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Link Aadhaar Card with PAN Card As per government regulations, all PAN card holders must link their PAN with their Aadhaar by 30th June 2023. Failure to do so will result in the PAN card becoming inoperative from 1st July 2023. If the deadline is missed, a late penalty of ₹1,000 must be paid before initiating the linking process. Why Link PAN with Aadhaar?   Ensures seamless tax filing and compliance. Prevents higher TDS/TCS deductions. Helps in faster processing of income tax returns. Reduces the risk of PAN misuse. How to Link Aadhaar with PAN?   Method 1: Online Linking via Income Tax Portal   Visit the official Income Tax e-filing portal. Click on “Link Aadhaar” under the “Quick Links” section. Enter your PAN number, Aadhaar number, and name (as per Aadhaar). Tick the confirmation box verifying that the details are correct. Enter the captcha code and click “Link Aadhaar”. A confirmation message will appear once the linking is successful. Method 2: Linking via SMS   You can also link Aadhaar with PAN by sending an SMS from your registered mobile number. Format:UIDPAN<SPACE><Aadhaar Number><SPACE><PAN Number> Example:UIDPAN 123456789123 AKPLM2124M Send this message to 567678 or 56161. You will receive a confirmation message once the linking is successful. Important Notes:   The name on Aadhaar must match the name on PAN. If there’s a mismatch, update the details before linking. Linking Aadhaar with PAN is mandatory for filing income tax returns. If your PAN becomes inoperative, it can be reactivated within 30 days after linking and paying the penalty. For further assistance, contact our team, and we will help you link your Aadhaar with PAN seamlessly!

Income Tax Slabs for FY 2023-24 (New & Old Regimes) Old Income Tax Scheme:   The old income tax scheme, also known as the existing tax regime, has been in place for many years. Under this scheme, tax rates are based on an individual’s income. The applicable tax rates are: Up to Rs. 2.5 lakh: Nil Rs. 2.5 lakh to Rs. 5 lakh: 5% Rs. 5 lakh to Rs. 10 lakh: 20% Above Rs. 10 lakh: 30% This scheme allows deductions under various sections of the Income Tax Act, such as Section 80C, 80D, and 80G, which cover investments like provident fund, life insurance premiums, and donations to charitable organizations. New Income Tax Scheme:   The new income tax scheme, introduced in the Union Budget of 2020, is an optional scheme with lower tax rates but fewer deductions. The tax rates under this scheme are: Up to Rs. 3 lakh: Nil Rs. 3 lakh to Rs. 6 lakh: 5% Rs. 6 lakh to Rs. 9 lakh: 10% Rs. 9 lakh to Rs. 12 lakh: 15% Rs. 12 lakh to Rs. 15 lakh: 20% Above Rs. 15 lakh: 30% Comparison Between Old and New Income Tax Schemes   Feature Old Income Tax Scheme New Income Tax Scheme Tax Rates Higher tax rates Lower tax rates Deductions Available (80C, 80D, etc.) Limited deductions Eligibility Default regime Optional scheme Taxpayers can choose between the two schemes based on their financial situation.   Example: Tax Calculation for Income of Rs. 15 Lakh   Under the Old Income Tax Scheme:   Up to Rs. 2.5 lakh: Nil Rs. 2.5 lakh to Rs. 5 lakh: 5% on Rs. 2.5 lakh = Rs. 12,500 Rs. 5 lakh to Rs. 10 lakh: 20% on Rs. 5 lakh = Rs. 1,00,000 Above Rs. 10 lakh to Rs. 15 lakh: 30% on Rs. 5 lakh = Rs. 1,50,000 Total Tax Liability: Rs. 2,62,500 Under the New Income Tax Scheme:   Up to Rs. 3 lakh: Nil Rs. 3 lakh to Rs. 6 lakh: 5% on Rs. 3 lakh = Rs. 15,000 Rs. 6 lakh to Rs. 9 lakh: 10% on Rs. 3 lakh = Rs. 30,000 Rs. 9 lakh to Rs. 12 lakh: 15% on Rs. 3 lakh = Rs. 45,000 Rs. 12 lakh to Rs. 15 lakh: 20% on Rs. 3 lakh = Rs. 60,000 Total Tax Liability: Rs. 1,50,000 Common Deductions Available in Both Regimes:   The standard deduction of ₹50,000 (previously available only in the old regime) is now extended to the new tax regime. Employer contributions to NPS (Section 80CCD(2)) are deductible under both regimes. Interest paid on housing loans for rented-out properties is deductible under Section 24(b) in both tax regimes. Taxpayers should evaluate which regime is more beneficial based on their deductions and financial planning.    

