According to the Income Tax Act in India, An individual is in obligation to file an income tax return (ITR) if he falls under any of the following categories:

• If an individual is less than 60 years of age and his total annual gross income exceeds ₹2.5 lakh.
• If a person is a senior citizen (aged 60-79), and his annual gross income surpasses the threshold of ₹3 Lakh.
• If a person is a super senior citizen (aged 80 and above) and his annual gross income exceeds the exemption threshold of ₹5 lakh.

It is important to note that even if an individual doesn't have a tax liability, it is required to file an (ITR) income tax return in order to avail of tax benefits.

• No More Standing in a Queue: You can e-file your income tax return from the comfort of your home.
• Online Status Check: Once you file your ITR electronically, it becomes easy to track the status of your return online.
• No More Errors: E-filing software programs can help you avoid errors on your tax forms. This is because the software programs are designed to follow the latest tax laws and regulations.
• Faster Refund: E-filed tax returns are processed faster than offline tax returns. I.e., You will get your refund faster.
• Auto Saving of Records: Many e-filing software programs can automatically save your tax forms with information from your previous tax returns. This can save you a lot of time and hassle.
• Easy Access to Documents: E-filing of your taxes gives you the option to save your documents online.
• E-Verification: E-filing allows taxpayers to verify their identity and sign their tax returns electronically

If you have filed an incorrect tax return, you can correct it by filing a revised return as per the current tax laws. The Income Tax Act allows taxpayers to file a revised return under section 139(5). If you come to know something wrong statement in your original return, a revised return can be filed before three months prior to the end of the assessment year or before the end of the assessment, whichever is earlier. Moreover, The assessment year comes immediately after the financial year in which the ITR is filed.

Income Tax returns can be filed an infinite number of times; however, if the original income tax return is filed on paper, then the revised return cannot be filed electronically or online. Moreover, The Income Tax Department do not charge any fees or penalty for the revision of income tax return. If ITR is to be filed online, the taxpayer must fill in the 15-digit acknowledgment number of the primary return. Additionally, it is to be noted that if the revised return is filled too many times, it might attract scrutiny from the Income Tax Department.

If you have paid more tax than your liability, you can claim a refund by filing your income tax return online. There is no separate process for the same. You should electronically verify your return using Aadhaar OTP, EVC (Electronic verification code) generated through the bank or by sending the signed physical ITR-V to CPC (Centralised Processing Centre) within 120 days of filing the return.

You should also check your form 26AS to ensure that the excess tax paid by you is stated there. The Income Tax Department will verify the claimed refund, and will be paid only if it is found valid.

It is mandatory to have a PAN card for filing Income Tax Return; however, if you have never applied for a PAN card and never allocated a PAN number, you can get an instant e-PAN using your Aadhaar card linked to your phone number.

Follow the below steps to generate an e-PAN:

1. Visit the Income tax e-Filing portal homepage, and click Instant e-PAN.
2. On the next page (e-PAN), click on Get a New e-PAN
3. Enter your 12 digits Aadhaar number on Get New e-PAN
4. Select the “I confirm that” checkbox and click Continue.
5. You will be receiving an OTP after OTP validation.
6. After OTP validation, select the “I accept that” checkbox and click continue.
7. You will be showing an acknowledgment number for future reference, And you will receive an e-PAN shortly after the process completion.

Linking Aadhaar with PAN for filing ITR is mandatory unless you fall under one of the exemptions. The deadline to link PAN and Aadhaar is June 30, 2023. If you do not link your PAN and Aadhaar by this date, your PAN will become inoperative. This means that you will not be able to use your PAN for any financial transactions, including filing ITR.

There are a few exemptions to the PAN-Aadhaar linking requirement. These exemptions include the following:

• Residents of Assam, Jammu, and Kashmir, and Meghalaya
• Non-residents as per the Income-tax Act, 1961
• Individuals who are 80 years old or older
• Individuals who are not citizens of India

The new ITR forms have incorporated a few changes after the introduction of Section 89A. One of the key changes is the disclosure of income on which Section 89A relief was claimed in the previous year. This change is applicable to ITR 2, 3, and 4.

Section 89A was introduced to provide relief to taxpayers who had income from retirement benefits accounts maintained in notified countries. Under this section, the income from such accounts is taxed in India in the year in which it is received rather than the year in which it accrues. This helps taxpayers to avail of the foreign tax credit relevant to tax paid outside India on such income.

If an individual having his a gross income exceeding ₹2.5 lakh, and he does not have any tax liabilities or even have a refund, he still needs to file an income tax return. On the other hand, a person does not need to file an ITR if his income is below the taxable limit of ₹ 2.5 lakh. However, there are exceptions to this law.

A person is still required to file an ITR if he has:

• Deposited an aggregate amount exceeding ₹1 crore in one or more current bank accounts with any bank.
• Incurred expenditure of an aggregate amount exceeding ₹2 lakh for himself or any other person for traveling to a foreign country.
• Incurred expenditure of an amount or aggregate of the amounts exceeding ₹1 lakh towards consumption of electricity.

If there are discrepancies between the actual TDS and the TDS credit as per Form 26AS. In such a situation, the employee will have two options as followings:

• Pay Tax again: The employee has to claim the TDS credit in the ITR; if not, he will end up paying the Income Tax twice on the same Salary Income. This means that he will suffer a double tax burden, once when the TDS is deducted and again when he files the ITR.
• Claim the TDS credit manually: If the discrepancy is not resolved, he can claim the TDS credit manually in his ITR. However, he may need to provide evidence to support his claims, such as salary slips or bank statements.

If the income tax return has been filed in an incorrect manner, or the wrong form has been filed, and any wrong statement has been given, then the ITR will be declared defective by the Income assessing officer of Income Tax. The income tax department will then send you the notice to rectify the mistakes you have made while filing the ITR. And if you don't rectify the mistakes within 15 days of the error being noticed, the ITR will be declared Invalid by the Income Tax Department, which means it will be assumed that the no income tax return was filed in the first place. However, Income Tax Laws allow taxpayers to file a revised income tax return if the wrong ITR has been filed.

An individual requires to file ITR if he has investments in foreign assets. However, he must disclose the details of these assets in Schedule FA of his ITR. This is mandatory for all residents and ordinarily resident Indians who hold any asset located outside India.

The following are some of the foreign assets that an individual need to disclose in Schedule FA:

• Foreign depository accounts
• Foreign equity and debt interest
• Foreign cash value insurance contracts
• Financial interest in any entity outside India

You must disclose the following information about each foreign asset:

• The name of the asset
• The country in which the asset is located
• The value of the asset
• The date on which you acquired the asset
• The source of the funds used to acquire the asset

• Penalties: The IT Department can impose a penalty of up to Rs. 5,000 for not filing an ITR on time. If you file the ITR after the due date but within a year, the penalty will be Rs. 10,000.
• Interest: If you have any tax liability and you do not file an ITR, you will be charged monthly 1% interest per month on the unpaid tax.
• Non-Carry Forward of Losses: You will be unable to carry forward any losses from a previous year if you do not file an ITR.
• Best judgment assessment: If you do not file an ITR, the assessing officer of the Income tax department will be obligated to make an assessment to the best of his judgment U/S 144 of the Income Tax Act.
• Refund of taxes: You will be able to claim a refund only if you have filed ITR.

The holdings of equity shares of a cooperative bank or credit societies, which are unlisted, are required to be reported. This is because the Income Tax Department of India considers these shares to be 'specified investments.' Specified investments are investments that are held by a taxpayer in any entity that is registered under the Companies Act and is not listed on any recognized stock exchange.

The Income Tax Department of India requires residents to report the details of the property and identity of the buyer in Schedule CG if they have sold land and building situated outside India. This is to ensure that all income from capital gains is taxed in India.

The information that should be reported in Schedule CG:

• Property details: The location of the property, the type of property, the date of purchase, the purchase price, and the current market value of the property.
• Buyer details: The name, address, and PAN of the buyer.
• Capital gains: The amount of capital gains, the short-term or long-term nature of the gains, and the tax paid.

Details of assets held as stock-in-trade of business are also required to be reported in Schedule AL-1 of ITR-6. This is because stock-in-trade is considered to be an asset of the company.

The information that is required to be reported for stock-in-trade:

• The cost of the stock-in-trade
• The fair market value of the stock-in-trade
• The quantity of stock-in-trade
• The type of stock-in-trade

Farmer Producer Companies (FPCs) are not required to furnish details of shareholding in the Schedule SH-1 of ITR-6. Since FPCs are not considered to be 'companies' for the purposes of the Income Tax Act of 1961. Instead, FPCs are considered to be 'cooperative societies.'

Here are the steps you must follow to track the status of your ITR -

Pre-login ITR Status

Step 1. Visit the homepage of the e-filing portal

Step 2. Click on 'Income Tax Return Status.'

Step 3. On the next page of the ITR status, enter the valid mobile number and your acknowledgment number and click on 'continue.'

Step 4. Enter the 6-digit OTP received on your registered mobile number in step 3 and click 'Submit.'

Step 5. Once the validation is complete, you can view the ITR status.

Post-login ITR Status

Step 1. Log in to the e-filing portal or online portal through a valid user Id and password.

Step 2. Click on e-file > income-tax returns > view the filed returns.

Step 3. The view filed returns shows all the returns you have filed. You can download the ITR-V acknowledgment, intimation order, and the complete ITR form in PDF.

Step 4. Click 'View details'

Here are the tax benefits -

• The basic exemption limit is 3 lakhs under both regimes
• Health insurance premium paid up to Rs.50,000 by a senior citizen is deductible under section 80D.
• No tax for senior citizens upto an annual interest of up to Rs.50,000 under section 80TTB.
• People above 75 years are exempt from filing ITR if they have income only from a pension and have furnished form 12 BBA to a specific bank.
• No need to pay advance tax except in case they have income from business or profession.
• Spent up to 1 lakh on any treatment for a specified disease is deductible under section 80 DDB.
• Rent on reverse mortgaging their property is exempt from tax.
• Standard deduction of Rs.50,000 on pension income and a deduction of Rs.15000 for family pensioners.

