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Missed the Belated Return Deadline? Here’s Your Guide on Filing ITR After December 31st

Introduction:

As the repercussions of the recently passed Belated Income Tax Return deadline continue to be felt, there’s a silver lining for those who failed to meet the initial cutoff. The prospect of redemption presents itself in the shape of the Revised Income Tax Return, affectionately referred to as ITR-U. This blog strives to act as your guide through the intricate terrain of tax filing, offering a detailed understanding of the purpose, eligibility prerequisites, and a systematic, step-by-step approach to submitting an ITR-U.

Understanding ITR-U: Let’s decode the acronym. ITR-U, or the Updated Income Tax Return, is your ticket to rectify any errors or omissions made during the initial filing process. You have a window of two years from the end of the financial year, extending until March 31, 2026, to set things right. However, it’s crucial to note that ITR-U comes with some constraints; taxpayers cannot reduce income, claim refunds, increase losses, or introduce new losses during this process.

Who Can File ITR-U?

The eligibility criteria for ITR-U extend to anyone who stumbled upon errors or omissions in their original, revised, or belated tax returns. It serves as a safety net, allowing individuals to correct inadvertent mistakes.
Any taxpayer can file an updated return u/s 139 (8A) whether he has furnished/not furnished an original return.

Who is Not Eligible to File ITR-U? Not everyone can ride the ITR-U wave. The following scenarios deem ITR-U inapplicable:

If an Updated Return has already been filed.
For those seeking tax refunds.
Individuals filing a NIL ITR.
When filing an updated return results in reduced income tax liability.

How to File ITR-U Form:

Download the Relevant ITR Form:

Begin your journey by choosing and downloading the utility of the applicable ITR form (ITR1/2/3/4, etc.) for each of the three years from the official Income Tax Department’s website.

Fill in the Details:

Armed with the ITR form, embark on the data-filling journey. Detail your income from diverse sources, deductions claimed, and taxes paid for each of the three years.

Compute Tax Liability:

With the details in place, leverage online tax calculators to compute your tax liability for each year.

Pay Pending Taxes:

Before submitting your ITR, settle any outstanding taxes for the three years. The Income Tax Department’s website offers a seamless online payment gateway for your convenience.

File the ITR Form:

Once the information is meticulously filled, and any pending taxes are cleared, proceed to file the ITR for each of the three years online on the official Income Tax Department’s website.

Verify the ITR:

The journey concludes with the verification of your ITR. This can be done using your Aadhaar card, net banking, or by dispatching a physical copy of the ITR-V to the Income Tax Department.

Conclusion:

Submitting an ITR-U can serve as your guiding light in case you’ve overlooked the extended deadline. Navigating the complex terrain of tax obligations, it’s crucial to recognize that filing ahead of the deadline is the optimal approach. Taking a proactive stance in managing your financial responsibilities not only ensures compliance but, more importantly, provides tranquility. Stay well-informed and stay proactive for a peace of mind.

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23 FebAllTaxation

Filing Taxes as an NRI: A Guide to Relevant Returns and Forms

Navigating the Indian income tax filing process as a non-resident Indian (NRI) can be intricate due to specific regulations and forms. This comprehensive guide aims to condense crucial information, highlighting the essential returns and forms that NRIs must be familiar with to ensure a seamless tax compliance experience.

Income Tax Returns for NRIs

The main income tax return forms relevant for NRIs are:

ITR-1 – This is for resident and non-resident individuals having total income up to Rs.50 lakhs from salaries, one house property, interest, family pension, etc. This simplest ITR form cannot be used by NRIs having income from business/profession or capital gains.

ITR-2 – This return form is for individuals and HUFs not having income from business or profession. All types of incomes applicable for NRIs can be reported in this form like rental income, capital gains, foreign assets/incomes, etc. It is applicable for non-resident individuals with income over Rs.50 lakhs.

ITR-3 – This is applicable for NRIs having income under the head “Profits and Gains from Business or Profession”. So any NRI with turnover above the threshold limit (Rs.10 lakhs or Rs.25 lakhs depending on business type) has to file ITR-3 regardless of overall income levels.

The major challenge is to identify which ITR form correctly matches the NRI’s income profile. So they should carefully assess their various income sources before selecting the applicable ITR.

