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Users

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10,00,000+

Users from 2600 towns trust TaxBuddy

Impact

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94%

That’s how many 1st time users save tax with TaxBuddy

Founded

Founded

2017

Led by a team of ex-IRS officers and accomplished CAs and Engineers

Streamlined E-filing of Income Tax Return with TaxBuddy

Effortless ITR filing

Maximum Tax Savings

Prompt Processing and Confirmation

Enhanced Security Measures

Expert Support at Your Fingertips

E filing of income tax Return

Three Convenient Ways to File Your Income Tax Return

Use a Digital Signature Certificate (DSC): 

Streamline your e-filing process with a secure Digital Signature Certificate. This digital equivalent of your physical signature ensures authenticity and ease of ITR tax filing.

E filing of income tax return without a DSC:

Choose the hassle-free option of e-filing without a Digital Signature Certificate. Generate an ITR-V form, print it, sign it, and send it to the Central Processing Centre (CPC), Bangalore within 30 days from e-filing. This option applies if Aadhaar details are not updated on the Income Tax site.

E-file and Verify with Aadhaar or Bank: 

Simplify your e-filing experience by verifying your tax return through your Aadhaar number or bank account. This eliminates the need to submit the ITR-V form to CPC.

Ensure a smooth E filing of Income Tax Return process by having key documents readily available. These may include PAN, Aadhaar linked to PAN, bank account information, salary slips, rent receipts, Form 16, interest certificates, insurance and home loan details, investment information, and proof of additional income such as from property or capital gains.

Relax, you don't need to stress about the process. Simply upload your necessary documents, and our team will handle the rest. We are your reliable partners, committed to guiding you at every juncture.

Explore Tax-Saving Opportunities for ITR Filing

  1. Tax Buddy keeps you aligned to the ever-changing landscape of tax deductions.

  2. We offer specialized packages based on your income nature.

  3. Our solutions keep you well-informed about the latest provisions.

  4. We work aggressively to maximize your deductions effectively.

  5. With Tax Buddy, you can confidently manage your taxes, sustain the momentum of tax savings and meet demanding deadlines.

tax saving

Choose Tailored Plans for Your ITR Filing

wallet

Salary & HP Plan

₹847

/ Year

₹508

*Exclusive of Taxes

SUITED FOR:

Single & Multiple Employers

Single & Multiple House Property

Income from Other Sources

Agriculture Income

wallet

₹2,118

Business & Professional Plan

/ Year

₹1,271

*Exclusive of Taxes

SUITED FOR:

Single & Multiple Employers

Single & Multiple House Property

Business & Professional Income (Non Audit) - Without B/S P/L*

Income from Other Sources

Agriculture Income

wallet

Capital Gain Plan

₹1,525

/ Year

₹2,542

*Exclusive of Taxes

SUITED FOR:

Single & Multiple Employers

Single & Multiple House Property

Multiple Capital Gain Income

Business & Professional Income(Non Audit)- Without B/S P/L*

Income from Other Sources

Agriculture Income

wallet

Future & Options Plan

₹4,236

₹2,542

/ Year

*Exclusive of Taxes

SUITED FOR:

F&O Income/Loss (Non Audit)

Speculative Income

Single & Multiple Employers

Single & Multiple House Property

Multiple Capital Gain Income

Income from Other Sources

Business & Professional Income(Non Audit)- Without B/S P/L*

Agriculture Income

wallet

Crypto Currency Plan

*Exclusive of Taxes

₹3,813

/ Year

₹6,355

SUITED FOR:

Crypto Income

F&O Income/Loss(Non Audit)

Speculative Income

Single & Multiple Employers

Single & Multiple House Property

Multiple Capital Gain Income

Business & Professional Income(Non Audit)- Without B/S P/L*

Income from Other Sources

Agriculture Income

wallet

NRI/Resident Having Foreign Income

₹6,355

₹3,813

/ Year

*Exclusive of Taxes

SUITED FOR:

Foreign salary(Including Foreign Tax relief)

DTAA Tax Relief

Single & Multiple Employers

Single & Multiple House Property

Multiple Capital Gain Income

RSU/ESOP

Business & Professional Income(Non Audit)- Without B/S P/L*

Crypto Income

F&O Income/Loss(Non Audit)

Speculative Income

Income from Other Sources

Agriculture Income

*For Balance sheet & P/L / Attestation: ₹1000 

*18% GST will be applicable to the base plan amount

Leverage the Benefits of Strategic ITR Filing with TaxBuddy

With TaxBuddy, your exclusive access to tax planning information, you can maximize your financial potential. Our devoted team of experts offers tailored advice to people and enterprises, assisting you in:

Investing Activity

Produce a thorough tax report based on your investing activity.

Lower your Tax

Receive thorough advice on investments that can lower your tax obligations.

Obtain Professional Advice

Obtain professional advice catered to your unique needs.

One Location for All Tax

One location for all tax planning (individual, business, NRI, capital gain)

Hassle-Free Assisted ITR Filing from Start to Finish

Discover Why Early ITR Filing Is a Smart Move!

E Filing Prompt Refunds

Timely E-filing for Prompt Refunds

Timely e-filing expedites verification, ensuring prompt refunds.

Penalty Free Tax Filing

Penalty-Free Tax Filing

Stay clear of penalties by filing your taxes accurately and on time.

Defective Return Notice Prevention

Defective Return Notice Prevention

Avoid receiving a Defective Return Notice through accurate tax filing.

Escape Tax Filing Rush

Escape the Last-Minute Filing Rush

Say goodbye to the commotion of the last-minute tax filing rush.

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Leverage the Advantages of Filing ITR

Leverage the Advantages of Filing ITR

1

Assuredly maximize your returns:

By filing your income tax return (ITR) on time, you can ensure that you claim all eligible deductions and exemptions, optimizing your potential tax savings.

