Income tax - Provisions

one of the core reforms in the Central Goods and Services Tax (Third Amendment) Rules, 2025 (Notification No. 13/2025-Central Tax, dated 17 Sept 2025, effective 22 Sept 2025) is the mandatory separate disclosure of ITC reversals under specific rules — namely Rules 37, 37A, 38, 42, and 43 . 🔹 1. Rule 37 – Non-payment to supplier within 180 days What it covers: If payment (value + tax) to supplier not made within 180 days, ITC earlier availed must be reversed . New requirement: The amount so reversed must now be specifically reported under the “Rule 37” head in GSTR-9 / 9C. Any re-availment upon subsequent payment also to be shown distinctly. Impact: Enables tax officers to track “re-claimed” credits separately and match them to supplier payments. 🔹 2. Rule 37A – Supplier failed to file GSTR-3B What it covers: Introduced in 2022; if supplier doesn’t file GSTR-3B by 30 Nov following the FY, recipient must reverse the ITC claimed earlier. New require...

  Section 18(4) of the Central Goods and Services Tax (CGST) Act, 2017 deals with the reversal of input tax credit (ITC) when a registered person switches from regular scheme (taxable supply under Section 9) to the composition scheme (under Section 10), or when they become exempt from payment of tax. ✅ CGST Act – Section 18(4) – Summary : Section 18(4) : Where any registered person who has availed input tax credit opts to pay tax under Section 10 (Composition Scheme) or, where the goods or services become wholly exempt , then such person shall pay an amount , by way of debit in the electronic credit ledger or electronic cash ledger , equivalent to the credit of input tax in respect of: Inputs held in stock , and Inputs contained in semi-finished or finished goods , and Capital goods (reduced by prescribed percentage), on the day immediately preceding the date of such switch (composition/exemption). After payment of such amount, the balance of input tax ...

powers of the Assessing Officer (AO) under Section 145(3) of the Income Tax Act, 1961 in a clear way. 📌 Powers of AO under Section 145(3), Income Tax Act, 1961 1. Scope of Section 145 Section 145(1): Income chargeable under “Profits & Gains of Business/Profession” or “Income from Other Sources” shall be computed in accordance with: Cash or Mercantile system of accounting regularly employed by the assessee , and ICDS (Income Computation & Disclosure Standards) notified by CBDT. Section 145(2): CBDT can notify accounting standards for compliance. Section 145(3): If AO is not satisfied with the correctness/completeness of accounts, or with accounting method/standards, he may reject the books . 2. Powers Vested in AO u/s 145(3) The AO has the power to: a. Examine Books of Account Scrutinize purchase/sale invoices, stock register, vouchers, ledgers, bank statements. Verify compliance with notified accounting standards (ICDS). b. Reject Boo...

comprehensive checklist that a small/medium business in India should maintain to safely discharge the burden of proof under Income Tax & GST laws . The department does not have to prove that the expense is false — it’s the assessee who must prove that it is genuine . ⚖️ Judicial Support CIT v. Calcutta Agency Ltd. (1951) – The Supreme Court held that the onus is on the assessee to prove the claim of expenditure. 📑 Checklist of Documents to Justify Expenses 1. Purchases & Raw Materials Tax Invoices from suppliers (with GSTIN, HSN/SAC, description). E-way bills for movement of goods (if applicable). Goods receipt notes, delivery challans. Payment proof → bank transfer/cheque/UPI records. Supplier agreements / purchase orders. 2. Sales & Revenue Sales tax invoices with GSTIN. E-way bills for dispatch. Customer agreements / work orders. Proof of receipt of payment (bank statement, UPI, etc.). 3. Labour & Wages Wage regist...

partner remuneration under the Indian Income Tax Act for Assessment Year (AY) 2026-27 , i.e., the financial year 2025-26: 1. Remuneration Limits Under Section 40(b) – New Higher Ceiling Effective April 1, 2025 (FY 2025-26; applicable for AY 2026-27): The allowable deduction for remuneration paid to working partners has doubled . Revised limits under Section 40(b) : On the first ₹6,00,000 of book profit (or in case of loss): higher of ₹3,00,000 or 90% of book profit. On the rest of the book profit : 60% of book profit. Previously , this limit was: On the first ₹3,00,000: ₹1,50,000 or 90% of book profit (whichever higher) On the balance: 60% of book profit. 2. Introduction of Section 194T – Mandatory TDS on Partner Payments Also effective April 1, 2025 : A new section, Section 194T , mandates 10% TDS on payments to partners when total annual payments exceed ₹20,000 . Applies to payments like salary/remuneration, commission, bonus, interest . ...

