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The <keyword id="65338" type="General" weightage="20" keywordseo="Income-Tax-Department" source="Orion">income tax department</keyword> on Tuesday asked taxpayers to link <keyword id="19939397" type="General" weightage="20" keywordseo="PAN" source="keywords">PAN</keyword> with <keyword id="19898107" type="General" weightage="20" keywordseo="Aadhaar" source="keywords">Aadhaar</keyword> by May 31 to avoid tax deduction at a higher rate. As per <keyword id="20822445" type="General" weightage="20" keywordseo="income-tax-rules" source="keywords">income tax rules</keyword>, if a <keyword id="134255" type="General" weightage="20" keywordseo="Permanent-Account-Number" source="Orion">Permanent Account Number</keyword> (PAN) is not linked with <keyword id="12619284" type="General" weightage="20" keywordseo="biometric-Aadhaar" source="Orion">biometric Aadhaar</keyword>, <keyword id="17506" type="General" weightage="100" keywordseo="TDS" source="Orion">TDS</keyword> is required to be deducted at double the applicable rate. Last month, the income tax department issued a circular stating that no action will be taken for short deduction of TDS in case the assessee links his/her PAN with Aadhaar by May 31. "Please link your PAN with Aadhaar before May 31, 2024, if you haven't already, in order to avoid tax deduction at a higher rate," the department posted on X. In a separate post, the I-T department asked reporting entities, including banks, forex dealers, to file SFT by May 31 to avoid penalties. "The deadline to file SFT (Statement of Specified Financial Transactions) is May 31, 2024. Avoid penalties by filing accurately and on time," the department said. The reporting entities which are required to file SFT returns with tax authorities include forex dealers, banks, sub-registrar, NBFC, post offices, issuer of bonds/debentures, mutual fund trustees, company paying dividend or buying back shares. These specified institutions are required to furnish the details of certain financial transactions or any reportable account registered/recorded/maintained by them during the year. Delay in filing of SFT returns may attract a penalty of up to Rs 1,000 for each day of default. Non-filing or filing inaccurate statement may also lead to levy of penalty. Through SFT, the income tax department keeps a track of high value transactions undertaken by an individual.

Link PAN with Aadhaar by May 31 to avoid double TDS deduction: Income Tax Department