Consequences of Inoperative Account – Dated 25/01/2024 Who Falls Under the Exempt Category for PAN-Aadhaar Linking? The exempt category individuals are not required to link PAN-Aadhaar by 30th June 2023. The exempt category includes: Individuals residing in the states of Jammu and Kashmir, Assam, and Meghalaya. A non-resident taxable person as per the Income-tax Act, 1961. People aged more than 80 years (Super Senior Citizens). Persons who are not citizens of India. Consequences of Not Linking PAN with Aadhaar Card Failure to link PAN with Aadhaar within the deadline results in the PAN becoming inoperative, leading to the following consequences: Tax Return Processing: Pending income tax returns will not be processed, and refunds will not be issued to inoperative PAN cards. TDS/TCS Deduction: Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) will be applicable at a higher rate. Credit and Certificates: The TCS/TDS credit will not appear in Form 26AS, and TCS/TDS certificates will not be available. Declaration Restrictions: Taxpayers will be unable to submit Form 15G/15H declarations for nil TDS. Restrictions on Financial Transactions: The following transactions will not be possible with an inoperative PAN: Opening a bank account. Issuance of debit/credit cards. Purchase of mutual fund units. Cash deposits with a bank or post office exceeding Rs.50,000 in a day. Purchase of a bank draft or pay order in cash exceeding Rs.50,000 in a day. Time deposits with banks, Nidhi, Non-Banking Financial Corporations (NBFCs), etc., exceeding Rs.50,000 or aggregating more than Rs.2,50,000 in a financial year. Payments for one or more prepaid payment instruments (as defined by the Reserve Bank of India) through bank draft, pay order, or banker’s cheque aggregating more than Rs.50,000 in a financial year. Sale or purchase of goods or services exceeding Rs.2,00,000 per transaction. Bank transactions exceeding Rs.10,000. Reactivating an Inoperative PAN A PAN card can be made operative again within 30 days by linking it with Aadhaar and paying a fee of Rs.1,000 to the prescribed authority.

A Comprehensive Guide to Interim Budget 2024 The Hon’ble Finance Minister Shrimati Nirmala Sitharaman presented the budget speech in parliament on 1st Feb 2024. As this is an interim budget, there are no major changes in taxation. While the major updates may hold off until after the 2024 general elections, the upcoming union budget presents an opportunity to address lingering concerns and set the stage for future economic growth. Key Highlights of the Interim Union Budget 2024   1. No Changes in Tax Rates of Direct Tax   One of the standout features of the interim budget is the decision to maintain the status quo in income tax rates. Both direct and indirect tax rates remain untouched, offering individuals a familiar framework for financial planning and continuity in tax policies. 