Income Tax Archives

Key money moves in Union Budget 2023-24

Finance Minister, Nirmala Sitharaman presented the last full-year budget under the Modi Government 2.0 today which has brought a smile to citizensâ€™ faces. After two disappointing budgets for the common men of the country, this budget has finally something to offer them. Here are the key provisions of the budget â€“

From April 2023 people earning up to Rs. 7 lakhs, do not have to pay any income tax. The income tax slabs have been altered and now, if your income is less than equal to Rs. 7 lakhs, then it will be entirely exempted from income tax as per Section 87A. The updated tax slabs are as follows â€“

Income Range (Rs.)	Updated New Tax Regime	Income Range(Rs.)	Existing New Tax Regime
0 -3lakhs	Nil	0-2.5 lakhs	Nil
3 lakhs â€“ 6 lakhs	5%	2.5 lakhs â€“ 5 lakhs	5%
6 lakhs â€“ 9 lakhs	10%	5 lakhs -7.5 lakhs	10%
9 â€“ lakhs â€“ 12 lakhs	15%	7.5 lakhs â€“ 10 lakhs	15%
12 lakhs â€“ 15 lakhs	20%	10 lakhs â€“ 12.5 lakhs	20%
Above 15 lakhs	30%	12.5 lakhs â€“ 15 lakhs	25%
Â	Â	Above 15 lakhs	30%

So, this updated tax regime will not only decrease the tax burden of the taxpayers but also help simplify tax assessment and income tax return filing process as suggested by the finance minister during her budget speech.

This updated new tax regime can help a person with an income of Rs. 10 lakhs save Rs. 15000 compared to the existing tax regime.

Salaried people having income over Rs. 15.5 lakhs will be eligible for a higher standard decoction which is Rs. 52500 while for those who have a salary income below Rs. 15.5 lakhs, they will be entitled to Rs. 50000 of standard deduction which is already there.
Individuals having a higher income that is more than Rs. 2 crores will be now paying a 25% surcharge against the existing 37%.
The budget has imposed a limit ofÂ Rs 10 crore for deduction on long-term capital gain tax for reinvestment in residential properties under Section 54 and 54F of the Income Tax Act. These two sections deal with reinvestment of proceeds from sale of long-term assets (housing or other capital assets like shares) to buy residential properties.

While these new provisions of the budget will help people save more taxes but they also need to keep in mind, that the updated new tax regime does not have any scope for the deductions and exemptions that the old tax regime has.

So, if you are investing in LIC, PPF, NPS, or any such schemes or mutual funds like ELSS which provide deductions under section 80 C of the Income Tax Act, you need to keep in mind, if you choose the new tax regime, then you will not be able to avail these deductions. It is not only about 80 C deductions but for all 70 deductions available under the Income Tax Act.

Thus even after making the updated new tax regime the default tax regime today in the budget session, our finance minister said that the old tax regime will be available too and people can opt for that if they want to avail of deductions.

Another important aspect of this budget which can adversely affect the HNIs is the tax on insurance policies having annual premiums over Rs. 5 lakhs. Earlier, insurance policy premiums were eligible for deductions, however, from the 1^St of April, 2023, insurance holders having high-premium (above Rs. 5 lakhs per annum) insurance policies will not be eligible for any deductions under section 80C.

The budget has no major negatives for larger middle class barring a couple of provisions like upper cap in Section 54 and 54F, and the removal of tax exemption on returns from insurance policies of Rs 5 lakh plus premium, which would primarily affect high networth individuals.

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Things you should know about RBI’s repo rate

Let us see the meaning of repo rate, reverse repo and bank rate.

The Reserve Bank of India serves as a lender of last resort to commercial banks, offering short-term loans during fund shortages. It also helps to maintain liquidity. The repo rate is the interest rate charged by the central bank when lending short-term funds to commercial banks.

In Repo Rate, Repo stands for Repurchasing option, or you may even say Repurchase Agreement.

But why does the RBI charge interest from commercial banks? Since RBI itself is a bank and needs funds to sustain itself, it charges interest from banks. Moreover, it is an instrument to control money supply in the economy.

But RBI does not provide unsecured loans to commercial banks. Banks need to give RBI some collateral security such as government bonds or treasury bills against such loans.