<ul><li>Total taxpayers have grown by 8% CAGR over 10 years to 71 mn as compliance improves. This still is merely 6.3% of India’s adult population.</li><li>The percentage of individual tax filers who actually pay taxes has dropped to 33% due to higher rebate options, shows a study done by Jefferies.</li><li>Incomes of individual filers have risen from 15% of GDP in FY12 to 24% in the present day, which has contributed to higher compliance. </li></ul> India may hold the distinction of being the world’s most populated country but only a small fraction of its population pay taxes. Data shows that currently India has 66.5 million individuals who pay <keyword id="35542" type="General" weightage="50" keywordseo="personal-income-tax" source="Orion">personal income tax</keyword>, which is 4.8% of total population and 6.3% of the adult population. Of this tax paying populace, 3.2 million individuals (0.3% of the adult population) account for 76% of total personal income tax receipts of the government. There is no doubt that overall compliance has been rising steadily, but personal income tax payers are still a very small portion of the population. In FY12, 31 mn individuals paid income taxes, but now this figure has jumped to 71 mn in FY23. According to a recent analysis of personal income tax data over a ten year period conducted by Jefferies Research, a global investment bank, the number of income tax filers has experienced a compound annual growth rate (CAGR) of 8%, reaching a total of 68 million. In contrast, the number of corporate income tax payers has grown by 5% CAGR to 1026 from 581 in FY12. However, the percentage of individual tax filers who actually pay taxes has dropped to 33% due to higher rebate options. One striking finding from the analysis is that the top 5% of income tax filers, which represents only 0.3% of adults, contribute a staggering 76% of the total personal tax collected. Additionally, the number of taxpayers with incomes exceeding Rs 0.5 million (Rs 5 lakh), Rs1.5 million (Rs 10.5 lakh), and Rs5 million (Rs 50 lakh) has all seen robust growth, with a CAGR of 17-20%. This indicates a rising compliance among individuals, as incomes of individual filers have risen from 15% of GDP in FY12 to 24% in the present day. Interestingly, personal income tax filers have outpaced corporate tax filers in terms of growth. Over the period from FY12 to FY21, personal income tax filers experienced a CAGR of 8%, reaching 68 million. In contrast, corporate tax filers saw a slower growth rate of 5%, totaling 1 million in FY21. This divergence in growth rates, coupled with corporate tax cuts, has led to a significant increase in the share of individuals in total direct taxes, rising from 33% in FY12 to 50% currently. As a percentage of GDP, personal income taxes have also increased from 1.9% in FY12 to 3.0% in FY24E, says Jefferies. Despite the positive growth in individual tax collections and filings, the analysis reveals that the number of IT return filers accounts for just 6.3% of the total adult population. Furthermore, only one-third of these filers, approximately 23 million individuals, are actually paying taxes. The concentration of tax liability remains significant, with the top 5% of income earners responsible for 76% of personal income tax payments, a figure that has remained relatively stable over the past nine years. The government has implemented various measures, such as demonetization, the rollout of the Goods and Services Tax (GST), and the usage of PAN cards for large transactions, to improve tax disclosures. The ongoing formalization of the economy and the shift of labor from agriculture to salaried jobs are expected to contribute to the expansion of the income tax base in the long run. <div type="image" title="IT image" msid="104727252" hostid="261" sizebytes="8518" cropleftpx="7" croptoppx="12" cropwidthpx="626" cropheightpx="388"></div> The analysis also highlights the composition of income sources for individuals. Salary income, accounting for 47% of total income, and business income, comprising 45%, are the predominant components. The study reveals that salary income has grown at a CAGR of 16% over the period from FY12 to FY21, reaching Rs25 trillion. The growth in salary income is primarily driven by an increase in the number of filers, which reached 31 million in FY21, contributing to 70% of the overall growth. The remaining 30% of the growth can be attributed to rising average salaries. On the other hand, business income, including proprietorships and consultants, has experienced relatively slower growth of 13%, amounting to Rs15 trillion. The analysis also indicates that the average income for individuals declaring business income is Rs0.5 million, coinciding with the non-taxable income limit. In contrast, salaried individuals have an average income of Rs0.79 million, which may be attributed to the easier traceability of salaries through the Tax Deducted at Source (<keyword id="17506" type="General" weightage="20" keywordseo="tds" source="Orion">TDS</keyword>) mechanism compared to business income, which relies on self-declaration. Another noteworthy finding is the significant increase in capital gains reported in FY21 returns. The contribution of capital gains, including both short-term and long-term gains, to total individual income more than doubled year-on-year, reaching 7.6%. Moreover, the number of filers reporting capital gains has also more than doubled over the past three years. This surge in capital gains can be partly attributed to the impact of rising disclosure and data tracking, with return forms now pre-filled with such information. The analysis done by Jefferies also sheds light on the impact of corporate tax cuts. While the effective tax rate for individuals has remained stable at 11-12% of income over the past decade, corporate India has enjoyed a significant tax reduction following the government's announcement in 2019. Effective corporate tax rates have declined by 7.6 percentage points to 23.5% in FY21. In conclusion, Jefferies Research's analysis of personal income tax data over the past ten years reveals several key trends. While the number of income tax filers has increased, the percentage of filers who actually pay taxes has decreased due to higher rebate options. The concentration of tax liability among the top 5% of income earners remains significant, with this group contributing the majority of personal tax collections. The analysis also highlights the faster growth of personal income tax filers compared to corporate tax filers, resulting in a higher share of individuals in total direct taxes. The study emphasizes the need for continued efforts to improve tax compliance and expand the income tax base, particularly as the economy matures.

