Latest news with #Form10-IEA
Mint
3 days ago
- Business
- Mint
Substance over form: If tax authorities can invoke it, why can't the common taxpayer?
The 'substance over form' principle in tax law means that what really happens in a transaction matters more than how it looks on paper. It empowers tax authorities to look past legal documents to understand the true purpose and effect of a deal. Tax authorities often invoke this doctrine when it helps them deny benefits, disregard sham transactions or expose tax avoidance. However, when it comes to the taxpayer—who may miss a form, a checkbox, or falter on minor procedural compliance—the same tax authorities often rigidly insist on 'form over substance'. This inequity is starkly evident in several recent compliance frameworks. Consider Form 10-IEA, which taxpayers engaged in a business or profession are required to file in order to opt out of the default new personal tax regime. The legislature offers taxpayers a choice between a lower tax rate regime without exemptions and the traditional regime with deductions. Yet, a delay or omission in filing Form 10-IEA, even if the tax computation and return filing clearly reflect the taxpayer's intention, is deemed fatal. The Centralised Processing Centre routinely defaults such taxpayers to the regime not opted for, disregarding the economic substance of the filing and enforcing strict adherence to the procedural form. A similar rigidity is seen in the treatment of Form 67, which is required for claiming a foreign tax credit. Many resident taxpayers having foreign income like dividends, interest or freelancing fees, pay taxes on such incomes in foreign jurisdictions and are entitled to relief in India. However, technical issues such as failure to upload Form 67 within the return filing timeline—even where all tax has been paid abroad and disclosed in the return—lead to denial of credit and consequent double taxation. Courts have begun to intervene in such cases, but the department's stance remains largely formalistic, prioritizing portal-driven validations over genuine tax neutrality. The issue extends to the income tax return forms itself. In several cases, tax authorities have issued notices or denied exemptions on the grounds of procedural omissions such as missing disclosures in exempt income schedules, unreported asset schedules even when such assets are otherwise declared fully accounted for, or unchecked declaration boxes. These are instances where the taxpayer has not suppressed any income or wilfully violated the law, yet substantive compliance is ignored in favour of hyper-technical scrutiny. Take another example of Forms 15G and 15H. Senior citizens and small investors are permitted to submit these self-declarations to avoid tax deducted at source (TDS) if their income falls below the taxable limits. But if these are not submitted on time, or the deductor fails to process them despite receipt, TDS is still deducted. The taxpayer then goes through the hassle of filing a return and waiting months for a refund. Isn't this a classic example where form trumps substance? In the realm of joint investments—whether in immovable property, mutual funds or securities—tax departments often insist on procedural proof of PAN linkage or nominee declarations. Even where ownership is legally shared and income attributable to each co-owner is proportionate and disclosed, revenue authorities have, in practice, demanded conformity with form-based validations, ignoring the substantive evidence available. The Goods and Service Tax (GST) framework presents another dimension. While GST rightly taxes supplies of goods and services, it does so on expenditure made from already taxed income. This creates an indirect double taxation, especially for individuals and small businesses, with no real relief available. Here again, the economic substance—that the expenditure is out of post-income-tax resources—is overlooked in favour of a transactional, form-based levy. The fundamental concern is this: if the tax department routinely invokes substance over form to protect revenue and curb abuse, is it not equitable to permit taxpayers the same benefit to claim reliefs, exemptions or credits where their intent and substance are compliant, even if procedural lapses exist? Tax policy must balance administrative convenience with fairness. Procedural forms serve a purpose, but they must not override substantive rights. The taxpayer's intent, supported by documentation, should matter more than their navigation of a labyrinth of forms. Particularly in a digital and artificial intelligence-driven tax ecosystem, where technical errors are increasingly common and often unintentional, a more nuanced and equitable approach is needed. Taxpayers' substantive reliefs shouldn't be sacrificed at the altar of technicality. After all, tax compliance should be about paying what is due—not more, not less—and certainly not losing relief for ticking the wrong box. Mayank Mohanka is founder, TaxAaram India, and a partner at S.M. Mohanka & Associates.
