For AY 2025-26, the ITR Forms have not yet been notified by CBDT. This delay could be attributed to the fact that the Central Board of Direct Taxes (CBDT) is trying to upgrade or fix their ITR utilities to accurately map the data fetched from various sources to avoid any error in processing the tax return.

Budget 2025-26 will only be applicable for the Financial Year (FY) 2025-26, corresponding to the Assessment Year (AY) 2026-27- 

No income tax payable up to ₹12 lakh under the new scheme

New tax slabs under new regime

₹0 lakh - ₹4 lakh: Nil. ₹4 lakh - ₹8 lakh: 5%. ₹8 lakh - ₹12 lakh: 10%. ₹12 lakh - ₹16 lakh: 15%. ₹16 lakh - ₹20 lakh: 20%. ₹20 lakh - ₹24 lakh: 25%. Above ₹24 lakhs: 30%.

The Central Board of Indirect Taxes and Customs (CBIC) has issued new, simplified guidelines for officers processing GST registration applications. The aim is to reduce paperwork, speed up the registration process, and ensure transparency for businesses.

What’s New:

• Quick Registration: For regular applicants, GST registration must now be approved within 7 working days if the application is complete and not flagged as risky.
  
  

• Extra Time for Risky Cases: Applications marked as risky, or where Aadhaar authentication fails, or if physical verification is needed, must be processed within 30 days after site inspection.
  
  

No More Unnecessary Documents:

CBIC has noticed that some officers were asking for extra documents and irrelevant details. To fix this, they’ve listed exactly what can be asked:

• For proof of business premises: upload any one of the following – property tax receipt, electricity bill, municipal khata, water bill, etc.
  
  

• If the place is rented: upload a valid rent/lease agreement along with one of the above documents.
  
  

• For business constitution: if it’s a partnership, upload the Partnership Deed.
  
  

Important: Officers are not allowed to ask for documents like Udyam registration, MSME certificate, trade license, or shop establishment certificate, as they are not required.

No More Presumptive Questions:

Officers should not raise unrelated or speculative queries such as:

• Why the applicant’s residential address is different from the business location.
  
  

• Whether the mentioned business activities are feasible from the premises.
  
  

Officers Must Do This:

• Check that the application is complete.
  
  

• Verify documents from official sources like land registry, electricity boards, or local bodies.
  
  

• Follow the rules and avoid discretionary practices.
  
  

Final Word:

This move is designed to help startups, proprietors, and small businesses avoid delays and confusion. With clear timelines and fewer document hassles, it’s a big step towards easier GST registration.

Now, the ball is in the officers' court — let’s see if they actually follow these updated instructions or not.

Senior citizens (60+) and super senior citizens (80+) get additional tax benefits:

• Basic exemption limit:

  • ₹3 lakh (60+)

  • ₹5 lakh (80+)

• Section 80TTB: Deduction of ₹50,000 on interest from FD and savings accounts.

• No advance tax if income is only from pension & interest.

Tip: Senior citizens should invest in SCSS, PPF, and tax-free bonds to maximize tax savings.

1. Understanding Capital Gains

Capital gains arise when a capital asset (like property, shares, or mutual funds) is sold at a price higher than its purchase price. These are classified as:

• Short-term capital gains (STCG): If assets are held for a short period before sale (e.g., listed equity shares held for less than 12 months).
  
  

• Long-term capital gains (LTCG): If assets are held for a longer period (e.g., listed equity shares held for more than 12 months).
  
  

2. Key Tax Planning Tips

🔹 Utilize Exemptions Under Section 54, 54F, and 54EC

• Section 54: Exemption for LTCG from sale of a residential property if another residential property is purchased within 2 years or constructed within 3 years.
  
  

• Section 54F: Exemption for LTCG from sale of any capital asset (except residential property) if entire sale proceeds are reinvested in a residential property.
  
  

• Section 54EC: Invest in specified bonds (e.g., NHAI, REC) within 6 months of sale to claim exemption, subject to a ₹50 lakh limit.
  
  

🔹 Opt for Tax Harvesting in Equity Investments

• Sell shares or mutual funds just before the financial year-end to realize LTCG up to ₹1 lakh, which is tax-free.
  
  

• Buy them back immediately to reset the purchase price and reduce future capital gains tax.
  
  

🔹 Set Off Capital Gains Against Losses

• STCL (Short-term Capital Loss) can be set off against STCG or LTCG.
  
  

• LTCL (Long-term Capital Loss) can be set off against LTCG only.
  
  

• Unused losses can be carried forward for 8 years.
  
  

🔹 Invest in Agricultural Land

• Capital gains on agricultural land (in rural areas) are tax-exempt.
  
