Mamtora & Associates
Chartered Accountants

Section 54F of income tax act provides the following conditions to get exemption on sale of certain long-term capital assets: Assessee should be either an INDIVIDUAL or HUF The asset transferred should be a long-term capital asset other than a residential house property (Let us call it "original asset") The amount of net consideration (#1) on sale of original asset should be invested into purchase / construction of ONE NEW RESIDENTIAL house (Let us call it "new house") New house can be purchased either 1 year before the date of sale or 2 years after the date of sale of original asset. In case where new residential house is being constructed, the construction should be completed within 3 years from the date of sale of original asset. New house purchased / constructed should not be located outside India. The assessee should not own more than one residential house, other than new house, on the date of transfer of original asset.  The income from new house, should not

What is NPA (Non-Performing Asset)? For banks, advances given to their customers are assets. An asset, including a leased asset, becomes non-performing when it ceases to generate income for the bank. Categories of NPA Banks are required to classify non-performing assets into different categories based on duration of their non-performance as under: NPA Category Description Sub-standard Asset An asset which has remained NPA for less than or equal to 12 months Doubtful Asset An asset which has remained in sub-standard category for 12 months Loss Asset An asset which is considered uncollectible and where loss has been identified by the bank or its auditors or RBI but the amount has not been written off wholly Facility-wise NPA classification Norms as per RBI Master Circular on IRAC Norms dated 02-04-2024: Facility Type NPA Classification Norms Term Loan Interest and/or Principal remains overdue (01) for more than 90 days Overdraft / Cash Credit Ac

Section 115BAC(1A) provides rate of tax applicable to New Tax Regime w.e.f 01-04-2024 i.e. FY 2023-24 (AY 2024-25). Below table compares the tax rates between New Tax Regime & Old Tax Regime:  New Tax Regime u/s 115BAC(1A) Old Tax Regime Total Income Tax Rate Total Income Tax Rate Upto 3 Lacs 0% Upto 2.5 Lacs 0% Above 3 Lacs - Upto 6 Lacs 5% Above 2.5 Lacs - Upto 5 Lacs 5% Above 6 Lacs - Upto 9 Lacs 10% Above 5 Lacs - Upto 10 Lacs 20% Above 9 Lacs - Upto 12 Lacs 15% Above 10 Lacs 30% Above 12 Lacs - Upto 15 Lacs 20% Above 15 Lacs 30% List of deductions not available under New Tax Regime: Leave Travel Allowance u/s 10(5) House Rent Allowance u/s 10(13A) Prescribed Allowances u/s 10(14) with few exceptions Allowances to MP/MLA u/s 10(17) Deduction u/s 10(32) of Rs. 1,500/- in respect of Minor's Income Deductions to SEZ units u/s 10AA Entertainment Allowance to Gove

Generally expenses are allowed based on accounting method followed by the Assessee. If you follow Mercantile method of Accounting, you will be allowed expenses on accrual basis. If you follow Cash accounting, you will be allowed to claim expenses on actual payment basis. However, Income Tax Act has carved out an exception here in respect of certain expenses.  Section 43B lists out certain expenses which are allowed only on actual payment basis. Finance Act 2023 inserted a new clause (h) in Section 43B which states that if any sum is payable by the assessee to a micro or small enterprise and if it is not paid within the time limit specified in Section 15 of the MSMED Act, 2006, the assessee cannot claim it as an expense until the said sum is actually paid. Such disallowed amount will be allowed to claim as expenditure in the year of actual payment. This provision is applicable w.e.f. FY 2023-24 (AY 2024-25) Let us first understand the criteria for Micro, Small & Medium Enterprises a

Finance Minister Nirmala Sitharaman in the Budget 2024 had announced withdrawal of past small direct tax demands as under: Demands upto Rs. Period Max Ceiling per Assessee Rs. 25,000/- Upto FY 2009-10 Rs. 1,00,000/- Rs. 10,000/- From FY 2010-11 to FY 2014-15 Rs. 1,00,000/- Direct tax demands include demands pertaining to Income Tax, Wealth Tax & Gift Tax. This is expected to benefit about 1 crore assessees and an estimated Rs. 3,500/- crore of demands will be withdrawn following the announcement.

