FAQs

No, it is not obligatory for the stay to be limited to one specific location in India when determining residential status for income tax purposes.

Yes, it is necessary for the NRI taxpayer to file objections with the DRP and provide information to the AO within 30 days. This timeframe is critical as both actions must be completed within this period—submitting objections and providing information to the AO.

Yes, an individual residing outside India, who is not an NRI/OCI but is married to an NRI/OCI, can jointly acquire one immovable property (excluding agricultural land/farmhouse/plantation property) with their NRI/OCI spouse. This is subject to the conditions stipulated in Rule 25 of the Foreign Exchange Management (Non-Debt Instrument) Rules, 2019.

Indeed, a resident individual can utilize the Liberalised Remittance Scheme (LRS) to send remittances for acquiring immovable property beyond India. These remittances under the LRS can also be pooled for relatives who are residents in India, given they comply with the terms and conditions of the Scheme.

In accordance with sub-section 4 of Section 6 of the Foreign Exchange Management Act, 1999, an individual resident in India is permitted to possess, retain, transfer, or invest in foreign currency, foreign securities, or any immovable property located outside India, provided that such currency, securities, or property were acquired, retained, or owned by the individual while they resided outside India or inherited from someone who was a non-resident.

Furthermore, a resident individual can also acquire property and other assets abroad under the Liberalized Remittance Scheme (LRS).

The due date for filing the income tax return for the financial year 2023-24 (assessment year 2024-25) is typically July 31st of the assessment year in not audit case.

ITR-2 is applicable for non-resident individuals as well as residents, along with Hindu Undivided Families (HUFs). Individuals and HUFs who do not have income under the head "Profits and Gains of Business or Profession" are not eligible for filing ITR-1 and can instead use ITR-2 for filing their income tax returns.

Form 16 is a document that provides details of Tax Deducted at Source (TDS) on salary, as per Section 203 of the Income Tax Act, 1961. It is issued by employers to their employees.

The form includes information such as salary paid, deductions/exemptions claimed, and tax deducted at source. These details are crucial for computing the tax payable or refundable by the employee.

Form 16A is a certificate issued under section 203 of the Income Tax Act, 1961, specifically for Tax Deducted at Source (TDS) on income other than salary.

This form is provided by the deductor to the deductee and is issued quarterly. It contains details such as the amount of TDS, nature of payments, and the TDS deposited with the Income Tax Department.

ITR-1 can be filed by a Resident Individual if:

• Their total income for the Financial Year does not exceed ₹50 lakh.
• Their income is derived from salary, a single house property, family pension income, agricultural income (up to ₹5000/-), and other sources, including:
  • Interest from Savings Accounts
  • Interest from Deposits (Bank / Post Office / Cooperative Society)
  • Interest from Income Tax Refund
  • Interest received on Enhanced Compensation
  • Any other Interest Income
  • Family Pension
• The income of their spouse (except those governed by the Portuguese Civil Code) or minor is combined, provided the source of income falls within the specified limits mentioned above.

ITR-1 cannot be filed by any individual who:

• Is a Resident Not Ordinarily Resident (RNOR) or Non-Resident Indian (NRI).
• Has a total income exceeding ₹50 lakh.
• Has agricultural income exceeding ₹5000/-.
• Has income from lottery, racehorses, legal gambling, etc.
• Has taxable capital gains (short-term and long-term).
• Has invested in unlisted equity shares.
• Has income from business or profession.
• Is a Director in a company.
• Has tax deduction under section 194N of the Income Tax Act.
• Has deferred income tax on ESOP received from an employer being an eligible start-up.
• Owns and has income from more than one house property.
• Does not meet the eligibility conditions for filing ITR-1.

The following types of income shall not be included in the ITR 1 form:

• (a) Profits and gains from business and professions;
• (b) Capital gains;
• (c) Income from more than one house property;
• (d) Income under the head "other sources" which includes:
  • Winnings from lottery;
  • Activity of owning and maintaining racehorses;
  • Income taxable at special rates under section 115BBDA or section 115BBE;
• (e) Income to be apportioned in accordance with the provisions of section 5A.

Yes, it is compulsory to specify the type of employment when filing a return from the following categories:

• Central Government Employee
• State Government Employee
• Employee of Public Sector Enterprise (whether Central or State Government)
• Pensioners (CG/SG/PSU/OTHER)
• Employee of Private Sector concern
• Not applicable (in case of family pension income)

You'll need to download AIS and keep copies of Form 16, house rent receipts (if applicable), and investment payment premium receipts (if applicable). However, ITRs are annexure-less forms, so attaching documents such as proof of investment or TDS certificates is not required along with your return, whether filed manually or electronically. However, it's important to retain these documents for situations where they need to be presented before tax authorities, such as during assessment or inquiry.

