Loading…
Loading…
Deep dives and practical guides written by the WFYI team.
Comprehensive explanations, FAQs, and updates about GST regulations, returns, and compliance.
This article clarifies the fundamental differences between an invoice and a bill, two common business documents. While both indicate money owed for goods or services, invoices are formal legal documents used by sellers, often for credit transactions with specific due dates, detailing comprehensive customer and tax information. In contrast, bills typically represent immediate cash transactions from a buyer's perspective, offering simpler proof of purchase.
This article provides an in-depth guide to ITR-4 (Sugam), outlining its applicability for taxpayers engaged in small businesses and specified professions under the presumptive taxation scheme for Assessment Year 2025-26. It details eligibility criteria, explains the structure of the form, and offers a step-by-step process for filing through the official Income Tax portal. Additionally, the guide highlights significant changes introduced in the ITR-4 form for AY 2024-25 and AY 2025-26, including updates to capital gains reporting, tax regime selection, and deduction clauses.
The Indian e-commerce market has witnessed significant growth, leading to the rise of online marketplaces. The Goods and Services Tax (GST) framework has introduced specific regulations for sellers operating on these platforms. Key implications include exemptions from standard GST registration thresholds for certain e-commerce sellers and their ineligibility for the Composition Scheme. Additionally, marketplace operators are mandated to collect Tax Collection at Source (TCS), affecting sellers' cash flow. Proactive planning for GST transition is crucial for these vendors.
Input Service Distributors (ISDs) play a crucial role in GST by distributing common input service tax credits to their various operational units. This article explains the mandatory provisions and conditions for ISDs under GST Rule 39, effective from April 1, 2025. It details the precise methods for allocating different types of Input Tax Credit (ITC), addressing various scenarios for distribution based on usage and turnover, and outlining implications of debit/credit notes for ISDs. The information ensures businesses understand compliance and recovery processes related to ISD operations.
This article provides an in-depth explanation of best judgement and summary assessments under India's GST framework. It details how tax liability is determined for non-filers and unregistered persons, including conditions for withdrawal of such assessments and the recent amnesty scheme for non-compliant taxpayers. The piece also outlines the process for summary assessments, emphasizing their role in protecting government revenue and the provisions for their revocation, while noting similarities to previous indirect tax systems.
Section 10(10D) of the Income Tax Act allows certain life insurance proceeds, including maturity benefits and bonuses, to be exempt from income tax. This exemption depends on specific conditions related to the annual premium amount compared to the sum assured. Different premium limits apply based on the policy issuance date and type, but death benefits are generally tax-free.
This article outlines the process for businesses to carry forward pre-GST input tax credits into the new regime using Forms TRAN 1 and TRAN 2. It details who is eligible to file these forms, the specific information required in each, and critical conditions for claiming credit on old stock and capital goods. The guide also covers special scenarios like goods sent for job work or held by agents, ensuring a clear understanding of the transition provisions.
Businesses transitioning to the Goods and Services Tax (GST) regime can claim pre-GST input tax credits using specific forms. This article explains the requirements for Forms TRAN-1 and TRAN-2, which allow taxpayers to carry forward credits from old tax systems for various scenarios, including existing stock, capital goods, and goods held by job workers or agents. Adhering to these transitional provisions is essential for a smooth credit transfer.
House Rent Allowance (HRA) is a salary component in India offering tax benefits under Section 10(13A) of the Income Tax Act for employees paying rent. This article explains who can claim HRA, detailing the specific rules for both salaried and self-employed individuals, and outlining the exemption limits based on city type. It also provides a practical example to illustrate the HRA calculation process. Claiming HRA requires fulfilling certain conditions and maintaining essential documents like rent receipts and rental agreements, especially under the old tax regime, as the new regime does not offer this exemption.
The Hindu Undivided Family (HUF) is a distinct legal entity under Indian income tax law, enabling families, including Buddhists, Jains, and Sikhs, to manage assets and income separately for tax optimization. Led by a Karta, the HUF offers unique tax benefits like separate exemption limits and various deductions, allowing for legitimate income splitting and reduced overall tax liabilities. While offering advantages in tax savings and succession planning, forming and maintaining an HUF involves specific compliance and legal considerations regarding membership, residential status, and dissolution procedures.
The article outlines various offenses and corresponding penalties under India's Goods and Services Tax (GST) law, primarily covered by Sections 122 to 128 of the CGST Act. It details different categories of offenses, including fake invoices, fraud, and tax evasion, along with their respective monetary penalties and, for severe fraud cases, potential imprisonment. The text also clarifies scenarios involving minor breaches, general penalty rules, and recent legislative amendments impacting e-commerce operators and tax collection provisions.
Input Service Distributor (ISD) under GST allows a centralized entity to distribute Input Tax Credit (ITC) from common service invoices to its various branches, all under the same PAN. Mandatory from April 1, 2025, ISD registration streamlines credit flow by ensuring proportional allocation across distinct GSTINs. This article outlines ISD eligibility, legal frameworks, registration processes, and the consequences of non-compliance, highlighting its critical role in GST compliance.