Salaried Person's Tax Deductions: A Complete Guide

 

Introduction

It's important for taxpayers to have a clear understanding of the available allowances and deductions, as they can greatly reduce tax liabilities. Throughout this article, we aim to provide you with all the necessary details on income tax allowances and deductions, empowering you to make informed decisions when filing your tax returns

TAX DUE DATE - APRIL 2024.

 

1

11.04.2024

GST

Filing of GSTR1 for the month of March, 2024

2

20.04.2024

GST

Payment of GST for the month of March, 2024 Filing of GSTR 3B for the month of March, 2024

3

30.04.2024

TDS/TCS (Income Tax)

Deposit TDS for payments of Salary, Interest, Commission or Brokerage, Rent, Professional fee, payment to Contractors, etc. during the month of March 2024. · Deposit TDS from Salaries deducted during the month of March 2024 • Deposit TCS for collections made under section 206C including sale of scrap during the month of March 2024, if any

Pre-GST taxes cannot be refunded if paid pursuant to an inquiry

 This is to update you about an important decision by Tribunal in the case of Filatex India Limited vs. CCE & ST, EA No. 10231 of 2020, wherein the Tribunal held that refund of Service Tax (‘ST’) is not allowed under GST transitional provisions where such ST was paid in pursuant to an inquiry by Authorities.

How to condone GST appeal

When is a delay of over 1 month acceptable (condone) for filing GST's First Appeal?

20% Pre deposit is not a precondition for graining a stay on demand

 Observations of the Hon Delhi HC while rejecting the precondition of 20% Pre deposit for granting stay on demand:

1. The Revenue erred in proceeding with a premise that the Assessee was obliged to tender or place evidence of having deposited 20% of the disputed demand before its application for stay under Section 220(6) could have been considered.

2. The deposit which an Assessee may be called upon to make will have to be examined and answered bearing in mind factors such as prima facie case, undue hardship and likelihood of success.

3. The circular dated 31/07/2017 would not operate as a fetter upon the power otherwise conferred on a quasi-judicial authority and that it would be wholly incorrect to view the same as mandating the deposit of 20%.

4. The respondents have clearly erred in proceeding on the assumption that the application for consideration of outstanding demands being placed in abeyance could not have even been entertained without a 20% pre-deposit.

National Association Of Software And Services Companies (NASSCOM) (TS-195-HC-2024(DEL))

How to handle errors in GST returns.

Errors in filing returns should be permitted if they meet these two conditions:
1. It was a clerical error made without any intention to evade taxes.
2. Revenue Neutral: The error resulted in no change to the overall revenue.

How to handle GST rectification application

We all are currently in the process of submitting Rectification Applications under Section 161 of GST Laws for errors that are evident from the records. What specific mistakes can be clearly identified from these records?

Let us delve into a discussion of several relevant judgments.

CESTAT classifies charter of aircraft as air transport of passenger service

 This Tax Alert summarizes a recent ruling of Customs, Excise and Service Tax Appellate Tribunal, Ahmedabad (CESTAT) ^[1] . The issue involved was whether aircraft charter is classifiable as air transport of passenger service or supply of tangible goods service.

Understand CCD & CPS.

 Certificates of Deposit

It is a fixed income financial tool that is governed by Reserve Bank of India and is issued in a dematerialized form. It is a type of agreement made between the depositors and the banks, wherein bank pays an interest on your investment for a tenure. Certificates of deposit are issued by the Scheduled Commercial Banks (SCBs) and All-India Financial Institutions. There is a term period of 1 month to 1 year for CDs that are issued by SCBs, whereas the term period ranges from 1 year to 3 years for CDs issued by financial institutions. CDs in dematerialized forms can be transferred through endorsement or delivery. There is no lock-in period for a CD. Major issuers: All Banks

CBDT guidelines for priority or out of turn disposal of Income Tax CIT (Appeals):

 

 1. In a significant move, the Central Board of Direct Taxes (CBDT) has released new guidelines aimed at ensuring the priority or out-of-turn disposal of pending appeals. This directive, issued under the reference F.No. 279/Misc./M-102/2021-ITJ, supersedes the previous guidelines set in December 2021.