When inflation is rising above expectations, RBI increases the repo rate. An increase in repo rate makes it expensive for commercial banks to take loans from RBI and forces them to use funds judiciously. This refrains banks from taking loans due to high charges. Further, it reduces the supply of money in the economy by soaking liquidity. Less money supply assists in controlling inflation crises in the economy.

In alternate situations, when the money supply needs to be increased in the economy, the repo rate is reduced by RBI.

Who is responsible for deciding the repo rate?

The decisions regarding repo rate are administered by Monetary Policy Council (MPC), which the RBI governor heads. Depending upon the market situation, the rates are finalised and modified from time to time.

What is the reverse repo rate? How is it different from the repo rate?

Repo rate and reverse repo rate are two tools to control the money supply in an economy. The reverse repo rate is the rate at which RBI borrows or arranges funds from commercial banks to reduce the money supply in the economy.

During inflation, when the supply of money is to be reduced in an economy, reverse repo rates are increased. It means RBI offers attractive interest rates to banks for borrowing money from them. Commercial banks, for high-interest rates, get ready to lend funds to RBI instead of disbursing loans to the public. In this case, the liquidity in the market gets soaked, and the money supply is reduced.

Repo rate vs reverse repo rate

The Repo rate is the rate at which RBI lends funds to commercial banks, while the reverse repo rate is the rate at which RBI borrows funds from commercial banks.
The main focus of the repo rate is to control inflation, while the major objective of the reverse repo rate is to control the money supply in the economy.
The reverse repo rate will always be lower than the repo rate.

Difference between Repo rate vs bank rate

Repo rate and bank rate are rates at which banks borrow from the RBI. However, there is a difference. The repo rate is the rate at which the RBI lends to commercial banks by buying securities, whereas the bank rate is the rate at which commercial banks can borrow money from the RBI without putting up any collateral.

Here are the similarities between repo rate and bank rate:

Fixed and altered by the central bank
Used to monitor cash flow in the economy
Offered by the central bank to commercial banks in times of lending funds

Let us look at their comparison below:

1. Time: The key difference between bank rate and repo rate is the duration of funds. A bank rate is a rate of interest charged by the central bank for long-term financial requirements of banks. However, the Repo rate is charged for short-term funds requirements of banks.

2. Collateral security: Bank rate does not involve any collateral security. Repo rate requires collateral security such as bonds, agreements etc., for lending loans.

3. Purpose: Central bank charges bank rates while offering loans to commercial banks. The central bank sets a Repo rate to repurchase securities sold by commercial banks of the country.

4. Degree: Bank rate is always lower than the repo rate. The Repo rate is always greater than the bank rate.

Impact of a repo rate hike on the country

On May 4, 2022, RBI announced a hike in the repo rate by 40 basis points. This led to an increase in the repo rate from 4% to the current rate of 4.4%.

To control rising inflation in the country, RBI had to take this move. The strategy is expected to control the rate and volume of liquidity in the country.

A hike in repo rate means banks will now have to use their funds sensibly. They will refrain from taking loans from the RBI due to high acquisition costs. In a video speech, the RBI’s governor, Shaktikanta Das, says that a jump in repo rate would drain around 87,000 crores of liquidity out of the banking sector of the economy.

“Inflation must be brought under control for the Indian economy to remain steadfast on its path to sustainable and inclusive development,” Mr Das added.

Final thoughts

The Repo rate is a tool used by the RBI to control inflation in the country. A rise in the repo rate helps control the money supply by soaking liquidity from the economy. While it may protect an economy from high inflation, it does not positively impact all the different sectors in an economy. Hence, volatility in the market has gone up, and it might persist for some time due to changes in the repo rate.

How can legal heirs of the deceased file income tax returns?

It is surprising but true that a person is taxed even after he is no more. If a person at the time of death has earned income exceeding the threshold limit ( i.e. >INR 2,50,000), he is still liable to file an Income Tax Return (ITR). Are you wondering who will be accountable for this? Well, look for section 159 of the Income Tax Act.

According to section 159 of the Income Tax Act, the deceased person’s legal representative will be liable to pay any sum that the deceased would have been liable to pay if he had not died.

This section further elaborates that:

â— The legal heir/representative shall be deemed to be an assessee. The heir will be responsible for paying tax on income of the financial year from the beginning to the deceased’s date of death.