Linking Aadhaar with PAN is indeed important. While you can still file your ITR if your PAN is not linked with Aadhaar, your access on the portal will be limited. Therefore, it's advisable to link PAN with Aadhaar.

• Download AIS and Form 26AS to verify the actual TDS / TCS / tax paid. In case of any discrepancies, reconcile them with the Employer / Tax Deductor / Bank.
• Compile and carefully review the documents needed for filing your ITR, such as bank statements / passbooks, interest certificates, receipts for claiming exemptions or deductions, Form 16, Form 26AS (Annual Information Statement), investment proofs, etc.
• Ensure that details like PAN, permanent address, contact information, bank account details, etc., are accurate in the pre-filled data.
• Identify the appropriate return form for your situation (from ITR-1 to ITR-7). Provide all necessary details in the return, including total income, deductions (if any), interest (if any), taxes paid / collected (if any), etc. No documents need to be attached along with ITR-1.
• File the income tax return electronically on or before the due date. Consequences of late filing may include late filing fees, loss of carry-forward of losses, and ineligibility for deductions and exemptions.
• After e-Filing the return, ensure to e-Verify it. If you prefer manual verification, send the signed physical copy of the ITR-V Acknowledgement (via speed post) within the specified timelines to the Centralized Processing Center, Income Tax Department, Bengaluru 560500 (Karnataka).

Individual taxpayers are required to file different tax returns based on their sources of income and residential status.

Form 26AS is a statement that displays various details, including Tax Deducted/Collected at Source and Advance Tax/Self-Assessment Tax. Taxpayers may pay tax in any of the following forms:

• Tax Deducted at Source (TDS)
• Tax Collected at Source (TCS)
• Advance tax or Self-assessment Tax

The Income Tax Department maintains a database of the total tax paid by all taxpayers, known as tax credit in the taxpayer's account. Taxpayers typically claim the credit of taxes based on the information reflected in their Form 26AS.

Errors or omissions in your Form 26AS can occur due to various reasons, including:

• Non-filing of TDS return by the Deductor
• Non-payment of TDS by the Deductor
• Quoting of incorrect Assessment Year (AY) or wrong PAN (or no PAN)
• Incorrect challan details in the submitted TDS returns
• Challan details being incorrectly quoted in the TDS return by the Deductor or in details uploaded by the bank

To rectify the details in your Form 26AS, you can take the following actions:

• 1. Submit a correction statement (via the NSDL website) for only those records that require correction.
• 2. In cases where a mistake was made by the Deductor (e.g., your employer), you should reach out to the Deductor and request them to:
  • File the pending TDS return if it hasn't been filed yet.
  • Provide a revised TDS return if they filed the return with incorrect details or with a wrong or missing PAN.
• 3. If there is an error made by the bank (e.g., incorrect tax amount, PAN), you should request the bank to rectify it in the uploaded challan details.

Yes, you can file ITR-1 for AY 2024-25 if the following conditions are met:

• If you are a single or joint owner of a single property, you can file ITR-1 for AY 2023-24.
• If you own more than one property, you cannot file ITR-1, even as a single owner.

To avoid complications in filing your return and obtaining your refund, ensure you:

• Link your Aadhaar and PAN.
• Pre-validate the bank account where you wish to receive your refund.
• Select the correct ITR form before filing; otherwise, the filed return will be deemed defective, requiring a revised ITR with the correct form.
• File the return within the specified deadlines.
• Verify your return; e-Verification (via "e-Verify Now") is the recommended option and the easiest way to verify your ITR.
• Respond to notices from the ITD within the specified deadlines.

For salaried individuals, advance tax is typically handled through TDS by employers. However, additional sources of income such as interest on savings bank accounts, fixed deposits, rental income, bonds, or capital gains can increase the tax liability. It's necessary to estimate one's tax liability beforehand. If the tax amounts to more than ₹10,000 per year, taxpayers need to pay advance tax in quarterly instalments (June, September, December, and March).

Advance Tax: Advance Tax must be calculated as follows: a) For all assesses (except eligible assessees under section 44AD and 44ADA of the Income Tax Act):

• At least 15% by June 15th
• At least 45% by September 15th
• At least 75% by December 15th
• Over 100% by March 15th

Self-Assessment Tax: After completing your ITR form with the TDS and advance tax details (if paid), the system computes your income and checks if tax is still payable. You need to pay it and then provide the challan details in the return before submission.

