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In our AIS or Form 26AS why is it showing the bank interest which is accrued as interest paid. This interest is actually not paid but is accrued. Form 26AS/AIS is showing this as paid. Why do you think so this happened?
Form 26AS or Annual Information Statement (AIS) is a consolidated tax statement that provides information on various types of income, including interest income. It is generated by the Income Tax service in Delhi & Department of India and is primarily based on the information provided by banks, employers, and other financial institutions.
The discrepancy you mentioned, where accrued interest is shown as "interest paid" in your Form 26AS/AIS, could be due to several reasons:
Reporting Method: Banks and financial institutions may report interest income based on the accrual method rather than the actual payment method. In the accrual method, interest is recorded when it is earned, regardless of whether it has been paid or not. This could lead to the inclusion of accrued interest in the "interest paid" section of your Form 26AS.
Timing of Reporting: Banks and financial institutions may provide the information to the tax authorities before the interest is actually paid to you. Therefore, even though you haven't received the interest yet, it may still be reported as "interest paid" in your Form 26AS. This could be due to differences in the timing of reporting between the financial institutions and the actual payment to you.
Data Entry Errors: It's possible that there may have been errors in data entry or reporting by either the bank or the tax authorities. Mistakes can occur during the process of compiling and transmitting the information, leading to incorrect categorization of accrued interest as "interest paid."
To address this issue, it is recommended to contact your bank or financial institution to verify the details of the interest reported and clarify any discrepancies. You can also consult with a tax professional or reach out to the Income Tax Department for guidance on how to help Income Tax service in Delhi and rectify any inaccuracies in your Form 26AS/AIS.
2. Can you think of any other instance where the bank FD/Savings/RD interest might not properly reflect in our Form 26AS/AIS?
While the Form 26AS/AIS generally reflects the interest income earned from bank fixed deposits (FDs), savings accounts, and recurring deposits (RDs), there can be certain instances where the interest may not be accurately reflected. Here are some circumstances when this could happen.:
Timing of interest accrual: The interest earned on bank deposits is generally accrued on a quarterly basis or at the end of the financial year. However, the timing of when the interest is credited to your account may not align with the financial year for which the Form 26AS/AIS is generated. As a result, the interest credited in a different financial year may not be immediately reflected in your tax statement. We provide the best Income Tax service in Delhi
Non-PAN reporting: If you have provided your Permanent Account Number (PAN) to the bank, the interest earned on your deposits should be reported against your PAN in Form 26AS/AIS. However, if you have multiple accounts in different banks and some of them do not have your PAN details, the interest from those accounts may not be linked to your PAN and thus not reflected in Form 26AS/AIS.
TDS deduction discrepancies: Banks are required to deduct Tax Deducted at Source (TDS) on interest income exceeding a certain threshold. However, there can be instances where the bank fails to deduct TDS or deducts an incorrect amount. If such discrepancies occur, the TDS reflected in Form 26AS/AIS may not match the actual interest income earned by you.
To ensure that your Form 26AS/AIS accurately reflects your interest income service in Delhi, it is advisable to regularly review your bank statements, reconcile the interest earned with the amounts reported, and ensure that your PAN is linked to all your bank accounts. If you notice any discrepancies, it is recommended to contact your bank and the tax authorities for rectification. Read More
Website:- https://lexntax.com/
Address:- 76-D, Outer Ring Road Opposite Fly Over Pillar No : 13,
Krishna Park Extension, Tilak
Nagar, Delhi, 110018.
Phone no.:-+919354179311
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Why it is important to file ITR before due date?
Resolving income tax filing problems
We will work on affordable charges to get your professional accounting, income tax preparation, and tax debt resolution. Our team works on issues that resolve the back tax or unfiled tax return debts. We do it swiftly and efficiently. You will have to know that file ITR is mandatory.
Those individuals who don’t have a regular salary or income may worry about the various conditions for filing ITRs. As they have to choose the right ITR for filing their income tax returns.
Filing Income Tax Return (ITR) before the due date is important for several reasons:
Avoiding Penalties and Interest: Filing your ITR before the due date helps you avoid penalties and interest charges that may be levied by the tax authorities for late filing. These penalties can be substantial and can add to your tax liability.
Timely Refunds: If you are eligible for a tax refund, filing your ITR early ensures that you receive your refund promptly. Delayed filing may result in delayed refunds, which can cause financial inconvenience.
Compliance with the Law: Filing your ITR on time ensures that you are compliant with tax laws and regulations. Non-compliance can lead to legal consequences, and you may be subject to audits or scrutiny by tax authorities.