â— The liability of the legal representative is limited to the extent of assets inherited from the deceased. If the deceased’s assets are valued at, say, Rs1,00,000, and liability is Rs 1,20,000, then the heir will only be responsible for Rs 1,00,000. The legal heir is not liable to pay anything from their pocket.

â— Before filing a return, the legal representative has to register himself as a legal heir of the deceased.

Steps to register as a legal heir/representative of the deceased

To file an income tax return of the deceased person, the legal heir/representative must get registered. To get registered, here are the exact steps to follow.

Step1: Go to the governmentâ€™s official website for e-filing of the returnâ€”login to the e-filing portal using the heirâ€™s credentials.

Step 2: In the top left corner, under â€œmy accountâ€, choose â€œ Add/Register as Representative.â€

Step 3: In the â€œRequest Typeâ€ option, choose the â€œNew Requestâ€ option.

Step 4: Next, select â€œ Register yourself on behalf of another personâ€ for the option â€œAdd/Register as Representative.â€

Step 5: Now, click on the highlighted â€œProceedâ€ option at the bottom.

Step 6: For â€œCategory to Registerâ€, select the â€œLegal Heirâ€ option. Then, click â€œProceedâ€ again.

Step 7: Provide all the necessary details asked. These are the PAN of the deceased, date of death, surname, middle name and first name of the deceased as per PAN.

Step 8: Select the files you wish to upload. These include a copy of the PAN card of the deceased, a copy of the death certificate, a legal heir certificate issued by the court/local authority or surviving member certificate or pension order or registered will, and a copy of the PAN card of the legal heir.

Step 9: Put all the files in a zipped format and upload them by clicking the ‘Submit’ button. Make sure that the size of the zipped folder is less than 1 MB.

Step 10: Wait for the confirmation message after submitting all the details.

Approval of the registration process

The request of the legal heir to be registered will be sent to the E-Filing administrator for approval. The administrator will carefully verify the documents attached. Based on the authenticity of the files, the administrator will approve or deny your request to register as a legal representative.

If the request is approved, it signifies your request as the â€œlegal heirâ€ is accepted. Once confirmed, the legal heir can perform all the services as a â€œlegal representativeâ€.

If the request is denied, the portal will display the reason for rejection. It may happen for several reasons, including filling in wrong information, uploading false documents, etc.

If you wish to check your registration status, follow the exact first six steps mentioned above. Clicking on “Proceed” will give you the registration status, i.e. accepted or denied, and reasons if rejected.

Filing of return as legal heir/representative

Once the registration process is successful, the representative can file ITR on behalf of the deceased. And, the return will be filed in the same way as a regular person.

The legal heir would be required to verify the ITR. Verification can be done through two procedures. The heir can send a copy of the ITR acknowledgement to the central processing centre after signing it. Or, the representative may verify it electronically through OTP by registering their phone number.

It is important to remember that if a deceased person has any dues such as interests, penalties or tax dues, the legal heir would be responsible for paying the same. However, their liability to pay the pending amount is not unlimited. It is limited to the value of assets acquired from the deceased person.

The Ultimate Guide to Tax on Digital Assets

Have you invested in cryptocurrency? Are you confused about how much you need to pay tax to the government when you transact digital assets?

In the Budget 2022, the finance minister announced a 30% tax on profits from digital assets, among other announcements. This article will help you figure out the tax on digital assets.

As per the governmentâ€™s definition, digital assets include ready money like Bitcoin, application coins, privacy coins, stable coins, Non-Fungible Tokens (NFTs), governance tokens and other related coins and tokens.

However, we need to understand that taxing profits doesnâ€™t mean that digital assets are legal. The government has mentioned that cryptocurrency would never be a legal tender, but the legality as an asset class is still unclear.

Tax on the income from digital assets

The income from transferring virtual digital assets is subject to a 30% tax. This means that the same tax rate will apply to individuals across different income slabs. Moreover, the people whose total income is less than Rs.2.5 lakh and donâ€™t file ITR might have to file ITR to show their income from cryptocurrency.

This tax on income would be computed after deducting the cost of acquisition, which might include the purchase price of the cryptocurrency, as well as transaction fees.

Like most investment options, the tax on capital gains is applicable when you sell digital assets.

