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Ramesh Sharma
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  1. CA Vishnu Ram Enlightened

    Is Aadhaar Number Mandatory Under the Income Tax Act? Yes, quoting the Aadhaar number is mandatory in various cases under the Income Tax Act, 1961. The government has linked Aadhaar with PAN to prevent tax evasion and duplicate PANs. 📌 Key Provisions Related to Aadhaar Under Income Tax Act 1️⃣ MandaRead more

    Is Aadhaar Number Mandatory Under the Income Tax Act?

    Yes, quoting the Aadhaar number is mandatory in various cases under the Income Tax Act, 1961. The government has linked Aadhaar with PAN to prevent tax evasion and duplicate PANs.

    📌 Key Provisions Related to Aadhaar Under Income Tax Act

    1️⃣ Mandatory Quoting of Aadhaar (Section 139AA)

    • As per Section 139AA, quoting Aadhaar number or Aadhaar Enrolment ID is mandatory while:
      • Filing Income Tax Returns (ITR)
      • Applying for a new PAN

    2️⃣ Linking PAN with Aadhaar

    • As per CBDT notification, PAN will become inoperative if not linked with Aadhaar within the prescribed deadline.
    • To check or link, visit the Income Tax e-filing portal.

    3️⃣ TDS and TCS Applicability (Section 206AA & 206CC)

    • If a taxpayer does not provide PAN or Aadhaar, TDS/TCS is deducted at a higher rate of 20% under Section 206AA & 206CC.

    4️⃣ Aadhaar for Verification & e-KYC

    • Aadhaar is required for e-verification of ITR and e-KYC of financial transactions like opening bank accounts, investing in securities, etc.

    5️⃣ Filing ITR Without Aadhaar

    • If an individual does not have an Aadhaar number, they must quote the Aadhaar Enrolment ID while filing their return.

    6️⃣ Penalty for Non-Linking

    • If PAN becomes inoperative due to non-linking with Aadhaar, transactions requiring PAN (e.g., bank accounts, Demat, property sales) may get restricted.

    📢 Final Thoughts

    Aadhaar is mandatory for filing ITR, linking with PAN, and certain tax-related transactions. Ensure your PAN is linked to Aadhaar to avoid penalties and non-compliance issues. 🚀

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Ramesh Sharma
Enlightened
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  1. CA Vishnu Ram Enlightened

    Transactions Where Quoting PAN is Mandatory As per Rule 114B of the Income Tax Rules, 1962, quoting Permanent Account Number (PAN) is mandatory for certain financial transactions to curb tax evasion and ensure financial transparency. 📌 List of Transactions Requiring PAN 1️⃣ Banking & Financial TRead more

    Transactions Where Quoting PAN is Mandatory

    As per Rule 114B of the Income Tax Rules, 1962, quoting Permanent Account Number (PAN) is mandatory for certain financial transactions to curb tax evasion and ensure financial transparency.

    📌 List of Transactions Requiring PAN

    1️⃣ Banking & Financial Transactions

    • Cash deposits exceeding ₹50,000 in a single day in a bank/post office.
    • Fixed deposit of ₹50,000 or more in a bank/post office/NBFC.
    • Opening a bank account, except for Jan Dhan accounts.
    • Applying for a credit/debit card.

    2️⃣ Real Estate Transactions

    • Sale or purchase of immovable property worth ₹10 lakh or more.
    • Renting property where monthly rent is ₹50,000 or more (Section 194-IB).

    3️⃣ Vehicle Purchases

    • Buying/selling a vehicle (excluding two-wheelers) requires PAN.

    4️⃣ Stock Market & Investments

    • Opening a Demat account.
    • Buying/selling securities or mutual funds exceeding ₹50,000 per transaction.
    • Buying/selling bonds or debentures exceeding ₹50,000.

    5️⃣ Foreign Exchange Transactions

    • Foreign travel or forex purchase exceeding ₹50,000.

    6️⃣ Cash & Business Transactions

    • Cash payments of ₹50,000 or more to a hotel or restaurant.
    • Purchases of jewelry, bullion, or other goods/services exceeding ₹2 lakh.
    • Cash payment of ₹50,000 or more for insurance premiums.
    • Payment to mutual funds, RBI bonds, or company shares exceeding ₹50,000.

    7️⃣ Loans & Borrowings

    • Applying for a loan of ₹50,000 or more from a bank, NBFC, or financial institution.

    🚀 Additional Points to Note

    ✅ If a person does not have a PAN, they must submit Form 60 instead.
    ✅ Businesses must quote PAN on invoices exceeding ₹2 lakh.