2

Build financial credibility:

Filing your ITR regularly establishes a record that can enhance your credibility when applying for loans or seeking better financial opportunities.

3

Avoid penalties consistently:

Timely ITR filing helps you steer clear of penalties and legal complications.

4

Track your financial progress:

Filing your ITR provides valuable insights into your income, expenses, and investments, allowing you to make informed decisions.

5

Expedite visa processing:

Consistent ITR filing history can expedite processing of your visa applications, expanding your chances of obtaining international travel opportunities.

Access Valuable Benefits by Filing Your Income Tax Return

1

Acts as Legal Proof:

Income Tax Return serves as a legal document, serving as proof in two ways: a) Identity Proof: It can be used as identity proof, accepted by the government for various purposes, including obtaining an AADHAAR card. b) Income Proof: The ITR form contains detailed information on incomes and expenses, serving as income proof for transactions like property purchases.

2

Claim Deductions:

Filing an income tax return allows you to claim deductions, reducing the tax burden. These deductions can be availed through investments and can include TDS and rebates.

3

Document for Loans:

Income tax returns are essential when applying for loans. Banks and credit card companies require ITR as proof of income and financial stability before approving loans or issuing credit cards.

4

Requirement for Going Abroad:

Filing ITR is necessary when planning to go abroad. Many countries require ITR as part of the documentation process for visa approval, as it showcases financial history and provides details to the embassy.

5

Avoid Penalties:

Failure to file Income Tax Returns, despite being eligible to pay taxes, can lead to penalties and punishments. The Income Tax Act 1961 allows for penalties of up to Rs 5000 and other serious consequences for non-compliance.

6

Carry Forward Losses:

The Income-tax Act 1961 allows for the carrying forward of losses from one year to the next (under Sections 70 and 71). This provision enables taxpayers to offset losses against future income.

Join Over 10 Lakh Happy Taxpayers Trusting TaxBuddy

Niranjana Sharma

Niranjana Sharma

Local Guide • 2 months ago

Team TaxBuddy came to the rescue in crunch time. They were prompt, courteous and professional. Superlative service a super competitive price. Couldn't be more satisfied. Strongly recommended for every taxpayer in India who wants accurate returns and peace of mind.
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Subham Saurabh

1 month ago

Tax Buddy was a breeze to work with. It's a straightforward procedure that's easy to follow. All you have to do is fill out the form with the relevant information and submit necessary documents as requested by them.
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Rohan Baruah

3 months ago

Positive : Professionalism, Responsiveness. Rajkumar was very responsive and prompt throughout the return filing process. Even though it was taking some time on the govt portal, I knew that the work
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Aahan Shetty

1 month ago

TaxBuddy has been a real buddy for me throughout my e-filing process. As a high-income professional, I have always struggled with high tax bills and refund concerns. Thankfully, now I have a partner I can trust to guide me for maximum savings.
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Rahul Patil

