Once an income tax audit is completed, an individual should check certain things. This is to ensure that the income tax auditor has not made any mistakes while submitting the audit report. If there is a mistake in the audit report, then an individual will be first required to prove to the income tax department that the mistake was made by the auditor. This must be done to avoid a penalty being levied by the income tax department due to the wrong information in the audit report. Further, the individual will have to hire an auditor again to get the audit done once more.

The net direct tax collection increased 23.51 per cent to over Rs 8.65 lakh crore till mid-September on higher advance tax mop-up from corporates, the Finance Ministry said on Monday.

The net collections have reached 47.45 per cent of the full-year budget estimates (BE) of Rs 18.23 lakh crore.

The Central Board of Indirect Taxes (CBDT) on September 18 announced an extension in the deadline for filing an audit report for trusts, educational institutions and hospitals for the financial year 2022-23 to October 30 from earlier September 30.

It also extended due date of furnishing of Return of Income in Form ITR-7 for the Assessment Year 2023- 24 to November 30, 2023 from earlier October 30.

The form ITR 7 is filled by Charitable and Religious Trusts, Political Parties, Scientific research institutions, University, college or other institutions.

The Centre’s advance direct tax receipts for the second quarter of the current fiscal from companies, LLPs and individuals rose by a robust 24% on year to Rs 2.38 trillion as per the data till Saturday, aided by a sharp increase in income tax receipts and a rebound in corporate tax collections.

Higher corporate profitability in Q2 amid an easing of input costs led to buoyancy in the quarterly advance tax mop-up. The advance tax receipts had grown by 14% on year in Q1FY24 and by 10% on year in Q2FY23.

In the long-drawn tax dispute with Cognizant Technology Solutions India Pvt Ltd, the Chennai Income Tax Appellate Tribunal (ITAT) has upheld that the company is liable to pay dividend distribution tax (DDT) on buyback of shares made in the assessment year 2017-18.

The order implies that the company may have to fork out around Rs 2,800 crore out of the total tax demand of around Rs 3,300 crore as it had deposited 15% of the tax demanded when the matter was being heard in the Chennai High Court.

India's corporate tax collections must be looked at over a longer period of time and the full-year numbers are likely to be in line with budget estimates, the country's economic affairs secretary said on Thursday.

"We should not look at few months' data and try to find a long-term trend over there... my sense is that whatever numbers are there in terms of budget estimates and revenues, those will be realised," Ajay Seth told reporters.

Corporate tax collections between April and July fell 10% to 1.76 trillion Indian rupees ($21.20 billion) from a year earlier, government data showed.

The government has exempted units of investment trusts and ETFs issued by entities based in GIFT City or traded in exchanges there from capital gains tax. The Central Board of Direct Taxes (CBDT) notified the exemption from capital gains tax any unit of investment trust; a unit of a scheme; and a unit of an Exchange Traded Fund (ETF) launched under the International Financial Services Centres Authority (Fund Management) Regulations, 2022.

Gujarat International Finance Tec-City (GIFT)-IFSC is being promoted as a tax-neutral enclave for the financial sector.

Nangia Andersen LLP Partner-Financial Services Sunil Gidwani said currently, the law provides for exemption from capital gains tax on various securities either trading on the stock exchanges in GIFT city or securities issued by entities set up in GIFT city.

The new rates of tax collection at source (TCS) will come into effect from October 1, 2023. Whether you are going for an international trip, investing in foreign stocks, mutual funds, or cryptocurrencies abroad, or going abroad for higher studies, you will have to pay TCS if you spend above a certain amount in a financial year. Now, it will be crucial for you to know how much TCS will be applicable on various types of transactions from next month. To make it simpler for you, ET Wealth Online decodes the new TCS regime that is set to kick in from next month.

20% TCS rule kicks in from October 1, 2023: All you need to know
Under the Liberalised Remittance Scheme (LRS) of the Reserve Bank of India (RBI), you can remit up to $250,000 in a financial year. Starting from October 1, 2023, all overseas outward remittances, except for medical and educational purposes, over a threshold limit of Rs 7 lakh in a financial year will attract a TCS of 20%.

To further the objective of making the GIFT International Financial Services Centre (IFSC) in Gujarat a hub for financial services in the world, the Centre has exempted tax on capital gains arising from the transfer of units of investment trusts and exchange-traded funds (ETFs) on exchanges in the IFSC.

The Central Board of Direct Taxes (CBDT) notified the exemption under the International Financial Services Centres Authority (Fund Management) Regulations, 2022.

The income tax department on Friday said that the burden of proof to establish the creditworthiness of an investor is on the company whose returns are being assessed. The statement came after BharatPe co-founder and former MD Ashneer Grover posted a questionnaire sent by the tax department to some startups seeking details.
"In the last one month, a number of startups (a few in my portfolio as well) have received I-T notices asking to furnish information about shareholders. Bahut interesting hai - they are asking startup companies to furnish 3-year ITR of all shareholders. 1) How and why will companies have ITR of shareholders! 2) Why would a shareholder/individual share their ITR with a private company?" Grover posted on X on Friday.

Instead of just going after the kingpin, the tax tribunal has directed that nearly 33,000 individuals or business entities engaged in a money laundering racket worth Rs 1,680 crore be probed. In a far-reaching order, the Income Tax Appellate Tribunal (Mumbai bench) has looked beyond just bringing to task an individual defaulting taxpayer and upholding lower tax authorities' assessment order.
As Naresh Manakchand Jain - the defaulting taxpayer - was engaged in a significant money-laundering operation, the tax tribunal has directed his jurisdictional I-T official to provide details of 30,000-plus entities involved within 90 days to various regulatory authorities for further investigation and action. The authorities include I-T officials, Sebi, RBI, and the registrar of companies.