Yes. You can get your income tax return e-verified by any representative assessee or authorized signatory on your behalf using any of the following methods -

• Aadhaar OTP: An OTP is received on the representative assessee or the authorized signatory's mobile number that is registered with the representative's Aadhaar number.
• Net banking: The authorized signatory or the representative assessee will receive an EVC or electronic verification code on his/her mobile number and email Id.
• Bank account/ Demat account: Any EVC generated through a pre-validated and EVC-enabled bank account is sent to the email Id or mobile of the authorized signatory or representative assessee.

Once you have filed your ITR, the next step is to e-verify your return online. Just verifying your return is not enough. You also need to check if it has been e-verified. Here's how you can know if your e-verification is complete -

If you are e-verifying your return yourself,

• A success message is displayed with your Transaction Id.
• You will also receive an email on your email Id, registered with the e-filing portal.

If you are a representative assessee or an authorized signatory -

• A success message is displayed, and your transaction Id is also mentioned.
• An email is also sent to the mobile number and the email Id of both the assessee and the authorized signatory.

Section 194P of Budget 2021 to provide relief to senior citizens from the burden of compliance. As per this section, citizens of age 75 years and above are exempt from filing ITR. However, there are a few conditions -

• Senior citizens should be aged more than 75 years.
• They should be residents in the previous year.
• They should have income from pension and interest, and the interest income should be received from the same specified bank where they receive their pension.
• The senior citizen is required to submit a declaration to the specified bank.
• The bank should be a specified bank notified by the Central Government.

If your self-assessment/ Advance tax does not reflect the amount you deposited in your annual 26AS, you should first identify the possible reasons for this and then ask the deductor to file a revised TDS return. And if there is a mismatch other than the TDS amount, you can -

• File a revised return yourself, if you do not receive an intimation
• Write correct challan details in ITR
• File a rectification request

If your 26AS does not reflect the amount deposited by you, the first thing you need to do is to identify the reason for such a mismatch.

After identifying the reason, you must take the following corrective actions -

• The mismatch in the information reflected in Form 26AS can be corrected only by the deductor. Therefore, you must approach the deductor and him/her to file a revised TDS return after making the corrections.

If there is any mismatch other than the TDS, the following corrective actions can be taken -

• If you don't receive an intimation, you can file a revised return.
• You can file a request for rectification
• Make sure to quote the correct challan details in the ITR.
• Claim tax credit only for the amount reflected in Form 26AS.

As per the provisions of the Income Tax Act, the residential status of individuals can vary between resident but not ordinarily resident, resident but ordinarily resident, and non-resident. Depending on the residential status of an individual, the taxability also differs. Here is the taxability of individuals with different residential status

The residential status of a HUF is as follows -

• A HUF will be called a resident in India if its management or control is situated either fully or partially in India.
• Here are the conditions where a HUF is treated as resident and ordinarily resident. The Karta must satisfy both the below-mentioned conditions -
• He has been resident in India for the previous 2 years out of 10 years in the years immediately preceding the current year.
• He must be in India for 730 days or more in the 7 years preceding the current year.

If Karta does not satisfy any one of the above conditions, the HUF is treated as a resident but not ordinarily resident.

If the HUFs control and management is situated wholly outside India, it is considered to be non-resident.

In India, the Income Tax Law has divided all types of income into 5 different categories -

1. Income from Salary: All income received by an employee from his/her employer is categorized under the head income from salary.
2. Income from House Property: Income earned by letting out a house property on rent is treated as income from house property.
3. Income from Capital Gains: The revenue and income from the sale of assets held by the assessee are known as income from capital gains. It includes stocks, bonds, debentures, etc.
4. Income from Business/Profession: All the income earned from carrying out any business, profession, or freelancing is taxable under this head
5. Income from Other Sources: Income from all the other sources not covered in the above heads are taxed under this category, like lottery winnings, dividends, etc.

If the assessee has not been allocated a Taxpayer Identification (TIN) number in the jurisdiction of residence, the assessee can mention the passport number under the column residential status instead of TIN. The country in which the passport was issued should also be mentioned in the jurisdiction of residence.

TIN number, or Taxpayer Identification Number, is an 11-digit number that is assigned to enterprises for tracking their transactions.

Any individual who does not satisfy any of the below conditions is considered a non-resident in India -

• The individual should spend 182 days or more in a financial year in India.
• Should have stayed in India for 60 days or more for 365 days or more in the previous 4 years.

While filing the ITR, you are presented with a drop-down menu where you have to select the type of company you have. In this deep-down, you can simply select a foreign company. As per the Income Tax Law, a foreign company is not required to furnish a PAN number. However, it is necessary to mention the PAN number if the foreign company has been allotted one. Therefore, you can select 'Foreign Company' as the type of company from the drop-down menu.

All the transactions relating to capital gains have to be filed under ITR -2. As per the Indian Income Tax Act, the assessees are required to provide details of the land sold while filing their ITR forms. The details that you need to furnish include 'the date of sale,' 'the date of purchase of the house property, purchase price, sale price, and brokerage. Exemption on capital gains is available under sections 54, 54EC, and 54F.

In case the unlisted equity shares are transferred in the form of a gift, will, merger, demerger, bonus issue, or amalgamation, since the cost of acquisition is zero for the beneficiary, he/she can enter zero in the relevant column against 'cost of acquisition' and 'sale consideration.' Also, the quantitative details are required only for reporting while filing the ITR and not while computing tax liability. Therefore, you can simply enter zero in the ITR against the relevant column and file your ITR.

Yes, as per the Indian Income Tax Act, you are required to report your foreign assets in schedule FA. It is mandatory for individuals to file their ITR even if they do not fall under the taxable income bracket. Schedule FA requires individuals to report all the foreign assets they hold during the previous year. Individuals must also report the same in the column 'whether you have held unlisted equity shares at any time during the year' while filing the ITR.

Yes, if you sell land or a building to a non-resident, it is mandatory to provide the PAN of the buyer in table A1/B1 in schedule CG. However, it is mandatory to furnish PAN of the buyer only if TDS is deducted under section 194IA or it is mentioned in the documents. Under section 194IA, any transferee who has to pay consideration for the transfer of any immovable property has to deduct tax at 1%.

Yes, as per section 12A of the Income Tax Law in India, you have to provide ISIN details and scrip-wise bifurcation and computation of LTCG arising from the sale of mutual funds/shares on which STT has been paid. As per section 12A, long-term capital gains are allowed on the sale of equity mutual funds, listed equity shares. If the capital gains exceed the threshold of Rs.1 lakh, the long-term capital gains are taxable at 10%. It also provides for the mandatory declaration of scrip-wise details on LTCG from the sale of shares on which STT has been paid.

The individuals are required to report the value of assets and liabilities in schedule FA if their total income is more than Rs. 50 lakhs. It is mandatory for resident taxpayers to file schedule FA and not for non-resident taxpayers. While schedule FA requires assessees to report the assets even if they have held them for just one day in the previous year. However, schedule AL requires the assessees to declare their assets held at the end of the previous year.

Just like Form 16, Form 16 A also serves the purpose of a TDS certificate. While Form 16 is used for the TDS deducted on salary income, Form 16A is used for the TDS deducted on income other than salary. It includes the TDS deducted from interest on fixed deposits, rent receipts, and insurance commissions. It is issued by financial institutions and banks on a quarterly basis under section 203 of the I.T. Act. Following are the components of Form 16A -

• PAN/TAN and Employer's name
• Employee's name, his PAN/TAN
• TDS payment number
• Payment details
• Date and amount of deposit

Form 16 can only be issued and downloaded by the deductor of the TDS, i.e., the employer. In other words, the employer can log in to the TRACES website and get Form 16. If you are an employee, you must approach your employer and request them to download Form 16 and share it with you.

On the other hand, if you are an employer and still unable to find Form 16 on the TRACES website, you should check all the details entered by you, like the PAN/TAN, and ensure that your KYC is updated.

If you are still not able to download Form 16, you can also download Form 26AS from the TRACES portal. It also consists of the details of TDS deducted and deposited.

Here are the rules for issuing Form 16 -

• Employers are required to issue Form 16 to their employees who are liable to pay income tax. It is typically issued to salaried employees.
• Form 16 is issued annually by the employer and should be issued annually by 15th June of the next financial year.
• Form 16 should contain details of the tax deducted at source (TDS) from the employee's salary and the employee's name, address, and PAN/TAN.
• Form 16 should provide a detailed breakup of the employee's salary, including basic salary, allowances, perquisites, and any other income. It should also include deductions claimed under section 80C.
• Form 16 contains the total tax deducted and deposited by the employer and the details of tax paid by the employee.
• Form 16 can be issued in both physical and electronic formats. If issued electronically, it should be digitally signed by the employer.

The Indian Income Tax Law provides for employers to issue Form 16 to employees if their annual income is more than the basic exemption limit and if they fall within the taxable income bracket. In other words, the employer has to issue Form 16 to every employee who earns more than Rs.2,50,000 per year. While it is mandatory to issue Form 16 if any TDS has been deducted, it is upto the employer to issue Form 16 if no TDS has been deducted. Therefore, it can be said that there is no specific income limit required for issuing Form 16 as it is based on the deduction of TDS and not on the income limit.

TDS (Tax deducted at source) is applied to both incomes from salary and income from other sources like interest on FD, rent, and professional fees. Form 16 is used to reflect the details of the TDS deducted on salary and is issued by the employer to the employee after the deduction of TDS. However, there are other variations of Form 16, like Form 16A, that are concerned with the TDS deducted on income from other sources like bank interest and rent. Form 16A is issued by the banks and financial institutions that deduct TDS.