Local Guide • 2 months ago

Positive : Quality.Right from the start the process was very smooth. The tax buddy assigned (Mr Gaurishankar) was extremely helpful, proactive, patient and answered all questions. Not only did I avail the service, because of the great experience, made my spouse use the service as well. recommend highly and continue the services again. I talked with Nikita Chilveri and my overall experience with tax buddy was so wonderful, they are so professional and the way Nikita explained everything to me was really helpful.
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  • How do I compute income from self-occupied property?
    The gross annual value of the self-occupied property is ZERO or NIL. Accordingly, the standard deduction at 30% of the annual value shall also be ZERO or NIL. Therefore, the amount of interest paid by the person against home loan shall be the loss from house property which can be set off against income under any other head or carried forward to next assessment year. Particulars - Amount Gross Annual Value - Nil Less: Municipal taxes paid by the assessee - Nil Net Annual Value (NAV) - Nil Less: Deduction u/s 24 - Amount 1. Standard deduction at 30% of NAV - Nil 2. Interest on borrowed capital - (xxxx) Income from House Property (It’s generally a loss) - ( – )xxxx
  • What will be the tax implications if I occupy more than one property for my residence? Can I treat all these properties as self-occupied and compute income from them at NIL or Zero?
    If the person has owned more than one self-occupied property, only one of them will be treated as self-occupied & the others will be treated and taxed as deemed to be let-out properties. The taxpayer can claim GAV as ‘Nil’ only for the one house property that he would consider as SOP (any 1 house of his choice). Other properties will be treated as deemed to be let-out & income from the same will be calculated accordingly. In such cases, the house whose income is computed at a higher value would be taken as Self Occupied Property (SOP).
  • I own two houses. One is a farmhouse that I visit on weekends and the other is in the city that I and my family live in. Is it correct to treat both these residences as self-occupied?
    No. In such a case, one of the houses of which the income is higher as compared to the other, shall be treated as a self-occupied house, while the other would be treated as a deemed let out. For the latter, the annual value shall be taken as the higher of the municipal value and the amount of rent it is expected to yield.
  • How do I compute income from a property which is self-occupied for part of the year and let out for part of the year?
    Such a property will be treated as been let-out throughout the year and income will be computed accordingly. However, while computing the taxable income in case of such a property, actual rent will be considered only for the let-out period.
  • I have received possession of a house in October 2018. Thus I have held the property only for a period of six months. This property was not given on rent and was vacant. I must compute the expected amount of rent that I might have received if the property would have been given on rent. The expected rent is Rs.10,000/- per month. Then annual value of my property shall be Rs.60,000/-. Is this correct?
    No. In case of the property which is considered as deemed let out, the annual value of the property is to be computed for the entire year and not for the part of the year. Therefore, the annual value of the property shall be Rs.120,000/-.
  • I have rented out a part of my house property and I stay in another part of the same house property. In such case, how will the income be computed? In this case, the two parts of the house shall be considered as independent house properties or taxable units.
    • The part in which you are staying shall be treated as a self-occupied property and the income shall be computed accordingly. • The part which is given on rent shall be treated as a let-out property and income shall be computed as income from let out property. • This can be applied to multiple units of a house property
  • For construction or buying a house, I have borrowed loans from friends and relatives and not borrowed home loan from bank. I am paying interest on such loans but not in the form of EMIs. Can I claim deduction on account of such interest paid?
    Yes, as the source of the loan does not matter. However, the loan must be taken and utilized for purchase, construction, acquisition, renovation or repair of the house property. The person from whom loan is taken and to whom interest is paid must be in India and he must be liable for tax on such interest paid by you to him.
  • While computing income chargeable to tax under the head “Income from house property” in case of a let-out property, how much interest on housing loan can be claimed as deduction?
    In case of a let-out property, there is no limit on the quantum of interest which can be claimed as deduction while computing income from house property.
  • I have given my shop on rent and I also facilitate services like providing of computers and other ancillary services to the tenant. I receive rent from the tenant which includes service charges. How should it be brought to tax?
    In such cases, the best approach would be to bifurcate the rent amount into two categories —‘rent’ and ‘service charges’. The amount of rent received is to be charged as Income from House Property and the amount of service charges received is to be treated as ‘Income from other sources’.
  • My spouse and I jointly own a house in which both of us have invested equally from individual and independent sources. Can we split the rental income received between the two of us to be taxed in individual hands?
    Yes, Rental Income received by each co-owner can be taxed proportionately and taxed in the hands of both independently as per your share in the said property.
  • I have received rent due for the past period in the current financial year. How do I offer it to tax?
    If you recover any rent that was not previously realized, then such unrealized rent shall be taxed in the year in which such income is realized by you (whether or not you are the owner of that property in that year) after deducting a sum equal to 30% of such unrealized rent. ​
  • I have paid property tax for the past years in this year. Can I claim deduction for entire amount of property tax paid?
    Yes. You can claim deduction for entire amount of property tax paid. The deduction on account of property tax is on a payment basis and not on the basis of charging year of such property tax.
  • What is ITR filing?
    ITR filing refers to Income Tax Return filing, where individuals report their income and taxes paid. TaxBuddy assists in this process, ensuring accuracy and compliance.
  • When to file ITR?
    The filing deadline varies, but typically it's before July 31st. TaxBuddy helps you determine the right time and file your ITR promptly.
  • Which ITR to file?
    The appropriate ITR form depends on your income sources. TaxBuddy guides you to select the correct form for accurate filing.
  • Which ITR form to file?
    Choosing the right ITR form is crucial. TaxBuddy can help you determine the suitable form based on your income and financial activities.
  • Who should file ITR?
    Anyone with taxable income should file ITR. TaxBuddy ensures that individuals who are required to file do so correctly and on time.
  • Can I file a revised return after ITR is processed?
    Yes, if there's an error in your ITR, you can file a revised return. TaxBuddy guides you through the process to rectify any mistakes.
  • What happens if I don't file ITR?
    Failure to file ITR may result in penalties and legal consequences. TaxBuddy advises on the importance of timely and accurate filing.
  • Can I file ITR for the last 3 years now?
    Yes, you can file ITR for previous years if you missed the deadlines. TaxBuddy helps you catch up on overdue filings.