This year, 22,000 taxpayers, including high-net-worth individuals, salaried individuals, and trusts, have received notices from the Income Tax Department because their deductions don't match the information on their Form 16 or Annual Information Statement (AIS).

According to a report in The Economic Times, all these intimation notices were sent for the tax returns filed for the assessment year 2023-24, and all the notices were sent in the last 15 days.

The Central Board of Indirect Taxes and Customs (CBIC) Thursday said it was mandatory for its field officials to issue a letter to bank authorities to release provisionally attached property including bank accounts upon expiry of an attachment order.

The instruction comes in the wake of many taxpayers moving courts to get their bank accounts and provisional attachment revoked.

One of the writ petitions filed by a taxpayer sought that the commissioner should also follow up by issuing an intimation of release of such provisional attachment because banks/relevant authorities seek such a communication.

The average time taken to process income tax returns after its verification by the tax payer has been reduced to 10 days, Central Board of Direct Taxes (CBDT) said in a statement on Tuesday.

CBDT said that the tax department's efforts to provide seamless and expeditious taxpayer services are being continuously strengthened. "In line with the same, average processing time of income tax returns after verification has been reduced to 10 days for the returns filed for assessment year (AY) 2023-24 compared to 82 days for AY 2019-20 and 16 days for AY 2022-23," CBDT said.

After several income taxpayers received notices for wrongly claiming income tax deductions under Section 80 P, the Income Tax Department (ITD) clarified that they were sent to them by mistake. The ITD added that "an email communication regarding this will be sent to you shortly".

“Defective return errors coming in partnership firms. Section 80P mentioned is not applicable to firms. A futile exercise of responding to such system-generated queries has to be done.@IncomeTaxIndia," this query was raised by taxpayer, chartered accountant Nirav Choksi on X (formerly Twitter),

The Income Tax Department has processed refunds of over Rs 2.45 lakh crore for 6.84 crore verified Income tax returns (ITRs), bringing down the average processing time to 10 days for the assessment year 2023-24.

Total 6.98 crore ITR were filed for the Assessment Year 2023-24.

“More than 6 crore ITRs of AY 2023-24 have been processed out of the verified ITRs as on September 5, resulting in processing of over 88% of the verified ITRs” Central Board of Direct Taxes (CBDT) said in a statement issued Tuesday.

If your bank, employer or any other financial institution has deducted tax in the wrong financial year, then now you can resolve this issue directly through the income tax department. You will not be required to approach the tax deductor to get the issue resolved.

The Central Board of Direct Taxes (CBDT) has notified Form 71 which a taxpayer can use to correct the wrong Tax Deducted at Source (TDS) credit for any financial year. The notification was issued on August 30, 2023.

Here is an example to understand this: Suppose an individual has FD interest of Rs 1 lakh in FY 2022-23 (AY 2023-24) due to which the bank will be required to deduct TDS. However, the bank deducted tax on FD interest in FY 2023-24 (AY 2024-25). As the bank deducted tax in the wrong financial year, the individual will not be able to claim credit for this TDS in FY 2023-24 (AY 2024-25).

The Income Tax department has signed 95 advance pricing agreements (APA) in 2022-23 -- the highest ever in any financial year since its launch in 2012. "In FY 2022-23, CBDT recorded the highest ever APA signings in any financial year since the launch of the APA programme, signing a total of 95 APAs," the income tax department said in a statement.

The APA programme of CBDT is one of its foremost initiatives for promoting an investor-friendly and non-adversarial tax regime in India. Since its commencement in July 2012, the Indian APA programme has contributed significantly to the Government of India's mission of promoting ease of doing business, it added.

The Central Board of Direct Taxes (CBDT), which is the apex decision-making body in direct taxes, also signed 32 Bilateral Advance Pricing Agreements (BAPAs) in 2022-23 being the maximum number of BAPAs in any financial year till date.

The internet has made it possible for individuals to create content and monetise it over various social media sites such as Twitch, YouTube, Instagram, X (formerly known as Twitter) and others.

As most of these social media websites are based abroad, how will an individual who earns money from these websites get taxed?

How will earnings from social media be taxed as per income tax laws?
The income earned from social media sites such as X, Instagram, YouTube will be taxed depending on the head under which it is classified for an individual. It can be classified either under ‘Income from business and profession’ or ‘Income from other sources’.

“If the person receiving income from social media websites is entirely engaged in content creation on a whole-time basis and revenue earned from social media is the primary source of income, then it will be classified under profits and gains from business or profession and taxed accordingly.

The income tax department has notified new rules on how rent-free accommodation provided by employers will be calculated. These rules will come into effect from today i.e., September 1, 2023, and will be applicable for FY 2023-24.

The new rules will impact employees living in an accommodation provided by their employer. The rules will have an impact on the amount of tax that will be deducted from their salary.

Dipen Mittal, chartered accountant and AGM at Taxmann.com, says, “Accommodation provided by the employer (free of cost or at concessional rate) is treated as perquisite in the hands of an employee. This is considered as part of the salary and TDS will be applicable on it. The new rules to calculate the value of accommodation provided by the employer is likely to lower the TDS and hike the take-home pay of an employee. Further, as the new rules are effective from September 1, 2023, then for the purpose of current FY 2023-24, the old rules will be applicable till August 31, 2023.”