Old vs New Tax Regime – What’s Better for You in FY 2025-26?

April 17, 2025 / Rohit More / 0 Comments

Posted on April 17, 2025, by Niftynews

As the new financial year 2025-26 kicks off, one of the key decisions taxpayers must make is whether to file under the old vs new tax regime. With the income tax return (ITR) deadline set for July 31, understanding the pros and cons of each system could save you a significant amount in taxes.

🔍 What’s the Difference Between the Old vs New Tax Regime?

The new tax regime was introduced to simplify taxation by offering lower income tax slab rates—but it comes with a catch: you cannot claim most deductions that are available under the old regime.

Here’s a quick breakdown:

📜 Old Tax Regime

Allows you to claim deductions under sections 80C, 80D, 80DD, HRA, LTA, home loan interest, and many more.
Ideal for those who make tax-saving investments and have eligible expenses.

🚫 New Tax Regime

Offers lower tax rates, but most exemptions and deductions are not allowed.
Only limited deductions like 80CCD(2) (employer contribution to NPS), 80CCH, and 80JJAA (for new employment) are permitted.
Standard deduction of ₹75,000 (higher than old regime’s ₹50,000) is available.

🧠 Which Income Tax Regime Should You Choose?

The best tax regime for you depends on your income profile, lifestyle, and investments.

✔️ Choose the New Tax Regime if:

You don’t claim many deductions or don’t invest in tax-saving instruments.
Your salary is structured without HRA or other tax exemptions.
You’re in a higher tax bracket and want the benefit of lower slab rates with minimal documentation.

✔️ Choose the Old Tax Regime if:

You invest in PPF, ELSS, KVP, or other tax-saving tools.
You pay premiums for health insurance and claim deductions under Section 80D.
You live in a rented house and claim HRA.
You are eligible for home loan interest deductions or education loan interest.

🆕 What’s New in FY 2025-26?

Finance Minister Nirmala Sitharaman announced in Budget 2025 that income up to ₹12 lakh will be tax-free under the new regime. However, these changes will apply only when you file your return for FY 2025-26 next year in 2026.

For FY 2024-25 (which you’re filing now), you’ll follow the rules announced in Budget 2024.

💸 Standard Deduction: Old vs New Tax Regime

There’s a notable difference here:

Regime	Standard Deduction
Old Tax Regime	₹50,000
New Tax Regime	₹75,000

The new tax regime now offers a slightly higher deduction benefit for salaried individuals and pensioners.

❓ Is the New Tax Regime Mandatory?

No. While the new regime is the default option under the Income Tax Act, you are free to choose the old tax regime if it benefits you. Just make sure you opt for it explicitly when filing your return.

⚖️ Need Help Deciding? Use an Income Tax Calculator

Still unsure? You can use an online income tax calculator that compares your tax liability under both regimes.

👉 Click here to access the tax calculator (replace with actual calculator link)

By entering your income details, deductions, and allowances, you can find out which regime helps you save more.

📆 Important Dates to Remember

Financial Year: April 1, 2025 – March 31, 2026
ITR Filing Deadline: July 31, 2025
Default Regime: New Tax Regime
To Opt for Old Regime: You must manually select it when filing your ITR

✅ Summary: Old Tax Regime vs New Tax Regime – A Quick Guide

Criteria	Old Tax Regime	New Tax Regime
Tax Rates	Higher	Lower
Deductions & Exemptions	Available	Mostly Not Allowed
Standard Deduction	₹50,000	₹75,000
Best For	Deduction-heavy cases	Simple salary structures

👥 Who Benefits Most?

Young professionals with fewer investments may benefit more under the new tax regime.
Middle-income families and salaried individuals using full deductions under 80C, 80D, and HRA may still find the old regime more beneficial.

📝 Final Word

Choosing between the old vs new tax regimes isn’t a one-size-fits-all decision. It requires a bit of planning and a good understanding of your income, expenses, and financial goals.

Evaluate your tax-saving investments, check your eligibility for deductions, and use a reliable tax calculator to make an informed decision. If needed, consult a tax expert to maximize your savings.

