1. If Your Total Income Exceeds the Basic Exemption Limit

You must file a return if your total income before claiming any deductions exceeds:

• ₹2.5 lakh, if you are below 60 years of age
• ₹3 lakh, if you are 60 years or more but below 80 years
• ₹5 lakh, if you are 80 years or older

2. If You Wish to Claim a Tax Refund

Even if your income is below the taxable limit, you must file an ITR to claim any refund for excess TDS or advance tax paid.

3. If You Have Foreign Assets or Income

ITR filing is mandatory if you have earned foreign income, held foreign bank accounts, or invested in foreign assets during the financial year—even if your total income is below the basic exemption limit.

4. For Visa or Loan Applications

Banks and embassies often require ITR proofs for processing loan or visa applications. Filing returns ensures a smoother approval process.

5. If You Are a Company or a Firm

All companies and firms must file ITR, regardless of whether they made a profit or incurred a loss.

6. To Carry Forward Losses

If you have incurred a loss under the head “capital gains” or “business/profession,” you must file your return within the due date to carry it forward to future years.

Mandatory ITR Filing Even with Lower Income

Even if your income is below the exemption limit, you are required to file an ITR if you meet any of the following conditions:

• You deposited ₹1 crore or more in one or more current accounts with a bank
• You deposited more than ₹50 lakh in one or more savings accounts
• You spent over ₹2 lakh on foreign travel for yourself or another person
• Your electricity expenses for the year exceeded ₹1 lakh
• TDS or TCS deducted during the year is more than ₹25,000 (₹50,000 for senior citizens)
• Your business turnover exceeded ₹60 lakh
• Your gross professional income exceeded ₹10 lakh

These conditions have been notified by the government under Notification No. 37/2022 dated 21st April 2022.

ITR Filing for NRIs

For Non-Resident Indians (NRIs), the basic exemption limit is ₹2.5 lakh—irrespective of age. Any income earned or accrued in India beyond this limit requires filing a return.

Further, NRIs cannot use the exemption limit to offset capital gains. Even if total income is below ₹2.5 lakh but includes long-term or short-term capital gains, ITR filing becomes mandatory.

Conclusion:
Filing your ITR on time is essential not just for compliance but also for financial planning. It enables you to claim refunds, carry forward losses, and build a clean financial record for future borrowing or international travel.

1. Section 194A – Interest Other Than Interest on Securities:
   • Senior Citizens: The TDS exemption limit has been increased from ₹50,000 to ₹1,00,000 per financial year.
   • Others: The exemption limit has been raised from ₹40,000 to ₹50,000 per financial year.
2. Section 194 – Dividend Income:
   • The TDS exemption limit has been increased from ₹5,000 to ₹10,000 per financial year.
3. Section 194DA – Life Insurance Policy Payouts:
   • The TDS exemption limit has been increased from ₹1,00,000 to ₹2,50,000.
4. Section 194H – Commission or Brokerage:
   • The TDS exemption limit has been increased from ₹15,000 to ₹20,000 per financial year.
5. Section 194I – Rent:
   • TDS is now applicable if the monthly rent exceeds ₹50,000. This means that any rental payment of ₹50,000 or more per month will attract TDS.
6. Section 194J – Fees for Professional or Technical Services:
   • The TDS exemption limit has been increased from ₹30,000 to ₹50,000 per financial year.
7. Section 194B & 194BB – Winnings from Lottery, Crossword Puzzles, and Horse Racing:
   • TDS will now be deducted only if a single transaction exceeds ₹10,000, replacing the previous aggregate limit.
8. Section 206AB – Higher TDS Rates for Non-Filers:
   • This section has been omitted, removing the provision for higher TDS rates for non-filers of income tax returns.

