Brief Summary
This video provides detailed advice on tax filing, common mistakes to avoid, and how to navigate the new tax regime. It covers topics such as the reasons for extended deadlines, issues with HRA claims, understanding Sections 44AD and 44ADA, potential problems with UPI and credit card transactions, and effective tax planning strategies. The speakers emphasize the importance of accurate reporting, maintaining proper records, and understanding the implications of both old and new tax regimes to avoid penalties and scrutiny from the Income Tax Department.
- Extended deadlines are due to detailed information requirements in tax forms for cross-verification.
- Incorrect HRA claims and misuse of Sections 44AD/44ADA can lead to notices and penalties.
- UPI and credit card transactions require careful record-keeping to avoid discrepancies and potential tax liabilities.
- The new tax regime simplifies filing but requires understanding its specific rules and potential benefits.
Intro
The video introduces the topic of tax filing and the importance of avoiding mistakes that can lead to penalties. It highlights the need for proper tax planning and accurate advice, distinguishing it from misleading information often found on social media. The speakers aim to provide unbiased guidance to help viewers understand practical issues and navigate tax filing correctly.
Why ITR Filing Deadline Is Extended This Year
The extension of ITR filing deadlines is attributed to the detailed information now required in the forms. This includes specifics about insurance policies and other investments, enabling easier cross-verification by the Income Tax Department. The detailed scrutiny aims to reduce false refund claims, which have been increasing. The Income Tax Department focuses on facilitating corrections through updated returns, allowing taxpayers to rectify errors and avoid penalties by paying additional taxes if necessary.
HRA Claim Issue With Live Example
A common issue arises with HRA claims when rent exceeds ₹50,000 and TDS (Tax Deducted at Source) is not paid. Notices are issued when discrepancies occur, such as failing to deduct TDS or providing incorrect PAN details of the landlord. Landlords evading income tax by not providing their PAN further complicate the matter. To avoid issues, rent payments should be made online, and landlords' PANs must be verified.
Section 44AD & 44ADA
Section 44AD applies to businesses, while 44ADA applies to professionals with a gross income of less than ₹50 lakhs. Many wrongly claim 50% of their income as expenses under Section 44AD without maintaining proper books. This can lead to scrutiny if investments exceed the declared income after deducting household expenses. It's crucial to accurately account for expenses and maintain books accordingly.
UPI and Credit Card Transactions Issue
UPI and credit card transactions are under increased scrutiny. Cashback earned from credit card transactions is taxable and must be reported. High credit card spending relative to declared income can trigger notices. Additionally, the GST implications for businesses with gross receipts exceeding ₹20 lakhs are discussed. Proper record-keeping of UPI transactions is essential to avoid discrepancies between reported income and actual transactions.
Tax Planning
The new tax regime aims to simplify tax filing with increased slab rates. While it offers fewer deductions, it includes a standard deduction and a tax benefit for NPS contributions under Section 80CCD. Filing under the new regime reduces the need for false details and simplifies the return process. It's advised to reconcile AIS, TIS, and 26AS data from the Income Tax website before filing returns to ensure accuracy.
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