No, Form 16 is not mandatory to file ITR. You can file your ITR even without Form 16. Here's how -

• Compute your annual income from salary slips and make adjustments for allowances.
• Verify the details of TDS from Form 26AS.
• Compute the income from house property.
• Compute capital gains. Capital gains are exempt up to Rs.1,00,000.
• Determine income from bank interest, etc.
• Adjust for the deductions and compute the total taxable income.
• Pay the remaining tax after deducting the tax paid reflected in 26AS.
• On completing the above steps, you can now file your ITR without using Form 16.

No Form 16 is not considered to be proof of employment. It is proof of the fact that TDS has been deducted by the employer and submitted to the government. It includes the details of the salary and the amount of tax deducted by the employer and deposited with the government. Even though it is issued only when TDS is deducted from salary, it does not establish any employer-employee relationship between both parties. Proof of employment generally includes details like date of employment, salary details, job title, and the terms and conditions of the employment.

No, Form 16 is not considered valid without the signature of the employer. As per the Income Tax Act, Form 16 can be issued both physically and electronically. In both scenarios, it is important for you to ensure that Form 16 contains a valid signature. If issued physically, Form 16 should be duly signed by the employer.

On the other hand, if Form 16 is issued electronically, it should be digitally signed by the employer. A duly signed Form 16 ensures that it is not tampered with and establishes its authenticity, and serves as a validation of the employer's acknowledgment of the deductions made.

Although it is not mandatory for the employer to issue Form 16 if there has been no deduction of TDS, it is still up to the employer if he wants to issue Form 16 to the employees. If he wants, the employer can issue Form 16 without deducting TDS as good work practice. There are various benefits of issuing a Form 16.

• Acts as proof of income
• Helps in filing ITR
• Provides details of salary and deductions
• Crucial to apply for loans and credit cards
• Consolidates all your tax-saving investments
• Helps in processing Visa
• Helps in claiming a refund as you can check any overpaid taxes.

If you are an employee, you cannot fill out Form 16 yourself. Form 16 has to be filed and issued by your employer or an authorized signatory of your employer. If you want to get Form 16 issued, you can approach your employer and ask them to issue Form 16. Form 16 contains details of the employee's salary and deductions, which the employer must compute.

However, if you are an employer, you can fill out Form 16 and issue it to your employees. Make sure all the calculations regarding the salary details, and deductions are accurate. You are also responsible for verifying the information provided sign it.

If there is any error in Form 16, you can do the following -

• Inform your employer about the discrepancies found in Form 16. Provide them with evidence and specific details like proof of deduction and salary slips.
• Request your employer to make the relevant corrections in the sections where there has been an error.
• Get the revised Form 16 with accurate details. This revised Form 16 should contain all the updated details.
• Keep a copy of both old and new Form 16, as these will come in handy while filing the ITR.

If there is an error even after entering the correct details in Part 1 and Part 2 of Form 16 and Form 16A on the validation screen, the deductor should first check that the details mentioned in the TDS statement and the details on the validation screen are same and do not contradict each other.

You should ensure that if you have filed any correction statement, the details of it should be in accordance with that mentioned in the correction statement. The details that you must check include the token number and the amount of TDS deducted.

It is mandatory for all employers to issue Form 16 to all their employees, Form 16 is a certificate issued to employees, and it contains Tax deducted at source, salary, and other information. However, employers may not issue Form 16 to employees in case no tax is deducted at the source. If the employer is being late in issuing Form 16, then a penalty of ₹100 per day will be imposed. Moreover, if you have been employed by more than one employer, you will be provided Form 16 from each of your employers. The due date for issuing Form 16 is 15th June of the financial year.

The due date to issue Form 16 is June 15th of the year for which it is being issued. For example, Form 16 for the financial year 2022-23 must be issued by June 15th, 2023.

Form 16 is a certificate issued by an employer to an employee that shows the amount of tax deducted from the employee's salary during the financial year. It is an important document for employees to file their income tax returns.

If your employer does not issue Form 16 by the due date, you can request a copy from them.

No, the TDS deductor cannot download Form 16 if he has not been registered on the TRACES (TDS Reconciliation Analysis and Correction Enabling System). In order to download Form 16, the deductor must register themselves on TRACES and must have a valid TDS account number. However, The deductor can still issue Form 16 to their employees, on condition that it must be in physical form and must be signed by the deductor.

If the Company name is incorrectly updated in Form 16 (Part A), you must first inform your employer about the same. Your employer must have to file a TDS correction statement with the Income Tax Department. Upon completing the TDS correction statement process, your employer will be able to download the new Form 16 (Part A) with the updated company name on it.

It is important to note that you and your employer cannot manually correct the company name on Form 16; your employer can only file a TDS correction statement in order to update the company name on Form 16 A.

• Details of the authorized person can be edited in Form 16A by logging in to the TRACES portal.
• Login to TRACES
• Click on the Profile Tab
• Enter the details, such as last return filed, acknowledgment/token of the last original return, Challan details, and any 3 unique PAN and amount combination for the above challan.
• The profile Tab will open, and you can now edit the representative PAN.
  • You do not need to enter the name and father's name of the representative. You only need to enter your PAN and date of birth. The name and father's name will be automatically filled in.
  • You can only edit the representative details for the current financial year. You cannot edit the representative details for previous financial years.

If you have been employed under more than one employer in a financial year, each employer will issue Form 16 (Part A) regarding the period for which you were employed with each of the employers.

Particulars of how you can file ITR with multiple Form 16:

• Pick the correct ITR form that applies to you.
• You will then need to provide your full name, address, and other information.
• Add the income earned during a financial year and enter it in your ITR form.
• Add details about tax deducted at source (TDS) from your salary and other deductions like House Rent Allowance, travel allowance, etc.
• Calculate the tax payable by you, if any.

You can use Form 12B to inform your new employer about your previous earnings and investments.

Form 16 is a certificate of tax deducted at source, which is issued by every employer to their employees. If no tax is deducted at the source, then the employer will no longer be required to issue Form 16. However, even if no tax has been deducted by the employer, you may still be required to file an income tax return if you have income from other sources, such as interest, dividends, or others if any, may be taxable. If you file an income tax return, you will be required to provide information about your income from salary along with income from other sources, even if no tax has been deducted at source.

If you have missed the due date for submitting proof of tax-saving investments or reimbursements to your employer, you can still claim these deductions and exemptions at the time of filing your income tax return and get credits from the Income Tax Department, even if these are not reflected in your Form 16. All you need to do is provide the necessary information and documents to support your claim.

Some of the deduction that you can claim in your ITR which is not reflected in Form 16:

• House Rent Allowance Exemption U/S 10
• Claim deductions under section 80C
• Medical expenses
• Interest on Home Loans
• Life Insurance premium

The Central Pension Accounting Office (CPAO) has authorized all banks to issue Form 16 to all pensioners, including family pensioners. This is in accordance with the provision of the pension scheme booklet. Form 16 is a certificate that contains information about the tax deducted at source from the pension that was paid to a pensioner during the previous financial year. Pensioners then can use this to claim any deduction while filing Income Tax Returns.

The bank will issue Form 16 and the pension statement, in which your pension is generally credited to you. The pension statement contains information about the amount of pension that was paid to you during the previous financial year and the date on which the pension is credited.

Form 16 is a must for all salaried employees whose salary income exceeds the threshold limit of ₹2.5 lahks annually. Employers provide Form 16 to employees on or before the 15th of June every financial year. However, if you haven't received Form 16 from your employer due to any reason, such as business closure, and your improper exit formalities, you can still file your income tax return without Form 16. You can use your salary slip, which has the details of your deductions, to file your Income Tax Return. It is to be noted that you should ensure that you have received Form 16 in a correct manner and check all the details of the total tax deducted at source from your salary.

If you have changed your employer in the middle of a financial year, then your new employer might ask you to provide Form 16 from your previous employer to calculate the correct TDS on your salary Income. However, if you cannot get Form 16 from your previous employer at the time of joining, you still have some alternatives as followings:

• You can provide salary slips for the period you worked with your previous employer; this will literate your new employer about your income and deductions for that particular period.
• You can fill Form 12B and submit it to your new employer. Form 12B is a statement showing the details of income and tax deducted by your previous employer. You can use Form 12B to declare your income from other sources as well.

If you are a registered user on TRACES and you have updated your communication and address details on TRACES, you might notice that your Form 16A still shows a different address. This is because the details updated in the 'Profile' Tab of your TRACES account are not reflected in the TAN database. To edit your address details in Form 16A, you need to submit a TAN change request form (Form 49B) at www.protean-tinpan.com. This will ensure that your TAN database is updated with your latest information, and your Form 16A will show the correct address.

TDS is a tax in which an amount is deducted on certain payments like salary, rent, commission, professional fees, and interest. The person making the payment has to deduct the tax, and the person receiving the payment is liable to bear the tax. This reduces the possibility of tax evasion as the tax is deducted right at the source of payment. TDS is deducted as per the rates specified in the Income Tax Act. The rates may vary depending on the type of service and products. Get to know in detail about the prevailing TDS rates.

Yes, the Income Tax Department has specified certain threshold limits or minimum limits under which TDS is not required to be deducted. In other words, if the payment amount is less than the threshold limit specified for that purpose, the payer is not responsible for deducting TDS, and the receiver is not liable to pay it. However, the threshold limit has been listed under multiple sections under the Income Tax Act and varies based on the payment type. Click here to learn about the applicable threshold limits in detail.

Yes, a payee can approach the payer or the TDS deductor and request them to make the payment without deducting Tax at source. Although this is only possible if the total annual income of the payee after including the income on which TDS is being deducted is less than the basic exemption limit. In other words, if the total annual income of the payee from all the sources does not fall under the taxable bracket, the payee can request the payer not to deduct TDS. The payee must file Form 15G or 15H to request non-deduction of TDS.