Avoiding Last-Minute Rush: Filing your ITR before the due date helps you avoid the last-minute rush and potential technical glitches that may arise when filing online. Early filing gives you ample time to gather all necessary documents and information accurately.
Easy Correction of Errors: Filing early allows you to identify and correct any errors or discrepancies in your tax return promptly. If you file late and discover errors, it might be more challenging to correct them within the required time frame.
Planning and Financial Management: Early filing provides you with a clear picture of your tax liability, allowing you to plan your finances better. This helps in managing your cash flow and making necessary adjustments to your financial strategies.
Loan or Visa Applications: Many financial institutions and foreign embassies require ITR documents as proof of income and financial stability. Having a timely filed ITR can expedite loan approvals and visa applications.
Continuity of Benefits: Timely filing ensures the continuity of various benefits such as carry-forward of losses, deductions, and exemptions, which can impact your tax liability in future years.
Peace of Mind: Filing your ITR early gives you peace of mind, knowing that you have fulfilled your tax obligations on time, without the stress of last-minute rush and potential penalties.
In conclusion, filing your ITR before the due date is essential for meeting legal obligations, avoiding penalties, and ensuring smooth financial planning and management. It is a responsible practice that benefits both individuals and the overall tax system.
At Lex N Tax, We have dedicated team of tax experts, who can help you in accomplishing your tax filling obligation timely and accurately. Further any further query, you can reach out to our team at _Lexntax Associates__________________________ Website Link - https://lexntax.com/
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How debt investor can lower their higher tax liability by investing in hybrid funds?
In order to provide investors with a diverse portfolio, hybrid mutual funds are a form of investment vehicle which typically invests in a blend of stocks, bonds, and other assets. Securities like mutual funds that have debt or equity proportions exceeding 35% but below 65% are considered hybrid securities. Following the budget 2023, hybrid instruments held for longer than a year are now more tax advantageous than debt funds because they are subject to a 20% tax rate and may even be eligible for an indexation benefit. Contrarily, the sale of debt mutual funds is subject to a slab rate of taxation that can reach 30%. Hence, here’s how can you lower your higher tax liability by investing in hybrid funds based on a discussion with multiple industry experts.
Atul Sharma, Founder, Lex N Tax
Investing in hybrid funds can potentially help lower your tax liability, but it is important to understand how hybrid funds work and how they can impact your taxes.
Hybrid funds are mutual funds that invest in a mix of equity and debt securities. They can be classified into three categories based on their asset allocation: conservative, balanced, and aggressive. Conservative funds typically have a higher allocation towards debt securities, while aggressive funds have a higher allocation towards equity securities.
When you invest in a hybrid fund, you are indirectly investing in both equity and debt securities. The returns generated by these funds are a combination of dividend from equity and interest income from debt. In India, equity-oriented hybrid funds have a tax advantage over pure debt funds, as they qualify for long-term capital gains tax of 10% without indexation on gains above Rs. 1 lakh if held for more than one year. However, pure debt funds are taxed at a higher rate, based on the individual’s tax bracket. Amendment to finance bill 2023 has scrapped the benefit of indexation on debt mutual fund. Earlier it was taxed at the rate of 20% with indexation benefit if held for more than three years.
In India, dividend income from mutual funds is subject to a dividend distribution tax (DDT). However, equity-oriented hybrid funds (where at least 65% of the fund’s assets are invested in equities) are exempt from DDT. So, if you invest in such a hybrid fund and earn dividends, you will not have to pay any DDT, which can result in lower tax liability. It is also important to note that if hybrid fund is Hybrid Equity oriented funds (Investment in Equity is≥ 65%) held for less than 1 year then it will attract short term capital gain u/s 111A at 15%.
Investing in hybrid funds, especially equity-oriented ones, can potentially help reduce your tax liability by generating long-term capital gains, which are taxed at a lower rate than short-term capital gains or interest income. However, it is important to note that hybrid funds are subject to market risks (due to its equity element) and can potentially result in losses.
Additionally, it is crucial to consult a financial advisor or tax professional and do proper research on past track record of fund before investing in any financial instrument to ensure it aligns with your overall financial goals and is suitable for your individual tax situation.
