Income tax - Provisions

 Under Section 24(b) of the Income Tax Act, arbitrary apportionment of the home loan interest deduction between joint owners is not permitted . The apportionment must follow logical and documented criteria , typically based on either : ✅ 1. Ownership Share (Default Rule) : If both co-owners have equal ownership , and no evidence suggests otherwise, the deduction must be split equally . For example: Ownership: 50:50 Interest Paid: ₹2,50,000 Deduction Allowed: ₹1,25,000 per person ✅ 2. Proportion of Loan Repayment (If Proven) : If co-owners repay the loan unequally , and this is evidenced by bank statements or loan repayment records , then the deduction may be split in the ratio of actual payment , even if ownership is equal. For example: Owner A repays 80%, Owner B repays 20% Then interest deduction can be claimed 80:20 But this must be clearly supported with proof like bank account transactions or a notarized agreement ❌ Arbitrary Apportio...

  Sample Reply to Deficiency Notice under Rule 45 To The Joint Commissioner of Income Tax (Appeals) [Appeal Unit Name, if available] Through: Income Tax e-Filing Portal Subject : Response to Deficiency Notice issued under Rule 45(2) of the Income Tax Rules, 1962 – Rectification of Defects in Form 35 PAN : [Your PAN] Assessment Year : [AY XXXX-XX] Appeal Reference Number : [Generated Appeal No.] Date of Deficiency Notice : [DD/MM/YYYY] Respected Sir/Madam, This is with reference to the Deficiency Notice issued under Rule 45(2) in connection with the above-mentioned appeal filed against the order passed under section [mention section, e.g., 143(3)] by the Assessing Officer. I hereby submit that the deficiencies pointed out in the notice have been duly rectified as follows: Sl. No. Deficiency Pointed Out Rectification Done / Remarks 1 [E.g., Appeal fee not paid / incorrect AY] [E.g., Paid the requisite appeal fee and challan is attached] 2 [E.g., Copy of assessment ord...

  📄 Deficiency Notice under Rule 45 – Income Tax Rules, 1962 🔍 What is a Deficiency Notice under Rule 45? When an appeal is filed via Form 35 on the Income Tax e-filing portal, the Commissioner (Appeals) or JCIT(A) examines the appeal for procedural completeness . If there are deficiencies in: Documents attached, Form content, Incorrect jurisdiction, Incomplete grounds of appeal, or Missing payment of fees, then the JCIT(A) or designated faceless appeal unit may issue a “Deficiency Notice” under Rule 45(2) of the Income Tax Rules, 1962. 📜 Relevant Legal Provision: Rule 45(2) : "Where a memorandum of appeal in Form No. 35 is found to be defective, the Commissioner (Appeals) may intimate the defect to the appellant and give him an opportunity to rectify the defect within a period of fifteen days from the date of such intimation or within such further period which, on an application made in this behalf, the Commissioner (Appeals) may allow." ...

 Once an appeal is filed in the e-Appeals portal and marked to the Joint Commissioner of Income Tax (Appeals) or JCIT(A) , the proceedings will generally follow the e-Appeals Scheme, 2023 notified by CBDT. The JCIT(A) functions under the faceless appeal system, similar to CIT(A), with a few procedural differences based on complexity and monetary limits. ✅ Stages of JCIT(A) Appeal After Filing on Portal Stage Description 1. Acknowledgment of Appeal After filing Form 35, the portal will generate an acknowledgment and assign the appeal to JCIT(A) based on CBDT criteria (usually based on monetary limits and case complexity). 2. Verification of Appeal by JCIT(A) Unit The JCIT(A) reviews whether the appeal is valid: timely filed, correct form, necessary documents attached, and jurisdiction. May issue deficiency notice under Rule 45. 3. Issue of Notice to Assessee (e-Proceedings) A notice for submission of arguments and supporting evidence will be issued online v...

As of now, the Income Tax e-filing portal shows only one appeal form: Form No. 35 , which is used for both CIT(A) and JCIT(A) appeals. There is no separate form titled "JCIT Appeal" visible. This is because under the e-Appeals Scheme, 2023 , the allocation to JCIT(A) or CIT(A) is handled internally by the Income Tax Department after you file Form 35 . ✅ Updated Clarification: 🔹 Form 35 = Appeal for Both JCIT(A) and CIT(A) 🔄 The system uses AI-based allocation (faceless scheme) to determine whether your appeal goes to: Joint Commissioner of Income Tax (Appeals) → if conditions of e-Appeals Scheme, 2023 are met (e.g., income ≤ ₹50 lakh, minor issues) Commissioner of Income Tax (Appeals) → for other cases 🧾 So What Should You Do? ✔️ Simply File Form 35 Online as Usual: Steps: Login to https://www.incometax.gov.in Go to: e-File > Income Tax Forms > File Income Tax Forms Search: Form 35 – Appeal to Commissioner (Appeals) Fill out: ...

 Here’s a step-by-step guide to file an appeal online using the Income Tax e-Filing portal under the e-Appeals Scheme, 2023 : 🧾 How to File an Appeal Online (Step-by-Step) Path: e-File > e-File Appeal > New Appeal ✅ STEP 1: Login to the Income Tax Portal Visit: https://www.incometax.gov.in Login using your PAN, password, and OTP (from Aadhaar-linked mobile) ✅ STEP 2: Navigate to the Appeal Section On the dashboard, go to: e-File > Income Tax Forms > File Income Tax Forms In the search bar, type "Appeal" Select "Form No. 35 – Appeal to Commissioner (Appeals)" for CIT(A) OR Select “Appeal to Joint Commissioner (Appeals)” (for e-Appeals Scheme, 2023 – JCIT(A)) ✅ STEP 3: Fill the Appeal Form You’ll be guided through these sections: 📌 Basic Details PAN, Name, Assessment Year Mobile number and email ID (auto-filled) 📌 Appeal Details Order against which appeal is filed Type of order (e.g., 143(1), penal...

  Section 194-IB and Section 194-I(b) both deal with TDS on rent , but they apply in different contexts , to different types of deductors , with different thresholds and rates . Here's a clear comparison between Section 194-IB and Section 194-I(b) : 🔍 Comparison: Section 194-IB vs 194-I(b) Particulars Section 194-IB Section 194-I(b) Applicability Individuals/HUFs not liable to tax audit All persons liable to audit under Income Tax Act Type of Payment Rent (land, building, or both) Rent of land/building Threshold Limit Rent > ₹50,000 per month Aggregate rent > ₹2,40,000 per year TDS Rate 5% 10% (for land/building) TDS Timing Deduct in last month of FY or tenancy Deduct at the time of credit or payment , whichever is earlier TAN Required ❌ Not req...

  Documents Commonly Requested in a 143(2) Scrutiny When you receive a notice under Section 143(2), the Assessing Officer requests specific documents to verify the details and claims .  Commonly requested documents include: 1. Financial Records Books of Accounts: Ledgers, cash/bank books, journal entries, trial balance Financial Statements: P&L, Balance Sheet (as of 31st March), Cash Flow (if applicable) Audit Reports: Tax Audit (3CA/3CB), Statutory Audit, Cost/Internal Audit (if applicable) 2. Income-Related Documents Revenue Records: Sales/purchase registers, invoices, delivery challans, GST returns, export/import docs Investment Income: Bank statements, interest/dividend certificates, capital gains, mutual fund/Demat statements Other Income: Rent agreements, professional/consultancy income, commissions, other support docs 3. Deductions & Exemptions Salary Proofs: Form 16, salary slips, PF, gratuity, perquisite details Investment Proofs (80C/80D etc.): LIC, ELSS, PPF...