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Returns / Tax / Taxes / ITR

https://taxbuddy.com

Tax evasion (punishable) vs tax avoidance (your legitimate right) of saving tax

Tax Consulation - https://www.charteredclub.com/tax-consultation-with-ca-karan-batra

Period: April 1, 2022 - March 31, 2023

  • Financial Year: 2022 - 2023
  • Assessment Year: 2023 - 2024

Input tax credit​

Input Tax Credit under GST - Conditions To Claim

Input Tax Credit (ITC) under GST Explained

What is Input Tax Credit (ITC) under GST with Example?

Direct and indirect taxes​

  • Direct taxes are paid directly to the government and are levied on one's income and profits.
  • Indirect taxes are totally opposite and are paid to the government if one makes any purchases of goods and services.

CA​

  1. Insurance receipt
  2. NGO receipt
  3. Add your name while filling, and not from individual portal
  4. HUF / consultant (for better tax savings)

F&O - 2.5 lakh profit exemption per financial year

Income Tax​

Income Tax SlabsTax Rate for Individual & HUF Below the Age Of 60 Years
Up to ₹2,50,000*Nil
₹2,50,001 to ₹5,00,0005% of total income exceeding ₹2,50,000
₹5,00,001 to ₹10,00,000₹12,500 + 20% of total income exceeding ₹5,00,000
Above ₹10,00,000₹1,12,500 + 30% of total income exceeding ₹10,00,000

An additional 4% Health & education cess will be applicable on the tax amount calculated as above.

Surcharge: 10% of income tax, where total income exceeds Rs.50 lakh up to Rs.1 crore.

Surcharge: 15% of income tax, where the total income exceeds Rs.1 crore.

So ~3cr or 2% of Indians out of 140cr invest.

ITR filings for FY 20/21 by income.

~4.8cr ₹5lks

~90lks ₹5 to ₹10lks

~43lks ₹10lks

If people have to invest or spend more, they need to earn at least ₹2.5lks/yr?

Incomes exempt from paying tax​

  1. Income from Agriculture (Agriculture Income)
  2. Gifts Received from Relatives
  3. Income from Gratuity
  4. Scholarships
  5. Certain Pensions - Pensions received by recipients of gallantry awards like the Mahavir Chakra, Param Vir Chakra, and Vir Chakra are tax-free. Additionally, the pension received by family members of Indian Armed Forces personnel is also exempt from tax.

Certain Pensions | Zee Business

New Tax Regime vs Old Tax Regime​

Old vs New Tax Regime

Freelancing / Freelancer / Consulting​

  • 194J
  • ITR4
  • If the total tax liability during a financial year exceeds Rs.10,000, the taxpayer is required to pay taxes every quarter. This is called advance tax.
  • If the total revenue from freelancing work is not more than Rs. 20 lakhs, then GST does not apply.
  • GST returns have to be filed quarterly or monthly based on your turnover and if you have opted for the composition scheme. Composition dealers and those with annual sales below Rs.1.5 crore for the supply of goods can file quarterly returns. For service providers, the limit is Rs.50 lakhs.

44ADA - Presumptive Tax Scheme for Professionals​

The benefit of section 44ADA can be taken only by those specified professionals whose annual gross receipts are under Rs.50 lakh (This limit is Rs.75 lakh, provided 95% of the receipts are through recognised banking channels).

The presumptive scheme of taxation reduces the compliance burden on small professions and facilitates ease of doing business. Under the presumptive scheme of taxation, profits/taxable income is presumed at 50% of the gross receipts.

Taxes can be significantly reduced. For 60 lakh under 44ADA tax is only around 7L instead of 12L in normal method.

