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Time of India
a day ago
- Business
- Time of India
ITR Filing FY 2024-25: Have you got an Income Tax notice? Don't ignore it! Top types of tax notices & actions required
ITR filing. A proper understanding and appropriate response to these notices can help you avoid penalties, conserve time and remain stress-free. (AI image) ITR filing FY 2024-25: As the Income Tax Return filing season for FY 2024-25 (AY 2025-26) begins, it's important to understand that merely filing your ITR does not end your responsibility. In some cases, the Income Tax Department might issue notices even after you have submitted and verified your returns. Whilst this can be concerning, most notices are standard procedures that can be handled systematically. A proper understanding and appropriate response to these notices can help you avoid penalties, conserve time and remain stress-free. Consider these essential guidelines if you receive a notice, as listed by Sudhir Kaushik, Founder & CEO of in a column in ET Wealth: * Never Ignore: Every notice has a deadline; missing it can result in penalties. * Importance of 26AS & AIS: These will help you to verify and reconcile your income and TDS data. * Accuracy: Mismatches can lead to additional scrutiny or tax demands. * Prompt action: Even minor notices can lead to complications if unaddressed. * Expert help: For complex notices, consult a chartered accountant or a tax professional immediately. Also Read | Big cheer! Home loan rates head below 8% - how much will 1% RBI repo rate cut reduce your EMI or tenure? Check calculations Here is a straightforward guide regarding common income tax notices and their appropriate handling procedures provided by Sudhir Kaushik: Section 245: Adjustment against Previous Dues When you qualify for a tax refund whilst having outstanding tax liabilities from earlier assessment years, the tax authorities retain the right to offset it. Required Actions: * Review the notification available in your account under 'e-Proceedings'. * Within 15 days, you must either accept or contest the stated grounds. * Should you fail to respond, your refund will be automatically adjusted against the dues. Section 142(1): Initial Assessment Investigation This represents a preliminary verification process initiated when tax returns remain unfiled or additional information is required by the tax authorities. Required Actions: * Submit your pending tax return. * Provide all requested documentation within the specified time frame. * Non-compliance may result in financial penalties or detailed examination. Also Read | ITR e-filing FY 2024-25: ITR-1 and ITR 4 forms enabled online for return filing on income tax e-filing portal; check details Section 143(1): Assessment Notice Post Return Processing This notice is commonly issued by the tax department to verify your submitted return against their database. The Income Tax department sends this when they detect discrepancies in TDS, mathematical errors, claims for deductions that appear incorrect, or when returns are submitted late. Required Actions: * Access your account on the income tax website to examine the notice * No response required if the assessment is accurate * Clear any tax dues within 30 days if applicable * Submit a correction request with supporting evidence if the assessment contains errors Section 139(9): Defective return When a tax return contains errors or lacks required information, the tax authorities classify it as defective. The primary concerns typically involve incomplete income information and inaccurate entries related to deductions. Required Actions: * A period of 15 days is provided to make corrections and submit again. * Access your account, locate the notice in the 'e-Proceedings' section, and submit your response. * Non-compliance within the stipulated time frame could result in invalidation of your return. Section 133(6): Information Request for Financial Details This formal notice requires explanation regarding specific financial activities, including substantial cash deposits and real estate acquisitions. Required Actions: * Provide supporting documentation, including banking records and contractual papers. * Ensure timely submission to prevent additional investigation. Also Read | ITR filing FY 2024-25: Income tax payers take note! These 7 mistakes in income tax return filing this year can cost you big HRA and TDS Discrepancy Notifications These notifications are issued when discrepancies are detected between your claimed house rent allowance (HRA) or TDS information and the tax department's database. Required Actions: * Verify that TDS requirements are met for monthly rent payments above Rs. 50,000 * Maintain proper documentation including rent receipts and landlord's PAN details * Should the discrepancy be confirmed, submit a revised return and safeguard all supporting documents for future reference Section 143(2) Detailed Review Notice under Section 143(2): This notification indicates that your tax return requires comprehensive verification through detailed scrutiny. Required Actions: * Submit all supporting documentation to validate your income, claimed deductions and expenses * If summoned, attend the scheduled hearings or provide responses via the online portal * Failure to respond could result in estimated tax assessments being made by authorities Section 148: Assessment of Undisclosed Income This notice is issued when tax authorities have reason to believe that certain income was not disclosed in previously filed returns. Required Actions: * Submit an updated return or provide clarification as requested in the notice. * Present evidence to validate the income source and attach supporting documentation. * Non-compliance may result in reassessment of previous years and monetary penalties. Section 271AAC(1): Penalty for Undisclosed Income When substantial unexplained deposits are discovered during assessment proceedings, authorities may issue this notification. Required Actions: * Submit supporting documents that establish the origin of funds. * Failure to justify the income source can result in penalties amounting to 60% of the undisclosed amount. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Time of India
2 days ago
- Business
- Time of India
Stock picking: Improving operating profit could signal long-term market outperformance
How do you pick winners when global equity markets are rocked by trade uncertainties and there is persistent weakness in domestic demand? One effective way is to closely check your company's EBITDA ( earnings before interest, taxes, depreciation, and amortisation) margins. In a nutshell, these are fundamentally sound companies that effectively minimise value erosion amid periods of high market volatility. Why EBITDA is a winner EBITDA is calculated by subtracting operating expenses (excluding depreciation) from the sales revenue. On the other hand, EBITDA margin is calculated by dividing EBITDA by the sales revenue. For example, a company with an EBITDA margin of 10% means that the company is generating Rs.10 as operating profit on every Rs.100 worth of sales. A study conducted by ET Wealth shows that the companies that have consistently improved EBITDA margins over the last four quarters have significantly outperformed the market benchmark in the last one year whereas the companies with consistent deterioration in EBITDA margins significantly underperformed the market benchmark. An analysis of 1,508 companies (excluding those in banking, finance, and insurance) reveals that 29 companies have maintained positive EBITDA margins and consistently improved them over the last four quarters. In contrast, 28 companies have shown a steady decline in EBITDA margins during the same period. The latest data pertains to the March 2025 quarter and has been sourced from the Reuters-Refinitiv database. In the last one year, the group of 29 companies (with positive EBITDA margins) has generated an equal-weighted average return of 30.3%, whereas the group of 28 companies (with negative EBITDA margins) has generated -9.8% returns. The Nifty 500 equal-weighted index delivered 7.8% returns in the last one year. The returns are based on 30 May 2025 closing prices. Experts agree. 'Improving EBITDA margins increases the RoE of the business, which in turn improves the growth and profitability of the business and the stock price of the company,' says Saurabh Joshi, Head of Research, Marwadi Shares and Finance Limited (MSFL). Significance of EBITDA margins EBITDA provides an accurate picture of the company's competitive strengths as it excludes the effect of non-cash charges (or depreciation), varying capital structures and taxes. 'EBITDA is the preferred metric for investors who want to know how a company performs at its core before financing decisions and accounting treatments cloud the picture,' says Om Ghawalkar, Market Analyst, a stock brokerage firm. A strong EBITDA indicates efficiency and the company's ability to generate value. Analysts suggest that investors should consider EBITDA margins over a period of time to spot good quality companies with sustainable business models and sound financial health. Corporate India performance Corporate India saw a modest improvement in both revenue and EBITDA in the March 2025 quarter compared to the December 2024 quarter. Based on a sample size of 1,508 non-BFSI companies. Growth is year-on-year. 