TAX VIC

Income Tax Refund on TDS: When and How You Can Get It (With ITR Types Explained)

TAXVIC — Thu, 19 Jun 2025 09:17:07 +0000

Each year, many salaried individuals, freelancers, small business owners, and even senior citizens receive an income tax refund after filing their ITR. This refund is primarily due to excess TDS (Tax Deducted at Source) being collected by banks, employers, or clients during the year. If your actual tax liability is lower than the TDS deducted, you’re eligible for a refund.

But who gets this refund, when, and through which ITR form should you claim it? This blog breaks down everything you need to know about TDS refunds, ITR types, and the refund process.

1. What Is a TDS Refund?

TDS is the amount of tax deducted by the person or organization paying you income (e.g., employer, bank, client). This deduction is deposited with the Income Tax Department against your PAN if the amount being given to you exceeds a certain limit. It can be for different types of payment made to you like professional income, contractual income interest income etc

However, if your total TDS exceeds your total tax liability for the year, you can claim the excess amount as a refund by filing your ITR.

2. Who Can Claim TDS Refunds?

Anyone who has paid excess tax during the financial year—either through TDS, TCS, Advance Tax, or Self-Assessment Tax—and whose total liability is lower than the taxes paid can claim a refund.

Common Examples:

Salaried individuals
Freelancers and consultants whose clients deducted TDS @ 10% or @ 2% but actual income tax liability was lower due to deductions or lower slabs.
Senior citizens earning interest income, where banks deducted 10% TDS despite income being below the basic exemption limit.
NRIs earning from Indian bank deposits with TDS @ 30% but actual taxable income below that.

Investors paying TDS on dividends or mutual fund redemptions but having capital loss carryforwards or low taxable income.

3. Types of ITR Forms and Refund Eligibility

Here’s a simplified view of which ITR forms are used to claim TDS refunds based on the taxpayer type:

ITR Form	Applicable To	Refund Eligible?
ITR-1	Salaried individuals, pensioners, interest income	Yes
ITR-2	Individuals with capital gains, foreign income/assets	Yes
ITR-3	Professionals, freelancers, business income (non-presumptive)	Yes
ITR-4	Individuals under presumptive taxation (Section 44ADA/44AE)	Yes
ITR-5/6	Firms, LLPs, Companies	Yes

No matter which form applies, refunds are auto-calculated when you file your ITR and will be credited to your bank account (provided it’s pre-validated on the income tax portal).

4. Common Situations Where Refund Arises

Salaried Person With 80C/80D/80G Claims Not Declared to Employer

If you forgot to submit proof of LIC premium, PPF, medical insurance, or donations to your HR, extra TDS may be deducted. You can claim it while filing ITR and get a refund.

Freelancer Earning Less Than Tax Slab but Client Deducts TDS

Clients deduct 10% or 2% TDS even if your income is ₹3–4 lakh/year (below exemption limit). In such cases, you can claim a full refund of the TDS amount.

Senior Citizens Not Filing Form 15H

If a bank deducts 10% TDS on FD interest for a senior citizen earning below ₹3 lakh (or ₹5 lakh for very senior citizens), a refund is due unless Form 15H was filed.

Investors With Capital Losses or Carry forwards

If mutual fund redemptions attract TDS, but you have capital losses carried forward or your total gain is exempt (under ₹1 lakh LTCG), you can claim a refund.

Excess Advance Tax or Self-Assessment Tax Paid

Sometimes, taxpayers estimate and pay higher advance tax or self-assessment tax before filing. If final computation shows overpayment, refund can be claimed.

5. How to Claim the Refund

Step-by-Step:

File your Income Tax Return correctly using the appropriate form.
Mention all TDS details in Schedule TDS/TCS or Tax Paid.
Enter your pre-validated bank account for receiving refund.
Submit and e-verify the ITR (using Aadhaar OTP, net banking, etc.).
Refund will be processed by CPC, Bangalore, and credited usually in 15–45 days, unless your ITR is under scrutiny.

Note: TAX VIC HELP YOU FILE ITR AND CLAIM YOUR INCOME TAX REFUND LEGALLY.

6. How to Track Your Refund

Login to Income Tax Portal → Go to “View Filed Returns”
You’ll see the status like: “Processed with Refund”, “Refund Issued”, or “Under Processing”

7. FAQs About TDS Refund

Q: Is interest paid on income tax refund?
Yes, if refund is delayed beyond 90 days from ITR processing, interest u/s 244A is paid.

Q: What if refund is not credited?
Check if your bank account is pre-validated. If not, update and reprocess refund through “Refund Reissue Request”.

Q: Can I revise my return if I missed refund details?
Yes, you can file a revised return before the due date (typically 31st Dec of AY).

Final Thoughts

A large number of taxpayers, especially first-time freelancers, salaried individuals, and senior citizens, often miss claiming legitimate refunds. The key is:

Match Form 26AS and AIS with actual income
Ensure all deductions and exemptions are claimed
File ITR using the right form and validate your bank account

Smart Tip: Even if your income is below taxable limits, you should file ITR if TDS has been deducted—you’ll get that money back!

The post Income Tax Refund on TDS: When and How You Can Get It (With ITR Types Explained) appeared first on TAX VIC.

From April 22, 2025: 1% TCS on Luxury Goods Above ₹10 Lakh – What Buyers & Sellers Need to Know (with GST Impact)

TAXVIC — Wed, 18 Jun 2025 06:21:59 +0000

Starting April 22, 2025, the Income Tax Department has implemented a new tax compliance measure: 1% TCS (Tax Collected at Source) is now applicable on luxury goods priced above ₹10 lakh. This rule is aimed at tracking high-value purchases, improving transparency, and widening the tax base.