2. Withdrawal of Outstanding Direct Tax Demands   As a measure to ease the burden on taxpayers, the budget introduces the withdrawal of outstanding direct tax demands for specific periods: Up to ₹25,000 (FY 2009-10 and earlier): Outstanding direct tax demands up to ₹25,000 for the financial year 2009-10 and earlier will be withdrawn. This aims to address longstanding tax issues. Up to ₹10,000 (FY 2010-11 to 2014-15): For the fiscal years from 2010-11 to 2014-15, outstanding direct tax demands up to ₹10,000 will be withdrawn, providing targeted relief for smaller outstanding amounts. To further clarify the tax benefits under different regimes, we have prepared a comparative analysis. New Tax Regime: Deductions and Exemptions   Here is a comparison between the deductions and exemptions available under the new and old tax regimes: Particulars Old Tax Regime New Tax Regime (until 31st March 2023) New Tax Regime (From 1st April 2023) Income level for rebate eligibility ₹5 lakhs ₹5 lakhs ₹7 lakhs Standard Deduction ₹50,000 – ₹50,000 Effective Tax-Free Salary Income ₹5.5 lakhs ₹5 lakhs ₹7.5 lakhs Rebate u/s 87A ₹12,500 ₹12,500 ₹25,000 HRA Exemption ✓ X X Leave Travel Allowance (LTA) ✓ X X Employer’s contribution to NPS ✓ ✓ ✓ Medical Insurance Premium (80D) ✓ X X Interest on Home Loan (80E) ✓ X X Donation to Political Party (80G) ✓ X X Savings Bank Interest (80TTA/80TTB) ✓ X X Surcharge Rate Reduced X X ✓   Key Changes Introduced in Budget 2023 (Remains Unchanged for FY 2024-25)   Higher Tax Rebate Limit & Marginal Relief: Rebate u/s 87A: Available for Resident Individuals having Total Income up to ₹7,00,000/-. 100% of tax payable or ₹25,000/- (whichever is lower). Marginal relief applies if total income exceeds ₹7,00,000 but does not exceed ₹7,27,770.                  Income Tax Slab Rates for FY 2023-24 / AY 2024-25 (Old Regime) Slabs Individuals (<60 Years) Senior Citizens (60-79 years) Super Senior Citizens (80+ years) Up to ₹2,50,000 Nil Nil Nil ₹2,50,001 – ₹3,00,000 5% Nil Nil ₹3,00,001 – ₹5,00,000 5% 5% Nil ₹5,00,001 – ₹10,00,000 20% 20% 20% Above ₹10,00,000 30% 30% 30%                                                               New Regime Income Tax Slab Rates Slabs Income Tax Rates Up to ₹3,00,000 Nil ₹3,00,001 – ₹6,00,000 5% (Tax rebate u/s 87A) ₹6,00,001 – ₹9,00,000 10% (Tax rebate u/s 87A up to ₹7 lakh) ₹9,00,001 – ₹12,00,000 15% ₹12,00,001 – ₹15,00,000 20% Above ₹15,00,000 30%   Standard Deduction & Family Pension Deduction   Standard Deduction: The ₹50,000 deduction is now available under both the old and new tax regimes. This makes the effective tax-free income ₹7.5 lakhs under the new regime. Family Pension Deduction: Deduction available: ₹15,000 or 1/3rd of pension, whichever is lower. Reduced Surcharge for High-Net-Worth Individuals   Surcharge on income over ₹5 crores reduced from 37% to 25%. This reduces the effective tax rate from 42.74% to 39%. Higher Leave Encashment Exemption   The exemption limit for non-government employees has been raised from ₹3 lakhs to ₹25 lakhs. Default Tax Regime   From FY 2023-24, the new tax regime is set as the default option. Taxpayers must submit a form to opt for the old regime when filing returns.           Old Tax Regime vs. New Tax Regime: Break-Even Points Income Level Standard Deduction Net Income Tax under Both Regimes Additional Deductions Required (Old Regime) Which Tax Regime to Choose? ₹7,00,000 ₹50,000 ₹6,50,000 ₹0 ₹1,50,000 New Regime ₹8,00,000 ₹50,000 ₹7,50,000 ₹36,400 ₹1,38,500 Depends on deductions ₹10,00,000 ₹50,000 ₹9,50,000 ₹54,600 ₹2,50,000 Depends on deductions ₹15,00,000 ₹50,000 ₹14,50,000 ₹1,45,600 ₹3,58,000 Depends on deductions Conclusion   A thorough comparison of both tax regimes is necessary to determine the best fit. If your deductions exceed ₹3,75,000, the old regime may be better; otherwise, the new regime is more beneficial.  

