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Tax2clear Frequently Asked Questions

Best answers for your complex tax issues.

Q.

What incomes are charged to tax under the head ‘Capital Gains’?

Income that arises from selling a capital asset is known as capital gains. A capital asset includes any type of property that an assessee holds for any purpose. The capital assets are taxable in the hands of the receiver in the year of transfer of the capital asset. Such tax is known as capital gains tax. Capital gains tax is of two types – short-term capital gains and long-term capital gains. The sale value of the asset is reduced by the cost of acquisition, and the profit from the sale is charged to tax as capital gains.

  • Land
  • Building
  • House property
  • Patents
  • Trademarks
  • Vehicles
  • Leasehold Property
  • Machinery
  • Jewellery

Q.

What is the meaning of capital asset?

Capital assets are significant pieces of property like investments, stocks, bonds, homes, cars, and art collectibles. Capital assets generally have a useful life of more than one year and are not intended for sale in the due course of a business. For example, a car purchased for the purpose of reselling and not for use will be considered an inventory. However, a car purchased by an individual or a business for the purpose of use in the business is considered a capital asset. Section 2(14) of the IT Act 1961 defines the capital asset as:

  • Any kind of property held by the assessee, whether related to his/her business or not.
  • Securities held by Foreign Institutional Investors (FIIs) who have invested in securities as specified by the SEBI Act, 1992.
  • Any Unit Linked Insurance Policy (ULIP) that is not covered under the exemptions on clause 10D of section 10.

Q.

What is the meaning of the term ‘long-term capital asset’?

A long-term capital asset is an asset held for more than 36 months before the date it is transferred. However, an asset is known as a capital asset even when it is held for more than 12 months in the following cases:

  • Equity shares or preference shares that are listed on a recognized Indian stock exchange
  • Other securities listed on the Indian Stock Exchange
  • Units of UTI
  • Units of an equity-oriented fund
  • Zero coupon bond
  • Unlisted preference shares or equity shares held in a company (if these shares were transferred on or before 10th July 2014)
  • Mutual fund units as specified under section 10(23D), except the equity-oriented fund.

Q.

What is long-term capital gain and short-term capital gain?

Any capital gain that arises from the sale of a long-term capital asset is known as a long-term capital gain. The classification of assets as short-term or long-term is done on the basis of the period of holding. The benefit of indexation is also available on a long-term capital gain. The indexation benefit increases the asset’s acquisition cost, thereby reducing the profit and tax.

Short-term capital gain is the gain that arises from the sale of short-term capital assets. Short-term capital gains are also classified on the basis Démarrer leur holding period and the type of the asset. If you have a short-term capital gain, you cannot avail yourself of the benefit of indexation. Also, the tax rates on short-term capital gains on equity mutual funds are higher than that on long-term capital gains. You can calculate the indexed cost of acquisition using an indexed cost calculator.

Q.

Why are capital gains classified as short-term and long-term?

The holding period of the asset defines its taxability. Whether you have to pay tax on a capital gain depends on how long you have held the asset. The tax rates on short-term and long-term capital gains also differ from each other. Therefore, capital assets are classified as short-term and long-term.

The sale of assets held for a period longer than 1 year and fixed assets held for a period longer than 3 years are chargeable to tax as long-term capital gains. The tax rates on long-term capital gains can be 0%, 15%, or 20% of the taxable income.

Q.

How to compute long-term capital gain?

Long-term capital gains arise when the owner of an asset sells it at a profit after holding it for 1 year (in the case of shares and securities) and before 3 years (in the case of assets like land, buildings, etc.).

The computation of long-term capital gains is performed as below:

Long-term capital gain = Sale Price – (indexed cost of acquisition + indexed cost of improvement + transfer cost)

  • Indexed cost of acquisition = cost of acquisition x cost of inflation index of the year when the asset was transferred or acquired.
  • Indexed cost of improvement = cost of improvement x the cost inflation index of the year in which the asset was transferred or the cost inflation index of the year of improvement.

Q.

How to compute short-term capital gain?

A short-term capital gain arises when a capital asset held for less than 1 year and 3 years is sold at a profit thereafter.

Short-term capital gains on shares are computed as follows:

Suppose you bought 100 shares of X Ltd. at Rs.100 each and sold at Rs.120 after holding for 6 months. Then,

STCG = Sale Price – Purchase price = Rs.120×100 – Rs.100×100 = Rs.2000

The sale price is computed as:

Sale value of an asset – (brokerage charges + securities transaction tax)

Short-term capital gains on assets are computed as follows:

STCG = sale value of the asset – (cost of acquisition + expenses incurred while transfer + cost of asset improvement)

Cost of acquisition – For a short-term asset purchased before 1st Feb 2018, it is calculated as follows:

  • The fair market value of assets is calculated by multiplying the number of shares with the highest share price on 31st Jan 2018.
  • The fair market value is then compared with the actual sale value of the shares, and the lower between the two is selected.
  • The resultant figure is compared with the actual purchase value, and the higher between the two is chosen.

Cost of improvement refers to the expenses incurred on improving the asset. It includes construction, expansion, or repair of an asset. However, this does not apply in the case of equity shares.

Q.

Is the benefit of indexation available while computing capital gain arising on the transfer of short-term capital assets?

If the property is acquired before 1st April 2001 by the assessee, the cost of acquisition of the asset is calculated as follows:

The assessee can consider any of the below options as the cost of acquisition:

  • The asset’s fair market value as of April 1st, 2001
  • The asset’s actual cost of acquisition.
  • The assessee can choose any of the above options as the cost of acquisition. If the option is available, the higher of the two is considered the cost of acquisition.
  • If the asset is of depreciable nature, this option is not available.
  • This option is also not available if the capital asset is a goodwill or trademark.

* Fair market value or FMV is the price at which an asset would ordinarily sell at a given date in the open market.

Q.

If any undisclosed income [in the form of investment in capital asset] is declared under Income Declaration Scheme, 2016, then what should be the cost of acquisition of such capital asset?

Income Declaration Scheme 2016 does not provide specific provisions for the cost of acquisition. However, the basic objective of the Income Declaration Scheme is to allow individuals to disclose their undisclosed income and pay tax on it to avoid any kind of penalty in the future.

The cost of acquisition or any other consideration paid for acquiring the asset is irrelevant to IDS. Therefore, the fair market value of the asset is considered to be its cost of acquisition. The cost of acquisition represents the price that the asset would sell at in an open market.

Therefore, the cost of acquisition while declaring an undisclosed asset under the Income Declaration Scheme of 2016 is the fair market value of the asset.

Q.

As per the Income-tax Law, the gain arising on the transfer of the capital asset is charged to tax under the head “Capital gains.” What constitutes ‘transfer’ as per Income-tax Law?

As per the Income Tax Act of 1961, the transfer of assets can be understood as the transfer of the rights or the ownership of any asset to another individual or company. It includes the following:

  • The sale or exchange of the asset
  • Extinguishment of rights
  • A compulsory acquisition under any law
  • When an asset is converted into stock-in-trade by the owner
  • The redemption of Zero coupon bonds
  • Any transaction that involves allowing the possession of an immovable property that is to be retained as a part of the performance of a contract.
  • Any transaction involving the transferring of an immovable property

Q.

Are any capital gains exempt under section 10?

Exempted capital gains US 10:

  • Capital Gain on Transfer of US64 [Section 10(33)] Any income from a capital asset being a unit of US 64 is not chargeable to tax where such assets transfer occurs on or after April 1, 2002.
  • Long-Term Capital Gain on Transfer of BSE-500 Equity Shares [Section 10(36)]
  • Capital Gain on Statutory Acquisition of Urban Agricultural Land [Section 10(37)]
  • In the Land pooling scheme (of the Andhra Pradesh Government), compensation in the form of reconstituted plots or land is provided to landowners.
  • For this scheme, the capital gain exemption is available (from the assessment year 2015-16) under section 10(37A)
  • Under section 115JG(1), capital gains that arise on the conversion of an Indian branch of a foreign bank into an Indian subsidiary are not chargeable to tax.
  • Capital gain arising from any award/agreement under the Right to Transparency and Fair Compensation in Land Acquisition, Resettlement (RFCTLARR) Act, 2013, and Rehabilitation is tax exempted.

Q.

At what rates capital gains are charged to tax?