    Quoting PAN is crucial for tax compliance and avoiding higher TDS deductions under Section 206AA. Always ensure you provide your PAN in high-value transactions to avoid legal and financial issues. 🚀

    Read:What are the financial transactions covered in annual information return?

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Ramesh Sharma
Enlightened
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  1. CA Vishnu Ram Enlightened

    Defective Return Under Income Tax Act (Section 139(9)) A Defective Return refers to an income tax return (ITR) that is incomplete or incorrect due to missing or improper information. Under Section 139(9) of the Income Tax Act, if a return is found defective, the taxpayer is given an opportunity to cRead more

    Defective Return Under Income Tax Act (Section 139(9))

    A Defective Return refers to an income tax return (ITR) that is incomplete or incorrect due to missing or improper information. Under Section 139(9) of the Income Tax Act, if a return is found defective, the taxpayer is given an opportunity to correct and resubmit it.

    📌 When is a Return Considered Defective?

    A return is treated as defective if it has any of the following errors or omissions:

    1️⃣ Mandatory Details Missing

    • Personal details such as Name, PAN, or Address are incomplete or incorrect.
    • Bank account details are missing or invalid.

    2️⃣ Incomplete or Inconsistent Information

    • Balance sheet or profit & loss account details missing in cases where audit is applicable.
    • Income details and TDS/TCS claims do not match with Form 26AS.

    3️⃣ Tax Computation & Payment Issues

    • Taxes due are not paid fully before filing the return.
    • Self-assessment tax (SAT) or advance tax is not deposited.

    4️⃣ Incorrect ITR Form Used

    • Filing an incorrect ITR form based on the income source.

    5️⃣ Missing Attachments (For Audit Cases)

    • If the taxpayer is required to maintain books of accounts but fails to attach the details.
    • Failure to submit the audit report under Section 44AB when applicable.

    📢 What Happens If a Return is Defective?

    If the Income Tax Department detects a defective return, they issue a Notice under Section 139(9), giving the taxpayer 15 days to rectify and resubmit the correct return.

    🚀 If the defect is not rectified within the given time, the return may be treated as invalid, and the taxpayer may face penalties or further notices.

    To avoid a defective return, always ensure that the ITR form is properly filled, taxes are paid, and supporting documents are submitted where required.

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Ramesh Sharma
Enlightened
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  1. CA Vishnu Ram Enlightened

    When Can a Revised Return Be Filed Under the Income Tax Act? A Revised Return is a corrected version of the originally filed Income Tax Return (ITR). If a taxpayer discovers any mistake, omission, or wrong statement in the original return, they can file a revised return under Section 139(5) of the IRead more

    When Can a Revised Return Be Filed Under the Income Tax Act?

    A Revised Return is a corrected version of the originally filed Income Tax Return (ITR). If a taxpayer discovers any mistake, omission, or wrong statement in the original return, they can file a revised return under Section 139(5) of the Income Tax Act.

    📌 Conditions for Filing a Revised Return

    1️⃣ Errors in the Original Return:

    • Incorrect income details or deductions claimed.
    • Omission of income that should have been reported.
    • Wrong tax computation or TDS mismatch.

    2️⃣ Updated Information:

    • If new information becomes available after filing.

    3️⃣ Defective Return Correction:

    • If a return is marked defective under Section 139(9) and needs rectification.

    4️⃣ Change in Tax Regime or Filing Status:

    • If a taxpayer wishes to switch between Old and New Tax Regimes.

    📅 Time Limit for Filing a Revised Return

    A revised return must be filed before the earlier of:
    ✅ December 31 of the assessment year (for FY 2023-24, the last date is 31st December 2024).
    ✅ Completion of assessment by the Income Tax Department.

    Example: If you filed your original return for FY 2023-24 on 30th July 2024, you can revise it until 31st December 2024, unless the tax department completes your assessment earlier.

    🚀 How to File a Revised Return?

    1️⃣ Log in to the Income Tax e-Filing Portal.
    2️⃣ Select ‘File Income Tax Return’ and choose the correct Assessment Year.
    3️⃣ Choose ‘Revised Return’ under Section 139(5).
    4️⃣ Enter the acknowledgment number of the original return.
    5️⃣ Make the required corrections and submit the revised return.

    ⚠️ Important Points to Remember

    • A return can be revised multiple times within the due date.
    • Filing a revised return does not attract penalties, but if income was underreported in the original return, interest or penalties may apply.
    • The revised return replaces the original return, so ensure all details are correctly updated.