New Tax Regime Slabs 2025 chart with updated income tax brackets and rates

🧾 New Tax Regime Slabs 2025: Complete Guide to Tax Relief and Smarter Planning

April 14, 2025 / Rohit More / 0 Comments

Posted on April 14, 2025, by Niftynews

The New Tax Regime Slabs 2025 have officially come into effect from April 1, 2025, introducing significant changes to India’s income tax structure. These updates are designed to make taxation more straightforward, eliminate the need for complex deductions, and provide greater relief to a wider segment of taxpayers.

If you’ve been wondering whether to stick with the old regime or switch to the new one, this comprehensive guide will walk you through the New Tax Regime Slabs 2025, explain the major benefits, and help you make a well-informed decision.

📊 New Tax Regime Slabs 2025: Updated Income Tax Brackets

One of the biggest highlights of the New Tax Regime Slabs 2025 is the simplified structure and improved income thresholds. Here’s how the new slabs look for individual taxpayers:

Annual Income (₹)	Tax Rate
0 – 4,00,000	0%
4,00,001 – 8,00,000	5%
8,00,001 – 12,00,000	10%
12,00,001 – 16,00,000	15%
16,00,001 – 20,00,000	20%
20,00,001 – 24,00,000	25%
Above 24,00,000	30%

These revised slabs offer smoother tax progression and are intended to reduce the burden on middle-income earners.

✅ What’s New in the New Tax Regime Slabs 2025?

🟢 Increased Basic Exemption Limit

The New Tax Regime Slabs 2025 have increased the basic exemption threshold from ₹3 lakh to ₹4 lakh. This means if your annual income is ₹4 lakh or less, you pay no income tax at all.

🟢 Enhanced Rebate Under Section 87A

The tax rebate under Section 87A has also been revised significantly:

Till March 31, 2025: ₹25,000 rebate for income up to ₹7 lakh
From April 1, 2025: ₹60,000 rebate for income up to ₹12 lakh

This means individuals earning ₹12 lakh or less can effectively bring their tax liability to zero under the new regime.

💸 Example: Tax Savings for ₹12 Lakh Income

Let’s say you earn ₹12 lakh per year. Under the old regime (without deductions), your tax liability would be substantial. Under the New Tax Regime Slabs 2025, however, you could save up to ₹83,200, thanks to the new rebate and tax brackets.

This is especially advantageous for individuals who do not actively invest in tax-saving instruments or claim multiple deductions.

🔁 Comparison: New Regime vs Old Regime

The New Tax Regime Slabs 2025 eliminate the need for common deductions, focusing instead on upfront tax relief. However, the old regime remains in place for those who prefer to utilize exemptions and deductions.

🔸 Old Tax Slabs (FY 2025-26)

Annual Income (₹)	Tax Rate
Up to ₹2,50,000	0%
₹2,50,001 – ₹5,00,000	5%
₹5,00,001 – ₹10,00,000	20%
Above ₹10,00,000	30%

📄 Deductions Allowed Under Old Regime

Section 80C: Up to ₹1.5 lakh (ELSS, PPF, life insurance)
HRA & LTA: Based on rent and travel expenses
NPS: Additional ₹50,000 under Section 80CCD(1B)
Medical Insurance: Up to ₹50,000 under Section 80D

If you invest wisely and make use of these deductions, the old regime may still provide better value.

🤔 Should You Choose the New Tax Regime Slabs 2025?

The decision to switch depends on your financial lifestyle. Here are some quick tips:

Choose the new regime if you don’t claim many deductions or prefer simplicity.
Stick with the old regime if you invest in tax-saving instruments and claim deductions.

You can use the official Income Tax Calculator to estimate your tax under both systems and decide accordingly.

📌 Final Thoughts

The New Tax Regime Slabs 2025 are a refreshing step forward for India’s tax system. They promote transparency, ease of filing, and provide meaningful relief for middle-income earners. With increased exemptions and a more generous rebate structure, many taxpayers will find the new regime to be both convenient and cost-effective.

