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The first draft of a new simplified <keyword id="20211090" type="General" weightage="20" keywordseo="income-tax-law" source="keywords">income tax law</keyword>, as proposed in the Budget, will be prepared by an internal committee of the tax department and will undertake stakeholder consultation before finalising the legislation, <keyword id="20419783" type="General" weightage="20" keywordseo="revenue-secretary" source="keywords">Revenue Secretary</keyword> <keyword id="301743" type="General" weightage="20" keywordseo="Sanjay-Malhotra" source="Orion">Sanjay Malhotra</keyword> said on Thursday. Malhotra said that the exercise is not linked to bringing a new <keyword id="22542056" type="General" weightage="20" keywordseo="direct-taxes-code" source="keywords">direct taxes code</keyword>, but a comprehensive review of the <keyword id="6354751" type="General" weightage="100" keywordseo="Income-Tax" source="Orion">income tax</keyword> law. Finance Minister Nirmala Sitharaman in her Budget speech earlier this week announced that a comprehensive review of the Income-tax Act, 1961 will be completed in six months. "The purpose is to make the Act concise, lucid, easy to read and understand. This will reduce disputes and litigation, thereby providing tax certainty to the taxpayers. It will also bring down the demand embroiled in litigation," Sitharaman said. To a question whether the review would mean that the government will come with a direct tax code, Malhotra said "It is not a new direct tax code... It is a comprehensive review". He said the first draft of the <keyword id="22542055" type="General" weightage="20" keywordseo="simplified-Income-Tax" source="Orion">simplified income tax</keyword> law, post the review, would be prepared by an internal committee of the tax department. "We would like to have a collaborative approach.... The first draft will be prepared by an internal team and then we will see how to go ahead with stakeholder consultation," Malhotra said at an interactive session with industry chamber Ficci.

First draft of new and simplified Income Tax law to be prepared by internal tax dept committee: Revenue Secretary

An internal committee of the <keyword id="19903456" type="General" weightage="20" keywordseo="Income-Tax-Department" source="keywords" meta.keywordsubtype="org" meta.entityname="Income Tax Department" meta.hostid="153" meta.entityid="Income Tax Department">Income Tax Department</keyword> will review the 1961 <keyword id="22868046" type="General" weightage="20" keywordseo="direct-tax-law" source="keywords">direct tax law</keyword> to eliminate redundant clauses, and adopt best global practices to simplify it for taxpayers for better compliance, <keyword id="19980145" type="General" weightage="20" keywordseo="CBDT" source="keywords">CBDT</keyword> chief Ravi Agrawal has said. The panel, comprising income tax (IT) officials from across the country, has started working on identifying areas of improvement in the Income Tax Act, 1961, he said, and added that the exercise is being conducted under a central government-mandated comprehensive review of the law, which was mentioned by FM Nirmala Sitharaman in the recent <keyword id="19936553" type="General" weightage="20" keywordseo="budget" source="keywords">budget</keyword> presented on July 23rd, 2024. <keyword id="19942037" type="General" weightage="20" keywordseo="Central-Board-of-Direct-Taxes" source="keywords" meta.keywordsubtype="org" meta.entityname="Central Board of Direct Taxes" meta.hostid="153" meta.entityid="Central Board of Direct Taxes">Central Board of Direct Taxes</keyword> (CBDT) chairman Agrawal said the committee is looking at the best global practices that can be adopted, as well as cutting redundancies in the existing law and finding those clauses that have reached their sunset, and hence, can be eliminated. "An internal committee of competent officers of the department from all across the country has been formed. They have started working on identifying areas of improvement. This is a work in progress," he told PTI on Wednesday during an event to mark 165 years of income tax in India. He said the committee is looking at the "problem statement" given to it in the recent Budget. It is trying to find the "best way forward" in giving the country a new direct tax law, Agrawal said. During the event, the CBDT chief assured Union Finance Minister Nirmala Sitharaman that the work of reviewing the Act will be done within the stipulated time-frame of six months, as announced by her in the Budget presented last month. The minister, during the Wednesday event, asked the I-T department to use simple language in its notices and communications with taxpayers, so that they are able to understand these quickly without getting intimidated. Agrawal said this factor is also a part of the I-T law review. The committee is trying to make tax communication simple and easy to understand to encourage compliance of rules by taxpayers, he said. The Income Tax Act, 1961, started its journey in 1922. It contains 298 sections and 23 chapters and other provisions in its current form of 1961. Sitharaman, while presenting the 2024-25 Union Budget, had announced a "comprehensive" review of the Income Tax Act. The purpose is to make the Act concise, lucid, easy to read and understand. This will reduce disputes and litigation, thereby providing tax certainty to the taxpayers. It will also bring down the demand embroiled in litigation. It is proposed to be completed in six months, she had said. Agrawal also said the CBDT will "put more officers" within the next 10-15 days to "expeditiously" clear the "substantial" number of appeals pending at the Income Tax Department level.