'Consistent improvement in EBITDA margins signals superior execution, pricing power, cost control, and positive operating leverage. It reflects a company's ability to increase profits faster than expenses,' says Sonam Srivastava, Founder and Fund Manager at Wright Research PMS.'. EBITDA in a soft quarter The recent quarter performance of corporate India indicates ongoing growth challenges. Despite muted revenue growth, the operating profit growth improved relative to the December 2024 quarter, helped by cost control initiatives, operational efficiencies and input cost benefits in certain segments (see graphic). EBITDA climbers favoured by analysts Going forward, analysts expect demand to improve, aided by rural revival, steady urban consumption, normal monsoons and increased government spending. However, input costs present a mixed picture. Ghawalkar says the softer crude oil prices and the strong coal supply may ease costs for sectors like aviation and chemicals, but other sectors are likely to face pressures. While cotton MSP hikes will hit input costs in the textiles segment, rising logistics costs may squeeze margins in cement. Additionally, wage inflation in IT and healthcare is likely to keep operating costs elevated in these sectors. Here are the five companies from the group of 29 with rising EBITDA margins that have a strong analyst coverage: Orient Electric The electrical equipment manufacturer specialises in home appliances, including fans, lighting and switchgears. The company has reported strong March 2025 quarter: revenue up 9% year-on-year (y-o-y), net profit up 144%. Growth was driven by the lighting and switchgears segment, on the back of distribution expansion, new products, and premium category demand. EBITDA margin expanded 390 bps y-oy, supported by cost optimisation and Project Sanchay. The fans segment is poised for market share gains via improved DTM strategy and Hyderabad plant scale-up. Centrum Broking cites DTM, premiumisation, alternate channels, and Hyderabad plant as key growth and margin drivers. Affle 3i The global technology company specialises in mobile advertising, digital consulting, and software development. In the March 2025 quarter, revenue was up 19% y-o-y, net profit up 17.8%. Growth was led by developed markets (+27.3% y-o-y); India grew nearly 15.9%. EBITDA margin up 290 bps y-o-y, driven by lower employee costs and operational gains. Management targets 20% revenue growth in 2025-26 with gradual margin improvement. Ambit Capital sees tailwinds from integrated platform, stronger processes, sales push, premiumisation, and exposure to high-growth markets and segments. Brigade Enterprises The Bangalore based real estate developer has a diversified portfolio, including residential, commercial, hospitality and retail projects. The March 2025 quarter pre-sales was up 9% y-o-y, driven by strong new launches. EBITDA was down 4% y-o-y, but margin expanded 307 bps on cost control and premium property sales. Robust launch pipeline in residential and commercial segments underpins 2025-26 growth visibility. It expects 15-20% pre-sales growth in 2025-26. Antique Stock Broking highlights geographic expansion beyond Bengaluru, strong launch pipeline, and rising rental asset occupancy as the key positives. Jupiter Life Line Hospitals The multispeciality healthcare provider offers tertiary and quaternary care across various medical specialties. In the March 2025 quarter, revenue was up 12.5% y-o-y, EBITDA up 25.7%, driven by better case mix and higher ARPOB. EBITDA margin expanded 260 bps yo-y due to cost control and operational efficiency. It is on track to reach 2,500 beds across 6 hospitals in Western India in 3-4 years. Exploring growth via acquisitions and greenfield projects. Prabhudas Lilladher expects sustained growth from expansion, rising occupancy, margin gains, and strategic moves in high-density western markets. National Aluminium The PSU company is engaged in in mining, alumina refining and aluminium smelting. In March 2025 quarter, revenue was up 47% y-o-y, EBITDA up 149%, driven by strong alumina and aluminium performance. EBITDA margin surged 2133 bps y-o-y, supported by lower costs and higher alumina realisations. Targeting 36-37% EBITDA margin in 2025-26 via volume growth and cost efficiencies. Axis Securities flags near-term EBITDA risk from falling alumina prices, but sees partial offset from strong cost control and higher alumina sales guidance.
