As the financial year 2024-25 (FY 2024-25) has been ended, taxpayers must planning to file their Income Tax Returns (ITR). As we know, the Indian tax system offers two tax regimes, Old Tax Regime and New Tax Regime. This regime comes with different slab rates and deductions.

Understanding the applicable tax rates and choosing the right regime can help you optimize your tax liability. Below is a detailed breakdown of the income tax rates for FY 2024-25 (AY 2025-26) under both regimes.

Old Tax Regime (With Deductions & Exemptions)

Under the Old Tax Regime, tax slabs depends on the age group of the person. The taxpayers can claim various deductions (like Section 80C, 80D, HRA, etc.) and exemptions. The tax rates, surcharges, cess and major deductions are as follows::

1. For Individuals Below 60 Years (Including NRIs & HUFs)

B. For Senior Citizens (Aged 60-80 Years)

C. For Super Senior Citizens (Aged 80+ Years)

D. Surcharges on the Income

E. Health & Education Cess: 4% on (tax + surcharge)

F. Rebate under Section 87A: Tax Rebate upto Rs. 12,500, if income Upto Rs. 5,00,000.

G. Key Deductions Allowed Under Old Regime:

• Section 80C (Rs. 1.5 Lakh): PPF, ELSS, Life Insurance Premium, etc.
• Section 80D (Rs. 25,000 – Rs. 1,00,000): Health Insurance Premium
• Section 80TTA (Rs. 10,000): Interest earned on Savings Accounts
• HRA Exemption: For salaried employees
• Section 24(b): Home Loan Interest (Rs. 2 Lakh)
• LTA (Leave Travel Allowance): Tax exemption on travel expenses

New Tax Regime (Section 115BAC)

The New Tax Regime has lower slab rates but does not allow most deductions (except standard deduction of Rs. 75,000 for salaried employees). It is the default regime, but taxpayers can opt for the Old Regime if they prefer.

1. Tax Slabs for Individuals & HUFs (New Regime – FY 2024-25)

B. Surcharges

C. Health & Education Cess: 4% on (tax + surcharge)

D. Rebate under Section 87A: Tax rebate upto Rs. 25,000 if taxable income is Upto Rs. 7,00,000

E. Key Features of New Regime:

• No major deductions (except standard deduction of Rs. 75,000 for salaried)
• Simplified tax structure with lower rates

Which Regime Should You Choose

Important Deadlines for FY 2024-25 (AY 2025-26)

Note: To read more about Income tax deadlines in FY 2025, Click Here.

Late fee

In case of late filing, Section 234F imposes a late fee of

• Rs.5,000, if your total income exceeds Rs. 5 Lakh.
• Rs.1,000, if your total income is within Rs.5 lakh

No Income Tax Up to Rs. 12,00,000 : Budget Feb 2025

In the Interim Budget of February 2025, the government proposed increasing the tax-free income limit to Rs. 12,00,000 under the New Tax Regime. However, this change is expected to take effect from FY 2025-26 (AY 2026-27) and not in  FY 2024-25 (AY 2025-26). For the current financial year (FY 2024-25), the existing tax slabs remain applicable.

As ITR filing for FY 2024-25 (AY 2025-26) will begin soon, assess your tax liability under both regimes to make an informed decision. If unsure, consult a tax advisor like  Taxunplug  by dropping your Name, Mobile and Email. Our team of experts will take care of all the sticky things and helps to take timely action, and ensure compliance to avoid legal complications.

Income Tax Rates for FY 2024-25

The information provided in above blog is for general informational only and should not be considered as legal or tax advice. Request you to please follow latest updated in reference to above details. We advise to consult with a qualified tax professional such as “Taxunplug” for all your tax needs.

The post Income Tax Rates for FY 2024-25 (AY 2025-26): Latest Slabs & Rates appeared first on Tax Unplug.