On selling equity shares or equity-oriented mutual funds after holding them for more than a year, taxpayers have to pay long-term capital gains tax (LTCG) on the profit. The LTCG tax rate is 10% for gains exceeding ₹ 1 lakh in a financial year. However, for other types of investments, such as unlisted securities or zero-coupon bonds, the LTCG tax rate is 20%. If equity shares or equity-oriented mutual funds are sold within one year, taxpayers have to pay short-term capital (STCG) on the profits. The STCG tax rate depends on whether the securities transaction tax (STT) is applicable or not. If STT is applicable, the STCG tax rate is 15%. If STT is not applicable, the STCG tax rate will be applied as per the income tax slab the assessee falls under.

Q.

Is there any benefit available in respect of re-investment of capital gain in any other capital asset?

There are tax benefits on capital gains by reinvesting them in other assets as per the Income Tax Act 1961.

Section 54EC: You can reinvest long-term capital gains from any asset except a house in bonds of the National Highways Authority of India (NHAI) or the Rural Electrification Corporation (REC). The amount of capital gains that can be reinvested under this section is limited to the capital gains arising from the asset’s sale or ₹50 lakhs, whichever is lower.

Section 54F: Any individual or HUF can reinvest LTCG from any asset other than a residential house property to a new residential house (Limited to One) in India. The amount of capital gains that can be reinvested under this section is limited to the capital gains arising from the asset’s sale, but it is capped at ₹10 crores.

Reinvestment should happen within six months U/S 54EC and within one year U/S 54F. Investing in certain assets like infrastructure or renewable energy may have other tax benefits.

Q.

Are there any bonds in which I can invest my capital gains to claim tax relief?

There are some bonds in which an individual can invest capital gains to claim tax relief. These bonds are known as capital gains bonds or Section 54EC bonds.

Capital gains bonds are issued by government-owned companies such as the National Highways Authority of India (NHAI), the Rural Electrification Corporation (REC), and the Power Finance Corporation (PFC). These bonds offer a fixed interest rate and a maturity period of 5 years.

To claim tax benefits on capital gains bonds, you must reinvest the capital gains from selling a capital asset, such as a house or land, in these bonds within 6 months of the sale. The maximum amount of capital gains an individual can reinvest in capital gains bonds is ₹50 Lakh.

Q.

What is the meaning of stamp duty value and what is its relevance while computing capital gain in case of transfer of capital asset, being land or building or both?

The stamp duty value is the price used to calculate stamp duty; it’s a tax levied on the sale of property. U/S 50c of the Income Tax Act, if the actual sale consideration for a property is less than the stamp duty value, then the stamp duty value will be used to calculate capital gains. I.e., The seller will be liable to pay tax on the entire stamp duty value, even if they received a lower consideration. This might happen when the seller sells the property to the related party at a discounted price or at a loss.

Q.

Whether interest received on amount deposited in capital gain account under capital gain account scheme is taxable?

Interest received on the amount deposited in a capital gain account under the Capital Gains Account Scheme (CGAS) is taxable under the Income Tax Act, and is taxed at the applicable rate. The tax is deducted at source by the bank or the financial institution where the account is held. The depositor will receive a TDS certificate from the bank or financial institution, which can be used to claim a deduction for the tax paid while filing the Income Tax Return (ITR). Moreover, The interest is taxable in the year in which it is credited to the account.

Q.

Which Form is to be filed for withdrawal from Capital Gain Account?

To withdraw from a capital gains account, you are required to fill out Form C. The withdrawn amount must be used within 60 days and cannot be deposited immediately into the account. You must fill out Form D if the second withdrawal is still needed.

Capital gains accounts can be transferred from one branch to another within the same Bank, but not from one Bank to another. Account type can also be changed from a term deposit to a saving account; however, if you transfer a term deposit to a saving account before the term deposit matures, you will be charged a penalty.

Q.

Whether profit earned from sale of land or building or both chargeable to capital gain tax?

Profit earned from the sale of land and building or both is chargeable to capital gains tax. The tax liability depends on the holding period of the asset. If the land or building is held for less than two years, the capital gains will be considered short-term capital gains, and the tax rate will be the same as the individual’s income tax slab. On the other hand, if the land or building is held for more than two years, the capital gains will be considered long-term capital gains, and the applicable tax rate will be 20%.

Q.

I want to close my capital gain account. The capital gain amount is already disbursed and only interest is lying in account. The branch manager asked for Form G with AO’s endorsement on it. How to get it? Please advise procedure?

Steps to close your capital gain account with AO’s endorsement:

  • Download Form G from the Income Tax Department website.
  • Fill out the form and attach the following documents:
  • Passbook of account A or deposit receipt of account B, as the case may be.
  • A letter from your bank stating that the capital gain amount has already been disbursed and only interest remains in the account.
  • Copy of your ID proof.
  • Copy of your PAN card.
  • Take the form and documents to the Assessing Officer (AO) with jurisdiction over you.
  • The AO will review the documents and endorse the form.
  • Take the endorsed form back to your bank.
  • The bank will close your account and pay you the interest amount.
  • The AO might ask you for additional information or documents.
  • The process of closing your account may take a few weeks.
  • You cannot claim any tax benefits on the interest earned in the account after it is closed.

Q.

What are the provisions relating to the computation of capital gain in case of asset transfer by way of gift, will, etc.?

 
  • Cost of acquisition: The cost of acquisition of the asset for the gift recipient will be the cost of acquisition to the previous owner plus any costs incurred by the gift recipient in improving the asset.
  • Holding period: The asset’s holding period for the gift recipient will be the asset’s holding period to the previous owner.
  • Capital gains computation: The capital gains will be computed as the difference between the asset’s sale price and the acquisition cost. The capital gains will be taxed as short-term capital gains if the asset is held for less than 24 months and as long-term capital gains if the asset is held for more than 24 months.

Q.

I have sold a house which had been purchased by me 5 years ago. Am I required to pay any tax on the profit earned by me on account of such sale?

Profit earned from the sale of a house purchased 5 years ago is subject to long-term capital gains tax, as the holding period exceeds 2 years. The tax rate for long-term capital gains on a house is 20% with the benefit of indexation, which adjusts the cost of acquisition for inflation, thereby reducing the taxable profit.

To compute the long-term capital gain: Long-term capital gain = Sale Price – (Indexed cost of acquisition + Indexed cost of improvement + Transfer cost). The indexed cost of acquisition is calculated as: Cost of acquisition × (Cost Inflation Index of the year of sale / Cost Inflation Index of the year of purchase).

Exemptions may be available under Section 54 if you reinvest the capital gains in another residential property within the specified time (2 years for purchase or 3 years for construction). The reinvested amount is limited to the capital gains. Alternatively, under Section 54EC, you can invest up to ₹50 lakh of the capital gains in specified bonds (e.g., NHAI or REC) within 6 months to claim tax relief.

It is advisable to consult a tax professional to calculate the exact tax liability and explore available exemptions based on your specific circumstances.

Q.

What is an Income Tax Return (ITR)?

Anincometaxreturn (ITR) isaformthattaxpayersmustfilewiththeIncomeTaxDepartmenttodeclareincomefromallsources. TheIncomeTaxDepartmentusesthisinformationtocalculatetaxanddeterminetheapplicabletaxslab. TaxpayerscanalsoclaimdeductionsandexemptionsonITRtoreducetheirtaxburden.
  • ITR 1: For individuals with a total income of up to ₹5 lakhs
  • ITR 2: For individuals with a total income of more than ₹5 lakhs
  • ITR 3: For individuals engaged in business or profession
  • ITR 4: For salaried employees
  • ITR 5: For Hindu Undivided Families (HUFs)
  • ITR 6: For trusts and charitable organizations
  • ITR 7: For individuals with income from overseas sources

Q.

Who needs to file an Income Tax Return in India?

AccordingtotheIncomeTaxActinIndia, anindividualmustfileanincometaxreturn (ITR) iftheyfallunderanyofthefollowingcategories:
  • If an individual is less than 60 years of age and their total annual gross income exceeds ₹2.5 lakh.
  • If a person is a senior citizen (aged 60-79) and their annual gross income surpasses ₹3 lakh.
  • If a person is a super senior citizen (aged 80 and above) and their annual gross income exceeds ₹5 lakh.

Q.

What are the benefits of e-filing the return of income?

E-filingincometaxreturnsoffersseveraladvantages:
  • No More Standing in a Queue: E-file your income tax return from the comfort of your home.
  • Online Status Check: Track the status of your return online with ease.
  • No More Errors: E-filing software helps avoid errors by adhering to the latest tax laws and regulations.
  • Faster Refund: E-filed returns are processed faster, leading to quicker refunds.
  • Auto Saving of Records: Many e-filing programs automatically save tax forms with information from previous returns, saving time.
  • Easy Access to Documents: Store your tax documents online for easy access.
  • E-Verification: Verify your identity and sign tax returns electronically.