  • Do I need to file ITR?
    Filing ITR is mandatory if your income is taxable. TaxBuddy ensures that you understand your filing obligation and helps you comply.
  • Is it mandatory to file ITR?
    Yes, if your income is above the exemption limit, filing ITR is compulsory. TaxBuddy simplifies the process for mandatory filers.
  • How can TaxBuddy simplify ITR filing for my small enterprise?
    TaxBuddy streamlines the ITR filing process for small enterprises, ensuring accurate and hassle-free income tax return submissions.
  • Can TaxBuddy assist in ITR filing for a partnership firm?
    Certainly, TaxBuddy provides expert guidance and support for ITR filing, catering to the specific needs of partnership firms to ensure compliance and efficiency.
  • What are the advantages of using TaxBuddy for small business ITR filing?
    TaxBuddy offers small enterprises a significant advantage with ITR filing, optimizing deductions, minimizing tax liabilities, and ensuring transparent financial reporting.
  • Can TaxBuddy aid in tax planning and optimization for my firm's ITR filing?
    TaxBuddy's experts are skilled in tax planning and optimization, tailoring strategies to your firm's unique requirements and ensuring maximum tax benefits during ITR filing.
  • Is TaxBuddy a cost-effective solution for small enterprise ITR filing?
    TaxBuddy provides highly cost-effective solutions, reducing compliance expenses and optimizing tax efficiency for small enterprises during the ITR filing process.
  • How do I simplify the process of e-filing of income tax return?
    You can conveniently file your income tax returns online through TaxBuddy. Visit our website at https://www.taxbuddy.com/ to e-file your returns effortlessly. It's quick, simple, and user-friendly. To avoid paying late costs, you must submit your Income Tax Return (ITR) for the fiscal year 2022–23 (Assessment Year 2023–24) by the deadline of July 31, 2023.
  • How can I file my income tax return for my freelance income?
    When filing your taxes with TaxBuddy, it is recommended that you choose "Income from Business/Profession" as your source of income. Simplify the process by visiting our user-friendly website at https://www.taxbuddy.com/ to effortlessly e-file your tax returns.
  • What is the process of e filing of income tax return, considering the recent announcement by the income tax department?
    Online ITR filing is known as electronic filing or e-filing. According to the income tax department's most recent notice, only online filing of income tax returns is permitted. Super senior citizens may use the offline paper option for filing ITRs 1 or 4, though.
  • What are the offerings of TaxBuddy associated with tax planning?
    Individualised approaches and credible income tax-saving techniques that guarantee the greatest tax savings. Quarterly reviews and specialised advice to guarantee you get the most recent and successful tax planning techniques. A comprehensive plan for tax planning for the entire family and assistance with tax authority representation. Get all the help you need with comprehensive tax preparation in one location, including help with advanced taxation, futures and options, cryptocurrency, capital gains, NRIs, domestic, and HNIs.
  • Does TaxBuddy help with settling IT notices?
    Yes, it does. The services include: Assistance from professionals when responding to Income Tax or GST notices Careful examination and professional guidance on creating a good response Constant availability of professional assistance during business hours Support in submitting amended returns for Section 139(9) or Section 143(1) notices
  • Could you provide a definition of ITR filing and its contents?
    ITR filing refers to the process of submitting a prescribed form containing information about one's income from various sources and the corresponding taxes paid to the Income Tax Department for the relevant financial year.
  • Will I be required to include any attachments when filing my ITR?
    No, it is not necessary to attach any documents with your income tax return. You are only obligated to submit documents if requested by the Income Tax Department.
  • Is it advisable to retain my documents even after completing the ITR filing for the current year?
    Generally, the Income Tax Department may request documents dating back six years prior to the current financial year. Therefore, it is recommended to retain your documents for at least this period. However, in certain special cases, the Income Tax Department may require documents from periods older than six years. Henceforth, we recommend retaining your documents till the time you possibly can.
  • Will the masterclass be live and pre-recorded?
    The classes will be live, and you will have access to recorded lectures for one week.
  • Will I receive study material?
    Yes, you will receive free access to study materials for a lifetime.
  • What is the price of a masterclass?
    The price varies for each class, but the starting price is only Rs. 99.
  • Are there any prerequisites to attend the masterclass?
    No, there are no prerequisites to attend the masterclass.
  • Will I receive a certificate?
    Yes, You will receive a signed certificate upon completion of the 2 hour masterclass.
  • Will I get a refund if I don’t end up attending the masterclass?
    No, once you have paid the registration fee, you are confirming your presence with our team, therefore no refund will be initiated
  • I have a full time job, not sure if I can make it. Will you be sharing recordings?
    Yes! You will have access to classes for a week in case you are unable to make it. You can learn post office hours too!
  • What is corporate tax planning?
    Corporate tax planning refers to the measures to reduce tax liabilities on registered companies. Most corporate houses rely on deductions such as health insurance of employees, office expenses, business transport, retirement planning, charitable contributions, and child care to reduce their tax liability.
  • What is tax planning in income tax?
    With tax planning, individual and business taxpayers can reduce their tax liability by claiming deductions, exemptions, and benefits. In India, tax planning can help them lower the amount payable to the income tax department every financial year. All they have to do is to seek help from an expert to plan ahead.
  • What are the objectives of tax planning for taxpayers?
    Tax planning is a crucial financial planning tool for individuals and business owners. Besides facilitating savings on taxes, it ensures that taxpayers adhere to the legal requirements and obligations of the Income Tax Act, of 1961. In the long run, they can save money, mitigate their tax burden, and prevent legal hassles.
  • How to save tax in business in India?
    Business owners in India can save taxes by adopting some savvy strategies from the start of the financial year. These include: Claiming deductions for business travel, utility expenses, medical insurance premium Hiring family members as employees Always deducting tax at the source Avoiding cash transactions Deductions for depreciation A tax planner is the best person to seek advice in this context.
  • How to save tax on business income?
    Saving tax on business income is not a complicated task, provided you do some tax planning from the start of the financial year. It includes keeping thorough records of business income and expenses, claiming genuine deductions, and ensuring authenticity at all times. Hiring a tax planner is also a wise move.
  • How to save tax deductions from your salary as an employee?
    Like business owners, salaried professionals in India can claim several deductions to reduce their tax liability. These include: House Rent Allowance Leave Travel Allowance Employee contribution to Provident Fund Standard deduction Pension Exemption u/s 89(1) A tax planner can guide you regarding additional deductions to maximise them.
