Tag: account

Understanding Tax Regulations in the Era of Cryptocurrency

Post author By Infinity Services
Post date January 14, 2025
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Introduction

The Indian government has officially categorized digital assets, including cryptocurrencies, as “Virtual Digital Assets” (VDAs). With this recognition comes a comprehensive set of tax rules that govern any earnings or profits generated from dealing with these assets.

In this blog, we summarize the key aspects of crypto tax legislation in India for 2024, helping you stay informed and compliant.

Income Tax on Crypto Transactions

Virtual digital asset transfers (sale, acquisition, or exchange) are taxed at a flat rate of 30%.
This tax applies regardless of the holding period (short-term or long-term).
No additional deductions are allowed except for the cost of acquiring the asset.
Losses incurred from crypto transactions cannot be offset against other income or carried forward to subsequent years.

Tax Deducted at Source (TDS)

A TDS of 1% will be deducted on crypto transactions exceeding ₹10,000 in a financial year.
This applies to both direct and indirect transfers of digital assets.

Gift Tax on Crypto Gifts

If you receive cryptocurrencies as a gift, a 30% tax is applicable on the fair market value if the total value exceeds ₹50,000 in a calendar year.
The recipient is responsible for paying this tax.

Key Points to Remember:

Maintain accurate records of all cryptocurrency transactions, including purchase prices, sale prices, and dates.
Report your crypto profits and losses in your annual tax return.
Stay updated and ensure full compliance with evolving tax regulations.

Important Note:

Tax regulations are subject to change and can be complex. Always consult a tax specialist for personalized advice tailored to your situation.

Summary Table of Crypto Tax Regulations in India (2024)

Category	Details
Tax on Crypto Transactions	30% flat tax on income from the sale, purchase, or exchange of virtual digital assets, regardless of holding period.
Deductions	Only the cost of acquiring the asset is deductible. No other deductions allowed.
Loss Carry Forward	Losses from crypto transactions cannot be carried forward or offset against other income.
Tax Deducted at Source (TDS)	1% TDS on transactions exceeding Rs 10,000 in a financial year (applies to both direct and indirect transfers).
Gift Tax on Crypto Gifts	30% tax on crypto gifts exceeding Rs 50,000 in a year, payable by the recipient.
Record Keeping	Maintain records of purchase prices, sale prices, and transaction dates for tax reporting.
Reporting	Report crypto income and losses on your annual tax return.
Compliance	Ensure adherence to tax laws and regulations for virtual digital assets.

Conclusion

Understanding crypto tax regulations is essential for compliance and avoiding penalties. By keeping accurate records and consulting tax professionals, you can ensure a smooth tax filing process.

Stay informed and adapt to any changes in the regulatory framework to secure your financial future in the world of cryptocurrencies.

Tags account, INCOME TAX

TDS

Section 194O of the Income Tax Act

Post author By Infinity Services
Post date January 16, 2024
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Section 194O of the Income-tax Act, 1961 deals with Tax Deducted at Source (TDS) on payments made to e-commerce participants. It was introduced in the Union Budget 2020 and came into effect on 1st October 2020.

Here’s a summary of the key points of Section 194O:

Who is responsible for deducting TDS?

E-commerce operators like Amazon, Flipkart, Meesho, etc., are responsible for deducting TDS at the rate of 1% on the gross amount of sales made through their platform by sellers (e-commerce participants).

What transactions are covered?

The TDS applies to sales of goods, provision of services, or both facilitated through the e-commerce platform. This includes professional and technical services as well.

When is the TDS deducted?

The TDS is deducted at the time of crediting the seller’s account, irrespective of the mode of payment, or at the time of making payment to the seller, whichever is earlier.

Threshold limit:

There is no threshold limit for e-commerce companies. They are required to deduct TDS on all transactions facilitated through their platform. However, for individual/HUF e-commerce participants, no TDS is deducted if the gross amount of sales during the previous year does not exceed Rs 5 lakh and they have furnished their PAN or Aadhaar.

Purpose of Section 194O:

This section aims to improve tax compliance by bringing e-commerce participants under the TDS net. Many small sellers operating on e-commerce platforms often miss filing their income tax returns. By collecting TDS at the source, the government ensures that some tax is collected upfront even if the seller doesn’t file their returns.
I hope this summary is helpful. If you have any further questions about Section 194O or its implications, feel free to ask!