Q.

Can I revise my ITR after filing?

Ifyoufileanincorrecttaxreturn, youcancorrectitbyfilingarevisedreturnundersection139(5) oftheIncomeTaxAct. Arevisedreturncanbefiledbeforethreemonthspriortotheendoftheassessmentyearorbeforetheassessmentiscompleted, whicheverisearlier. TheassessmentyearfollowsthefinancialyearinwhichtheITRisfiled.

Q.

How many times can I revise the return?

Incometaxreturnscanberevisedmultipletimeswithoutanylimit. However, iftheoriginalreturnwasfiledonpaper, therevisedreturncannotbefiledelectronically. NofeesorpenaltiesarechargedforrevisinganITR. Foronlinerevisions, includethe15-digitacknowledgmentnumberoftheoriginalreturn. NotethatexcessiverevisionsmayattractscrutinyfromtheIncomeTaxDepartment.

Q.

If I have paid excess tax, how will it be refunded to me?

Ifyouhavepaidmoretaxthanyourliability, youcanclaimarefundbyfilingyourincometaxreturnonline. VerifyyourreturnelectronicallyusingAadhaarOTP, EVCthroughabank, orbysendingasignedphysicalITR-VtotheCentralisedProcessingCentre (CPC) within120daysoffiling. EnsuretheexcesstaxpaidisreflectedinForm26AS. TheIncomeTaxDepartmentwillverifyandprocessvalidrefundclaims.

Q.

Can I file my ITR without a Permanent Account Number (PAN)?

APANcardismandatoryforfilinganIncomeTaxReturn. Ifyoudon’thaveaPAN, youcanobtainaninstante-PANusingyourAadhaarcardlinkedtoyourphonenumber.
  • Visit the Income Tax e-Filing portal and click “Instant e-PAN.”
  • Click “Get a New e-PAN” on the next page.
  • Enter your 12-digit Aadhaar number.
  • Select the “I confirm that” checkbox and click “Continue.”
  • Receive and validate an OTP sent to your registered mobile number.
  • Select the “I accept that” checkbox and click “Continue.”
  • An acknowledgment number will be provided, and the e-PAN will be issued shortly after.

Q.

Is it mandatory to link Aadhaar with PAN for filing ITR?

LinkingAadhaarwithPANismandatoryforfilingITRunlessexempted. ThedeadlineforlinkingwasJune30, 2023; failuretolinkrendersthePANinoperative, preventingitsuseforfinancialtransactions, includingITRfiling. Exemptionsapplyto:
  • Residents of Assam, Jammu and Kashmir, and Meghalaya
  • Non-residents as per the Income-tax Act, 1961
  • Individuals aged 80 years or older
  • Non-citizens of India

Q.

What are the changes incorporated in new ITR forms after introduction of section 89A?

ThenewITRformsrequiredisclosureofincomeonwhichsection89Areliefwasclaimedinthepreviousyear, applicabletoITR2, 3, and4. Section89Aprovidesreliefforincomefromretirementbenefitaccountsinnotifiedcountries, taxingsuchincomeinIndiawhenreceivedratherthanwhenaccrued, allowingforeigntaxcreditclaims.

Q.

Do I need to file an ITR if my income is below the taxable limit?

Ifyourgrossincomeisbelow ₹2.5lakh, filinganITRisnotmandatoryunlessyoumeetspecificconditions:
  • Deposited over ₹1 crore in one or more current bank accounts.
  • Incurred expenditure exceeding ₹2 lakh for foreign travel for yourself or others.
  • Incurred electricity consumption expenditure exceeding ₹1 lakh.

Q.

What to do if discrepancies appear in actual TDS and TDS credit as per Form 26AS?

Ifthere’sadiscrepancybetweenactualTDSandTDScreditinForm26AS, youcan:
  • Pay Tax Again: Claim TDS credit in the ITR to avoid double taxation on the same income.
  • Claim TDS Credit Manually: Provide evidence like salary slips or bank statements to support your claim.

Q.

What happens if there are errors in my filed ITR?

IfanITRcontainserrorsorusesthewrongform, theIncomeTaxassessingofficermaydeclareitdefectiveandissueanoticetorectifythemistakeswithin15days. FailuretocorrectwithinthisperiodrenderstheITRinvalid, treatedasifnoreturnwasfiled. Youcanfilearevisedreturnundersection139(5) tocorrecterrors.

Q.

Can I file my ITR if I have investments in foreign assets?

Yes, youmustfileanITRifyouhaveinvestmentsinforeignassetsanddisclosetheirdetailsinScheduleFA. ThisismandatoryforresidentandordinarilyresidentIndiansholdingassetsoutsideIndia, including:
  • Foreign depository accounts
  • Foreign equity and debt interest
  • Foreign cash value insurance contracts
  • Financial interest in any entity outside India
  • Name, country, value, acquisition date, and source of funds for the asset

Q.

What are the consequences of not filing an ITR?

FailuretofileanITRcanleadto:
  • Penalties: Up to ₹5,000 for late filing, or ₹10,000 if filed within a year after the due date.
  • Interest: 1% monthly interest on unpaid tax.
  • Non-Carry Forward of Losses: Inability to carry forward losses from previous years.
  • Best Judgment Assessment: The assessing officer may assess tax under section 144.
  • Refund Issues: Refunds can only be claimed by filing an ITR.

Q.

Please clarify whether holding of equity shares of a Co-operative Bank or Credit Societies, which are unlisted, are required to be reported?

Yes, unlistedequitysharesofacooperativebankorcreditsocietymustbereportedastheyareconsidered ‘specifiedinvestments’ undertheIncomeTaxAct, applicabletoentitiesregisteredundertheCompaniesActbutnotlistedonarecognizedstockexchange.

Q.

I am resident and have sold land and building situated outside India. Whether I need to report the details of property and identity of buyer in Schedule CG?

Yes, residentsmustreportdetailsofthesaleoflandandbuildingoutsideIndiainScheduleCGtoensurecapitalgainsaretaxedinIndia. Requireddetailsinclude:
  • Property details: Location, type, purchase date, purchase price, and current market value.
  • Buyer details: Name, address, and PAN.
  • Capital gains: Amount, short-term or long-term nature, and tax paid.

Q.

An unlisted company is required to furnish details of assets and liabilities in the Schedule AL-1 of ITR-6? Please clarify whether details of assets held as stock-in-trade of business are also required to be reported therein.

Yes, detailsofassetsheldasstock-in-trademustbereportedinScheduleAL-1ofITR-6, astheyareconsideredcompanyassets. Requireddetailsinclude:
  • Cost of the stock-in-trade
  • Fair market value of the stock-in-trade
  • Quantity of stock-in-trade
  • Type of stock-in-trade

Q.

Please clarify whether a farmer producer company as defined in section 581A of Companies Act, 1956 is required to furnish details of shareholding in the Schedule SH-1 of ITR-6?

No, FarmerProducerCompanies (FPCs) arenotrequiredtofurnishshareholdingdetailsinScheduleSH-1ofITR-6, astheyaretreatedascooperativesocieties, notcompanies, undertheIncomeTaxAct, 1961.

Q.

How do I track the status of my ITR?

YoucantrackyourITRstatususingeitherpre-loginorpost-loginmethods:
Pre-login ITR Status:
  • Visit the e-filing portal homepage and click ‘Income Tax Return Status.’
  • Enter your valid mobile number and acknowledgment number, then click ‘Continue.’
  • Enter the 6-digit OTP received on your registered mobile number and click ‘Submit.’
  • View the ITR status after validation.
Post-login ITR Status:
  • Log in to the e-filing portal with your user ID and password.
  • Go to e-file > Income Tax Returns > View Filed Returns.
  • View all filed returns and download ITR-V acknowledgment, intimation order, or complete ITR form in PDF.
  • Click ‘View Details’ for specific return status.

Q.

Is there any special benefit available under the income tax law to senior citizens?

Seniorcitizensareeligibleforthefollowingtaxbenefits:
  • Basic exemption limit of ₹3 lakh under both tax regimes.
  • Deduction of up to ₹50,000 for health insurance premiums under section 80D.
  • No tax on annual interest up to ₹50,000 under section 80TTB.
  • Exemption from filing ITR for those above 75 years with only pension and interest income, upon submitting Form 12 BBA to a specified bank.
  • No advance tax requirement unless income is from business or profession.
  • Deduction of up to ₹1 lakh for treatment of specified diseases under section 80DDB.
  • Tax-exempt rent from reverse mortgaging property.
  • Standard deduction of ₹50,000 on pension income and ₹15,000 for family pensioners.

