Category Income Tax

Over the past few years, the Indian government has made significant initiatives to improve the tax system. One of the most important changes is the introduction of the Faceless Assessment Scheme—a digital-first approach to conducting income tax assessments.

The initiative, which was started as part of the 2019 E-Assessment Scheme, is a significant step in improving the transparency, efficiency, and lack of interference in tax governance.

What is the Faceless Assessment Scheme?

In standard tax assessments, taxpayers often had to meet tax officials in person, submit plenty of paperwork, and deal with long waiting periods and possible discretion. The Faceless Assessment Scheme changes all of that.

Under this system, income tax assessments are performed completely online — without any direct interaction between the taxpayer and the assessing officer. It’s designed to reduce bias, enhance fairness, and promote efficiency by using technology, automation, and artificial intelligence (AI).

Key Objectives of the Scheme

The key goals of the faceless assessment scheme are:-

• removing personal interaction in order to avoid bias and corruption.
• Unplanned case distribution to ensure fair evaluations.
• Integrated processing to keep evaluations consistent.
• Quick resolution through simplified digital correspondence.

For whom does it apply?

The Faceless Assessment Scheme is applicable to almost all taxpayers. But certain sensitive cases, such as serious fraud, major tax evasion, international tax matters, or black money-related issues, may be stayed out of the faceless scheme and handled through standard methods.

Income Tax Act Section 144B

The function of the faceless assessment system is governed by Section 144B of the Income Tax Act, which creates a legal basis for the digital procedure. This section outlines how duties should be divided among various units and how online assessments should be conducted in order to increase responsibility.

Structure of the Faceless Assessment Mechanism

A clear framework has been established to conduct assessments under this programme. It consists of:

National Faceless Assessment Centre (NFAC) – This is the central body that oversees the entire process. It sends notices, allocates cases, and issues final assessment orders.

Regional Faceless Assessment Centres (RFACs) – These act as support arms to the NFAC, spread across different parts of the country.

Assessment Units (AUs) – Responsible for examining returns, asking for further information, and preparing assessment proposals.

Verification Units (VUs) – These teams verify evidence, conduct enquiries, and authenticate submitted documents.

Technical Units (TUs) – These consist of experts (e.g., in accounting, transfer pricing, or legal matters) who advise on complex issues.

Review Units (RUs) – These units ensure that the draft assessment orders are legally sound and consistent with tax laws.

Each unit works independently and is digitally connected, making the entire process paperless, structured, and transparent.

Step-by-Step Procedure in a Faceless Assessment

This is the basic procedure for a faceless assessment:

Notice Issued: In accordance with Section 143(2), the NFAC sends out an electronic notice to start the procedure.

Taxpayer’s Response: Within a specified time frame, the taxpayer must reply via the income tax portal.

Case Assignment: The case is assigned to an AU at random by the NFAC.

Information Request (if necessary): The AU has the right to request more details or supporting material.

Technical input or verification: The AU may ask a VU or TU for assistance if needed.

Draft Order: Following assessment, an order is draughted by the AU and forwarded to an RU for approval.

Final Order: The taxpayer receives the final order through the NFAC following review and approval.

In order to promote fairness, this procedure eliminates any direct communication between the taxpayer and the concerned officer.

Effects and Advantages of the Scheme

India’s tax assessment process has evolved as a result of the Faceless Assessment Scheme. Among its advantages are:-

Transparency: All procedures are digitally recorded, which lowers the possibility of unjust treatment.

Efficiency: Automation minimises delays and speeds up the process.

Consistency: Taxpayers across the board receive consistent treatment because of standardised procedures.

Reduced Litigation: Unnecessary disputes can be avoided with a fair and documented assessment.

Conclusion

Knowing how this scheme operates can help taxpayers stay compliant without worrying about excessive pressure or influence, act on signals more effectively, and keep accurate records.

In this new era where digital change is influencing every industry, faceless assessment is an indication of a more reliable and adaptable governance approach rather than only a tax reform.

Many people pay more tax than they actually owe, either because of advance tax, TDS deductions, or calculation errors. When this happens, the extra amount you paid can be claimed back as an income tax refund. The process is completely online and easy to follow if you know the right steps.

What is an income tax refund?

An income tax refund is the money returned by the Income Tax Department when the tax you paid is more than your actual liability. This usually happens if:

• Too much TDS was deducted by your employer or bank.
• You paid advance tax or self-assessment tax that turned out to be higher than the actual amount due.
• You claimed deductions or exemptions later that reduce your taxable income.
• There is double taxation on your income in India and another country.

The rules for tax refunds are given under Sections 237 to 245 of the Income Tax Act, 1961.

Who Can Claim a Tax Refund?