Section 44ADA – Presumptive Tax Scheme for Professionals

Section 44ADA - Presumptive Tax for Professionals

Tax on Consultancy Services: Applicability, Tax Rate and Benefits

Taxation for software engineer consultant : r/IndiaTax

LUT - Letter of Undertaking

Tax Benefits for Consultants in India 2024

  1. If the consultant works from home, rent of space
  2. Commuting if it is related to work
  3. Vehicle fuel expenses
  4. Equipment maintenance
  5. Telephone and internet bill
  6. Stationery charges
  7. Cost of cell phone
  8. Car loan interest
  9. Courier and mail service
  10. Books and newspapers
  11. Vehicle insurance
  12. Sweeper, peon or driver’s salary
  13. Depreciation is allowed on vehicle and office equipment

Consultant’s whose income exceeds Rs.10 lakh must get their expenses audited by a chartered accountant. Consultant trades off less tax for more paperwork. The highest tax charged for a consultant is 11.33% which includes the educational cess whereas an employee can get charged 33.99% as the highest tax.

Deductions​

  • Rent of the property
  • Repairs undertaken
  • Depreciation
  • Office expenses
  • Travel Expenses
  • Meal, entertainment or hospitality expenses
  • Local taxes and insurance for your own business property
  • Domain registration and apps purchased
  • Mobile / Wifi Bills

Freelancers and Taxes - Income Tax for Freelancers

A Comprehensive Guide on Tax for Freelancers

LUT (Letter of Undertaking) - GST: How to file an LUT? - let's you export goods or services without payment of GST

Proprietorship Taxation - Proprietorship Tax Return Filing & Its Compliance - IndiaFilings

Tax on Consultancy Services: Applicability, Tax Rate and Benefits

Taxation for software engineer consultant : r/IndiaTax

Save MONEY on TAXES! | Tax Tips for Freelancers 2023 | Ankur Warikoo Hindi - YouTube

GST / LUT​

Is LUT needed even if the income is under 20 Laks? : r/IndiaTax

How to furnish LUT in RFD-11 on GST Portal

LUT Full Form, Eligibility, and Process

LUT Full Form, Eligibility, and Process

ITR​

  1. If you have an income from just salary, one house property and bank deposits (Savings, FD, RD, Flexi RD), it is ITR1 (total income up to 50 L).
  2. If you have income specified in a) and income from selling Real Estate, Stocks, Mutual fund units, derivatives, gold etc, or you have withdrawn EPF/PPF, it is ITR2 (individual or HUF with no business income)
  3. If in addition to the above, you (or HUF) have income from a business or proprietorship, ITR3
  4. For people having a presumptive business it is ITR4 (no capital gains allowed). This form is for Individuals, HUFs and Firms having income up to Rs 50 lakh and having business income from Business or profession which is computed under the presumptive taxation schemes (sections 44AD, 44ADA or 44AE). Income from Salary, one house property and bank deposits can also be filled in ITR 4.

https://freefincal.com/which-itr-form-should-i-use

Terms​

Marginal Tax Rate​

What Is the Marginal Tax Rate? The marginal tax rate is the amount of additional tax paid for every additional dollar earned as income. The average tax rate is the total tax paid divided by total income earned. A 10 percent marginal tax rate means that 10 cents of every next dollar earned would be taken as tax.

Offshore Bank Account​

An offshore account is one that is opened by a citizen outside her home country. This does not apply only to Indian citizens. A citizen of the US, opening a bank account in Canada has also opened an offshore bank account.

Offshore Bank Account: Everything You Need to Know

Penalty / Notices / Fines - Section 148​

As per the amendment in the Finance Act 2021, with effect from 1st April 2021, the time limit up to which the assessing officer can re-open the assessment of the taxpayer is as follows;

  • Up to three years from the end of the relevant assessment year in normal cases and
  • Beyond three years but not more than ten years from the end of the relevant assessment year, if the assessing officer has material evidence that income of Rs.50 lakh or more for a financial year has escaped assessment.

Income Tax Notice - How To Check And Authenticate?

Tax dept won’t be able to re-open ITR after 3 yrs from filing

Summary of Penalties Under the Income Tax Act

Penalty Under Income Tax Act

Section 148 of Income Tax Act: Notice Under Assessment or Reassessment