  

🔹 Use Gift and Inheritance Strategies

• Transferring assets to family members in lower tax brackets can reduce tax liability.
  
  

• Inherited assets are not taxed as per current rules, but capital gains apply when the inheritor sells the asset.
  
  

🔹 Indexation Benefit for Inflation Adjustment

• Available for LTCG on assets like real estate, debt funds, and unlisted shares, reducing taxable gains.

NRIs are taxed only on income earned in India unless they qualify as a Resident but Not Ordinarily Resident (RNOR).

DTAA Benefits:

• NRIs can claim tax relief to avoid double taxation.

• Foreign Tax Credit (FTC) can be used if tax is already paid abroad.

Tip: NRIs should carefully track the days spent in India to avoid becoming a tax resident.

From April 1, 2023, new TDS rules apply to online gaming and crypto transactions.

• Online Gaming (Sec. 194BA):

  • 30% TDS on winnings (no exemption).

  • Platforms must deduct TDS before payout.

• Crypto Transactions (Sec. 194S):

  • 1% TDS if annual transactions exceed ₹10,000.

  • No TDS if crypto is traded on foreign exchanges (but buyer must deduct manually).

Tip: Track gaming winnings and crypto trades to avoid tax surprises.

With the rise of digital creators, income from freelancing, YouTube, and Instagram monetization is taxable.

Tax Rules for Freelancers:

• Income is taxed as business income (not salary).

• Section 44ADA: If turnover ≤ ₹75 lakh, presumptive tax is 50% of gross receipts.

• GST registration is mandatory if turnover exceeds ₹20 lakh (services) or ₹40 lakh (goods).

Tip: Keep track of online earnings and expenses to claim deductions effectively.

Under LRS, individuals can remit up to $250,000 (₹2 crore) per year abroad for education, travel, investment, and medical treatment.

TCS (Tax Collected at Source) on LRS Transactions:

• 5% TCS on education expenses above ₹7 lakh.

• 20% TCS (earlier 5%) on foreign investments & international travel (from Oct 1, 2023).

Tip: Plan remittances in a phased manner to reduce the impact of TCS blockage.

If you have income from freelancing, business, capital gains, or rental property, you must pay advance tax if total tax liability exceeds ₹10,000 in a financial year.

Due Dates for Advance Tax:

• 15% by June 15

• 45% by September 15

• 75% by December 15

• 100% by March 15

Failing to pay advance tax leads to interest penalties:

• Section 234B: 1% per month for short payment.

• Section 234C: 1% per month for delayed installments.

Tip: Salaried individuals earning capital gains should pay advance tax immediately after selling assets to avoid penalties.

Many taxpayers face a dilemma—should they claim House Rent Allowance (HRA) or Home Loan Benefits?

Comparison:

• HRA (Sec. 10(13A)): Available only if you live in a rented house. Deduction = Least of

  • Actual HRA received,

  • 50% of salary (metro cities) or 40% (non-metro),

  • Rent paid minus 10% of salary.

• Home Loan Benefits:

  • Section 80C: Deduction of up to ₹1.5 lakh on principal repayment.

  • Section 24(b): Deduction of up to ₹2 lakh on home loan interest.

  • Section 80EEA: Additional ₹1.5 lakh deduction for first-time homebuyers.

Tip: If you have a home loan but still live in a rented house, you can claim both HRA and home loan benefits.

Under Section 56(2)(x), gifts received are taxable if received from non-relatives and exceed ₹50,000 in a year.

Exemptions:

• Gifts from relatives (spouse, parents, siblings, etc.).

• Gifts received on marriage.

• Inheritance and Will-based transfers are fully tax-free.

• Gifts received from employers are taxable under "Income from Salary".

Tip: If you are receiving or planning to give gifts, ensure proper documentation to avoid tax disputes.

Capital gains taxation has undergone significant changes in Finance Act 2023, affecting investors in real estate, stocks, mutual funds, and digital assets.

Key Amendments:

• Debt Mutual Funds: From April 1, 2023, they are taxed as short-term capital gains (STCG) irrespective of holding period (earlier, they had indexation benefits under LTCG).

• Virtual Digital Assets (VDAs): Crypto and NFTs are taxed at 30% (Sec. 115BBH), and TDS @1% (Sec. 194S) applies on transfers above ₹10,000.

• Real Estate Indexation: Property buyers and sellers must check Section 50C to ensure capital gains are calculated based on fair market value.

Tip: If you are investing in property, mutual funds, or crypto, structure your transactions carefully to minimize tax liability

With the introduction of the new tax regime under Section 115BAC, taxpayers have an option to choose between:

• The old regime, which allows deductions (like 80C, 80D, HRA, home loan interest) but has higher tax rates.