You are eligible for a refund in the following cases:

• Advance tax paid exceeds your actual liability.
• Self-assessment tax is more than the payable amount.
• TDS deducted is more than your final tax calculation.
• An error occurred in the tax assessment, and you corrected it.
• You declared deductions or investments later (e.g., under Section 80C).
• Your income was taxed both in India and abroad (covered under DTAA).

Step-by-Step Process to Claim Your Tax Refund

The Income Tax Department has made the refund process simple and digital through the Income Tax e-filing portal (www.incometax.gov.in). Follow these steps:

Step 1: File Your Income Tax Return (ITR)

You must file your ITR before the deadline (usually July 31 unless extended). While filing, enter all income details, deductions, and exemptions. For example, investments in PPF, ELSS, or life insurance can be claimed under Section 80C up to ₹1.5 lakh.

Step 2: System Calculates Refund

After you submit the details, the system automatically compares your tax liability with the taxes you have paid. If you paid extra, the refund amount will be shown on the ITR form.

Step 3: Verify Your ITR

Once the return is filed, you need to verify it online using Aadhaar OTP, net banking, or by sending a signed physical copy (ITR-V) to CPC Bengaluru. Without verification, the return is not processed, and no refund will be issued.

Step 4: Processing and Intimation

The Centralised Processing Centre (CPC) checks your return and sends an intimation under Section 143(1) to your registered email. It will mention:

• No refund is due.
• The refund was accepted and will be credited soon.
• Claim rejected or additional tax payable.

Step 5: Refund Credited to Bank Account

If your claim is approved, the refund will be directly credited to your bank account linked with your PAN and pre-validated on the portal. Always check that your account details are correct to avoid delays.

How to Track Your Refund Status?

You can easily check the status of your refund:

• On the e-filing portal: Login → “View Returns/Forms” → “Refund/Demand Status.”
• On the NSDL Refund Portal: Enter your PAN and assessment year.

Interest on Income Tax Refund

Under Section 244A, if the refund is delayed, you will get simple interest at 6% per year (0.5% per month). The interest is calculated:

• From 1st April of the assessment year till the refund date if you filed on time.
• From the filing date if you filed late.

This interest is taxable under “Income from Other Sources.”

Conclusion

Getting an income tax refund in India is simple if you file your return on time and provide correct details. The entire process is online, quick, and transparent. If you are eligible for a refund, make sure to claim it promptly and track the status regularly. Filing accurate returns not only ensures refunds but also keeps you compliant with tax laws.

Taxes are the basis of a nation’s economy since they generate the money required for welfare and development initiatives. Both individuals and companies are subject to taxation in India under the Income Tax Act, 1961.

Despite having direct taxes, corporate tax and personal income tax have different regulations and apply to different entities. For the purpose of financial planning and compliance, it is crucial to understand the differences between these two.

WHAT IS CORPORATE TAX?

Corporate tax is the tax charged on the profits of companies registered under the Companies Act, 2013. It applies to both domestic and foreign companies that earn income in India. Corporate tax is calculated on the net taxable income, which is total revenue minus permissible expenses, depreciation, and deductions.

In India, the corporate tax rate has undergone significant changes in recent years. As of August 2025, the basic rates are

• Domestic Companies:

22% (plus surcharge and cess) for companies not claiming exemptions or incentives under Section 115BAA.

15% for new manufacturing companies incorporated after October 1, 2019, and commencing production before March 31, 2025, under Section 115BAB.

• Foreign Companies:

Taxed at 40% on income earned in India, plus applicable surcharge and cess.

Additional components like Minimum Alternate Tax (MAT) at 15% (Section 115JB) may apply if the company’s tax liability is lower than the prescribed threshold.

Corporate tax applies to:

• All Indian companies (small, medium, and large).
• Foreign companies operating through a permanent establishment in India.

The revenue collected through corporate taxes is a major source of funds for the government and is used to finance infrastructure, social welfare, and public services.

WHAT IS PERSONAL INCOME TAX?

Personal income tax is the tax imposed on the income of individuals, Hindu Undivided Families (HUFs), Associations of Persons (AOPs), and similar entities. It is payable on income from all sources combined, such as salary, house property, business or profession, capital gains, and other sources.

In India, individuals can choose between two tax regimes:

• Old Regime: Offers higher tax rates but allows deductions and exemptions under various sections like 80C, 80D, HRA, and LTA.
• New Regime: Provides lower tax rates with fewer deductions and exemptions.

