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Clubbing of income  under Section 64 of the Income Tax Act, 1961, prevents taxpayers from reducing their tax burden by transferring income-generating assets to close family members. It ensures that the income earned through such transfers—made without adequate consideration—remains taxable in the hands of the transferor. This rule primarily applies to individuals and not to firms, HUFs, or companies, thereby maintaining fairness in taxation and discouraging indirect methods o

The Income Tax Department requires taxpayers filing ITR -1 (Sahaj) to report exempt income even if it is not taxable. Accurate disclosure ensures transparency and prevents notices or mismatched entries in the Annual Information Statement (AIS). Exempt income includes items like interest from PPF, HRA , gratuity, dividends, and agricultural income up to ₹5,000. Understanding how to fill this schedule correctly helps avoid errors and keeps your ITR fully compliant with CBDT gui

Agricultural income in India enjoys a unique position under the Income Tax Act, 1961. While it is exempt under Section 10(1), accurate reporting in your Income Tax Return (ITR) is crucial to avoid scrutiny and maintain compliance. Whether derived from cultivation, rent, or the sale of produce, this income must be declared with proper documentation. The exemption applies only when the income genuinely arises from land used for agricultural purposes within India. The key lies i

Section 270A of the Income Tax Act, 1961, lays down penalties for taxpayers who fail to accurately report their income. Introduced through the Finance Act, 2016, this provision differentiates between underreporting—caused by errors or omissions—and misreporting, which involves deliberate concealment or falsification. The law imposes a penalty of 50% of the tax on underreported income and up to 200% for misreporting. With tighter digital monitoring through AIS and Form 26AS,

Section 148A of the Income Tax Act, 1961, introduced through the Finance Act, 2021, redefined how reassessment proceedings are initiated by ensuring fairness, transparency, and accountability. Before issuing a reassessment notice under Section 148 , the Assessing Officer must conduct an inquiry, verify evidence, and offer the taxpayer an opportunity to respond. This change strengthens taxpayer protection, ensuring no reassessment is initiated arbitrarily and that income disc

The Annual Information Statement (AIS) serves as a consolidated record of your income and financial transactions reported by employers, banks, and financial institutions. However, discrepancies like unreported income or incorrect TDS entries can disrupt your income tax return filing process. Correcting these issues before filing ensures accuracy, prevents penalties, and helps maintain compliance with the Income Tax Act, 1961. Filing accurate returns begins with ensuring tha

The Annual Information Statement (AIS) is a detailed record of your financial transactions, including income, investments, and TDS details, reported to the Income Tax Department. Submitting accurate feedback on AIS ensures that your financial data is correctly reflected in your income tax records, minimising errors during return filing . The process can be completed easily online through the e-filing portal, where users can review, correct, and verify details in just a few s

Dividend income taxation in India for FY 2024–25 (AY 2025–26) continues under the Income Tax Act, 1961, with key refinements introduced in Budget 2025. The TDS threshold for dividends has been raised to ₹10,000, and new compliance guidelines ensure smoother and more transparent reporting. Since the abolition of Dividend Distribution Tax, the responsibility for paying tax on dividends now lies with investors. Understanding how to compute and report dividend income correctly i

TDS  on property sale under  Section 194-IA ensures that tax is collected at the source during the sale of immovable property valued above ₹50 lakh. The buyer is responsible for deducting 1% TDS on the higher of the sale price or stamp duty value and depositing it with the government through Form 26QB. The seller, on the other hand, must ensure this TDS is reflected in Form 26AS to claim credit while filing the Income Tax Return . Understanding these obligations prevents mism

Failure to verify your Income Tax Return (ITR) within the prescribed 30 days can invalidate your filing under the Income Tax Act, 1961. The return is treated as unfiled, leading to penalties, refund denials, and potential scrutiny from the Income Tax Department. With e-verification being the final step in the tax filing process, missing this deadline can disrupt financial planning, delay refunds, and even affect your compliance history. Understanding the implications and corr