Form 15G: It is applicable to individual or any other person (except a firm and company)

Form 15H: It is applicable to the request filed by senior citizens.

The payer deducts the TDS as per the applicable rates as mentioned in the Income Tax Law. If you want to know the amount that was deducted as tax at source by the payer, you can do the following -

• You can also ask the employer or the deductor to furnish a TDS certificate in respect of the amount of TDS deducted by him/her during the year.
• Log in to the government's website or portal for Income Tax and download and view Form 26AS. This form contains details about all the TDS deducted in the previous year.
• You can also use the 'View your tax credit' facility available at the official website of the Income Tax Department India.

Under section 206AB, the tax is deducted at higher rates as per this provision provides the following conditions are satisfied:

• The deductee should not have filed the Income Tax Return for the assessment years or in the year immediately preceding the previous year in which tax is to be deducted.
• As per section 139(1), the due date to file the Income tax Return has expired, and
• The aggregate amount of tax collected or deducted should be equal to or more than Rs.50,000 in the previous years.

Tax should be deducted at higher rates for every income or amount on which tax is deductible under the provisions of Chapter XVII-B except the following -

A non-resident who doesn't own a permanent establishment in India or a person who doesn't have to furnish income return and is notified by the central government.

Sometimes, the TDS deducted by the payer is not reflected in Form 26AS. There can be various reasons for such non-reflection of TDS amount in 26AS like -

• The payer forgets to file the TDS statement
• Providing incorrect PAN details of the deductee in the TDS statement filed by the payer.

If such a thing happens and the TDS deducted is not reflected in 26AS, the payee must contact the payer and ask them to identify the correct reason for such an error.

If the taxpayer has proof of such deduction, he/she can claim a TDS credit manually at the time of ITR filing.

The taxpayer can approach the deductor and ask them to file a revised TDS return or file a grievance to the concerned authority.

If you do not have a PAN, you cannot furnish Form 15G/15H for non-deduction of TDS from interest. In this case, the bank will deduct TDS at the higher of the following rates:

• The rate specified in the relevant provision of the Act.
• The rate or rates in force, therefore, the rate prescribed in the Finance Act.
• The rate of 20%.

For example, if you are a resident individual below the age of 60 and your interest income is more than Rs. 10,000 in a year, the bank will deduct TDS at the rate of 20% even if you do not have a PAN.

You can apply for a PAN card online or at the nearest PAN card issuing authority. Once you have your PAN card, you can submit Form 15G/15H to the bank to request that no TDS be deducted from your interest income.

The Tax collected at source is regulated by the Income Tax Department of India. A specific percentage of tax is deducted by the payer at the time of the transaction made to the receiver, and the deducted amount is then deposited to the government.

And if you fail to deposit TDS to the government within the stipulated time limit, you will face adverse consequences such as interest, penalty, and rigorous imprisonment of upto seven years. I.e., it is not recommended to use TDS for personal use instead of depositing it to the government. Everyone should comply with the income tax provisions and pay taxes on time.

Yes, you can claim TDS in your return of income even if you have not received the TDS certificate from the deductor. You can verify the amount of tax deducted at source from your income by checking your Form 26AS, which is a consolidated statement of all TDS transactions. You should claim the TDS credit in your income tax return based on the amount reflected in Form 26AS and not on any other document or source. You should claim TDS with your income tax return file, as the TDS credit is being reflected in Form 26AS. If there is a mismatch between the TDS credit in Form 26AS and the TDS claim in your return of income, the tax authorities may reject your claim.

Section 194-IA of the Finance Act 2013 mandates the deduction of tax at source from the payment of sale consideration of immovable property (excluding rural agricultural land) to a resident seller. The deduction rate is 1% of the total amount. This provision is not applicable if the seller is non-resident or the consideration is less than ₹50 lakh. If the seller is a non-resident, then the tax will be deducted under section 195 of the Income Tax Act and not under section 194-IA. I.e., if the property is purchased from a non-resident, then section 195 will be applicable instead of 194-IA.

You can also consult a tax advisor to get more information on TDS on property purchases.

The remuneration paid to a company director is related to different provisions of TDS depending on the nature of the payment. If the payment is in the form of salary, then section 192 will be applicable, and TDS will be deducted as per the income tax slab rates. However, if the payment is in the form of fees or any other compensation for professional services rendered by the director. In that case, section 194J will be applicable, and TDS will be deducted at a flat rate of 10%. This is usually the case for non-executive directors or independent directors who do not have an employer-employee relationship with the company. They earn income from their directorship under the head 'income from business or profession.'

One common question in the context of tax deduction at source (TDS) is whether it applies to payments made to the Government or its entities.

No tax will be deducted if any sum is payable to the Government, Reserve Bank of India, or a corporation established by or under a central act. This means that any payment made to these government bodies, whether it is interest, commission, rent, royalty, fees, or any other income, is exempt from TDS. This exemption is based on the rationale that the Government is the ultimate recipient of tax revenue, and hence there is no need to deduct tax from payments made to the government.

The Central Board of Direct Taxes (CBDT) clarified this issue in circular no.17 dated 29.9.2020. It has stated that TCS is to be collected on the sales consideration that includes GST as well. This is because TCS is not a tax on income but an interim levy on the possible income earned from the sale of goods. Therefore, it does not affect the valuation of goods or services under GST. This is also in line with the circular issued by the Central Board of Indirect Taxes and Customs (CBIC) in Dec 2018, which clarified that TCS is not a part of the taxable value for GST purposes.

Allowances are periodic payments that the employer makes to the employees to help them meet specific requirements of the employee as tiffin allowance, servant allowance, transport allowance, and uniform allowance. Such allowances are given over and above the salary and are included in the total salary except in case it is specifically exempted.
Allowances can be fully taxable, partially taxable, or fully exempt.
Here are a few examples of the most common allowances -

• House rent allowance
• Leave travel allowance
• City compensatory allowance
• Children education allowance
• Tribal area allowance
• Border area allowance

Yes, any reimbursement provided by the employer to the employee for the expenses incurred is considered to be perquisite under the Indian Income Tax Law. Perquisites are additional benefits provided by the employer to the employee over and above the salary and allowances. These perquisites are taxable in the hands of employees.

While allowances are the benefit provided to meet specific expenses in monetary form, perquisites are the benefits the employer provides to the employee above the salary and allowance amount and can be given in the form of goods, services, reimbursements, etc.

Since the expenses like children's education and grocery expenses are considered perquisites under the Indian Income Tax Act, the reimbursements of the same will be taxable in the employee's hands.

Yes, you have to file an ITR, do a self-assessment, and pay taxes in such a case. If you have worked in three different companies within a year and your salary in each of them individually did not exceed the threshold limit, the employers are not responsible for deducting TDS. However, if your total salary from the three employers is clubbed together, and, the annual salaried income turns out to be more than the threshold limit/basic exemption limit, then you have to pay taxes even if no TDS has been deducted by the employer. In this case, you must do a self-assessment and file an ITR.

As per the Indian Income Tax Act, an employer is required to deduct TDS from the employee's salary before making the payment. The employer also has to issue Form 16 to the employee only if there has been any deduction of TDS. However, if no tax is deducted or the employee's income is below the minimum threshold limit, then it is not mandatory for the employer to furnish Form 16. However, the employer can still provide Form 16 to the employee as good work practice. Form 16 has various benefits apart from acting as a TDS statement. These are as follows -

• Apply for loan
• Apply for a credit card
• Filing ITR
• Acts as proof of income
• Detailed information on salary, exemptions, deductions
• Checking for errors and making corrections
• Helps claim refund
• Get details of tax-saving investments

Any ex-gratia payment received by the employer as a token of appreciation for good work or as compensation for any injury or hazard that took place while on duty or due to death on duty is not considered a part of salary and hence not taxable.

Ex gratia payment is a monetary compensation provided by an employer to the employee or the dependents of the employee (in case of death) or in case of injury or retrenchment. For example, if a company decides to do retrenchment of employees, it has to pay legal compensation to the employees on an ex-gratia basis before laying them off.

Yes, an employee can claim transport allowance as an exemption to some extent. As per the Indian Income Tax Law, employees were granted transport allowance of up to Rs.1600 per month. This exemption was discontinued w.e.f. A.Y. 2019-20.

However, if the employee is blind, dumb, orthopedically handicapped, or deaf, he/she can avail of an exemption of transport allowance of up to Rs.3200 per month.

Pension is the portion set aside from an employee's salary, which is paid out periodically, usually on a monthly basis. The Taxpayer can also opt to receive his pension as a lump sum which is called commuted pension. A periodically paid pension is called uncommuted pension. The source of pension income is usually an annuity fund that the employer and the employee create during the service period. The annuity fund invests the contributions and pays out the pension to the employee after retirement.

The taxation of pension income depends on whether it is commuted or uncommuted. An uncommuted pension is taxed as salary income in the hands of the employee. Commuted pension is partially exempt from tax depending on the type of employee. Commuted or uncommuted pension is exempted from tax in case of government employment. In the case of a non-government employee, a pension is partially exempt depending on whether the employee receives the gratuity.

A family pension is a regular payment made to the spouse or children of a deceased employee. It is different from the pension received by an employee after retirement. Family pension is not taxed as salary income but as income from other sources. The tax treatment of family pensions depends on the amount received.

According to the Income Tax Act, 1961, a family pension received by a family member of a deceased employee is exempt from tax up to Rs. 15,000 or 1/3rd of the family pension received, whichever is less. The remaining amount is taxable as income from other sources and is subject to the normal tax rates applicable to the recipient.

The taxability of retirement benefits like PF and Gratuity depends on the type of employee and the conditions specified in the Income Tax Act. For Government employees, both PF and Gratuity are fully exempt from tax. For non-Government employees, Gratuity is exempt up to a limit of Rs 20 lakh. PF is exempt if received from a recognized PF after completing at least 5 years of continuous service. However, if the employee has not completed 5 years of service, PF is taxable as salary income in the year of receipt. The exemption limit for Gratuity is calculated as the least of the following: 15 days' salary for each completed year of service or part thereof; actual amount received; or Rs 20 lakh. The salary for this purpose includes basic pay and dearness allowance.