CBDT forms committee for IT Act review; 'sunset' clauses to be eliminated

Today is <keyword id="22458495" type="General" weightage="20" keywordseo="July-31st" source="keywords">July 31st</keyword>, 2024, the last day to file your income tax returns, without having to pay any penalties. And before you ask, the <keyword id="19903456" type="General" weightage="20" keywordseo="income-tax-department" source="keywords">Income Tax Department</keyword> has not come out with any notification informing the taxpayers of a deadline extension. That is why you should not delay filing your <a href="https://www.businessinsider.in/personal-finance/article/heres-your-ready-reckoner-for-itr-filing/articleshow/111402608.cms" data-type="tilCustomLink">income tax returns</a> anymore! The <keyword id="20171597" type="General" weightage="20" keywordseo="IT-department" source="keywords">IT department</keyword> noted that as of July 26th, 2024, over 5 crore ITRs had already been filed, marking an 8.5% increase from the number of ITRs filed during this period, last year. The IT department, in an X post, highlighted that last year, it had reached the 5-crore <keyword id="22083160" type="General" weightage="100" keywordseo="ITR-filing-deadline" source="keywords">ITR filing deadline</keyword> on July 27th. However, this year, it had breached the milestone a day earlier, i.e., on July 26th, 2024. Earlier, the All Gujarat Federation of Tax Consultants and Income Tax Bar Association had requested a deadline extension for AY 2024–25 from July 31st, 2024, to August 31st, 2024, citing issues and glitches in the tax filing portal. However, there has been no response from the finance ministry on the same. <h2>What happens if I don't file my ITR until July 31st? </h2>For AY 2024–25, you can file a <keyword id="6380232" type="General" weightage="20" keywordseo="belated-ITR" source="Orion">belated ITR</keyword> until December 31st, 2024. But remember, it comes with many disadvantages as well. Here's a snapshot of all the benefits you will have to forego: <h2>What are the penalties for late filing of ITR? </h2>1. You will have to pay a penalty of Rs. 1,000 if your total annual taxable income is below Rs 5,00,000. But if your taxable income exceeds this threshold, you will have to pay a penalty of Rs 5,000. 2. Even if you have to file a <keyword id="17933087" type="General" weightage="20" keywordseo="NIL-ITR" source="Orion">nil ITR</keyword>, you must do so before July 31st. This is because if you do not end up filing it on time, you will have to pay a fine of Rs 1,000. 3. According to Section 234A of the <keyword id="19936187" type="General" weightage="20" keywordseo="income-tax-act" source="keywords">Income Tax Act</keyword>, you will also have to pay interest on your outstanding tax amount at the rate of 1% per month, starting from the due date, i.e., July 31st. <h2>No carry forward of losses, old tax regime</h2>1. You will not be able to carry forward any losses, including those from your mutual funds or stock investments, business income, and other sources. You will only be allowed to carry forward your losses from house properties. This could significantly raise your total tax liability and lead to you incurring hefty losses. 2. After July 31st, 2024, you will not be able to opt for the old tax regime for tax calculation purposes. Starting August 1, the new tax regime, which offers significantly fewer deductions and exemptions as compared to the old regime, will be considered default for you. Also read: <a href="https://www.businessinsider.in/personal-finance/article/decoding-form-16-how-do-you-file-your-taxes-if-you-dont-get-form-16/articleshow/111529754.cms" data-type="tilCustomLink">Decoding Form 16: How do you file your taxes if you don't get Form 16?</a> <a href="https://www.businessinsider.in/finance/tax/article/wondering-which-itr-form-is-right-for-you-know-all-about-it-here/articleshow/111406215.cms" data-type="tilCustomLink">Wondering which ITR form is right for you? Know all about it here</a>

