Question 1

Who is required to file an income tax return (ITR) in India?

Accepted Answer

Filing is mandatory for: (1) individuals with gross income above the basic exemption (₹2.5L old regime / ₹3L new regime); (2) anyone with foreign income or foreign assets; (3) anyone who wants to claim a TDS refund; (4) companies and firms regardless of income; (5) those depositing ₹1 crore+ in current accounts or spending ₹2L+ on foreign travel or ₹1L+ on electricity annually.

Question 2

What is the ITR filing deadline for FY 2025-26?

Accepted Answer

For individuals and entities not requiring audit: 31 July 2026. For businesses requiring a tax audit (turnover above ₹1 crore for businesses or ₹50L for professionals): 21 November 2026, extended from 31 October by CBDT Circular No. 07/2026. The tax audit report is due 21 October 2026. For transfer pricing cases: 30 November 2026. A belated return can be filed up to 31 December 2026 with a ₹5,000 penalty (₹1,000 if income is below ₹5L).

Question 3

Which ITR form should a salaried employee use?

Accepted Answer

Use ITR-1 (Sahaj) if: total income is below ₹50L, income is only from salary, one house property and interest/other sources, and you have no capital gains or foreign assets. Use ITR-2 if you have capital gains (stocks, property, crypto), more than one house property, or foreign income. Never use ITR-1 for crypto, ESOP, or share sale income.

Question 4

What is the new tax regime and who should choose it?

Accepted Answer

The new regime is now the default. It has lower tax rates but eliminates most deductions (80C, HRA, LTA, home loan interest). It benefits those with low deductions — typically younger employees without home loans or large 80C investments. If your total deductions exceed ₹3.75 lakh, the old regime usually saves more tax. Use our Tax Regime Comparator calculator for your exact situation.

Question 5

What deductions can I claim in the old tax regime?

Accepted Answer

Key deductions: Section 80C (₹1.5L — LIC, ELSS, PPF, EPF, home loan principal, school fees); 80D (health insurance ₹25K–₹1L); 80CCD(1B) (NPS extra ₹50K); HRA (if renting); home loan interest (₹2L for self-occupied); LTA; standard deduction (₹50K salaried); 80E (education loan interest); 80TTA (savings interest ₹10K); 80TTB (senior citizens ₹50K).

Question 6

What is advance tax and when should it be paid?

Accepted Answer

Advance tax is income tax paid during the year, before you file your ITR. Required when annual tax liability exceeds ₹10,000. Payment deadlines: 15% by 15 June, 45% by 15 September, 75% by 15 December, 100% by 15 March. Missing deadlines attracts interest under Section 234B (3% p.m.) and 234C (1% per instalment). Salaried employees covered fully by TDS generally don't need to pay advance tax.

Question 7

How is capital gains tax calculated on shares in India?

Accepted Answer

Listed equity shares: LTCG (held 12+ months) = 12.5% on gains above ₹1.25L per year. STCG (held less than 12 months) = 20%. Grandfathering applies for shares bought before 31 January 2018 — FMV as of that date is considered the cost for LTCG. These rates apply since 23 July 2024 (Budget 2024 changes).

Question 8

What is Section 44ADA presumptive taxation for professionals?

Accepted Answer

Section 44ADA allows specified professionals (doctors, lawyers, CAs, engineers, architects, interior designers, technical consultants, film artists) to declare 50% of gross receipts as profit, without maintaining detailed books of accounts, if gross receipts are up to ₹75 lakh. Use ITR-4. If you claim profits below 50%, you must get a tax audit done.

Question 9

What happens if I get a defective ITR notice?

Accepted Answer

A defective return notice (Section 139(9)) means there's a material deficiency — wrong ITR form, missing schedules, or mismatch between schedules. You must respond through the income tax portal (Pending Actions → Response) within 15 days. You can either rectify the error online or file a fresh return. Ignoring the notice treats the return as never filed.

Question 10

How do I reconcile AIS and Form 26AS with my ITR?

Accepted Answer

Download your AIS and TIS from the income tax portal. Compare TIS values with what you're declaring in your ITR — salary, interest, dividends, capital gains, rent. If a transaction in AIS is incorrect, submit feedback in the AIS portal before filing. Mismatches between ITR and AIS/26AS trigger automated Section 143(1) demand notices.