Before filing your taxes for FY 2025-26, take a moment to compare your liability under both regimes. Whether you’re a salaried employee, freelancer, or small business owner, choosing the right tax structure can help you save more and plan better.

New income tax slabs and tax reforms for FY 2025-26.

New Income Tax Slabs & 9 Other Tax Reforms Effective from April 1, 2025

April 1, 2025 / Rohit More / 0 Comments

Posted on April 1, 2025, by Niftynews

The beginning of the new Financial Year 2025-26 introduces a slew of tax reforms that will impact millions of taxpayers. The government has made several significant changes, including new income tax slabs, zero tax on income up to Rs 12 lakh, and revisions to TDS thresholds. These reforms aim to simplify tax processes and provide relief to middle-class and salaried taxpayers.

1. New Income Tax Slabs for FY 2025-26

Under the revised tax regime for FY 2025-26, the government has introduced new income tax slabs designed to reduce the burden on low to middle-income earners. Here’s a detailed breakdown of the new tax slabs:

Income Range (₹)	Tax Rate (%)
0 – 4,00,000	0%
4,00,001 – 8,00,000	5%
8,00,001 – 12,00,000	10%
12,00,001 – 16,00,000	15%
16,00,001 – 20,00,000	20%
20,00,001 – 24,00,000	25%
24,00,001 and above	30%

2. Zero Tax on Income Up to Rs 12 Lakh

For taxpayers opting for the new tax regime, there will be zero tax on incomes up to Rs 12 lakh. This benefit is made possible through a tax rebate under Section 87A. It is important to note that taxpayers must still file their income tax return (ITR) to claim the rebate.

3. Tweak in ULIPs Taxation

The taxation on Unit Linked Insurance Plans (ULIPs) has been updated. If the annual premium of a ULIP exceeds Rs 2.5 lakh, the proceeds will now be taxed as capital gains. Short-term capital gains will be taxed at 20%, while long-term gains will attract a 12.5% tax without the benefit of indexation.

4. Rationalization of TDS Rates and Thresholds

Starting April 1, 2025, the TDS (Tax Deducted at Source) thresholds have been revised upwards across multiple sections. Some notable changes include:

Section	Current Threshold	New Threshold
193 – Interest on Securities	Nil	₹10,000
194A – Interest on Banks	₹40,000 (general)	₹50,000 (general), ₹1,00,000 (senior citizens)
194D – Insurance Commission	₹15,000	₹20,000

These changes aim to simplify compliance and reduce TDS deductions for taxpayers.

5. Removal of Higher TDS/TCS for Non-Filers of ITR

The government has removed the higher TDS and TCS rates that were previously applicable to non-filers of Income Tax Returns (ITR). From April 1, 2025, higher rates will no longer be applied to non-filers, reducing the compliance burden on taxpayers.

6. Deduction under Section 80CCD for NPS Vatsalya Contributions

The NPS Vatsalya scheme now qualifies for deductions under Section 80CCD for those opting for the old tax regime. This will allow taxpayers to enjoy tax benefits on their contributions to the NPS Vatsalya fund.

7. Increased Limits for Medical Perquisites

Medical perquisites provided by employers to employees or their families are now eligible for a higher tax-free limit. The change, effective from April 1, 2025, applies to medical treatment abroad covered under employer-paid schemes.

8. Simplified Calculation for Self-Occupied Property

The calculation for annual value of self-occupied properties has been simplified. Taxpayers will now be able to claim the value of two self-occupied houses as zero for income tax purposes.

9. Exemption from Prosecution for Delayed TCS Payments

The new law provides an exemption from prosecution for delayed TCS payments, provided the payments are made to the credit of the government on time. This aims to reduce penalties and streamline compliance.

10. Extended Deadline for Filing Updated Returns

The deadline to file an updated return has been extended to 48 months from the end of the assessment year, up from the previous 24-month limit. This change allows taxpayers more time to file their returns and correct any discrepancies.

11. Comparison of Current and Past ITRs

The Income Tax Department will now have the authority to compare current ITRs with previous year filings to check for irregularities. This new feature will help ensure greater accuracy and transparency in tax filing.