ITR Filing: Today is the last day to file your income tax returns, so file today to avoid penalties

The <keyword id="19903456" type="General" weightage="20" keywordseo="Income-Tax-department" source="keywords">Income Tax department</keyword> on Wednesday said 'substantial <keyword id="20138064" type="General" weightage="100" keywordseo="tax-savings" source="keywords">tax savings</keyword>' are expected for a vast majority of taxpayers due to reduction in the <keyword id="22526761" type="General" weightage="20" keywordseo="long-term-capital-gains" source="keywords">long term capital gains</keyword> <keyword id="45031" type="General" weightage="20" keywordseo="tax" source="Orion">tax</keyword> (LTCG) rate in the <keyword id="19895040" type="General" weightage="20" keywordseo="real-estate" source="keywords">real estate</keyword> sector. The Budget has reduced tax rates on capital gains earned from sale of house properties held for long term, but has removed the <keyword id="22142879" type="General" weightage="20" keywordseo="indexation-benefit" source="keywords">indexation benefit</keyword> available to taxpayers. The LTCG has been reduced from 20 per cent with indexation benefit to 12.5 per cent without indexation for the real estate sector. The indexation benefit allowed taxpayers to compute gains arising out of sale of <keyword id="801267" type="General" weightage="20" keywordseo="capital-assets" source="Orion">capital assets</keyword> after adjusting inflation. In a post on X, the income tax department said the nominal real estate returns are generally in the region of 12-16 per cent per annum, much higher than inflation. "The indexation for inflation is in the region of 4-5 per cent, depending on the period of holding. Therefore, substantial tax savings are expected to a vast majority of such taxpayers," it said. Giving a comparison of benefits based on the holding period of the real estate property, the I-T department said the new <keyword id="22422932" type="General" weightage="20" keywordseo="tax-rate" source="keywords">tax rate</keyword> without indexation is beneficial in most cases. For property held for five years, the new regime is beneficial when property has appreciated 1.7 times or more, while for a property held for 10 years, it is beneficial when the value has increased 2.4 times or more. For a property purchased in 2009-10, if value has increased to 4.9 times or more, it is beneficial, it said. "From the above examples, it is clear that only where returns are low (less than about 9-11 per cent per annum) that the earlier tax rate is beneficial, but such low returns in real estate are unrealistic and rare," the I-T department said. As per the changes brought in the 2024-25 Budget, the government has retained the indexation benefit for taxpayers on properties bought or inherited before 2001. The changes in the tax rate have been made effective from July 23, 2024.

Majority of taxpayers to have substantial tax savings due to reduction of long term capital gains on real estate: IT Dept