Question 11

What is TDS on rent and who must deduct it?

Accepted Answer

Under Section 194I, TDS is deducted at 10% on rent exceeding ₹2.4 lakh per year (₹20K/month) from land, building and furniture. Individuals/HUFs paying above ₹50,000/month must also deduct 5% TDS under Section 194-IB. TDS must be deposited by the 30th of the following month using Challan 281 and Form 26QC.

Question 12

Can I file ITR without Form 16?

Accepted Answer

Yes. Form 16 is a TDS certificate from your employer, not a mandatory attachment to ITR. You can file using your salary slips, AIS data, and PF passbook as cross-references. If your employer hasn't issued Form 16, cross-check the TDS credit in Form 26AS and use the salary details from your offer letter and payslips.

Question 13

What is the Section 87A rebate?

Accepted Answer

Section 87A provides a tax rebate of up to ₹25,000 for taxpayers whose total income does not exceed ₹7 lakh (new regime) or ₹5 lakh (old regime). This means zero tax liability for income up to these limits under their respective regimes. The rebate offsets your tax before surcharge and cess are added. It does not apply to special rate incomes like LTCG.

Question 14

What is the standard deduction for salaried employees?

Accepted Answer

The standard deduction is a flat ₹75,000 deduction from salary income available under the new tax regime (raised from ₹50K in Budget 2024). Under the old tax regime, it remains ₹50,000. It is available to all salaried employees and pensioners without submitting any proof. No additional deduction is needed — it's automatically applied.

Question 15

Is capital gains tax applicable on mutual fund redemption?

Accepted Answer

Yes. Equity mutual funds (65%+ equity): LTCG (12+ months) at 12.5% above ₹1.25L annual exemption; STCG (under 12 months) at 20%. Debt mutual funds: both LTCG and STCG are now taxable at slab rates (no LTCG benefit from April 2023 onwards). Hybrid funds depend on equity allocation — if 65%+ equity, treated as equity funds.

Question 16

What is the basic exemption limit for FY 2025-26?

Accepted Answer

Under the new tax regime (default): ₹3 lakh for all individuals. Under the old tax regime: ₹2.5 lakh for individuals below 60; ₹3 lakh for senior citizens (60-80 years); ₹5 lakh for super senior citizens (above 80 years). Income up to these limits attracts zero tax (before cess).

Question 17

When is GST registration mandatory?

Accepted Answer

GST registration is mandatory when: (1) annual turnover from supply of goods exceeds ₹40L (₹20L in special category states); (2) annual turnover from services exceeds ₹20L (₹10L in NE/hill states); (3) you sell through e-commerce platforms — from rupee one; (4) inter-state supply of goods — from rupee one; (5) making supplies as an e-commerce operator; (6) receiving services from outside India under reverse charge.

Question 18

What are the GST return filing due dates?

Accepted Answer

GSTR-1 (outward supplies): 11th of the following month for monthly filers; quarterly for QRMP filers. GSTR-3B (summary return with payment): 20th of following month for monthly; last day of month following quarter for QRMP. GSTR-9 (annual return): 31 December of next FY. GSTR-9C (reconciliation statement): same as GSTR-9 for turnover above ₹5 crore.

Question 19

What is Input Tax Credit (ITC) and how do I claim it?

Accepted Answer

ITC is the credit for GST paid on your business purchases, which reduces your GST output liability. To claim ITC: (1) the supplier must have filed GSTR-1 and the invoice must appear in your GSTR-2B; (2) goods/services must be for business use; (3) you must hold a valid tax invoice; (4) payment to supplier must be made within 180 days. ITC cannot be claimed on blocked credits (Section 17(5)) — personal expenses, food, motor vehicles, construction.

Question 20

What is the QRMP scheme for GST?

Accepted Answer

QRMP (Quarterly Return Monthly Payment) scheme allows small taxpayers with turnover up to ₹5 crore to file GSTR-1 and GSTR-3B quarterly instead of monthly. However, GST must still be paid monthly by the 25th (using the fixed-sum method or self-assessment). The scheme reduces compliance burden from 24 returns per year to 8. Opt-in/out is possible at the start of each quarter.

Question 21

Can I claim ITC on capital goods under GST?

