Latest news with #AshishKarundia
Economic Times
a day ago
- Business
- Economic Times
Waiting for pending old ITR? You may soon get ITR refund or income tax demand notice as CBDT extends the deadline till 30 November 2025
This is an representative image. Some taxpayers can get tax demand notice or tax refund as tax dept starts processing these old ITRs; Know more about it The Income Tax Department will process pending ITRs for AY 2023-24 (FY 2022-23) by November 30, 2025, potentially leading to tax refunds, demand notices, or no change. This applies to ITRs filed by July 31, 2023, or belatedly by December 31, 2023, excluding those under scrutiny or delayed due to taxpayer issues. Tired of too many ads? Remove Ads Tax refund: Once the said ITRs are processed, eligible taxpayers can get their due tax refunds. Once the said ITRs are processed, eligible taxpayers can get their due tax refunds. Tax demand notice: Some taxpayers may get a tax demand notice depending on what information the tax department digs out after processing the said ITR. Some taxpayers may get a tax demand notice depending on what information the tax department digs out after processing the said ITR. No refund no tax demand: The ITR is simply processed as it is i.e. without any tax refund or tax demand. What did the income tax department say? What does this mean? Tired of too many ads? Remove Ads Which ITRs are not eligible for this extended deadline? Good news for those tax payers who have any pending tax refund due despite filing their income tax returns (ITR) on or before the deadline. The Income Tax Department has said such unprocessed ITRs for AY 2023-24 (FY 2022-23) will now be processed by them by November 30, 2025. This announcement by the tax department can mean either of these three things:Read below to know more about what the income tax department to the income tax department office order dated June 9, 2025 here are the details:'Order u/s 119(2)(a) of the Income-tax Act,1961 regarding processing of returns filed u/s 139 of the Income-tax Act, 1961 beyond the prescribed time limit. Central Board of Direct Taxes hereby relaxes the time-frame prescribed in second proviso to sub-section (1) of section 143 and directs that electronically filed valid returns of income filed u/s 139 of the Act for Assessment Years 2023-24, for which date of sending intimation under sub-section (1) of section 143 of the Act has lapsed, shall be processed now and intimation under sub-section (1) of section 143 of the Act shall be sent to the assessee concerned by 30.11.2025.'The above mentioned office order means that all those pending ITRs filed on or before July 31, 2023 for FY 2022-23 (AY 2023-24) which could not be processed before the tax department's deadline will now be processed by November 30, 2025. As per the tax law, the tax department has the power to process an duly filed ITR on or before the end of 9 months from the end of the financial year for which the ITR was Accountant Ashish Karundia says: "The Income-tax Act, 1961, imposes a 9-month deadline for issuing intimation after processing an income tax return . For returns filed for the FY 2022-23 (AY 2023–24), this deadline has already passed. However, this circular provides a relaxation, allowing intimations to be issued up to November 30, 2025 in specific cases. The ITR may be processed either by accepting the information provided by the taxpayer or by generating a demand or refund."'This order by the tax department means that ITRs duly filed and e-verified on or before July 31, 2023 or December 31, 2023 (belated ITRs) and pending for processing will now be processed with either tax refund or demand or as it is. The time limit for processing such ITRs was 9 months from the end of the financial year in which it was filed which was December 31, 2024,' says chartered accountant Mayank Mohanka, founder, relaxation in deadline as mentioned above is not applicable to the following ITRs:a. returns selected in scrutiny;b. returns remain unprocessed for any reason attributable to the assessee.'In cases where PAN-Aadhaar is not linked, refund of any amount of tax or part thereof, due under the provisions of the Act shall not be made as laid down in Circular No.03/2023 dated 28.03.2023 vide said the Income Tax Department in the order dated June 9, explains that tax refunds will only be issued if the taxpayer's PAN is linked with their Aadhaar.