As of FY 2025-26, under the new tax regime (which is now the default option), the slab rates for individuals are

• ₹0 – ₹300,000: Nil
• ₹300,001 – ₹700,000: 5%
• ₹700,001 – ₹1,000,000: 10%
• ₹10,00,001 – ₹12,00,000: 15%
• ₹12,00,001 – ₹15,00,000: 20%
• Above ₹15,00,000: 30%

For individuals, the tax is levied on the total income after allowing deductions and exemptions (if opted under the old regime). For example, if someone earns ₹10,00,000 and has deductions of ₹1,50,000 under Section 80C, the taxable income will be ₹8,50,000.

Most individuals pay tax based on progressive tax slabs, meaning higher income attracts higher rates.

Corporate vs Personal Income Tax: The Key Differences

Although both taxes serve the same purpose—raising revenue for the government—they differ in several ways:

• Taxpayer: Corporate tax is paid by companies, while personal income tax is paid by individuals and certain other entities like HUFs.
• Tax Rate: Corporate tax rates are fixed, whereas personal income tax follows a slab system under progressive taxation.
• Deductions: Companies can claim business-related expenses and incentives, while individuals claim personal deductions like investments under Section 80C or medical expenses under 80D (if the old regime is chosen).
• Compliance: Companies must file detailed financial statements and tax audit reports along with their ITR (Form ITR-6 for most companies). Individuals file simpler returns like ITR-1 or ITR-2, depending on their income sources.
• Minimum Tax: Companies are subject to MAT, while individuals are not.

WHY UNDERSTANDING THE DIFFERENCE MATTERS

For business owners, tax planning must address both personal and corporate tax obligations. For example, if you draw a salary from your own company, it will be taxed under personal income tax, while your company’s profits will face corporate tax. Understanding both ensures proper compliance, avoids penalties, and helps optimize your tax liability through legitimate deductions and planning.

CONCLUSION

The two main foundations of India’s direct taxation system are personal income tax and corporate tax. Individuals’ income is subject to personal income tax, whilst companies’ profits are subject to corporate tax. Each has its own set of regulations, fees, and standards for compliance. Being informed is essential due to the constant changes made to the Finance Acts, such as the latest modifications to business tax benefits and the updated slab structure for individuals. It is always advised to consult a tax professional for appropriate filing and tax preparation.

Filing an Income Tax Return (ITR) is an essential part of every taxpayer’s compliance with Indian tax laws. Even with careful preparation, mistakes may occur—whether it’s forgetting to include interest income, entering wrong bank details, or claiming deductions incorrectly. Fortunately, the Income Tax Act, 1961, provides taxpayers with an opportunity to correct such mistakes by filing a revised ITR. This facility ensures that unintentional errors do not lead to penalties, delayed refunds, or unnecessary scrutiny.

What is a revised ITR?

A revised ITR is a new return filed to replace an original ITR that contains errors or omissions. Under Section 139(5) of the Income Tax Act, taxpayers are allowed to correct any incorrect details in their original return.

• It can be filed even if the original ITR was filed after the due date, as long as it is within the permitted timeline.
• For Assessment Year (AY) 2025-26, the revised return can be filed on or before 31st December 2025, or before the completion of assessment, whichever is earlier.
• Once filed, the revised ITR replaces the original return completely, so accuracy is crucial.

Also Read ITR Filing : Who must file?

ITR Filing : Who Must File?

When Should You Revise Your ITR?

You should consider revising your return if you find any of the following:

• Incorrect personal details like name, PAN, Aadhaar, or bank account number.
• Missed income reporting—for example, interest on fixed deposits, capital gains, or freelance earnings.
• Wrong deduction or exemption claims, such as incorrect entries under Sections 80C, 80D, etc.
• Mismatch in tax credits with Form 26AS, AIS (Annual Information Statement), or TIS.
• Any omission or error that impacts your tax liability or refund claim.

Timely correction ensures compliance and prevents notices from the tax department.

Step-by-Step Process to File a Revised ITR

Filing a revised ITR is simple. The process is similar to filing an original return, with an additional step of selecting the “Revised Return” option. Here are the following steps:

1. Log in to the Income Tax e-Filing Portal.

Go to https://eportal.incometax.gov.in/iec/foservices/#/login and log in using your PAN and password.

2. Select the Correct Assessment Year

Choose AY 2025-26 (for income earned in FY 2024-25) to ensure you are revising the correct return.

3. Download or Use the Correct ITR Form

Pick the ITR form applicable to your income type (ITR-1, ITR-2, ITR-3, etc.). You can use either the online mode or offline utility (JSON/Excel).

4. Correct the Errors

Update the details that were missed or incorrectly reported in the original ITR.

5. Enter Original ITR Details

In the revised ITR, you must enter the acknowledgement number and date of filing of the original return. This links the revised return to the earlier one.