July is here, and while we are still 5 months away from the end of 2024, the deadline to file your <keyword id="19897621" type="General" weightage="20" keywordseo="ITR" source="keywords">ITR</keyword> is July 31st, which is looming large. While it is best to not "file away" filing your income tax returns for later, are you aware of the right ITR form that applies to you? Out of the 7 ITR forms available, how do you know which one is the right fit for you, and where to start? For starters, the first 4 ITR forms (ITR-1,2,3,4) are necessary for an individual to know about, while filing taxes. Lets decode all these forms in detail with Tanya, a 22 year old IT professional who earns Rs 10,000 per month. Her mother has a monthly rental income of Rs 12,000 per month. Will the two of them be required to file ITR? Well, the answer is no. You see, Tanya's <keyword id="21120362" type="General" weightage="20" keywordseo="annual-income" source="keywords">annual income</keyword> comes to about Rs 1,20,000, while her mother's total rental income comes to about Rs 2,40,000. If you opt for the old tax regime, you don't need to file an ITR if you annual income is below Rs 2.5 lakh. In the new regime, this limit stands at Rs 3 lakh. Similarly, if your grandparents are aged between 61-79, they need not file an ITR if their annual income (via rent, pensions) falls below Rs 3 lakh. And if they are aged above 80, this threshold if of Rs 5 lakh for the year. <h2>ITR-1: Sahaj </h2>Lets continue with Tanya's life. She works super hard, and over the years, earns a few well deserved raises. Now, her monthly income is Rs 50,000. In this case, she will have to file ITR-1, which is also known as Sahaj. This form applies to you if your total annual income for the year does not exceed Rs 50,00,000. The best part? This form is generally pre-filled, and all you've got to do is verify the information through your <keyword id="22247325" type="General" weightage="20" keywordseo="Form-16" source="keywords">Form-16</keyword> and Annual Information Statement (AIS). <h2>ITR-2 </h2>Over time, Tanya decides to start investing in mutual funds. While she holds most of her investments for the long-term, she is compelled to sell some units of her investment in equity mutual funds, due to a medical emergency at home. She had purchased some equity mutual fund units worth Rs 2,00,000 on April 1, 2023. Due to the emergency, she had to sell about Rs 80,000 worth of units in December of the same year. On redemption, she received Rs 1,10,000. Since she had held these securities for less than 12 months, Tanya would have to pay a short-term <keyword id="20301441" type="General" weightage="20" keywordseo="capital-gains-tax" source="keywords">capital gains tax</keyword> of 15%, Had Tanya held on to these securities for more than 12 months and then sold them at a gain, she'd have to pay long-term capital gains tax, which is applicable at 10% for equity mutual funds. And to account for such capital gains, be it from sale of shares, mutual funds, property or the like, Tanya needs to file ITR-2. <h2>ITR-3</h2>Tanya's brother, Vishal, is a freelancer who got hooked to trading in futures and options during the pandemic. Initially, he made solid profits, but during FY24, he ran into losses worth Rs 5 lakh. In this case, he will have to file ITR-3 to report his losses. This form is to be used by those who earn income under the head of profits (or even losses) of business or profession, other than regular salary. In case Tanya's mother starts receiving rental income from more than one house properties, she will also have to file ITR-3. Or, in case you are a CA, or a doctor and have your own practice (are self employed), this form is for you. <h2>ITR-4: Sugam </h2>This form is exclusively for those who opt to be taxed under the presumptive taxation scheme. You can opt for this scheme if you are a small business/firm and your annual turnover is less than Rs 3 crore, or you are self employed with an annual revenue of less than Rs 75 lakh. Under this, you don't pay taxes on your actual income, rather, you pay taxes on a presumed income. As per law, under this scheme, your net income will be considered as 6% of your total revenue, and you'll have to pay taxes on that. Here, you're really not calculating your income for taxation, and hence, it is not even mandatory to maintain records. In case you file the wrong ITR, you can always file a revised return by December 31, 2024. In case you miss filing your ITR on time, you’ll have to pay Rs 5,000 as a penalty. Moreover, you’ll be charged interest on your outstanding tax liability, if there is any. So, get down to work, right away!