Time of India
a day ago
- Business
- Time of India
Waiting for pending old ITR? You may soon get ITR refund or income tax demand notice as CBDT extends the deadline till 30 November 2025
Tax refund: Once the said ITRs are processed, eligible taxpayers can get their due tax refunds. Once the said ITRs are processed, eligible taxpayers can get their due tax refunds. Tax demand notice: Some taxpayers may get a tax demand notice depending on what information the tax department digs out after processing the said ITR. Some taxpayers may get a tax demand notice depending on what information the tax department digs out after processing the said ITR. No refund no tax demand: The ITR is simply processed as it is i.e. without any tax refund or tax demand. What did the income tax department say? What does this mean? Live Events Which ITRs are not eligible for this extended deadline? Good news for those taxpayers who have any pending tax refund due despite filing their income tax returns (ITR) on or before the deadline. The Income Tax Department has said such unprocessed ITRs for AY 2023-24 (FY 2022-23) will now be processed by them by November 30, 2025. This announcement by the tax department can mean either of these three things:Read below to know more about what the income tax department to the income tax department office order dated June 9, 2025 here are the details:'Order u/s 119(2)(a) of the Income-tax Act,1961 regarding processing of returns filed u/s 139 of the Income-tax Act, 1961 beyond the prescribed time limit. Central Board of Direct Taxes hereby relaxes the time-frame prescribed in second proviso to sub-section (1) of section 143 and directs that electronically filed valid returns of income filed u/s 139 of the Act for Assessment Years 2023-24, for which date of sending intimation under sub-section (1) of section 143 of the Act has lapsed, shall be processed now and intimation under sub-section (1) of section 143 of the Act shall be sent to the assessee concerned by 30.11.2025.'The above mentioned office order means that all those pending ITRs filed on or before July 31, 2023 for FY 2022-23 (AY 2023-24) which could not be processed before the tax department's deadline will now be processed by November 30, 2025. As per the tax law, the tax department has the power to process an duly filed ITR on or before the end of 9 months from the end of the financial year for which the ITR was Accountant Ashish Karundia says: "The Income-tax Act, 1961, imposes a 9-month deadline for issuing intimation after processing an income tax return . For returns filed for the FY 2022-23 (AY 2023–24), this deadline has already passed. However, this circular provides a relaxation, allowing intimations to be issued up to November 30, 2025 in specific cases. The ITR may be processed either by accepting the information provided by the taxpayer or by generating a demand or refund."'This order by the tax department means that ITRs duly filed and e-verified on or before July 31, 2023 or December 31, 2023 (belated ITRs) and pending for processing will now be processed with either tax refund or demand or as it is. The time limit for processing such ITRs was 9 months from the end of the financial year in which it was filed which was December 31, 2024,' says chartered accountant Mayank Mohanka, founder, relaxation in deadline as mentioned above is not applicable to the following ITRs:a. returns selected in scrutiny;b. returns remain unprocessed for any reason attributable to the assessee.'In cases where PAN-Aadhaar is not linked, refund of any amount of tax or part thereof, due under the provisions of the Act shall not be made as laid down in Circular No.03/2023 dated 28.03.2023 vide said the Income Tax Department in the order dated June 9, explains that tax refunds will only be issued if the taxpayer's PAN is linked with their Aadhaar.