CBDT has made amendments in Tax Audit Report:

The Central Board of Direct Taxes (CBDT) has amended the tax audit form (Form 3CD & Form No. 3CEB) and the form for filing a tonnage tax application (Form 65).

The following are the key changes introduced in the forms:

CBDT clarifies on income tax implications of inter-trust donations by one registered charitable entity to another

 This Tax Alert summarizes a recent Circular^[1] issued by the Central Board of Direct Taxes (CBDT) wherein the CBDT clarifies the tax treatment of non-corpus donations made by one registered charitable entity to another in the wake of amendment by Finance Act (FA) 2023, which restricted the eligible application of such donated amount to 85% leaving 15% as ineligible application in computing the income of the trust under the Income Tax Laws (ITL) (15% amount is hereinafter referred as Ineligible Application).

How to handle Notice on Input GST mismatch between 2A & 3B.

 

The GST department are issuing show cause notice to the taxpayers as the input credit available in GSTR-2A of the year is less than GSTR-3B and asking taxpayer to pay the difference with interest. In this regard, the Kolkata High court in the case of Suncraft energy held that GST department first take action on vendor who had not filed their GST return and in case of no action from GST department buyer cannot be penalized for wrong act of seller.   The Supreme court also confirms the view of Calcutta High Court.  After that we had seen number of high court decisions which rejected GST department  notice on input mismatch.  Top 5 High Court recent judgments of 2024 related to the same.

What is Form 13 application for lower deduction of TDS?

 1. As per the provisions of the Income Tax Act, TDS is required to be deducted at the time of making any payment. In cases where such TDS is being deducted, the tax payable will be computed by first deducting the TDS and then the recipient of income claims a refund of TDS at the time of filing of his Income.

 2. Therefore, when a taxpayer’s final tax liability is less than the amount of TDS being deducted, based on TDS rate in force, he may file an application for Nil/ Lower deduction of TDS U/S 197 of the Income Tax Act in Form 13. This is possible in cases where justification can be made for lower deduction of TDS on the basis of low projected profitability.

 3. Application in FORM 13 can be made by the recipient of income in case of the following category of receipts where TDS is required to be made under the following Sections:

Principles of Transfer pricing.

 Given below the major principles of transfer pricing.

1.     Arm's length principle

The arm's length principle is the cornerstone of transfer pricing. It states that the prices of transactions between related parties should be comparable to those of transactions between independent parties under similar circumstances. This principle aims to prevent artificial shifting of profits and ensure a fair allocation of taxable income among countries. To apply the arm's length principle, you need to identify comparable transactions, select appropriate transfer pricing methods, and document your analysis and assumptions.

SC rules discount on prepaid SIM cards and recharge coupon vouchers not liable for withholding as commission or brokerage

 This Tax Alert summarizes the recent Supreme Court (SC) decision in a batch of appeals with lead case being that of Bharti Cellular Ltd. v ACIT^[1] (Taxpayer). The issue before the SC was whether discount allowed to distributors on print price of prepaid SIM cards and recharge coupon vouchers by the telecom operators can trigger withholding tax obligation under the provisions of the Indian Tax Laws (ITL).

Tax treaties and tax residence certificates (TRC)

Is the Indian Finance Ministry's 2013 press release something the tax authorities have to follow? Sometimes, the Indian tax authorities have not accepted a TRC as definite proof of where a taxpayer lives for tax treaty reasons.

TAX DUE DATE - MARCH 2024.

 

Sr No	Due Date	Related to	Compliance to be made
1	11.03.2024	GST	Filing of GSTR 1 for the month of February, 2024

2

20.03.2024

GST

Payment of GST for the month of February, 2024 Filing of GSTR 3B for the month of February, 2024

3	07.03.2024	TDS/TCS (Income Tax)	· Deposit TDS for payments of Salary, Interest, Commission or Brokerage, Rent, Professional fee, payment to Contractors, etc. during the month of February 2024. · Deposit TDS from Salaries deducted during the month of February 2024 • Deposit TCS for collections made under section 206C including sale of scrap during the month of February 2024, if any
4	15.03.2024	Income Tax	Payment of Advance Tax
5	31.03.2024	GST LUT	Filing of LUT for the FY 24-25