Wondering which ITR form is right for you? Know all about it here

New Delhi: The <keyword id="19903456" type="General" weightage="20" keywordseo="income-tax-department" source="keywords">income tax department</keyword> has notified the <keyword id="21803475" type="General" weightage="100" keywordseo="Cost-Inflation-Index" source="keywords">Cost Inflation Index</keyword> for the current fiscal beginning April 2024, for calculating <keyword id="20584761" type="General" weightage="20" keywordseo="long-term-capital-gains" source="keywords">long-term capital gains</keyword> arising from sale of immovable property, securities and jewellery. The Cost <keyword id="19895000" type="General" weightage="20" keywordseo="inflation" source="keywords">Inflation</keyword> Index (CII) is used by <keyword id="20081991" type="General" weightage="20" keywordseo="taxpayers" source="keywords">taxpayers</keyword> to compute gains arising out of sale of capital <keyword id="19975917" type="General" weightage="20" keywordseo="assets" source="keywords">assets</keyword> after adjusting inflation. The CII for <keyword id="19910979" type="General" weightage="20" keywordseo="financial-year" source="keywords">financial year</keyword> 2024-25, relevant to assessment year 2025-26, stood at 363, as per a notification of the Central Board of Direct Taxes (<keyword id="19980145" type="General" weightage="20" keywordseo="CBDT" source="keywords">CBDT</keyword>). The CII number for last fiscal was 348 and for 2022-23 financial year it was 331. Moore Singhi Executive Director Rajat Mohan said the CII reflects the inflation in the economy, which causes the prices of goods and services to increase over time. The index for the following financial year, 2024-25, has been updated to 363, marking an increase of 15 points, which corresponds to an annual inflation rate of approximately 4.3 per cent. "This is consistent with the retail inflation rate of 4.83 per cent recorded in April 2024. Taxpayers usually prefer a higher CII as it allows them to claim larger tax rebates," Mohan said. AKM Global Partner-Tax Sandeep Sehgal said the index is useful to adjust the capital gains for inflation, so that the taxpayers are taxed on real appreciation of the assets and not the gains due to inflation. "Taxpayers can use this to calculate gains for long-term capital assets sold during FY 24-25 and reduce the tax liability accordingly," Sehgal said. CII is notified under the Income-tax Act, 1961 every year. It is popularly used to calculate "indexed cost of acquisition", while calculating capital gains at the time of sale of any capital asset. Normally, an asset is required to be retained for more than 36 months (24 months for immovable property and unlisted shares, 12 months for listed securities) to qualify as 'long-term capital gains'. Since prices of goods increase over time resulting in a fall in the purchasing power, the CII is used to arrive at the inflation adjusted purchasing price of assets so as to compute taxable long-term capital gains (LTCG).

IT department declares 363 as cost inflation index for current fiscal

Today is the last day to file your <keyword id="19948101" type="General" weightage="20" keywordseo="income-tax-returns" source="keywords">income tax returns</keyword> for <keyword id="21169488" type="General" weightage="20" keywordseo="AY-2024-25" source="keywords">AY 2024-25</keyword>, without having to pay a <keyword id="19899183" type="General" weightage="20" keywordseo="penalty" source="keywords">penalty</keyword>. Starting tomorrow, you will be able to file your <keyword id="19897621" type="General" weightage="20" keywordseo="itr" source="keywords">ITR</keyword>, but you'd have to forego several benefits, like not being able to choose the old tax regime, or paying a penalty of Rs 1,000 (if your annual taxable income is less than Rs 5,00,000). As per official data, about 6 crore ITRs have already been filed so far, and around 70% of them have opted for the new tax regime. But if you have left your ITR filing to the <keyword id="22611090" type="General" weightage="20" keywordseo="last-minute" source="keywords">last minute</keyword>, and will rush to meet the deadline today, here's a handy list of mistakes you should avoid while filing your ITR: 1. Do not miss out on reporting on your income from other sources. Generally, we only account for our salary, income from business/profession and capital gains (if any) while calculating our tax liability. However, there is one crucial segment we tend to forget-income from other sources. This includes interest income from your savings account, fixed deposits, recurring deposits and bonds. 2. Income from other sources also includes any dividend income you've received throughout the year through stocks, mutual funds, and any monetary gifts with value of over Rs 50,000 you've received from friends, acquaintances, or anyone but your relatives. Don't forget to account for those as well. <div type="Article" hostid="261" msid="111406215" title="Wondering which ITR form is right for you? Know all about it here" mstype="2" mssubtype="0"></div> 3. In case your total annual income exceeds Rs 50,00,000, you have to disclose all details of your properties, both movable and immovable under <keyword id="22611091" type="General" weightage="20" keywordseo="schedule-al" source="keywords">Schedule AL</keyword>. This should also include any liabilities you have incurred on these assets. 4. If you are an NRI, or an Indian holding foreign assets, you will have to share details of all your foreign income, assets, accounts and stocks under <keyword id="22334040" type="General" weightage="20" keywordseo="schedule-fa" source="keywords">Schedule FA</keyword>, along with your ITR. This needs to be done, irrespective of whether your income is taxable in India or not. 5. If you are filing your ITR as per your AIS (<keyword id="20776896" type="General" weightage="20" keywordseo="annual-information-statement" source="keywords">Annual Information Statement</keyword>) and see erroneous entries, don't ignore them. File your ITR as per Form 26AS, which is a condensed version of AIS, and Form 16A and B, which is provided by your employer (both previous and current). But remember to go back and flag errors in AIS, otherwise the IT department could penalise you for willful misreporting of your income. <div type="Article" hostid="261" msid="111402608" title="ITR filing: Documents you need to file your income tax return" mstype="2" mssubtype="0"></div> 6. Do not forget to e-verify your ITR within 30 days of filing it. If you do not do this, your ITR filing will be considered invalid. If 30 days have passed since you filed your ITR post today, it will be seen as filing ITR post deadline, and you'll have to pay a fine. So, get going on your ITR filing, right away!