However, there’s another layer to consider: GST (Goods and Services Tax), which is already applicable on such luxury items at high rates (often 18–28%). Let’s understand the full tax impact—TCS + GST—and how it affects both buyers and sellers.

What is the New TCS Rule?

Effective Date: April 22, 2025
Applicable On: Sale of luxury goods above ₹10 lakh per invoice
Rate: 1% of the sale value (collected by seller)
Collected From: Buyer and deposited by the seller under the buyer’s PAN
Claimable: Yes, the buyer can claim this TCS as credit in their income tax return

What are “Luxury Goods”?

The following goods are notified

Wrist watches
Art pieces such as antiques, paintings, and sculptures
Collectibles such as coins and stamps
Yachts, rowing boats, canoes, and helicopters
Sunglasses
Bags such as handbags and purses
Shoes
Sportswear and equipment such as golf kit and ski-wear
Home theatre systems
Horses for horse racing in race clubs and polo.

Full Tax Impact: GST + TCS

Let’s break it down with an example:

Example: Buying a Designer Watch worth ₹12,00,000

Base Price: ₹12,00,000
GST @ 18%: ₹2,16,000
TCS @ 1% on Base Price: ₹12,000
Total Invoice Value (incl. GST): ₹14,16,000
Total Amount Paid (incl. TCS): ₹14,28,000

Note: TCS is over and above the GST amount.

Can the Buyer Claim GST Input Tax Credit (ITC)?

Yes, but with a condition:

For business use: If you are a GST-registered buyer purchasing luxury goods for business use, you may claim Input Tax Credit (ITC) on the GST component (₹2,16,000 in this case), provided the goods are not classified under blocked credits under Section 17(5) of the CGST Act.
For personal use: If the purchase is for personal consumption, ITC is not allowed.

So, if you’re a professional or business buying luxury items for office décor, resale, or gifting (with proper documentation), you may be eligible to claim ITC.

What About TCS?

TCS is not part of GST. It is an income tax credit, which means:

It will reflect in your Form 26AS
You can claim it while filing your ITR
It will be adjusted against your total income tax payable or refunded if not required

Key Considerations for Buyers:

Increased Upfront Payment: You’ll now pay GST + TCS, which increases cash outflow even if TCS is refundable.
Use Banking Channels: To avoid scrutiny, make large purchases through traceable modes like bank transfers or cards.

Keep Your PAN Handy: It’s mandatory for TCS reporting.

What Should Sellers Do?

Charge and Collect 1% TCS on all qualifying invoices.
Deposit TCS using the buyer’s PAN.
Issue Form 27D (TCS Certificate) to buyers.
Continue to charge GST as usual, and file GSTR-1/3B along with TCS returns.

Final Words

With this new rule, luxury purchases now come under dual tax compliance—GST under indirect tax laws, and TCS under income tax laws. This reflects the government’s broader push for transparency and monitoring of high-value spending.

If you’re a high-value consumer or a luxury goods dealer, make sure your compliance, invoicing, and documentation are fully updated.

Frequently Asked Questions (FAQs) about TCS on luxury goods

According to an Income tax Department circular released on April 24, 2025, here are the details:

Q.1 What changes were brought in section 206C(1F) of the Income Tax Act, 1961 through Finance (No. 2) Act, 2024?

Answer: Earlier, Section 206C(1F) provided for collection of tax at source (TCS) on sale of motor vehicles of value exceeding Rs 10 lakh. Vide Finance (No. 2) Act, 2024, section 206C(1F) was amended to provide that TCS will also be levied on any other goods of value exceeding Rs 10 lakh, as may be notified by the Central Government in the Official gazette.

Q.2 Which are the luxury goods of value exceeding Rs 10 lakh on which TCS will be levied?

Answer: Vide CBDT Notification No. 36/2025 dated 22.4.2025 SO 1825(E), the following goods of the value exceeding ten lakh rupees have been notified for collection of tax at source as specified in sub-section (1F) of section 206C of the Act –

Serial number	Nature of goods
1.	Any wrist watch
2.	Any art piece such as antiques, painting, sculpture
3.	Any collectibles such as coin, stamp
4.	Any yacht, rowing boats, canoes, helicopters
5.	Any pair of sunglasses
6.	Any bag such as handbag, purse
7.	Any pair of shoes
8.	Any sportswear and equipment such as golf kit, ski-wear
9.	Any home theatre system
10.	Any horse for horse racing in race clubs and horse for polo

Q.3 Will the TCS will be levied on sale of a single item of the notified goods of value exceeding Rs 10 lakh?

Answer: Yes, TCS will be levied on sale of a single item of the goods of the nature specified in the above table which is of the value exceeding Rs 10 lakh.

Q.4 When will the new provisions become effective from?

Answer: The new provisions will become effective from the date of publication of notification i.e. 22.04.2025.

Can the buyer be held in default if the seller of specified luxury goods does not deduct TCS?

The accountability is on the seller, as it is the responsibility of the seller to deduct and deposit TCS on high value specified luxury items is on the seller of goods . Therefore the buyer is not at fault. If the seller after collecting the TCS did not deposit the same with the government, he shall be liable for penalty not the buyer.

What is the rate of TCS on specified luxury goods?

TCS will be collected by the seller of such specified luxury goods at 1% rate on the entire value (of any of the notified items) so long as the sale consideration exceeds Rs 10 lakh.