Arrears of Salary is the term used for the unpaid salary due to an employee for the previous period. Sometimes, the salary may be revised or increased, but the payment may be delayed or made retrospectively. In such cases, the extra amount paid later is called salary arrears. The employer should show this amount separately in the salary slips and part B of Form 16.

Salary arrears are considered salary income in the ITR and are taxable in the year of receipt. However, some taxpayers may be concerned about paying higher taxes because of a higher tax bracket in the year of receipt or due to a change in the slab rate. To avoid this, the taxpayer can claim relief under Section 89.

If you have faced losses from letting out house property, you can ask your employer to consider this loss against your salary income while computing the TDS on your salary, but it is limited to ₹2 lakh. Excess losses from house and property cannot be claimed for the deduction when computing the TDS on salary.

Leave encashment is the process of converting unused leaves into money at the time of resignation or retirement. The leave encashment amount is taxable as income from salary, and the employee can claim tax relief under Section 89 of the Income Tax Act. To claim this relief, the employee has to fill and submit Form 10E online on the income tax department's website. Employees can use Form 10E to calculate the amount of tax that can be reduced from the leave encashment amount. In the case of the employee's death before the leave encashment, the legal heir of the deceased employee can receive the total encashment amount.

Yes, the standard deduction applies to all salaried employees, including private sector employees and state and central government employees.

The Income Tax Act provides various provisions for taxpayers to decrease their tax liability by claiming deductions and rebates. The deductions are based on how the taxpayers spend or invest their income. One of the deductions available to salaried individuals and pensioners is the standard deduction. The standard deduction is a flat amount that can be deducted from the gross salary without any proof of investment or expenditure. The standard deduction for salaried individuals is Rs. 50,000, which was increased from Rs. 40,000 in 2019.

Family pension is taxed under the “Income from Other Sources” head in India. The family pension beneficiaries can claim a standard deduction of 1/3 of the amount of the family pension received, or Rs 15,000, whichever is less, as per section 57 (iia) of the Income Tax Act. This deduction has to be mentioned in the last row under the “Income from Other Sources” section to get the benefit. Family pension received by members of the armed forces is exempt from tax. However, family pension received by other categories of employees is taxable.

A family pension differs from a regular pension received by an employee after retirement. Family pension is paid to the legal heir of an employee who dies while in service or after retirement.

Yes, the rental income received can be split up between the husband and wife and taxed separately in the individual hands. If a house property has more than one owner, then the rental income from that property will be split according to the ownership share of each co-owner, and each co-owner has to pay tax on their own share of income.

For instance, Mr. and Mrs. Choudhary are the co-owner of a house in a 50:50 ratio; if the total rental income of that particular property is 20,000 per month, the couple can split the rental income to ₹10,000 each in their Income Tax Return.

A property that belongs to the taxpayer and is used by him as his own residence for the entire year is called a self-occupied property. It means the owner does not rent out the property to anyone else during the year or any part of it. A property the owner does not use as his residence cannot be considered self-occupied.

An individual may be eligible for tax deductions under Section 24 of the Income Tax Act, 1961, if he/she meets the following conditions:

• The taxpayer owns a property;
• The taxpayer cannot occupy the property because his/her employment, business, or profession requires him/her to live in another place where he/she does not own any property;
• The taxpayer does not rent out the property, either partially or fully, at any time during the year;
• The taxpayer does not derive any other benefit from the property.

A self-occupied property is a property that is used for residential purposes by the owner or his/her family. A property that is not occupied is also considered a self-occupied property for income tax purposes. Until Financial Year 2019-20, only one property could be declared as self-occupied by the taxpayer if he/she owned more than one property. The rest were deemed to be let out. From Financial Year 2019-20 onwards, the taxpayer can declare two properties as self-occupied and the remaining properties as deemed to be let out.

Calculation of Income from self-occupied property:

A property that belongs to the taxpayer and is used by him as his own residence for the entire year is called a self-occupied property. It means the owner does not rent out the property to anyone else during the year or any part of it. A property the owner does not use as his residence cannot be considered self-occupied. However, if the property owner resides in a different city for work or business reasons and rents a place there, and his property is either unoccupied or used by some of his family members, the property is treated as self-occupied for tax purposes.

Income earned from letting out a property consisting of a building and land attached to it is taxed under the head “Income from House Property.” House property includes different types of properties, such as residential houses, commercial buildings, apartments, offices, shops, godowns, factories, and so on. The property can be self-occupied or leased from someone else. The income from the house property is calculated based on the annual value of the property, which is the higher of the actual rent received or the expected rent of the property.

If a person holds more than one property and resides in it, he can choose any two of them as self-occupied properties (SOP) and declare their gross annual value (GAV) as nil under section 23 of the Income Tax Act, 1961. I.e., He does not have to pay taxes on the notional rent of these two properties. This provision of the income tax act was introduced in the financial year 2019-2020. Earlier, only one property could be treated self-occupied property, and the other property was deemed to be let out and taxed on its notional rent.

According to the Income-tax Law, you can claim only one property as self-occupied property, and the other property will be deemed to be let-out property for the assessment year 2019-20 and earlier. However, from the assessment year 2020-21 onwards, you can claim two properties as self-occupied properties subject to certain conditions. Therefore, you can treat both your farmhouse and your city house as self-occupied properties from the assessment year 2020-21 onwards, provided you fulfill the specified conditions.

The deduction can be claimed up to ₹2 lakh for home loan interest if the owner or his family resides in the house property. The same treatment is applicable if the house is vacant. If the property is rented out, the entire home loan interest will be allowed as a deduction.

However, the deduction for home loan interest will be limited to ₹30,000 instead of ₹ 2 lakhs in case:

• The loans were taken on or after 1st April 1999
• The construction or the purchase is not completed within 5 years from the financial year-end in which the loan was taken.
• The loans were taken on or after 1st April 1999 for the purpose of renovation or the maintenance of the house property.
• The loan was taken before 1 April 1999

If you own a property that you use for yourself for some part of the year and rent out for the rest of the year, you may wonder how to calculate your income from it for tax purposes. You have to treat the property as if it was rented out for the whole year and use the rent received as the basis for your income calculation. However, you can only include the actual rent you received for the period that the property was let out and not the notional rent you could have received if it was let out for the entire year. This way, you can account for the income from your property in a fair and accurate manner.

Section 25AA of the Income Tax Act deals with the taxation of unrealised rent that is subsequently realised by the owner of a house property. Unrealised rent refers to the rent that is due from a tenant but not received by the owner. If the owner takes legal action against the tenant and recovers the unrealised rent, it will be treated as income from house property in the year of receipt. This is irrespective of whether the owner still owns the property or not. The unrealised rent will be taxed at the normal rates applicable to the owner's income.

Income in the form of rent on the property is charged to tax under the head of Income from house property and in the hands of the property owner. If any person other than the property owner receives rent (as in the case of subletting), then such income is not considered income from house property and is charged under the head income from other sources.

However, in the below cases, the receiver of rent is deemed to be the property owner -

• Any individual who transfers his house property to a spouse or a minor child without enough consideration is deemed to be the property owner.
• The person holding an impartible property is deemed the owner of that property.
• A member of a cooperative society who is leased or allotted a property under the house-building scheme.
• If a property is leased for more than 12 years, the lessee in deemed to be the owner of the property.

If you have 5 properties that you have let out to different people and earn rent from them, you still need to calculate the income from each property separately. As per the Income tax act, there are certain provisions relating to deductions on house property that might require you to compute taxes separately. You cannot club the income from all 5 properties in one calculation.

If a property is let out throughout the year and has not been vacant or self-occupied during any time during the previous year, the income from the house property is determined in the following way-

As per section 23(1) of the Income Tax Act, the gross annual value or GAV of a house property that is let out throughout the year and not self-occupied or vacant during any part of the year is calculated as follows -

• Calculate a reasonable amount of expected rent for the property
• Calculate the actual rent received from the property
• Calculate the Gross Annual Value (GAV). Gross annual value is calculated by comparing expected rent and the actual rent. The higher of the two is considered the property's GAV.

Any rental income from a property that is land or a building and of which the taxpayer is the registered owner is chargeable to tax under the head 'Income from house property.' Since a shop is considered to be a building, it is taxed under the head income from house property, and all the provisions for house property apply to it.

However, if the shop or the commercial property is sublet by you, the rental income from such property is charged to tax under the head income from other sources.

When the rent received by the property owner includes the rent from the property as well as the rent for other services, it is known as composite rent. The tax on composite rent is calculated as follows -

• If the rent from the house property and rent from adjoining services is inseparable, the entire amount is charged to tax under the head income from business/profession or under income from other sources. In such a case, the earnings are not charged under income from house property.
• If the rent from the house property and adjoining services is separable, rent from the house property is taxable under income from the house property, and rent from other services is taxable under income from other sources or profits and gains from the business profession.

The reasonable expected rent of a property that is let out throughout the year is computed by comparing the following -

• Municipal value of the property
• Fair rent of the property

The higher value of the above is considered as the reasonable expected rent. However, if the said property is included under the Rent control act, then it should not exceed the standard rent.

Municipal value refers to the property's value as derived by the municipal authority after conducting a careful survey.

Fair rent refers to the reasonable expected rent that the property is expected to generate. It is determined based on the rent prevailing in similar properties in the same locality.

Actual rent refers to the actual rent of the property that is received during the year if it is let out. At the time of computing the Gross Annual Value (GAV) of a let-out property, the actual rent is calculated as follows -

• If the property remains vacant for any period during the year, the expected rent for that period is not to be deducted from the actual rent.
• Unrealized rent has to be deducted from the actual rent if -
  • Bona fide tenancy
  • The tenant has vacated the property or forced to do so
  • The tenant does not have any other property of the taxpayer
  • The taxpayer has taken all possible measures to recover the rent including the legal route.