Crypto investors cannot claim deductions to decrease their tax liability because of their earnings.

Cryptocurrency losses cannot be adjusted against other sources of income, such as real estate or salaries, and losses cannot be carried over to future years. However, it’s uncertain if profits from one type of digital asset may be used to offset losses from another.

If you use a foreign crypto exchange, a peer-to-peer marketplace like LocalBitcoins or mine your cryptocurrency, you have to pay 30% on your profits. However, experts feel miners might be able to deduct cost of acquisition expenses such as power, depreciation on mining computers, and so on.

It is to be noted that profits made from cryptocurrency transactions made before April 2022 will also be taxed as per the Central Board of Direct Taxes (CBDT) statement.

Tax on Gifts

The budget also announced that digital assets received as gifts would also be taxed.

In addition to the digital assets received from another individual, such as a friend or relative, free cryptocurrency got through airdrops, learn-to-earn schemes, and play-to-earn games will be treated and taxed as gifts.

However, gifts made to specific relatives or on particular occasions are free from taxation under the Income-tax Act of 1961, regardless of the size of the gift. Gifts from parents, siblings, and other relatives, for example, are tax-free. Gifts received at weddings, via a will or inheritance, or in anticipation of the donor’s death are likewise excluded from income tax, regardless of their value.

In the hands of the individual, however, a gift received from a friend over Rs. 50,000 on the occasion of a birthday will be taxable.

The question now is whether the same gift taxation regulations that apply to physical assets would also apply to virtual digital assets. According to experts, the term â€˜propertyâ€™ under the Income-tax Act would be broadened to include virtual digital assets.

Individuals who got digital assets such as cryptocurrencies or NFTs as part of their pay package will be subject to a 30% tax since they will be considered a “gift” under the new tax law, rather than pay or employee stock options (ESOPs).

Even if the employee has not sold the coins, they will be obligated to pay the tax during the assessment year. Not only that, in many situations, employees may be required to pay tax on higher sums even if the value of the coins has declined since they received them.

1% TDS

Besides the tax on income and gifts, the government imposed a 1% TDS on all transactions.

Crypto exchanges will be required to withhold 1% TDS for most transactions starting July 1, 2022, under the new section 194S of the Income Tax Act. It will make sure that the government knows about all crypto transactions.

It is like charge on a remittance or sending an IMPS to someone else.

Let us consider an example. If a trader conducts ten transactions each day for Rs. 10 lakh, it will cost them 10,000 rupees multiplied by ten transactions for a total of Rs. 1 lakh rupees. However, trading within the site is not subject to a 1% TDS.

This TDS may apply only if the total amount of crypto transactions in a year exceeds Rs. 50,000 for the following sections of people:

Individuals or Hindu Undivided Families (HUF) with annual sales/gross receipts/turnover above Rs. 1 crore
Individual professionals with a yearly salary of more than Rs. 50 lakh
Individuals or HUFs who do not have a source of income from a job or a business

For others, this TDS may apply if the total amount of crypto transactions in a year exceeds Rs. 10,000.

However, as crypto trading takes place on a global level, there is no clarity if they would deduct the TDS if the transaction occurs between an Indian buyer and a foreign seller.

Conclusion:

Taxation of digital assets such as cryptocurrency is an intriguing topic and one thatâ€™s going to become even more relevant as the industry continues to expand.

In today’s blog, we shared everything you needed to know about taxation on digital assets.

What you need to know about digital rupee

The government has proposed Central Bank Digital Currency (CBDS) in Budget 2022, which will promote the digital economy. The Reserve Bank of India is developing a digital rupee which is expected to be launched in a year.

This article will cover all the fundamental aspects of the digital rupee.

What is a CBDC?

The central bank of a country issues CBDC or Central Bank Digital Currency. In India, RBI will issue a digital rupee or CBDC and regulate it. It will be a digital form of the Indian rupee, and individuals can exchange physical currency with digital currency.

So, one rupee in the physical form will equal one digital rupee.

Difference between CBDC and digital payment

Many of us use digital payments, such as net banking or UPI, to transfer and receive money. So, the difference between the digital rupee and digital payments may seem confusing.

Experts say that CBDC may work as a payment token. This would take the shape of a digital wallet where users may store CBDCs, which are like bank accounts but do not pay any interest.