Time of India
2 days ago
- Business
- Time of India
Singapore casts tax shadow on India bets, shuns shell companies
Mumbai: Singapore is intensifying scrutiny of companies and investment entities, a move that could ignite new tax disputes. This development particularly impacts many MNCs and international funds that use the Asian financial hub as a base to invest in and acquire companies in India. The catalyst for these potential disputes is a recent series of advance rulings by the Inland Revenue Authority of Singapore (IRAS), which define and endorse what constitutes ' economic substance '. If a Singaporean entity fails to meet the conditions emphasized by the tax administrator and thus cannot prove it has adequate 'substance,' the Indian Income Tax (I-T) department could levy higher taxes. This could involve claiming tax on certain stock sale transactions or demanding increased tax on earnings from dividends and loan interest paid by an Indian company. Dealmakers and businesses are closely monitoring this situation. "These advance rulings are the first to evaluate economic substance factors since their inclusion in 2024 as Section 10L of Singapore's Income Tax Act for taxing gains from the sale of foreign assets. These factors could be used by Indian tax authorities to determine whether a Singapore-based entity is merely a conduit, particularly when applying the Principal Purpose Test (PPT)," explained Ashish Karundia of the CA firm Ashish Karundia & Co. (A PPT is a provision that allows denial of treaty benefits). According to Girish Vanvari, founder of the tax and regulatory advisory firm Transaction Square, the implications are far-reaching due to the change in law prioritizing substance and economic reality over legal form. "For tax professionals and business leaders, this means a necessary recalibration of how Singapore is used in cross-border structuring -especially in relation to Indian operations. So, if you're using Singapore as a holding or IP base for India-related investments, it's time to revisit the structure. The days of relying purely on treaty protection without operational presence are over," said Vanvari. Many foreign investors betting on India utilize Singapore to leverage the tax treaty between the two countries. A common structure involves one of their arms in a tax-friendly jurisdiction setting up a company in Singapore (say, S1), which in turn owns another company in Singapore (say, S2). In this two-layered structure, S2 serves as a vehicle to invest in India. Typically, when exiting an Indian investment, S1 might sell the shares of S2, which holds shares in an Indian company; alternatively, S2 would directly sell its interest in the Indian company. THE PARAMETERS The IRAS underscored that economic substance would require: (a) a company to have adequate human resources with the necessary qualifications and experience; (b) have a premise in Singapore; (c) take key business decisions there; and (d) incurs expenditure. If S1 or S2 does not fulfil these criteria, they would come under the lens of the tax authorities in either Singapore or India. How? Here are the possible situations: · Say, S1 sells shares of S2 (both local entities) and if India demands tax on the 'indirect transfer' by invoking India's domestic tax regulations, companies like S1 have till now argued that under the treaty India has no right to tax gains from indirect transfers. However, in future, the I-T department could assert that the treaty holds only if S1 has substance. But if it doesn't (as per Singapore's terms), S1 cannot avail treaty benefits and must pay tax to India. Here, I-T would challenge that S1 was formed primarily to escape tax. · If S2 directly sells shares of the Indian company, there's no capital gains tax if the shares were bought before 2017 (under a grandfathering provision introduced when the treaty was amended). However, if S2 lacks substance, I-T may demand tax on the grounds that treaty relief can be denied to a shell outfit. · Suppose, S1 sells stocks it directly holds of another company in a third country. S1 can avoid tax in Singapore if it can demonstrate substance. However, if S1 fails the substance test (and is taxed by Singapore), then India would also have strong grounds to demand tax from S1 when it sells shares of S2. · Also, there's an increased risk of double taxation - with India taxing based on source and Singapore taxing based on substance.