Key Forms to be Furnished by NRIs

Apart from income tax returns, NRIs may also be required to furnish other forms and declarations such as:

Form 12BB – For providing investment/exemption details to employers for TDS calculations
Form 16/16A – Tax deduction certificate from employer/clients to track TDS credits
Form 26AS – Consolidated annual tax statement from IT Department
Form 10E – For income tax relief on salary arrears/advance
AIS – Annual Information Statement received via email from IT Dept
Form 3CB-3CD: Tax audit report from chartered accountant
Form 3CEB: CA certificate for international transactions
Form 3CE: CA certificate regarding royalty/FTS income

The deadline for submitting audit forms (No.6, 7 & 8 mentioned above) is one month prior to the due date for filing ITR. Failure to comply with this requirement may result in penalties ranging from Rs.1-2 lakhs, depending on the duration of the default.

Navigating the complexities of NRI tax filing can be daunting. Therefore, staying informed about the latest regulations and seeking professional expertise can prove beneficial in optimizing tax liability.

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23 FebAllTaxation

Understanding Residential Status Under Indian Income Tax Law

The determination of an individual’s residential status under Indian income tax law is a crucial factor influencing their tax liability, whether they are categorized as a resident or non-resident. Section 6 of the Income Tax Act, 1961, outlines essential rules for establishing residential status:

1. Resident An individual satisfies the basic conditions to be considered a resident if:

They are in India for at least 182 days in the relevant financial year.

They are in India for at least 60 days (120 days for NRIs with income over Rs 15 lakhs) in the relevant financial year AND at least 365 days in the preceding 4 years. For NRIs/PIOs visiting India with income under Rs 15 lakhs, this 60 day rule is relaxed to 182 days.

2. Non-Resident
An individual who does not meet the above residential status tests would be considered a non-resident. They are subject to different tax treatment than residents.

3. Deemed Resident There is also a concept of “deemed resident” under Section 6(1A) for Indian citizens with income over Rs 15 lakhs who do not meet the basic resident conditions but are not liable to tax in any other country.

To illustrate these rules, the document provides some examples. An Indian citizen staying for 54 days in India with income over Rs 15 lakhs would be deemed a resident since they do not pay tax anywhere else. However, a PIO visiting India for 181 days with income below Rs 15 lakhs would be a non-resident since they fail the 182 day test applicable to them instead of the regular 60 day rule.

Establishing residential status can become intricate due to numerous exceptions and special circumstances. Generally, being a resident for tax purposes in India is determined by substantial time spent in the country or maintaining strong connections, as demonstrated by previous visits. Individuals with limited presence, primarily for temporary reasons, are categorized as non-residents.

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23 FebAllTaxation

Liberalised Remittance Scheme (LRS)

The Liberalized Remittance Scheme (LRS) is a scheme introduced by the Reserve Bank of India (RBI) that allows resident individuals in India to remit a certain amount of money abroad for various purposes without seeking prior approval from the RBI. The LRS aims to facilitate resident individuals to diversify their investment portfolio and engage in international financial transactions.

The LRS can be used for a variety of purposes, including travel, education, medical treatment, gifts, maintenance of relatives abroad, and investment in stocks and real estate outside India.

Under the Liberalised Remittance Scheme, all resident individuals, including minors, are allowed to freely remit up to USD 2,50,000 /- per financial year (April – March) for any permissible current or capital account transaction or a combination of both. Further, resident individuals can avail of foreign exchange facility for the purposes mentioned in Para 1 of Schedule III of FEM (CAT) Amendment Rules 2015, dated May 26, 2015, within the limit of USD 2,50,000 only.

Purposes under FEM (CAT) Amendment Rules, 2015, under which a resident individual can avail of foreign exchange facility:

Individuals can avail of foreign exchange facility for the following purposes within the LRS limit of USD 2,50,000 on financial year basis:

Private visits to any country (except Nepal and Bhutan)
Gift or donation
Going abroad for employment
Emigration
Maintenance of close relatives abroad
Travel for business, or attending a conference or specialised training or for meeting expenses for meeting medical expenses, or check-up abroad, or for accompanying as attendant to a patient going abroad for medical treatment/ check-up
Expenses in connection with medical treatment abroad
Studies abroad
Any other current account transaction which is not covered under the definition of current account in FEMA 1999.

The AD bank may undertake the remittance transaction without RBI’s permission for all residual current account transactions which are not prohibited/ restricted transactions under Schedule I, II or III of FEM (CAT) Rules, 2000, as amended or are defined in FEMA 1999. It is for the AD to satisfy themselves about the genuineness of the transaction, as hitherto.