In accordance with the provisions of section 23(1)(c), if a property or any part of it is let out and was vacant during the year or a part thereof, and the actual rent receivable or received is less than the reasonable expected rent due to such vacancy, then the actual rent is considered as the Gross Annual Value (GAV) of the property. If the expected reasonable rent is more than the rent receivable if there is no vacancy, then the expected reasonable rent is considered to be the Gross annual value (GAV) of the property.

Yes, the interest paid on loans taken from friends and relatives can be claimed as a deduction while determining the income from house property if the following conditions are met -

• If the loan is taken for repair, construction, purchase, renewal, or reconstruction of property, the interest is deductible.
• The loan should not be taken for personal or any other purposes. If the loan is of personal nature, the deduction of interest is not available on the calculation of house property.

In India, the income tax slabs are structured progressively, where the tax rates increase as the income levels rise. For income tax purposes, individuals who are aged 60 years and above but below 80 years are called senior citizens. This means individuals who have reached the age of 60 or will turn 60 during the relevant financial year are classified as senior citizens. Further, individuals aged 80 years and older are called super senior citizens. This means individuals who have reached the age of 80 or will attain the age of 80 years during the relevant financial year are classified as very senior citizens. The tax slabs for senior citizens and super senior citizens are different than the tax slabs for normal individuals, as the tax exemption limits are higher for senior citizens and super senior citizens.

A person is classified as a very senior citizen for income tax purposes if their age is 80 years or older. This means individuals who have reached the age of 80 or will attain the age of 80 years during the relevant financial year are classified as very senior citizens. Yes, under the Income-tax Law in India, special benefits are available to very senior citizens (individuals aged 80 years or above). These benefits aim to provide additional relief and ease the tax burden for this age group. Very senior citizens are exempt from paying advance tax. They can pay their entire tax liability when filing the income tax return. Every senior citizen claim deduction under Section 80D for medical insurance premiums paid for themselves or their dependents. The maximum deduction allowed depends on the actual premium paid and the individual's age.

Budget 2021 introduced an exemption for seniors aged 75 years and older if they meet certain eligibility criteria. Section 194P was introduced in the Income Tax Act, as per which very senior citizens are exempt from tax if:

• The senior citizen must be a resident in India.
• The senior citizen should be 75 years old or older during the previous year, which would be applicable for the financial year 2022-23 (ended on March 31, 2023).
• The senior citizen should have pension income as their only source of income. However, they may also have interest income from the same bank where they receive their pension.
• If the very senior citizen fulfills these criteria, then he/she has to submit a declaration to the bank to deduct TDS from their income in the previous financial year, i.e., during FY 2022-23. If the senior citizen has not submitted the declaration during the last financial year, then the senior citizen will be required to file his/her ITR.

If your tax liability exceeds Rs. 10,000 in a financial year, paying an advance tax under Section 208 is mandatory. However, resident senior citizens and super senior citizens are not required to pay any advance tax on their income if they do not have income from business or profession. They file their returns through self-assessment tax after the completion of the financial year. After the income is aggregated and the eligible deductions are deducted from the income, the individual's taxable income is ascertained. This taxable income is, then, subject to tax as per the applicable tax slab.

Any senior citizen as a resident individual in India can claim a deduction of up to Rs 50,000 from the interest income earned on deposits (savings or fixed) during the concerned financial year. Section 80TTB is designed to help senior citizens maintain a decent lifestyle after retirement, many of whom depend on their interest income for these expenses. This section acts as an upgrade of Section 80TTA, as the threshold limit of the tax deduction on interest income was raised from INR 10,000 to INR 50,000 for senior citizens. However, Section 80TTB has certain limits and eligibility criteria that should be followed to gain the benefits of the same.

Section 80DDB provides a deduction for the expenditure incurred on treating specified diseases for self, spouse, children, parents, and siblings. Rule 11D of the income tax covers the list of specified diseases. The amount of the deduction depends on two factors - the age of the patient and the actual amount of expenditure. For senior citizens, the maximum deduction amount is Rs.1 lakh.

Section 80DDB deduction limits

If your tax liability exceeds Rs. 10,000 in a financial year, then paying an advance tax under Section 208 is mandatory. However, retired senior citizens and super senior citizens are not required to pay any advance tax on their income if they do not have income from business or profession. They file their returns through self-assessment tax after the completion of the financial year. After the income is aggregated and the eligible deductions are deducted from the income, the individual's taxable income is ascertained. This taxable income is, then, subject to tax as per the applicable tax slab.

Senior citizens over 60 years of age are required to pay taxes. They can pay taxes by both ways; new and old tax regime.

Income Tax Slab Rate for Senior Citizens (FY 2022-23) (Old Regime)

Additionally, as per the new tax regime the basic exemption limit is Rs. 2.5 lakh.

In India, the income tax exemption limits for elderly individuals (senior citizens) depend on their age and the financial year in question. Here are the income tax exemption limits for senior citizens for the financial year 2022-23 ( assessment year 2023-24):

Senior Citizen (60 years or above but below 80 years):

Basic exemption limit: The basic exemption limit for senior citizens for the financial year 2022-23 is INR 3,00,000. This means that the first INR 3,00,000 of income is exempt from income tax.

Very Senior Citizen (80 years or above):

Basic exemption limit: The basic exemption limit for very senior citizens for the financial year 2022-23 is INR 5,00,000. This means that the first INR 5,00,000 of income is exempt from income tax.

As per the new tax regime, this exemption limit is up to 2.5 lakh.

Below are the objectives of the tax audit -

• Ascertain/report/derive the requirements of Forms 3CA, 3CB, and 3CD.
• Ensures that the books of accounts and other account records are maintained properly and reflect the actual income of the taxpayer.
• It ensures that the claims for deduction are made correctly.
• Helps keep check of fraudulent activities
• Analyzes the accuracy of ITR filed in the A.Y. by companies and individuals.
• Reporting the findings of the tax auditor after analyzing the inaccuracies in ITR.
• Reporting details like tax depreciation and other compliances.

Any person who is covered under section 44AB and gets his/her books audited is required to obtain the audit report from the auditor before 30th September of the assessment year. If you are filing the ITR for the previous year, 2022-2023, then you need to obtain the audit report before 30th September 2023 for the A.Y. 2023-2024.

A chartered accountant is required to electronically file the tax audit report to the Income Tax Department. Once a CA files the report, it has to be approved by the taxpayer using his/her e-filing account with the Income Tax Department.

Any person mandated to conduct a tax audit of his/her books of accounts under section 44AB has to furnish either of the following -

Form 3CA: Any taxpayer having a business or profession and already mandated to get their accounts audited under any other law. For example, if a company needs to conduct an audit under the companies act, then it has to furnish Form 3CA.

Form 3CB: Any taxpayer having a business/profession but doesn't have to get their accounts audited under any other law has to furnish Form 3CB. Proprietorship or partnership firms having opted for presumptive tax schemes and having a turnover exceeding Rs. 1 crore. Such companies are required to furnish Form 3CB.

Form 3CD: Form 3CD is a detailed statement of particulars that contains 41 different points. The details of various business and professional aspects must be furnished in this form.

Companies or cooperative societies might be required to conduct an audit of their books of accounts under the respective act/law. As per section 44AB, if a person is required to get their accounts audited under a law other than the Income tax law, such person is not required to get their accounts audited again in accordance with the Income Tax Law. However, it is mandatory to get the accounts audited under the other law and obtain an audit report duly signed by the chartered accountant and in the manner prescribed under section 44AB in Forms 3CA and 3CD.

A person who has to follow section 44AB and does not get his accounts audited or submit the report as per section 44AB for any year or years may face a penalty from the Assessing Officer. The penalty amount will be the lower of the following:

• 0.5% of the total turnover, sales, or gross receipts in business or profession for that year or years.
• ₹ 1,50,000.

However, section 271B states that no penalty will apply if the person can prove a reasonable cause for such failure.

The taxpayers who need to get a tax audit done:

• An aggregate amount received, including the amount received for sales, turnover, or gross receipts during the previous year in cash, does not exceed 5% of the said amount.
• An aggregate of all payments made, including the amount incurred for expenditure, in cash, during the previous year does not exceed 5% of the said payment: Threshold limit would be ₹10 crores instead of ₹1 crore (from 1/4/21 for FY 2021-22 - 5 crores)
• An individual (In profession) with a gross receipt that exceeds ₹ 50 lakh during the previous year.
• An assessee opted for sections 44ADA and 44AD but claimed his income was lower than the profits computed under presumptive and income exceeds the taxable amount according to the Income Tax Act.
• An assessee opted for sections 44AE, 44BB, 44BBB but claimed his income was lower than the profits computed under the mentioned sections in any previous year.

A tax audit verifies the accuracy and compliance of an assessee's income tax return and financial statements. An auditor is appointed by the government to conduct a tax audit on its behalf. An auditor can be a chartered accountant or any other person who can be appointed as an auditor as per section 141 of the companies act 2013. The purpose of a tax audit is to ensure that the assessee has complied with all the provisions of the Income Tax Act and has paid the correct amount of tax.

A tax audit verifies the accuracy and compliance of an assessee's income tax return and financial statements as per the Income Tax Act 1961. However, not all taxpayers are required to undergo a tax audit. There are some exceptions available for certain categories of taxpayers, as follows:

• Any taxpayer earning income from the shipping business under section 44B of the Income Tax Act, 1961.
• Any taxpayer earning income from aircraft operation under section 44BBA of the Income Tax Act, 1961. This section provides a presumptive taxation scheme for computing the income from aircraft operations at 5% of the gross receipts.
• Any taxpayer whose books of account have been audited under any other law applicable to him. However, such a taxpayer has to furnish a tax audit report in Form 3CB, 3CA, or Form 3CD along with his return of income.