As we know, the new tax regime will be applicable from FY 2025-26, where income up to Rs. 12 lakh is exempt, you might already be dreaming of a tax-free life! But hold on—until then, you still need to deal with the existing tax schemes and their rules and grab every deduction possible.

Taxpayers in India are always looking for ways to save on taxes. While Section 80C is well known, many other tax-saving options go unnoticed. In this blog, we will explore hidden tax deductions in FY 2024-25 that can reduce your tax burden. Make sure you claim them before filing your Income Tax Return (ITR)!

Section 80D – Health Insurance Premium

Health is wealth, and the government encourages taxpayers to get health insurance. You can claim deductions

Pro Tip: Preventive health check-ups are covered up to ₹5,000 under this section.

Section 80E – Interest on Education Loan

The deduction u/s 80E can be claim by individual on the interest paid on education loan. It is not available to HUF or any other kind of taxpayer. The loan should be taken for the higher education of self, spouse or children or for a student for whom the individual is a legal guardian.

Further, there is no maximum limit under section 80E hence whatever you paid as interest in a financial year can be claimed as a deduction. The maximum period of deduction is for up to 8 years.

Section 80EEA – First-Time Home Buyers

Under the initiative of “Housing for all”, Government of India was introduced a new deduction u/s 80EEA in which you can be eligible for an extra deduction of interest of Rs. 1.5 Lakh on home loan interest, apart from Section 24(b) subject to that this is your first home.

Section 80G – Donations to Charitable Organizations

Individuals can claim a deduction under Section 80G on donations made to eligible institutions or funds, with the deductible amount being either 50% or 100% of the donated sum, depending on the recipient institution or fund.

For companies, the deduction under Section 80G is also available at either 50% or 100% of the donated amount. However, this deduction is subject to specific conditions and restrictions.

Section 80GG – Rent Paid (For Non-Salaried Individuals)

If you do not receive HRA from your employer, you can claim up to ₹60,000 per year under this section.

Section 80C, CCD1, 1B & 2 : NPS Tax Benefits

FAQs on Hidden Tax Deductions in 2025

Hidden Tax Deductions

1. Can I claim 80C and 80EEA together?

Yes, both deductions can be claimed separately. 80EEA is specifically for first-time homebuyers.

2. Is health check-up covered under 80D?

Yes, preventive health check-ups up to Rs. 5,000 are included in 80D.

3. Who can claim a deduction for electric vehicle loans?

Anyone who has taken an electric vehicle loan can claim up to Rs. 1.5 lakh under 80EEB.

4. Can I claim both HRA and 80GG?

No, if you receive House Rent Allowance (HRA), you cannot claim 80GG.

5. Is there a limit for tax-free gratuity?

Yes, gratuity is tax-free up to Rs. 20 lakh for non-government employees.

Final Thoughts

There are many hidden tax deductions in 2025 that most taxpayers miss. By claiming these benefits, you can reduce your taxable income and maximize savings. Confused about which way to go? No worries! Just connect with us at Taxunplug—we’ll handle your taxes while you focus on enjoying your life (or figuring out how to spend those tax savings!).”

The information provided in above blog is for general informational only and should not be considered as legal or tax advice. Request you to please follow latest updated in reference to above details. We advise to consult with a qualified tax professional such as “Taxunplug” for all your tax needs

The post Hidden Tax Deductions You Must Claim in FY 2024-25 appeared first on Tax Unplug.

Receiving a tax notice can be intimidating, but it doesn’t have to be stressful if approached correctly. Understanding the purpose of the notice and responding within the prescribed timeline is key. This step-by-step guide by TaxUnplug, your trusted tax advisor, will help you address a tax notice effectively.

Whether you’re in Mumbai, Surat, Pune, Jaipur, Jodhpur, or Ahmedabad, this guide will clarify the steps to ensure timely compliance with the tax department’s requirements.

What Is a Tax Notice?

A tax notice is an official communication from the Income Tax Department. It is typically issued for:

• Discrepancies in tax returns,
• Failure to comply with filing requirements,
• Unpaid taxes or incorrect information.