India.com
04-08-2025
- Business
- India.com
ITR Filing 2025: Selected New Tax Regime? Check Slab-Wise Tax Rates If Your Income Exceeds Rs 12 Lakh
New Delhi: With the income tax return (ITR) filing date extended to September 15, taxpayers have more time to decide whether to choose the old or new tax regime. Salaried employees or pensioners without business income can change their tax regime at any time prior to filing their ITR every year by simply selecting the relevant option on the ITR-1 or ITR-2 form. With commercial or professional income, the regulations are stricter. Only once in your lifetime may you return to the old tax regime, and the choice is locked afterwards. For this change, you must file Form 10-IEA before the filing date. The new tax regime will take effect by default if you miss filing this form. If you are confused about choosing which regime, you should be aware that House Rent Allowance (HRA), Leave Travel Allowance (LTA), deductions under Sections 80C to 80U, and home loan interest under Section 24(b) are only available under the old tax regime. New Tax Regime: What Will Be Slab-Wise Tax Rates If Your Income Exceeds Rs 12 Lakh The new regime has fewer deductions, but individuals with taxable income up to Rs 12 lakh get a full tax rebate under the new regime. Your entire income will be taxed slab-wise if your taxable income exceeds Rs 12 lakh. The slabs are zero tax for the initial Rs 4 lakh, 5 per cent tax on Rs 4 lakh to Rs 8 lakh, 10 per cent on Rs 8 lakh to Rs 12 lakh, 15 per cent on Rs 12 lakh to Rs 16 lakh, and so forth. Importantly, the new regime allows only limited benefits under Sections 80CCD(2) and 80CCH(2), excluding the broader 80C basket popular among salaried taxpayers. Before choosing a regime, consider your income, pay structure, and tax-saving investments. Salaried individuals with minimal deductions may benefit from the new regime. If you can claim substantial deductions under Sections 80C, 80D, HRA, or house loan interest, the old regime may be more beneficial. Also, note that you have losses from house property, capital gains, or business income; they cannot be carried forward under the new regime. This may affect future tax liabilities, so consider it before deciding. As a general rule of thumb, tax experts say that the old tax regime will only be advantageous to taxpayers who are eligible to claim Rs 2 lakh deduction for home loan interest under Section 24(b) or a large house rent allowance (HRA). Most other deductions are unlikely to justify remaining with the old regime.
Time of India
30-07-2025
- Business
- Time of India
Online ITR-3 filing enabled: Income taxpayers with share trading, unlisted shares investment, professional, business, other incomes can now file ITR-3 online
Who needs to file ITR-3 for AY 2025-26 (FY 2024-25)? The residential status can be either Non-resident or Resident(ROR/RNOR) If a person is the director of the company. Persons who had investments in unlisted equity shares at any time during the entire financial year. Income from other sources Income of a person who is a partner in a firm. Income from salary or Pension Income from House Property(one or more) Total income can exceed 50 lakhs in this case. Income earned from capital gains or foreign assets/foreign income. Who has income under the head profits or gains of business or profession and who is not eligible to file Form ITR-1 (Sahaj), ITR-2, or ITR-4 (Sugam). Key changes in ITR-3 form for AY 2025-26 (FY 2024-25) Academy Empower your mind, elevate your skills Schedule-Capital Gain split for gains before/ after 23.07.2024 (post changes in Finance Act, 2024) Capital loss on share buyback allowed if corresponding dividend income is shown as income from other sources (post 01.10.2024) Asset & liability reporting limit raised to Rs 1 crore of total income Reference of sec 44BBC (cruise biz) added Enhanced reporting for deductions [80C,10(13A)] etc. TDS section code to be reported in Schedule-TDS Seven prominent changes in ITR-3 excel utility Disclosure of Regime Selection (Form 10-IEA): Form ITR-3 now requires assessees to confirm whether Form 10-IEA was filed in AY 2024–25 (i.e., the preceding financial year), along with a declaration on whether they intend to continue with or opt out of the new tax regime for the current assessment year. Form ITR-3 now requires assessees to confirm whether Form 10-IEA was filed in AY 2024–25 (i.e., the preceding financial year), along with a declaration on whether they intend to continue with or opt out of the new tax regime for the current assessment year. Revised Reporting for Capital Gains Transactions: Due to the changes in capital gains tax rates brought about by the Finance Act (No. 2), 2024, Schedule CG and other related Sections have been revised. Now, taxpayers have