TCS is not an extra tax, it’s an advance tax which can be claimed at the time of income tax return (ITR) filing. Once the seller collects TCS from you, they will deposit it with the government and also file a TCS return intimating that he collected TCS against your PAN. Once the TCS amount is deposited against your PAN, then you can use it to claim an income tax credit and pay a lower tax in the ITR filing.

The post From April 22, 2025: 1% TCS on Luxury Goods Above ₹10 Lakh – What Buyers & Sellers Need to Know (with GST Impact) appeared first on TAX VIC.

GST Amendment Deadline for FY 2024–25: What You Can Fix Before 30th November 2025

TAXVIC — Fri, 13 Jun 2025 05:47:51 +0000

Introduction:

As the financial year 2024–25 progresses, businesses must keep one critical compliance date in mind:
30th November 2025 — the last date to rectify, amend, or add entries related to GST returns for FY 2024–25.

In this blog, we’ll break down:

What changes are allowed in GSTR-1 and GSTR-3B
What’s not allowed
How to avoid mismatches with Income Tax Returns
Pro tips for smooth GST reconciliation

What Amendments Are Allowed Till 30th November 2025?

1. GSTR-1 (Outward Supplies Return)

GSTR-1 allows invoice-level corrections, including:

Amendments you can make:

Wrong invoice number, date, or taxable value
Wrong GSTIN of the buyer
Wrong tax rate applied
Corrections in export invoices like port code, shipping bill no., or value

Additions you can make:

Completely missed invoices from FY 2024–25
Missed export or SEZ supplies
Omitted credit/debit notes

Tip: Use the correct financial year while adding missing invoices. Even if added later, they should reflect in books of FY 2024–25.

2. GSTR-3B (Summary Return)

While you can’t amend a specific month’s 3B once filed, you can:

Report missed outward supply turnover (e.g., zero-rated exports)
Adjust Input Tax Credit (ITC) if claimed short or excess
Declare liabilities or reverse ITC in the current month’s return

Tip: Make proper working notes to match adjusted entries with books & ITR.

What’s Not Allowed After 30th November 2025

Amendments related to FY 2023–24 or earlier
Claiming ITC for FY 2024–25 invoices after 30th Nov 2025
Adding invoices to GSTR-1 without correct financial year tagging
Editing monthly 3B retroactively – changes only via future months

Example Scenario

Let’s say your business received GST registration in Feb 2025 but had export turnover of ₹20 lakhs in Apr–Jan.

You can:

Add these zero-rated export invoices now in June/July 2025 GSTR-1
Report the amount under Table 3.1(b) of GSTR-3B

This ensures alignment with your ITR, avoiding mismatch notices.

Why This Date Matters for You

ITC Deadline: 30th Nov 2025 is also the final date to claim ITC for FY 2024–25.
Reconciliation Deadline: Any mismatch with 26AS, ITR, or financials can invite audit scrutiny or notices.
Clean Annual Return (GSTR-9): Fixing errors now helps avoid disputes while filing the GSTR-9.

Pro Tips for Businesses

Maintain a reconciliation tracker between books, GSTR-1, and 3B
Review invoices for correctness before GSTR-9
Add any missed export or SEZ invoices now
File voluntary disclosure letter if large discrepancies occurred

Conclusion

Don’t miss the 30th November 2025 GST amendment deadline for FY 2024–25. Use this window to correct errors, report missed sales, and claim any missed ITC. Staying proactive now can save your business from future GST queries or tax mismatches.

The post GST Amendment Deadline for FY 2024–25: What You Can Fix Before 30th November 2025 appeared first on TAX VIC.

Transfer Pricing Compliance for Foreign Subsidiary in India: Complete Guide for 2025

TAXVIC — Thu, 12 Jun 2025 05:16:53 +0000

Introduction

As India becomes a key market for global businesses, many multinational enterprises (MNEs) set up foreign subsidiaries in the country. However, when these subsidiaries engage in transactions with their parent company or other related entities abroad, Transfer Pricing (TP) regulations under Indian Income Tax Law come into play.

Failure to comply with TP rules can lead to audits, penalties, and serious reputational damage. In this blog, we explain Transfer Pricing compliance requirements for foreign subsidiaries operating in India, key deadlines, documentation needs, and how to stay audit-ready.

What is Transfer Pricing?

Transfer Pricing refers to the pricing of goods, services, and intangibles between related parties (also called associated enterprises or AEs) across international borders.

The Indian subsidiary and its foreign parent are considered associated enterprises, and any intercompany transaction between them must be conducted at Arm’s Length Price (ALP) — i.e., the price that would be charged if the parties were unrelated.

Who is Covered Under Transfer Pricing Regulations in India?

A foreign subsidiary in India is required to comply with TP regulations if it has international transactions with:

- Its foreign parent company

Other group companies or sister concerns abroad

Types of Transactions That Attract TP Rules

Nature of Transaction	Examples
Sale/Purchase of Goods	Raw materials, finished goods
Services Rendered	IT, R&D, support services
Royalty or License Fee	Use of trademarks, patents
Loans or Guarantees	Intercompany funding
Cost Sharing	Shared management, admin costs

Even a single rupee of international transaction can trigger TP compliance.

Transfer Pricing Compliance Checklist for Foreign Subsidiary

1. Maintain TP Documentation (Rule 10D)

You must prepare three-tier documentation:

- Local File (Indian entity-specific)
- Master File (group-level info, if applicable)

CBCR (Country-by-Country Report, only if global revenue > ₹6400 crore)

2. Benchmarking Study

Justify that your intercompany transactions are at ALP using methods like:

Comparable Uncontrolled Price (CUP)
Transactional Net Margin Method (TNMM)
Cost Plus / Resale Price Method, etc.