Source link: https://www.livemint.com/money/personal-finance/how-debt-investors-can-lower-their-higher-tax-liability-by-investing-in-hybrid-funds-11682875480218.html
Website link: https://lexntax.com/
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GST Refund On Export
GST- Goods and Services tax implemented in 2017 with the aim to replace different taxes with 1 common tax. Good and service tax includes a refund process in which registered taxpayers can claim in case the excess amount is more than GST liability. Taxpayers can claim their refund on GST depending on their industry or business niche. There are different rules and regulations, and methods to claim for different industries. the GST refund of unutilized ITC on account of exports without payment of tax is described in this guide. The newly introduced GST filing return system is expected to make the return process simple. If you are looking to claim a GST refund under the export of goods, we have simplified it for you.And GST refund application in delhi.
Export of Goods under GST
The export of goods or services falls under the IGST Act and is treated as an interstate supply The export of Goods and services under GST is also a Zero-rated supply as the rate of taxes on export supplies is nil/zero. In addition, deemed export supplies are also under zero-rated supply.
How to claim a GST refund for the export of goods?
The process of GST declaration and claim under the export of goods and services can vary. The zero-rated supply or export of goods and services can go through two ways:
(i) Export of goods with payment of tax
(ii) Export of goods without payment of tax
Export of Goods with payment of tax
Exporters of goods and services are allowed to claim if IGST is paid during export. The process under IGST for refund begins with reference to the shipping bill and other documents that were used during the export procedure as per Indian Customs Electronic Commerce Gateway (ICEGATE). To be eligible to claim or file a refund via RFD-01, there are certain perquisites that the taxpayer or export must fulfill:
The taxpayer or exporter must have a registered GST Portal and have GSTIN during the refund process.
Exporters have paid taxes on the export of goods for which the taxpayer is claiming a refund.
Forms GSTR-1 and GSTR-3B have been filled for the relevant tax period.
BRC/FIRC numbers must be present on the export documents that will be required during the refund process.
The filing of RFD-01 will occur only in certain cases such as:
Only if the export of goods with payment of tax, no separate return/refund application in delhi is needed due to all the details present on the shilling bill. However, when filling out the GSTR-1 make sure all the details match with the shopping bill filled with ICEGATE that you are using as proof.
When a separate return/refund application is needed. The filing of RFD-01 along with details of the export of services is required to upload with an offline utility. A reference number will be generated to track the status of the application.
Export of Goods without payment of tax or IGST
Under this different documents are required as shipping bills cannot be used as an application for a refund. Exporters must fill RFD-01 with GST portals. This option can be used under a bond or Letter of Undertaking (LUT). Any ITC accumulated services are available for funds. However, LUT is only applicable to selected services. Under the export of goods without payment of tax or IGST, exporters have to provide a turnover of zero-rated supplies. Along with adjusted total turnover of the refund period to get a refund. At the time of filing the GST return without payment of tax, the exporter must have all the applications and documents ready for the filing process. You have to fill out forms under CGST rules and circulars.
How to file a refund application(RFD-01)?
In the case of the export of goods and services with payment, the shipping bill by default acts as a refund application in delhi. However, in case of a refund application without payment of tax, RFD-01 should be filled as follows:
Open GST Portal, log in, select services, then Refund selection. Select the application for refund and click on the export of services with/without payment of tax. Finally, get RFD-01.
You can fill out form RFD-01 at the GST portal to get a refund. If you are claiming a refund for multiple periods, you can file the same application.
You must have zero-rated supplies and adjusted total turnover for the period you want to apply for a refund.
In the NET ITC table fill the ITC attributes of zero-rated supply along with RFD-01.
The system will calculate the eligible amount automatically and post it in the column” maximum refund amount to be claimed”.
When filling out the form and posting the maximum refund amount, make sure that amount is equal to or lower than the balance in each electronic credit ledger. The total amount should not be more than the “maximum refund amount to be claimed” in Statement 3A. It should not increase the calculated aggregate in the table ” balance in the electronic ledger at the end of the tax period.”
The form GST RFD-01 is no rectification form, so utmost precaution is needed. Fill out the form and upload all the required documents.
After an application is submitted a Reference Number(ARN) is generated and the application is assigned to the Refund processing officer. You can track your status using an ARN number.
In addition, applicants need to ensure that invoice details under GSTR-1 and refund statements should be the same.
Process for filing Refund with tax payment within the GST system:
Login to GST Portal, select services, refund, applications for refund, export with payment of tax, RFD-01.
File the RFD-01 refund application in delhi.With all the details and precautions as it is not a rectification form.
After submission of the form, the application is passed to the processing officer. The processing officer will issue an acknowledgement via RFD-02/03. Followed by provisional and final sanction order RFD-04/06.
The processing of the application by an officer and the issue of payment order RFD-05 will be done after PFMS validates the bank account mentioned in the forms.