The ICAI sets rules and regulates chartered accountants and tax audits in India, i.e., the ICAI also sets the limit for tax audits a chartered accountant can perform. A chartered accountant can perform 60 tax audits in one financial year. However, In the case of a firm of Chartered Accountants in practice, this limit applies to each partner of the firm and can be shared among them in any proportion. For example, one partner can sign 600 tax audit reports if the other nine partners do not sign any. The number of tax audit reports that a Chartered Accountant can sign in a financial year.

Every person who deducts tax at source and collects tax at source must apply for TAN and obtain it to make it easier to file ITR, except a person covered under the provisions of section 194IA as they are not required to obtain a TAN number.

TDS refers to the tax deducted by the payer at the time of making the payment for specified services such as rent, commission, interest, salary, etc.

The tax collected at source or TCS is the tax deducted by the seller from the buyer on the sale of certain specified goods. This amount is added to the sale price, collected from the buyer, and deposited to the Central Government.

Not knowing your TAN number might cause you to go through a lot of difficulties. Here are the reasons why you should hold a TAN number. All the provisions for the relevance of TAN are mentioned in 203A of the IT Act.

• It is difficult to file TCS and TDS statements without a TAN.
• When you want challans for TDS or TCS payment, you need to provide a TAN number.
• You also need to quote your TAN number to be able to submit your TDS or TCS certificates. Not having the TAN number can cause difficulty in the documentation process.
• TAN number is also necessary for filing various Income Tax Forms.

A duplicate TAN is a number that is obtained by the same person who already has a TAN allotted to him/her and is responsible for deducting the TDS/TCS on transactions through illegal means. It is an illegal practice to obtain a duplicate TAN number. However, if there are different branches or divisions of an entity, they can hold different TAN numbers. A person can also obtain a duplicate TAN in cases of loss, theft, etc, after furnishing proper evidence of such loss/theft.

If you have been allotted a duplicate TAN by mistake or due to any other reason, you should continue to use the TAN number that was allotted first and has been used regularly by you. The duplicate TAN number should be surrendered and applied for consolation. This can be done using the “Form for changes or correction in TAN.” Now you need to download the Form for surrendering from the official website of NSDL-TIN, obtained from TIN-FCs or other vendors.

If you are issued a duplicate TAN by oversight, you can simply apply for the cancellation of the duplicate TAN, as holding more than one TAN is considered illegal. You can apply for cancellation of the unused TAN number by submitting the 'Form for changes or correction in TAN.' You can download this form from the NSDL-TIN website, or it can be obtained from third-party vendors or TIN-FCs. Since holding more than one TAN is an illegal practice, you should immediately apply for its cancellation as soon as you receive it and never put it to use, as it might lead to severe legal consequences.

Here are the steps to be followed to apply for a new TAN -

• Visit the NSDLs official website
• Select 'TAN' from the 'Services' drop-down menu.
• Click on 'Apply Online'.
• Choose 'New TAN'
• On the next page, choose the appropriate option from the list - 'category of deductors' and click select.
• You will be redirected to Form 49B
• Fill out the form and submit it
• Once the form is submitted, you will receive a confirmation consisting of the following details -
  • 14-digit application number
  • Application status
  • Applicant's name
  • Contact details
  • Payment details
  • Signature space
• You can save the acknowledgment and also take a printout for your reference.

When you apply for a TAN number, all your whereabouts are thoroughly checked, and the Income Tax Department allots TAN on the basis of the application that you submitted to the TAN facilitation center. These TAN facilitation centers are managed by the NSDL. The NSDL intimates or provides the TAN number, which the taxpayer has to use in all future correspondence related to the TDS or TCS. This number will have to be mentioned in many forms and used for various purposes.

Yes, you can file an online application to get the TAN number on the official website of NSDL. Make sure you read all the instructions carefully.

• Fill out the required form with all the details and submit it.
• After submitting the form online, they will receive the acknowledgment number.
• You need to print the acknowledgment number and send it to the Pune office of NSDL.
• After this, you are required to pay the fees either online or through a cheque/DD.
• After receiving the application, the IT department verifies the details and issues the applicant's TAN to NSDL.
• NDSL will then send the TAN details to the applicant's address as provided in Form 49B and also send an email containing the required TAN details.

Yes, a government deductor should also apply for TAN either online or offline and obtain a TAN number to use in all future correspondences. A deductor is someone who is responsible for deducting the tax from the payment amount and paying it to the government. In other words, the person who deducts the TDS/TCS and submits it to the government is known as the deductor and the person who receives the payment after the deduction of TDS is known as the deductee.

Yes, even if there are multiple DDOs (drawing disbursing officers), each of them should apply for TAN separately. This is so because the TAN application requires you to fill in details such as division name, branch's name and location and the designation of the person who is responsible for deducting the TDS/TCS. All the DDOs should apply for TAN separately and fill in the relevant and accurate details in the application for allotment of TAN.

Yes, each branch or division of the company can have a separate TAN as their name, location, and the name of the designated person changes from branch to branch and division to division. At the time of filing the TAN allotment application, the applicant has to clearly mention details such as the name of the company/branch/division, the location of such company/branch/division, and the details of the person responsible for deducting the tax should be clearly mentioned in the application.

No, the TAN application cannot be made on plain paper. It must be made on Form 49B, which is a standard form that can be downloaded from the Income Tax Department website or the NSDL website. You can also get the form at TIN facilitation centers.

The application form must be filled in capital letters and signed by the applicant. If you are applying online, you will need to print out the acknowledgment form and sign it. The signed acknowledgment form must then be mailed to the NSDL office address mentioned on Form 49B.

Form 49B is to be used for applying for a new TAN. Form 49B can be downloaded from NSDL or the income tax department website. It can also be accessed through the TIN facilitation centers. Form 49B can not be made on a plain piece of paper but can be filled on a typewriter in capital letters and with a good impression.

You do not have to attach any documents with your application for TAN Allotment.
But, if you apply online, you need to download the acknowledgment that appears after submitting the form, sign it, and send it to NSDL by Post.

Address:-
NSDL e-governance Infrastructure Limited,
5th floor, Mantri Sterling,
Plot No. 341, Survey No.997/8,
Model colony,
Near Deep Bungalow Chowk,
Pune-411016
The envelope should be superscribed as 'APPLICATION FOR TAN-Acknowledgment Number.' (e.g., 'APPLICATION TAN - 88301020000244').

TAN application status can be tracked using the TAN acknowledgment number; You can call the TAN call center (020-27218080).

Form 49B is to be used for applying for a new TAN. Form 49B can be downloaded from NSDL or the income tax department website. It can also be accessed through the TIN facilitation centers. The TIN facilitation center assists the applicants in filling Form 49B. However, if the applicant submits an incomplete or incorrect Form, the TIN facilitation center will reject the application. It is advisable to fill Form 49B in a prescribed and correct manner.

The applicant has to pay Rs 65 (Rs 55 for the application fee + 18.00% Goods & Services Tax) for TAN application processing. This fee is non-refundable even if the application is not approved. The applicant should make the demand draft/Cheque payable to NSDL-TIN.

The department will check the details submitted in Form 49B. If the application is correct, NSDL will either mail the TAN details to the applicant's address given in Form 49B or send an email with the TAN details for online applications.

The new TAN number will be intimated to the deductor by NSDL (National Securities Depository Limited) in the following ways:

• By post: If the deductor has provided their address in Form 49B, the new TAN number will be sent to them by post.
• By email: If the deductor has provided their email address in Form 49B, the new TAN number will be sent to them by email.
• Against the acknowledgment: In case of online applications for TAN, the new TAN number will be displayed against the acknowledgment number.

There are three ways for a deductor to know his TAN :

• Check with the TIN Facilitation Centres (TFCs). TFCs are the authorized centers where TAN applications are processed, and TANs are allotted. Deductors can visit any TFC and provide their details to the officials there. The officials can check the TAN database and provide the deductor with his TAN.
• Check the website of the Income Tax Department. The Income Tax Department website has a section where deductors can check their TAN status. Deductors can enter their PAN or TAN numbers on the website to check their TAN status.
• Use the 'Know Your TAN' facility. The Income Tax Department offers a 'Know Your TAN' facility on its website. This facility allows deductors to check their TAN by entering their name, PAN number, or TAN number.

• No, applying for different TAN is unnecessary if a deductor has to deduct tax from unique types of payments. A single TAN can be used for all types of deductions. This is because the TAN is not linked to the type of deduction but to the deductor itself.
• For example, if a company has to deduct tax from salaries, interest, dividends, and commissions, it can use the same TAN for all of these deductions. The only time that a deductor would need to apply for a separate TAN is if they were operating in different branches or divisions.
• Possessing or using more than one TAN is not legal.

There are two options to know the status of your TAN application:

Through the application number:

• Go to the TIN-NSDL website: https://www.protean-tinpan.com/services/tan/tan-introduction.html
• Enter your acknowledgment number in the 'Acknowledgment Number' bar.
• Click on the 'Submit' button.

Through the transaction number:

• Go to the NSDL website: https://tin.tin.nsdl.com/tan/changemode.html
• Enter your transaction number in the 'Transaction Number' bar.
• Click on the 'Show Status' button.
• The transaction number is the number displayed on the 'Payment through Credit Card' screen.

TAN refers to Tax Collection and Deduction Account Number, which is a 10-digit alphanumeric code that must be obtained by anyone who deducts or collects tax. TAN is essential to quote in TDS/TCS return (including any e-TCS/TDS return), any TDS/TCS payment challan, and TDS/TCS certificates.

All TCS/TDS/Annual Information returns, whether filed in paper or electronic format, require the mention of TAN. The return, whether in paper or electronic format, will be rejected if the correct TAN is not quoted.