3. Form 3CEB Filing

Mandatory for all entities with international transactions
Certified by a Chartered Accountant
Filed on or before 31st October following the end of financial year

4. Form 3CD Disclosure

Annexure to Tax Audit Report

Requires disclosures of TP transactions

Penalties for Non-Compliance

Default	Penalty
Not maintaining documentation	2% of transaction value
Not filing Form 3CEB	₹1,00,000
Incorrect ALP reporting	Up to 100%–200% of tax underreported
Not furnishing CBCR (if applicable)	₹5,00,000 and more

Case Study: SaaS Subsidiary in India

A US-based tech company opens an Indian subsidiary to provide software development support. The Indian entity charges a fixed monthly service fee to the parent.
They must benchmark the fee using TNMM and file Form 3CEB with proper documentation to prove it’s at arm’s length. Missing this can trigger TP audit.

Common Mistakes by Foreign Subsidiaries

Treating related party pricing casually
Using generic third-party agreements as proof
Delayed or missed Form 3CEB filings
Ignoring master file or CBCR thresholds
Inadequate documentation in case of scrutiny

How TaxVic Can Help You Stay Compliant

At TaxVic, we help foreign subsidiaries in India by offering:

- Benchmarking study and intercompany agreement drafting
- Form 3CEB filing and documentation under Rule 10D
- Support during TP audit or notice

Strategic planning to reduce TP risk and optimize tax

Conclusion

Transfer Pricing compliance is not just a tax formality — it’s a critical component of risk management for foreign subsidiaries in India. With increasing digitization and AI-driven scrutiny by tax authorities, ensuring accurate reporting and strong documentation is a must.

File smart. Stay compliant. Avoid penalties.

FAQs

Is TP compliance required if my foreign subsidiary only provides back-office services?
Yes, if it receives payments from the foreign parent or any AE, compliance is mandatory.
What if I miss the 3CEB deadline?
A penalty of ₹1,00,000 may apply, and increased scrutiny is likely.
Is TP applicable on loans or capital infusion?
Yes, especially on interest rate charged or waived.

4. Can I do TP study later if I’m not audited?
No. TP documentation must be maintained proactively before due date.

The post Transfer Pricing Compliance for Foreign Subsidiary in India: Complete Guide for 2025 appeared first on TAX VIC.

FC-GPR (Foreign Currency-Gross Provisional Return): Complete Guide for Indian Companies and Foreign Investors

TAXVIC — Wed, 11 Jun 2025 05:43:38 +0000

Introduction

India has become a hotspot for foreign direct investment (FDI), especially in startups, tech, manufacturing, and financial services. When a company in India receives investment from a foreign entity or individual in exchange for equity shares, it must report this transaction to the Reserve Bank of India (RBI). This reporting is done through the FC-GPR form — a critical compliance requirement under FEMA (Foreign Exchange Management Act), 1999.

In this blog, we’ll simplify what FC-GPR is, when and how to file it, documents required, and common mistakes to avoid.

What is FC-GPR?

FC-GPR stands for Foreign Currency-Gross Provisional Return. It is a form filed by an Indian company to report FDI received against the issuance of shares or convertible debentures or preference shares to a foreign investor.

FC-GPR is filed on the FIRMS portal (Foreign Investment Reporting and Management System) maintained by the RBI.

When is FC-GPR Required?

You must file FC-GPR when:

Your Indian company receives foreign investment in equity shares, CCPS (compulsorily convertible preference shares), or CCD (compulsorily convertible debentures).
Shares are allotted to the foreign investor.

Timeline: FC-GPR must be filed within 30 days from the date of allotment of securities.

Step-by-Step Process to File FC-GPR

1. Registration on the FIRMS Portal

Register your entity and Authorised Dealer (AD) Bank.
Appoint a business user who will access the portal.

2. Login and Create FC-GPR

Navigate to the “Single Master Form” under FIRMS.
Select the FC-GPR option and begin filling in investment details.

3. Fill Key Sections

Basic company information
Investment details (amount, nature of securities)
Valuation details
Remittance certificate details

4. Upload Required Documents

(See next section)

5. Submit to AD Bank

The AD Bank verifies the form before it goes to RBI.

Documents Required for FC-GPR Filing

Document	Purpose
Board Resolution	Approving share allotment
FIRC (Foreign Inward Remittance Certificate)	Proof of money received
KYC from AD Bank	Identity of foreign investor
Valuation Certificate	From a CA or registered valuer
Declaration by Director	Regarding compliance
Share Allotment Report	Details of securities allotted

Key Regulatory Framework

Governed by FEMA, 1999
RBI Master Direction on Reporting under FDI Scheme
Companies Act, 2013 (for share allotment compliance)

Penalty for Non-Compliance

Failure to file FC-GPR within 30 days may attract penalties under FEMA:

Compounding proceedings
Monetary fines
Reputational risk

Tips to Ensure Smooth Filing

Keep all documents ready before filing
Don’t wait till the last day — start early
Coordinate closely with your AD Bank
Engage a qualified CA or compliance expert for valuations and technical support

Real-World Use Case

Let’s say a startup in Bangalore raises $500,000 from a US-based venture capital firm. After allotting equity shares, the company has 30 days to file FC-GPR through the FIRMS portal. Missing this deadline could result in hefty penalties and affect future rounds of funding.