to report capital gains transactions separately for those done before and on or after July 23, 2024. Due to the changes in capital gains tax rates brought about by the Finance Act (No. 2), 2024, Schedule CG and other related Sections have been revised. Now, taxpayers have to report capital gains transactions separately for those done before and on or after July 23, 2024. Bifurcation of Indexed Cost for Resident Individuals: Resident taxpayers are now required to separately provide details of the cost of acquisition and cost of improvement for any land or building transferred before July 23, 2024. This is intended to help apply indexation benefits for those transfers. Resident taxpayers are now required to separately provide details of the cost of acquisition and cost of improvement for any land or building transferred before July 23, 2024. This is intended to help apply indexation benefits for those transfers. Enhanced Threshold for Asset and Liability Reporting: Taxpayers with a total income of over Rs 1 crore (up from Rs 50 lakh) now need to disclose their assets and liabilities at the end of the financial year, except for those already covered under Part A – Balance Sheet. Taxpayers with a total income of over Rs 1 crore (up from Rs 50 lakh) now need to disclose their assets and liabilities at the end of the financial year, except for those already covered under Part A – Balance Sheet. Inclusion of Presumptive Taxation under Section 44BBC: The updated form ITR-3 now includes provisions for reporting under Section 44BBC, which deals with presumptive taxation for income earned from operating cruise ships. The updated form ITR-3 now includes provisions for reporting under Section 44BBC, which deals with presumptive taxation for income earned from operating cruise ships. New Reporting Requirement for Dividend Income under Section 2(22)(f): A specific row has been added to report dividend income received in the form of buyback proceeds under Section 2(22)(f). A specific row has been added to report dividend income received in the form of buyback proceeds under Section 2(22)(f). Capital Loss Reporting for Share Buybacks: The updated form ITR-3 now includes a distinct row in Schedule CG for reporting capital losses that come from companies buying back shares from shareholders, as per Section 68 of the Companies Act, 2013. These losses can be claimed, as long as the corresponding dividend income is reported under the 'Income from Other Sources' category. The Income Tax Department has enabled online filing of income tax return ITR ) form number 3 (ITR-3). This means those with share trading income like future and options (F&O), business income, or even investment in unlisted shares like National Stock Exchange (NSE ), they can now file ITR-3 via the e-filing ITR Income Tax Department said on July 30, 2025: 'Kind Attention Taxpayers! Income Tax Return Form of ITR-3 is now enabled for filing through online mode.'According to chartered accountant Abhishek Soni, co-founder, Tax2Win, ITR-3 is to be used by either an individual or a Hindu Undivided Family who are carrying on a business or profession. The following persons are eligible to fill this form:According to the Income Tax Department, Key updates for ITR-3 are:Chartered Accountant Suresh Surana explains seven prominent changes in ITR-3 excel utility for AY 2025-26 which every taxpayer filing ITR-3 should know:
India Today
02-07-2025
- Business
- India Today
Wanting to switch tax regime? Here's how to do it while filing ITR
It's that time of the year again when many taxpayers sit down to file their income tax returns. One important decision is choosing between the old and new income tax regimes. From FY 2023–24 onwards, the new tax regime is the default option, which means if you want to stick to the old regime, you must say so clearly when filing your how can you switch from one regime to the other? Let's understand the same through this FOR SALARIED PEOPLEIf you're a salaried employee with no business or professional income, you have the flexibility to choose the tax regime every year. While filling out your ITR, usually ITR 1 or ITR 2, you'll see a question asking whether you wish to opt out of the new tax regime under section 115BAC(6). You just need to tick 'Yes' or 'No'. By default, it's set to 'No', meaning the new regime remember, this option is only open if you file your original return within the due date. If you miss the due date and file a belated return, the default new regime will automatically apply. However, you can still revise your return later if you had filed the original one on time, and change your tax regime FOR BUSINESS OR PROFESSIONAL INCOMEIf you have business or professional income and file ITR 3, ITR 4, or ITR 5, the rule is stricter. You can switch from