  • How to save taxes in India?
    Whether you are a business owner, a salaried employee, or a self-employed professional in India, you can save your taxes with timely and proper tax planning. The best way to reduce your liability is by claiming legitimate deductions. Also, maintain proper accounts and records of income and expenses to stay on the right side of tax laws.
  • How to reduce income tax?
    Deductions are the key to reducing income tax in India, regardless of job or business. However, claiming deductions can get complicated because you need to validate them with proper evidence. Also, a financial and tax planner can guide you in reducing your tax burden.
  • How to save maximum income tax?
    Saving maximum income tax is about maximising your deductions. You can seek guidance from a tax planning expert to do it. However, it shouldn’t be a last-minute decision because timely planning is the best way to handle the complications.
  • Which instrument saves tax?
    In India, you can rely on several tax-saving instruments to reduce your liability and maximise your savings. These include: Equity-linked savings scheme Public provident fund Senior Citizen Saving Scheme Tax Saver Fixed Deposit (FD) National Pension Scheme (NPS) Unit Linked Insurance Plans (ULIP) National Savings Certificates (NSC) Life Insurance
  • How to reduce tax on income?
    You can save tax on income by utilizing deductions and exemptions under the Income Tax Act of India. You can also invest in tax-saving instruments to reduce your burden. A tax planner is the best person to show the way.
  • Will opting for a flexible benefit plan in salary reduce the take-home pay?
    Yes, a flexible benefit plan (FBP) can help employees reduce their tax burden. They have to declare FBP allowance and provide relevant receipts. Essentially, FBP components such as travel allowance and food allowance are non-taxable. Restructuring employees' CTC with these components can limit their tax rate without affecting the take-home salary
  • How to reduce income tax for a salaried person in India?
    Reducing income tax for a salaried person in India is as simple as claiming deductions and exemptions such as employee contribution to the Provident Fund, House Rent Allowance, Leave Travel Allowance, pension, and standard deduction.
  • How to save maximum tax for salaried employees in India?
    Besides claiming deductions and exemptions, a salaried employee in India can save maximum tax by investing in tax-saving instruments such as life insurance, PPF, NPS, ULIP, and FDs. A tax planner is the best person to seek advice regarding deductions and tax-saving instruments.
  • How to save tax in the new tax regime?
    With the new tax regime coming into effect in FY24, taxpayers can save taxes by paying attention to the changes and opportunities taxes. Planning your investments and claiming all tax deductions are the basics of minimising your liability. You can also leverage Section 80C investing in schemes qualifying for deductions, such as ELSS, NPS, PPF, etc. The maximum limit for Section 80C is ₹1.5 lakh.
  • What is the meaning of “Income from house property”?
    When you own a property, which may be a building, flat, house, bungalow, gala, factory building or a shop, it may or may not yield a rental income. Such income which you have received or could have received if the property was given on rent is subject to tax. This income is categorized under the head ‘Income from House Property’.
  • When can I have income from house property?
    Three conditions are necessary to bring income under the head, ‘Income from House Property’:
  • What is the meaning of ‘House Property’?
    ‘House Property’ implies ‘a building or buildings with lands connected thereto’. It means that it should be a superstructure which is capable of occupation, and the building must be the most prominent part of the said property comprising of land and building. Where the property comprises a mere vacant land or site, the income from that will not be brought under the head ‘Income from house property’ but will be assessed as income from ‘other sources’.
  • What is the meaning of self-occupied property (SOP)?
    A self-occupied property is the one which is used by the person for his own residential purpose. If the person owns more than one self-occupied property, then only one property will be treated as self-occupied and the other will be considered as the property which is deemed to be let out. Accordingly, income from house property shall be determined for both these properties.
  • I own the property and I have not given the property on rent. It is vacant. I don’t earn income from this property? Can there be a taxable income from such property?
    Yes. As per the Income tax law, if there is a property, there will be income. This income may be NIL or negative or positive. But there shall be income computed. The only exception to this rule is that ‘the property is occupied by the owner for the purpose of his business.’ Once there is a house property, the income from the same has to be computed as per the applicable provisions. This may result in NIL income or loss or taxable positive income. Based on this principle, the taxation of house property is different for ‘Self Occupied Property’, ‘Vacant Property’ and ‘Let out Property’.
  • I have rented a property from someone and since I could not occupy that property or could only partly occupy, I have sub-let the property to a third party in exchange for a receipt of income. Is this receipt taxed as house property income?
    The income or receipt can be taxed as ‘income from house property’ only when you own the property. This property is not owned by you and you are not entitled to legally receive income from such property. You are the tenant in the said property. Hence, the income received by you from sub-letting or partly sub-letting this property cannot be taxed as Income from House Property, but has to be taxed under ‘Income from other sources.’
  • I am not the owner of the land on which I have constructed the house. But as per municipal records, the house is in my name. Is the income taxable in my hands?
    You need not be the absolute owner of the house property. It will suffice if you are the beneficial owner and are entitled to receive the income from such house property. This income is liable to be taxed in your hands as income from house property.
  • Can rental income on a property be taxed in the hands of a person who is not a registered owner of the property?
    The income or receipt can be taxed as ‘income from house property’ only when you own the property and you are entitled to legally receive income from such property.
  • I have transferred my house property to my spouse through a gift. We are living together and not separated. In whose hands will income from the house property be taxed?
    In such a case, you shall be the owner of the house property and hence the income shall be taxed in your hands. (Section 27(i) of the I T Act)
  • I have transferred my house property to my spouse as per the terms of the agreement of living separately from each other. In whose hands will the income from the house property be taxed?
    As per section 27(i) of the IT Act, your spouse shall be the owner of the house property and hence the income shall be taxed in her/his hands, since the property stands transferred in connection with an agreement to live apart.
  • I have transferred my house property to my minor child who is not married. In whose hands will the income from the house property be taxed?
    As per section 27(i) of the IT Act, you shall be the owner of the house property and hence the income shall be taxed in your hands.
  • How is income from a house property as per the Income tax Act different from the ‘rental income’ received from house property?