• The new regime, which offers lower tax rates but eliminates most exemptions and deductions.

Key Highlights:

• For income below ₹7 lakh, the new regime is beneficial due to rebate under Section 87A.

• If you have significant deductions (EPF, LIC, tuition fees, home loan, etc.), the old regime may still be better.

• A taxpayer can switch between the regimes every year, except for those having business income (who have restricted switches).

Tip: Calculate your tax liability under both regimes before filing your return to optimize savings.

Introduction: 

The Finance Bill 2025 has introduced a significant tax relief for individuals, offering a no-tax benefit on income up to ₹12 lakh. However, businesses attempting to declare such income must ensure corresponding sales figures in their GST returns. This blog explores the impact of this amendment on businesses, the applicability of GST, and the role of presumptive taxation under Section 44AD of the Income Tax Act.

1. Income Tax Benefit of ₹12 Lakh – Who Can Avail?

The new amendment provides tax exemption on income up to ₹12 lakh for individuals. While this is beneficial for salaried individuals and professionals, businesses need to meet certain conditions before taking advantage of this provision.

If a business declares ₹12 lakh as its net income, it must demonstrate corresponding sales in GST filings.

Businesses cannot simply declare this as net profit without showing actual turnover.

2. GST Implications on Declaring Business Income

When a business reports ₹12 lakh as net profit, it must also show a corresponding turnover in GST filings.

Under GST laws, businesses are required to pay tax on their total taxable supply of goods or services.

If a business earns ₹12 lakh in net profit, its gross turnover must be adjusted accordingly (considering expenses and profit margins).

GST Liability: Businesses must pay GST on sales, depending on the applicable rate (5%, 12%, 18%, or 28%).

Thus, a business that falsely inflates profit without showing genuine sales may face GST penalties, scrutiny, and tax evasion charges.

3. Section 44AD – Presumptive Taxation and Business Implications

Under Section 44AD, businesses with turnover up to ₹3 crore (if cash transactions are below 5% of total turnover) can opt for presumptive taxation, where minimum 8% (or 6% for digital transactions) of turnover is considered as profit​.

If a business wishes to show ₹12 lakh as income, its minimum turnover should be at least ₹1.5 crore (assuming an 8% profit margin).

If the turnover is below this threshold, the business may have to justify its profit percentage to tax authorities.

If a lower profit is declared, the business must maintain books of accounts and undergo tax audit under Section 44AB​.

Thus, businesses cannot simply declare ₹12 lakh income without ensuring compliance with turnover and audit requirements.

4. Tax Audit Applicability Under Section 44AB

Businesses falling under the presumptive tax scheme under Section 44AD are not required to maintain books of accounts if they declare income as per presumptive provisions. However:

If a business declares lower profit than 8% (or 6%), and its total income exceeds the basic exemption limit, it must maintain books and get a tax audit done under Section 44AB​.

A tax audit is also applicable if turnover exceeds ₹1 crore (₹3 crore if cash transactions are ≤5%).

Penalty for Non-Compliance: Failure to conduct a tax audit attracts a penalty of 0.5% of turnover or ₹1,50,000, whichever is lower​.

5. Risks of Misreporting Income and GST Discrepancies

If a business tries to artificially declare ₹12 lakh profit without showing actual sales:

GST authorities may issue a notice demanding proof of corresponding turnover.

Income Tax Department may scrutinize the return for under-reported sales.

Tax Audit requirement will be triggered if profit is below the presumptive limit.

Thus, taxpayers must ensure proper bookkeeping and compliance to avoid penalties.

Conclusion

While the ₹12 lakh tax-free limit is a great incentive, businesses must align their income tax returns with GST filings. If a business is showing a high net profit, it must also justify corresponding turnover. Otherwise, it could attract GST scrutiny and tax audit requirements.

Key Takeaway: Ensure proper compliance with Income Tax and GST laws to avoid legal complications and financial penalties. 

1. Gross Total Income Exceeding Basic Exemption Limit (Section 139(1))

• If your gross total income exceeds the basic exemption limit before claiming any deductions under Chapter VI-A, you are mandated to file ITR.

  • For A.Y. 2024-25:

    • Individuals below 60 years: ₹2,50,000

    • Individuals aged 60–79 years: ₹3,00,000

    • Individuals aged 80 years and above: ₹5,00,000

2. Possession of Specified Assets and Transactions (Section 139(1)(b))

• Mandatory ITR filing is required if you:

  • Deposit an amount or aggregate amounts exceeding ₹1 crore in one or more current accounts.