the new regime to the old regime only once in your lifetime by submitting Form 10-IEA before the due date. If you switch back to the new regime later, you can't go back to the old regime latest ITR 4 form for FY 2024–25 asks for more details from taxpayers opting out of the new regime. For example, you'll need to mention if you filed Form 10-IEA last year, its date and acknowledgement number, and whether you plan to continue opting out this year. Even if you missed filing Form 10-IEA last year, you must now declare your choice and give the right details for the current BEFORE YOU CHOOSEBefore you tick any box or fill out any form, it's wise to compare both regimes. Check which one gives you more tax savings. The old regime offers various deductions and exemptions, while the new regime has lower tax rates but no major deductions.- EndsTrending Reel
Time of India
30-06-2025
- Business
- Time of India
ITR filing FY 2024-25: How can taxpayers switch between old and new income tax regimes? Explained
The new personal tax regime has been made the default regime from the financial year 2023-24. (AI image) ITR filing FY 2024-25: When e-filing your Income Tax Regime (ITR) for AY 2025-26, the choice of the income tax regime is an important one. The new income tax regime is the default tax regime, so if you want to file your tax return under the old regime, you will have to expressly opt for it. The new personal tax regime has been made the default regime from the financial year 2023-24. So how can you make the switch from the new income tax regime to the old tax regime? We explain: ITR filing: How To Switch Between New & Old Tax Regime A salaried taxpayer can switch from one regime to another every year , so long as they file the original return of income within the due date u/s 139(1). According to Ishita Sengupta, Partner and India Leader, Vialto Partners, a taxpayer only has to select the appropriate option in the ITR Form 1 or ITR 2 by ticking 'Yes' or 'No' in response to the question: 'Do you wish to exercise the option u/s 115BAC(6) of opting out of the new tax regime?' By default, this section is pre-filled with 'No'. Also Read | Income Tax Return: What is Form 16? Top things taxpayers should check in this document before filing ITR 'Notably, if a return is filed after the due date (i.e., a belated return), the default tax regime—New Income Tax Regime—will automatically apply. However, if a revised return is filed, the taxpayer can still exercise the option to choose the regime, as long as the original return was filed within the due date,' Ishita Sengupta tells TOI. A taxpayer with business or professional income is NOT allowed to choose between the old and new tax regimes each financial year . by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Adidas Three Shorts With 60% Discount, Limited Stock Available Original Adidas Shop Now Undo If the taxpayer opts out of the new tax regime, they are permitted to switch back to it only once. Once the taxpayer reverts to the new income tax regime, they cannot opt for the old regime again in the future. To opt out of the new regime, a declaration must be submitted in Form 10-IEA before the due date for filing the original return. Ishita Sengupta explains that the ITR 4 (SUGAM) released for the FY 2024-25 (applicable for those who have business/ professional income under presumptive taxation) now seeks more comprehensive details from individual taxpayers opting out of the new income tax regime. The taxpayers are now required to disclose: Whether they have filed Form 10-IEA to opt out of new income tax regime in last year (FY 2023–24), along with the date of filing and the acknowledgement number Whether they intend to continue opting out for it the current year (FY 2024–25). If not, they must again provide Form 10-IEA details for the current year Even if Form 10-IEA was not filed or was filed late for last year (FY 2023–24), taxpayers must elect their current choice of regime and submit Form 10-IEA details accordingly The taxpayers who filed ITR-1 or ITR-2 last year must also confirm whether they wish to opt out this year and provide Form 10-IEA details, if applicable Hence, before making a final selection between the two income tax regimes, taxpayers should carry out a comparative analysis to determine which is more beneficial for them. Also Read | Income Tax Return filing AY 2025-26: Which ITR form should freelancers and gig workers use? Explained 'Individuals having significant tax savings payments/investments (approximately more than Rs 8 lakh) may still find the old income tax regime beneficial, but if they have business income, they should carefully evaluate future year scenarios before making the final switch,' Ishita Sengupta adds. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