Accepted Answer

Yes. ITC on capital goods (machinery, equipment) is eligible in full in the year of purchase if used exclusively for business. However, if the capital good is used for both taxable and exempt supplies, ITC must be reversed proportionately. There is no 5-year write-off rule in GST — unlike the old CENVAT credit system.

Question 22

What is reverse charge mechanism in GST?

Accepted Answer

Under the Reverse Charge Mechanism (RCM), the recipient (buyer) of goods/services pays GST instead of the supplier. RCM applies to: purchases from unregistered dealers (Section 9(4) in specific notifications), certain categories of services (legal, GTA, director fees, security services, renting of motor vehicles), and imports of services. The recipient must self-invoice and pay RCM on their return. ITC can be claimed on RCM-paid GST.

Question 23

What is the GST rate on restaurant services?

Accepted Answer

Standalone restaurants (AC and non-AC): 5% with no ITC. Restaurants in hotels with tariff above ₹7,500 per day: 18% with ITC. Outdoor catering: 5% without ITC or 18% with ITC. Packaged food sold at restaurant counter is taxed based on the specific food product (nil to 12%). Cloud kitchens operating through aggregators like Zomato/Swiggy: 5% on food orders.

Question 24

How do I get a GST refund for excess ITC accumulated?

Accepted Answer

ITC refund is available when ITC accumulates because tax rate on inputs is higher than on outputs (inverted duty structure), or for zero-rated supplies (exports). File Form GST RFD-01 on the portal within 2 years from the relevant date. Attach: working of ITC claimed, GSTR-3B and GSTR-1 data, invoices as required. Processing typically takes 30-60 days. For export refunds, shipping bill and bank realisation certificate may be required.

Question 25

What is the GST composition scheme?

Accepted Answer

The composition scheme allows small businesses (goods: turnover up to ₹1.5 crore; services/mixed: up to ₹50L) to pay GST at flat rates — manufacturers (0.5% CGST + 0.5% SGST), restaurants (2.5% each), other businesses (0.5% each) and service providers (3% each). Composition dealers cannot collect GST from customers, cannot claim ITC, and cannot make inter-state sales. They file quarterly statement CMP-08 and annual GSTR-4.

Question 26

What are the penalties for late GST return filing?

Accepted Answer

Late fee for GSTR-3B: ₹50/day (₹25 CGST + ₹25 SGST) for delayed return with tax liability; ₹20/day (₹10 CGST + ₹10 SGST) for nil returns. Late fee for GSTR-1: ₹50/day (₹25 CGST + ₹25 SGST). Maximum late fee: ₹10,000 per return. Interest at 18% p.a. applies on unpaid tax from due date. For annual return (GSTR-9): ₹200/day (₹100 CGST + ₹100 SGST) capped at 0.25% of turnover.

Question 27

Can a freelancer providing services to foreign clients be exempt from GST?

Accepted Answer

Services exported to foreign clients (where payment is received in foreign currency and the place of supply is outside India) are treated as 'zero-rated supply' under GST. Zero-rated means 0% GST applies. However, the freelancer must either: (a) file a Letter of Undertaking (LUT) and supply without paying GST, or (b) pay IGST and claim a refund. If services are OIDAR (digital to non-business consumers in India), GST applies even if the receiver is abroad.

Question 28

Does an NRI need to file ITR in India?

Accepted Answer

An NRI must file ITR in India if: (1) India-source income exceeds the basic exemption limit (₹3L new regime / ₹2.5L old regime); (2) there are capital gains from Indian assets (any amount); (3) TDS was deducted and NRI wants a refund; (4) NRI is a director in an Indian company; (5) NRI has foreign assets that need disclosure in Schedule FA. ITR deadline for NRIs is same as residents — 31 July.

Question 29

How is residency status for tax purposes determined in India?

Accepted Answer

Residency is determined by days in India. For FY 2025-26: Resident if 182+ days in India, OR 60+ days in the current year AND 365+ days in the preceding 4 years (with exceptions for citizens going abroad for employment). NRI if below 182 days (or below 120 days for Indian citizens with income from Indian business > ₹15L). RNOR (transitional status) applies if you were NRI in 9 of the past 10 years or were in India for 729 days or less in 7 preceding years.