India’s Income Tax Burden: Mere 0.3% of adult population account for 76% of total personal IT receipts

<ul><li>If you did not file your tax returns in 2018-19, you may be stuck in pickle this season and have to pay double the applicable rate or 5%, whichever is higher.</li><li>This rule shall come into force starting 1 July 2021.</li><li>Deductors will now have to ask for proof of ITR submission for the last two years, increasing the burden of compliance, according to Archit Gupta, the founder and CEO of ClearTax.</li></ul>“Suppose you are making payment to a contractor. And, when you’re getting the work executed, you’re supposed to deduct TDS at 2% — that’s the normal rate. If I made a payment of ₹ 1 crore, I deducted TDS of ₹2 lakh and deposited it in his account.,” explained Ved Jain, former President of The Institute of Chartered Accountants of India (ICAI) told Business Insider. “Starting from December 2021-22, I will ask him if he has filed returns for the last two years or not. For years 2018-19 and 2019-20. If he has filed for any of these, I will continue to deduct 2%. But, if he has not filed returns of the last two years, then I need to deduct at 5%,” he said. This provision has been brought in by Finance Minister Nirmala Sitharaman in the latest budget to tighten the leash on those who haven’t filed their <keyword id="6355828" type="UNKNOWN" weightage="20" keywordseo="income-tax-returns">income tax returns</keyword>. This new provision comes into effect from 1 July 2021. However, it may be the case that some of the stick may hit those making the payment to the lax taxpayer, and therefore collecting the tax at source. The burden of compliance is on the the person⁠— who may be a prompt filer of returns⁠— deducting the tax. Some will have no choice but to pay double the tax The new proposal means that those who haven’t filed their tax returns in 2018-19 and 2019-20 may be in trouble. Some corporates already take a declaration, before processing payments, from their usual vendors that they have filed their returns. For transactions involving individuals, like contractors, artists and freelancers, and businesses in the unorganised sector, the situation is a little more complicated. How do you know if the person you are transacting with has filed returns? Deductors can check whether or not returns have been filed on the Income Tax Department’s official website. There is a utility available where the PAN number can be given, and deductors can check the last returns filed by an individual. “That utility is in the public domain,” said Jain. <div type="image" title="Form 26AS" msid="80765867" hostid="261" caption="&amp;lt;p&amp;gt;Sample of Form 26AS&amp;lt;/p&amp;gt;"></div> Wherever TDS or TCS applies, it should automatically come in Form 26AS and return filing could be ascertained through it. But it is still easier said than done for most people. "This is an additional burden of compliance for deductors. No additional remedy has been provided for cases where ITR filing was not applicable in the two previous years. Taxpayers who foresee facing this issue should prepare to file ITR for FY 2020-21 in due course," Archit Gupta, founder and CEO, ClearTax told Business Insider. Unanswered questions about the new TDS rule* The primary challenge that emerges from the proposed amendment is the ability of the deductor to determine whether the deductee or collectee has filed their income tax returns for the previous two years, according to <a href="https://www.taxmann.com/budget-2021-22/budget-story/154/are-you-a-non-filer%3F-tds%2Ftcs-on-non-filers-at-higher-rates">Taxmann</a>. The onus will also be on the deductor to determine whether the aggregate TDS and TCS over the last two years was more or less than ₹50,000. Another uncertainty is whether the deductee was mandatorily required to furnish their income tax return. For instance, individuals who don’t fall under any taxable bracket or if they are an NRI earning only dividend, interest, royalty or fees for technical services — as specified in section 115A of the Act — will they also be penalised for not submitting their TDS or TCS over the last two years. Taxmann points out that in cases where the due date of filing of return has not expired, should a deductor obtain a declaration from the deductee that the income-tax return will be filed within the prescribed due date and will such declaration be admissible? “It is also possible that the deductee or collectee may refrain from furnishing particulars of their income tax return with the deductors/clients. As a result, the onus of gathering information from the deductee or collectee shall trammel the deductors from ease of functioning and may impose additional compliances in terms of revision of e-TDS returns in case the information is retrieved belatedly from the deductee,” says Taxmann. SEE ALSO: <a href="https://www.businessinsider.in/business/startups/news/meet-the-lawyer-turned-fitness-entrepreneur-who-is-training-alia-bhatt-ranbir-kapoor-kiara-advani-among-others/articleshow/80761071.cms">Meet the lawyer-turned-fitness entrepreneur who is training Alia Bhatt, Ranbir Kapoor, Kiara Advani among others</a> <a href="https://www.businessinsider.in/international/news/joe-biden-and-narendra-modi-spoke-over-the-phone-last-night-heres-what-they-discussed/articleshow/80759960.cms">Joe Biden and Narendra Modi spoke over the phone last night⁠— here’s what they discussed</a> <a href="https://www.businessinsider.in/thelife/personalities/news/meet-the-it-veteran-making-a-comeback-as-tech-mahindras-cfo/articleshow/80708957.cms">Meet the 63-year old making a comeback as Tech Mahindra's CFO</a>