After complete validation of the payment order, processing within PFMS will take place which also includes DDO/PAO approval.
After the payment order, RFD-07B or RFD-08 will be issued. In response to RFD-08, RFD-09 will be issued.
RFD-01
RFD-01 is an application form used for the refund of GST under various cases and categories. It can be filed on the GST portal for a claim.
RFD-02
RFD-02 is an acknowledgment that is made available to the applicants through the common portal indicating the date of the claim for the GST refund.
RFD-03
RFD-03 is a deficiency memo that is issued to applicants who are required to file a fresh/new refund application for which a new ARN will be issued.
RFD-04
RFD-04 is a provisional refund where the amount of refund claimed by the applicant, and the balance amount left that will be refunded later( which is 10% of the refund claimed). The amount allowed on a provisional basis will be provided under each category of different taxes- IGST, CGST, SGST/UTGST.
RFD-05
The payment order where the amount of refund and interest will be issued by the officer. The refund will be processed on this electronically by PFMS.
RFD-06
RFD-06 is a provisional or final GST refund sanction order that is issued by the officer. It will be issued by a GST officer within 60 days of application submission for a GST refund.
RFD-07B
RFD7B is issued for complete adjustment or withholding of refund.
RFD-08
RFD-08 is a form also called “Show case notice” issued by a GST officer on the rejection of a refund application in delhi. This form contains why the application is rejected.
RFD-09
RFD-09 also called “ Reply to show cause notice” is a reply in accordance with RFD-08 by the applicant. Website:- https://lexntax.com/
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📢 Attention Visa Applicants! 🌍✈️
Are you planning to apply for a visa? Are you worried about the daunting task of filing your Income Tax Returns (ITR) and obtaining a Net Worth Certificate? Fret no more! Lex N Tax have the perfect solution for you! 💼💸
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Why choose our services? 🤝
✅ Expert Guidance: Our team consists of seasoned professionals who have extensive knowledge and experience in tax filing and financial documentation. They will guide you through every step of the process, ensuring compliance and accuracy.
✅ Time-saving: By availing our services, you can save valuable time and effort. We understand that visa applications can be time-sensitive, so we strive to provide efficient and prompt service.
✅ Peace of Mind: Entrust your ITR filing and Net Worth Certificate preparation to us, and enjoy peace of mind knowing that your documents are in capable hands. We take pride in delivering reliable and trustworthy services.
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Don't let the complexities of ITR filing and Net Worth Certificate preparation dampen your visa application process. Take advantage of our specialized services, and enhance your chances of a successful visa application. 🌟
Contact us today to learn more about our ITR Filling and Net Worth Certificate Services. Leave a comment below, send us a message, or call us at 8800164109, 9354179311 & 8595547933. Our friendly team is ready to assist you!
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You can also visit at www.lexntax.com to checkout our service portfolio and avail any services at most affordable and competitive price.
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Choosing the right Income Tax forms: One-stop guide for salaried, consultants, business class
Filing your Income Tax Return (ITR) using the wrong form can lead to various consequences. The Income Tax Department may reject your return, requiring you to refile with the correct form. Additionally, using the incorrect form may result in additional compliance requirements, such as providing clarifications or documents. This can cause delays and extra effort. Moreover, filing in the wrong form can attract penalties and legal implications as per the Income Tax Act. It is, therefore, crucial to understand these potential outcomes and ensure accurate filing to comply with tax regulations.However, choosing the right Income Tax Return (ITR) form depends on various factors, including your sources of income, the type of taxpayer you are, and the nature of your financial transactions. Atul Sharma, Founder, Lex N Tax tells in detail how to select the appropriate ITR form: Determine your residential status: Are you a resident or non-resident of India for tax purposes? The ITR forms differ for resident individuals, non-resident individuals, Hindu Undivided Families (HUFs), companies, firms, etc. Identify your income sources: Consider the various types of income you earn, such as salary, house property, capital gains, business or profession, and income from other sources. Different ITR forms cater to specific types of income. Assess your eligibility for simplified forms: If you have a straightforward income structure, you may be eligible to use the simplified ITR forms, such as ITR-1 (Sahaj) or ITR-4 (Sugam). These forms are applicable for individuals and HUFs meeting specific criteria regarding income sources and total income. Analyse your financial transactions: If you have engaged in certain financial transactions, such as foreign asset ownership, investments in unlisted equity shares, income from abroad, or income from agricultural activities, you may need to use specific ITR forms that require detailed reporting. Check turnover thresholds: If you are a business owner or self-employed professional, the turnover of your business or profession plays a role in determining the applicable ITR form. Different forms are available based on the turnover thresholds specified by the Income Tax Department. Review form instructions: Each ITR form comes with detailed instructions and eligibility criteria. It is crucial to go through t6hese instructions provided by the Income Tax Department to understand the requirements and choose the appropriate form.