Q.

Can an Authorized Signatory / Representative Assessee e-Verify the return on my behalf?

Yes, anauthorizedsignatoryorrepresentativeassesseecane-verifyyourITRusing:
  • Aadhaar OTP: OTP sent to the representative’s Aadhaar-linked mobile number.
  • Net Banking: EVC sent to the representative’s mobile number and email ID.
  • Bank/Demat Account: EVC generated through a pre-validated, EVC-enabled account sent to the representative’s email or mobile.

Q.

How will I know that my e-Verification is complete?

Toconfirme-verificationcompletion:
  • A success message with a Transaction ID is displayed upon e-verification.
  • An email is sent to the registered email ID for self-verification, or to both the assessee and authorized signatory’s email and mobile for representative verification.

Q.

Is a senior citizen exempt from filing ITR?

Undersection194PofBudget2021, seniorcitizensaged75yearsandaboveareexemptfromfilingITRif:
  • They are residents in the previous year.
  • They have income only from pension and interest from the same specified bank.
  • They submit a declaration to the specified bank, which must be notified by the Central Government.

Q.

My Self-Assessment / Advance Tax in my Annual Tax Credit Statement (26AS) do not reflect the amounts deposited by me. What do I need to do now?

Ifyourself-assessmentoradvancetaxisnotreflectedinForm26AS, identifythereasonforthemismatchand:
  • Ask the deductor to file a revised TDS return.
  • File a revised return if no intimation is received.
  • Ensure correct challan details are included in the ITR.
  • File a rectification request.

Q.

What can I do if there is a tax-credit mismatch in one of my filed Income Tax Return?

Foratax-creditmismatchinForm26AS, takethesesteps:
  • Contact the deductor to file a revised TDS return with corrections.
  • File a revised return if no intimation is received.
  • File a rectification request.
  • Ensure correct challan details in the ITR.
  • Claim tax credit only for the amount reflected in Form 26AS.

Q.

Is the residential status of a person relevant for determining the taxability on the income in his hands?

Yes, residentialstatus (residentandordinarilyresident, residentbutnotordinarilyresident, ornon-resident) determinestaxabilityundertheIncomeTaxAct. ForHinduUndividedFamilies (HUFs):
  • An HUF is resident in India if its management or control is fully or partially in India.
  • An HUF is resident and ordinarily resident if the Karta is resident in India for 2 out of 10 previous years and stays in India for 730 days or more in the 7 years preceding the current year.
  • If the Karta does not meet these conditions, the HUF is resident but not ordinarily resident.
  • An HUF with control and management wholly outside India is non-resident.

Q.

Which incomes are taxable in India?

UndertheIncomeTaxAct, incomesarecategorizedintofiveheads:
  • Income from Salary: Income received from an employer.
  • Income from House Property: Rental income from letting out property.
  • Income from Capital Gains: Revenue from the sale of assets like stocks, bonds, or property.
  • Income from Business/Profession: Earnings from business, profession, or freelancing.
  • Income from Other Sources: Income not covered above, such as lottery winnings or dividends.

Q.

I am a non-resident. The Taxpayer Identification Number (TIN) is not allotted in my jurisdiction of residence. How do I report the same in the column on ‘residential status’?

IfnoTaxpayerIdentificationNumber (TIN) isallottedinyourjurisdiction, reportyourpassportnumberintheresidentialstatuscolumn, alongwiththecountryofissuance. Non-residentsareindividualswhodonotmeeteitheroftheseconditions:
  • Spent 182 days or more in India in a financial year.
  • Stayed in India for 60 days or more in a financial year and 365 days or more in the previous 4 years.

Q.

I am a director in a foreign company which does not have PAN. How do I report the same against the column ‘Whether you were Director in a company at any time during the previous year?’

Select ‘ForeignCompany’ fromthedrop-downmenuintheITRform. APANisnotrequiredforaforeigncompanyunlessithasbeenallottedone, inwhichcaseitmustbementioned.

Q.

I have sold land and earned capital gains. Whether I have to mention the date and sale of such land sold in the ITR forms?

Yes, youmustreportcapitalgainsfromlandsalesinITR-2, includingthedateofsale, dateofpurchase, purchaseprice, saleprice, andbrokerage. Exemptionsmaybeavailableundersections54, 54EC, and54F.

Q.

In case unlisted equity shares are acquired or transferred by way of gift, will, amalgamation, merger, demerger, or bonus issue, etc. how to report the ‘cost of acquisition’ and ‘sale consideration’ in the relevant column?

Forunlistedequitysharesacquiredortransferredviagift, will, amalgamation, merger, demerger, orbonusissue, reportzeroforboth ‘costofacquisition’ and ‘saleconsideration’ intheITR, asthecostiszeroforthebeneficiary. Quantitativedetailsarerequiredonlyforreporting, notfortaxcomputation.

Q.

I hold shares in an unlisted foreign company which have been duly reported in the Schedule FA. Whether I am required to report the same again in the column ‘Whether you have held unlisted equity shares at any time during the previous year?’

Yes, youmustreportunlistedequitysharesinaforeigncompanyinbothScheduleFAandthecolumn ‘Whetheryouhaveheldunlistedequitysharesatanytimeduringthepreviousyear’ intheITR, aspertheIncomeTaxAct.

Q.

I have sold land and building to a non-resident. Whether I need to report the PAN of buyer in the table A1/B1 in Schedule CG?

Yes, youmustprovidethebuyer’sPANintableA1/B1ofScheduleCGifTDSisdeductedundersection194IAorifthePANismentionedinthesaledocuments. Section194IArequiresa1% TDSonthetransferofimmovableproperty.

Q.

Whether it is mandatory to provide ISIN details and scrip-wise computation of Long Term Capital Gains (LTCG) arising on sale of Shares/Mutual Funds units on which STT has been paid?

Yes, undersection12AoftheIncomeTaxAct, youmustprovideISINdetailsandscrip-wisecomputationofLTCGforsalesofsharesormutualfundswhereSTTispaid. LTCGexceeding ₹1lakhistaxableat10%.

Q.

I hold foreign assets during the previous year which have been duly reported in the Schedule FA. Whether I am required to report such foreign asset again in the Schedule AL (if applicable)?

Ifyourtotalincomeexceeds ₹50lakh, youmustreportforeignassetsinScheduleAL, inadditiontoScheduleFA, ifyouarearesidenttaxpayer. ScheduleFAcoversassetsheldanytimeduringtheyear, whileScheduleALcoversassetsheldattheendofthepreviousyear.

Q.

What is Form 16?

Form 16 is a TDS certificate issued by an employer to an employee as proof of tax deducted at source (TDS). It details the tax deducted from the employee’s salary and confirms its submission to the government. Employers calculate the tax based on the employee’s income and investment declarations at the start of the year, deduct TDS accordingly, and reflect this in Form 16.

Q.

What is Form 16A, and how is it different from Form 16?

Form 16A is a TDS certificate for tax deducted on income other than salary, such as interest on fixed deposits, rent receipts, and insurance commissions, issued quarterly by financial institutions and banks under section 203 of the Income Tax Act. Unlike Form 16, which covers TDS on salary, Form 16A includes:
  • PAN/TAN and employer’s name
  • Employee’s name and PAN/TAN
  • TDS payment number
  • Payment details
  • Date and amount of deposit

Q.

What should I do if I am not getting Form 16 from TRACES?

Form 16 can only be downloaded by the employer (TDS deductor) from the TRACES website. As an employee, request your employer to download and share Form 16. If you are an employer unable to find Form 16 on TRACES, verify details like PAN/TAN and ensure KYC is updated. Alternatively, download Form 26AS from TRACES, which also contains TDS details.

Q.

What are the rules for issuing Form 16?

The rules for issuing Form 16 are:
  • Employers must issue Form 16 to salaried employees liable to pay income tax.
  • It is issued annually by June 15 of the next financial year.
  • It must include details of TDS, employee’s name, address, PAN/TAN, salary breakdown (basic salary, allowances, perquisites), and deductions under section 80C.
  • It should show the total tax deducted and deposited by the employer.
  • It can be issued physically or electronically, with a digital signature for electronic issuance.

Q.

What is the income limit for Form 16?