TCS (Tax Collected at Source) Changes:

1. Section 206C(1H) – TCS on Sale of Goods:
   • This section has been omitted to avoid overlap with TDS provisions under Section 194Q.
2. Section 206C(1G) – TCS on Foreign Remittances under LRS and Overseas Tour Packages:
   • Threshold Increase: The exemption limit for TCS on foreign remittances under LRS has been increased from ₹7,00,000 to ₹10,00,000 per financial year.
   • Education Loans: Remittances for education financed by loans from specified financial institutions are now exempt from TCS.
   • TCS Rates:
     • Education and Medical Treatment: 5% TCS on amounts exceeding ₹10,00,000.
     • Other Remittances: 20% TCS on amounts exceeding ₹10,00,000.
3. Section 206CCA – Higher TCS Rates for Non-Filers:
   • This section has been omitted, removing the provision for higher TCS rates for non-filers of income tax returns.
4. Section 276BB – Prosecution for Failure to Pay TCS:
   • Prosecution will not be initiated if the TCS is deposited before the due date for filing the quarterly statement under Section 206C(3).

These amendments aim to simplify tax compliance and reduce the burden on taxpayers.

Summary:

Today is the deadline for the last advance tax installment for FY24-25. Taxpayers are required to adhere to the following schedule based on their estimated annual tax liability:

• Installment Schedule:
  • 15% of the estimated tax liability is due by June 15.
  • 45% of the total liability should be met cumulatively by September 15.
  • 75% is required cumulatively by December 15.
  • 100% of the estimated liability must be paid by March 15.
• Interest & Penalties:
  • Section 234C (Default on Installments):
    If there is any delay or shortfall in meeting any of the installment deadlines, interest is charged under Section 234C. This interest is computed at 1% per month (or part of a month) on the difference between the tax liability expected by the installment and the amount actually paid.
  • Section 234B (Underpayment of Total Liability):
    If the total advance tax paid is less than 90% of the total assessed tax liability, interest under Section 234B is levied on the outstanding amount from April 1 until the tax is paid. Notably, if the balance is cleared by March 31, no interest under Section 234B will be applicable since the interest period commences on April 1.
• Exemptions:
  Taxpayers whose total tax liability for the financial year is less than ₹10,000 are exempt from the requirement to pay advance tax. However, it remains essential to complete the final tax payment by the due date to avoid any penalties. Maintaining proper documentation is vital for verifying eligibility for this exemption.

Timely payment of advance tax is crucial to avoid additional interest and penalties. Adhering to these schedules and ensuring full compliance not only helps in managing financial obligations efficiently but also minimizes the risk of incurring unnecessary extra interest under Sections 234B and 234C.

1. Revised Tax Slabs & Enhanced Deductions

Under the Old Regime

• Tax Slabs:
  • Up to ₹2.5 lakh: Nil
  • ₹2.5 lakh to ₹5 lakh: 5%
  • ₹5 lakh to ₹10 lakh: 20%
  • Above ₹10 lakh: 30%
• Standard Deduction:
  • Salaried/Pensioners: ₹50,000 (₹15,000 for family pensioners)
• Other Deductions:
  • Common limits such as Section 80C remain at ₹1.5 lakh.

Under the New Regime

• Revised Tax Slabs:
  • ₹3 lakh to ₹7 lakh: 5%
    (Previously, the 5% rate applied up to ₹6 lakh.)
  • ₹7 lakh to ₹10 lakh: 10%
  • ₹10 lakh to ₹12 lakh: 15%
  • ₹12 lakh to ₹15 lakh: 20%
  • Above ₹15 lakh: 30%
• Enhanced Standard Deduction:
  • Salaried/Pensioners: ₹75,000 (increased from ₹50,000)
  • Family Pensioners: ₹25,000 (increased from ₹15,000)
• NPS (Employer Contribution) Deduction:
  • New Regime: Increased from 10% to 14% of salary
• Leave Encashment Exemption:
  • Non-Government Employees: Raised from ₹3 lakh to ₹25 lakh

Note: Taxpayers can opt between the old and new regimes each year. The new regime is now the default, so if you wish to claim traditional deductions (like those under Section 80C, 80D, etc.), you must actively choose the old regime.