Economic Times
28-05-2025
- Business
- Economic Times
Taxpayers should avoid filing ITR before June 15: Here's why
The income tax department recently notified the income tax return (ITR) forms to be used for filing tax returns for FY 2024-25 (AY 2025-26). However, unlike previous years, when the ITR forms were notified well in advance, this year they were notified by the end of April 2025. Further, the income tax department has yet to release the utilities, i.e. the online software/forms necessary for filing ITRs. Tax experts advise postponing the filing of ITRs until June 15, 2025, even though the ITR forms are available now. ET Wealth online explains why it is advisable to defer filing your ITR till after June 15 and the problems you can face if you file it before. Also Read: 9 changes in ITR forms for FY 2024-25 (AY 2025-26) As per income tax rules, taxpayers should get their TDS certificates, such as Form 16 or Form 16A, latest by June 15. Chartered Accountant Prakash Hegde says, "When the taxpayer has earned any income in the last quarter of FY 2024-25 (January 1-March 31, 2025) that is subject to TDS, the payer of that income has time until May 31, 2025, to file the eTDS return with the income tax authorities. The eTDS return captures the details of the income paid to the taxpayer and tax deducted on it." The payer of income might be the taxpayer's employer (i.e., for salary), bank (i.e., for interest on deposit), company in which the taxpayer holds the shares (i.e., for dividends), buyer of property in the case of a non-resident (i.e. for capital gains), tenant of a non-resident (i.e., for rent), customer/client of a contractor/professional (i.e., for contract payments/professional fees), etc. Hegde says, "Once the eTDS return is filed, it may take up to 3-4 days for the same to get processed and reflected in Form No. 26AS of the taxpayer. If the payer of income files the eTDS return on May 31, the details of income and TDS could be available in Form No. 26AS of the taxpayer by the end of the first week of June. Further, the payer of the income is required to issue a TDS Certificate in Form No. 16 (annual certificate for salary) or Form No. 16A (quarterly certificate for other income) to the taxpayer by June 15. These certificates show the exact details of the income and the TDS deducted and paid by the payer of the income."If taxpayers have these TDS certificates, ITR filing becomes easier. Due to technological advancements, the information from the TDS certificates is auto-populated in the ITR forms. A taxpayer can cross-check the information in TDS certificates, ITR forms, and the Annual Information Statement (AIS) to ensure that the correct information is given to the income tax department while filing the ITR. Also Read: Can you claim LTA tax exemption in new tax regime? Hegde says, "As per the changes made in the income tax law in recent years, even where TDS is not deducted, the reporting entities (e.g., banks, companies, mutual funds, etc.) are required to report several kinds of financial transactions called Specified Financial Transactions (SFT) to the income tax authorities by filing an Annual Information Return. The reporting of financial transactions by reporting entities is subject to a certain threshold. Examples of such transactions are cash transactions, fixed deposits, credit card payments, purchase of bonds/debentures, investment in company shares, etc. All this information pertaining to a financial year must be reported by the concerned entities by May 31 of each year. Thereafter, the data gets processed in a few days (which may vary between 5 and 10 days) and gets reflected in the taxpayer's Annual Information Statement (AIS). The final version of the AIS will likely be available in the income tax portal by the second week of June." Tarun Kumar Madaan, a practising Chartered Accountant, says, "Once the income tax department enables the ITR utilities, early versions of the filing utility often experience technical glitches, which may cause calculation errors, system failures, or data validation issues. Allowing a buffer of a few days gives the system time to stabilise, ensuring smoother filing." Hegde says, "If a taxpayer rushes to file his ITR before Form No. 26AS, Form No. 16/16A, and AIS are available to him, there is a possibility of reporting incorrect details of income and TDS. This is because he may miss some critical information relevant to filing his ITR. If he misses such information and files the ITR, he must file a revised return, allowed until December 31 to provide correct information to the tax department. Hence, it is advisable to wait till June 15 for filing ITR." Madaan says, "Mismatch in AIS, or Form 26AS or non-reporting of TDS, even if done unintentionally, can result in tax notices or scrutiny assessments, delayed refunds or denial of legitimate TDS and even the requirement to file a revised return." He further adds, "When the income tax return is processed by the Centralised Processing Centre (CPC), TDS credit is allowed only for entries appearing in Form 26AS. If TDS has been deducted but not yet reflected in 26AS, the credit will be denied initially, which could affect your refund or result in a tax demand being raised. While a correction can be made later through rectification or revised returns, it delays resolution and complicates compliance." Conclusion While the Income Tax Act does not restrict early filing, for most salaried individuals and small taxpayers, filing after June 15 ensures complete and reconciled tax credit data and a lower risk of compliance issues or mismatched says, "Unless your ITR is urgently required for purposes such as loan approval or visa purposes, it is prudent to wait till June 15 to have all the required information to file ITR. In tax compliance, accuracy is far more valuable than speed provided the ITR is filed before the due date. A few extra days of patience can prevent future complications, safeguard your refunds (if eligible), and ensure that your ITR is filed right the first time."