    The rental income is received by a person against renting out of his property. The computation of income from house property is NOT solely dependent on this rental income. If you are not receiving rental income, it does not mean that there will be no income from House Property. The Income from house property is computed as per the relevant provisions of the Income tax Act after certain deductions from the rental income received by the person.
  • How is the income from house property computed?
    The income from house property is computed after making certain deductions to the annual value or annual lettable value of the property. The first and most important step is the computation of annual value (AV) or (ALV) of the said property. The steps for computation of net income from house property are:(img)
  • What is meant by the annual value of the property?
    This is the term used in the Income tax Act for computation of income from house property. It is the amount which can be yielded from the property in a year as income, as rent, service charges, etc. This is the starting point for computation of ‘income from house property’. This base value is used to make relevant additions/subtractions and then to compute the ‘income from house property’. The annual value of the property is actually the gross annual value (GAV) stated in the above example.
  • Under which head is the rental income from a shop charged to tax?
    Shop being a building, rental income received from a shop is charged under Income from House Property.
  • What is the Annual Lettable Value (ALV) of the property? How is it computed?
    • This is the amount for which a particular property is expected to be given on rent in a particular year OR an amount of potential rent. This is also known as ‘fair value of rent’, ‘expected amount of rent’, etc. • It is computed as annual value or Gross Annual Value (GAV) in case of the property which is vacant throughout the year. • It is higher of the following: • Municipal value of the property–It
  • How to compute the gross annual value (GAV) of the property which is vacant only for some time during the year? In such a case, the GAV of the property shall be the annual expected rent from the property. The annual expected rent of the property shall be computed in following manner, depending on whether or not the property is governed by The Rent Control Act:
    In such a case, the GAV of the property shall be the annual expected rent from the property. The annual expected rent of the property shall be computed in following manner, depending on whether or not the property is governed by The Rent Control Act: Does not fall under Rent Control Act Rent as per municipal valuation (A), Fair amount of rent (B), Expected Rent (C) = Higher of (A) or (B) Gross Annual Value = Expected Rent (C) Falls under Rent Control Act - Rent as per municipal valuation (A), Fair amount of rent (B) Expected Rent (C) = Higher of (A) or (B) Standard Rent (D) Gross Annual Value = Higher of (C) or (D) Thus, in case of a property not falling under Rent Control Act, the expected rent from a property shall be the Gross Annual Value of the property.
  • What is the meaning of presumptive taxation scheme?
    For small taxpayers generating business income or professional income, the Income Tax Law provides a scheme whereby you don’t need to keep and maintain books of account, if you declare business profits or professional profits above certain fixed percentage. This scheme is called as Presumptive Taxation Scheme (PTS).
  • What is the legal framework of presumptive taxation scheme?
    The presumptive taxation scheme is prescribed in the following sections of Income-tax Act ​ 1. Section 44AD - Small business having a turnover of less than Rs.2 crores Eligible business covered - Small business having a turnover of less than Rs.2 crores ​ 2. Section 44AD - Taxpayers engaged in any profession Eligible business covered - Taxpayers engaged in any profession ​ 3. Section 44AE - Small transporters having 10 or less vehicles Eligible business covered - Small transporters having 10 or less vehicles
  • Who is eligible to take advantage of the presumptive taxation scheme of section 44AD?
    Resident Individual. Resident Hindu Undivided Family. Resident Partnership Firm (not Limited Liability Partnership Firm). A person who has “NOT” made any claim towards deductions under section 10A/10AA/10B/ 10BA or under sections 80HH to 80RRB in the relevant year.
  • Which businesses are NOT eligible for a presumptive taxation scheme?
    The following businesses are not eligible for the presumptive taxation scheme: ​ A person who is carrying on any agency business A person who is earning an income of commission or brokerage Any business whose total turnover or gross receipts exceeds two crore rupees Business of plying, hiring, or leasing goods carriages referred to in sections 44AE
  • Can an insurance agent adopt the presumptive taxation scheme of section 44AD?
    A person who is earning income in the nature of commission or brokerage cannot adopt the presumptive taxation scheme of section 44AD. Insurance agents earn income by way of commission. Hence, they cannot adopt the presumptive taxation scheme of section 44AD.
  • Can a person engaged in a profession adopt the presumptive taxation scheme of section 44AD?
    No. He has to adopt the presumptive taxation scheme as given in section 44ADA and not in section 44AD.
  • Can a person whose total turnover or gross receipts for the year exceed Rs. 2,00,00,000 adopt the presumptive taxation scheme of section 44AD?
    No, a person whose total turnover or gross receipts for the year exceed Rs. 2,00,00,000 cannot adopt the presumptive taxation scheme of section 44AD.
  • If I don’t opt for a presumptive taxation scheme, how do I compute my taxable business income?
    For the purpose of computing taxable business income in the above manner, then you have to maintain books of account of the business, and income will be computed by deducting expenses from receipts as follows: ​ 1. Particulars - Turnover or gross receipts from the business Amount - XXXXX ​ 2. Particulars - Less: Expenses incurred in relation to earning of the income Amount - XXXX ​ 2. Particulars - Taxable Business Income Amount - XXXXX ​ ​In case, you are claiming any deductions from the business income, the same needs to be deducted from the business income before arriving at taxable business income.
  • What is the manner of computation of taxable business income in the case of a person adopting the presumptive taxation scheme of section 44AD?
    In the case of a person adopting the presumptive taxation scheme, the taxable business income shall be 8% or more of the turnover or gross receipts of the eligible business for the year. This rate shall be 6% for that portion of the turnover which is received through banking channels or other than cash.
  • Can I claim any further deductions from the income computed at 6% or 8% on a presumptive basis?
    No. The income computed at the given rates shall be the final taxable income on which you have to compute tax and no further deductions are allowed from this income.
  • If I adopt the presumptive taxation scheme of section 44AD, then am I required to maintain books of account as per section 44AA?
    No.
  • If I adopt the presumptive taxation scheme of section 44AD, then am I liable to pay advance tax in respect of income from business covered under section 44AD?
    In this case, you are required to pay advance tax once, i.e. on or before 15th March of a financial year. However, any amount paid by way of advance tax on or before 31st day of March shall also be treated as advance tax paid during the financial year ending on that day.
  • What will happen if I don’t pay advance tax?
    If you fail to pay the advance tax by 15th March of the previous year, you will be liable to pay interest as per section 234C.
  • What will happen if I opt for a presumptive taxation scheme (PTS) for small businesses but I declare the profit at the lesser percentage of turnover/receipts than that mandated as per the PTS (i.e. I declare profits at a rate lesser than 8%)?