6. Validate and Submit

Once corrections are made, validate the form, complete e-verification (via Aadhaar OTP, net banking, etc.), and submit. The revised ITR will replace the previous one.

Other Ways to Correct Mistakes

Not every mistake requires filing a revised ITR. Some errors can be corrected using other provisions:

• Rectification Request under Section 154—Suitable for minor mistakes like incorrect tax credit entries or small calculation errors. This can be filed directly on the e-filing portal.
• Updated Return under Section 139(8A) – If you failed to report income or missed filing the original ITR, you can submit an updated return within 48 months from the end of the relevant assessment year. However, this comes with an additional tax liability.

Conclusion

Filing a revised ITR under Section 139(5) is a valuable facility for taxpayers to correct genuine mistakes without penalties. The key is to detect errors early and file the revised return within the permitted time. By keeping your documents ready, reviewing every entry, and using the portal efficiently, you can ensure a smooth filing experience.

Mistakes are natural, but with timely action and accurate reporting, you can stay compliant and avoid unnecessary complications with the Income Tax Department.

Running a private limited company is not just about growing your business—it’s also about staying compliant with the law. In India, companies are expected to follow a set of annual and event-based compliance requirements. Missing even a single deadline can lead to hefty penalties, director disqualification, or even the closure of the company.

1. Meetings You Cannot Skip

• Board Meetings: You must hold at least four board meetings in a financial year, ensuring there’s no gap of more than 120 days between two meetings. Keep proper minutes for all meetings—they’re crucial records for your company.
• Annual General Meeting (AGM): Although AGMs are not mandatory for small private companies unless specifically required, if applicable, they should be conducted. within six months from the end of the financial year, usually by 30th September. Important decisions like approving financial statements and appointing auditors are taken here.

2. ROC Filings You Must Remember

• AOC‑4 (Financial Statements): This form contains your audited financial statements and must be filed within 30 days of the AGM.
• MGT‑7 (Annual Return): This includes details like shareholding patterns and changes in directors. File it within 60 days of the AGM.

Timely ROC filings help avoid unnecessary penalties and ensure your company’s records remain clean.

3. Key Forms & Annual KYC

• DIR‑3 KYC: Every director must update their KYC by 30th September each year. Failing to do so can deactivate the DIN, creating problems during filings.
• DPT‑3: If your company has loans, deposits, or similar amounts outstanding, file this by 30th June.
• MBP‑1 and DIR‑8: At the first board meeting of every financial year, directors must disclose their interests in other entities and confirm they are not disqualified to act as directors.

4. Auditor Appointment (ADT‑1)

Auditors must be appointed or reappointed within the timelines prescribed. The company needs to file ADT‑1 within 15 days of the appointment. This ensures statutory audits are carried out without interruptions.

5. Income Tax Obligations

Every company—profit-making or not—must file an ITR‑6 by 30th September (or 31st October if an audit is applicable). If your turnover crosses ₹1 crore (₹10 crore in the case of digital transactions), a tax audit becomes mandatory.

Also, ensure advance tax payments are made quarterly and TDS returns (if applicable) are filed on time.

6. MSME Reporting

If your company deals with micro and small enterprises and payments to them are delayed beyond 45 days, you must file MSME Form‑I twice a year—by 30th April and 31st October. This is a crucial compliance often overlooked.

7. GST Returns (For GST-Registered Companies)

If your company is registered under GST:

• File GSTR‑1 (sales) by the 11th of the following month,
• GSTR‑3B (summary return) by the 20th, and
• GSTR‑9 (annual return) by 31st December.

If turnover exceeds ₹5 crore, GSTR‑9C (GST audit) is also required.

8. Event-Based Filings

Some compliances are triggered by events, such as

• Change in directors – DIR‑12 within 30 days
• Change in registered office – INC‑22
• Allotment of shares – PAS‑3 within 15 days
• Increase in share capital – SH‑7
• Creation/modification of charges – CHG‑1/CHG‑4

Whenever your company undergoes structural or operational changes, check the corresponding filing requirements.

9. Maintain Proper Registers & Records

Keep statutory registers like the register of members, directors, charges, contracts, and related-party transactions updated. Also, maintain minute books for meetings and keep them safe at the registered office.

10. Pro Tips to Stay Compliant

• Set up a compliance calendar to track deadlines.
• Use accounting/compliance software to avoid last-minute hassles.
• Conduct quarterly compliance reviews with your CA or CS.
• Outsource compliance management if your team lacks resources.