2. Capital Gains Tax Overhaul

Long-Term Capital Gains (LTCG)

• Uniform Rate: A flat 12.5% tax rate (without indexation) is now applicable across asset classes.
• Exemption Limit for Listed Equities: Increased from ₹1 lakh to ₹1.25 lakh per year.
• Other Assets (property, gold, debt, etc.): Taxed at 12.5% without indexation, instead of 20% with indexation benefit earlier​. For assets acquired after the effective date, indexation will no longer apply.
  Transitional rule: For residential house property bought on or before July 22, 2024, sellers (resident individuals/HUF) can choose between the old method (20% with indexation) or new method (12.5% without indexation) for computing LTCG tax​. Properties purchased from July 23, 2024 onward will strictly follow the 12.5% no-indexation rule.

Short-Term Capital Gains (STCG)

• For Listed Equities & Equity Mutual Funds:
  • Now taxed at 20% (up from 15%).
• Other Assets:
  • STCG continues to be taxed as per the applicable normal slab rates.

These changes aim to simplify calculations and provide a consistent tax rate across various asset types.

3. Additional Notable Changes

• Abolition of Angel Tax for Startups:
  • Investments in eligible startups will no longer trigger the additional “angel tax,” easing the fundraising process.
• Mandatory PAN-Aadhaar Linking:
  • Ensure your PAN is linked with Aadhaar. Failure to link results in an inoperative PAN, which can affect return filing and lead to higher TDS deductions.
• Timely Payment Requirement:
  • It is crucial to pay any outstanding taxes on time to avoid interest charges. Delayed payments will attract interest, increasing your overall liability.
• TCS on Foreign Remittances:
  • For amounts above ₹7 lakh per year, TCS on outward remittances under the Liberalised Remittance Scheme has increased to 20% (up from 5%).
  • Note: Remittances for education or medical purposes remain subject to lower rates.
• Other Provisions:
  • RBI 7.15% Bonds: Interest from these bonds will now have TDS deducted similar to bank fixed deposits.
  • Non-ULIP Life Policies: For policies issued after April 1, 2023, maturity proceeds become taxable if annual premiums exceed ₹5 lakh.

4. What This Means for You

These changes are designed to streamline tax calculations and provide greater benefits for many taxpayers. However, they also require careful review of your financials:

• Choose Wisely: Evaluate whether the new or old regime best suits your situation.
• Plan Capital Gains: Adjust your investment strategy to leverage the uniform LTCG rate and exemption limits.
• Ensure Compliance: Make sure your PAN is active and remit any due taxes on time to avoid unnecessary penalties.

For tailored advice on how these updates impact your personal tax situation, please feel free to reach out to our team.

Discover how Form 12BAA can help you save on taxes, increase your in-hand salary, and efficiently claim TDS/TCS credits.

Key Points

• New Notification: Employees can now claim TDS/TCS from non-salary incomes, increasing their net salary.
• Previous Challenges: Claiming TDS on cash withdrawals, property sales, and TCS on car purchases, foreign remittances, was complicated.
• Refund Delays: Many employees had to file ITRs to reclaim TDS, resulting in delayed refunds.

Leverage Form 12BAA

Using Form 12BAA, employees can now claim TDS credits from non-salary incomes while filing their returns. Employers will provide an updated Form 16 to simplify the process.

What to Include in Form 12BAA

Employees must share their name, address, PAN, Aadhaar, financial year, and details of TDS deductions, including the section, collector’s TIN, and amounts. Similarly, for TCS claims, the collector’s name, address, TIN, and collected amounts must be provided.

A recent amendment now allows parents/guardians to claim TCS on a minor child’s income, provided it is clubbed with the parent’s taxable income.

Changes in Tax Return Forms

Form 16 (Part B) now includes new columns for salary TDS and non-salary TDS/TCS claims.

• TDS return formats are updated to reflect adjustments filed through Form 12BAA.

Conclusion

This new process encourages financial literacy among employees, ensuring maximum tax efficiency. Stay ahead—file smart, save more, and claim every rupee that’s rightfully yours!

Extension Announcement

The deadline for submitting the Tax Audit Report has been extended from September 30, 2024, to October 7, 2024. This gives taxpayers an extra week to complete their filings.

ITR Filing Deadline Unchanged

Despite the extension for the audit report, the deadline for filing Income Tax Returns (ITR) remains October 31, 2024. The extension does not apply to ITR filings.