However, you may not need a savings account to make online payments when you have digital currency. Plus, you may not need any digital payment options that come with bank savings accounts.

Benefits of digital rupee

CBDCs could also help payment systems become more real-time and cost-effectively globalised. Digital rupee may allow Indian exporters to get digital rupee from a US importer in real-time and without depending on formal banking hours and time zones.

The CBDC can provide individuals with advantages such as liquidity, scalability, acceptance, transaction convenience and speedier settlement.

The Reserve Bank of India (RBI) can minimise operational costs by replacing a percentage of the cash in circulation with a digital rupee. According to a market estimate, the price of each Rs 100 note in its four-year life cycle is around Rs 15-17 rupee. The process comprises a series of new notes printed and soiled notes returned to the RBI by commercial banks.

Unlike totally anonymous currency, they will construct a digital rupee so that the central bank can track expenditure to prevent money laundering.

Differences between cryptocurrency and CBDC

Cryptocurrencies are decentralised, meaning there is no one issuer or debt liability. Blockchain technology, which is the backbone of cryptocurrency and CBDC, by its very nature, is not centralised. This means that all of its information is stored on a network of computers. Digital Rupee will have a slightly different structure than cryptocurrency, as it wonâ€™t be decentralised because the RBI will issue it and regulate digital rupee.

Cryptocurrencies are considered an investment. Individuals can buy a cryptocurrency unit and sell it when its value increases. However, the digital rupee will be a medium of exchange and not an investment option.

The government has announced a 30% tax on gains from cryptocurrencies. However, such taxes wonâ€™t apply to the digital rupee. The other cryptocurrencies are considered digital assets, and the digital rupee would be a legal tender.

Conclusion

The introduction of the digital rupee may be the first step towards a cashless economy. It may also reduce money laundering and bring about financial inclusion.

To understand the overall working of the digital rupee, we will have to wait for further clarity from the government.

Budget 22-23 puts an end to Bonus Stripping for Tax Planning

Finance Minister Nirmala Sithraman in Union Budget 2022-23 has taken away one of the popular tax planning mechanisms called bonus stripping.

From April 1, 2023, investors who previously used a technique known as bonus stripping to reduce their tax liability could no longer do so. It is because of a change in the Income Tax Act that was introduced in the Union Budget 22-23.

This article will look at bonus stripping and how it works.

What is Bonus Stripping, and how does it work?

Bonus stripping occurs when shares or mutual funds are purchased and sold in a way that results in a short-term capital loss that can help to offset capital gains.

So, in this scenario, an investor buys units or shares at a higher price to sell them at a lower price.

Let us take a simple example to explain bonus stripping.

Assume that an investor buys 100 shares of a corporation at Rs 100 per share. After some time, they publicly announce that they are going for a 1:1 bonus issue. As one share is now split into two shares, the share price of the company’s share gets priced to Rs 50. Now, the person has a total of 200 shares.

The person might sell the original 100 shares at Rs 50 each. As per the current rules, they can record this sale of shares as a loss because they bought a single share of the company at Rs 100 and sold it for Rs 50.

So, the investor can use the loss of Rs 5,000 (Rs.100*100â€“100*50) to offset any capital gains from other transactions.

We also need to keep in mind that the investor still owns the 100 shares they received as a bonus. They may stay invested for one year to take advantage of the LTCG tax on equity units, which is taxed at 10% on gains over Rs 1 lakh.

Budget bans Bonus Stripping

The Income Tax Act currently has a clause prohibiting the set-off of losses suffered through bonus stripping against other capital gains to deter investors from engaging in such practices.

According to Section 94 (8) of the Income Tax Act, if units are purchased within three months of the bonus issue’s record date and sell some units within nine months of the record date, the loss incurred shall be ignored. But till now, the anti-avoidance portion of section 94(8) only applied to mutual fund units.
With the latest budget announcement, in addition to mutual funds, the equity shares and units of InvITs, REITs and other alternative investment funds would also not be allowed to offset the losses arising out of the bonus issue against other gains.

The budget has also recommended revising the definition of units to incorporate units of new pooled investment vehicles such as InvITs, REITs, and AIFs.