Conclusion

The new income tax slabs and other changes set to take effect from April 1, 2025, aim to simplify the tax filing process and provide more relief to taxpayers, especially those with lower and middle incomes. It’s essential to review your financial strategy and tax planning to ensure you benefit from these reforms.

For detailed information on the income tax slabs, TDS rationalization, and other tax reforms, stay tuned for more updates.

Income Tax Department sending notices for HRA claims without TDS deductions before March 31 deadline

Income Tax Department Sends Urgent Notices for HRA Claims Without TDS – Here’s What You Must Do Before March 31

March 28, 2025 / Rohit More / 0 Comments

Posted on March 28, 2025, by Niftynews

On March 28, 2025, the Income Tax Department began sending out notices to salaried individuals who have claimed House Rent Allowance (HRA) in their tax returns but failed to deduct Tax Deducted at Source (TDS) on their monthly rent payments. These notices are part of the department’s effort to verify HRA claims and ensure that taxpayers are complying with the necessary tax regulations. If any discrepancies are found, taxpayers are required to amend their returns before the March 31, 2025 deadline to avoid penalties.

Why Are These Notices Being Issued?

The Income Tax Department is targeting tenants who have failed to deduct TDS on rent payments exceeding ₹50,000 per month. The department has highlighted the rise in fake HRA claims, with many individuals trying to evade the proper tax procedures by not deducting TDS from rental payments.

According to reports, the Income Tax Department is asking taxpayers to verify their HRA claims. If the claims are incorrect, individuals must amend their tax returns before the end of the financial year, which is March 31, 2025. This is an essential step to avoid penalties and interest charges for failing to deduct or deposit TDS.

What Does the Law Say About TDS on Rent Payments?

As per the Income Tax Act, tenants are required to deduct 2% TDS on monthly rent payments exceeding ₹50,000, but this applies only if the landlord is a resident Indian. The TDS rate increases to 31.2% if the landlord is a Non-Resident Indian (NRI), regardless of the rent amount.

These laws are intended to ensure that landlords pay their fair share of taxes on rental income and that tenants do not make false claims for HRA. Failure to deduct or deposit TDS can lead to interest charges and additional penalties.

What Should You Do If You Receive a Notice?

If you receive a notice from the Income Tax Department regarding your HRA claim and TDS deduction, here’s what you should do:

Verify Your HRA Claim: Ensure that the HRA claimed is accurate and reflects the actual rent payments made.
Deduct TDS: If you haven’t deducted TDS on your rent payments, do so immediately. Remember, the rate is 2% for resident landlords and 31.2% for NRIs.
Amend Your Tax Return: If your previous return didn’t include TDS deductions or had incorrect HRA claims, file an updated return before March 31, 2025, to avoid penalties.
Provide Proof: In case you did deduct TDS but the department claims otherwise, you can provide the landlord’s tax return as evidence that the rental income was duly reported and taxes were paid. Form 26A can also be filed, along with a CA certificate, confirming that the landlord has reported rental income and paid taxes.
Pay Any Penalties: Failing to deduct TDS or deposit it on time will incur interest charges. A 1% monthly interest applies if you didn’t deduct TDS, and if you didn’t deposit it, the interest rate increases to 1.5% per month. There is also a late fee of ₹200 per day for failing to file e-TDS, although the total fee cannot exceed the TDS amount.

Penalties and Consequences of Non-Compliance

If you ignore these notices or fail to amend your returns, the Income Tax Department may consider you a defaulter under Section 201 of the Income Tax Act. This can result in additional penalties, interest, and even legal consequences.

It’s essential to act promptly if you’ve received such a notice to avoid unnecessary complications. If you have already claimed genuine HRA without the TDS deduction, Bhawna Kakkar, a Chartered Accountant, mentioned that there’s no need to file an updated return unless the claims were incorrect.

Conclusion: Take Action Before the March 31 Deadline

As the financial year comes to a close, tenants who have claimed HRA without deducting the necessary TDS need to verify their claims and ensure compliance before March 31, 2025. By doing so, they can avoid penalties and interest and make sure their tax returns are accurate.