Gaurav Sharma
8878797882
Infinityservices2018@gmail.com
Infinityservices2018.com

Tags account, central GST, CGST, INCOME TAX, tax return

Income tax TAN or Tax deduction

The income tax challan rectification process

Post author By Infinity Services
Post date October 31, 2023
1 Comment on The income tax challan rectification process

Login to incometax.gov.in
Go to “Services” and click on “Challan Correction”.
Click on “Create challan correction request”.
Select the attributes which needs to be corrected. For example: Assessment year, major head, minor head
Select the “Assessment year” or “Challan Identification Number” (CIN)
All the open challans will be displayed on the next screen. You need to select the challan which needs to be corrected.
Enter the correct details (AY, major head or minor head which is correct) and click on continue.
The next screen will show the existing details and updated details. Click on Continue and do the e-verification.
Once e-verification is complete, the challan correction procedure is completed.

Step 1: Go to the ITR filing website (https://www.incometax.gov.in/iec/foportal/) and sign in with your credentials. Choose the “challan correction” option located under the “Services” column.

Step 2: A new webpage will open. Here select ‘create challan correction request’.

Step 3: Now a new webpage will load. You will be prompted by the income tax portal to choose the relevant field that needs amending. A taxpayer has three possibilities: (a) modifying the assessment year; (b) altering the tax applicable (major head); and (c) modifying the payment method (minor head). After selecting, click “Continue.”.

Step 4: The taxpayer will be prompted to submit details about the income tax return that requires adjustment in the following phase. Either the assessment year or the challan identification number (CIN) should be given here. After that, click “Continue.”

Step 5: A new webpage will open depending on the choice selected. If the user entered a CIN number, the challan details will be shown. Otherwise, if an assessment year (AY) has been selected, a list of all challans connected with that AY will be displayed. One has to choose the challan which has to be modified. Once you’ve selected your choices, click the Continue icon.

Step 6: An individual needs to input the proper details of the earlier chosen option. Continue by selecting the icon. The example of updating the assessment year will be seen in the picture below.

Step 7: Once the proper details has been successfully input, the taxpayer has to verify the alteration in the tax challan. Through net-banking, Demat, and bank accounts, the verification can be done using an Aadhaar OTP, a digital signature certificate (DSC), or an electronic verification code (EVC). After selecting the authentication option, click Continue.

Step 8: Once the correction is successfully e-verified, the income tax e-filing website will show the success message along with the transaction ID. Keep this transaction ID handy to track the status of the correction request submitted.

Tags account, GST Network, INCOME TAX, tax, tax return

Income tax

The Influence of the Digital India Act on India’s Gross Domestic Product (GDP)

Post author By Infinity Services
Post date August 11, 2023
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The Digital India Act (DIA)

The Digital India Act (DIA) is a proposed piece of legislation that intends to act as a catalyst for the Indian economy by encouraging more innovation and entrepreneurs while also safeguarding Indian residents in terms of safety, trust, and accountability.

The DIA is predicted to have a large direct and indirect influence on India’s GDP. The DIA will directly contribute to the expansion of the digital economy, which is expected to reach $1 trillion by 2030. The DIA will also generate fresh job possibilities in the digital industry, which is projected to develop at a 20% per year over the next decade.

By making it easier for firms to operate online, the DIA will indirectly assist to increase the efficiency of the Indian economy. This will result in higher productivity and reduced costs, enhancing GDP growth.

The DIA is expected to have a good influence on social indices in India, such as education, healthcare, and financial inclusion. The DIA, for example, will make it less difficult for kids to access online education, which will aid in the improvement of literacy rates. Additionally, the DIA will make it simpler for consumers to receive healthcare services online, which will assist to enhance care quality. Furthermore, the DIA will make it easier for consumers to create bank accounts and conduct monetary transactions online, which will aid in decreasing poverty.

Overall, the Digital India Act is anticipated to have a major beneficial influence on India’s GDP and social metrics. The DIA will assist to make India a more wealthy and fair nation.

The following are some particular instances of how the DIA is predicted to effect India’s GDP:

The DIA will encourage the advancement of emerging digital technologies including artificial intelligence, blockchain, and quantum computing. These technologies have the potential to transform numerous sectors while also providing new employment and driving economic development.

The DIA will make it easier for firms to operate online. This will lower the cost for operating business and make it easier for enterprises to reach new clients.

The DIA will make government services more efficient. This will save both businesses and individuals time and money, promoting economic growth.

The DIA will encourage the development of digital literacy and skills. This will improve India’s workforce’s productivity in the global marketplace.

The DIA is still in its early phases of development, but it has the potential to be a significant engine of India’s economic growth. The DIA is projected to boost India’s GDP, social indicators, and global competitiveness.