Question 30

What is DTAA and how does it help NRIs avoid double taxation?

Accepted Answer

DTAA (Double Tax Avoidance Agreement) is a tax treaty India has with 90+ countries. It prevents the same income from being taxed in both India and the country of residence. For an NRI: salary earned abroad is taxable only in the country of employment (not India). Indian rental income or dividends may be taxed in India but with DTAA credit in the home country. To claim benefit: obtain Tax Residency Certificate (TRC) from your country and file Form 10F with Indian authorities.

Question 31

What is FEMA compliance for NRIs?

Accepted Answer

Key FEMA obligations for NRIs: (1) Convert resident accounts to NRO within a reasonable time of becoming NRI; (2) Ensure NRE/NRO accounts are properly maintained; (3) File Form 15CA/CB for outward remittances above ₹10L; (4) Follow LRS limits for sending money abroad (USD 250K per year); (5) Obtain prior approval for certain investments in India. Violation of FEMA can result in penalty up to 3x the amount involved.

Question 32

How much tax does an NRI pay on rental income from India?

Accepted Answer

NRIs pay 30% TDS on rental income from Indian properties (deducted by the tenant under Section 195). However, when filing ITR, the NRI can claim: 30% standard deduction on net annual value, and actual property tax paid as deduction. After these deductions, the effective tax rate is lower. NRIs can also claim DTAA credit for tax paid on this income in their country of residence.

Question 33

What is Form 15CA and 15CB for NRIs?

Accepted Answer

Form 15CA is a declaration filed by the remitter (person making a foreign remittance) on the income tax portal, certifying that applicable taxes have been paid. Form 15CB is a certificate from a CA verifying the tax position on the remittance. For payments/remittances above ₹5 lakh (other than exempt payments), Form 15CA with CA-certified 15CB is required. NRIs repatriating from NRO accounts require 15CA/CB for amounts above ₹10L.

Question 34

Can an NRI buy property in India?

Accepted Answer

Yes. NRIs can buy residential and commercial properties in India without RBI approval. Agricultural land, plantation property and farmhouses cannot be bought. Payment must be from NRE/NRO account or inward remittance through banking channels — not foreign currency cash. Rental income from the property will be taxable in India at 30% TDS. Capital gains on sale are also taxable in India.

Question 35

What is Schedule FA in the income tax return?

Accepted Answer

Schedule FA (Foreign Assets) is a compulsory disclosure in ITR-2/ITR-3 for residents (not NRIs/RNORs) who hold any foreign assets — foreign bank accounts, foreign equity shares, foreign immovable property, foreign business interests, or any other capital asset outside India. Non-disclosure of foreign assets is punishable under the Black Money Act with penalty of ₹10 lakh and prosecution. Residents who received foreign assets as gifts or inheritance must also disclose.

Question 36

How long does it take to register a Private Limited Company?

Accepted Answer

Company registration via MCA SPICe+ typically takes 7-15 working days if all documents are in order. Timeline: (1) Name reservation — 1-3 days; (2) DSC for directors — 1-2 days (obtained in advance); (3) SPICe+ filing — 1 day; (4) ROC processing — 5-10 days. Additional time if ROC raises queries. Upon approval, Certificate of Incorporation (CoI), PAN, TAN are issued simultaneously.

Question 37

What is the minimum share capital required for a Pvt Ltd?

Accepted Answer

There is no minimum paid-up capital requirement for Private Limited Company registration since 2015. The government fee (stamp duty) is calculated on authorised capital — so starting with ₹1,000-₹10,000 authorised capital keeps fees low. You can increase authorised capital later by paying additional fees and stamp duty.

Question 38

What annual compliance is required for a Private Limited Company?

Accepted Answer

Every financial year, a Pvt Ltd must: (1) Hold AGM within 6 months of FY end (by 30 Sep); (2) File AOC-4 (financial statements) within 30 days of AGM; (3) File MGT-7/7A (annual return) within 60 days of AGM; (4) File statutory audit by auditor — mandatory for all companies; (5) Maintain statutory registers; (6) File income tax return by 21 Nov 2026 for AY 2026-27 audit cases, then follow the notified audit-case due date each year. Non-compliance attracts ₹100/day per form penalty.