What form applies to the salaried class
Atul Sharma, Founder, Lex N explains, for the salaried class in India, the most commonly used ITR form is ITR-1 (Sahaj). This form is applicable to individuals who have income from the following sources:Salary or pension income Income from one house property (excluding cases where losses are carried forward)Income from other sources (excluding income from lottery, racehorses, legal gambling, etc.) Agricultural income up to Rs 5,000ITR-1 (Sahaj) is a simplified form and is suitable for individuals with relatively straightforward income structures. It does not cater to individuals with income from business or profession, capital gains, or those claiming double taxation relief. Additionally, there are other eligibility criteria such as being a resident individual, having total income up to Rs 50 lakhs, and owning only one house property.
If an individual falls outside the eligibility criteria for ITR-1, they may need to use other ITR forms such as ITR-2, ITR-3, or ITR-4, depending on the nature and complexity of their income sources. It is advisable to review the instructions provided with each ITR form or consult a tax professional to determine the appropriate form based on specific circumstances.
Which ITR form applies to consultants and business people?
For consultants and business people in India, the applicable ITR form depends on the nature and scale of their business or profession. The commonly used ITR forms for consultants and businesspeople areITR-3: This form is suitable for individuals and Hindu Undivided Families (HUFs) who have income from the following sources:
a. Income from a business or profession as a partner (not applicable for individuals who are partners in a firm but do not have any business income)
b. Income from a profession (such as doctors, lawyers, architects, etc.)
c. Salary or pension income
d. Income from house property
e. Income from other sources
Itis important to note that ITR-3 is applicable if the individual or HUF does not have any income from presumptive taxation under sections 44AD, 44ADA, or 44AE of the Income tax Act.
TR-4 (Sugam): This form is specifically designed for individuals, HUFs, and firms (other than Limited Liability Partnerships) who have opted for the presumptive taxation scheme under sections 44AD or 44AE of the Income Tax Act. It is applicable if the total turnover or gross receipts of the business do not exceed Rs 2 crores or for profession 50 lakhs in a financial year.
(The government in the budget 2023 extended the limit for presumptive tax for small businesses from Rs 2 crore to Rs 3 crore and for individual professionals from Rs 50 lakhs to Rs 75 lakhs) This limit is applicable for AY 2024-25.
The presumptive taxation scheme allows eligible businesses and professions to declare income at a prescribed percentage of the total turnover or gross receipts without the need to maintain books of accounts.
What are the restrictions in various ITR forms?
Sharma explains, the restrictions and eligibility criteria vary for different Income Tax Return (ITR) forms in India.
ITR-1 (Sahaj):
Applicable to individuals who have income from salary, one house property, and other sources (excluding income from business or profession).
Restrictions:
Total income should not exceed Rs 50 lakhs.
Individuals who are directors of a company, have investments in unlisted equity shares, or have more than one house property cannot use this form.
ITR-2:
Applicable to individuals and Hindu Undivided Families (HUFs) who have income from salary, house property, capital gains, and other sources (excluding income from business or profession).
Restrictions:
Individuals with income from business or profession cannot use this form.
Individuals who are eligible for ITR-1 cannot use this form.
ITR-3:
Applicable to individuals and HUFs who have income from business or profession as a partner or proprietor.
Restrictions:
Individuals with income from sources other than business or profession as a partner cannot use this form.
Individuals who have opted for presumptive taxation under sections 44AD, 44ADA, or 44AE cannot use this form.
ITR-4 (Sugam)
Applicable to individuals, HUFs, and firms (excluding Limited Liability Partnerships) who have opted for presumptive taxation under sections 44AD or 44AE.
Restrictions:
Total turnover or gross receipts should not exceed Rs 2 crores in a financial year.
Professionals (such as doctors, lawyers, architects) are not eligible to use this form.
Individuals with income from sources other than the presumptive taxation scheme cannot use this form.
It is crucial to understand the restrictions and limitations of specific ITR forms. Carefully reviewing the instructions provided with each form is essential to ensure eligibility and compliance. Tax regulations and forms can change over time, so staying updated with the latest guidelines issued by the Income Tax Department or seeking professional advice is advisable for accurate information based on the current tax laws.