It’s important to identify the nature of the notice to determine the necessary action.

Steps to Respond to a Tax Notice

1. Understand the Notice
   • Read It Thoroughly: Check key details like the section of law under which it is issued, reason for the notice, deadlines, and required action.
   • Some Types of Notices:
     • Notice under Section 143(1): Intimation for tax return adjustments.
     • Notice under Section 139(9): Defective return notice.
     • Notice under Section 142(1): Inquiry for incomplete return details.
     • Scrutiny Notice under Section 143(3): Detailed scrutiny of filed returns.

2. Consult a Tax Professional

Tax laws are complex and technical. Engaging a tax consultant like TaxUnplug ensures accurate understanding of the notice and an appropriate response.

3. Gather Required Documents

Depending on the notice, collect supporting documents, including:

3. Filed Income Tax Returns (ITR),
4. Bank statements and financials,
5. TDS certificates or related documents,
6. Any other evidence to validate your claims.

4. Draft a Proper Response
   • Clearly address the concerns raised in the notice.
   • Attach supporting documents to substantiate your explanations.
   • Maintain a polite and professional tone while drafting your response.

5. Submit the Response Online
   • Log in to the Income Tax Portal.
   • Navigate to the “e-Proceedings” under pending action section of login dashboard.
   • Upload the drafted response along with supporting documents.
   • Acknowledge submission and save the receipt.

6. Monitor the Status
   • Track the progress of your response through the income tax portal.
   • Keep an eye out for any follow-up communications or further requirements.

Common Mistakes to Avoid

1. Ignoring the tax notice or delaying action.
2. Responding without thoroughly understanding the notice.
3. Submitting incomplete or incorrect information.
4. Missing the deadline for response.

Why Trust TaxUnplug?

At TaxUnplug, we specialize in guiding clients through tax-related challenges with a stress-free approach. Our team of experts offers tailored solutions to ensure compliance and peace of mind.

No matter where you are—Mumbai, Surat, Pune, Jaipur, Jodhpur, or Ahmedabad—TaxUnplug is here to help you handle tax notices effectively and professionally.

Facing a tax notice? Let TaxUnplug handle it for you!

The post How to Respond to a Tax Notice without Stress appeared first on Tax Unplug.

Filing taxes may be difficult for both individuals and corporations. To avoid penalties, it is necessary to be thoroughly aware of tax rules, stay current on changes, and ensure accuracy. In India, competent tax professionals make the tax filing procedure considerably easier and more efficient. Let’s look at the top benefits of filing your taxes with Indian specialists and why they’re worth the money.

1. Accurate Tax Filing

One of the key advantages of submitting taxes to specialists in India is accuracy. Tax specialists have the knowledge and experience to correctly prepare tax returns, lowering the likelihood of errors that could result in fines or penalties. Because tax rules change regularly, specialists stay up to date on new regulations, ensuring that your tax return is accurate and by the most recent legislation.

Why Accuracy Matters

Errors in tax returns can lead to time-consuming revisions and even financial penalties. By filing your taxes with experts in India, you gain confidence in knowing your returns are error-free and backed by expertise.

2. Maximizing Tax Deductions and Benefits

Tax experts in India are well-versed in tax deductions, exemptions, and credits that may not be widely known to individuals. They can identify ways to reduce your tax liability legally, which means you can save more money. From health insurance deductions to investments in eligible funds, tax experts ensure that you’re making the most out of all possible deductions.

Key Deduction Areas

Hiring tax professionals ensures you benefit from the full range of deductions, from business expenses and travel costs to eligible charitable donations, giving you maximum savings.

 3. Saving Time and Reducing Stress

Filing taxes requires meticulous planning, gathering documents, and understanding complex forms, which can be time-consuming and stressful. Tax experts simplify this by managing every step, allowing you to save time and focus on other responsibilities. For business owners, this can mean dedicating more time to growing their business instead of dealing with paperwork.