Employers must issue Form 16 to employees with an annual income exceeding ₹2.5 lakh if TDS is deducted. However, issuance is not strictly tied to an income limit but to TDS deduction. Employers may choose to issue Form 16 even if no TDS is deducted.

Q.

Is Form 16 only for salaried employees?

Form 16 is primarily for salaried employees, reflecting TDS deducted on salary. For TDS on other incomes (e.g., bank interest, rent, professional fees), Form 16A is issued by banks or financial institutions.

Q.

Is Form 16 mandatory for ITR?

Form 16 is not mandatory for filing an ITR. You can file an ITR without Form 16 by:
  • Computing annual income from salary slips, adjusting for allowances.
  • Verifying TDS details from Form 26AS.
  • Computing income from house property.
  • Calculating capital gains (exempt up to ₹1,00,000).
  • Determining income from bank interest, etc.
  • Adjusting for deductions and computing total taxable income.
  • Paying any remaining tax after deducting tax paid as per Form 26AS.
  • Filing the ITR after completing these steps.

Q.

Is Form 16 proof of employment?

No, Form 16 is not proof of employment. It confirms TDS deduction and submission to the government, detailing salary and tax deducted. Proof of employment requires details like date of employment, job title, salary details, and employment terms.

Q.

Is Form 16 valid without signature?

No, Form 16 is not valid without the employer’s signature. Physical copies require a manual signature, while electronic copies need a digital signature to ensure authenticity and prevent tampering.

Q.

Can Form 16 be issued without TDS?

Issuing Form 16 is not mandatory if no TDS is deducted, but employers may issue it as a good practice. Benefits of issuing Form 16 include:
  • Acts as proof of income
  • Helps in filing ITR
  • Provides details of salary and deductions
  • Crucial for loan and credit card applications
  • Consolidates tax-saving investments
  • Assists in visa processing
  • Helps claim refunds for overpaid taxes

Q.

Can I fill Form 16 myself?

Employees cannot fill out Form 16; it must be issued by the employer or their authorized signatory, who computes salary and deduction details. Employers must ensure accuracy and sign the form. Employees can request Form 16 from their employer.

Q.

What if the figures in the Form 16 are wrongly mentioned?

If Form 16 contains errors, take these steps:
  • Inform your employer about discrepancies, providing evidence like salary slips or proof of deductions.
  • Request the employer to correct the errors.
  • Obtain the revised Form 16 with accurate details.
  • Keep copies of both old and revised Form 16 for ITR filing.

Q.

While submitting request to download Form 16 / 16A, deductor has entered details correctly in Part 1 and Part 2 in validation details screen, yet it shows error as ‘Invalid Details’ in Part 1 and Part 2. What should deductor do?

If an ‘Invalid Details’ error appears despite correct entries in Part 1 and Part 2 of Form 16/16A on TRACES, the deductor should:
  • Verify that details in the TDS statement match those on the validation screen, including token number and TDS amount.
  • Ensure any correction statements align with the provided details.

Q.

Is Form 16 to be issued to all employees?

Employers must issue Form 16 to all employees if TDS is deducted. If no TDS is deducted, issuance is optional. A penalty of ₹100 per day applies for late issuance. Employees with multiple employers receive Form 16 from each. The due date for issuance is June 15 of the next financial year.

Q.

What is the due date to issue Form 16?

The due date to issue Form 16 is June 15 of the next financial year (e.g., June 15, 2023, for FY 2022-23). Form 16 details TDS deducted from an employee’s salary, essential for ITR filing. Employees can request a copy if not issued by the due date.

Q.

Can deductor download Form 16 without being registered on TRACES?

No, a TDS deductor must be registered on TRACES with a valid TAN to download Form 16. Without registration, Form 16 can be issued in physical form, signed by the deductor.

Q.

What should I do in case company name is updated incorrectly in Form 16 (Part A) / Form 16A?

If the company name is incorrect in Form 16 (Part A) or Form 16A, inform your employer to file a TDS correction statement with the Income Tax Department. After correction, the employer can download the updated Form 16/16A. Manual corrections are not permitted.

Q.

How can I edit or add detail of authorized person in Form 16 / Form 16A?

To edit or add authorized person details in Form 16/16A:
  • Log in to the TRACES portal.
  • Go to the Profile Tab.
  • Enter details like last return filed, acknowledgment/token of the last original return, challan details, and three unique PAN and amount combinations for the challan.
  • Edit the representative’s PAN in the Profile Tab.
  • Provide PAN and date of birth; name and father’s name auto-populate.
  • Edits are allowed only for the current financial year.

Q.

How are the particulars of those employees who are employed with more than one employer in a financial year to be shown in Form 16?

Employees with multiple employers in a financial year receive Form 16 (Part A) from each employer for their respective employment periods. To file ITR with multiple Form 16s:
  • Select the appropriate ITR form.
  • Provide personal details like name and address.
  • Add income earned during the financial year.
  • Include TDS details and deductions like HRA or travel allowance.
  • Calculate any tax payable.
  • Use Form 12B to inform new employers about previous earnings and investments.

Q.

Even if no taxes have been deducted from salary, is there any need for my employer to issue Form 16 to me?

If no TDS is deducted, employers are not required to issue Form 16, but employees may still need to file an ITR if they have other taxable income (e.g., interest, dividends). Salary income details must be included in the ITR, even without TDS.

Q.

There are various deductions that are not reflected in the Form 16 issued by my employer. Can I claim them in my return?

If deductions (e.g., tax-saving investments) are not reflected in Form 16 due to missed submission deadlines, you can still claim them in your ITR with supporting documents. Deductions include:
  • House Rent Allowance Exemption under section 10
  • Deductions under section 80C
  • Medical expenses
  • Interest on home loans
  • Life insurance premiums

Q.

If I receive my pension through a bank, who will issue Form 16 or pension statement to me – the bank or my former employer?

The bank disbursing your pension, authorized by the Central Pension Accounting Office (CPAO), issues Form 16 and the pension statement, detailing TDS and pension amounts paid during the financial year, which can be used for ITR deductions.

Q.

Do I have to attach Form 16 while filing income tax return?

Form 16 is not mandatory for ITR filing, though it’s essential for salaried employees with income above ₹2.5 lakh. If unavailable (e.g., due to business closure), use salary slips to file the ITR, ensuring TDS details are verified.

Q.

What if I cannot get Form 16 from my previous employer at the time of joining?

If you can’t obtain Form 16 from a previous employer when joining a new job, provide:
  • Salary slips for the period worked, detailing income and deductions.
  • Form 12B, declaring previous earnings, investments, and other income sources to the new employer.

Q.

Registered user on TRACES has updated the communication and address details on TRACES. However, while downloading Form 16A, it shows a different address. How can deductor edit address details in Form 16A?

If Form 16A shows an incorrect address despite updated TRACES profile details, submit a TAN change request (Form 49B) at www.protean-tinpan.com to update the TAN database, ensuring the correct address appears in Form 16A.

Q.

What is the amount of TDS if property belongs to NRI?

TDS on a property owned by an NRI is deducted in two scenarios: during sale or when the property is rented. The buyer must deduct TDS at 20% on the sale of the property if held for more than 2 years, or 30% if sold within 2 years.

Q.

What are the payments covered under the TDS mechanism and the rates for deduction of tax at source?

TDS is deducted on payments such as salary, rent, commission, professional fees, and interest, reducing tax evasion by collecting tax at the source. The payer deducts tax as per rates specified in the Income Tax Act, which vary by payment type. For detailed TDS rates, refer to the Income Tax Department’s guidelines.

Q.

Is there any minimum amount up to which tax is not deducted?

Yes, the Income Tax Department specifies threshold limits below which TDS is not deducted. These limits vary by payment type as outlined in multiple sections of the Income Tax Act. For specific threshold limits, consult the Income Tax Department’s resources.

Q.

Can the payee request the payer not to deduct tax at source and to pay the amount without deduction of tax at source?

A payee can request the payer not to deduct TDS if their total annual income, including the payment, is below the basic exemption limit. The payee must submit:
  • Form 15G: For individuals or entities (except firms and companies).
  • Form 15H: For senior citizens.

Q.

How can I know the quantum of tax deducted from my income by the payer?

To determine the TDS deducted by the payer:
  • Request a TDS certificate from the employer or deductor, detailing the amount deducted during the year.
  • Log in to the Income Tax Department’s portal to view or download Form 26AS, which lists all TDS transactions for the year.
  • Use the ‘View your tax credit’ facility on the Income Tax Department’s website.

Q.

At what rate the payer will deduct tax if a taxpayer doesn’t furnish return of income?