If you receive a notice, don’t panic. Review your claims, make necessary corrections, and file an amended return if needed. By taking swift action, you can clear up any discrepancies and avoid penalties from the Income Tax Department.

Andhra Pradesh Commercial Taxes Department to collect profession tax from April 1, 2025.

Important Update: Commercial Taxes Department to Collect Profession Tax in A.P. from April 1, 2025

March 28, 2025 / Rohit More / 0 Comments

Posted on March 28, 2025, by Niftynews

In a significant move for tax collection in Andhra Pradesh, the Commercial Taxes Department will once again take over the responsibility of collecting profession tax starting April 1, 2025. This decision, announced under G.O. Ms. No.63 dated March 5, 2025, means that all taxpayers must now pay their profession tax directly through the state’s official portal, shifting away from the previous practice of local municipal corporations handling this task.

What is Profession Tax and Who Needs to Pay It?

Profession tax is a state-imposed tax on individuals engaged in various professions, trades, or employments. As per Section 4(2) of the Andhra Pradesh Profession Tax Act, 1987, anyone working in specified categories, such as employees in both private and public sectors, self-employed individuals, and business owners, must pay this tax. The amounts vary depending on the nature of the profession and income levels.

Since the introduction of the profession tax in 1987, it has played a crucial role in generating revenue for the state. The tax is paid annually or monthly, depending on the taxpayer’s classification under the First Schedule.

How to Pay Profession Tax in Andhra Pradesh from April 1, 2025

With the Commercial Taxes Department now handling the collection, taxpayers in Andhra Pradesh must make all profession tax payments through the official online platform. The state government aims to streamline the process and ensure compliance through an efficient, centralized system.

Here’s how you can pay your profession tax:

Visit the Official Website: Navigate to the Commercial Taxes Department portal.
Login to Your Account: Existing users can log in using their credentials. New users will need to register on the portal before making payments or filing returns.
Access the Profession Tax Section: After logging in, click on the “My Profession Tax” portal and choose the “Taxpayer Login” option.
Complete Registration & File Returns: Fill in the necessary details to complete the registration process. Ensure that all tax returns are filed and payments are processed on time.

The online portal will also offer easy-to-follow steps for filing returns, ensuring taxpayers can comply with the updated tax regulations efficiently.

Why the Change?

From April 1987 to July 2012, the Commercial Taxes Department was responsible for profession tax collection. However, following this period, the task was shifted to local municipal corporations. The latest decision to bring the responsibility back to the Commercial Taxes Department will help centralize the tax collection process, enhancing efficiency, reducing administrative overhead, and improving compliance rates.

The centralized online system will not only streamline the payment process but also reduce the chances of errors, delays, and administrative bottlenecks. Taxpayers can now access and make payments at any time, ensuring greater convenience and accessibility.

Contact Information for Assistance

For any questions or issues regarding the profession tax payment system, taxpayers can reach out to the following officers for guidance:

GSTO Visakhapatnam 1 Division: 9100582692
GSTO Visakhapatnam 2 Division: 89789 71652

These officers will assist with the registration process, tax filings, or any other queries related to the profession tax collection.

Important Dates to Remember

April 1, 2025: The Commercial Taxes Department will officially take over the responsibility for collecting profession tax.
April 5, 2025: It is recommended that taxpayers complete their payments and filings by this date to avoid late fees and penalties.

Conclusion

The shift of profession tax collection back to the Commercial Taxes Department from April 1, 2025, marks a new chapter in the tax collection system in Andhra Pradesh. By following the easy-to-use online platform, taxpayers can efficiently pay their dues and file returns, avoiding any penalties.

Stay updated, register on the portal, and ensure your profession tax payments are made on time to stay compliant with the state regulations.