Source link: https://www.businesstoday.in/personal-finance/tax/story/choosing-the-right-income-tax-forms-one-stop-guide-for-salaried-consultants-business-class-382251-2023-05-22 Website link: https://lexntax.com/
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5 tax-saving investments that will lose their charm under the new tax regime
The old tax regime offered several tax deductions that helped bring down one’s taxable income, and save on taxes. With the Government revising the tax slabs under the new tax regime, and making it the default tax regime in budget 2023-24, the new regime has become more attractive to certain taxpayers as they can save more on taxes by opting for it.
A lot of investments were popular due to the available tax deductions, and section 80C provided deductions of up to ₹1.5 lakh for various investments. With deductions under section 80C no longer available under the new tax regime, many popular tax-saving options have become less attractive. Let us take a look at these.
Public Provident Fund (PPF)
PPF was one of the most popular investments under section 80C as it was government backed and fell under the EEE category. This meant that the investment made, interest accrued and payout at maturity were all tax exempt. However, under the new tax regime, any amount invested in PPF will not be eligible for tax exemption under section 80C. “This change might have affected the attractiveness of PPF for certain investors,” says Atul Sharma, founder of Lex N Tax, a tax consultancy firm.
Equity-Linked Savings Scheme (ELSS)
ELSS funds were a very popular deduction under section 80C, since they had a lock-in period of 3 years, and also provided market-linked returns. “Since the deduction under section 80C is not allowed under the new regime, ELSS investments have become less popular,” says Sharma.
Tax-saving fixed deposits
FDs have been a popular investment choice because they offer fixed returns. “Tax-saving fixed deposits are long-term deposits with a lock-in period of five years, offering tax benefits under section 80C of the Income Tax Act,” says Sharma. However, since 80C deductions are not available under the new tax regime, the appeal of tax-saving FDs have reduced, especially because without tax savings at the time of investments, the real rate of return on FDs will be even lower.
Endowment plans
Certain types of life insurance policies, such as traditional endowment plans, have witnessed a decline in popularity due to the new tax regime. Even though they were not a wise investment option, they were popular because of the guaranteed returns and the tax benefits they offered under section 80C. Now, with that gone under the new tax regime, endowment plans have lost their sheen.
National Savings Certificate (NSC)With no tax deduction available under section 80C if one opts for the new tax regime, NSC becomes taxable as per the individual’s income tax slab rate – thus making it less popular as a tax-saving investment.
Source link: https://www.businessinsider.in/personal-finance/news/investments-like-elss-ppf-and-tax-saving-fixed-deposits-are-likely-to-lose-their-sheen-in-new-tax-regime/articleshow/100464933.cms Website link: https://lexntax.com/
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How debt investor can lower their higher tax liability by investing in hybrid funds?
In order to provide investors with a diverse portfolio, hybrid mutual funds are a form of investment vehicle which typically invests in a blend of stocks, bonds, and other assets. Securities like mutual funds that have debt or equity proportions exceeding 35% but below 65% are considered hybrid securities. Following the budget 2023, hybrid instruments held for longer than a year are now more tax advantageous than debt funds because they are subject to a 20% tax rate and may even be eligible for an indexation benefit. Contrarily, the sale of debt mutual funds is subject to a slab rate of taxation that can reach 30%. Hence, here’s how can you lower your higher tax liability by investing in hybrid funds based on a discussion with multiple industry experts.
Atul Sharma, Founder, Lex N Tax
Investing in hybrid funds can potentially help lower your tax liability, but it is important to understand how hybrid funds work and how they can impact your taxes.
Hybrid funds are mutual funds that invest in a mix of equity and debt securities. They can be classified into three categories based on their asset allocation: conservative, balanced, and aggressive. Conservative funds typically have a higher allocation towards debt securities, while aggressive funds have a higher allocation towards equity securities.
When you invest in a hybrid fund, you are indirectly investing in both equity and debt securities. The returns generated by these funds are a combination of dividend from equity and interest income from debt. In India, equity-oriented hybrid funds have a tax advantage over pure debt funds, as they qualify for long-term capital gains tax of 10% without indexation on gains above Rs. 1 lakh if held for more than one year. However, pure debt funds are taxed at a higher rate, based on the individual's tax bracket.
Amendment to finance bill 2023 has scrapped the benefit of indexation on debt mutual fund. Earlier it was taxed at the rate of 20% with indexation benefit if held for more than three years.