How TaxVic Can Help

At TaxVic, we specialize in end-to-end FDI compliance — from startup registration, share allotment, to FC-GPR filings. Whether you are a foreign investor or an Indian entity receiving foreign capital, our team ensures timely and error-free reporting to RBI.

Conclusion

Filing FC-GPR is not just a regulatory formality — it’s a legal obligation. With increasing scrutiny from RBI and the ED (Enforcement Directorate), it’s vital for Indian businesses to treat FDI compliance seriously.

Stay compliant. Stay investor-ready.

FAQs

Who is responsible for filing FC-GPR?
The Indian company receiving the FDI.
What happens if the investor sends money but shares are not allotted?
FC-GPR filing isn’t triggered unless shares are allotted.
Can FC-GPR be revised once filed?
Only if the AD Bank rejects it and asks for corrections.

4. Is valuation certificate mandatory?
Yes, in all cases except rights issue.

The post FC-GPR (Foreign Currency-Gross Provisional Return): Complete Guide for Indian Companies and Foreign Investors appeared first on TAX VIC.

How to E-Verify Income Tax Return for FY 2024-25 (AY 2025-26)

TAXVIC — Tue, 10 Jun 2025 09:14:04 +0000

Filing your Income Tax Return (ITR) is only half the job done. To complete the process, you must e-verify your return within 30 days of submission. Without verification, your ITR is not valid—which can lead to penalties or even a notice from the Income Tax Department.

In this blog, we’ll show you how to e-verify your ITR online for the Financial Year 2024-25 (Assessment Year 2025-26) using various methods provided by the Income Tax e-Filing portal.

Why is E-Verification Important?

Mandatory step after filing the ITR
Validates the authenticity of your return
Avoids penalties or ITR rejection
Quick and paperless process

Deadline to E-Verify ITR for AY 2025-26

You must e-verify your return within 30 days of filing it online.
For example, if you filed your ITR on July 10, 2025, you must e-verify it by August 9, 2025.

6 Methods to E-Verify Your ITR Online

1. Aadhaar OTP

Link your Aadhaar with your PAN.
Go to e-Filing portal > ‘e-Verify Return’
Choose “Aadhaar OTP”
Enter OTP sent to your registered mobile

Most popular and fastest method

2. Net Banking

Login to your bank’s net banking
Select the Income Tax e-Filing option
It redirects you to the portal
Choose the return and click “e-verify”

Works with banks like SBI, HDFC, ICICI, Axis, etc.

3. Bank Account EVC

Pre-validate your bank account on the portal
Request Electronic Verification Code (EVC)
Enter EVC sent to your registered mobile/email

4. Demat Account EVC

Similar to bank account method
Must pre-validate your Demat account
Use EVC for verification

Useful for stock market investors

5. Digital Signature Certificate (DSC)

Recommended for company or audit cases
Register your DSC on the portal
Attach and e-verify via emSigner

Not for regular salaried taxpayers

6. Offline Option – Send Signed ITR-V

Download and print ITR-V
Sign it and post to:
CPC, Income Tax Department, Bengaluru – 560500

Must reach CPC within 30 days of filing

Step-by-Step Guide: How to E-Verify ITR via Aadhaar OTP

Go to https://www.incometax.gov.in
Login using your PAN and password
Click on “e-File” > “Income Tax Returns” > “e-Verify Return”
Select the ITR you want to verify
Choose “Verify using OTP on mobile number registered with Aadhaar”
Enter the 6-digit OTP
Done! You will get a confirmation message.

What Happens if You Don’t E-Verify?

Your return is not processed
You may face penalties or legal notices
Tax refund (if any) will be delayed or denied

FAQs on ITR E-Verification

Can I e-verify after 30 days?
A. No. Your ITR will be considered invalid unless condonation is granted by the department.
Can I verify someone else’s return using my Aadhaar OTP?
A. No, the Aadhaar OTP must belong to the taxpayer.
Do I need to e-verify if I have sent ITR-V physically?
A. No, either e-verification OR physical submission is needed—not both.

Final Thoughts

E-verification is the final step in completing your ITR filing process for FY 2024-25 (AY 2025-26). It’s quick, digital, and can be done in just 2 minutes using Aadhaar OTP or Net Banking. Don’t delay—verify within 30 days to ensure your return is processed smoothly.

If you need help with filing or verifying your ITR, TaxVic can do it for you—accurately and stress-free.

Need Help with ITR Filing or E-Verification?

Let experts at TaxVic handle your income tax filing, verification, and compliance—all under one roof.

Contact us today at www.taxvic.com or DM us on Instagram @taxvic.in

The post How to E-Verify Income Tax Return for FY 2024-25 (AY 2025-26) appeared first on TAX VIC.

Customized Package for Post-Incorporation Compliance Services of a Private Limited Company

TAXVIC — Mon, 09 Jun 2025 07:19:47 +0000

Setting up a private limited company in India is just the first step. Once incorporated, many founders and directors are surprised to discover that post-incorporation compliance is where the real work—and responsibility—begins.

Ignoring or missing these compliance requirements can lead to penalties, disqualification of directors, or even legal trouble. That’s why TaxVic offers affordable, customized packages to handle your company’s post-incorporation compliance, giving you peace of mind and letting you focus on growing your business.

Let’s break down what’s involved.

Why Post-Incorporation Compliance Matters

Once your Certificate of Incorporation arrives, several legal, financial, and regulatory obligations kick in automatically. These aren’t optional—they are mandatory under the Companies Act, 2013.