Question 39

What is DPIIT Startup India recognition and who is eligible?

Accepted Answer

DPIIT recognition is a government certificate for startups. Eligibility: (1) Pvt Ltd, LLP or registered partnership; (2) Incorporated less than 10 years ago; (3) Annual turnover less than ₹100 crore in any FY; (4) Working on innovation, development or improvement of products/services, OR scalable business model with high employment potential. Benefits: exemption from angel tax, Section 80-IAC tax holiday (3 years), self-certification for 9 labour laws, fast-track patent.

Question 40

What is the difference between LLP and Pvt Ltd for tax purposes?

Accepted Answer

LLP: taxed at 30% flat income tax on profits. Partner profit-sharing is tax-free (no DDT). Audit required if turnover > ₹40L or capital contribution > ₹25L. Pvt Ltd: 22% corporate tax (Section 115BAA) — lower than LLP. But dividends paid to shareholders are taxed again at shareholder's marginal rate. For distribution-heavy businesses, LLP is often more tax-efficient despite higher corporate rate.

Question 41

What is OPC (One Person Company) and when to use it?

Accepted Answer

OPC is a company structure for a single entrepreneur with limited liability but no partners. Key rules: only an Indian resident citizen can be the sole member; must appoint a nominee; mandatory to convert to Pvt Ltd when paid-up capital exceeds ₹50L or average turnover exceeds ₹2 crore. OPC is suitable for solo founders who want corporate structure but don't plan to raise equity investment. Compliance burden is same as Pvt Ltd.

Question 42

What software is recommended for small business accounting in India?

Accepted Answer

Most common options: Tally Prime (₹18,000-₹27,000/year) — most widely used in India, excellent for GST filing and inventory; Zoho Books (₹3,000-₹10,000/year) — cloud-based, good for service businesses and online sellers; QuickBooks India — being phased out in India; ClearBooks/Busy — alternatives for specific industries. For freelancers with simple needs, even well-maintained Excel can work for the first year.

Question 43

What is Virtual CFO service and when does a company need it?

Accepted Answer

A Virtual CFO provides part-time Chief Financial Officer services — typically on a monthly retainer. Useful when: (a) you're a growing startup needing investor-ready financials but can't justify a full-time CFO; (b) your accountant handles compliance but you need strategic financial analysis; (c) preparing for fundraising, bank loans, or due diligence. Services include: MIS reports, cashflow forecasting, investor decks, board reporting, compliance oversight.

Question 44

What services does Indus Tax provide?

Accepted Answer

Indus Tax provides: Income Tax (ITR filing for individuals, freelancers, HNIs, NRIs, companies), International Taxation (NRI filing, DTAA, FEMA), GST (registration, monthly returns, annual return, notice handling), Startup services (company/LLP registration, DPIIT recognition, ROC compliance), Accounting (bookkeeping, MIS, Virtual CFO, e-commerce accounting), Audit (tax audit, statutory audit, internal audit), and Legal & Consulting services.

Question 45

How do I get started with Indus Tax?

Accepted Answer

WhatsApp us at +91-9059139258 with your goal and deadline. We respond with a checklist of required documents and confirm pricing — usually within 2-4 hours on working days. All services are 100% online — no office visit required. We work with clients across India and NRI/expat clients connected with the US, UK, UAE, Canada, Australia, Singapore and Germany.

Question 46

Are Indus Tax's services fully online?

Accepted Answer

Yes. All services at Indus Tax are delivered 100% online. Documents are shared via secure channels. Signatures for ITR, GST returns and company filings use OTP-based e-verification or DSC. You do not need to visit any office. NRI clients in the US, UK, UAE and elsewhere regularly use our services without any in-person interaction.

Question 47

How are CA services priced at Indus Tax?

Accepted Answer

Pricing depends on scope and complexity. Indicative ranges are listed on each service page — from ₹999 for basic salary ITR to ₹15,000+ for complex NRI or business filings. Final pricing is confirmed on WhatsApp after a brief pre-check of your situation. There are no hidden charges — scope and price are confirmed before work begins.

Question 48

What is the difference between a CA and a tax consultant in India?