    You can not opt for PTS if you are declaring profits at a rate lesser than the mandated rate. In such a case, you need to maintain the books of account and get them audited from a Chartered Accountant, and based on the report of such audit you have to declare income when filing returns.
  • If I adopt the PTS for a small business initially and then opt out of PTS in any of the subsequent five years, what will be the consequences?
    Once you opt for PTS then you have to continue with it for the next five years if your turnover is less than 2 crore rupees. Even after having a turnover of less than 2 crores in any of the subsequent five years if you declare profits lesser than 8% (or 6%), then it is considered as withdrawal from PTS, and you are barred from availing PTS for the next five years from the assessment year in which you had withdrawn from PTS.
  • Who is eligible to take advantage of the presumptive taxation scheme of section 44ADA?
    Any person resident in India, engaged in the following professions, and having a turnover of Rs.50 lacs or less are eligible to take advantage of PTS. ​ Legal Medical Engineering or architectural Accountancy Technical consultancy Interior decoration Any other profession as notified by CBDT
  • As a professional, I adopt the PTS. How should I compute my taxable business income?
    As a professional, if you adopt PTS, then your taxable income shall be 50% of your turnover or receipts. For example, if you have received receipts of, or your annual turnover is Rs.48 lacs, then you must declare taxable profits at 50% of such turnover i.e Rs.24 lacs.
  • If I adopt the presumptive taxation scheme of section 44AD, then am I liable to pay advance tax in respect of income from business covered under section 44AD?
    You are not required to pay advance tax in all the four quarters of a financial year but you are required to pay advance tax only once i.e. on or before 15th March of a financial year. However, any amount paid by way of advance tax on or before the 31st day of March shall also be treated as advance tax paid during the financial year ending on that day.
  • What will happen if I don’t pay advance tax?
    Clause(a) of section 15 provides that any Salary due from an employer or a former employer to an assessee in the previous year whether paid or not, is chargeable to income-tax under the head ‘Salaries’. In other words, the Salary accrued or which becomes due need not be actually paid in order to make it chargeable income. What is relevant is whether the Salary is due to an employee from an employer. Income from ‘Salary’ is chargeable to tax on “due basis” or “receipt basis” whichever is earlier.Clause(a) of section 15 provides that any Salary due from an employer or a former employer to an assessee in the previous year whether paid or not, is chargeable to income-tax under the head ‘Salaries’. In other words, the Salary accrued or which becomes due need not be actually paid in order to make it chargeable income. What is relevant is whether the Salary is due to an employee from an employer. Income from ‘Salary’ is chargeable to tax on “due basis” or “receipt basis” whichever is earlier.
  • What will happen if I opt for a presumptive taxation scheme (PTS) for the profession but I declare the profit at lesser percentage of turnover/receipts than that mandated as per the PTS (i.e. I declare profits at a rate lesser than 50%)?
    You cannot opt for PTS if you are declaring profits at a rate lesser than the mandated rate. In such case, you need to maintain the books of account and get them audited from a Chartered Accountant and based on the report of such audit, you have to declare income in the income tax return.
  • What is a presumptive taxation scheme (PTS) for transporters?
    What is a presumptive taxation scheme (PTS) for transporters? The PTS is available for persons who are engaged in the business of transport (plying and hiring) through goods vehicles and own 10 or lesser number of vehicles. In such cases, the taxable income shall be computed as follows: In the case of a Heavy Goods Vehicle (the gross vehicle weight exceeds 12 tons), the taxable income shall be Rs. 1,000 per ton of gross vehicle weight for every month or part of a month during which the heavy goods vehicle is owned by the assessee in the previous year. In the case of vehicles other than heavy goods vehicles, the income shall be Rs. 7,500 for every month or part of the month during which the carriage of the goods is owned by the assessee in the previous yea
  • Who is eligible to take advantage of the PTS of section 44AE and which business is eligible for the PTS under section 44AE?
    Everyone i.e. Individual, Firm, HUF, Company, etc. can take advantage of the presumptive taxation scheme of section 44AE and all businesses are also eligible for it.
  • Can a person who owns more than 10 goods vehicles adopt the presumptive taxation scheme of section 44AE?
    As per the presumptive taxation scheme of section 44AE, the income of a taxpayer will be computed at the rate of Rs. 7,500 per goods vehicle per month and in such a case the taxpayer can claim any further deductions from the presumptive income declaration. ​ As per the PTS of section 44AE, no expenses shall be allowed or disallowed. The income computed at the presumptive rate will be the final taxable income. However, in the case of the taxpayer is a partnership firm opting for the presumptive taxation scheme, the deduction can be claimed on account of remuneration and interest paid to partners (computed as per the Income-tax Act) from the income computed at the presumptive rate. No separate deduction on account of depreciation is available. However, the written down value of any asset used in such business shall be calculated as if depreciation as per section 32 is claimed and has actually been allowed.
  • If a person adopts the presumptive taxation scheme of section 44AE, then is he required to maintain books of account as per section 44AA?
    No
  • If I adopt the presumptive taxation scheme of section 44AE, then am I liable to pay advance tax in respect of income from business covered under section 44AE?
    Yes. In case of PTS for transporters, advance tax needs to be paid in all quarters and not only in last quarter unlike the PTS for section 44AD and 44ADA.
  • Can the bonds be owned jointly?
    Yes, this bond can be held in the name of a single holder as well as jointly. Keep in mind that even if you make separate applications, individually or jointly, the aggregate investment should not exceed Rs. 50 lakh, or both of you may lose the benefit under section 54EC. You will be able to avail a nomination facility on these bonds.
  • How is the interest earned on these bonds taxed?
    There is no tax deductible at source on the interest paid by these bonds. But the interest earned on these bonds is taxable. You will need to pay tax on the interest income as advance tax.
  • What is the risk in this investment?
    The bond comes with minimum risk and does not need daily monitoring. Moreover, you do not need to pay a commission to get the bond. The bond also comes with AAA/stable rating by Crisil Ltd and AAA(Ind)/(Affirmed) by Fitch.
  • What is the tenure of this bond?
    The NHAI /REC bond can be fully redeemed at maturity after three years. You cannot transfer these bonds in another person’s name. Also, it is a non-negotiable financial instrument, hence one should not expect to get money by keeping the bond as a security against any loan or advance, since this is not permitted.
  • What is the Interest rate on such bonds?
    Currently, an interest rate (coupon rate) of 6%, payable annually, is being offered on this bond annually on 1st April and final interest is payable at the time of maturity.
  • How much can you invest?
    You can invest a minimum of Rs. 10,000 and a maximum of Rs. 50 lakh. The face value is Rs. 10,000 per bond, so you can buy up to 500 bonds.