Key reasons why post-incorporation compliance is critical:
Avoids late fees, penalties, and legal actions
Maintains your company’s active status with the Ministry of Corporate Affairs (MCA)
Builds trust with investors, banks, and clients
Keeps directors safe from personal liability
Ensures smooth audits, funding rounds, or future company exits

What’s Included in a Customized Compliance Package?

At TaxVic, we know that one size doesn’t fit all. That’s why we create tailored packages depending on your company’s size, activity level, and growth plans.

Here’s what a typical post-incorporation compliance package covers:

Mandatory Registrations

PAN & TAN application (if not applied during incorporation)
GST registration (if turnover exceeds limits or if needed for interstate trade)
Professional Tax registration (if applicable in your state)
Shops & Establishment registration (if you have an office setup)
ESI/PF registration (if you plan to hire employees)

Statutory Filings & Records

Preparing and filing Form INC-20A (Declaration of Commencement of Business)
Drafting share certificates and updating the statutory register
Holding the first board meeting and documenting minutes

Appointment of the auditor (Form ADT-1) within 30 days of incorporation

Ongoing Compliance Setup

Setting up accounting systems and ledger templates
Guidance on director duties and board responsibilities
Setting up company bank accounts and linking with compliance systems
Drafting essential company policies (like employment contracts, NDAs, etc.)

Annual Compliance Calendar

Reminders and preparation for:
- Annual General Meeting (AGM)
- Filing Form AOC-4 (financial statements) and MGT-7 (annual return)
- DIR-3 KYC updates for directors
- Income tax filing and advance tax tracking

Why Choose TaxVic’s Customized Packages?

Here’s what makes our compliance packages stand out:

Tailored to Your Needs
We don’t dump generic services. We assess your business model, industry, and plans to build the right checklist.

Affordable, Transparent Pricing
No hidden charges. You pay only for what you need—whether it’s a basic startup compliance set or a full-scale corporate package.

Expert Guidance
With TaxVic, you get a dedicated compliance manager who will track deadlines, handle filings, and answer your queries.

Seamless Digital Experience
We provide digital records, online reminders, and client dashboards so you’re always in control without drowning in paperwork.

Future-Ready Planning
Our team advises not just on today’s needs, but also on what’s coming—like fundraising, ESOP planning, or international trade compliance.

Final Thoughts

Post-incorporation compliance isn’t just a legal formality—it’s the backbone of a healthy, growing company. Whether you’re a startup founder, a solo entrepreneur, or an experienced business owner, TaxVic’s customized compliance packages make sure you stay compliant, penalty-free, and investor-ready.

Want to know which package fits your company best?
Contact TaxVic today for a free consultation and get a tailored compliance roadmap for your private limited company.

The post Customized Package for Post-Incorporation Compliance Services of a Private Limited Company appeared first on TAX VIC.

What Are the Advantages of Having a Private Limited Company by an Individual? A Comparison Between LLP and Private Limited Company

TAXVIC — Fri, 06 Jun 2025 12:28:56 +0000

For many entrepreneurs in India, choosing the right legal structure is the first big decision when starting a business. While sole proprietorships or partnerships are common at a small scale, once you want credibility, scalability, or external investment, you need to look at structured entities like Private Limited Companies (Pvt Ltd) or Limited Liability Partnerships (LLP).

But which one is better for an individual starting or growing their business? Let’s break it down.

Advantages of a Private Limited Company (Pvt Ltd)

Even if owned by a single individual (with a second shareholder as a formal requirement), a Pvt Ltd company offers several unique benefits:

Limited Liability
Your personal assets are protected. Even if the business faces losses, your liability is limited to the amount invested in shares.

Separate Legal Identity
A Pvt Ltd company is treated as a separate legal entity under Indian law. It can own property, sue, or be sued in its own name.

Ease of Raising Funds
Banks, venture capitalists, and angel investors prefer Pvt Ltd companies because they have structured governance, clear shareholding, and transparent compliance.

Perpetual Succession
The company exists beyond the life or involvement of its owners. Even if shareholders or directors change, the business continues smoothly.

Better Credibility
Clients and partners often view Pvt Ltd companies as more professional and reliable compared to informal or unregistered setups.

Tax Benefits & Planning
A Pvt Ltd company is taxed at a flat rate, and there are multiple ways to plan taxes effectively—such as director’s salaries, d.

Global Expansion Ready
If you ever want to raise international funds, sign cross-border contracts, or expand globally, a Pvt Ltd company is the preferred structure.

How Does LLP Compare with Private Limited Company?

Let’s look at a direct comparison:

Feature	Private Limited Company	LLP (Limited Liability Partnership)
Legal Identity	Separate legal entity	Separate legal entity
Ownership	Shareholders + Directors	Partners
Minimum Members	2 shareholders, 2 directors	2 partners
Compliance	Higher (mandatory ROC filings, board meetings)	Lower compliance, fewer formal meetings required
Fundraising	Easier (VCs, angels prefer shares)	Limited; LLPs can’t issue shares
Taxation	Corporate tax rate (plus dividend tax, if declared)	LLP tax rate; profits taxed directly in LLP’s hands
Transferability	Shares can be transferred (with restrictions)	Ownership transfer is complex; needs partner consent
Credibility	Generally higher in market	Moderate; seen as professional but smaller in scale
Global Appeal	High; suited for international expansion	Lower; less recognition globally
Cost of Setup	Slightly higher (due to stamp duty, incorporation)	Slightly cheaper to set up

Which One Should an Individual Choose?