Another similar concept is dividend stripping. Under dividend stripping, the investors hope to profit from capital losses resulting from post-dividend stock sales at a reduced price. However, as dividends are now taxed in the hands of the shareholder, dividend stripping is no longer relevant.

These changes will take effect on April 1, 2023, and will apply to the assessment years 2023-2024 and the following years.

4 key changes in Union Budget 22-23 for investors

Union Finance Minister Nirmala Sitharaman announced the Union Budget 2022 on Tuesday. While there were no changes in the income tax slab or standard deductions, the budget announced some reforms for digital assets, and also relaxation in the correction of ITR filings. Â

Let us look at the announcements made by the Finance Minister that relate to investments and may be helpful for investors.

Launch of digital rupee

The Indian government has been discussing launching a digital currency for quite some time. It looks like it might finally see the light of the day.

In today’s budget, finance minister Nirmala Sitharaman announced that the government is planning to launch a digital rupee based on blockchain and other technologies in the financial year 2022-23. The Reserve Bank of India will issue it.

“The introduction of central bank digital currency will give a big boost to the digital economy. Digital currency will also be a cheaper and more efficient currency management system,” the finance minister said today.

This move comes after the RBI voiced its concern regarding the rise of private cryptocurrencies and its frenzy among individuals.

Tax on cryptocurrency

The tax on gains from digital assets, i.e., cryptocurrency, had lacked clarity.

However, in this budget, the Finance Minister announced that the profits from digital assets would fall in the highest tax bracket of 30%. She also mentioned that the crypto investors could not set off in case of losses. Moreover, only the acquisition cost would be included while calculating the income from digital assets.

As per her speech, 1% TDS will also be deducted on the transfer of digital assets. The person receiving the digital assets as gifts will also have to pay tax.

Tax deduction on NPS for state govt employees increased to 14%

People who work for the state governments will get a tax break of 14% on the NPS contributions made by their employer, which is the state government. Currently, state government employees can get a tax break of 10% for their employer’s contribution. This new update will start in FY 2022-23.

Currently, only the people who work for the central government can get a tax break of 14% for money the central government puts into their NPS account.

The goal is to ensure that the state and central government employees get the same tax benefits for their employer contributions.

Contribution to NPS can reduce taxable income in three different ways.

Section 80CCD allows you to deduct up to Rs 1.5 lakh in NPS contributions in a single financial year. This deduction is limited to Rs 1.5 lakh under section 80C’s maximum limit.

Section 80CCD(1B) allows for an extra deduction of up to Rs 50,000.

Besides the Rs, 2 lakh maximum, any contribution from the employer is deductible under section 80CCD (2) of the Act.

Your employer’s contribution to your NPS account is the only tax break available under both the new and old tax regimes.

Opportunity to correct an error in income tax Â

The budget also announced that taxpayers can now file an updated return within two years from the relevant assessment year.

“We have further simplified the tax system. Introducing a new updated return where people can file updated returns within two years of the filed IT Return,” the Finance Minister said.

This means that the individual taxpayers will have more time to complete revised income tax returns if they have missed disclosing income at the time of filing.

Currently, an individual has until December 31 (unless the government extends the deadline) to amend their ITR to provide a complete picture of the income obtained from various sources during the fiscal year. Taxpayers will have two years from the end of the relevant assessment year to file their proper ITR.

The new I-T annual information statement, and how it affects you as a taxpayer

The Central Board of Direct Taxes (CBDT) has issued a notification stating that several additional details will now be populated in the Annual Information Statement (AIS) in Form 26AS. This includes foreign remittances, interest on income tax refund, off-market transactions, dividend income earned through mutual funds and purchase of mutual fund units. Clearly, the tax department is trying to put as much financial data as possible and will then track people who did not pay due taxes on such transactions. Here are more details on the topic.

What is AIS

At present, Form 26AS is detailed by the Tax Department. It is a consolidated annual tax statement that includes information on tax deducted/collected at source, advance tax, and self-assessment that is available on the Income-Tax website against a taxpayerâ€™s Permanent Account Number (PAN).
Form 26AS is the tax passbook of an individual. It contains details of the tax deducted and deposited against the PAN of an individual during a financial year.

