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Professional tax is a small but important deduction that can reduce your taxable income. Whether it’s automatically deducted from your salary or paid directly by self-employed individuals, it qualifies for a deduction under Section 16(ia) of the Income Tax Act, 1961. Reporting it correctly in your ITR ensures your taxable income is computed accurately and helps avoid discrepancies during assessment. Understanding where and how to claim it depends on your income type and the I

Interest under Section 234A of the Income Tax Act is a financial penalty imposed when a taxpayer fails to file their Income Tax Return (ITR) within the prescribed due date under Section 139(1). The interest rate is 1% per month or part of a month, calculated on the unpaid tax amount after deducting TDS, advance tax, and self-assessment tax. The intention behind this provision is to promote timely compliance and discourage delays in tax filing. With the recent digital refo

Income earned by a minor child in India is taxed under specific rules that depend on how the income is generated. The Income Tax Act outlines clear provisions on when a minor’s income must be clubbed with a parent’s tax return and when the child must file a separate ITR. These rules apply to common income sources such as bank interest, gifts, investments, or earnings from a child’s talent or business activity. Understanding these provisions ensures correct reporting, prevents

Introduction The Income Tax Act promotes exports through Section 10AA , but previously, the reporting for this deduction was a bit of a mess due to a lack of standardization. Form 56F has improved transparency and expedited the procedure to address this. This form is essentially a report from a practicing Chartered Accountant that details the entity registered under SEZ, along with the export turnover, total turnover, and the exemption claimed under Section 10AA. Now, it is m

ITR filing for trusts receiving donations requires strict compliance with the Income Tax Act, 1961. Trusts registered under sections like 12AB, 10(23C), or 80G must file ITR-7 and report all donations in Form 10BD. The process involves maintaining accurate records, meeting audit requirements, and disclosing donor details to retain exemptions under Sections 11 and 12. Updated reporting rules, validation checks, and mandatory disclosures ensure transparency for donors and regu

Handling discrepancies between Form 16 and Form 26AS is one of the most common issues faced by taxpayers during income tax filing. These mismatches can lead to inaccurate tax credit claims, refund delays, or even notices from the Income Tax Department. Understanding why these differences occur and how to correct them ensures smoother filing and prevents compliance hassles. When Form 16 and Form 26AS don’t match, the issue usually arises due to incorrect TDS reporting or de

Section 139(8A)  of the Income Tax Act, 1961 allows taxpayers to correct or update their previously filed returns by submitting an Updated Return, known as ITR-U. Introduced in the Finance Bill 2022 and refined in Budget 2025, this provision ensures taxpayers can rectify errors, report missed income, and comply with tax obligations more accurately. The recent Budget 2025 changes have extended the filing window to 48 months and simplified compliance requirements, making it eas

Small business owners often face income tax notices because of mismatched books, incorrect ITR forms, and gaps in AIS or TDS data. A clear system for recording business transactions, reconciling income, and selecting the right return form significantly reduces these triggers. Accurate books support proper deductions, while digital tools streamline tasks like AIS matching and advance tax calculation. TaxBuddy improves this process with automated form selection, real-time reco

Individuals earning rental income must pay advance tax if their total annual tax liability exceeds ₹10,000. Rental income, classified as “Income from House Property” under the Income Tax Act, 1961, is taxable after a standard deduction of 30% on the gross rent. The taxpayer must estimate total income, adjust for deductions and TDS, and pay advance tax in instalments during the financial year to avoid penalties under Sections 234B and 234C. With Budget 2025 introducing smooth

Defective returns under Section 139(9) of the Income Tax Act , 1961, can directly block or delay your income tax refund. When a return is marked “defective,” the Income Tax Department halts processing until errors are corrected. This often occurs due to missing documents, incorrect entries, or non-disclosure of crucial details such as bank accounts. As a result, taxpayers lose access to refunds, deductions, and even carry-forward benefits until a corrected return is filed and