BBMP Property Tax Collection 2024-25: Yelahanka tops with 99.97% collection rate

BBMP Property Tax Collection for FY 2024-25: Yelahanka Leads with 99.97% Success Rate

March 17, 2025 / Rohit More / 0 Comments

Posted on March 17, 2025, by Niftynews

BENGALURU: The Bruhat Bengaluru Mahanagara Palike (BBMP) has given instructions to its zonal officials to prioritize the collection of property taxes for the 2024-2025 financial year. With only two weeks remaining before the financial year ends, the civic body is working to collect the Rs 606 crore remaining from its Rs 5,210 crore target.

As of March 2025, BBMP has already collected Rs 4,604 crore, achieving 88.36% of its annual revenue target. In a final push, officials have been tasked with focusing on properties that have outstanding dues, especially commercial properties and companies that have significant unpaid taxes. This targeted approach aims to meet the revenue target before the close of the fiscal year.

Yelahanka Zone Tops with Nearly 100% Tax Collection

Among the eight BBMP zones, Yelahanka has emerged as the leader in property tax collection. The zone has achieved an outstanding 99.97% collection rate, having collected Rs 445.24 crore of its target of Rs 445.15 crore. Yelahanka’s near-perfect collection rate serves as an example for other zones and reflects the effectiveness of their tax recovery strategies.

Bommanahalli Zone Faces Challenges in Meeting Tax Collection Goals

While Yelahanka shines, the Bommanahalli zone has encountered challenges in meeting its tax collection target. The zone had set a target of Rs 585.11 crore, but has only managed to collect Rs 468.48 crore, achieving 80.06% of its goal. This figure is the lowest among all the zones as of March 14, 2025, and officials are focusing on recovering the remaining dues to bring Bommanahalli closer to meeting its target.

Mahadevapura Zone Shows Strong Performance

The Mahadevapura zone, which has the highest property tax target of Rs 1,309.04 crore, has made significant progress toward its goal. The zone has collected Rs 1,223.30 crore, achieving 93.45% of its target. The impressive collection rate in Mahadevapura showcases the effectiveness of BBMP’s initiatives in tax recovery, placing it among the top-performing zones.

Strategies for Recovering Pending Property Taxes

In an effort to meet the Rs 5,210 crore target, BBMP has implemented several key initiatives, including the One-Time Settlement (OTS) Scheme. This scheme allows property owners to settle outstanding taxes by paying a lump sum amount. Additionally, BBMP is taking legal measures to auction properties owned by long-term tax defaulters in order to recover pending dues.

The auctioning of properties is aimed at recovering significant amounts of overdue taxes from defaulters who have not responded to previous attempts to collect taxes. With these strategies in place, BBMP is optimistic that it will surpass the Rs 5,000 crore mark in property tax collection by the end of the fiscal year.

Focus on Commercial Properties for Enhanced Revenue Collection

Commercial properties are one of the key areas where BBMP has focused its tax recovery efforts. These properties typically contribute a substantial portion of the overall tax collection. In an effort to increase revenue from this sector, officials have been instructed to visit commercial establishments and take the necessary steps to recover overdue taxes.

By targeting both residential and commercial properties, BBMP aims to ensure that all sectors contribute fairly to the city’s tax revenue, which is essential for maintaining and improving Bengaluru’s civic infrastructure.

BBMP’s Confidence in Meeting Property Tax Target

Despite the challenges faced by some zones, BBMP officials are confident that the overall target will be met by the end of the fiscal year. The property tax collection efforts are vital in ensuring that the civic body can continue to provide essential services to the people of Bengaluru.

Officials have also emphasized the importance of maintaining transparency throughout the collection process. By using both traditional and modern methods, including online tax payment options, BBMP has made it easier for property owners to settle their dues.

Conclusion

As Bengaluru approaches the end of the FY 2024-25, BBMP property tax collection drive remains a top priority for the civic body. With Yelahanka leading the charge and other zones working hard to catch up, the BBMP aims to not only meet but exceed its revenue target by the end of March. The ongoing efforts to recover overdue taxes, combined with strategic initiatives like the One-Time Settlement Scheme and property auctions, are set to ensure that Bengaluru meets its fiscal goals while continuing to provide essential services to its residents.

Income Tax Bill 2025 overview – simplified provisions and tax reforms.

Income Tax Bill 2025: What Are the Key Reforms and Will New Compliance Training Be Needed?

