Income Tax

Restriction on cash transactions under Income tax act, 1961

Cash Transactions-min
After the demonetization, Government has earned an important lesson. Keeping the rhetoric aside, it's enlightened to the wisdom of colours in money. Notes of two-thousand turned pink, five hundred went green but none could become black. Still, it's a firm belief, perhaps the only way to stop money from turning black. It's no longer secrete, cash transaction is mere the starting point in the webs of money launderers. A web that has no definite end. Once, cash turns black, it keeps exchanging hands. For few, the cycle ends on real estate, but it's an illusion. It becomes part of an
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Know the TDS rates when you do not provide your PAN

Although in some cases, quoting of PAN for certain type of transaction is must, for most of the transactions quoting of PAN is optional yet it is beneficial to quote PAN in your own interest. When TDS is to be deducted by payer, you should quote your PAN for getting TDS deducted at lower rate. If you do not quote your PAN on transaction that attracts TDS, the rates applicable for deduction will be subject to the provisions of Section 206AA of the Income-Tax Act, 1961. This section provides that where PAN is not quoted, the rate applicable will be
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Interest on Income Tax Refunds

Interest on Income Tax Refunds
Normally, an assessee pays tax based on computation of his expected tax liability. And very often his tax liability is either less or higher when he finally computes his actual tax liability at the time of filing of his return. If his actual tax liability is higher, he has to pay such higher tax and there is interest if such additional tax paid is after the due date. Likewise, when his actual tax liability is lower than what he has already paid, he will have right to get refunds. Subject to conditions under the income tax act, he has also
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Mandatory Linking of Aadhaar and Exemptions from Income Tax Department

Mandatory Linking of Aadhaar
With Aadhaar being mandatory for filing ITR, there are several consequences for not linking the same. Below is in detail consequences. Most immediate impact will be on filing of ITR. As earlier notified by Government, no ITR shall be accepted within Adhaar being linked to the PAN. However, there are some exemptions discussed later on this article. Further, for those who don't care for filing of ITR, government has made clear that they need to link Aadhaar to their PAN or else the PAN allotted earlier shall be cancelled from the date as to be notified by Government. But cancellation
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How to calculate WDV Rates for Depreciation

Calculating WDV rates
Straight Line Method (SLM) and Written Down Value (WDV) methods are the most used methods for calculating depreciation. Although Companies Act doesn't require any specific method to be chosen, the income tax limits the choice for selecting options. SLM is allowed by the Companies Act, but the Income-tax Act requires calculation of depreciation by WDV Method only. However, certain exceptions are there where even income-tax act allows calculation of depreciation by SLM. But, that's part of another discussion. Schedule II of the Companies Act, 2013 contains the useful guide for calculation of depreciation. Although it doesn't contain the rates to
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TDS on Insurance Commission [Section 194D]

TDS 194D-min
Section 194D deals with Tax Deduction on payment of insurance commission. This section casts responsibility on any person responsible for paying to a resident any income by way of remuneration or reward as a commission from the insurance business. Payment to non-residents is covered under section 195. This section covers TDS on payments of commission for insurance business obtained from a resident only. When is TDS deducted under 194D It casts responsibility to deduct TDS on any person who pays commission on insurance to a resident. Such income may be named by way of insurance commission or other remuneration. This
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Know about TDS on Payments to Contractors and sub-contractors [Section 194C]

Tds 194c-min
Provisions related to Tax Deduction at Source (TDS) that are applicable on payments to contractors and sub-contractors are in Section 194C of the Income Tax Act, 1961. This section applies only to payments made to resident contractors and sub-contractors. For payments to non-residents, section 195 shall be applicable. TDS on Contracts Who should deduct such TDS? This section requires all individuals, HUFs and other forms of entities that are subject to tax audit under section 44AB to deduct TDS under this section. However, following individuals will not collect TDS – Individual, HUF, AOP or BOI whose total sales, gross receipts
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Procedure to check status of Tax refund (Income Tax)

Check Income Tax Refunds
One can check the status of Income Tax refund from TIN-NSDL website. You can click on the below link: Link to TIN-NSDL Refund Status Page On visiting the above link, option as shown in image below: TIN NSDL Refund Status Page On this page, you can provide your Permanent Account Number (PAN) and Assessment Year for which you want to check the status of income tax refund. Assessment Year is the year in which you file the return of the Previous Year. For example, you file the return of your income for the period starting on 1st April 2016 and
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TDS on Winnings from Lotteries, crossword puzzles and horse races [Sections 194B and 194BB]

TDS on Winning-min
Any income from winnings from lotteries, crossword puzzles, card games and other game of any short, races including horse races, etc., is chargeable to income-tax under section 115BB. This section imposes an income tax at a flat rate of 30%. Further, the provisions of TDS are applicable on it. Section 194B and 194BB deals with TDS on such income. It casts a legal obligation on such person making payment on account of winning or other activities as mentioned above, to deduct TDS at the time of payment. Such TDS should be deducted at a rate of 30% if the payment
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Know about TDS on Interest other than Interest on Securities [Section 194A]

TDS 194A-min
Section 194A deals with TDS on interest other than the interest on securities. Provisions related to the TDS on interest on securities are in section 194. The current rate of TDS under this section is given by Part II of the First Schedule to the Annual Finance Act. At present, the rate is 10% for both in the case of resident non-corporate assessees and the domestic companies. The main provisions of this section are as listed below – This section applies only to interest, other than "interest on securities". It applies when such interest is credited or paid by assessees
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