In India, dividend income from mutual funds is subject to a dividend distribution tax (DDT). However, equity-oriented hybrid funds (where at least 65% of the fund's assets are invested in equities) are exempt from DDT. So, if you invest in such a hybrid fund and earn dividends, you will not have to pay any DDT, which can result in lower tax liability. It is also important to note that if hybrid fund is Hybrid Equity oriented funds (Investment in Equity is≥ 65%) held for less than 1 year then it will attract short term capital gain u/s 111A at 15%.
Investing in hybrid funds, especially equity-oriented ones, can potentially help reduce your tax liability by generating long-term capital gains, which are taxed at a lower rate than short-term capital gains or interest income. However, it is important to note that hybrid funds are subject to market risks (due to its equity element) and can potentially result in losses.
Additionally, it is crucial to consult a financial advisor or tax professional and do proper research on past track record of fund before investing in any financial instrument to ensure it aligns with your overall financial goals and is suitable for your individual tax situation.
Source link: https://www.livemint.com/money/personal-finance/how-debt-investors-can-lower-their-higher-tax-liability-by-investing-in-hybrid-funds-11682875480218.html
Website link: https://lexntax.com/
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Should you close or extend your PPF after 15 years of lock-in period?
Should you close or extend your PPF after 15 years of lock-in period?
Because of its low risk and tax advantages, Public Provident Fund (PPF), a long-term investment program backed by the Indian government, is one of the most well-known fixed income schemes. The government determines and adjusts the PPF interest rate on a quarterly basis. The current interest rate is 7.1% per annum (compounded yearly) as of April 2023. The investment made in the PPF plan is eligible for a tax deduction under Section 80C of the Income Tax Act and has a lock-in period of 15 years. After the PPF account's lock-in term, the account holder has two options: they can either quit the account by taking the maturity amount or they can extend it for a block of five years. But should you as an investor close or extend your PPF account after 15 years of lock in period, let’s know from our industry experts.
Atul Sharma, Founder, Lex N Tax
If you have a PPF (Public Provident Fund) account and it has completed its lock-in period of 15 years, you have two options: close the account or extend it.
Closing the account means withdrawing the entire balance along with the accumulated interest. You can use the funds for your financial goals or invest them in other financial instruments. However, if you close the account, you will not be able to enjoy the tax benefits that come with investing in PPF.
On the other hand, you can choose to extend the PPF account after the completion of 15 years for a block of five years. During this extended period, you can continue to make contributions to your PPF account and earn tax-free interest on the balance. The maximum deposit amount into a PPF account is Rs.1.5 lakh per financial year.
So, whether you should close or extend your PPF account after 15 years depends on your financial goals and needs. If you need the money for some urgent financial requirement, you can consider closing the account. However, if you do not need the money immediately, and want to continue earning tax-free interest, you can opt to extend the account.
Website link: https://lexntax.com/ Source link: https://www.livemint.com/money/personal-finance/should-you-close-or-extend-your-ppf-account-after-15-years-of-lock-in-period-11682162344788.html
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5 popular deductions you can claim under Section 80C in 2023-24
5 popular deductions you can claim under Section 80C in 2023-24
Among all the different sections that provide deductions under the old tax regime, 80C is the most popular. Various expenses and investments qualify for deduction of up to ₹1.5 lakh u/s 80C and thus one can choose from various options according to one’s needs. We look at five of the popular deductions you can claim u/s 80C in 2023-24.
Equity Linked Savings SchemeELSS, short for Equity-Linked Saving Scheme, is a type of mutual fund that invests primarily in equity and equity-related instruments in India. It offers tax benefits under Section 80C of the Income Tax Act and comes with a lock-in period of three years.
With the potential to offer high returns, ELSS is considered a tax-saving investment option for those who are willing to take on some risk in their portfolio. “If someone is looking for short term investment then he/she may go for ELSS funds as it has only 3 years of lock-in period(least among all),” says Atul Sharma, Founder, Lex N Tax, a tax consultancy. ELSS is one of the products in the 80C deduction bucket that offers an exposure to equities.
Website link: https://lexntax.com/
Source link: https://www.businessinsider.in/personal-finance/news/five-popular-investments-under-80c-in-2023-24/articleshow/99732870.cms
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Gst Audit – Know Your Numbers And Manage Your Business
Whether you have a best GST Audit services in delhi requirement or a GST return, we offer a wide range of exclusive services. We will help you organize, analyze, and manage your financial documents with quality.
GST – Goods and Services Tax is one tax system to subsume all other taxes. To bring one nation, one Tax into work, the government of India Launched GST. To ensure GST is paid and the refund is claimed by the right person, GST laws came into the picture. GST Audit is a subject under GST that requires individual taxpayers and businesses to Audit their financial documents.