Mint
4 days ago
- Business
- Mint
TDS on rent: Why the tax department needs to fix its Traces portal
Certain payments made by individuals attract tax deduction at source (TDS), but many are unaware of it. For instance, 2% TDS applies to rent exceeding ₹50,000 per month, 1% on property purchases above ₹50 lakh, and a similar rule applies to high-value freelance or contract payments. The income tax department has been tracking individuals who failed to comply with these TDS rules. Taxpayers who claimed HRA exemption while paying rent above ₹50,000 received SMS and email alerts from the I-T department. The penalty for non-compliance is steep. Tenants who did not deduct TDS on rent under 194-IB can avoid these penalties by proving that the landlord has paid tax on the rental income. This is done by filing Form 26A, a certificate from a chartered accountant (CA) confirming that the tax has been paid. This seemingly simple solution is, however, fraught with technical hurdles. Also Read: Details on rent, home loan, TDS: ITR forms seek more disclosures this year Portal problems The Traces (TDS Reconciliation Analysis and Correction Enabling System) or e-filing portal, which is needed to generate Form 26A, does not allow individual deductors to initiate the process unless the user has a tax deduction and collection account number or TAN number, tax experts told Mint. The tax department's Traces portal is an online platform that helps both deductors and taxpayers view, reconcile, and manage their TDS transactions for filing returns and claiming refunds. To be sure, individuals paying rent to resident landlords aren't required to obtain a TAN to deduct TDS. Even if someone goes through the trouble of getting a TAN, which is an entirely online process and typically takes 2-4 days, the problem doesn't end there. Chartered accountant Ashish Karundia said even when a TAN is obtained, the portal does not have Form 26QC, which is required to fill in details regarding this matter when logged in to the Traces portal. As per Section 201, defaulting tenants can show the landlord's ITR to prove that tax on rental income is paid. To do this, they should initiate Form 26A on the Traces website. The tenant should log in to the Traces platform as a deductor. He needs to initiate Form 26A, add details of non-deduction and assign the Form 26A to a CA for verification through the TAN login on e-filing portal. Also Read: TDS on rent and contract work: How small taxpayers can avoid penalties The process may seem easy, but it is an uphill task due to technical challenges. Logging into Traces through PAN will not work as Form 26A can only be initiated through 'deductor' Traces log-in, which needs a TAN, said Karundia. Deductor login is for those who deduct and deposit the TDS and taxpayer login is for the deductee on whose behalf tax is being paid (landlord in this case). Getting TAN takes 2-4 days to be issued, but even if the tenant gets a TAN number and successfully logs in to the Traces portal as a deductor, a second layer of challenge crops up, said Karundia. 'After logging in, the tenant has to initiate Form 26A and choose the type of form he's filing–26QB for TDS on property purchase, 26QC for TDS on rent or 26QD for TDS on payment to contractors. It is mandatory to choose one of these options before entering other transaction details," he explained. The Traces portal for deductors does not have this option as all three TDS deductions–property, rent and contractual services–are PAN-based and do not require a TAN in the first place. 'Even if the tenant gets a TAN and logs in to the Traces deductor portal, he will still not be able to initiate Form 26A due to unavailability of Form 26QC," said Karundia. Also Read: Relying on rental income in retirement? Take these steps to protect yourself. What needs to change Karundia said Traces should allow users to log in using PAN details instead of TAN, and allow Form 26A initiation for Forms 26QB, 26QC, and 26QD. Once this is initiated, the taxpayer can assign it to a CA through the e-portal. After the CA certifies that the recipient has paid the due tax, they can sign it and get it processed. "Currently, taxpayers can't assign Form 26A to a CA through their taxpayer (PAN) ID in Traces. So, there is a need to extend the ability of assignment of Form 26A to a CA....," said Mayank Mohanka, founder of TaxAaram India and a partner at S.M. Mohanka & Associates. For now, CAs like Karundia are maintaining Form 26A manually. 'Right now there is no other option. The other option is to have the form along with CA-certified Annexure A in physical form with the tenant, " Karundia said. Bhawna Kakkar, chartered accountant and founder, Kakkar & Company, Chartered Accountants, said she is also maintaining the Form 26A manually. 'Due to this technical limitation, such tenants cannot initiate Form 26A filing through Traces. The alternative approach is to manually submit the CA-certified Form 26A along with supporting documents (landlord's ITR, rent income proof, tax paid details) either in response to a notice received from the department or directly to the jurisdictional assessing officer." 'The tenant would still be required to pay interest under section 201(1A) at 1% per month from the month TDS was deductible till the month the landlord filed the ITR. Once the AO is satisfied that the conditions are met, the tenant is not treated as in default for the TDS, and no demand will be raised for the tax amount, only the interest may be payable," said Kakkar. The government has to necessarily address this issues faced by taxpayesr at the earliest so that the ordinary citizens who are ignorant of the TDS provisions can take necessary steps to avoid ending up being 'assessee in default', said Prakash Hegde, a Bengaluru-based CA. "Until the government makes these updates to form 26A, it is going to be big challenge for the defaulters, most of whom are ignorant of the provisions," said Hegde. Kakkar said, 'If procedures are not in sync with the law, the law should be applied instead of procedures, and the law nowhere restricts form 26QB/26QC type payments for the benefit under proviso to section 201. So, the only option left is to proceed manually and provide a manual CA certificate. We actually have given one such certificate."