  തൃശൂർ ജ്വല്ലറി ഹബ്ബിൽ നടന്ന റെയ്ഡുകൾ ജിഎസ്ടി ഒഴിവാക്കലിൻ്റെ അപകടസാധ്യതകളും സുരക്ഷാ രീതികളും ഉയർത്തിക്കാട്ടുന്നു. തൃശൂർ, കേരളം – ഓഗസ്റ്റ് 2025: കേരളത്തിന്റെ സ്വർണ്ണ തലസ്ഥാനം എന്നറിയപ്പെടുന്ന തൃശൂർ, 16 ആഭരണ വ്യാപാരികളുമായി ബന്ധപ്പെട്ട 42 സ്ഥലങ്ങൾ ലക്ഷ്യമിട്ട് സംസ്ഥാന ജിഎസ്ടി ഇന്റലിജൻസ് ആൻഡ് എൻഫോഴ്‌സ്‌മെന്റ് വിംഗ് ഓപ്പറേഷൻ ആർക്കൻസ്റ്റോൺ നടത്തിയപ്പോൾ ഒരു വലിയ എൻഫോഴ്‌സ്‌മെന്റ് നടപടിക്ക് സാക്ഷ്യം വഹിച്ചു. ഈ റെയ്ഡിൽ 100 ​​കോടി രൂപയുടെ വിൽപ്പന അടിച്ചമർത്തൽ കണ്ടെത്തി, കണക്കിൽ പെടാത്ത 36 കിലോഗ്രാം സ്വർണ്ണം പിടിച്ചെടുത്തു , നികുതിയും പിഴയും ആയി 2 കോടിയിലധികം രൂപ കണ്ടെടുത്തു. നികുതി ബാധ്യതകൾ കുറയ്ക്കുന്നതിന് വിൽപ്പന അണ്ടർ-റിപ്പോർട്ട് ചെയ്യൽ, സ്റ്റോക്ക് രജിസ്റ്ററുകളിൽ കൃത്രിമം കാണിക്കൽ, വ്യാജ ഇൻവോയ്‌സുകൾ നൽകൽ തുടങ്ങിയ രീതികൾ ഉപയോഗിക്കുന്ന ജ്വല്ലറി മേഖലയിൽ ജിഎസ്ടി വെട്ടിപ്പ് തുടരുന്ന പ്രശ്‌നത്തിലേക്ക് ഈ പ്രവർത്തനം അടിവരയിടുന്നു . ജിഎസ്ടി ഒഴിവാക്കലിലെ അപകടകരമായ രീതികൾ മനസ്സിലാക്കൽ വിൽപ്പനയുടെ വ്യവസ്ഥാപിത അടിച്ചമർത്തൽ യഥാർത്ഥ വിൽപ്പനയേക്കാൾ മനഃപൂർവ്വം കുറഞ്ഞ വിൽപ്പന രേഖപ്പെടുത്തൽ. ...

business loss (non-speculative) can be set off against capital gains (both short-term and long-term), subject to restrictions under Section 71 : ✅ Allowed Business loss (other than speculative loss) can be set off against income under any head (except salary). So, if you have a business loss and a taxable capital gain, you can adjust the loss against that gain. 📌 Example: Business loss = ₹4,00,000 LTCG (u/s 112A) = ₹3,00,000 ➡ Net taxable income = ₹(4,00,000 – 3,00,000) = ₹1,00,000 (loss carried forward if return filed in time). ❌ Not Allowed Speculative business loss → can be set off only against speculative business income (not capital gains). Loss from specified business u/s 35AD → only against specified business income. Capital loss → cannot be set off against business income (only against capital gains). 👉 So the direction is: Business Loss → Capital Gain ✅ Capital Loss → Business Income ❌