A Brief Overview of Due Dates (FY 2024–25)

Compliance	Due Date
DIR‑3 KYC	30 Sept 2025
DPT‑3	30 June 2025
MSME Form‑I	30 Apr & 31 Oct 2025
AOC‑4	30 days post-AGM
MGT‑7	60 days post-AGM
ITR‑6	30 Sept / 31 Oct 2025

Conclusion

Compliance may seem tedious, but it’s the backbone of running a legitimate and trustworthy business. Keeping up with these requirements not only helps avoid fines but also boosts your company’s credibility with investors, banks, and stakeholders.

If you ever feel overwhelmed, don’t hesitate to consult a chartered accountant or company secretary—they’ll ensure your filings are done right and on time. Staying compliant is not just a legal duty; it’s a business advantage.

Are you running Company, either, Private Limited or Limited or OPC? Do you know, irrespective of turnover amount, the Company needs place its Audited Financial statements before the stakeholders in AGM (Except OPC). OPC is exempted from holding AGM/EGM, But Audit is still need to be done and Annual filing of AOC 4 and MGT 7A are mandatory. Statutory Audit must be done, Turnover is not relevant here. Let’s Know more here about.    

One of the most important parts of Indian law that governs how companies’ function, handle their finances, and maintain transparency is the Companies Act of 2013. The audit provisions, which are primarily located in Sections 128 to 138, are among its significant features.

In order to safeguard the interests of creditors, shareholders, and other stakeholders, these regulations are intended to ensure that businesses keep accurate books of accounts and that these accounts are independently reviewed.

1. Section 128 – Books of Accounts

Section 128 requires every company to prepare and maintain proper books of accounts that give a true and fair view of the financial position of the company. These accounts must include records of:

• All money received and spent.
• All sales and purchases of goods and services.
• Assets and liabilities of the company.

The books must be kept at the registered office of the company, although with board approval they can also be kept at another place in India. The law also allows companies to maintain accounts in electronic mode, which is in line with modern business practices.

Importantly, these records must be preserved for at least 8 years, ensuring that there is a proper history available for verification whenever needed.

2. Section 129 – Financial Statements

Section 129 deals with the preparation of financial statements. Every company has to prepare a financial statement at the end of the financial year that presents a true and fair view of the state of affairs of the company.

These statements include:

• Balance Sheet,
• Profit and Loss Account,
• Cash Flow Statement,
• Statement of Changes in Equity, and
• Any explanatory notes.

Listed companies are also required to prepare consolidated financial statements for all their subsidiaries, joint ventures, and associates. These financial statements must comply with accounting standards notified by the government.

Small Company and One Person Company (OPC) are exempted to prepare the Cash Flow Statement.

3. Section 130 – Reopening of Accounts

Sometimes, there may be a need to reopen and revise accounts of a company. Section 130 allows this, but only under specific circumstances and with approval from the National Company Law Tribunal (NCLT). Reopening may be permitted if:

• Accounts were earlier prepared fraudulently, or
• Accounts are found to be incorrect due to mismanagement or other wrong practices.

This provision ensures that the integrity of financial statements is maintained and any wrongdoing can be corrected.

4. Section 131 – Voluntary Revision of Financial Statements

Apart from reopening, Section 131 allows companies to revise their financial statements or board’s report voluntarily, but only if they discover that the original filing did not comply with applicable laws. This revision requires approval from the Tribunal and can only be done once in a financial year.

5. Section 132 – National Financial Reporting Authority (NFRA)

Section 132 establishes the National Financial Reporting Authority (NFRA), which is an independent regulatory body that oversees auditing and accounting standards in India. NFRA has the power to:

• Recommend accounting and auditing standards,
• Monitor compliance,
• Investigate professional misconduct of auditors, and
• Impose penalties or debar auditors in case of violations.

The creation of NFRA has strengthened the audit system in India by making it more accountable and transparent.

6. Section 133 – Central Government and Accounting Standards

Section 133 empowers the Central Government to prescribe accounting standards in consultation with NFRA. This ensures uniformity and consistency in financial reporting across companies in India.

7. Section 134 – Approval of Financial Statements

According to Section 134, the Board of Directors is responsible for approving the financial statements before they are signed and submitted to the shareholders. Along with the financial statements, the Board’s Report is also prepared, which provides key information such as:

• The company’s performance,
• Details of loans, guarantees, and investments,
• CSR activities, and
• Director’s responsibility statement.

This section ensures that directors are held accountable for the financial health of the company.

8. Section 135 – Corporate Social Responsibility (CSR)

Although not directly part of the audit provisions, Section 135 requires certain companies (with a specific net worth, turnover, or profit) to spend at least 2% of their average net profits on CSR activities. The spending and reporting of CSR is also subject to auditing and disclosure norms.

9. Section 136 – Right of Members to Copies

Section 136 gives shareholders the right to receive financial statements and other reports at least 21 days before the annual general meeting. This ensures that members have enough time to review the company’s financial position before making decisions.