Avoiding Stress with Expert Guidance

Tax experts in India provide a streamlined, stress-free experience, ensuring all filings are submitted before deadlines and keeping you informed about your tax obligations. Their expertise reduces your workload significantly.

4. Better Financial Planning and Advice

A tax professional isn’t just limited to filing returns; they can also offer valuable advice on financial planning, investment strategies, and how to structure your income to minimise tax liability in the future. Filing taxes with experts in India provides a holistic approach to your finances, giving you access to insights that benefit you long-term.

Why Financial Advice Matters

With expert guidance, you can make smarter financial decisions that impact your taxes in the coming years, from investing in tax-saving schemes to structuring your assets wisely.

5. Avoiding Penalties and Ensuring Compliance

Missing deadlines, incorrect filings, or non-compliance with tax laws can lead to fines, interest charges, and other penalties. Tax experts in India ensure that your tax returns are filed correctly and on time, helping you avoid these costly penalties. By entrusting your taxes to experts, you reduce the risks associated with non-compliance, allowing you to stay on the right side of the law.

The Role of Compliance

Tax laws in India are complex, and compliance is essential to avoid legal issues. With professional support, you’ll stay compliant and worry-free about unexpected fines.

 6. Access to the Latest Tax Tools and Software

Tax experts use special software to make filing taxes easier and more accurate. These tools help calculate taxes, find deductions, and keep track of important documents. This saves time and reduces errors. When you file taxes with experts in India, you benefit from these tools without having to buy them yourself.

How Technology Enhances Filing

By leveraging advanced tax software, professionals can ensure faster, error-free filings and provide you with organized records for future reference.

7. Expert Support in Case of Audits

If your tax filings are ever subject to an audit, having a tax expert by your side can make a significant difference. Tax experts in India understand the process and can represent you, respond to queries, and provide the necessary documentation. This support can be invaluable during an audit, ensuring that you have an expert who understands the legalities.

Peace of Mind During Audits

In case of an audit, tax experts provide essential assistance and help you navigate the process, giving you peace of mind and a clear plan of action.

Conclusion

With the assistance of tax professionals, filing taxes in India is easier and more advantageous. Tax specialists make the tax filing process easy and stress-free by guaranteeing accuracy, optimizing deductions, and providing insightful financial guidance. Filing your taxes with professionals in India can save you time, and money, and lower the possibility of expensive mistakes, regardless of whether you’re an individual taxpayer or a business owner.

Choosing to engage with a tax specialist is an investment that will pay off in a variety of ways, including peace of mind, financial savings, and important tax help.

The post Top Benefits of Filing Your Taxes with Experts in India appeared first on Tax Unplug.

This new iteration follows the successful implementation of the earlier scheme. Such initiatives are increasingly becoming integral to taxation legislation, as the government prioritizes the resolution of disputes rather than dedicating administrative resources to contesting them, where the likelihood of success is minimal.

Eligible Cases ?

1. Taxpayer’s case is pending in Appeal / Writ / SLP with following as on 22^nd July 2024:
2. Joint Commissioner (Appeals)
3. Commissioner (Appeals)
4. Income Tax Appellate Tribunal
5. High Court
6. Supreme Court

• Taxpayers who have filed objections against the draft assessment order before the Dispute Resolution Panel (“DRP”) under section 144C of the Income-tax Act, 1961 (“IT Act”) and the DRP has not issued any directions to the Assessing Officer (“AO”) on or before July 22, 2024.

• Taxpayers in whose case the DRP has issued directions to the AO under section 144C(5) of the IT Act and the AO has not passed the final assessment order on or before July 22, 2024.

Taxpayers who have filed revision application under section 264 of the IT Act and such application is pending as on July 22, 2024.

Herein after referred to as “pending cases”

What to pay and what to save ?