If you are:
Looking to raise investment → Private Limited is the clear winner.
Planning a scalable, long-term business → Go Pvt Ltd.
Running a small, tightly controlled professional practice → LLP may suit you.
Wanting minimum compliance & no external funding → LLP is simpler.

However, many successful founders still pick Pvt Ltd even if they are starting alone because they want the flexibility to add shareholders, issue ESOPs, and scale up later.

Final Thoughts

At TaxVic, we always remind clients that legal structure matters. It’s not just paperwork—it defines how you raise funds, plan taxes, protect your assets, and position your brand.

If you’re confused between LLP and Pvt Ltd, or want to fast-track your incorporation, reach out to our team. We guarantee affordable yet highly professional services to get your company off the ground smoothly.

Want to set up your Private Limited Company today?
Book your consultation with TaxVic now!

The post What Are the Advantages of Having a Private Limited Company by an Individual? A Comparison Between LLP and Private Limited Company appeared first on TAX VIC.

TDS on Foreign Remittances under LRS – What Freelancers and Travelers Must Know

TAXVIC — Thu, 05 Jun 2025 13:06:20 +0000

In recent years, the Indian government has tightened its grip on foreign remittances made by individuals under the Liberalised Remittance Scheme (LRS). Whether you’re a freelancer paying for software tools, a student paying fees abroad, or a traveler booking an international holiday, the TDS (Tax Deducted at Source) rules under Section 206C(1G) of the Income Tax Act may apply to you.

In this blog, we break down what LRS is, how TDS on foreign remittances works, the updated rules as of FY 2023–24, and what freelancers, remote workers, and global travelers must watch out for.

1. What is the Liberalised Remittance Scheme (LRS)?

The LRS allows Indian residents to send up to USD 250,000 per financial year per person abroad for:

Travel
Education
Investment in foreign stocks or property
Gift/donation to relatives
Maintenance of relatives abroad
Subscription to foreign software or tools (common for freelancers)

All such outward remittances are reported by banks to the RBI and Income Tax Department.

2. TDS Under Section 206C(1G): An Overview

Introduced in October 2020 and updated in July 2023, this section mandates that banks/authorised dealers collect TDS on certain types of foreign remittances.

TDS Rates under LRS (FY 2023–24 onwards):

Purpose of Remittance	TDS Rate	Threshold
For education or medical treatment	5%	Above ₹7 lakh
If education loan is taken (Section 80E)	0.5%	Above ₹7 lakh
For other purposes (travel, investment, etc.)	20%	No threshold
For overseas tour packages	20%	No threshold

Note: If PAN is not provided, TDS can be charged at higher rates under Section 206AA.

3. How This Affects Freelancers and Remote Workers

If you’re a freelancer paying for foreign services, such as:

Canva Pro, Adobe, Figma
Hosting services (e.g., Bluehost, AWS)
International business tools (Zoom, Notion, etc.)

And the payment is being made via bank remittance or credit card, TDS at 20% may be applied if routed through LRS.

However, due to representations from taxpayers, the government excluded international credit card payments from LRS tracking for now (as per clarification in May 2023).

So, card-based payments up to ₹7 lakh/year may not face TDS. But anything beyond this could be questioned, and banks may apply TDS if routed through formal LRS.

4. How It Affects Travelers and Students

International Travelers:

If you book a foreign tour package (through an Indian travel agent or website), the provider must collect 20% TCS (tax collected at source), regardless of amount.
If you make payments directly for flight/hotel (not part of tour), LRS TDS may apply above ₹7 lakh.

Students Studying Abroad:

If remittance is for tuition fees, 5% TDS applies above ₹7 lakh.
If you take an education loan from a financial institution, TDS is only 0.5% above ₹7 lakh.

You can claim this TDS as credit while filing ITR, or claim refund if your actual tax liability is lower.

5. Real-Life Example

Example 1: Freelancer Subscribing to Tools

A freelance designer paid ₹3.5 lakh in FY 2024–25 for subscriptions to Figma, Adobe, and other SaaS tools via wire transfer. Her bank deducted TDS @ 20% = ₹70,000 and issued a certificate.

What she did: She claimed this as TDS credit in her ITR and got most of it refunded as her total tax liability was lower.

Example 2: Student Going Abroad for Master’s

A student remitted ₹10 lakh to a US university for tuition. Since this exceeded ₹7 lakh, the bank deducted TDS @ 5% = ₹15,000.

What he did: He included the TDS in his ITR and used it to offset his total tax dues.

6. How to Track and Claim TDS on LRS

Ask your bank/authorised dealer for TDS certificate (Form 16A) if they deduct tax on your remittance.
The amount should reflect in your Form 26AS and AIS.
You can then claim it in your ITR under the TDS/TCS Schedule.

Always keep invoices and purpose proof for any foreign payment made under LRS.

7. Common Misunderstandings

Myth	Fact
Credit card payments are exempt from LRS	Only up to ₹7 lakh per year. Large card payments may be monitored
TDS under LRS is a final tax	No, it’s adjustable against your final tax liability
Only businesses need to worry about LRS	Even individuals making personal payments are covered
No TDS on gifts to relatives	20% TDS applies if total exceeds limit and is for non-medical/educational reasons

8. Final Thoughts

Foreign remittances are now under close watch through AIS, bank reports, and Form 26AS. Freelancers, professionals, and international students must understand their TDS liability under LRS before making large outward payments.

Smart Tip: Where possible, use Indian payment gateways, check for GST invoicing, and plan your foreign spending across family members to avoid breaching limits.

