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Direct Tax Compliances

Direct Tax Compliances

Direct tax or income-tax are those taxes that are levied directly on the individual or organizations on their incomes and the burden of which cannot be shifted to others. In India, income-tax is governed by the provisions of the Indian Income-tax Act, 1961 (‘Act’). The Act works on the principle of self-assessment whereby every person in receipt of income or any amount is required to assess and compute its total income under five categories of income via salaries, income from house property, income from business or profession, capital gain, and income from other sources and discharge its tax liability before the filing of return of income. In addition to this, there are certain compliances that are required to be made by the payer of the income like TDS/WHT related compliances. There is an internal mechanism under the Act to ensure proper and timely compliances. The Act provides for levy of interest, penalty, and prosecution depending upon the quantum and nature of failures. Generally, the following compliances are required to be made by every person within the prescribed time:

  • Filing of return of income self-assessing the income and tax in the relevant ITR form via ITR-1, ITR-2, ITR-3, ITR-4, ITR-5, ITR-6, and ITR-7.
  • Payment of advance tax and TDS/WHT, and also filing of TDS/WHT returns in Form 24Q/26Q, etc.
  • Filing of form SFT detailing the financial transactions undertaken during the year.
  • Filing of the Tax audit report in Form 3CD and transfer pricing audit report in Form 3CEB before filing the return of income.

How ASC Help on Direct Tax Compliance!

ASC has a proficient team keeping up with ever-changing taxation policies, rules, and regulations. Our team also provides solution-oriented advice to a client and apply their timeless experience of the taxation provisions for the ease of client. We aim at providing timely fast-paced services to our clients with effectiveness in their taxation practices to reduce down the interest, penalty, and prosecution to the most insignificant levels.

Over the years the Government has been expanding the tax base by ensuring strict and proper compliances and therefore it is imperative all the compliances under the Act should be timely made.  We assist our clients in the following ways:

  • Computation of quarterly advance tax and payment of the same before the due date to minimize the incident of interest.
  • Computation of monthly TDS/WHT under relevant sections in order to compute the correct amount of TDS/WHT and payment of the same before the due date.
  • Review of the quarterly TDS/WHT returns and filing of the same within the prescribed time.
  • Preparation of computation of income under various heads of income and compute the amount of tax to be payable by the person.
  • Identification of various deductions available to minimize the incidence of tax. 
  • Review of computation of income to check the admissibility or non-admissibility of various deductions.
  • Coordination with the clients for obtaining various details required to be disclosed in the ITR form and ensuring that every such detail has been properly disclosed.
  • Filing of the tax audit report in Form 3CD and transfer pricing audit report in Form 3CEB within the prescribed time.
  • Any other compliances under the Act depending upon the nature of person or class of persons
  • Application for obtaining lower rate tax or NIL deduction certificate on behalf of the persons

Frequently Asked Questions

Q
What are the various income tax return filing forms and their applicability?
A

Following are the various income tax forms and their applicability:

  • ITR-1: Also known as SAHAJ, it is applicable to individuals having salary income, pension income, income from house property or income from other sources.
  • ITR-2: It is applicable to individuals and HUF not having income chargeable under the head PGBP
  • ITR-3: It is applicable to individuals and HUF whose any income is chargeable under the head PGBP
  • ITR-4: Also known as SUGAM, it is applicable to individuals, HUF or partnership firms opting for presumptive taxation scheme under section 44AD/44ADA/44AE
  • ITR-5: It is applicable to AOP, BOI, LLP, co-operative society, local authority or artificial juridical person
  • ITR-6: It is applicable to companies (other than one claiming exemption under section 11)
  • ITR-7: It is applicable to persons including companies filing returns as per section 139(4A), 139(4B), 139(4C) or 139(4D) (i.e., political parties, colleges, trusts, institutions).
Q
What are the due dates for direct tax returns and audits under income tax?
A

Following are the due dates for filing income tax returns and audits:

Particulars

Due Date (of assessment year)

A company other than the company that is required to furnish report under Section 92E in Form No. 3CEB

31st October

Any person that is required to furnish report under Section 92E in Form No. 3CEB

30th November

Any person (other than a company) whose accounts are required to be audited under this act or any other law.

31st October

A working partner of a firm whose accounts are required to be audited under this act or any other law.

31st October

Audit under the income tax law

30th September

Any other assessee

31st July

Q
What is the time available for the e-verification of direct tax returns?
A

With effect from 1st August 2022, income tax returns shall be e-verified within 30 days after submission of the returns. However, for returns filed till 31st July 2022, the time limit for e-verification is 120 days from the date of submission of the return.

Q
What is the due date for payment of TDS to the government?
A

The due date for payment of TDS to the government is the 7th of next month. Therefore, the TDS deducted in August shall be paid till the 7th of September and so on.

Q
What if I miss the income tax return filing deadline?
A

If you fail to file your ITR within the above deadline, then you can file a belated return as per Section 139(4). The due date for filing a belated return is 31st December of the assessment year. 

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