Note:

In the following scenarios only 50% of the amount payable in the Table above shall be payable for availing the VSV Scheme, 2024:

1. Where the Pending Case has been filed by the Income-tax Authorities.
2. Where an appeal / objection has been filed before the CIT(A) / ITAT / DRP and an order in favour of the taxpayer has been received on any issue pending in the said appeal / objection from the higher Appellate Forums (and such decision has not been reversed).

Cases not covered under the VSV Scheme, 2024

• Where assessment has been made on the basis of the search initiated under section 132 or 132A of the IT Act.
• Where prosecution under the IT Act or any other specified act has been instituted on or before the date of filing declaration by the taxpayer.
• Where there is undisclosed income from a source located outside India or undisclosed  asset outside India.
• Where assessment or reassessment has been made based on the information received under Double Taxation Avoidance Agreement.
• Where an order of detention has been made under the provisions of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 on or before the date of filing of declaration and the same has not been revoked or set aside in specified circumstances.
• Where the taxpayer has been notified under section 3 of the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992 on or before the date of filing of declaration.

Note

Where the declarant had, before filing the declaration under this scheme, paid any amount under the Income-tax Act in respect of his tax arrears which exceeds the amount payable as depicted in table above, he shall be entitled to a refund of such excess amount, but shall not be entitled to interest on such excess amount under section 244A of the Income-tax Act.

The Direct Tax Vivad se Vishwas Scheme 2024

“The site is for information purposes only and does not provide legal advice of any sort. Viewing this site, receipt of information contained on this site, or the transmission of information from or to this site does not constitute an attorney-client relationship. The information on this site is not intended to be a substitute for professional advice.”

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SVP Southwest Industries Ltd v. The Deputy Commissioner of Income Tax [ITA No. 1269/Mum/2022] (ITAT Mumbai)

The Hon’ble ITAT Mumbai reviewed contentions regarding the validity of certain tax assessment orders. The key issue was whether the necessary prior approval from the Joint Commissioner of Income Tax (JCIT) was properly obtained, as required by section 153D of the Income Tax Act.

Section 153D mandates that any assessment order must receive prior approval from a JCIT, ensuring oversight in cases involving searches or requisitions.

The assessee argued that the approval process was flawed because it was claimed that the JCIT’s approval was mechanical and lacked proper consideration. The draft assessment orders were not properly reviewed.

The Hon’ble Tribunal found that few companies were not actually in existence and had not filed any returns. Despite this, the Assessing Officer (AO) carried out assessment proceedings against these companies and treated their returns as if they were filed by the non-existent companies.

The Tribunal found the presence of approval numbers and approval dates from the Additional CIT in some draft assessment orders concerning. The assessee had provided a list of draft orders, covering various assessment years and different companies. It was however unclear as to how these details could appear in draft orders, as it seemed improbable for draft assessments to include such approval specifics.

It further found that the Assessing Officer’s actions were approved by the Additional Commissioner of Income Tax (CIT) under Section 153D of the Income Tax Act, which mandates that approval from higher authorities is required for certain assessments. However, the draft assessment orders were approved even though the companies were not incorporated, indicating a lack of due diligence and proper application of mind by the approving authority.

Moreover, the approvals were granted mechanically, without proper consideration of the facts, and this lack of due process violated principles of fair play and natural justice. Consequently, the Tribunal annulled the assessment orders, deeming them invalid.

The Hon’ble ITAT Mumbai also emphasized that the approval process is not a mere formality but requires a genuine review of the draft order. There was evidence that approvals were granted without detailed examination or reasoning. It also ruled that the approvals granted were without proper application of mind.

The guidelines from the Central Board of Direct Taxes (CBDT) under Section 119 of the Act were not followed, which require a thorough review and written approval.

Consequently, the assessment orders were invalidated, as they did not meet the legal requirements.

This decision reinforces the importance of thorough and thoughtful oversight in tax assessments, ensuring fairness and compliance with the law.

To download official order, click here.

“The site is for information purposes only and does not provide legal advice of any sort. Viewing this site, receipt of information contained on this site, or the transmission of information from or to this site does not constitute an attorney-client relationship.
The information on this site is not intended to be a substitute for professional advice.”

