Professional Updates

 

Do you wonder why an assessee will receive a notice for non-filing of return/ non-inclusion of certain information? Department can send a notice in case the information provided in SFT is not included in the income tax returns. Hence be careful while carryout the financial transactions and make sure the transactions are in harmony. We are all aware that we are under the lens of income tax department with respect to most of the financial transactions. Let me go through few of the transactions which are being reported by the financial intermediaries. What is SFT? SFT stands for Specified Financial Transactions OR Statement of Financial Transactions is a report filed by SPECIFIED PERSONS mentioned under the Act. The report is filed every year by the Specified Persons on or before 31st May. Does bank/post office report all the transactions to the department? NO. Only certain specified transactions within the specified limits will be reported by them. Hence, make sure you file an income ret...

           

Head of Income Income from futures and options will be considered as   Non-speculative business income   and taxed under the head "Income from business/profession". Calculation of turnover: Turnover for this purpose shall comprise of 1) Profit from sale of derivates + 2) Loss from sale of derivatives + 3) Premium received while writing an option Taxation of profits Non-speculative business income shall be taxed at normal rates applicable to the assessee. Loss from trading in F&O Loss from F&O trading during the year can be set-off against any other head of income  except  Income from salary. Ex: Loss from F&O can be set-off against Income from house property/Income from other business/profession/ Income from other sources earned during the year. Carry forward of Loss Loss remaining after set-off during the year can be carried forward to next 8 A.Ys and can be set-off from Income from other heads except salary in future years. To be eligible to carry forwa...

 Why does a tax liability arises in case of change in employment? 1) While filing the returns we may see that there is a tax payable while disclosing salaries from all the employers during the year. 2) This situation arises when the salary from previous employment is not disclosed with the later employer. 3) In the absence of disclosure, second employer calculates tax on the salary paid by him alone. 4) In such case, each employers calculates tax as below upto 250000 - 0 tax 250001-500000 5% 500001-1000000 20% above 10 lacs 30% 50000 standard deduction  5) But while filing tax return, the entire salary will be clubbed and taxed according to the slabs. 6) We get standard deduction of 50000 only once, the basic exemption of 250000 only once and the balance income might be taxed at highest slab. This results in shorter tax deduction from both the employers and you see there is a tax payable while filing the return. To be crisp, this tax payable is nothing but shorter tax deductio...

Who is eligible to apply? Employee must be in service and contributing to pension scheme under EPS-95 before 01.09.2014 or individuals retired after 01.09.2014 but contributed to EPS-95 before 01.09.2014. Member of EPFO before 01.09.2014 ✅ Still in employment ✅ Retired after 01.09.2014 ✅ When is the last date to opt for HIGHER PENSION? 03.05.2023. What is Pensionable salary? Pensionable salary is used to calculate the contribution made to EPS out of the employer's contribution of EPF. If Not opting for higher pension, it is Rs.15000 p.m irrespective of your actual Basic + DA p.m If opting for higher pension, it is considered as the average of last 60 months actual Basic + DA p.m before retirement. What is pensionable service? The number of years of service for which contribution to EPS was made.  What is the formula to calculate monthly pension? Monthly pension amount  = Pensionable salary * (Pensionable se...

Let us discuss about the key points from the budget presented today. This budget will be effective for the Financial Year 2023-24. Let us understand the FM's speech concerning Personal income tax.  1) Currently, those with income up to Rs.  5 lakh do not pay any income tax in both old and new tax regimes. I  propose to increase the rebate limit to Rs.7 lakh in the new tax regime. Thus,  persons in the new tax regime, with income up to Rs7 lakh will not have to  pay any tax. If an employee choses NEW TAX REGIME, then there is NO tax if the Gross salary and Other taxable income is less than Rs.7 lacs. 2)  I had introduced, in the year 2020, the new personal income tax regime  with six income slabs starting from Rs.2.5 lakh. I propose to change the tax  structure in this regime by reducing the number of slabs to five and  increasing the tax exemption limit to Rs.3 lakh. The new tax rates are: Income in Rs.          Tax ...