Under section 206AB, higher TDS rates apply if:
  • The deductee has not filed an ITR for the assessment years or the year immediately preceding the year of tax deduction.
  • The due date for filing ITR under section 139(1) has expired.
  • The aggregate tax collected or deducted is ₹50,000 or more in the previous years.
Higher rates apply to all income subject to TDS under Chapter XVII-B, except for non-residents without a permanent establishment in India or those exempt from filing ITR as notified by the government.

Q.

What to do if the TDS credit is not reflected in Form 26AS?

If TDS is not reflected in Form 26AS due to issues like the payer not filing the TDS statement or providing incorrect PAN details, the payee should:
  • Contact the payer to identify the error and request a revised TDS return.
  • Claim TDS credit manually during ITR filing with proof of deduction (e.g., salary slips).
  • File a grievance with the concerned authority if the issue persists.

Q.

I do not have PAN. Can I furnish Form 15G/15H for non-deduction of TDS from interest?

Without a PAN, you cannot submit Form 15G/15H for non-deduction of TDS on interest. The bank will deduct TDS at the higher of:
  • The rate specified in the Income Tax Act.
  • The rate in force per the Finance Act.
  • 20%.
For example, if interest income exceeds ₹10,000 annually for a resident individual under 60, TDS is deducted at 20% without a PAN. Apply for a PAN online or at a PAN-issuing authority to submit Form 15G/15H.

Q.

Would I face any adverse consequences if instead of depositing TDS in the government’s account I use it for my personal needs?

Using TDS for personal needs instead of depositing it with the government is illegal and can lead to:
  • Interest on delayed deposits.
  • Penalties for non-compliance.
  • Rigorous imprisonment for up to seven years.
Compliance with Income Tax provisions is essential to avoid these consequences.

Q.

I have not received TDS certificate from the deductor. Can I claim TDS in my return of income?

Yes, you can claim TDS in your ITR without a TDS certificate by verifying the deducted amount in Form 26AS. Claim only the TDS reflected in Form 26AS to avoid rejection by tax authorities due to mismatches.

Q.

If I buy any land/building then is there any requirement to deduct tax from the sale proceeds to be paid by me to the seller?

Under section 194-IA of the Finance Act 2013, buyers must deduct 1% TDS on the sale consideration of immovable property (excluding rural agricultural land) paid to a resident seller, if the consideration is ₹50 lakh or more. For non-resident sellers, TDS is deducted under section 195, not section 194-IA. Consult a tax advisor for detailed guidance.

Q.

How much TDS will be deducted in case of payment of Remuneration to company’s director?

TDS on remuneration to a company director depends on the payment type:
  • Salary: TDS under section 192 as per income tax slab rates.
  • Fees or professional services (e.g., for non-executive or independent directors): TDS under section 194J at 10%, treated as income from business or profession.

Q.

Whether TDS required to be deducted on payment made to Government?

No TDS is required on payments to the Government, Reserve Bank of India, or corporations established under a central act, as they are exempt from TDS, regardless of the payment type (e.g., interest, commission, rent).

Q.

Whether TCS can be collected on amount inclusive of GST?

As per CBDT circular no. 17 dated 29.9.2020, TCS is collected on the sales consideration, including GST, as it is an interim levy on potential income from goods sold, not affecting GST valuation. This aligns with CBIC’s December 2018 clarification that TCS is not part of the taxable value for GST.

Q.

What is considered as salary income?

Salary income is the compensation an employer provides to an employee for services rendered under an employment contract, taxed under section 15 if an employer-employee relationship exists. It includes:
  • Wages
  • Annuity/pension
  • Gratuity
  • Fees/Commission
  • Salary in Advance
  • Leave encashment
  • Transferred balance in a provident fund to the extent it is taxable
  • Central government’s contribution to an employee’s pension scheme account

Q.

What are allowances?

Allowances are periodic payments provided by an employer over and above the salary to meet specific employee needs, such as tiffin, servant, transport, or uniform allowances. They are included in total salary unless specifically exempted and can be fully taxable, partially taxable, or fully exempt. Common allowances include:
  • House rent allowance
  • Leave travel allowance
  • City compensatory allowance
  • Children education allowance
  • Tribal area allowance
  • Border area allowance

Q.

My employer reimburses to me all my expenses on grocery and children’s education. Would these be considered as my income?

Yes, reimbursements for expenses like groceries and children’s education are considered perquisites under the Income Tax Act, taxable in the employee’s hands. Perquisites are additional benefits provided beyond salary and allowances, in the form of goods, services, or reimbursements, unlike allowances which are monetary payments for specific expenses.

Q.

During the year I had worked with three different employers and none of them deducted any tax from salary paid to me. If all these amounts are clubbed together, my income will exceed the basic exemption limit. Do I have to pay taxes on my own?

Yes, if your total salary from three employers exceeds the basic exemption limit, you must file an ITR, perform a self-assessment, and pay taxes, even if no TDS was deducted by the employers, as their individual payments may not have exceeded the threshold.

Q.

Even if no taxes have been deducted from salary, is there any need for my employer to issue Form-16 to me?

If no TDS is deducted because the employee’s income is below the threshold limit, issuing Form 16 is not mandatory. However, employers may provide it as a good practice. Benefits of Form 16 include:
  • Applying for loans
  • Applying for credit cards
  • Filing ITR
  • Acting as proof of income
  • Providing details on salary, exemptions, and deductions
  • Checking for errors and making corrections
  • Helping claim refunds
  • Detailing tax-saving investments

Q.

What is the taxability of ex-gratia received from employer?

Ex-gratia payments, given as appreciation for good work, compensation for injury, hazard, death on duty, or retrenchment, are not considered salary and are exempt from tax.

Q.

Is transport allowance can be claimed as exemption by an employee?

Transport allowance exemption of up to ₹1,600 per month was discontinued from A.Y. 2019-20. However, employees who are blind, deaf, dumb, or orthopedically handicapped can claim an exemption of up to ₹3,200 per month.

Q.

Is pension income taxed as salary income?

Pension income taxation depends on its type. Uncommuted (periodic) pension is taxed as salary income. Commuted (lump-sum) pension is partially exempt for non-government employees, depending on gratuity receipt, and fully exempt for government employees. Pension is typically paid from an annuity fund created by employer and employee contributions during service.

Q.

Is Family pension taxed as salary income?

Family pension, paid to the spouse or children of a deceased employee, is taxed as income from other sources, not salary. It is exempt up to ₹15,000 or 1/3rd of the pension received, whichever is less, with the remaining amount taxable at the recipient’s slab rates. Family pension for armed forces members is fully exempt.

Q.

Are retirement benefits like PF and Gratuity taxable?

For government employees, PF and gratuity are fully exempt. For non-government employees, gratuity is exempt up to ₹20 lakh, and PF is exempt if received from a recognized PF after 5 years of continuous service. If service is less than 5 years, PF is taxable as salary income. Gratuity exemption is the least of: 15 days’ salary per year of service, actual amount received, or ₹20 lakh (including basic pay and dearness allowance).

Q.

Are arrears of salary taxable?

Salary arrears, unpaid salary from a previous period, are taxable as salary income in the year of receipt. Employees can claim relief under section 89 to mitigate higher tax liability due to slab rate changes or higher tax brackets, reported separately in salary slips and Form 16 (Part B).

Q.

My income from let out house property is negative. Can I ask my employer to consider this loss against my salary income while computing the TDS on my salary?

Yes, you can request your employer to offset losses from let-out house property against your salary income for TDS computation, but the loss is limited to ₹2 lakh. Excess losses cannot be claimed for TDS purposes.

Q.

Is leave encashment taxable as salary?

Leave encashment, converting unused leaves to money upon resignation or retirement, is taxable as salary income. Employees can claim tax relief under section 89 by submitting Form 10E online to reduce tax liability. In case of an employee’s death, the legal heir receives the encashment amount.

Q.

Is standard deduction applicable to all the salaried person whether he is an employee of Central or State Government?

Yes, the standard deduction of ₹50,000 (increased from ₹40,000 in 2019) applies to all salaried employees, including those in private, state, and central government sectors, deductible from gross salary without proof of expenditure.

Q.

Is standard deduction applicable to family pensioners?

Family pension, taxed as income from other sources, allows a standard deduction of ₹15,000 or 1/3rd of the pension received, whichever is less, under section 57(iia). This must be reported in the ITR’s “Income from Other Sources” section. Family pension for armed forces members is fully exempt.

Q.

What is pre-construction period?