  • If I sell my asset situated outside India, can I claim exemption u/s 54EC
    Yes, provided you invest the amount in three year bonds issued by REC/NHAI. Want to know more about REC/NHAI Bonds?
  • What if I redeem the bonds issued by REC/NHAI before the period of three years after investment?
    In that case, the income from long term capital gains shall be taxed in the Assessment Year in which such redemption is done
  • Can I claim benefits u/s 54EC, 54 and 54F at the same time?
    The benefits of exemption u/s 54EC can be clubbed with those under either section 54 or 54F but not both.
  • Is Capital Gains Account Scheme applicable for exemptions u/s 54EC of the Act?
    No. It is applicable only to benefits under sections 54 and 54F
  • Is it possible to invest more than Rs.50 lakhs in the REC/NHAI bonds?
    No. After amendment in the Finance Act (No.2) 2014, it is not possible to invest more than Rs.50 lakhs for benefits under section 54EC of the Act. But you may consider investment u/s 54F or 54.
  • I wanted to invest in REC/NHAI bonds but they are not available in market at this time and hence I am not able to invest my funds. What to do?
    If bonds of assessee’s choice are not available throughout period of six months as provided under section 54EC, time to invest in bonds would get automatically extended till bonds are available in market; and assessee can purchase same and claim exemption under section 54EC accordingly.
  • I have invested the sale proceeds of a residential house in purchase of a house in the name of me and my wife. Am I eligible for the benefits?
    Section 54 does not explicitly state that the purchase to be made or the construction to be put up by the taxpayer should be in the name of the taxpayer. What is material is the investment of the sale consideration in acquiring the residential premises or constructing a residential premises. Once the sale consideration is invested in the above manner, the taxpayer would be entitled to the benefit conferred on him under this provision.
  • I have sold my house to a builder in exchange for a new house in a different building. There was no exchange of money or cash in the transaction. Am I eligible for benefits?
    Yes. The word ‘purchase’ in section 54 ordinarily means buying for a price or equivalent of price by payment in kind or adjustment towards an old debt or for other monetary consideration. There is no stress in the section on ‘cash and carry’.
  • I have purchased a flat from the builder through an agreement to purchase. The payments are being done as per the stage of construction. I have not received the possession of the said flat within two years and I have not registered a sale deed for purchase of a new flat/house from the builder. Am I eligible?
    Yes. Agreement to purchase coupled with substantial payments is enough for claim of exemption. The date of possession is more important than the date of sale deed or purchase deed. However, if possession is beyond your control, you can claim so before the Assessing Officer (AO).
  • I am getting the house constructed from builder/contractor. Am I eligible for exemption?
    Yes. The taxpayer himself may not be required to construct the house.
  • Can I include the cost of the plot on which I am constructing a new house in computing exemption benefits?
    Yes. As per CBDT Circular 667 (dated 18.10.1993), the cost of the plot purchased for construction of a new house can be included for computation of benefits u/s 54 of the Act.
  • I have sold my residential house and invested the entire proceeds in purchase of a new house from a builder for which an agreement to sale is registered. However, the builder has not given possession of the flat. Am I eligible for benefits?
    Yes. The key condition is utilization of sale proceeds for investment in a new residential house. If you could demonstrate that the delayed possession is beyond your control and you have paid substantial amounts to the builder, you are eligible for benefits u/s 54 of the Act.
  • I have demolished my old residential house and given the plot for development to a developer to construct a residential complex out of which I will receive some apartments. Am I eligible for exemption?
    No. Since you have demolished the said building yourself and what you sold is actually your rights in the land, you may not be eligible for benefits under section 54 of the Act.
  • Can I start the construction of a NEW residential house before I sell my existing house?
    GST-Calendar-Jan-2020-taxbuddy-comIn this case, you will NOT be eligible for exemption under section 54 of the Act.
  • What is the time limit for construction of a new residential house from the time of sale of original house?
    In order to be eligible for the benefit under this section the NEW house must be constructed within a period of THREE years AFTER the sale of original asset.
  • What is the time limit for purchase of a new residential house from the time of sale of original house?
    In order to be eligible for the benefit under this section the NEW house must be purchased within a period of ONE year BEFORE or TWO years AFTER the sale of original asset.
  • What does the ‘appurtenant land’ in section 54 mean?
    The benefit under this section is applicable in case of profit from sale of a residential house with appurtenant land. This means the ‘house’ has the prominent weight-age. If the land exists so as to serve the purpose of residential house, then it is an appurtenant land, like verandah, garden, or compound which exists so as to serve the purpose of a residential structure. In case an insignificant residential quarter exists on a large open plot, the said structure does not qualify for the purpose of a residential house within the meaning of sec. 54 of the Act.
  • What is the position in case of a sale of a house owned by a firm but which was occupied by partners for residential purposes?
    The firm can not claim the benefit u/s 54. However, if the property owned by a firm was ocupied by partners for residence and on dissolution of the firm, partners sell their share of the property, they may exercise the option of benefit under this section.
  • What is Capital Gains Account Scheme?
    If you have a profit from sale of a residential house and you have not invested such profits before filing return of income or before due date of RoI, then such an amount of capital gains needs to be deposited in the Capital Gains Account Scheme before due date of RoI and whenever the assessee purchases a new residential house, this amount can be withdrawn with permission from the Assessing Officer.
  • Can I claim exemption u/s 54EC & 54EE along with section 54?
    Yes. You can claim exemption under all these sections together, but you have to exhaust exemption under section 54 first, since it doesn’t have a ceiling limit which is present in the other two.
  • Is the exemption valid in case of residential house purchased outside India?Is the exemption valid in case of residential house purchased outside India?
    No. The section specifically mentions that the new asset being a residential house must be acquired in India.
  • Can exemption can be claimed u/s 54 and 54F when capital gains from transfer of multiple properties are invested in a single residential property?
    If other conditions as regards time limit etc. are fulfilled, exemption under section 54 is allowable where capital gains arising from sale of two residential houses are invested in a single residential house.
  • My capital gain is worked out at an amount more than actual profit I earned in the sale of my asset because of application of section 50C of the Income tax Act. Am I eligible for exemption of such deemed capital gains in entirety?
    Yes. Where capital gain is assessed on notional basis under section 50C, whatever amount is invested in new residential house within prescribe