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As per the CBDT Circular No. 6 dated 23-04-2024, Many taxpayers have complained that they have received notices stating that they failed to comply with the terms of the “short- deduction/collection” of TDS/TCS when conducting transactions in which the PANs of the deductees and collectors were non-functional.

When processing TDS/TCS statements under section 200A or section 206CB of the Act, depending on the circumstances, the Department has initiated demands against the deductors/collectors because the deduction or collection has not been made at a higher rate.
The CBDT has offered exemption from tax demand resulting from inoperative PAN non order to resolve the problems of deductors/collectors, provided that the following requirements are met:

• Transaction (which pertaining to TDS or TCS) were entered into up to dated 31.03.2024, and
• The Dedutee’s or Collectee’s PAN become operative (as a result of linkage with Aadhaar) on or before 31.05.2024.

If the aforementioned requirements are met, the deductors/collectors will not be considered in arrears for taxes deducted at the regular rate for transactions completed through March 31, 2024, and they won’t be obligated to deduct/collect taxes at higher rates specified under section 206AA/206CC for transactions completed through March 31, 2024.

The tax demand that was made will thus no longer be available on the portal.

Important note:

The extension till May 31, 2024, is for the payee’s PAN and Aadhar to be linked in order to provide relief for transactions made through March 31, 2024, only.

For transactions occurring on or after 01.04.2024, it is essential to ensure that the PAN of the deductee is linked to Aadhaar and remains valid on the date of deduction, if inoperative then the deductor/collector must deduct/collect tax at a higher rate under section 206AA/206CC.

This circular is an important step that the CBDT has taken to address grievances and help those deductors and collectors who were forced to deduct or collect tax at a higher rate because the payee’s PAN was non-operative but who instead deducted or collected tax at a normal rate because they were unaware of transactions completed up until March 31, 2024.

To Download Official Circular, please visit https://www.incometax.gov.in/iec/foportal/sites/default/files/2024-04/Circular%20no%206%20of%202024%20on%20TDS%20TCS.pdf

“The site is for information purposes only and does not provide legal advice of any sort. Viewing this site, receipt of information contained on this site, or the transmission of information from or to this site does not constitute an attorney-client relationship.

The information on this site is not intended to be a substitute for professional advice.”

The post CBDT offered exemption from tax demand resulting from inoperative PAN appeared first on Tax Unplug.

In order to reconcile the mismatch, an on-screen functionality has been made available in the Compliance portal of the e-filing website https://eportal.incometax.gov.in for taxpayers to provide their response. At present, the information mismatches relating to FY 2021-22 and 2022-23 have been displayed on the Compliance portal. The taxpayers are also being made aware of the mismatch through SMS and emails as per details available with the Department.

Those taxpayers who have already registered on the e-filing website, can navigate to Compliance portal directly after logging into their account. Details of mismatches identified will be available under the “e-Verification” tab.

Taxpayers who are not registered on the e-filing website have to register themselves on the e-filing website to view the mismatch. For registration, the “Register” button on the e-filing website can be clicked and the relevant details can be provided therein. After successful registration, the e-filing account can be logged into and the Compliance portal can be navigated to view the mismatches.

The on-screen functionality is self-contained and will allow the taxpayers to reconcile the mismatch on the portal itself by furnishing their response. No document is required to be furnished. This is a pro-active step taken by the Department to reach out to the taxpayers and provide them an opportunity to respond to the communication in a structured manner. It is clarified that the said communication is not a notice.

In case the taxpayer has disclosed the interest income in the ITR under the line item ‘Others’ in the Schedule OS, he/she need not respond to the mismatch pertaining to the interest income. The said mismatch shall be resolved on its own and will be reflected in the portal as ‘Completed’.

The taxpayers who are unable to explain the mismatch may consider the option of furnishing an Updated Income Tax Return if eligible, to make good any under reporting of income.

To Download official notification, click here.