The pre-construction period refers to the time span between the date of taking a loan for the construction or acquisition of a property and the earlier of: (1) the date of loan repayment, or (2) March 31 of the financial year preceding the year in which the construction or acquisition is completed. Interest on the loan during this period is deductible in five equal installments starting from the year the construction or acquisition is completed, under Section 24(b) of the Income Tax Act.

Q.

My spouse and I jointly own a house in which both of us have invested equally out of independent sources. Can the rental income received be split up between us and taxed in the individual hands?

Yes, rental income can be split between you and your spouse and taxed individually based on your ownership share. For example, if you co-own a house in a 50:50 ratio and the total rental income is ₹20,000 per month, each can report ₹10,000 in their Income Tax Return, as per the Income Tax Act.

Q.

What is self-occupied property?

A self-occupied property is one owned by the taxpayer and used as their residence for the entire year, without being rented out. It may also qualify if the owner lives elsewhere due to work, business, or profession, provided the property remains unoccupied or is used by family members and is not rented or used for other benefits. Tax deductions under Section 24 may apply if these conditions are met.

Q.

How to compute income from self occupied property?

For a self-occupied property, the gross annual value (GAV) is considered nil, meaning no income is taxed from it. From Financial Year 2019-20, taxpayers can declare up to two properties as self-occupied, with any additional properties deemed let out and taxed on notional rent, as per Section 23 of the Income Tax Act.

Q.

Can a property not used for residence by the taxpayer be treated as self occupied property?

A property can be treated as self-occupied even if not used as the taxpayer’s residence, provided it is not rented out and the owner resides elsewhere due to work or business. For example, if the property is unoccupied or used by family members, it qualifies as self-occupied for tax purposes under the Income Tax Act.

Q.

What income is charged to tax under the head ‘Income from house property’?

Income from letting out a property, such as residential houses, commercial buildings, or shops, is taxed under “Income from House Property.” The income is based on the property’s annual value, which is the higher of actual rent received or expected rent, as per Section 23 of the Income Tax Act.

Q.

What will be the tax implications if a person occupies more than one property for his residence? Can he treat all the properties as self occupied (SOP) and claim gross annual value (GAV) as Nil?

From Financial Year 2019-20, a person can treat up to two properties as self-occupied, with their gross annual value (GAV) considered nil, exempting them from tax on notional rent. Additional properties are deemed let out and taxed on notional rent, as per Section 23 of the Income Tax Act.

Q.

I own two houses. One is a farmhouse that I visit on weekends and the other is in the city that I use on weekdays. Is it correct to treat both these residences as self occupied?

From Assessment Year 2020-21, you can treat both your farmhouse and city house as self-occupied properties, provided they are not rented out and are used for residential purposes, as per the Income Tax Act.

Q.

In case of a self-occupied property, how much of interest on housing loan can be claimed as deduction?

For a self-occupied property, you can claim a deduction of up to ₹2 lakh on home loan interest if the owner or family resides there or if the property is vacant. If rented, the entire interest is deductible. The deduction is limited to ₹30,000 if: the loan was taken on/after April 1, 1999, and construction/purchase isn’t completed within 5 years; the loan is for renovation; or the loan was taken before April 1, 1999.

Q.

How to compute income from a property which is self-occupied for part of the year and let out for part of the year?

Treat the property as let out for the entire year for tax purposes. Calculate income based on the actual rent received during the let-out period, excluding notional rent for the self-occupied period, as per the Income Tax Act.

Q.

What is the tax treatment of unrealised rent which is subsequently realised?

Unrealised rent recovered through legal action is taxed as “Income from House Property” in the year of receipt, regardless of whether the owner still owns the property, under Section 25AA of the Income Tax Act.

Q.

Whether rental income could be charged to tax in the hands of a person who is not a registered owner of the property?

Rental income is taxed under “Income from House Property” only for the registered owner. Non-owners receiving rent (e.g., via subletting) are taxed under “Income from Other Sources.” Exceptions include deemed owners, such as those transferring property to a spouse/minor child or long-term lessees.

Q.

I have 5 separate let out properties. Should I calculate the house property income separately for each individual property or by clubbing all the rental receipts in one calculation?

You must calculate the income from each let-out property separately, as the Income Tax Act requires individual computation to account for specific deductions and provisions.

Q.

How to compute gross annual value of a property which is let-out throughout the year?

The gross annual value (GAV) is the higher of: (1) actual rent received, or (2) expected rent (higher of municipal value or fair rent, capped by standard rent if under Rent Control Act), as per Section 23(1) of the Income Tax Act.

Q.

Under which head is the rental income from a shop charged to tax?

Rental income from a shop is taxed under “Income from House Property” if the taxpayer is the registered owner. If sublet, it is taxed under “Income from Other Sources,” as per the Income Tax Act.

Q.

What is the tax treatment of composite rent when the composite rent pertains to letting of building along with other assets?

If composite rent (building + services) is inseparable, it is taxed under “Income from Business/Profession” or “Income from Other Sources.” If separable, building rent is taxed under “Income from House Property,” and service rent under other heads, as per the Income Tax Act.

Q.

How to compute reasonable expected rent while computing gross annual value of a property which is let-out throughout the year?

Reasonable expected rent is the higher of municipal value or fair rent, capped by standard rent if under Rent Control Act. Municipal value is assessed by authorities; fair rent is based on similar properties in the locality.

Q.

How to compute actual rent while computing gross annual value of a property which is let-out throughout the year?

Actual rent is the rent received during the year. Deduct unrealised rent if: (1) tenancy is bona fide, (2) tenant has vacated or eviction steps are taken, (3) tenant has no other property of the taxpayer, and (4) all recovery measures were taken. Do not deduct expected rent for vacant periods.

Q.

Can interest paid on loans taken from friends and relatives be claimed as deduction while calculating house property income?

Yes, interest on loans from friends or relatives can be claimed as a deduction under Section 24(b) if used for repair, construction, purchase, renewal, or reconstruction of the property, not for personal purposes, as per the Income Tax Act.

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Q.

What are the benefits available to a senior citizen and a very senior citizen in respect of tax rates?

Senior citizens aged 60 years and above but below 80 years and super senior citizens aged 80 years and above are provided with certain tax benefits and concessions. Some elementary waivers are provided to both senior and super senior citizens. The basic tax exemption limit for senior citizens is up to Rs 3 lakhs under the old tax regime, while under the new tax regime, this is Rs. 2.5 lakh. Super citizens get a higher advantage; this exemption limit is up to Rs 5 lakh under the old tax regime. Under the new regime, for super senior citizens, this basic exemption limit is up to Rs. 2.5 lakhs.

Q.

At what age a person will qualify as a senior citizen and very senior citizen under the Income-tax Law?

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.

Q.

Is there any special benefit available under the Income-tax law to very high aged person, i.e., very 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 can 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.

Q.

Is a very senior citizen granted exemption from e-filing of income tax returns?

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.

Q.

Is a Resident senior citizen granted exemption from payment of advance tax?

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.

Q.

What are the benefits available in respect of interest on deposits in case of senior citizens?

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.

Q.

What are the benefits available in respect of expenditure incurred on account of medical treatment of specified diseases on treatment of a senior citizen?

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.

Q.

Is a retired senior citizen granted exemption from payment of advance tax?

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.

Q.

How much is the income tax limit for senior citizens?

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

Q.

What is tax audit?

Literally, the word Audit means to check, review, and inspect. An audit is often associated with the inspection of a company’s books of accounts. Different laws require different types of audits; for example, company law requires you to conduct a company audit, Income tax law prescribes a tax audit, and cost accounting prescribes a cost audit.

Section 44AB of the Income Tax Act provides for the classes of taxpayers who are required to get their books audited by a Chartered Accountant.

The audit of the accounts of taxpayers conducted by a CA, as per the requirement of section 44AB, is known as a tax audit.

Q.

What is the objective of tax audit?

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.

Q.

What is the due date by which a taxpayer should get his accounts audited?

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.

Q.

What are Form Nos. 3CA/3CB and 3CD?

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.

Q.

If a person is required by or under any other law to get his accounts audited, then is it compulsory for him to once again get his accounts audited to comply with the requirement of section 44AB?

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.

Q.

What is the penalty for not getting the accounts audited as required by section 44AB?

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.

Q.

As per section 44AB, who is compulsorily required to get his accounts audited, i.e., who is covered by tax audit?

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.

Q.

Who is in charge of conducting a tax audit?

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.

Q.

Who is exempt from undergoing a tax audit?