Accepted Answer

A Chartered Accountant (CA) is a member of ICAI (Institute of Chartered Accountants of India) — a statutory body established by the Chartered Accountants Act 1949. CAs undergo a rigorous multi-year professional programme, pass national exams and maintain CPE hours. A 'tax consultant' is not a regulated term — anyone can call themselves a tax consultant. For complex tax matters, NRI filings, audits and legal compliance, always verify you're working with an ICAI-qualified CA.

Question 49

What documents do I need for ITR filing?

Accepted Answer

Basic documents: PAN card, Aadhaar, Form 16 (salaried), bank statements for the FY, Form 26AS / AIS download. For capital gains: buy/sell contract notes. For rental income: rent receipts. For NRIs: passport (travel dates), foreign tax return or TRC. For businesses: P&L, balance sheet, cash flow, GST returns. Additional documents vary by income type — we send a checklist after your initial WhatsApp.

Question 50

How long does it take to file ITR?

Accepted Answer

For salaried individuals with complete documents: 2-5 working days from receiving complete documents. For businesses requiring audit: 15-30 working days (audit must be completed first). For NRIs with foreign income and DTAA: 7-15 working days. For complex cases (multiple income sources, capital gains, notices): as discussed after scope confirmation. Timelines depend heavily on document completeness at the start.

Question 51

What is the income tax slab for FY 2025–26 (AY 2026–27) under the new regime?

Accepted Answer

New tax regime slabs for FY 2025–26: Up to ₹4 lakh — Nil; ₹4–8 lakh — 5%; ₹8–12 lakh — 10%; ₹12–16 lakh — 15%; ₹16–20 lakh — 20%; ₹20–24 lakh — 25%; Above ₹24 lakh — 30%. Add 4% health & education cess. Rebate under Section 87A: No tax if total income ≤ ₹12 lakh (new regime). Standard deduction: ₹75,000 for salaried.

Question 52

How to check income tax refund status online?

Accepted Answer

Method 1: Log in to incometax.gov.in → e-File → Income Tax Returns → View Filed Returns → check Refund Status for the relevant year. Method 2: Visit the Protean (formerly NSDL) refund status page at tinpan.proteantech.in → enter PAN and Assessment Year. Refund is typically credited within 30–90 days of filing and e-verification. Ensure your bank account is pre-validated on the portal.

Question 53

What is Form 26AS and how to download it?

Accepted Answer

Form 26AS (Annual Tax Credit Statement) shows all tax deducted/collected on your PAN — TDS from salary, TDS from bank FD interest, TDS by buyers of property, advance tax paid, and self-assessment tax. Download it: Log in to incometax.gov.in → e-File → Income Tax Returns → View Form 26AS. Alternatively, log in through your net banking → Tax Centre → Form 26AS. Always reconcile Form 26AS with your income before filing ITR.

Question 54

What is AIS (Annual Information Statement) in income tax?

Accepted Answer

AIS (Annual Information Statement) is a comprehensive 360° view of your financial transactions reported to the Income Tax Department — covers salary, interest, dividends, mutual fund transactions, property purchases, foreign remittances, and more. It's more detailed than Form 26AS. Download AIS: incometax.gov.in → Services → Annual Information Statement. Review AIS before filing ITR — any discrepancy should be submitted as feedback on the portal.

Question 55

What is Section 87A tax rebate and who can claim it?

Accepted Answer

Section 87A provides a rebate that reduces your income tax to zero if your total taxable income doesn't exceed ₹12 lakh (new regime, FY 2025–26) or ₹5 lakh (old regime). The rebate equals the computed tax (so net tax = zero). Only resident individuals (not HUF, firm, or company) can claim 87A. NRIs cannot claim this rebate. Note: Special rate income (STCG at 20%, LTCG at 12.5%) is taxed separately even if total income ≤ ₹12 lakh.

Question 56

Can I claim both HRA and home loan interest deduction?

Accepted Answer

Yes — you can claim both HRA exemption (Section 10(13A)) and home loan interest deduction (Section 24(b)), provided you meet the conditions for each. This is allowed when: you are paying rent in the city where you work AND your own property is in a different city (rented out or under construction). If you own and occupy a home AND also pay rent in the same city, the claim is challenged — you'd need to justify why you're renting despite owning.

Question 57

How to calculate HRA exemption for income tax?