With the new TDS rule, every time you make a payment, you must ask if the receiver has filed tax returns in last two years

<ul><li>Despite their physical presence abroad, NRIs maintain tax obligations on their Indian-sourced income. </li><li>The capital gains tax provisions for NRIs are similar to those for resident individuals, except for the applicability of TDS provisions. </li><li>It is important for NRIs to carefully consider their tax liabilities in both India and the country where they are a resident. </li></ul>You are a non resident Indian (NRI) if you live abroad. More specifically, you are classified as "non-resident" of India for a specific financial year as per the Income Tax Act. Despite their physical presence abroad, NRIs maintain tax obligations on their Indian-sourced income. This includes income sources such as salary received for services provided in India, interest earned from fixed deposits or savings bank accounts in India, as well as any capital gains arising from the sale of assets located in India. “NRIs are not taxed on their foreign income, which is not received in India or deemed to accrue or arise in India. However, they may be subject to tax in the country where the income is earned,” says Archit Gupta, CEO, Clear, a fintech company. <cmsannotation type="cmsannotation" annotationid="How income in India is taxed for NRIs" comment="subhead" text="How income in India is taxed for NRIs">How income in India is taxed for NRIs</cmsannotation> Let us take a look at how income in India is taxed for NRIs. <cmsannotation type="cmsannotation" annotationid="Income from salary" comment="subhead" text="Income from salary">Income from salary</cmsannotation> NRIs are subject to income tax in India on their salary if the services are rendered in India. “The income is taxed according to the income tax slabs applicable to residents,” says Akhil Chandna, Partner, Grant Thornton Bharat, a professional services firm. <cmsannotation type="cmsannotation" annotationid="Income from business and profession" comment="subhead" text="Income from business and profession">Income from business and profession</cmsannotation> Income earned by NRIs who have business connections in India is liable to be taxed in the country. The taxation of this income follows the same slab rates that are applicable to residents, and it is calculated based on the total income earned within India. <cmsannotation type="cmsannotation" annotationid="Rental income" comment="subhead" text="Rental income">Rental income</cmsannotation> There are no distinct rules for the taxation of house property in India based on residency status. The taxation rules for rental income from properties situated in India are the same for both residents and non-residents (NRIs). The rental income is taxable in the hands of the property owner, regardless of whether they are an NRI or a resident Indian. <cmsannotation type="cmsannotation" annotationid="Income from other sources" comment="subhead" text="Income from other sources">Income from other sources</cmsannotation> "Other Sources" income typically includes interest income from fixed deposits and savings bank accounts held in India, dividend income, etc. “Interest earned on Non-Residential External (NRE) and Foreign Currency Non-Resident Account (FCNR) accounts is fully exempt from tax. However, interest on non-resident ordinary (NRO) accounts is fully taxable,” says Chandna. He adds that for NRIs, income from "Other Sources" is subject to slab rates applicable to them. However, in many cases, income paid to an NRI is subject to TDS at a flat rate of 30% plus the applicable surcharge and health and education cess. <cmsannotation type="cmsannotation" annotationid="Taxation on investment gains" comment="subhead" text="Taxation on investment gains">Taxation on investment gains</cmsannotation> The capital gains tax provisions for NRIs are similar to those for resident individuals, except for the applicability of TDS provisions. The taxability of capital gains depends on the holding period and the type of investments sold. <table style="border-width: initial; border-style: none;"></colgroup><tbody><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#e7e6e6;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Type of Shares </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#e7e6e6;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Holding Period </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#e7e6e6;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Category </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#e7e6e6;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Rate of Tax </td><td style="border-left:solid #000000 0.75pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"> </td></tr><tr><td rowspan="2" style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Listed shares </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Less than 12 months </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Short Term </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">15% </td><td style="border-left:solid #000000 