If you are about to change or make corrections to the data associated with the TAN, the Income Tax Department should be notified by filling out the Form for changes or corrections in TAN data for the TAN allotted and paying the required fees at any of the TIN facilitation centers, or at NSDL-TIN website. This includes any changes in address or other details that were used to obtain the TAN.

According to Section 9 of the Income Tax Act 1961 (ITA 1961), income is deemed to have accrued or arose in India if it meets any of the following conditions:

• It is earned in India, either directly or indirectly, through any business connection, property, asset, or source of income.
• It is received in India, either by the person who earns it or by any other person on his behalf.
• It is received or accrues or arises outside India but is attributable to any business activity carried out in India.

The Foreign Exchange Management Act (FEMA) is a law enacted by the Indian Parliament in 1999 to regulate foreign exchange transactions in India. The main objectives of FEMA are:

• To facilitate the external trade and payments of India
• To promote the orderly development and maintenance of the foreign exchange market in India
• To simplify and amend the law relating to foreign exchange
• To control and direct the activities and investments of non-residents in India
• To use foreign exchange resources effectively for the country
• To remove the imbalance of payments

FEMA applies to all parts of India and to all Indian citizens and agencies located outside India. FEMA is administered by the Reserve Bank of India (RBI) and the Enforcement Directorate (ED).

A business connection is a relationship between a non-resident entity and an activity in India that contributes directly or indirectly to the income of the non-resident entity. A business connection may include any of the following situations:

• The non-resident entity has an agent in India who has the authority to dissolve contracts on its behalf, except for contracts for the purchase of goods or merchandise.
• The non-resident entity has an agent in India who usually maintains a stock of goods or merchandise from which he tidily delivers goods or merchandise on its behalf.
• The non-resident entity habitually secures orders in India mainly or wholly for itself or for another non-resident entity under the same management.

Only the income that is attributable to the business connection in India is deemed to accrue or arise in India and is taxable in India. The entire income of the non-resident entity is not taxable in India.

A few other arrangements beneath the Income-tax Act that are appropriate to a Non-Resident are:

• A Non-Resident is obligated to pay tax on income that's deemed to accrue or arise in India, such as pay from business connection, property, asset, or source of salary in India.
• A “resident but not-ordinarily resident” pays a charge on his taxable Indian income and on foreign income, which is derived from a business controlled in or a profession set up in India.
• A Non-Resident is additionally liable to pay tax on income that's received or deemed to be gotten in India, such as salary for services rendered in India, dividend from an Indian company, and interest from an Indian bank account.
• A Non-Resident may claim relief from double taxation beneath the arrangements of the Double Taxation Avoidance Agreement (DTAA) between India and the country of his home.

The Foreign Exchange Management Act (FEMA) 1999 is a jurisprudence implemented by the Indian Parliament to govern and modernize foreign exchange transactions and markets in the country. The act aims to facilitate the external trade and payments of India and to promote the tidy growth and stability of the foreign exchange market. The act covers the entire territory of India and also applies to any person residing in India who owns or controls any branch, office, or agency across the Indian border. The act also empowers the authorities to take action against any person who violates the provisions of the act outside India.

The capital account records all economic transactions between a country and the rest of the world. Capital account manifests how much a country's assets have changed due to transactions with foreign entities. These transactions comprise the import and export of goods, services, capital, and receiving transfers like foreign aid and remittances. The balance of payments collectively of a current and capital account, which displays how much a country's income and assets have transformed caused by these transactions. Some definitions split the capital account into a financial account, and a capital account, where the financial account comprises transactions involving financial assets and liabilities, and the capital account includes transactions involving non-financial assets and liabilities.

A current Account is a deposit account that is used for large-value transactions on a regular basis. It is mainly opened by businessmen who need to make payments to their creditors using cheques. Current Account does not offer any interest on the deposits and allows customers to deposit and withdraw money at any time without notice. A current Account is also known as a financial account, and it is different from Savings Account, which provides interest. Current Account is suitable for businesses who want to carry out their financial business transactions smoothly.

Foreign nationals are permitted to open an ordinary savings account, as many residents in India do. In fact, even foreign tourists on a short visit to India can open an account. A foreign national who comes on a visit can open only an NRO account, while a foreign national resident in India can open a resident account as well. So, this will operate just like any other domestic account. However, one needs to be careful on the likely procedure that would be followed for repatriation. Money in the NRE account can be repatriated freely, while in the case of NRO, certain terms might need to be fulfilled. So, although Foreign nationals may be allowed to open a resident account, foreign nationals must also understand the implications and whether they are allowed to freely repatriate from a resident account or whether specific permission is needed for the purpose.

A resident individual can open a foreign currency account in India with an authorized dealer, according to the Foreign Exchange Management Act, 1999 (FEMA). This account is called a Resident Foreign Currency (Domestic) Account and can be in the form of a current or savings account. The account can be opened with foreign exchange acquired in the following ways:

• By receiving payment for services not arising from any business or activity in India while visiting a place outside India
• By receiving honorarium, gift, or payment for services rendered from a non-resident who is visiting India
• By receiving an honorarium or gift while visiting a place outside of India
• By having unspent foreign exchange acquired from an authorized person for travel abroad
• By receiving a gift from a relative

The account can be held either singly or jointly with another resident individual. The account does not bear any interest, and the balance can be used for any permissible current or capital account transactions.

The tax liability of a person depends on the residential status of the person who earns the income.

• The person's residential status according to the Income-tax Law; and
• The type of income that he has earned.

Therefore, residential status is an important factor in determining the taxability of the income.

An individual's residency status is one of the main factors that determine the extent and extent of their taxable income under income tax law. An individual's residency status is not the same as their citizenship. A person can be an Indian citizen but not a resident for tax purposes or vice versa. An individual's status of residence depends on the number and nature of his stay in India during a given financial year.

According to the Income-tax Act 1962, there are three classes of residential status for individuals, namely:

• Resident and ordinarily resident (ROR)
• Resident but not ordinarily resident (RNOR)
• Non-resident (NR)

According to the new section 6(1A) of the Income-tax Act, 1961, introduced by the Finance Act 2020, an Indian citizen's residential status for taxation purposes depends on two constituents: His income from foreign sources and his taxability in any other country.

Income from foreign sources is illustrated as income earned across the Indian border, except for income from a business or profession controlled or set up in India. I.e., from the assessment year 2021-22 onwards, an Indian citizen who has a total income of more than ₹15 lakh (excluding foreign sources) and who is not subject to tax in any other country will be deemed to be a resident of India for taxation purpose.

A HUF can have any one of the following different residential status for the purpose of Income-tax Law:

• Resident and ordinarily resident in India
• Resident but not ordinarily resident in India
• Non-resident

The residential status of a HUF depends on the norms specified in the Income-tax Law for each class. I.e., the residential status of a HUF may be different from year to year. For instance, a HUF may be a resident and ordinarily resident in one year, a non-resident or a resident but not ordinarily resident in another year, and so on.

To determine an individual's residential status, one must check if he is s resident or non-resident of India. A resident is someone who meets one of these norms:

• He stayed in India for at least 182 days in the previous year
• He stayed in India for at least 60 days in the previous year and 365 days in the last four years

A non-resident is someone who does not meet either of these norms.

There are some exceptions to the second criterion for Indian citizens who work abroad or on Indian ships.

If he is a resident, one must check if he is a resident and ordinarily resident (ROR) or a resident and not ordinarily resident (RNOR). A ROR is someone who meets both of these norms:

• He was a resident in at least two of the last ten years
• He stayed in India for at least 730 days in the last seven years

An RNOR is someone who does not meet both of these conditions.

To determine the residential status of a HUF, one must check two conditions: first, if the HUF is a resident or non-resident in India, and second, if the HUF is ordinarily resident or not ordinarily resident in India.

Condition 1: Determining whether resident or non-resident

A HUF is a resident in India if it has some or all of its control and management in India.

Condition 2: Determining whether resident and ordinarily resident or resident but not ordinarily resident

A resident HUF is ordinarily resident in India if its manager (i.e., karta or manager) meets both of these conditions:

• He is resident in India for at least 2 years out of the last 10 years.
• He has stayed in India for 730 days or more in the last 7 years.

A resident HUF is not ordinarily resident in India if its manager (i.e., karta or manager) does not meet or meet only one of these conditions.

A company is a resident in India if:

• It is Indian; or
• Its key decisions are made in India.

This rule is applicable from Assessment Year 2017-18. The CBDT has issued final guidelines for the determination of the POEM of a foreign company.

The guidelines have a test of Active Business Outside India (ABOI). A company has ABOI if passive income is less than 50% of total income. It also has to meet some conditions on assets, employees, and payroll.

If a company has ABOI, its key decisions are assumed to be outside India if most board meetings are outside India.

If not, the key decision-makers and their location have to be identified.

However, According to CIRCULAR NO.8, DATED 23-2-2017, companies with annual turnover or gross receipts of INR 50 crores or less are exempt from the POEM guidelines.

The Income-tax Law specifies different classes of residential status for a person other than an individual or a HUF, i.e., partnership firm, company, etc., may have any one of the following residential status:

• Resident
• Non-resident

The residential status of the taxpayer is not fixed and has to be determined every year based on the criteria laid down by the Income-tax Law. Therefore, the taxpayer may be a resident in one year and a non-resident in another year or vice versa.

Direct taxes are taxes that are paid by individuals or different entities directly to the government. In India, direct taxes include Income Tax and Wealth Tax. These taxes are based on the income or wealth of the taxpayer and cannot be shifted to anyone else. Direct taxes are divided into two main categories: Income Tax and Corporate Tax. Income Tax is levied on the income earned by an individual, a Hindu Undivided Family, or any other taxpayer except companies. Corporate Tax is levied on the profits made by companies from their businesses.

The income tax is calculated on the total income of an individual for a financial year. The income tax is applicable to the following sources of income:

• Income from salary
• Income from house property
• Income from business or profession
• Income from capital gains
• Income from other sources