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Business Standard
4 days ago
- Business
- Business Standard
Influencers to F&O traders: here's what ITR utility update means for you
As India's digital economy evolves and more taxpayers report income from non-traditional sources like content creation and speculative trading, the Income Tax department has overhauled its ITR utility to introduce a revised list of 'Nature of Business/Profession' codes. This change, effective from assessment year (AY) 2025–26, is designed to bring more clarity, compliance and alignment with sector-specific practices. Why did the Income Tax department make this change? The update is a response to the changing economic landscape. 'The revised codes aim to better capture emerging income sources, like social media influencing or F&O trading, while reducing ambiguity in disclosures,' said Parag Jain, chartered accountant & tax head at 1 Finance. The older codes were too generic, leading to inconsistent classification and potential compliance gaps. The change also boosts the department's analytics and cross-platform matching. 'It is a strategic move to enhance digital governance, improve compliance, and match data with GST and MCA systems,' said Deepak Kumar Jain, founder & chief executive officer of Vivek Jalan, Partner at Tax Connect Advisory Services LLP, noted that the classification will also help the department compare profitability within sectors using AI tools, which may affect how returns are scrutinised. What changes for small businesses, freelancers, and professionals? The new codes help taxpayers report income more accurately. For example: A freelance graphic designer must now use code 14010 instead of the generic 0607 A mobile retailer should now choose code 09019 instead of selecting 'Others' F&O traders must now use code 21010, replacing older catch-all financial activity codes YouTubers and influencers have a new code: 16021 'These help align disclosures with actual income and reduce mismatches,' Parag Jain said. Sonu Jain, chief risk officer at 9Point Capital, added that better classification can also ensure eligibility for presumptive schemes under Sections 44AD/44ADA. What if the wrong code is selected? While there's no explicit penalty, the risks are real. 'Wrong codes can trigger AI-based scrutiny, mismatches, or even notices,' Parag Jain noted. 'This is especially critical if the data doesn't match with GST or MSME/Udyam records,' Deepak Kumar Jain added. Jalan pointed out that if declared profits diverge significantly from industry norms, for instance, an influencer showing just 20 per cent profitability where the average is 50 per cent, they may need to furnish expense justifications. What should taxpayers and CAs do now? Experts agree there's no need to revise past filings. 'This is a forward-looking change,' Sonu Jain said. However, accuracy this year is essential. 'Use the latest ITR utility, match codes with GST/MSME records, and verify presumptive scheme eligibility,' Deepak Kumar Jain advised. In short, the ITR utility's new codes aren't just a formality. They are a signal that the tax system is adapting to modern income sources and taxpayers must adapt too.
New Indian Express
01-07-2025
- Business
- New Indian Express
June sees slump in GST revenue growth; net collection up only 3.3%
After showing stellar rise in April and May, the growth in GST revenue dropped to low single digit in June primarily due to low mop-up from domestic transactions, indicating moderation in economic activities. The gross GST collection showed a growth of 6.2% to Rs 1.85 lakh crore in June 2025 compared to Rs 1.74 lakh crore a year ago. Gross collections from domestic transactions – which account for 75% of the monthly collections – grew by only 4.6% during the month. Collections from imports/exports rose by 11.4%, bringing some semblance of respectability. The net GST collection during the month was even worse, growing at a paltry 3.3% to Rs 1.59 lakh crore, as refunds grew by 28.5%. The slump in June comes after two back-to-back months of over Rs 2 lakh crore collection in April and May. Gross GST collections in May rose by 16.5% to Rs 2.01 lakh crore – only the third time since GST came into force in July 2017. In April, gross GST collections hit an all-time high of Rs 2.36 lakh crore in April 2025, 12.6% higher than the collection of Rs 2.10 lakh crore in April 2024. Net GST revenues in May showed even better buoyancy as the same increased by 20.4% to Rs 1.74 lakh crore. 'After two successive months of Rs 2 Lakhs Crore plus GST revenues and double-digit growths, Rs.1.85 lakh crore collections in June 2025 seems a little dampening,' says Vivek Jalan, partner, Tax Connect Advisory Services LLP. However, Jalan says that the year-to-date growth of 11.8% in GST still gives a tax buoyancy of more than 1% which means that India is still in the 'Goldilocks situation' amidst global turmoil.