The audit is a procedure to analyze financial records, documents, and other financial data to file taxes and returns. The main aim of performing a GST Audit is to ensure the accuracy of taxes charged, turnover reported, and input tax credit used. To ensure accuracy of rebate received, and to determine the requirements of GST law. Professionals like Chartered accountants, cost accountants, and lawyers can help you comply with GST laws.
Whether you’re an individual or a business, the accuracy of GST Audit Services in delhi can be offered by experts.
GST Audit Limit FY 2022-23
For any business and individual payment of taxes and filing of returns within the due date to avoid any penalty. There are certain limits for GST audit Services in delhi.
As per the recent changes in the budget proposal, GST AUDIT(GSTR-9C) is not mandatory for professionals (effective after Feb 01, 2021). Businesses and individuals can file GST annual return GSTR-9 with self-certification.More info visit to lexntax
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Gst Audit – Know Your Numbers And Manage Your Business
Whether you have a best GST Audit services in delhi requirement or a GST return, we offer a wide range of exclusive services. We will help you organize, analyze, and manage your financial documents with quality.
GST – Goods and Services Tax is one tax system to subsume all other taxes. To bring one nation, one Tax into work, the government of India Launched GST. To ensure GST is paid and the refund is claimed by the right person, GST laws came into the picture. GST Audit is a subject under GST that requires individual taxpayers and businesses to Audit their financial documents.
The audit is a procedure to analyze financial records, documents, and other financial data to file taxes and returns. The main aim of performing a GST Audit is to ensure the accuracy of taxes charged, turnover reported, and input tax credit used. To ensure accuracy of rebate received, and to determine the requirements of GST law. Professionals like Chartered accountants, cost accountants, and lawyers can help you comply with GST laws.
Whether you’re an individual or a business, the accuracy of GST Audit Services in delhi can be offered by experts.
GST Audit Limit FY 2022-23
For any business and individual payment of taxes and filing of returns within the due date to avoid any penalty. There are certain limits for GST audit Services in delhi.
As per the recent changes in the budget proposal, GST AUDIT(GSTR-9C) is not mandatory for professionals (effective after Feb 01, 2021). Businesses and individuals can file GST annual return GSTR-9 with self-certification.More info visit to lexntax
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Lex N Tax Associates is one of the best goods and service tax in delhi . Our team at the firm delivers comprehensive services in the area of GST. These include providing services related to GST registrations in delhi and GST return filings, GST assessments, GST Advisory and Tax Compliances, Due Diligence and litigation services. In litigation, our team represents before Tax Authorities on behalf of clients. Our team has a rich experience in representing clients both in the previous indirect tax regime and new GST regime.more info visit to lexntax
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Minimum time period to claim GST refund
The refund claim can be made within 2 years from the relevant date in RFD-01.
Relevant date means date at which the payment is due in respect to the note/coupon/order issued.
RFD-01 can be filled for multiple tax periods in one application which is in 1 financial year. In some cases, RFD-01 is filled monthly:
For claims of zero-rated supplies
For claims of deemed exports
For claims of excess balance in electronic cash ledger.
For claims of inverted duty structure.
These are crucial documents and processes to complete refund applications for export of goods and services. The Form GST RFD -01 is now easy to fill through the GST portal. Lex N Tax Associates will provide you with the necessary support and meet all the requirements for you to claim a refund as per the law.
Declarations, statements, undertakings, or certificates required:
Declaration Under Second and Third Provision to section 54(3)
Undertaking in relation to section 16(2)(c) and 42(2).
Statement 3 under rule 89(2)(b) and rule 89(2)(c).
Statement 3A under rule 89(4)
Supporting documents
Copy of GSTR-2A of the relevant period
Statement of invoices (Annexure-B)
Self-certified copies of invoices entered in Annexure-B
BRC/ FIRC in case of export of services and shipping bill in case of goods.
Who is eligible for a GST refund?
Under section 54(3) of the CGST Act, 2017, a registered applicant or taxpayer is eligible to claim a refund of unutilized input tax credit by the end of the tax period. A taxpayer can claim unutilized input tax credit on a monthly basis. More info visit to lexntax
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We are a tax consultancy firm in India that is managed, maintained, and pushed by highly skilled Team CA, CS, Advocates, and Influencers who have extensive experience in their respective fields.More info visit to https://lexntax.com/
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We are a tax consultancy firm in India that is managed, maintained, and pushed by highly skilled Team CA, CS, Advocates, and Influencers who have extensive experience in their respective fields.
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