Time of India
27-05-2025
- Business
- Time of India
Taxpayers should avoid filing ITR before June 15: Here's why
The income tax department recently notified the income tax return (ITR) forms to be used for filing tax returns for FY 2024-25 (AY 2025-26). However, unlike previous years, when the ITR forms were notified well in advance, this year they were notified by the end of April 2025. Further, the income tax department has yet to release the utilities, i.e. the online software/forms necessary for filing ITRs. Tax experts advise postponing the filing of ITRs until June 15, 2025, even though the ITR forms are available now. ET Wealth online explains why it is advisable to defer filing your ITR till after June 15 and the problems you can face if you file it before. Also Read: 9 changes in ITR forms for FY 2024-25 (AY 2025-26) TDS Certificates such as Form 16, Form 16A are issued latest by June 15 As per income tax rules, taxpayers should get their TDS certificates, such as Form 16 or Form 16A, latest by June 15. Chartered Accountant Prakash Hegde says, "When the taxpayer has earned any income in the last quarter of FY 2024-25 (January 1-March 31, 2025) that is subject to TDS, the payer of that income has time until May 31, 2025, to file the eTDS return with the income tax authorities. The eTDS return captures the details of the income paid to the taxpayer and tax deducted on it." Live Events The payer of income might be the taxpayer's employer (i.e., for salary), bank (i.e., for interest on deposit), company in which the taxpayer holds the shares (i.e., for dividends), buyer of property in the case of a non-resident (i.e. for capital gains), tenant of a non-resident (i.e., for rent), customer/client of a contractor/professional (i.e., for contract payments/professional fees), etc. Hegde says, "Once the eTDS return is filed, it may take up to 3-4 days for the same to get processed and reflected in Form No. 26AS of the taxpayer. If the payer of income files the eTDS return on May 31, the details of income and TDS could be available in Form No. 26AS of the taxpayer by the end of the first week of June. Further, the payer of the income is required to issue a TDS Certificate in Form No. 16 (annual certificate for salary) or Form No. 16A (quarterly certificate for other income) to the taxpayer by June 15. These certificates show the exact details of the income and the TDS deducted and paid by the payer of the income." If taxpayers have these TDS certificates, ITR filing becomes easier. Due to technological advancements, the information from the TDS certificates is auto-populated in the ITR forms. A taxpayer can cross-check the information in TDS certificates, ITR forms, and the Annual Information Statement ( AIS ) to ensure that the correct information is given to the income tax department while filing the ITR. Also Read: Can you claim LTA tax exemption in new tax regime? SFT is updated by second week of June Hegde says, "As per the changes made in the income tax law in recent years, even where TDS is not deducted, the reporting entities (e.g., banks, companies, mutual funds, etc.) are required to report several kinds of financial transactions called Specified Financial Transactions (SFT) to the income tax authorities by filing an Annual Information Return. The reporting of financial transactions by reporting entities is subject to a certain threshold. Examples of such transactions are cash transactions, fixed deposits, credit card payments, purchase of bonds/debentures, investment in company shares, etc. All this information pertaining to a financial year must be reported by the concerned entities by May 31 of each year. Thereafter, the data gets processed in a few days (which may vary between 5 and 10 days) and gets reflected in the taxpayer's Annual Information Statement (AIS). The final version of the AIS will likely be available in the income tax portal by the second week of June." Glitches in early ITR forms Tarun Kumar Madaan, a practising Chartered Accountant, says, "Once the income tax department enables the ITR utilities, early versions of the filing utility often experience technical glitches, which may cause calculation errors, system failures, or data validation issues. Allowing a buffer of a few days gives the system time to stabilise, ensuring smoother filing." Problems you can face if you file ITR before June 15 Hegde says, "If a taxpayer rushes to file his ITR before Form No. 26AS, Form No. 16/16A, and AIS are available to him, there is a possibility of reporting incorrect details of income and TDS. This is because he may miss some critical information relevant to filing his ITR. If he misses such information and files the ITR, he must file a revised return, allowed until December 31 to provide correct information to the tax department. Hence, it is advisable to wait till June 15 for filing ITR." Madaan says, " Mismatch in AIS , or Form 26AS or non-reporting of TDS, even if done unintentionally, can result in tax notices or scrutiny assessments, delayed refunds or denial of legitimate TDS and even the requirement to file a revised return." He further adds, "When the income tax return is processed by the Centralised Processing Centre (CPC), TDS credit is allowed only for entries appearing in Form 26AS. If TDS has been deducted but not yet reflected in 26AS, the credit will be denied initially, which could affect your refund or result in a tax demand being raised. While a correction can be made later through rectification or revised returns, it delays resolution and complicates compliance." Conclusion While the Income Tax Act does not restrict early filing, for most salaried individuals and small taxpayers, filing after June 15 ensures complete and reconciled tax credit data and a lower risk of compliance issues or mismatched reporting. Madaan says, "Unless your ITR is urgently required for purposes such as loan approval or visa purposes, it is prudent to wait till June 15 to have all the required information to file ITR. In tax compliance, accuracy is far more valuable than speed provided the ITR is filed before the due date. A few extra days of patience can prevent future complications, safeguard your refunds (if eligible), and ensure that your ITR is filed right the first time."