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Business Standard
11-06-2025
- Business
- Business Standard
Told your employer one tax regime, but want to switch? Here's the rulebook
You selected a tax regime in April but now want to change while filing your Income Tax return (ITR) With the new tax regime being the default from FY24, many taxpayers are reconsidering their earlier choice. Are you allowed to change regimes? What are the consequences? We asked experts to explain. You can switch regimes while filing ITR 'Even if a salaried individual opted for a particular regime at the start of the financial year and the employer deducted TDS accordingly, they [individuals] are free to choose a different regime at the time of filing the return,' said Kunal Savani, partner, Cyril Amarchand Mangaldas. While the employer collects regime preference for TDS purposes, this doesn't lock the employee into that choice for return filing. 'The regime option is merely for calculating monthly TDS. Taxpayers have the flexibility to change the regime at the time of filing their ITR depending on which one gives them a lower final tax liability,' said Ritika Nayyar, partner at Singhania & Co. What if tax was already deducted? There's no penalty for switching, but there may be financial adjustments. 'If more tax was deducted under the regime declared to the employer, the individual can claim a refund,' Savani said. 'If less was deducted, they may have to pay the balance tax along with applicable interest.' Vivek Jalan, partner at Tax Connect Advisory Services LLP, noted a possible mismatch. 'The Form 16 issued by the employer may not align with the final ITR, which could trigger a verification notice from the tax department.' Can you switch regimes every year? Salaried individuals can switch between the old and new regimes every year. 'This flexibility is available only if such taxpayers do not have any business or professional income,' said Savani. 'For non-salaried taxpayers like freelancers or business owners, the choice is more rigid,' Jalan pointed out. 'They can opt out of the default new regime only once. After switching back to the new regime, they cannot opt for the old regime again, unless they no longer have business income.' Finalising your ITR Nayyar advised taxpayers to calculate income under both regimes and then choose one. 'The system will automatically adjust TDS and show the final liability or refund while filing the return,' she said. Jalan summed it up best: 'The date of filing one's ITR is practically the date when a salaried employee can make a final call on the tax regime.' Bottom line: If you initially told your employer one tax regime but want to pick another while filing ITR, you can. Just be ready to handle any refund or additional tax, and keep documentation ready if there's a mismatch.
Mint
01-05-2025
- Business
- Mint
GST collection rises 12.6% to highest-ever of ₹2.37 lakh crore in April 2025
Goods and Services Tax (GST) collection rose 12.6 per cent Y-o-Y to an all-time high of about ₹ 2.37 lakh crore in April, government data showed on Thursday. The GST mop-up was ₹ 2.10 lakh crore in April 2024 -- the second highest collection ever since the roll-out of the indirect tax regime on July 1, 2017. In March 2025, the collection was ₹ 1.96 lakh crore. GST revenue from domestic transactions rose 10.7 per cent to about ₹ 1.9 lakh crore, while revenue from imported goods was up 20.8 per cent to ₹ 46,913 crore. Refunds issuance rose 48.3 per cent to ₹ 27,341 crore during April. After adjusting refunds, net GST collection rose 9.1 per cent to over ₹ 2.09 lakh crore in April. The data revealed that collections in March were 6.8 per cent higher than the ₹ 1.84 lakh crore recorded in the previous month. On the GST data, Saurabh Agarwal, Tax Partner, EY India, said, 'The record GST collections underscore the Indian economy's underlying strength in the face of global economic uncertainties.' "While a potential moderation in absolute GST collections is anticipated next month due to the current global economic climate, the overall outlook for the Indian economy remains optimistic," he added. Adding to this, Vivek Jalan - Partner Tax Connect Advisory Services LLP said, 'Amidst the global tariff war, the disruption caused by the heinous attack in Kashmir, and the related uncertainties, the growth of net GST revenues by 9.1 per cent over last year show the firm resolve of the Country to keep the dream of 'Viksit Bharat' going, amidst all odds.' 'However, what stands out is the stark variation between the growth of GST revenues of the Central vis-a-vis State jurisdictions in certain states,' added Jalan For example, in Tamil Nadu, the growth in GST revenues of Central formulations is 9.3 per cent while that in State formulation is 17 per cent. 'This aspect may be looked into by the State CGST and SGST Authorities. It would be just that taxpayers, whether in State or in Centre jurisdictions would be consistently treated,' he said. The Goods and Services Tax was introduced in the country with effect from July 1, 2017, and states were assured compensation for loss of any revenue arising on account of the implementation of GST. Experts noted domestic collections have steadily grown over the last year with the first month of the current fiscal showing a 9.9 per cent growth. "The import collections show a higher growth of 20.8 per cent, which appears to be led by the export growth as visible by the significantly higher export refunds and this could be on account of the tariff pressures and anticipated tweaks to the tariffs leading to companies adjusting their supply chains," said Mahesh Jaising, Partner and Leader, Indirect Tax, Deloitte India "Major states also show a positive growth which is a good sign for fiscal 25-26. The rising number of GST registrants points to the fact that more and more taxpayers (25L+ over FY25) are coming into the tax net and should result in higher collections," added Jaisingh.