0.75pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"> </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">More than 12 months </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Long Term </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">10% on gain in excess of INR 1,00,000 </td><td style="border-left:solid #000000 0.75pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"> </td></tr><tr><td rowspan="4" style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Unlisted Shares/ Immovable Property </td><td rowspan="3" style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Less than 24 months </td><td rowspan="3" style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Short Term </td><td rowspan="3" style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Slab Rates </td><td style="border-left:solid #000000 0.75pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"> </td></tr><tr><td style="border-left:solid #000000 0.75pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"> </td></tr><tr><td style="border-left:solid #000000 0.75pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"> </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">More than 24 months </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Long Term </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">20% (with indexation) </td><td style="border-left:solid #000000 0.75pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"> </td></tr><tr><td rowspan="4" style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Debt Funds and Other Capital Assets </td><td rowspan="3" style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Less than 36 months </td><td rowspan="3" style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Short Term </td><td rowspan="3" style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">15% </td><td style="border-left:solid #000000 0.75pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"> </td></tr><tr><td style="border-left:solid #000000 0.75pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"> </td></tr><tr><td style="border-left:solid #000000 0.75pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"> </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">More than 36 months </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">Long Term </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:top;background-color:#ffffff;padding:0pt 5pt 0pt 5pt;overflow:hidden;overflow-wrap:break-word;">20% (with indexation) </td><td style="border-left:solid #000000 0.75pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;"> </td></tr></tbody></table> Source: Grant Thornton <cmsannotation type="cmsannotation" annotationid="Taxation on money remitted to India" comment="subhead" text="Taxation on money remitted to India">Taxation on money remitted to India</cmsannotation> Since the money being remitted is from the NRIs income in a foreign country, it may be subject to income tax in that country. “Hence, in most cases, the NRI will not have to pay income tax on the remittance in India as it is already taxed in the foreign country. Further, if the money is being remitted for personal use by the NRI's family in India, such as for their living expenses or education, there is no tax liability,” says Chandna. <cmsannotation type="cmsannotation" annotationid="How NRIs can reduce their tax liability" comment="subhead" text="How NRIs can reduce their tax liability">How NRIs can reduce their tax liability</cmsannotation> NRIs can avail tax deductions under the Indian Income Tax Act, including deductions under Section 80C for investments in specified financial instruments, Section 80D for health insurance premiums, Section 80G for charitable donations, and Section 24 for home loan interest. “NRIs can minimise capital gain tax by investing in specified assets, such as residential properties and specific bonds, within a stipulated time period,’ says Chandna. <cmsannotation type="cmsannotation" annotationid="What to do if your PAN is inoperative" comment="subhead" text="What to do if your PAN is inoperative">What to do if your PAN is inoperative</cmsannotation> An NRI is not required to obtain an Aadhaar Card in India, and hence they are not required to link their PAN and Aadhaar. However, it is likely that some NRIs will find their PANs inoperative after June 30. “This is because the residential status of the individuals may not be updated in the records of the Income Tax (IT) Department as "Non-Residents". The IT Department has clarified that NRIs whose PAN has become inoperative shall reach out to their jurisdictional AOs along with supporting documents (such as a passport copy) to prove that they are NRs in India,” says Chandna. “It is important for NRIs to carefully consider their tax liabilities in both India and the country where they are resident, as double taxation may arise if they are taxed on the same income in both countries,” says Gupta. NRIs can claim relief from double taxation under the provisions of a tax treaty (DTAA) between India and the country where they are residents or through the use of the foreign tax credit provisions under Indian tax law.