Why new AIS

The Budget for 2020-21 had announced the revised Form 26AS. This will now give a more comprehensive profile of the taxpayer.
Mutual fund investments exceeding Rs 10 lakh is required to be reported in Form 26AS as per the amended version from last year.
Similarly, dividend income has become taxable from FY 2020-21 and tax has to be deducted on it if it exceeds Rs 5,000 in a financial year. Thus, any tax deducted on dividend income in the last year must be reflected in Form 26AS.

What’s new

The revised AIS includes additional categories of information of interest, dividend, securities transactions, mutual fund transactions, and remittances from abroad. Besides, there will be information on many other transactions that are at present available with the Income Tax Department.
Form 26AS will continue to exist until the new AIS is validated and is completely operational.
The recent inclusions will make Form 26AS as a ready reckoner for all financial transactions.

What taxpayers have to do

The new AIS can be accessed by clicking on the link â€œAnnual Information Statement (AIS)â€ under the â€œServicesâ€ tab on the new Income tax e-filing portal (https://www.incometax.gov.in).
If you as taxpayer feel that the information is incorrect, relates to another person/year, is a duplicate etc., there is no need to panic.Â
There is a facility to submit feedback online. Feedback can also be furnished by submitting information. An AIS Utility has also been provided for taxpayers to view AIS and upload feedback in offline manner.
If the taxpayer submits feedback on AIS, the derived information in TIS will be automatically updated in real time, and that information will be used for pre-filing of returns.Â
Taxpayers have been asked to check all related information, and to report complete and accurate information in their Income Tax Returns.

Last date to file income tax returns extended to December 31

The Central Board of Direct Taxes (CBDT) has extended the deadline for filing of income-tax returns for FY 2020-21 to December 31, 2021. This is the second time the ITR filing deadline has been extended. It was previously extended to September 30 from July 31.

â€œThe due date of furnishing of Return of Income for the Assessment Year 2021-22, which was 31st July, 2021 under sub-section (1) of section 139 of the Act, as extended to 30th September, 2021 vide Circular No.9/2021 dated 20.05.2021, is hereby further extended to 31st December, 2021,â€ said a statement released by the Union Finance Ministry.

On consideration of difficulties reported by the taxpayers and other stakeholders in the filing of Income Tax Returns and various reports of audit for the Assessment Year 2021-22 under the Income-tax Act, 1961 (the â€œActâ€), the Central Board of Direct Taxes has decided to further extend the due dates for filing of Income Tax Returns and various reports of audit for the Assessment Year 2021-22.

The due date of furnishing of Return of Income for the Assessment Year 2021-22, which was July 31, 2021, under sub-section (1) of section 139 of the Act, as extended to September 30, 2021, is hereby further extended to December 31, 2021.

The due date of furnishing of Report of Audit under any provision of the Act for the Previous Year 2020-21, which is September 30, 2021, as extended to October 30, 2021, is now further extended to January 15, 2022;

The due date of furnishing Report from an Accountant by persons entering into an international transaction or specified domestic transaction under section 92E of the Act for the Previous Year 2020-21, which is October 31, 2021, as extended to November 30, 2021, is now extended to January 31, 2022;

The due date of furnishing of Return of Income for the Assessment Year 2021-22, which is October 31, 2021 under sub-section (1) of section 139 of the Act, as extended to November 30, 2021, is hereby further extended to February 15, 2022.

The due date of furnishing of Return of Income for the Assessment Year 2021-22, which is November 30, 2021, under sub-section (1) of section 139 of the Act, as extended to December 31, 2021, is now further extended to February 28, 2022.

The due date of furnishing of belated/revised Return of Income for the Assessment Year 2021-22, which is December 31, 2021, under sub-section (4)/sub-section (5) of section 139 of the Act, as extended to January 31, 2022, is hereby further extended to March 31, 2022.

Do note that the extension of the dates as referred above in cases where the amount of tax on the total income as reduced by the amount as specified in clauses (i) to (vi) of sub-section (1) of that section exceeds rupees one lakh.

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Let us see the meaning of repo rate, reverse repo and bank rate.

Who is responsible for deciding the repo rate?

What is the reverse repo rate? How is it different from the repo rate?

Repo rate vs reverse repo rate

Difference between Repo rate vs bank rate

Impact of a repo rate hike on the country

Final thoughts

Steps to register as a legal heir/representative of the deceased

Approval of the registration process

Filing of return as legal heir/representative

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