10. Section 137 – Filing with Registrar

Once approved, financial statements must be filed with the Registrar of Companies (RoC) within 30 days of the annual general meeting. Failure to comply attracts penalties on both the company and its officers.

11. Section 138 – Internal Audit

Finally, Section 138 makes provisions for internal audit. Certain classes of companies, as prescribed by rules, must appoint an internal auditor (a chartered accountant, cost accountant, or other professional) to check the internal controls and risk management of the company. This adds another layer of accountability and strengthens governance.

Conclusion

India takes corporate responsibility and transparency very seriously, as evidenced by the statutory provisions included in Sections 128–138 of the Companies Act, 2013. These sections address every facet of financial management and auditing, from internal audits to keeping accurate books of accounts. They increase trust among investors in the corporate sector in addition to protecting shareholders’ interests.

Such audit provisions are essential for ensuring that businesses operate responsibly and uphold financial integrity in a developing country like India.

Business trusts such as Infrastructure Investment Trusts (InvITs) and Real Estate Investment Trusts (REITs) have become popular investment options in India because they allow investors to earn income from infrastructure and real estate projects. These trusts pool funds from investors, invest them in assets, and distribute the income generated to the unit holders. However, taxation of this income is a crucial aspect that every investor should understand.

What is a business trust?

A business trust is a special type of trust registered under SEBI regulations. It works as a pass-through entity, which means that the trust collects income from its investments and distributes it to its unit holders without paying tax at the trust level in most cases. Instead, the tax liability falls on the unit holders, subject to the provisions of the Income Tax Act, 1961.

Business trusts mainly earn income from three sources:

1. Interest Income – earned from debt investments in Special Purpose Vehicles (SPVs).
2. Dividend Income – received from SPVs where the trust holds shares.
3. Rental Income – in the case of REITs, from leasing out real estate properties.

Taxation of Unit Holders

The taxation of unit holders depends on the type of income distributed by the trust. The key provisions under the Income Tax Act (specifically Sections 10(23FC), 10(23FCA), 115UA, and 194LBA) govern this area.

1. Interest Income

• Interest distributed by the business trust is taxable in the hands of unit holders.
• For residents, it is taxed at the applicable slab rate.
• For non-residents, it is taxed at 5% (plus applicable surcharge and cess).

2. Dividend Income

• A dividend is exempt if the SPV has not opted for the concessional tax regime under Section 115BAA.
• If the SPV has opted for Section 115BAA, the dividend becomes taxable in the hands of the unit holder.

3. Rental Income (from REITs)

• Any rental income received from leasing of property is taxable in the hands of the unit holders at their respective slab rates.

4. Capital Gains on Transfer of Units

• Short-Term Capital Gain (STCG) on listed units (held for less than 36 months) is taxed at 15% under Section 111A.
• Long-Term Capital Gain (LTCG) on listed units (held for more than 36 months) is taxed at 10% (without indexation) under Section 112A if gains exceed ₹1 lakh.

TDS Provisions

• Section 194LBA requires the trust to deduct tax at source (TDS) before distributing income:

Interest: 10% for residents, 5% for non-residents.

Dividend: 10% for residents; for non-residents, rates as per DTAA.

Rental Income: 10% for residents; for non-residents, rates as per DTAA.

Why This Taxation System?

The pass-through structure is designed to avoid double taxation and make business trusts an attractive investment vehicle. If both the trust and the unit holders were taxed on the same income, it would reduce returns for investors. Therefore, the law ensures that most of the tax burden shifts to the unit holders.

Conclusion

Understanding the taxation of business trust income is important for investors to plan their taxes effectively. While business trusts provide steady income opportunities, investors should remember that different income streams attract different tax treatments. Staying updated on the latest provisions and judicial rulings is essential for compliance and effective tax planning.

Connect with us +91-9267970588 or taxacumen.consultancy@gmail.com to get professional advice on such income from business trust.

Although it is a necessary duty, paying taxes doesn’t have to be a stressful experience. Instead of paying their income tax all at once, taxpayers can use the Advance Tax system to even out their payments over the duration of the year. In addition to assisting the government in distributing tax revenue throughout the year, this approach guarantees improved cash flow management for both people and businesses.

What are advance tax payments?

Income tax paid in instalments before the duration, based on expected earnings for a particular year, is referred to as advance tax. Taxpayers pay in instalments according to the Income Tax Department’s timetable rather than waiting until March to pay the whole amount due.

This method applies to income from all sources—salary, business or profession, rent, interest, capital gains, or any other taxable earnings.

Who Is Responsible for Paying advance tax?