Accepted Answer

HRA exemption is the MINIMUM of three values: (1) Actual HRA received from employer; (2) Rent paid minus 10% of basic salary; (3) 50% of basic salary for metro cities (Delhi, Mumbai, Kolkata, Chennai) or 40% for non-metro. Example: Basic ₹50,000/month, HRA received ₹20,000/month, Rent paid ₹25,000/month. Calculation: (1) ₹20,000; (2) ₹25,000 − ₹5,000 = ₹20,000; (3) 50% × ₹50,000 = ₹25,000. Exemption = ₹20,000/month.

Question 58

What is Section 80D deduction for health insurance?

Accepted Answer

Section 80D allows deduction for health insurance premium paid. For self, spouse, children: ₹25,000 (₹50,000 if any insured person is a senior citizen). Additional ₹25,000 (₹50,000 for senior citizens) for parents' health insurance. Maximum total: ₹1 lakh if both you and your parents are senior citizens. Under new regime, 80D is NOT available — only under old regime.

Question 59

What is presumptive taxation under Section 44AD?

Accepted Answer

Section 44AD allows eligible small businesses to declare 8% of total turnover as taxable income (6% if turnover received via digital/banking channels) without maintaining detailed books of accounts. No tax audit needed if declared profit ≥ 8% (or 6%). Eligible: individuals, HUFs, partnership firms (not LLP). Turnover limit: ₹3 crore (if cash receipts ≤ 5%) or ₹2 crore (if cash receipts > 5%). Does NOT apply to professionals (they use Section 44ADA).

Question 60

What is the capital gains tax rate on property sale in India (2025–26)?

Accepted Answer

From July 23, 2024 (Budget 2024): Long-term capital gains (LTCG) on property = 12.5% without indexation (for properties sold on/after July 23, 2024). Holding period for LTCG = 24 months. For properties bought before July 23, 2024, resident individuals and HUFs can choose (a) 12.5% without indexation OR (b) 20% with indexation — whichever results in lower tax; NRIs do not get this option. Buyer must deduct TDS at 1% when buying from a resident for ₹50 lakh or more, or at 12.5% on LTCG / 30% on STCG plus surcharge and cess when buying from an NRI seller.

Question 61

How to file ITR for F&O (Futures and Options) trading income?

Accepted Answer

F&O trading income is treated as non-speculative business income. You must file ITR-3 (not ITR-1 or ITR-2). Calculate F&O turnover = sum of absolute value of profits/losses on each settlement. If turnover > ₹3 crore or declared profit < 6% of turnover, a tax audit under Section 44AB is mandatory. F&O losses can be set off against other business income (not salary) and carried forward for 8 years — but ONLY if ITR is filed by July 31 due date.

Question 62

What is a belated return under income tax and what is the penalty?

Accepted Answer

A belated return (Section 139(4)) is an ITR filed after the due date (July 31 for most individuals). You can file a belated return until December 31 of the assessment year. Penalty under Section 234F: ₹5,000 (income > ₹5 lakh) or ₹1,000 (income ≤ ₹5 lakh). Interest under 234A: 1% per month on unpaid tax from August 1. Loss carry-forward is not available in belated returns. After December 31, only an Updated Return (ITR-U) is possible with additional 25–50% tax.

Question 63

What are the TDS rates for FY 2025–26?

Accepted Answer

Key TDS rates: Section 192 (salary) — as per slab; Section 194A (bank FD interest) — 10% (20% if no PAN); Section 194B (lottery) — 30%; Section 194C (contractors) — 1% (individual/HUF) or 2% (others); Section 194H (commission) — 5%; Section 194I (rent) — 10% (land/building) or 2% (machinery); Section 194J (professional fees) — 10%; Section 194Q (purchase of goods >₹50L) — 0.1%. Surcharge and cess apply for higher income slabs on salary.

Question 64

What is the GST rate on services in India?

Accepted Answer

Most services attract 18% GST (e.g., CA/lawyer fees, software services, hotel stays > ₹7,500, banking). 12% GST: works contracts (construction), hotel stays ₹1,001–₹7,500. 5% GST: transportation services, standalone restaurants. 0% (exempt): health services, educational services, exports. Some items attract the GST compensation cess (e.g., premium cars, tobacco, aerated drinks).

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