    If you’ve made a mistake in your ITR, file a revised return as soon as possible to avoid any tax complications. 🚀

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Ramesh Sharma
Enlightened
Asked: In:

  1. CA Vishnu Ram Enlightened

    Filing your Income Tax Return (ITR) after the due date can lead to several consequences under the Income Tax Act, 1961. It's essential to be aware of these implications to avoid unnecessary penalties and interest charges. Interest on Outstanding Tax – Section 234A If there's any unpaid tax after theRead more

    Filing your Income Tax Return (ITR) after the due date can lead to several consequences under the Income Tax Act, 1961. It’s essential to be aware of these implications to avoid unnecessary penalties and interest charges.

    1. Interest on Outstanding Tax – Section 234A

    If there’s any unpaid tax after the due date, interest is levied at 1% per month or part thereof on the outstanding amount. This interest accrues from the day immediately following the due date until the actual filing date or full payment of tax, whichever is earlier.

    Example:

    • Outstanding Tax: ₹10,000
    • Delay in Filing: 3 months
    • Interest: ₹10,000 × 1% × 3 = ₹300
    1. Late Filing Fee – Section 234F

    A late filing fee is imposed based on the date of filing and total income:

    • Filing after the due date but before December 31:
      • Income up to ₹5,00,000: Late fee of ₹1,000
      • Income above ₹5,00,000: Late fee of ₹5,000
    • Filing after December 31:
      • Income up to ₹5,00,000: Late fee of ₹1,000
      • Income above ₹5,00,000: Late fee of ₹10,000

    Note: No late filing fee is applicable if the total income does not exceed ₹2,50,000.

    1. Loss of Certain Benefits
    • Carry Forward of Losses: Losses under the heads “Capital Gains” and “Profits and Gains of Business or Profession” cannot be carried forward to subsequent years if the ITR is filed late.
    • Interest on Refunds: Delayed filing may result in reduced or no interest on refunds due, as interest is calculated from the date of filing the return.
    1. Prosecution and Penalty for Concealment

    In cases where the taxpayer willfully fails to file the return, the Income Tax Department may initiate prosecution, leading to penalties and possible imprisonment, depending on the amount of tax evaded.

    Recent Changes Post Budget 2025

    The Budget 2025 introduced provisions for filing Updated Returns to encourage voluntary compliance:

    • Extended Timeframe: Taxpayers can now file updated returns within 48 months from the end of the relevant assessment year.
    • Additional Tax Liability: Filing an updated return attracts an additional tax on the unpaid liability:
      • Within 12 months: Additional tax of 25% on the due tax and interest.
      • Beyond 12 months but up to 24 months: Additional tax of 50% on the due tax and interest.
      • Beyond 24 months but up to 36 months: Additional tax of 60% on the due tax and interest.
      • Beyond 36 months but up to 48 months: Additional tax of 70% on the due tax and interest.

    Read:What are the due dates for filing Income Tax Returns?

    What is the penalty If I fail to furnish my Income Tax return within the due date?

    Can an Income Tax return be filed after the due date?

     

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Ramesh Sharma
Enlightened
Asked: In:

  1. CA Vishnu Ram Enlightened

    What is a Belated Return under the Income Tax Act? A belated return under the Income Tax Act, 1961 refers to an Income Tax Return (ITR) that is filed after the due date under Section 139(1) but before the deadline allowed under Section 139(4). Time Limit for Filing a Belated Return (Section 139(4))Read more

    What is a Belated Return under the Income Tax Act?

    A belated return under the Income Tax Act, 1961 refers to an Income Tax Return (ITR) that is filed after the due date under Section 139(1) but before the deadline allowed under Section 139(4).

    Time Limit for Filing a Belated Return (Section 139(4))

    Financial Year (FY) Assessment Year (AY) Due Date for Original Return Last Date for Belated Return
    FY 2024-25 AY 2025-26 31st July 2025 / 31st Oct 2025* 31st December 2025

    *31st October is applicable for taxpayers under audit.

    Consequences of Filing a Belated Return

    1. Late Filing Fees under Section 234F

    Total Income Penalty Amount
    More than ₹5,00,000 ₹5,000
    Up to ₹5,00,000 ₹1,000
    Below ₹2,50,000 No penalty

    2. Interest on Unpaid Tax (Section 234A)

    • Interest at 1% per month or part thereof on unpaid tax from the original due date until filing.

    3. Loss of Carry Forward of Losses

    Type of Loss Carried Forward if Belated Return Filed?
    Business Loss (PGBP) ❌ Not Allowed
    Capital Loss ❌ Not Allowed
    House Property Loss ✅ Allowed (under Section 71B)

    4. Impact on Refunds

    • Filing late may delay or reduce interest on your tax refund.