The following are subject to advance tax:

• Salaried people who receive additional income from sources such as rent, capital gains, or interest from fixed deposits
• Business owners and freelancers with a yearly tax liability of at least ₹10,000
• Professionals having taxable income, such as physicians, attorneys, architects, and consultants

Exemption: Senior citizens who are 60 years of age or older who do not earn money from a business or profession are exempt from paying advance taxes.

Presumptive Taxation

In accordance with Section 44AD for businesses and Section 44ADA for professionals, taxpayers who choose presumptive taxation are required to pay all of their advance taxes in one lump sum by March 15th of the financial year. Additionally, they can pay by March 31st without facing penalties.

Due Dates of Advance Tax Due in FY 2025–2026

Regular taxpayers are required to pay advance tax in four instalments:

Due Date	Minimum Tax to be Paid
15th June 2025	15% of total tax liability
15th September 2025	45% of total tax liability
15th December 2025	75% of total tax liability
15th March 2026	100% of total tax liability

How Can Advance Tax Be Calculated?

• Calculate the year’s total income from all sources.
• Use permitted deductions and exemptions (e.g., Sections 80C, 80D, etc.).
• Utilising the relevant tax slab, determine your tax liability.
• Deduct any TDS that has already been taken out.
• The remaining tax must be paid in installments as advance tax.

These calculations can be made easier with the use of a few internet resources, such as the calculator provided by the Income Tax Department.

How to Pay Advance Tax?

Advance tax can be paid in two ways:

Online: Go to the Income Tax e-filing portal, select Challan ITNS 280, and pay using net banking or debit card.

Offline: Go to an authorised bank and deposit the payment using a challan.

Always keep a copy of the payment receipt for your records.

Why On-Time Payment Is Important

Failure to pay advance tax on time results in interest under Sections 234B and 234C. These sections charge a monthly interest of 1% on the unpaid amount. Timely payments prevent these extra costs and keep your compliance record clean.

Advantages of Making Advance Tax Payments

• prevents financial stress at the last minute.
• keeps interest and penalties in check.
• Simplify the yearly tax submission procedure.
• encourages improved financial planning.

Conclusion

In addition to being required by law, paying taxes in advance is a wise financial move. You can evenly distribute out your tax liability, avoid fines, and have peace of mind during tax season by paying your taxes in advance. Estimating your revenue and making on-time tax payments is important for maintaining compliance and reducing stress, regardless of whether you are a business owner, freelancer, or salaried individual.

For all Indian taxpayers, filing an Income Tax Return (ITR) is an essential duty, not only a legal requirement. Compared to common perception, individuals who make taxable income are not the only ones who must file an ITR. Even if your income is less than the basic exemption threshold, there are a number of circumstances in which filing is required.

What is an Income Tax Return (ITR)?

To report your income, deductions, and taxes paid during a financial year, you must file an income tax return with the Income Tax Department. It guarantees openness, facilitates refund claims, and lets you carry your losses to subsequent years. In addition, filing an ITR provides official verification of income, which is frequently needed for government paperwork, loans, and visa applications.

Who Must File an ITR?

As per the provisions applicable for FY 2024-25, these are the main categories of people who must file an ITR:

1. Income Above Basic Exemption Limit

The most common reason for filing is income exceeding the exemption limit.

New Tax Regime (default): ₹3,00,000 for all taxpayers, regardless of age.

Old Tax Regime (if opted):

• Below 60 years: ₹2,50,000
• 60–79 years (Senior Citizens): ₹300,000
• 80 years and above (Super Senior Citizens): ₹5,00,000

2. Claiming a Refund

If tax has been deducted at source (TDS) and you want to claim a refund, you must file an ITR.

3. Companies, Firms, and LLPs

All companies, firms, and LLPs must file an ITR, even if there is no income or business activity during the year.

4. Residents with Foreign Assets or Income

If you own foreign assets, foreign bank accounts, or earn income abroad, you must file an ITR regardless of your income level.

5. High-Value Transactions (As per Rule under Section 139(1))

Even if your income is below the exemption limit, you must file an ITR if you have:

• Deposited ₹1 crore or more in current accounts during the year.
• Deposited more than ₹50 lakh in savings accounts.
• Spent ₹2 lakh or more on foreign travel.
• Paid ₹1 lakh or more towards electricity bills.

6. Higher Business or Professional Receipts

You must file an ITR if:

• Your business turnover exceeds ₹60 lakh, or
• Your professional receipts exceed ₹10 lakh, or
• Your TDS/TCS is ₹25,000 or more (₹50,000 for senior citizens).

7. Loss Carry Forward

If you have business or capital losses and want to carry them forward for future adjustment, you must file the return before the due date.