However, for the purposes i.e., Emigration, Expenses in connection with medical treatment abroad & Studies abroad, the individual may avail of exchange facility for an amount in excess of the limit prescribed under the Liberalised Remittance Scheme as provided in regulation 4 to FEMA Notification 1/2000-RB, dated the 3rd May, 2000 (here in after referred to as the said Liberalised Remittance Scheme) if it is so required by a country of emigration, medical institute offering treatment or the university, respectively:

LRS scheme for NRIs

The LRS scheme applies to the residents of India, and thus, the remittance takes place through a savings account. Non-Residential Indians are not supposed to have any savings accounts in Indian banks. Thus, they cannot remit funds from India, but they are permitted to transfer funds from NRO, NRE, and FCNR accounts abroad as per the regulations and requisite documentation:

They are permitted to transfer up to USD 10,000 from an NRO account.
No limitations apply to payments made from an NRE or FCNR account.
The Liberalised Remittance Scheme has made it simpler for Indian citizens to manage financial transactions abroad.
You can use the funds for debt repayment, education, and other needs. You can also invest outside of India, which is a great method of diversifying your investment portfolio.

Tax on Liberalised Remittance Scheme (LRS)

LRS- Remittance for	TCS rate with effect from 01.10.2023
	Exemption Limit	Rate
a) Education abroad If the amount being remitted out is a loan obtained from any approved financial institution.	7 Lakhs	0.5%
b) Education abroad if the remittance is out of own funds and not out of loans as mentioned in (a) above	7 Lakhs	0.5%
c) Medical treatment	7 Lakhs	5%
d) Any other such as gift, emigration, family maintenance, investments etc	7 Lakhs	20%
e) Purchase of overseas tour program package	Nil	5% till Rs. 7 lakhs. 20% Above Rs. 7 lakhs.

# 1/3rd reduced for Land value.

Form 15CA and Form 15CB

Conditions under New GST Rate for the Builders:

Form 15CA and 15CB which does not require RBI approval will NOT be required to be furnished by an individual for remittance.
List of payments of specified nature mentioned in Rule 37BB, which do not require submission of Forms 15CA and 15CB, has been expanded from 28 to 33 including payments for imports.
Form No.15CB will only be required for payments made to non-residents, which are taxable and if the payment exceeds Rs.5 lakh.

A person responsible for making a payment to a non-resident or to a foreign company has to provide the following details:

When payment made is below Rs 5 lakh: For such payments information is required to
be submitted in Part A of Form 15CA

When payment made exceeds Rs 5 lakh:

Following documents is required to be submitted:

Part B of Form 15CA has to be provided
Certificate in Form 15CB from an accountant
Part C of Form 15CA

When the payment made is not chargeable to tax under IT Act: Part D of Form 15CA is required to be submitted.

In the following cases, no submission of information is required:

The remittance is made by an individual and it does not require prior approval of Reserve Bank of India [as per the provisions of section 5 of the Foreign Exchange Management Act, 1999 (42 of 1999) read with Schedule III to the Foreign Exchange (Current Account Transaction) Rules, 2000] T
The remittance is of the nature specified in the list below:

Overall list of payments where no forms 15CA and 15CB are required are as follows (Rule 37BB):

S.No	Nature of Payment
1	Indian investment abroad -in equity capital (shares)
2	Indian investment abroad -in debt securities
3	Indian investment abroad-in branches and wholly owned subsidiaries
4	Indian investment abroad -in subsidiaries and associates
5	Indian investment abroad -in real estate
6	Loans extended to Non-Residents
7	Advance payment against imports
8	Payment towards imports-settlement of invoice
9	Imports by diplomatic missions
10	Intermediary trade
11	Imports below Rs.5,00,000-(For use by ECD offices)
12	Payment- for operating expenses of Indian shipping companies operating abroad.
13	Operating expenses of Indian Airlines companies operating abroad
14	Booking of passages abroad -Airlines companies
15	Remittance towards business travel.
16	Travel under basic travel quota (BTQ)
17	Travel for pilgrimage
18	Travel for medical treatment
19	Travel for education (including fees, hostel expenses etc.)
20	Postal Services
21	Construction of projects abroad by Indian companies including import of goods at project site
22	Freight insurance – relating to import and export of goods
23	Payments for maintenance of offices abroad
24	Maintenance of Indian embassies abroad
25	Remittances by foreign embassies in India
26	Remittance by non-residents towards family maintenance and savings
27	Remittance towards personal gifts and donations
28	Remittance towards donations to religious and charitable institutions abroad
29	Remittance towards grants and donations to other Governments and charitable institutions established by the Governments.
30	Contributions or donations by the Government to international institutions
31	Remittance towards payment or refund of taxes.
32	Refunds or rebates or reduction in invoice value on account of exports
33	Payments by residents for international bidding.