Key Dates

• Tax Audit Report Due Date: Extended to October 7, 2024.
• ITR Filing Due Date: Remains October 31, 2024.

Important Reminder

If you file your ITR after October 31, 2024, a late fee will apply. Partnership firms should also note that partner ITRs are due by October 31 if the firm’s audit is completed.

This extension provides much-needed relief, allowing taxpayers more time to file their Tax Audit Reports accurately without rushing.

Key Changes in Tax Rates:

Futures Trading:

• Old rate: 0.0125%
• New rate: 0.0200%

Options Trading:

• Old rate: 0.0625%
• New rate: 0.1000%

This tax hike is set to impact a large number of market participants, and may discourage trading in a manner similar to how cryptocurrencies and IPOs have been regulated in the past.

Impact on Trading Calculations:

For example, if a trader trades 2000 units of Nifty Futures at a price of 15,000:

• Before October 1, 2024: STT would be ₹3,750 (calculated as 0.0125% of the total transaction).
• After October 1, 2024: STT increases to ₹6,000 (calculated as 0.02%).
• This represents an increase of ₹2,250, which reflects a 60% hike in the tax.

What Can You Do?

While this change could feel like a heavy burden, you can still deduct these taxes as business expenses, offering some relief from the increased rates. However, many are concerned that this could lead to lower participation in the market.

Stay Informed!

If you’re navigating the complexities of the market, now more than ever it’s crucial to stay updated on changes like these.

Why is the 87A Rebate Being Disallowed?

Many taxpayers claimed the 87A rebate when filing their Income Tax Returns (ITR). However, the Centralized Processing Centre (CPC) has disallowed these claims, leading to demand notices for outstanding tax amounts. Here’s what’s behind this issue:

Changes to Special Rate Income Treatment: After July 5, updates were made to the income tax portal’s utility, affecting how special rate income—like long-term and short-term capital gains or income from online gaming—is treated. Under the new tax regime, no 87A rebate is allowed on such special rate income. This change caught many taxpayers off guard, especially those who filed their ITRs early or used tax software that didn’t update the changes.

Potential Scenarios:

• If you filed your ITR before July 5, the rebate may have been disallowed under the new rules.
• If you used paid tax software that wasn’t updated with the latest guidelines, your ITR may have incorrectly claimed the rebate, triggering a demand notice.

Lack of Guidance from the Department: Another contributing factor is the lack of clear communication from the income tax department regarding these changes, leading to confusion among taxpayers who are now receiving notices.

What Should Taxpayers Do?

If you’ve received a demand notice, here’s what you need to consider:

Pay the Amount Owed: The department is unlikely to change its stance, so it’s recommended to settle the demand amount if you find the notice valid. The new regime rules on special rate income are being strictly enforced.

Explain to Clients: If you’re a tax advisor or accountant, it’s crucial to communicate with your clients about why these notices are being issued. Ensure they understand the changes in tax law and guide them through the process of handling refunds or paying the demanded amount.

By staying proactive, you can avoid further complications and ensure that your tax filings remain compliant with the latest guidelines.

Stay informed, and don’t let these tax updates catch you off guard!

• Section 194DA: TDS on maturity or bonus of life insurance policy reduced from 5% to 2%.
• Section 194A: TDS on repayment of units by Unit Trust of India and mutual funds is abolished.
• Section 194G: TDS on commission from sale of lottery reduced from 5% to 2%.
• Section 194H: TDS on commission and brokerage reduced from 5% to 2%.
• Section 194IB: TDS on rent payments exceeding ₹50,000 per month reduced from 5% to 2%.
• Section 194M: TDS on certain specific contracts reduced from 5% to 2%.
• Section 194O: TDS by e-commerce operators reduced from 1% to 0.1%.

TDS on Property Transactions:
Previously, for property purchases over ₹50 lakhs, TDS could be shared among multiple buyers. This exemption will be discontinued. All buyers, regardless of the number, must deduct TDS if the property value exceeds ₹50 lakhs.

Future Amendments (Effective April 1, 2025):

Section 194D: TDS on insurance commission for agents reduced from 5% to 2%.
Section 194T: New section for TDS on payments made by partnerships at a rate of 10%.