8. NRIs with Indian Income

Non-Resident Indians (NRIs) must file an ITR if they earn income in India exceeding the basic exemption limit.

Note: For NRIs, capital gains (short-term or long-term) from India do not get the basic exemption benefit. So even small gains make filing mandatory.

Why File an ITR Even If Not Mandatory?

• Faster Loan and Visa Approvals: Banks and embassies require ITR as proof of income.
• Claiming Refunds: A refund of excess TDS or advance tax is only possible if you file.
• Official Record: ITR serves as legal proof of income.
• Carry Forward Losses: Helps in future tax planning and reducing liability.

Penalties for Non-Filing

The due date for ITR filing for FY 2024-25 is September 15, 2025. Missing the deadline can lead to:

• Penalty under Section 234F:
  • ₹5,000 for late filing
  • ₹1,000 if income is below ₹5 lakh.
• Interest on unpaid taxes under Sections 234A, 234B, and 234C.
• Possible prosecution for serious defaults.

Conclusion

Staying in compliance and maintaining financial control are more important for filing an ITR than just avoiding fines. Filing your return is necessary whether you have high-value transactions, overseas assets, exceed the income threshold, or are simply seeking a refund. The Income Tax portal has simplified the e-filing procedure, making it paperless, quicker, and easier.

Many taxpayers face situations where TDS (Tax Deducted at Source) is deducted from their income even when they do not have to pay any tax. Later, they have to claim a refund while filing the return. To avoid this hassle, the Income Tax Act allows eligible people to submit Form 15G or Form 15H.

These forms are self-declarations asking the payer (like banks, EPF offices, insurance companies, etc.) not to deduct TDS if your total income is below the taxable limit or your tax liability is nil.

What are Form 15G and Form 15H?

• Form 15G is for residents below 60 years, Hindu Undivided Families (HUF), and certain trusts.
• Form 15H is for resident senior citizens aged 60 years and above.

Both forms can only be filed by Indian residents. NRIs cannot use them. These forms can be submitted to banks and other tax deductor to ensure that TDS is not deducted where it is not applicable.

Who Can Use These Forms?

You can submit Form 15G if:

• You are below 60 years.
• Your total income is below the basic exemption limit (₹2.5 lakh in old regime, ₹4 lakh in new regime for FY 2025–26).
• There is no tax payable on your total income.

You can submit Form 15H if:

• You are a resident senior citizen (60 years or older).
• Your tax liability is nil, even if interest income exceeds the exemption limit.

When and Where to Submit?

These forms must be submitted at the start of every financial year (preferably in April). This way, banks or other institutions will not deduct TDS throughout the year.

You can submit them:

• To banks (for FD, RD, or savings interest)
• To EPF authorities (for withdrawals before 5 years)
• To companies (for bonds or dividends)
• To post offices (for deposits)
• To tenants (for rent subject to TDS)
• To insurance companies (for commission or maturity proceeds)

Most banks also accept online submission via their website.

Where Are These Forms Useful?

These forms are commonly used to avoid TDS on:

• Bank interest on FD/RD (Sec 194A)
• EPF withdrawals (Sec 192A)
• Rent (Sec 194-I)
• Dividends (Sec 194, 194K)
• Insurance commission (Sec 194D)
• Life insurance maturity (Sec 194DA)
• Corporate bond interest (Sec 193)
• National Savings Scheme withdrawals (Sec 194EE)

Each of these has a specific threshold, beyond which TDS applies if forms are not submitted.

What If You Forget to Submit?

If you miss the deadline, TDS may still be deducted. However, you can:

• File an Income Tax Return to claim the refund.
• Submit the form later to stop further deductions for the rest of the year.

Filling the Forms – Step by Step

When filling Form 15G/15H, you need to:

• Enter your name, PAN, and residential status.
• Mention the financial year for which the form is being filed.
• Declare your estimated income (interest, rent, etc.) where TDS applies.
• State your total expected income for that year.
• Provide investment details (FD numbers, bond details, etc.).
• Sign the declaration confirming that your tax liability is nil.

Only fill this form if you meet the eligibility conditions. Filing a false declaration can lead to penalties and imprisonment under the Income Tax Act.

Penalty for False Declaration

If someone files these forms even when their income is taxable, it is considered a false statement. This may lead to:

• Imprisonment (3 months to 7 years), and
• Heavy fines, especially if the tax evaded is above ₹25,000.

So, be truthful while filing.

Conclusion

Forms 15G and 15H are simple forms to avoid unnecessary TDS deductions. They save you from the trouble of claiming refunds later. Submit them every year at the start of April, ensure all details are correct, and keep copies for records.

For seamless process, consult a tax expert or use online resources provided by banks and the Income Tax Department.