Allowances are fixed periodic amounts paid by an employer in addition to salary, such as conveyance allowance, traveling allowance, or uniform allowance. Allowances are considered income and increase your gross total income, subject to taxation. Perquisites are benefits received due to your official position, beyond your salary or wage income, and can be taxable or non-taxable based on their nature.

No, not all donations qualify for 100% tax exemption. Donations are categorized based on the recipient (charitable institution, government fund, scientific research, etc.), and exemptions vary accordingly:

• 1. Donations entitled to 100% deduction without a qualifying limit
• 2. Donations entitled to 50% deduction without a qualifying limit
• 3. Donations entitled to 100% deduction subject to a qualifying limit
• 4. Donations entitled to 50% deduction subject to a qualifying limit

Check the exemption limit on your donation receipt and claim deduction accordingly while filing your return.

Yes, you can submit a revised return if you've already filed your Income Tax Return but later discover a mistake. Your return must be revised three months before the end of the relevant Assessment Year. For AY 2024-25, the deadline for filing a revised return is December 31, 2024.

Yes, you can file ITR-U if you missed filing your previous two ITRs. For the current year, you can file your normal ITR.

If you miss filing the ITR within the due date under section 139(1), you can still file your Income Tax Return, but you may need to pay a late filing fee of up to ₹5000. Additionally, you'll be required to pay interest on any tax liability.

Do I need to file returns if tax has been deducted by my employer or bank?

Yes, any excess tax paid can be claimed as a refund by filing your Income Tax Return. After processing your return, the ITD checks and accepts your refund claim, and the amount is credited to your bank account. You'll also receive a notification on your registered email ID on the e-Filing portal

The deduction of tax from rent payments is mandated by sections 194-I and 194IB of the Income-tax Act.

• Section 194-I stipulates the deduction of tax by any person (excluding specified individuals or HUFs) from the sum paid or payable as rent to a resident person exceeding Rs. 2,40,000 during the financial year.
• Section 194-IB provides for tax deduction by specified Individuals or HUFs from rent paid or payable, if the rent exceeds Rs. 50,000 per month or part of the month during the financial year.

• For section 194-I, rent encompasses any sum paid for the use of land, building, plant, machinery, equipment, furniture, or fittings under any lease, sub-lease, tenancy, or any other arrangement or agreement.
• For Section 194-IB, Rent refers to any sum paid or payable for the use of any land or buildings or both under any lease, sub-lease, tenancy, or any other arrangement or agreement.

Any person, other than an Individual or HUF, responsible for paying rent is required to deduct tax under section 194-I. An individual or HUF engaged in business or profession having turnover or gross receipts exceeding Rs. 1 crore or Rs. 50 lakhs respectively.

Furthermore, no deduction shall be made if the rent is credited or paid to a business trust, being a real estate investment trust, in respect of any real estate asset, referred to in clause (23FCA) of section 10, owned directly by such business trust.

Tax is required to be deducted under section 194-I only if the rent is payable to a person who is a resident of India. The tax shall be deducted at the time of credit of such rent or payment to the payee, whichever is earlier.

The tax shall be deducted by the payer if the amount paid or payable exceeds Rs. 2,40,000 during the financial year. However, in the case of joint owners of a property, the threshold limit of Rs. 2,40,000 applies to each owner individually if their share in the property is definite and ascertainable.

The rate of deduction of tax at source (TDS) is 2% in case rent is paid for the use of plant, machinery, or equipment. However, if rent is paid for the use of land, building (including factory building), or land appurtenant thereto or furniture or fittings, the rate of tax would be 10%. These rates will not be enhanced by surcharge or health and education cess.

As per section 206AA, if the payee does not furnish PAN, tax shall be deducted at a rate higher of the following:

The rate prescribed in the relevant provisions of the Act, or Rate or rates in force, or 20%

As per section 206AB, if the payee has not furnished its return of income as per section 139(1) and the due date has expired, tax is required to be deducted at a rate higher of the following:

Twice the rate prescribed in the relevant provisions of the Act, or

Twice the rates in force, or

5%

In this case, the tax shall be deducted at the rates specified under section 206AA or section 206AB, whichever is higher.

The rental proceeds are considered as composite rent if other assets such as plant, machinery, or equipment are also let out along with land or building. The tax deduction in such case would be as under:

• If there is a separate agreement for letting out of land or building and letting out of other assets: The tax shall be deducted at the rate of 10% from the payment of rent of land or building and 2% from the rental payment of machinery, plant, or equipment.
• If there is no separate agreement for letting out of land or building and letting out of other assets: The tax shall be deducted at the rate of 10% or 2% depending upon the substantial element of the rent agreement. If the renting of machinery, plant, or equipment is incidental to the renting of land or building, tax shall be deducted at the rate of 10%.