When it comes to evaluating investment performance, three common metrics are often discussed: XIRR, CAGR, and Absolute Returns. Each of these measures offers a different perspective on how an investment has performed over time. ABSOLUTE RETURNS Absolute Returns measure the total return of an investment over a specific period. It is the simplest form of calculating returns and does not take into account the time factor. The formula for Absolute Returns is: Absolute Return = ((Final Value – Initial Value)/Initial Value)*100 Example_A: If you invested Rs. 1,00,000 and it grew to Rs. 1,20,000 in 3 years, the Absolute Return would be 20% as under: = ((120000 – 100000)/100000)*100  = (20000/100000)*100  = 20% CAGR (COMPOUNDED ANNUAL GROWTH RATE) CAGR is the mean annual growth rate of an investment over a specified time period longer than one year. It represents one of the most accurate ways to calculate and determine returns for anything that can rise or fall in value over time

Tax Planning is important for every taxpayer and the same needs to be done before the end of the financial year to which income pertains. In addition to tax planning, taxpayer needs to collect relevant supporting documents/evidence and calculate his tax dues and pay the same in advance, if advance tax is applicable. Here we have listed few common things every individual taxpayer  needs to keep in mind before the end of financial year i.e. on or before 31st March: Calculate your estimated income & tax liability to check if you are liable to pay advance tax and to assess which scheme of taxation is beneficial to you viz. New Tax Scheme or Old Tax Scheme. Please note, many of the below mentioned deductions will not be available if you opt for new tax scheme. Hence we suggest you to consult a Chartered Accountant who is expert and well experienced at tax planning who would help you collating your income, exemptions, deductions, TDS details for estimating your tax liability more ac

TDS (Tax Deducted at Source) u/s 194IA is required to be deducted @1% by the buyer of an Immovable Property from a RESIDENT transferor of the said immovable property.  No TDS is required to be deducted where sale consideration and stamp duty value of the property, both, are less than Rs. 50 Lakhs. TDS is required to be deducted only when either the Sale Consideration (01) or Stamp Duty Value of the immovable property is more than or equal to Rs. 50 Lakhs. TDS @ 1% is required to be deducted on the entire sale consideration or stamp duty value, whichever is higher. EXAMPLE_A:  Sale Consideration = Rs. 49 Lakhs Stamp Duty Value = Rs. 60 Lakhs TDS of Rs. 60,000/- will be deducted @ 1% on stamp duty value (being higher than the sale consideration) Immovable Property means Land (except Agricultural Land) or any Building or any part of a Building. It is important to note here that Agricultural Land (02) is exempted from definition of Immovable Property under this section.  If the seller of

RBI instructs all banks to discontinue issuance of Rs. 2000/- banknotes with immediate effect dated May 19, 2023. Rs. 2000/- banknotes will continue to be a Legal Tender. Member of public are encouraged to either deposit or exchange Rs. 2000/- notes into their bank branches. Deposit into bank accounts can be made without restrictions subject to compliance with KYC & Other applicable statutory/regulatory requirements. The facility for deposit/exchange of Rs. 2000/- banknotes shall be available for members of the public upto September 30, 2023. The facility for exchange of Rs. 2000/- banknotes will be available at the bank branches starting from May 23, 2023 upto a limit of Rs. 20000/- at a time. The facility for exchange will also be available at the 19 Regional Offices (#1)  of the RBI having issue Departments until September 30, 2023. The exchange facility shall be provided free of cost by the banks. Business Correspondents (BCs) may also be allowed to exchange Rs. 2000/- banknote

Section 54 of Income Tax Act provides for exemption from capital gains on transfer of long-term capital asset being a residential house property subject to following conditions: Assessee should be either an INDIVIDUAL or HUF Asset transferred is a long-term (#1) capital asset being a RESIDENTIAL house property Capital gains arising on transfer of such property should be invested in purchasing / constructing one NEW RESIDENTIAL house property. So to get maximum benefit of section 54 exemption, assesse will be required to invest 100% of the capital gains. New asset purchased / constructed should not be located outside India. New residential house can be purchased either 1 year before the date of sale or 2 years after the date of sale. In case where new residential house is being constructed, the construction should be completed within 3 years from the date of sale. In case where whole of the capital gains are not invested in purchase / construction of new residential house, exemption wi

(Text of the Notification) MINISTRY OF FINANCE  (Department of Revenue)  NOTIFICATION  New Delhi, the 3rd May, 2023  S.O. 2036(E).— In exercise of the powers conferred by sub-clause (vi) of clause (sa) of sub-section (1) of section 2 of the Prevention of Money-laundering Act, 2002 (15 of 2003), the Central Government hereby notifies that the financial transactions carried out by a relevant person on behalf of his client, in the course of his or her profession, in relation to the following activities- (i) buying and selling of any immovable property;  (ii) managing of client money, securities or other assets;  (iii) management of bank, savings or securities accounts;  (iv) organisation of contributions for the creation, operation or management of companies;  (v) creation, operation or management of companies, limited liability partnerships or trusts, and buying and selling of business entities,  shall be an activity for the purposes of said sub-section.  Explanation 1.- For the purposes

Section 6 of Income Tax Act lists the conditions for determination of residential status of an Individual.