    5. Higher Chances of Scrutiny or Notice

    • Late filing may increase the chances of being flagged for review by the Income Tax Department.

    Can a Belated Return be Revised?

    Yes! Under Section 139(5), you can revise a belated return before 31st December of the assessment year or before completion of assessment, whichever is earlier.

    Recent Changes Post Budget 2025

    • Updated Return (Section 139(8A)):
      If you miss the belated return deadline, you can file an updated return within 48 months, but additional tax liability applies.

    Key Takeaways

    ✔ Always try to file your return before the due date to avoid penalties.
    ✔ If you miss it, file a belated return before 31st December of the next assessment year.
    ✔ Pay outstanding tax and interest while filing to avoid further penalties.
    ✔ Losses (except house property losses) cannot be carried forward if the return is belated.

    Read:What are the consequences of late filing of return after due date or say late return?

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CA Sanjiv Kumar
Enlightened
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  1. CA Vishnu Ram Enlightened

    How to Compute Income Tax on Agricultural Income? Under the Income Tax Act, 1961, agricultural income is exempt from tax as per Section 10(1). However, if a taxpayer earns both agricultural and non-agricultural income, the partial integration method is used to determine the applicable tax rate. WhenRead more

    How to Compute Income Tax on Agricultural Income?

    Under the Income Tax Act, 1961, agricultural income is exempt from tax as per Section 10(1). However, if a taxpayer earns both agricultural and non-agricultural income, the partial integration method is used to determine the applicable tax rate.

    When is Agricultural Income Considered for Tax Computation?

    The partial integration method applies only if:
    ✅ Agricultural income exceeds ₹5,000, AND
    ✅ Non-agricultural income exceeds the basic exemption limit (₹2,50,000 / ₹3,00,000 / ₹5,00,000 depending on age & category).

    Step-by-Step Computation of Tax on Agricultural Income

    Step 1: Compute Total Income

    • Add non-agricultural income (salary, business income, rental income, etc.).
    • Exclude pure agricultural income (income from farming, sale of produce, etc.).

    Step 2: Apply the Partial Integration Method

    Tax is computed in three parts:

    Step Calculation
    A Compute tax on (Non-Agricultural Income + Agricultural Income).
    B Compute tax on (Agricultural Income + Basic Exemption Limit).
    C Final tax payable = A – B

    Step 3: Apply the Applicable Tax Rate & Add Cess

    • Compute tax based on slab rates.
    • Add 4% Health & Education Cess.

    Example Calculation

    Let’s assume a taxpayer has:
    🔹 Non-Agricultural Income = ₹8,00,000
    🔹 Agricultural Income = ₹3,00,000

    Step A: Compute Tax on (₹8,00,000 + ₹3,00,000) = ₹11,00,000

    • As per slab rates, tax = ₹1,32,000

    Step B: Compute Tax on (₹3,00,000 + ₹2,50,000) = ₹5,50,000

    • Tax on ₹5,50,000 = ₹22,500

    Final Tax Calculation:

    ✅ Tax Payable = ₹1,32,000 – ₹22,500 = ₹1,09,500
    ✅ Add 4% Cess = ₹1,13,880

    🔹 Total Tax Payable = ₹1,13,880

    Key Points to Remember

    ✅ Agricultural income alone is tax-free, but it affects the tax rate on other income.
    ✅ Partial integration applies only if agricultural income > ₹5,000.
    ✅ Different exemption limits apply based on the taxpayer’s category (individual, senior citizen, etc.).
    ✅ Agricultural income from tea, rubber, and coffee plantations is partially taxable under Rule 7, 7A, and 7B.

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Ramesh Sharma
Enlightened
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  1. CA Vishnu Ram Enlightened

    Why is Agricultural Income Tax-Free in India? Agricultural income is exempt from Income Tax in India under Section 10(1) of the Income Tax Act, 1961. The government provides this exemption due to historical, economic, and social reasons. Key Reasons for Exemption of Agricultural Income 1. To SupportRead more

    Why is Agricultural Income Tax-Free in India?

    Agricultural income is exempt from Income Tax in India under Section 10(1) of the Income Tax Act, 1961. The government provides this exemption due to historical, economic, and social reasons.

    Key Reasons for Exemption of Agricultural Income

    1. To Support Farmers & Rural Economy

    ✅ A large portion of India’s population depends on agriculture for livelihood.
    ✅ Taxing farmers could increase their financial burden and affect agricultural productivity.