Are you an NRI having income in India? Here’s how you will be taxed

Finance Minister <keyword id="129243" type="General" weightage="20" keywordseo="nirmala-sitharaman" source="Orion">Nirmala Sitharaman</keyword> on Tuesday made a strong case for regulating cryprocurrencies at a global level to mitigate the risk of money laundering and terror funding. Participating at a high-level panel discussion organised by the IMF, the Finance Minister said that as long as the non-governmental activity of the <keyword id="2721952" type="General" weightage="20" keywordseo="crypto" source="Orion">crypto</keyword> assets was through unhosted wallets, the regulation was going to be very difficult. However, she said, cross border payments between countries will become very effective through Central Bank-driven digital currencies. "The risk which worries me more on the non-governmental domain is essentially you're looking at unhosted wallets across the borders, across the globe... So, regulation cannot be done by a single country within its terrain through some effective method and for doing it across the borders, technology doesn't have a solution which will be acceptable to various sovereigns at the same time applicable within each of the territory," she said. The risks involved will have to be differentially approached, because for each user case, the risks can also be different, depending on the economy, she said during a panel discussion on the topic 'Money at a Crossroad: Public or Private Digital Money?' Citing an example, Sitharaman said application of regulation and risk involved for Nigeria would be different from a tourism or investment rich Bahamas. Stressing that regulation using technology will have to be so adept and nimble that it should not be behind the curve. It has to be ahead and this is not possible if any one country thinks that it can handle it, she said. Pointing out that unless there's going to be a global approach at regulating and understanding of the technology on cryptocurrencies there is a risk of money laundering. "I harp on that very much because I think the biggest risk for all countries across the board will be on the money laundering aspect, and also on the aspect of currency being used for financing terror," she said. With regard to taxing income generated from transactions in crypto assets, Sitharaman said it is a means to check the source and trail but not to legitimise them. "We haven't said that this is currency. We haven't said that this has intrinsic value, but certain operations are taxable for the sovereign and that is why we have taxed," she said. Budget 2022-23 proposed a 30 per cent tax on income from transactions in crypto assets and also imposed a 1 per cent TDS (tax deducted at source) on transactions in such asset classes above a certain threshold. "We did announce that on the income that was generated out of the transactions of these crypto assets will be taxed at 30 per cent and over and above that, there is a 1 per cent tax deduction at source which is also imposed on every transaction. So through that we will be able to know who's buying and who's selling it," she said. On the Central Bank Digital Currency (CBDC), she said, it is going to happen sometime this year. RBI is planning to come out with a central bank-backed digital currency using blockchain technology in 2022-23. SEE ALSO <a class="tout-title-link" href="https://www.businessinsider.in/finance/news/wholesale-inflation-in-india-is-now-near-the-same-level-as-it-was-during-the-1991-economic-crisis/articleshow/90930779.cms">Wholesale inflation in India is now near the same level as it was during the 1991 economic crisis</a> <a href="https://www.businessinsider.in/finance/news/rbi-thinks-that-risk-of-inflation-may-continue-to-rise-as-export-declines/slidelist/90932616.cms" data-type="tilCustomLink">Here’s what is worrying RBI as India faces the double whammy of rising inflation and declining exports</a> <a href="https://www.businessinsider.in/science/health/news/ayushman-bharat-health-account-features-benefits-and-how-to-apply-for-abha/articleshow/90933084.cms" data-type="tilCustomLink">Ayushman Bharat Health Account — features, benefits and how to apply for ABHA</a>

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Link PAN with Aadhaar by May 31 to avoid double TDS deduction: Income Tax Department

PTI

India’s Income Tax Burden: Mere 0.3% of adult population account for 76% of total personal IT receipts

BI India Bureau

With the new TDS rule, every time you make a payment, you must ask if the receiver has filed tax returns in last two years

Prabhjote Gill

Are you an NRI having income in India? Here’s how you will be taxed

Anagh Pal

Cryptocurrency could be used for money laundering and terror funding, says Indian finance minister

PTI

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