Saurabh Geetisha and Associates

19/03/2023

-tax

Income tax Section 54 is a very important provision for taxpayers who are looking to save on taxes while selling their residential property. This provision provides for exemption of capital gains tax if the proceeds of the sale of a residential property are reinvested in another residential property within a specified time period.

Let us understand the provisions of Section 54 in detail:

Eligibility: Section 54 is applicable to individuals and Hindu Undivided Families (HUFs) who have sold their residential property and have made a capital gain on the sale.
Exemption limit: The capital gains tax exemption limit under Section 54 is up to Rs. 2 crores.
Time limit for reinvestment: The taxpayer has to reinvest the proceeds from the sale of the residential property in another residential property within 2 years from the date of sale of the original property. If the taxpayer plans to construct a new residential property instead of purchasing one, then the construction has to be completed within 3 years from the date of sale of the original property.
Amount of exemption: The amount of exemption is equal to the amount reinvested in the new residential property. For example, if the capital gain on the sale of the original residential property was Rs. 50 lakhs and the taxpayer reinvests Rs. 40 lakhs in a new residential property, then the amount of exemption would be Rs. 40 lakhs.
Multiple properties: If the taxpayer sells multiple residential properties, then the exemption under Section 54 can be claimed for only one of the properties.
Joint ownership: If the original residential property was jointly owned by multiple individuals, then the exemption under Section 54 can be claimed only by the individual who has reinvested the proceeds in another residential property.
Sale of new property: If the new residential property is sold within 3 years from the date of purchase, then the exemption claimed earlier under Section 54 would be reversed and the capital gains tax would be applicable.
In conclusion, Section 54 is a very important provision for taxpayers who are looking to save on taxes while selling their residential property. Taxpayers should ensure that they reinvest the proceeds from the sale of the residential property within the specified time period to claim the exemption under Section 54. It is advisable to consult a tax expert to understand the provisions of Section 54 in detail and to plan your taxes accordingly.

18/03/2023

Section 194IA






Introduction:
TDS or Tax Deducted at Source is a tax collection mechanism where the payer deducts a specific percentage of tax from the payment made to the payee. TDS is applicable to various transactions, including salary, interest, commission, and immovable property transactions. In this blog, we will focus on TDS on immovable property and understand its key aspects.

What is TDS on Immovable Property?
TDS on immovable property is applicable when an individual or a company purchases an immovable property worth more than Rs. 50 lakhs. The buyer is required to deduct TDS at the rate of 1% on the total consideration paid for the property. The seller can claim the TDS amount as a credit while filing their income tax returns.

Who is responsible for deducting TDS on Immovable Property?
The buyer of the property is responsible for deducting TDS at the rate of 1%. If the property is jointly owned, then the TDS must be deducted proportionately to the share of each owner.

When is TDS on Immovable Property deducted?
TDS on immovable property is deducted at the time of payment to the seller or at the time of credit to the seller's account, whichever is earlier. The TDS amount should be deposited with the government within 30 days from the end of the month in which the TDS was deducted.

Exemptions from TDS on Immovable Property:

Agricultural land: TDS on immovable property does not apply to agricultural land.
Property purchased by the government: If the immovable property is purchased by the government, TDS is not applicable.
Property purchased by specified entities: TDS on immovable property is not applicable if the property is purchased by entities like statutory bodies, universities, or trusts.
Impact of TDS on Immovable Property:
TDS on immovable property has a significant impact on both buyers and sellers. For buyers, the TDS amount must be deducted from the total consideration paid for the property, which can increase the cost of the property. For sellers, TDS can affect their cash flow, as they must wait until they file their income tax returns to claim the TDS amount as a credit.

Conclusion:
TDS on immovable property is an important tax collection mechanism that helps the government in its revenue collection efforts. As a buyer or a seller of immovable property, it is essential to understand the key aspects of TDS on immovable property to comply with the tax laws and avoid any penalties or legal issues.

13/01/2023

New Functionality in GST Returns:

1) Re-compute Interest button in Table 5.1 of Form GSTR-3B

➡️A RE-COMPUTE INTEREST button has been provided in Table 5.1 of Form GSTR 3B which enables the taxpayers to re-compute interest in case they feel there is any discrepancy in the system
computed interest.

➡️On click of the RE-COMPUTE INTEREST button, the system will re-compute the interest and
update the system generated Form GSTR-3B PDF.