    2. Constitutional Provisions (State vs. Centre Power)

    ✅ As per the Constitution of India, the power to tax agricultural income lies with the State Governments, not the Central Government.
    ✅ The Income Tax Act is a Central law, so it cannot impose tax on agricultural income.

    3. Unpredictability of Agricultural Income

    ✅ Farming depends on rainfall, climate, and natural calamities.
    ✅ Fluctuating income levels make taxation impractical for farmers.

    4. Encouragement for Agricultural Growth

    ✅ Tax exemption acts as an incentive for farmers to expand production and improve food security.
    ✅ Supports rural employment and economic development.

    5. Historical Perspective

    ✅ In British India, agricultural income was taxed, leading to resentment among farmers.
    ✅ Post-independence, the government decided to exempt agricultural income to promote rural welfare.

    Is Agricultural Income Completely Tax-Free?

    🔹 Yes, but only if it is purely agricultural income from activities like crop cultivation, sale of farm produce, and land rent received from agricultural land.
    🔹 If a person earns both agricultural and non-agricultural income, the partial integration method applies for tax computation.

    Conclusion

    Agricultural income is tax-free in India to support the rural economy, comply with constitutional provisions, and protect farmers from economic hardships. However, discussions on taxing large-scale agribusinesses continue as part of tax reforms.

    Read: How to compute Income Tax on agriculture income?

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Ramesh Sharma
Enlightened
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  1. CA Vishnu Ram Enlightened

    No, Non-Resident Indians (NRIs) are not eligible for the rebate under Section 87A of the Income Tax Act, 1961. This rebate is exclusively available to Resident Individuals whose total taxable income does not exceed the prescribed limit. Who Can Claim Rebate Under Section 87A? ✅ Only Resident IndividRead more

    No, Non-Resident Indians (NRIs) are not eligible for the rebate under Section 87A of the Income Tax Act, 1961. This rebate is exclusively available to Resident Individuals whose total taxable income does not exceed the prescribed limit.

    Who Can Claim Rebate Under Section 87A?

    ✅ Only Resident Individuals can claim the rebate.
    ✅ The total taxable income (after deductions) must not exceed ₹7,00,000 for FY 2023-24 & FY 2024-25 (under the new tax regime).
    ✅ The maximum rebate available is ₹25,000.

    Why is Section 87A Not Available for NRIs?

    🔹 Residential Status Restriction: The Income Tax Act explicitly restricts this rebate to “Resident Individuals”.
    🔹 Different Tax Treatment for NRIs: NRIs are taxed only on their Indian-sourced income (income earned in India), and they do not receive the same benefits as resident taxpayers.
    🔹 Separate Exemptions & Deductions for NRIs: NRIs can claim deductions under Section 80C, 80D, and other specific provisions, but not the 87A rebate.

    Conclusion

    If you are an NRI, you cannot claim the rebate under Section 87A. However, you can still reduce your tax liability by using other available deductions and planning your taxable income efficiently.

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Ramesh Sharma
Enlightened
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  1. CA Vishnu Ram Enlightened

    Tax Deductions for Disabled Persons Under the Income Tax Act Section Who Can Claim? Applicable For Deduction/Exemption Amount Conditions 80U Disabled Individual Self - ₹75,000 (Disability 40%-79%) - ₹1,25,000 (Severe Disability 80% & above) - Requires a government medical certificate. - No medicRead more

    Tax Deductions for Disabled Persons Under the Income Tax Act

    Section Who Can Claim? Applicable For Deduction/Exemption Amount Conditions
    80U Disabled Individual Self – ₹75,000 (Disability 40%-79%)
    – ₹1,25,000 (Severe Disability 80% & above)    		 – Requires a government medical certificate.
    – No medical bills required.
    80DD Individual or HUF Dependent (Spouse, Parents, Children, Siblings) – ₹75,000 (Disability 40%-79%)
    – ₹1,25,000 (Severe Disability 80% & above)    		 – Dependent should not claim under 80U.
    – Fixed deduction, no proof of actual expenses required.
    80DDB Individual or HUF Self or Dependent (For Specified Diseases) – ₹40,000 (Below 60 years)
    – ₹1,00,000 (Senior Citizen)    		 – For diseases like Parkinson’s, chronic renal failure, cancer, etc.
    – Requires a medical prescription from a specialist.
    10(14) Salaried Disabled Employee Self (Transport Allowance) ₹3,200 per month (₹38,400 per year) – Available only for salaried employees with at least 40% disability.
    – No separate proof required apart from disability certificate.
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