Yes, where estimated tax liability of an assessee justifies nil deduction of tax, he can file a declaration to the deductor for nil deduction of tax under Section 197A. Further, he also has the option to apply before the assessing officer for a nil or lower deduction certificate under Section 197.

Tax deducted at source under section 194-I is required to be deposited to the credit of the Central Government through Challan ITNS 281 within 7 days from the end of the month in which tax was deducted. However, the tax deducted during the month of March shall be deposited by 30th April of the next financial year.

If the deductor is a government office and tax is required to be deposited without submitting an Income-tax Challan, the Govt. Dept. shall deposit the tax on the same day on which tax has been deducted.

The person responsible for the deduction of tax at source under section 194-I is required to file a statement of tax deducted at source in Form 26Q on a quarterly basis.

The deductor is required to issue a TDS certificate to the deductee in Form No. 16A within 15 days from the due date of furnishing the TDS Statement.

Any individual or HUF, who is not covered under section 194-I, is required to deduct tax at source under section 194IB on rental payments.

The section provides the following timelines for deduction of tax at source:

• Where the property is let out for the whole year: Tax shall be deducted at the time of payment or credit of rent to the account of the payee for the last month of the financial year, whichever happens earlier.
• Where the property is vacated during the year: If the property is vacated during the year, tax shall be deducted at the time of payment or credit of rent to the account of the payee for the last month of tenancy, whichever happens earlier.

The tax shall be deducted under this section if the rent for a month or part of the month exceeds Rs. 50,000 during the financial year.

The tax shall be required to be deducted under section 194IB at the rate of 5%. Further, the rate will not be enhanced by a surcharge or health and education cess. However, tax deducted under this section shall not exceed the amount of rent paid for the last month of the financial year or the termination of tenancy, as the case may be.

As per section 206AA, if the payee does not furnish PAN, tax shall be deducted at a rate higher of the following:

• The rate prescribed in the relevant provisions of the act, or
• The rate or rates in force, or
• 20%

However, deduction at a higher rate will prevail subject to the condition that the amount of TDS cannot exceed the amount of rent for the last month of the financial year or the termination of tenancy, as the case may be.

Section 206AB provides for deduction of tax at higher rate if the deductee has not furnished the return of income for a specified period. However, the provisions of Section 206AB are not applicable if tax is required to be deducted under section 194-IB.

There is no requirement to apply or obtain Tax Deduction or Collection Account Number (TAN) for deducting tax under this section. Hence, a deductor can use his PAN in place of TAN.

Where tax is deducted under section 194-IB, it is required to be deposited through a challan-cum-statement in Form No. 26QC within 30 days from the last day of the month in which such tax is deducted. No further statement or form is required to be furnished. In case more than one seller, Form 26AS shall be filled up according to the number of sellers. TDS certificate shall be issued to all sellers.

• ITR-2 and ITR-3 are suitable for Non-Resident Individuals depending on their income sources.

• PAN Card
• Form 16/16A
• Form 26AS
• Bank Statements
• Investment Proofs
• Property Documents or lower TDS certificates
• Tax Residency Certificate (TRC)
• Form 15CA and 15CB
• Passport
• Other Relevant Documents

• Tax rates vary based on the individual's age and the chosen tax regime (old or new).

• NRIs can select their tax regime annually by indicating it in their Income Tax Return (ITR) or by submitting Form-10-IEA.

• Yes, they must submit Form-10-IEA by the due date under section 139(1) for filing the income tax return, and the option to switch is available only once in a lifetime.

• Surcharge rates vary based on the total income range and the chosen tax regime (old or new).

• Deductions under various sections like 24(b), 80C, 80D, 80E, 80GG, 80GGA, 80GGC, and 80TTA are available for NRIs, subject to specific conditions.

• The maximum deduction limit is ₹2,00,000 for self-occupied properties, but this deduction is not applicable for individuals opting for the New Tax Regime.

• Payments towards life insurance premium, ELSS, ULIP, tuition fees, housing loan principal, and other specified items are eligible for deductions.

• Section 80D provides deductions for health insurance premiums and preventive health check-ups for self, spouse, dependent children, and parents.

• Deductions under Section 80E are available for interest payments made on loans for higher education of self or relative.

• The maximum deduction allowed under Section 80TTA is ₹10,000 on interest received on Saving Bank Accounts by individuals / HUF.

• NRIs should carefully review eligibility criteria and documentation requirements specified under relevant sections to ensure compliance with tax laws while claiming deductions.

• Deductions play a crucial role in reducing taxable income for NRIs, providing opportunities for tax planning and optimization of tax liabilities.