2) Enabling validation at 4- digit HSN declaration in Table-12 of GSTR-1

➡️A validation has been implemented in Table-12 of Form GSTR-1 wherein the taxpayers with AATO up-to Rs.5 crores have to mandatorily enter minimum 4 digits of HSN.

➡️A warning message shall be displayed if less than 4 digits are entered.

3) Implementing Sequential Filing of Form GSTR-1 and filing of Form GSTR-1 prior to Filing of Form GSTR-3B

➡️From October-2022, tax period onwards, filing of Form GSTR-1 has been made sequential.

➡️The system would not allow filing of
Form GSTR-1 until the GSTR-1 for the previous return period is filed.

➡️This would apply to both Monthly and Quarterly filers.

➡️In addition, w.e.f. October-2022 tax period onwards, filing of Form GSTR-1 before filing of Form GSTR-3B for a particular tax period has been made mandatory on the portal.

➡️This would apply to both Monthly and Quarterly filers.

4) Validation to check duplicate entries in Form GSTR-2B

➡️From the period Sep 2021, onwards, an option was provided to the taxpayers to pull the BoE details in Form GSTR-2B in case it was not populated automatically from ICEGATE using ‘Fetch Bill of Entry’ functionality.

➡️However, in absence of a check in the system in some cases the BoE
details were getting populated twice in taxpayer’s Form GSTR-2B.

➡️A validation has now been implemented on the portal so as to ensure that BoE details do not get populated twice in Form GSTR-2B.

5) Turnover threshold validation on filing by composition taxpayers

➡️With effect from FY 2021-22, a validation has been implemented on
the portal so as to ensure that a taxpayer whose aggregate turnover exceeds Rs.1.5 crore for goods and/or Rs.50 lacs for goods and services will not be able to file quarterly statement in Form CMP-08 and annual return in Form GSTR-4.

➡️An alert message will be displayed on the taxpayer’s dashboard in such cases.

12/01/2023

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13/12/2022

Know 10 proposals for Individuals in ICAI Pre-Budget Memorandum – 2023 on Direct Taxes

IICAI MembersIICAI Notifications@budget2023/2024

1) Minor Income

At present income of minors included in the hands of parents is exempt to the extent of Rs.1500/- . The average expenditure to meet cost of a minor’s education/health/living expenses has gone up considerably, suggested to be raised Rs. 10,000/-.

2) Grandfathering provisions for shares received by way of inheritance

While grandfathering as on 31 January 2018 is available for listed shares acquired prior to 1 February 2018, there is no clarity where shares are received by way of inheritance, propose to make them eligible

3) Deduction to salaried – Payment for notice period

Amount reimburse for Notice Buyout should not be included in Income

4) Regular enhancement of standard deduction

Salaried employees are currently allowed standard deduction u/s 16 @ Rs 50,000 may be enhanced to at least Rs. 100,000

5) Expenses incurred due to COVID19/lockdown/Work from home

Reimbursement should not be included in the salary and exempt

6) Deduction of interest from house property

Pre EMI interest is allowed for deduction in five equal instalments from the year of completion of construction. It is suggested to remove the said hardship by allowing deduction of pre EMI interest in the year of payment of interest

7) Raise in allowable expenses in the form of interest on capital and remuneration to working partner

Remuneration for working partner be changed at Rs 1,80,000 per annum per partner or 90 % of book profits for first Rs 10,00,000 of book profits and 75 %remaining book profits.

8) Section 44AD – Monetary limit for presumptive basis

It is suggested that due to growth of economic activity , the rate of 6% may be reduced to 5% for certain specified contractors and turnover ceiling may be increased to Rs. 5.00 crores for Infrastructure Industry

9) Section 44ADA – Special provision for computing profits and gains of profession on presumptive basis

It is suggested that the threshold limit of Rs 50 lakh may be raised appropriately (say to at least Rs 1 crore) and estimated income rate reduce from 50% to 30%

10) 54EC Bonds

Limits to be allowed so that time limit for investment in specified bonds may be allowed upto the due date of filing of ITR from presently 6 months

11) Section 80C – Various suggestions

PPF be increased to Rs. 3 lakhs The quantum of deduction under section 80C be increased from Rs 1,50,000 to Rs 2,50,000

12) Interest on deposits in savings account

Section 80TTA deduction of 10k must be revised upward and 80TTB must be revised from 50k to upward

16/11/2022

14/11/2022

Connect with SGA to complete your monthly compliance on time…