March 13, 2025 / Rohit More / 0 Comments

Posted on March 13, 2025, by Niftynews

The Indian government has introduced the Income Tax Bill 2025 with the aim of modernizing and simplifying the tax framework in the country. This bill seeks to reorganize provisions under the Income Tax Act, 1961, making it more accessible and easier to understand for taxpayers, businesses, and tax professionals alike. The government’s primary objective is to streamline the taxation system, minimize ambiguities, and improve taxpayer compliance.

As the bill progresses through Parliament, one major concern that has been raised is whether businesses and tax professionals will be required to undergo new compliance training to understand the new provisions. The government has confirmed that no such additional training will be necessary, as the changes are designed to simplify the existing system.

Key Features of the Income Tax Bill 2025

The Income Tax Bill 2025 reorganizes and updates multiple provisions under the Income Tax Act, 1961, with the goal of simplifying tax compliance. The reorganization is not intended to introduce new concepts but rather to restructure existing provisions for better clarity and ease of understanding.

1. Simplification of Language and Structure

One of the key objectives of the new bill is to make the tax provisions more user-friendly. The language used in the provisions has been simplified, with shorter sentences and clear definitions. By adopting a more concise format, the bill aims to eliminate unnecessary complexities that often lead to confusion among taxpayers and businesses. Provisions that were previously scattered across different chapters have now been consolidated, making it easier for businesses and professionals to navigate.

2. Retention of Key Terms and Judicial Precedents

In cases where judicial rulings have already provided clarity on specific terms or concepts, the Income Tax Bill 2025 has retained these terms, with minimal modifications. This ensures that there is no change to the legal interpretation of previously settled matters. The bill also aims to retain the same key phrases used in previous tax provisions, minimizing the scope for new interpretations that might lead to further legal disputes.

3. Use of Formulae and Tables

To further improve the clarity of tax calculations and provisions, the Income Tax Bill 2025 introduces the use of formulae and tables. These tools will be helpful in reducing confusion, particularly for businesses that deal with complex tax calculations. This approach will also help streamline the tax-filing process for both individual taxpayers and corporate entities.

4. Streamlined Provisions and Removal of Redundancies

The reorganization also involves removing redundant provisos and explanations that previously made the tax provisions unnecessarily complicated. Simplifying the content by placing relevant information under sub-sections and clauses makes the tax code easier to read and apply.

Will New Compliance Training Be Required?

Despite speculations that the reorganization of the tax code might require businesses and tax professionals to undergo new compliance training, the government has clarified that this will not be the case. Pankaj Chaudhary, the Minister of State in the Ministry of Finance, emphasized that the restructuring of provisions is aimed at enhancing ease of reference and making the tax provisions clearer, not changing their core intent.

Chaudhary assured that the new bill would not require new compliance training but would instead make tax compliance easier for both taxpayers and professionals. The simplified language and consolidated provisions should help all stakeholders adapt to the changes with minimal effort.

Key Benefits of the Income Tax Bill 2025

The Income Tax Bill 2025 will come into effect on April 1, 2026, and will include all amendments proposed up until the Finance Bill 2025. Along with the simplification of tax provisions, the bill also retains important technological reforms, such as:

Pre-filled Income Tax Returns (ITRs) to save taxpayers time.
Faceless Tax Proceedings to reduce human intervention and increase transparency.
E-filing of Various Forms for greater convenience.

These technological advancements are part of the government’s broader effort to digitize and modernize tax administration, making the process smoother and more transparent.

Conclusion: A Step Toward Better Taxpayer Compliance

The introduction of the Income Tax Bill 2025 is a step toward making India’s tax system simpler and more efficient. By simplifying language, consolidating provisions, and eliminating ambiguities, the bill will help taxpayers understand and comply with their obligations more easily.

The government’s reassurances that no new compliance training will be required should put concerns to rest. In fact, the simplification efforts are expected to improve taxpayer compliance by making the process more intuitive and accessible.

Stay informed about future updates to the Income Tax Bill and other important tax reforms by following our blog.