Parts of Form 15CA

The form is divided into four parts, to be filled based on the scenario that is prevalent at the time. The four parts are:

Part A

To be filled irrespective of whether taxable or not and the remittance or its aggregate does not exceed Rs. 5 lakh in a financial year.

Part B

To be filled when the Certificate under Section 195(2)/195 (3)/197 of the Income Tax Act has been obtained from the Assessing Officer.

Part C

To be filled when the remittance or its aggregate exceeds Rs. 5 lakh in a financial year and that remittance is chargeable to tax.

Part D

Is filled when as per the domestic laws, the remittance is not chargeable to tax.

Illustrations:

1. Arjun wants to get his heart surgery done at United Kingdom. Up to what limit Foreign Exchange can be drawn by him and what are the approvals required?

2. Mr. Rana, an Indian Resident individual desires to obtain Foreign Exchange for the following purposes:

(A) US$ 120,000 for studies abroad on the basis of estimates given by the foreign university.

(B) Gift Remittance amounting US$ 10,000.

Whether he can get Foreign Exchange and if so, under what condition(s)?

Remittance of Foreign Exchange for studies abroad: Foreign exchange may be released for studies abroad up to a limit of US $ 250,000 for the studies abroad without any permission from the RBI. Above this limit, RBI’s prior approval is required. Further proviso to Para I of Schedule III states that individual may be allowed remittances exceeding USD 250,000 based on the estimate received from the institution abroad. In this case since US $ 120,000 is the drawal of foreign exchange, so permission of the RBI is not required.

Gift remittance exceeding US $ 10,000: Under the provisions of Section 5 of FEMA 1999, certain Rules have been made for drawal of foreign exchange for current account transactions. Gift remittance is a current account transaction. Gift remittance exceeding US $ 250,000 can be made after obtaining prior approval of the RBI. In the present case, since the amount to be gifted by an individual, Mr. Rana is USD 10,000, there is no need for any permission from the RBI.

Declared for residential use to Regulatory Authority Part of a Residential Real Estate Project (RREP) where commercial apartment carpet area is <=15% of total

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08 FebAllTaxation

GST Implications for Real Estate

The Indian real estate sector has complex Goods and Services Tax (GST) implications based on project and apartment type. This article summarizes GST rates and definitions for key real estate terms.

Residential Apartments face 5% GST (without input tax credit) if the following conditions are met:

Declared for residential use to Regulatory Authority
Part of a Residential Real Estate Project (RREP) where commercial apartment carpet area is <=15% of total

Commercial Apartments face 18% GST (with input tax credit)

Affordable Housing Units up to 60 sq.mts (645 sq.ft) in metro cities or 90 sq.mts (969 sq.ft) in other cities, with value <= 45 Lakhs face 1% GST (without input tax credit).

Real Estate Projects (REPs) refer to development of apartments for sale. Gross value of an apartment includes construction cost, land cost, preferential location charges, development charges, parking charges, etc.

When can resolution be sought under DRP?

The entry of international businesses into the Indian market not only expands the avenues for tax collection in the country but also underscores the need for a robust Revenue department capable of effectively addressing growing disputes. The Finance Bill of 2009 introduced an extra avenue to aid in the resolution of transfer pricing matters through the establishment of the Dispute Resolution Panel (DRP).

The DRP serves as an Alternative Dispute Resolution (ADR) mechanism specifically designed for addressing disputes pertaining to Transfer Pricing in International Transactions. Its establishment aims to ensure the prompt and equitable resolution of cases in a fair and just manner.