Time of India
26-05-2025
- Business
- Time of India
LTA exemption in new tax regime: Can you claim leave travel allowance exemption in new tax regime or is it taxable?
From April 1, 2025, the new tax regime has become more attractive than the old tax regime for a larger number of taxpayers. This is because zero tax is payable on net taxable income up to Rs 12 lakh for FY 2025-26 under the new tax regime. Taxpayers often look for deductions from their gross income to reduce taxable income to Rs 12 lakh or below in order to pay zero tax under the new tax regime. Many would like to know if they can claim leave travel allowance (LTA) deduction via travel bills under the new tax regime or not. ET Wealth online tells you if you can claim exemption on leave travel allowance for the FY 2025-26 under the new tax regime. Is LTA exemption available under the new tax regime? According to income tax rules, LTA exemption is not available under the new tax regime. An individual opting for the new tax regime for FY 2025-26 and getting LTA from their employer cannot claim exemption using it. Is LTA taxable under the new tax regime? The tax exemption on LTA is not available under the new tax regime. Hence, if you have received LTA as a part of Cost-to-Company (CTC) and opt for the new tax regime for TDS on salary for FY 2025-26, then LTA will be taxable even if you submit bills of travel. When is LTA tax exemption available for private sector employees? For private sector employees, LTA tax exemption is available if they opt for the old tax regime for FY 2025-26 to pay tax. However, specific rules prescribed under the Income Tax Act, 1961, must be followed to claim LTA exemption under the old tax regime. Live Events In the old tax regime, LTA exemption is available under Section 10(5) of the Income Tax Act. Is LTA exemption available in a block of four years? Yes, the LTA exemption is available twice in a four-year block. The current block extends from January 1, 2022, to December 31, 2025. A taxpayer can claim LTA exemption on a maximum of two journeys in this block. If an employee is unable to undertake a journey/claim LTA in the block, then one journey/LTA can be carried forward to the first year of the next block. Are LTA exemption rules different for government employees? Abhishek Soni, CEO, - an ITR filing website, says, "The LTA exemption rules for government employees are not different vis-à-vis those for private sector employees. The income tax laws allow government employees to claim LTA exemption twice in a block of four years, either to visit their hometown or to any place in India. Further, this exemption will be available if the government employee opts for the old tax regime in a particular financial year. No LTA exemption can be claimed under the new tax regime." Rules to claim LTA exemption under old tax regime Soni explains the conditions that a taxpayer must meet to claim LTA exemption under the old tax regime. a) LTA part of salary: An employee must be receiving LTA as part of his/her salary from his/her employer. b) Submission of travel bills: Employees must submit the bills and other travel documents to their employer before the date specified by the employer for doing so, to claim tax exemption in a particular financial year. c) No international vacation: The LTA exemption is available for travel within India and cannot be claimed for international travel. d) Cost of travelling for specific family members: The LTA tax exemption can also be claimed for cost of travel of accompanying family members. For this purpose, family members can include spouse, children, dependent parents, and dependent siblings. e) Covers only mode of travel: LTA exemption rules cover only cost incurred for actual transportation for travel, including by air, train, or road. LTA exemption is not allowed for cost of hotel bookings and food expenses during the trip. Maximum LTA exemption in old tax regime The maximum LTA exemption that can be claimed depends on the actual cost incurred on transportation and the LTA amount allowed by the employer. Soni says, "The LTA exemption is allowed for the cost of the shortest journey (either by bus, train or air) from the employee's place of residence to the travel destination and back. If the LTA offered by the employer is less than the actual cost incurred on transportation, the exemption would be limited to the LTA allowed by the employer and not the actual costs incurred."