Tags account, accountant, audit, Digital India Act (DIA), Gross Domestic Product (GDP), INCOME TAX, quickbooks, tax, tax return

Income tax Uncategorized

Income Tax Audit under Section 44AB – Criteria, Audit Report, Penalty

Post author By Infinity Services
Post date July 30, 2023
No Comments on Income Tax Audit under Section 44AB – Criteria, Audit Report, Penalty

In India, an income tax audit is conducted under Section 44AB of the Income Tax Act, 1961. It is a formal examination of a taxpayer’s financial records and tax return by a chartered accountant (CA) or a tax auditor to ensure compliance with the provisions of the Income Tax Act. Income tax audits in India are applicable to certain categories of taxpayers meeting specific criteria.

Key Points about Income Tax Audit in India:

1. Mandatory Audit Threshold

As per Section 44AB, the following categories of taxpayers are required to undergo a tax audit if their total income in a financial year exceeds the specified threshold:

a. Businesses: Any person carrying on a business with total sales, turnover, or gross receipts exceeding Rs 1 crore in a financial year (Rs 2 crore from FY 2020-21 onwards).

b. Professionals: Any professional (e.g., doctors, lawyers, architects) with gross receipts exceeding Rs 50 lakhs in a financial year.

c. Presumptive Taxation Scheme: Taxpayers opting for the Presumptive Taxation Scheme under Sections 44AD, 44ADA, or 44AE, and having income lower than the deemed profits and gains.

2. Appointment of Tax Auditor

The taxpayer subject to tax audit needs to appoint a qualified chartered accountant as a tax auditor. The tax auditor will conduct the audit and provide an audit report in the prescribed format (Form 3CA/3CB and Form 3CD).

Audit Process: During the tax audit, the tax auditor examines the taxpayer’s books of accounts, financial statements, supporting documents, and other relevant records to ensure the accuracy and compliance of the tax return.
Due Date for Filing Audit Report: The audit report along with the income tax return must be filed by the due date for filing income tax returns, which is usually September 30th of the assessment year (i.e., the year following the financial year).
Consequences of Non-Compliance: Failure to comply with the tax audit requirements can lead to penalties under Section 271B. A penalty of 0.5% of the total sales, turnover, or gross receipts, subject to a maximum of Rs 1,50,000, can be imposed.

It’s important for taxpayers meeting the audit criteria to ensure timely compliance with the tax audit requirements to avoid penalties and other consequences. Consulting with a qualified chartered accountant or tax consultant can help in the smooth conduct of the tax audit and proper filing of the audit report.

Tags account, accountant, INCOME TAX, income tax audit, tax, tax return

Income tax

Benefit of Filing of income tax returns

Post author By Infinity Services
Post date July 28, 2023
No Comments on Benefit of Filing of income tax returns

Filing income tax returns offers several benefits for individuals and the broader economy. Some of the key advantages include:

1. Compliance with the Law

Paying income tax and filing returns is a legal obligation in many countries. By fulfilling this responsibility, individuals comply with the tax laws, helping maintain a fair and functioning tax system.

2. Claiming Refunds

Sometimes, individuals may have paid more taxes throughout the year than they owe. Filing a tax return allows them to claim a refund for the excess taxes they have paid, putting money back in their pockets.

3. Avoiding Penalties

Failure to file income tax returns or underreporting income can lead to penalties and legal consequences. Filing returns on time and accurately can help individuals avoid these penalties.

4. Documentation for Financial Transactions

Income tax returns serve as essential financial documents. They can be used as proof of income when applying for loans, visas, or other financial transactions.

5. Supporting Social Programs

Income tax revenue is a significant source of funding for various social programs, such as healthcare, education, infrastructure, and welfare initiatives. By paying income tax, individuals contribute to the development and well-being of their society.

6. Building a Financial History

Consistent filing of income tax returns helps individuals build a financial history, which can be beneficial when seeking financial opportunities or demonstrating financial responsibility.

7. Retirement Benefits

In some countries, contributing to certain retirement plans or pension schemes is linked to tax benefits. Filing returns can enable individuals to claim these benefits and save for their retirement.

8. Avoiding Tax Evasion Charges

Filing income tax returns honestly helps individuals avoid tax evasion charges, which can lead to severe penalties and even criminal prosecution in some cases.

9. Supporting Government Operations

Income tax revenue is a crucial source of funds for governments. It aids in funding public services, maintaining infrastructure, and supporting various administrative functions.

10. Contribution to Economic Growth

Income tax revenue contributes to a country’s overall economic growth and development. It helps the government invest in projects that stimulate the economy and create job opportunities.

Overall, filing income tax returns is not just a legal obligation; it is a way for individuals to contribute to the functioning of society and support various public services and initiatives that benefit everyone.

Tags account, accountant, audit, Filing income tax returns, INCOME TAX, income tax returns, quickbooks, tax, tax return

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