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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

Interest earned from fixed deposits (FDs) and savings bank accounts is fully taxable under the head “Income from Other Sources” as per the Income Tax Act, 1961. Many taxpayers often overlook this income or report it incorrectly, leading to mismatches in the Annual Information Statement (AIS). Whether the amount is small or substantial, it must be disclosed while filing your Income Tax Return (ITR) . Correct reporting ensures compliance, prevents penalty notices, and helps cla

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

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

Receiving a notice under  Section 143(2) of the Income Tax Act, 1961, means your Income Tax Return has been selected for detailed scrutiny by the Assessing Officer. This is part of the government’s regular assessment process to verify the accuracy of income, deductions, and claims made in your return. Such scrutiny doesn’t imply wrongdoing—it simply ensures your filings align with available data and compliance norms. A timely and accurate response is crucial to avoid penaltie

ITR-6 is the prescribed income tax return form for all companies in India, except those claiming exemption under Section 11. Applicable for Assessment Year 2025-26, this form must be filed electronically, typically using a digital signature, to ensure statutory compliance. Companies, whether Indian or foreign, must disclose income, deductions, and other mandatory details accurately to avoid penalties. Proper adherence to ITR-6 requirements helps businesses maintain transparen

Missing the income tax return (ITR) deadline can lead to penalties, interest, and the loss of certain benefits under the Income Tax Act, 1961. However, filing after the deadline is still possible, and modern platforms like TaxBuddy simplify this process with AI-powered automation, expert guidance, and secure document handling. With its mobile app, TaxBuddy ensures accuracy and compliance while reducing stress for taxpayers who have missed the due date. Table of Contents Under

Filing income tax returns late is generally considered better than not filing at all, but both come with consequences. A belated return attracts penalties and interest, while complete non-filing can trigger prosecution, heavy fines, and legal complications. Updated provisions under the Income Tax Act, 1961, clearly distinguish between these two scenarios, making it vital for taxpayers to understand the risks before missing deadlines. Choosing to file late keeps compliance int