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.

Q.

How many tax audit reports can a Chartered Accountant sign?

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.

Q.

What is TAN?

The Central Government’s Income Tax Department issues a 10‑digit alphanumeric number, TAN (Tax Deduction and Collection Account Number), to anyone responsible for TDS/TCS. As per Section 203A, it must be quoted in all TDS returns. TAN format: 4 letters + 5 digits + 1 letter.

Q.

Who must apply for TAN?

Anyone deducting tax at source (TDS) or collecting tax at source (TCS) must apply. Exception: those covered under Section 194IA. TDS applies to payments like rent, commission, interest; TCS on specified goods sold.

Q.

Why TAN is required?

TAN is mandatory for:

  • Filing TDS/TCS statements
  • Generating TDS/TCS challans
  • Issuing TDS/TCS certificates
  • Maintaining proper documentation

Q.

What is duplicate TAN?

A “duplicate TAN” is unlawfully obtained by someone who already holds a TAN. However, distinct branches or divisions within the same entity can hold separate TANs. A duplicate may be reissued if the original is lost or stolen and valid proof is provided.

Q.

If a duplicate TAN has been allotted, which TAN should be used?

Use the original TAN. Surrender the duplicate using the “Form for changes or correction in TAN” available via NSDL-TIN or TIN-FCs.

Q.

What should be done if a duplicate TAN is allotted by oversight?

Submit the correction form to cancel the duplicate TAN. Holding more than one TAN is illegal and may lead to penalties.

Q.

How to apply for TAN?

Steps to apply:

  1. Visit the NSDL website
  2. Select “TAN” under Services & click “Apply Online”
  3. Choose “New TAN” and the relevant deductor category
  4. Fill & submit Form 49B
  5. Receive acknowledgment (14-digit number)
  6. Save/print for your records

Q.

Who will allot TAN?

The Income Tax Department, via NSDL and TAN facilitation centers, verifies your application and issues your TAN, which must then be used for all TDS/TCS activities.

Q.

Can TAN be applied for online?

Yes. Submit Form 49B online, print the acknowledgment, send it to NSDL’s Pune office, pay the fee, and NSDL will verify and issue your TAN by post/email.

Q.

Should Government deductors apply for TAN?

Yes. Even government entities responsible for TDS/TCS must obtain and use a TAN for compliance.

Q.

If there are multiple DDOs, must each get a TAN?

Yes. Each Drawing and Disbursing Officer (DDO) must file individually for a TAN, providing distinct branch/division details.

Q.

Can separate branches of a company or bank have individual TANs?

Yes. Each branch or division may apply for and hold its own TAN with its own details and deductor name.

Q.

Can the TAN application be made on plain paper?

No. You must use Form 49B, downloadable from NSDL or Income Tax Department or available at TIN facilitation centers.

Q.

Can Form 49B be filled on a typewriter?

Yes. It must be typed in capital letters on a typewriter with a clear impression.

Q.

What documents are required with the TAN application?

No documents are needed. For online applications, print, sign and post the acknowledgment to:
NSDL e‑Governance Infrastructure Ltd,
5th Floor, Mantri Sterling,
Model Colony, Pune‑411016
Super‑subscribe: APPLICATION FOR TAN – [Ack No.]

Q.

What if Form 49B is incomplete?

TIN facilitation centers will reject incorrect or incomplete forms. Ensure full accuracy when filling out.

Q.

What is the fee for TAN application?

Fee: ₹65 (₹55 + 18% GST). Non‑refundable. Payable by cheque/DD to NSDL‑TIN.

Q.

How will the new TAN be communicated?

TAN will be sent via:

  • Post (if address provided)
  • Email (if provided)
  • Displayed online with acknowledgement for e-applications

Q.

How to find your TAN if forgotten or not received?

You can:

  • Visit a TIN Facilitation Centre
  • Use “Know Your TAN” on the Income Tax portal
  • Check via PAN or TAN lookup online

Q.

Is a separate TAN needed for different types of payments?

No. One TAN covers all deductions (salary, interest, commissions). Multiple TANs for the same entity are not permitted.

Q.

How to check the status of your TAN application?

Visit the TIN‑NSDL portal, enter your 14‑digit acknowledgement number, and click “Submit” to view status.

Q.

Can an e-TDS return be filed without a TAN?

No. Quoting TAN in e‑TDS/TCS returns, challans, and certificates is mandatory. Returns without TAN will be rejected.

Q.

How to update address or details linked to TAN?

Use the “Form for changes or correction in TAN” and submit with required fee at NSDL-TIN or TIN‑FC.

Q.

Which incomes are deemed to be received in India?

• Employer contribution to recognised PF exceeding 12% of salary or interest credited beyond 9.5% p.a.
• Contribution by Central Govt or employer under pension scheme (Sec 80CCD).
• Transfer of employer contribution and interest from unrecognised PF to recognised PF.

Q.

What incomes are deemed to have accrued or arisen in India?

As per Sec 9 ITA 1961, income is deemed to accrue/arise in India if:
• It is earned in India via business connection, property, assets or other income sources.
• It is received in India, by the taxpayer or on their behalf.
• It accrues or arises outside India but is attributable to business activity in India.

Q.

What is the objective of FEMA?

FEMA (1999) aims to:
• Facilitate external trade and payments.
• Promote order in the foreign exchange market.
• Simplify foreign-exchange law.
• Regulate non‑resident investments.
• Manage forex resources and address payment imbalances.
Administered by RBI and ED; applies across India and abroad to Indian citizens/agencies.

Q.

When is a business connection said to be established?

A non-resident has a business connection in India if:
• Its agent in India can conclude contracts (other than goods purchases).
• Agent holds stock of goods/merchandise and delivers on behalf.
• Habitually secures orders in India for itself or related non‑resident.
Only income attributable to that business connection is taxable in India.

Q.

What are other provisions under Income‑tax Act applicable to non‑residents?

• Tax on income deemed to accrue/arise in India.
• RNOR taxed on Indian and controlled foreign business income.
• Tax on received or deemed income in India (salary, dividend, interest).
• DTAA relief availability.

Q.

What is the extent and application of FEMA 1999?

FEMA governs all forex transactions, applies to residents and Indians abroad, and empowers authorities to act on breaches even outside India’s boundaries.

Q.

What are capital account transactions?

These include the import/export of goods, services, capital, and transfers (like aid/remittances). In BOP terms, capital account records asset and liability changes due to foreign transactions.

Q.

What are current account transactions?

In BOP, current account refers to trade and income transfer flows. In banking, a Current Account (for businesses) allows unlimited non‑interest transactions.

Q.

Can foreign nationals resident in India open resident accounts?

Yes. Foreign nationals can open NRO accounts (for tourists) or savings accounts (resident foreigners), subject to repatriation rules between NRE and NRO accounts.

Q.

Can a resident open a foreign currency denominated account in India?

Yes. Residents can open RFC(D) accounts under FEMA using foreign exchange received outside India, gifts, unspent forex etc. These operate like savings or current accounts without interest accrual.

Q.

Is residential status relevant for taxability?

Yes. Your residential status determines which global incomes are taxable in India, per Income‑tax Law.

Q.

What are the residential status categories for individuals?

1. Resident & Ordinarily Resident (ROR)
2. Resident but Not Ordinarily Resident (RNOR)
3. Non‑Resident (NR)

Q.

Will Indian citizenship alone make someone tax-resident?

From AY 2021‑22, Indian citizens with income >₹15 lakh (excluding foreign sources) and not taxable elsewhere, are deemed Indian residents due to Sec 6(1A).

Q.

Residential status categories for an HUF?

An HUF may be ROR, RNOR, or NR, depending annually on control, management and karta’s residential history.

Q.

How is residential status determined for individuals?

R if:
• ≥182 days in India, or
• ≥60 days + ≥365 days over past 4 years.
Exceptions apply to Indian citizens abroad or on ships.

Q.

How is residential status determined for an HUF?

Resident if control & management are in India.
ROR if karta has ≥2 years in India during last 10 and ≥730 days in last 7.

Q.

How is residential status determined for a company?

Resident if Indian-incorporated or key decisions made in India. For foreign cos turnover ≤₹50 cr, POEM test is exempt.

Q.

Residential status categories for other persons?

Other entities (firm, company) are classified as Resident or Non‑Resident each year, based on law-defined criteria.

Q.

Which incomes are charged to tax in India?

Direct taxes include:
• Income from salary
• House property
• Business/profession
• Capital gains
• Other sources
Corporate tax applies to company profits.

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