Filing your ITR at the last minute? Don't make these mistakes

<keyword id="20190045" type="General" weightage="20" keywordseo="Industry-body" source="keywords">Industry body</keyword> <keyword id="21568150" type="General" weightage="20" keywordseo="SME-Chamber-of-India" source="keywords" meta.keywordsubtype="org" meta.entityname="SME Chamber of India" meta.hostid="261" meta.entityid="SME Chamber of India">SME Chamber of India</keyword> has urged <keyword id="19956758" type="General" weightage="20" keywordseo="Finance-Minister" source="keywords">Finance Minister</keyword> <keyword id="19916618" type="General" weightage="20" keywordseo="Nirmala-Sitharaman" source="keywords">Nirmala Sitharaman</keyword> to continue the 45-day <keyword id="21233021" type="General" weightage="100" keywordseo="MSME-payment-rule" source="keywords">MSME payment rule</keyword> for <keyword id="20008810" type="General" weightage="20" keywordseo="corporates" source="keywords">corporates</keyword> and other buyers. According to Section 43B(h) of the <keyword id="19936187" type="General" weightage="20" keywordseo="Income-Tax-Act" source="keywords">Income Tax Act</keyword>, introduced through the <keyword id="19955404" type="General" weightage="20" keywordseo="finance" source="keywords">Finance</keyword> Act 2023, if a larger company does not pay an MSME on time -- within 45 days in case of written agreements -- it cannot deduct that expense from its taxable income, leading to potentially higher taxes. The government in last year's Budget added a new clause under Section 43B of the Income Tax Act to address the challenge of delayed payments faced by MSMEs in the country. "We are pursuing not to change the 45-day MSME payment rules imposed by the Department under the pressure of corporates or multinational companies to save the life span of the MSME sector. Section 43B(h) of the Income Tax Act reinforces the importance of timely payments by mandating that companies settle payments to MSME vendors within 45 days to qualify for deductions," SME Chamber said in a statement addressed to Sitharaman. The industry body argued that this provision serves as a powerful incentive for companies to adhere to payment timelines, thereby supporting the financial health of MSMEs. "Many MSMEs are NPA victims of corporates, who are buying from them and not dealing through the TReDs platform. Most of the corporates and multinational companies are forcefully insisting to deregister from the Udyam Portal and insisting not to deal through the TReDs platform," SME Chamber stated. The industry body also urged the finance minister to consider providing Rs 5 crore loans under the "Differential Rate of Interest" scheme for micro and <keyword id="20569966" type="General" weightage="20" keywordseo="small-enterprises" source="keywords">small enterprises</keyword>. It suggested changing the NPA definition from 90 days to 180 days for the MSME sector. The chamber also sought the setting up of a task force to review various issues, hurdles, grievances and difficulties faced by MSMEs for availing credit facilities and the lack of approach by the financial institutions towards enhancement of credit flow to the MSME sector.

You Searched For "The Income Tax department" and got 8 results

First draft of new and simplified Income Tax law to be prepared by internal tax dept committee: Revenue Secretary

PTI

CBDT forms committee for IT Act review; 'sunset' clauses to be eliminated

PTI

ITR Filing: Today is the last day to file your income tax returns, so file today to avoid penalties

Ira Alok Puranik

Majority of taxpayers to have substantial tax savings due to reduction of long term capital gains on real estate: IT Dept

PTI

Wondering which ITR form is right for you? Know all about it here

Ira Alok Puranik

IT department declares 363 as cost inflation index for current fiscal

PTI

Filing your ITR at the last minute? Don't make these mistakes

Ira Alok Puranik

Continue 45-day MSME payment rule: Industry body to Finance Minister Nirmala Sitharaman

PTI

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