Mint
01-06-2025
- Business
- Mint
I-T department is cross-verifying claims in real time. You've been warned.
NEW DELHI : For a long time, people have been getting away with making inflated or false claims in their income tax returns (ITRs). Unless returns are picked up for post-filing scrutiny by officials, the income tax (I-T) department can do little to stop individuals from beating the system. But this income tax season, this is going to change. The I-T department is rolling out an integrated verification system designed to automatically cross-check information against multiple government databases at the time of ITR filing. Imagine a taxpayer filling out inaccurate details of their investment claim—home loan details, house rent allowance (HRA), or insurance—the system will immediately throw up an error and prompt the taxpayer to modify the return. Also Read: How you can save tax by getting a mobile phone, laptop or car lease from office Meaning: Taxpayers will be caught red-handed if they try to play smart. 'You can no longer fake a loan account number or a policy document number," said Ashish Karundia, founder of Ashish Karundia & Co., Chartered Accountants. 'These are now directly mapped to your permanent account number (PAN) or Aadhaar." Cross-platform data sharing Insurance companies, for instance, already share data with the government. So, if a person tries to claim a deduction using someone else's insurance policy number, the system can identify the discrepancy. The real-time verification now extends to HRA claims, loans for housing and education, and even deductions on electric vehicles. Each claim is verified using backend integrations with banks and platforms such as the m-Parivahan app. "As soon as a taxpayer inputs any detail, say a loan number or an insurance policy, the system cross-verifies it instantly with the information they already have. If something doesn't match, it throws an error and prompts the taxpayer to modify their return," Karundia added. To be sure, so far, verification has been happening manually and after the detection of a post-filing discrepancy. 'The I-T department would look at your return, flag inconsistencies, and then issue a notice. It was slow and added to the workload of tax officials," he said. Now, the department aims to entirely automate this process. To do so, the newly notified ITR forms require taxpayers to provide a detailed breakup of income tax deductions through specific drop-down fields, replacing the earlier practice of entering a single consolidated figure, according to CA Vijaykumar Puri, Partner at VPRP & Co LLP. Also Read: Legal minefield: Decoding capital gains tax on the sale of leasehold and tenancy rights He explained how earlier, someone could simply write ₹1.5 lakh under Section 80C without specifying if it was in PPF, ELSS, or LIC. 'Now, taxpayers must specify the exact amounts invested in instruments like PPF, ELSS, or LIC. This added transparency will not only deter fake claims but also give the tax department clear visibility into the nature of each deduction," he said. A nudge towards the new tax regime The move from human-led scrutiny to system-led verification is crucial for ensuring better compliance and fewer fraudulent claims. 'It significantly reduces the scope for manual oversight and any manipulation. It eliminates case-by-case verification, conserves departmental resources, and ensures quicker, more reliable compliance," he added. Less human involvement also means that people won't be able to fabricate investment proofs like rent receipts for claiming HRA deduction. 'When people know that everything is digitally captured, the chance of fraud automatically goes down," Karundia said. Karundia explained that the move is a step closer to former finance minister Arun Jaitley's broader strategic vision of lower tax rates, fewer exemptions, and minimal discretion introduced. In essence, by automating cross-verification and reducing human intervention, the I-T department is pushing taxpayers towards an exemption-less new tax regime. Also Read: Capital gains on equities: Here's all you need to know when filing tax returns this year The I-T department on 27 May extended the ITR filing due date for FY25 (AY26) from 31 July to 15 September. The decision was made after a delay in issuing the notification of ITR forms.