The post TDS on Foreign Remittances under LRS – What Freelancers and Travelers Must Know appeared first on TAX VIC.

Common ITR Filing Mistakes That Trigger Income Tax Notices – With Real-Life Examples

TAXVIC — Wed, 04 Jun 2025 13:02:13 +0000

Filing your Income Tax Return (ITR) is not just about declaring income—it’s about declaring it correctly. Many taxpayers, including salaried individuals, freelancers, and property owners, receive notices from the Income Tax Department because of small but costly errors in their returns.

In this blog, we’ll explore the most common ITR mistakes, explain how they trigger tax notices, and share real examples (anonymized) from actual assessments. If you’re serious about staying compliant and avoiding scrutiny, read this carefully.

1. Mismatch Between ITR and AIS/TIS or Form 26AS

The Mistake:

You forget to include income that appears in your Annual Information Statement (AIS) or Form 26AS (e.g., interest from FD, foreign remittance, or property sale).

What Notice You’ll Get:

Notice under Section 143(1)(a) – Proposed adjustment for mismatch
Notice under Section 148 – Income escaping assessment (reopening)

Real Example:
A salaried employee forgot to report ₹65,000 interest from a fixed deposit. His AIS showed it, but he ignored it thinking TDS already covered it. Result? A 143(1)(a) notice and demand for differential tax + interest.

Tip: Always reconcile your AIS and TIS with your ITR before submission.

2. Using the Wrong ITR Form

The Mistake:

Filing ITR-1 even when you have capital gains, foreign income, director status, or foreign assets—all of which disqualify you from using ITR-1 or ITR-4.

What Notice You’ll Get:

Notice under Section 139(9) – Defective return
ITR gets treated as invalid if not corrected in time.

Real Example:
A freelancer earning both professional fees and selling mutual funds filed ITR-4. He received a 139(9) defective return notice because capital gains are not allowed in ITR-4.

Tip: Choose the correct ITR form. When in doubt, use ITR-3 or ITR-2 (they cover more cases).

3. Not Reporting Foreign Assets or Income

The Mistake:

You are a resident taxpayer, but fail to disclose foreign bank accounts, stocks, or property under Schedule FA.

What Notice You’ll Get:

High-risk cases may get notices under the Black Money Act or foreign assets scrutiny
Could lead to penalties of ₹10 lakh per year of non-disclosure

Real Example:
An NRI who became a resident again in India in FY 2022-23 didn’t report a dormant US brokerage account. In FY 2023-24, he received a compliance query from the IT Department regarding foreign assets in his AIS.

Tip: If you’re a resident, report all foreign assets—even if no income is earned.

4. Not Reporting Income from Freelancing or Side Gigs

The Mistake:

You earn money from Upwork, Fiverr, teaching, or Instagram collaborations, but don’t declare it thinking “it’s small” or “already taxed by the client.”

What Notice You’ll Get:

143(1)(a) adjustment or 148 notice
Often flagged via AIS (foreign payments or domestic TDS deductions)

Real Example:
A software developer earning ₹18 lakh from a foreign client didn’t report it, assuming the money was received via PayPal and not taxable. He got flagged in AIS under “foreign remittances” and received a Section 148 notice.

Tip: Declare all global income if you’re a resident, even if no TDS was deducted.

5. Not Filing ITR at All When It’s Mandatory

The Mistake:

Skipping ITR filing assuming “I had no tax to pay” or “TDS was already deducted.”

When It’s Wrong:

Your gross income is above basic exemption limit
You want to carry forward losses
You did high-value transactions (credit card > ₹10L, property > ₹30L, etc.)

What Notice You’ll Get:

Non-filer compliance notices or CASS scrutiny

Real Example:
A salaried individual didn’t file ITR thinking TDS already handled his taxes. But he had gains from shares (short-term) worth ₹1.2 lakh. Since TDS didn’t apply, the ITD noticed and sent a compliance query.

Tip: TDS doesn’t absolve you from filing. You must file ITR if you cross any mandated criteria.

6. Claiming Wrong or Inflated Deductions

The Mistake:

Claiming deductions (like Section 80C, 80D, HRA, interest on housing loan) without valid proofs.

What Notice You’ll Get:

143(1)(a) adjustment or full-blown scrutiny assessment under Section 143(2)

Real Example:
A consultant claimed ₹1.5 lakh under 80C for ELSS investments but had only invested ₹80,000. His return was flagged, and he had to provide proof during e-proceedings.

Tip: Keep every deduction backed by a valid document. Don’t overclaim.

7. Ignoring Capital Gains from Mutual Funds or Shares

The Mistake:

Selling mutual funds or shares and not declaring capital gains
Thinking “it’s under ₹1 lakh so no need to report” (for LTCG on equity)

What Notice You’ll Get:

148 Notice – Income escaping assessment
Or mismatch alerts in AIS

Real Example:
An investor sold shares for ₹5 lakh, incurring a LTCG of ₹1.8 lakh. He didn’t report it, thinking the broker pays the tax. AIS captured it, and he was served a 148 notice the next year.

Tip: Even exempt income or gains under threshold must be disclosed in the correct schedule.

Final Thoughts: Don’t Invite a Notice – File Smart

Income Tax notices can be avoided by simply:

Reconciling AIS/Form 26AS with your ITR
Choosing the right ITR form
Reporting all incomes honestly
Keeping documentation handy

If you get a notice, don’t panic. Most are routine and can be resolved if handled correctly and timely. But better yet, avoid errors at the source.

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