Crypto Currency or Virtual Digital Assets Taxation Taxation of Virtual Digital Assets (VDA)   Definition of Virtual Digital Asset (VDA) For the purpose of tax deduction under this section, Virtual Digital Asset (VDA) includes: Any information, code, number, or token generated through cryptographic means, commonly known as cryptocurrency (e.g., Bitcoin, Ethereum, etc.). A Non-Fungible Token (NFT) or any similar token as notified by the Government. Any other digital asset as notified by the Central Government. Exclusions from Virtual Digital Assets (VDA)   The following shall not be treated as VDA: Gift Cards or Vouchers that are used to obtain goods/services or discounts. Mileage Points, Reward Points, or Loyalty Cards for promotional rewards. Subscriptions to websites, platforms, or applications. Taxability of Virtual Digital Assets under Section 115BBH   Section 115BBH, introduced in the Finance Bill, 2022, states that income from the transfer of VDA will be taxable at 30%. No deduction except the cost of acquisition will be allowed. No indexation benefit even if the VDA is held for more than 36 months. No set-off of losses from the transfer of VDA against any other income. No carry-forward of VDA losses to subsequent years. Even if the total income (including VDA income) is below the basic exemption limit, a tax rate of 31.2% (including Health & Education cess) applies. Rebate u/s 87A is allowed under this section as there is no prohibition in 115BBH. Tax Deduction at Source (TDS) under Section 194S   Finance Act 2022 introduced Section 194S in the Income Tax Act, 1961. Any person responsible for paying a resident any sum as consideration for the transfer of VDA must deduct 1% TDS. TDS is deducted at the earlier of: When the sum is credited to the account of the resident. When the payment is made. Frequently Asked Questions (FAQs) What is the rate of TDS under Section 194S? TDS is deducted at 1% of the consideration. If the payee does not provide PAN, TDS will be 20%. What is the maximum amount up to which no tax needs to be deducted under this section? TDS is deducted at 1% of the consideration. If the payee does not provide PAN, TDS will be 20%. Who is considered a specified person under Section 194S? A specified person is: Individuals or HUFs whose turnover/gross receipts in the preceding financial year do not exceed ₹1 crore in business or ₹50 lakhs in the profession. Is TAN (Tax Deduction & Collection Account Number) mandatory for TDS under this section? No, specified persons can deduct TDS using their PAN instead of a TAN Compute Income Tax if VDA Transfer Consideration is ₹62,000 and Cost of Acquisition is ₹21,000. Tax Calculation: Income from Transfer of VDA = ₹62,000 – ₹21,000 = ₹41,000 Tax @30% = ₹12,300 Health & Education Cess @4% = ₹492 Total Tax Payable = ₹12,792

NRI Update: Crucial PAN-Aadhaar Linking Guidelines Exempt Categories for PAN-Aadhaar Linking   The following categories of individuals are exempt from linking their PAN with Aadhaar by 30th June 2023: Individuals residing in Jammu and Kashmir, Assam, and Meghalaya. Non-resident taxable persons as per the Income-tax Act, 1961. Super Senior Citizens (individuals aged more than 80 years). Persons who are not citizens of India. Consequences of Non-Linking   If the PAN-Aadhaar linking is not completed by 30th June 2023, the PAN card will become inoperative from 1st July 2023. Method 1: Online Linking Process   Follow these steps to link your Aadhaar card with your PAN card online: Visit the Income Tax e-filing website at Income Tax e-Filing. Click on the “Link Aadhaar” option under the “Quick Links” section on the right-hand side of the page. In the relevant fields, enter your PAN card number, Aadhaar card number, and name as it appears on your Aadhaar card. Check the box to confirm that the details you have entered match your Aadhaar card. Enter the captcha code as shown on the screen and click on the “Link Aadhaar” button. A pop-up message will appear, indicating that your Aadhaar card has been successfully linked to your PAN card. Method 2: For Cases Where Aadhaar Card is Not Available   In cases where the Aadhaar card is not available, you can make your PAN operative by writing a letter to your Jurisdictional Assessing Officer (A.O.) with the following documents: Copy of PAN card. Copy of Indian Passport, or Copy of foreign Passport (if available). Screenshot of PAN showing “Inoperative” status or a copy of Form 26AS. This process may take approximately 30 days, after which your PAN will become active and operative. For a smooth process, you can also contact us for assistance.