  • Incur expenditure of ₹2 lakh or more on foreign travel for yourself or another person.

  • Spend ₹1 lakh or more on electricity consumption.

3. Income from Foreign Assets (Section 139(1) & Black Money Act)

• Residents having any foreign income or owning foreign assets must report these and file an ITR, regardless of income level.

4. Capital Gains or Losses

• Filing is compulsory if you have capital gains during the year, even if your net taxable income is below the exemption limit after deductions.

5. Tax Deducted at Source (TDS)/Tax Collected at Source (TCS)

• If TDS/TCS has been deducted or paid but your income does not exceed the taxable limit, you should file to claim a refund.

6. Carrying Forward Losses (Section 139(3))

• Filing is mandatory to carry forward losses under the heads of capital gains, business income, or speculative transactions.

7. Other Specific Cases

• Section 139(1) requires filing if:

  • You have received income from charitable trusts or political parties.

  • You are a partner in a firm or a shareholder in a closely-held company.

8. Companies and Firms

• All companies and firms, regardless of income, must file ITR.

9. Applicability of Alternative Tax Regimes

• Individuals or companies opting for alternative tax regimes (e.g., Sections 115BAC or 115BAA) are required to file ITR.

This summary ensures compliance with the latest provisions applicable for A.Y. 2024–25​​.

Under Indian tax law, cash transactions in bank accounts are monitored closely to ensure compliance and prevent tax evasion. Key reporting thresholds for banks concerning individual transactions in saving and current accounts are as follows:

1. Cash Deposits in Savings Accounts:

   • If cash deposits in a savings account exceed ₹10 lakhs during a financial year, the bank is required to report these transactions to the Income Tax Department under the Statement of Financial Transactions (SFT) provisions.

2. Cash Deposits/Withdrawals in Current Accounts:

   • For current accounts, cash deposits or withdrawals exceeding ₹50 lakhs during a financial year must be reported.

3. Aggregate Reporting:

   • The limits apply per account type. If an individual holds multiple accounts (savings or current), these limits are considered for each account individually.

4. PAN Requirement:

   • Banks require individuals to furnish their Permanent Account Number (PAN) for any cash deposit exceeding ₹50,000 in a single day.

Once these limits are crossed, the transactions are reported to the Income Tax Department, and the depositor may be required to explain the source of funds in case of scrutiny. This ensures accountability and helps in tracking unaccounted money.

1. Operating a CSP with Bank Permission

Income Tax Implications

Income Classification: Income earned through CSP operations is considered "business income" and taxed under the provisions of the Income Tax Act, 1961.

Audit Requirements: If total turnover exceeds ₹1 crore (or ₹10 crore with cash receipts and payments below 5%), a tax audit is required under Section 44AB.

Presumptive Taxation:

Under Section 44AD, if the turnover is below ₹2 crores, income is deemed to be 8% (6% for digital transactions) of the gross receipts.

TDS/TCS Compliance: If payments are made to agents or contractors, TDS might apply under Sections like 194C or 194H.

GST Implications

Registration: Mandatory if aggregate turnover exceeds ₹20 lakhs (₹10 lakhs for special category states).

Taxable Supplies:

Commission or fee charged for services provided is subject to GST.

GST rate is 18%.

Input Tax Credit (ITC): ITC can be claimed on business-related expenses if registered under GST.

Compliance: File GST returns like GSTR-1, GSTR-3B, etc.

2. Operating a CSP Without Bank Permission

Income Tax Implications

Classification of Income: Income is still treated as "business income." However, without permission, penalties or legal consequences may affect financial declarations.

Income from Illegal Activity: As per the Income Tax Act, even income from illegal sources is taxable. Therefore, income must be declared, though legal consequences might follow.

GST Implications

Non-Compliance:

Operating without authorization from a bank might result in inability to register under GST or claim ITC.

GST liability on commission remains.

Penalty: Non-registration or non-payment of GST can attract penalties under Section 122 of the CGST Act, 2017.

Legal and Compliance Consequences

Banking Laws: Operating without a bank's permission may violate RBI guidelines and the Banking Regulation Act, 1949.

Penalties under IT Act:

Concealment of income may result in penalties under Section 270A.

Failure to maintain books of accounts as per Section 44AA attracts fines.

GST Penalties:

Non-registration: Penalty up to 10% of the tax amount (minimum ₹10,000).

Late filing: ₹100/day for CGST and SGST each.

Recommendations:-

With Permission: Ensure compliance with Income Tax and GST laws, maintain proper documentation, and file required returns.

Without Permission: Obtain bank authorization to regularize the business and avoid legal complications.