GST Rate for Builders for the supply of Residential or commercial projects:

Project Type	Rate of tax	ITC
Affordable Residential	1.5%*2/3=1%	No
Non-Affordable Residential	7.5%*2/3=5%	No
Pure Commercial	18%*2/3=12%	Available

# 1/3rd reduced for Land value.

GST Rate for Builders for the supply of Residential and commercial projects:

Project type	REP where Commercial Apartment is < =15% of Total Carpet Area		EP where Commercial Apartment is >15% of Total Carpet Area
	Rate of tax	ITC	Rate of tax	ITC
Affordable Residential	1.5%*2/3=1%	No	1.5%*2/3=1%	No
Non-Affordable Residential	7.5%*2/3=5%	No	7.5%*2/3=5%	No
Pure Commercial	7.5%*2/3=5%	No	18%*2/3=12%	Available

Conditions under New GST Rate for the Builders:

Do not avail of Input tax credit and the same report is ineligible in GSTR 3B
 GST has to be paid on the transfer of Development Rights under RCM by the
Builder
 At least 80% of Procurement should be bought from registered vendors other than
TDR, long-term lease premium, salami, FSI, electricity, high-speed diesel, motor
spirit, and natural gas.
 GST has to be paid @18% on purchases from an unregistered person when the
purchases fall less than 80% rule other than cement. For cement GST rate @ is 28%.

GST on Joint Development Agreement(JDA):

JDA for Builder Perspective:

Area Sharing Agreement

Nature of project	Rate of tax	Conditions
Sold units before completion certificate [CC] / Occupancy Certificate [OC]. Sale of Flats – GST levy	7.5%*2/3=5% (Forward Charge)	Amount to be collected from Customer. No ITC
Unsold Units after completion certificate [CC] / Occupancy Certificate [OC]. Sale of Immovable property, No GST levy. However, the same portion of amount to be paid for the Transfer of Development Rights	7.5%*2/3=5% (Reverse Charge)	It should be paid by the Builder from his own pocket. No ITC

JDA for Landowner Perspective:

Nature of project	Rate of tax	Conditions
Sold units before completion certificate [CC] / Occupancy Certificate [OC]. Sale of Flats – GST levy	7.5%*2/3=5% (Forward Charge)	Amount to be collected from Customer. ITC Available
Unsold Units after completion certificate [CC] / Occupancy Certificate [OC]. Sale of Immovable property, No GST levy. However, the same portion of amount to be paid for the TDR’s	NIL GST Levy	Treated as Immovable Property ITC to be reversed since the services are exempted
Development Rights which are to be paid by the Builder	NIL GST Levy	Exempted for Builder ITC is to be reversed since the services are exempted

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Missed the Belated Return Deadline? Here’s Your Guide on Filing ITR After December 31st

Missed the Belated Return Deadline? Here’s Your Guide on Filing ITR After December 31st

Introduction:

Who Can File ITR-U?

Who is Not Eligible to File ITR-U? Not everyone can ride the ITR-U wave. The following scenarios deem ITR-U inapplicable:

How to File ITR-U Form:

Download the Relevant ITR Form:

Fill in the Details:

Compute Tax Liability:

Pay Pending Taxes:

File the ITR Form:

Verify the ITR:

Conclusion:

Categories

Filing Taxes as an NRI: A Guide to Relevant Returns and Forms

Filing Taxes as an NRI: A Guide to Relevant Returns and Forms

Income Tax Returns for NRIs

Key Forms to be Furnished by NRIs

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Understanding Residential Status Under Indian Income Tax Law

Understanding Residential Status Under Indian Income Tax Law

Categories

Liberalised Remittance Scheme (LRS)

Liberalised Remittance Scheme (LRS)

Purposes under FEM (CAT) Amendment Rules, 2015, under which a resident individual can avail of foreign exchange facility:

LRS scheme for NRIs

Tax on Liberalised Remittance Scheme (LRS)

Form 15CA and Form 15CB

Conditions under New GST Rate for the Builders:

Overall list of payments where no forms 15CA and 15CB are required are as follows (Rule 37BB):

Parts of Form 15CA

Illustrations:

GST Implications for Real Estate

GST Implications for Real Estate

Residential Apartments face 5% GST (without input tax credit) if the following conditions are met:

Affordable Housing Units up to 60 sq.mts (645 sq.ft) in metro cities or 90 sq.mts (969 sq.ft) in other cities, with value <= 45 Lakhs face 1% GST (without input tax credit).

When can resolution be sought under DRP?

GST Rate for Builders for the supply of Residential or commercial projects:

GST Rate for Builders for the supply of Residential and commercial projects:

Conditions under New GST Rate for the Builders:

GST on Joint Development Agreement(JDA):

JDA for Builder Perspective:

JDA for Landowner Perspective:

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