“The site is for information purposes only and does not provide legal advice of any sort. Viewing this site, receipt of information contained on this site, or the transmission of information from or to this site does not constitute an attorney-client relationship.

The information on this site is not intended to be a substitute for professional advice.”

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The case involves an order under Section 144 r.w.s 147 of the I.T. Act, which added Rs. 12,25,500/- as Long Term Capital Gain to the assessee’s account. The assessee had sold an immovable property for Rs. 9,25,000/- in 2006, but the Stamp Duty Authority had adopted the property’s value at Rs. 21,50,000/- and charged stamp duty accordingly. This resulted in a difference of Rs. 12,25,000/- in the sale value declared by the assessee and adopted by the Stamp Duty Authority.

The assessee did not file a return of income under Section 139(1) of the Act, and the higher valuation of the property led to escapement of income. The AO reopened the assessment, and the best judgment assessment was passed on 23.02.2015, determining total income of Rs. 12,25,000/- on account of Long Term Capital Gain. The AO adopted the stamp duty valuation as the full value of consideration under Section 50C of the Act.

The PCIT ruled that the Ld. Assessing Officer did not ascertain the cost and year of acquisition of the capital asset during the assessment order, making it erroneous and prejudicial to the Revenue’s interest under Section 263 of the Income Tax Act 1961. The capital gain on the property was claimed to be chargeable to tax in AY 2003-04 under Section 53A of the Transfer of Properties Act, 1882. The assessee had no taxable income in AY 2003-04, and no return of income was filed. The PCIT found that these evidences were not produced during the assessment proceedings.

The assessment order was set aside, and the assessing officer was directed to work out the capital gain on the transfer of the capital asset after ascertaining the year of acquisition and cost of acquisition. The assessee is appealing against a PCIT order under Section 263 of the Act, which was framed in the name of a deceased person.

The counsel for the assessee argued that the original assessment order is bad in law and void ab initio, making it unconstitutional. The court ruled that the original order is void ab initio, making it unsuitable for revision under Section 263 of the Act. The counsel cited the Chandresh Bhai v. ITO 101 taxman.com case, which ruled that no order can be passed in the name of a deceased person.

The DR argued that the assessee had expired despite multiple notices, and no legal heir informed the Department. They relied on PCIT’s observation in the 263 order. The court found that the assessee expired on 15.10.2013, and the assessment order was passed on 16.02.2015 in his name. Therefore, the assessee had expired at the time the order was framed.

The legal heir of a deceased person is questioned about their obligation to inform the Tax Department about the assessee’s death. If there is no specific intimation from the legal heirs, the validity of the assessment order is uncertain. The High Court in Savita Kapila v. ACIT ruled that a duty cannot be placed on legal representatives to inform the Department of the assessee’s death. If an assessment officer issued a notice invalid after the assessee’s death, the notice should be quashed. This case highlights the importance of legal intimation in determining the validity of assessment orders.

The assessment order cannot be considered valid in the eyes of law due to the absence of a specific statutory provision under Income Tax law that requires legal heirs to inform the Income Tax Department about the deceased assessee’s death. It is also established that no assessment can be framed in the name of a deceased person without bringing their legal heirs on record. The High Court in Pravinchandra A Shah 154 (Gujarat) held that reopening notice issued under section 148 issued upon the deceased assessee was a nullity, and consequential proceedings and orders were to be quashed and set aside.

The order passed under section 263 of the Act is deemed invalid in the eyes of law due to its original assessment order being framed in the name of a deceased person. The order cannot be revised through 263 proceedings, and therefore, it is directed to be set aside.

To Download official order, click here.

“The site is for information purposes only and does not provide legal advice of any sort. Viewing this site, receipt of information contained on this site, or the transmission of information from or to this site does not constitute an attorney-client relationship.

The information on this site is not intended to be a substitute for professional advice.”

The post The legal heirs are not required by law to notify the Income Tax department regarding the demise of the assessee. appeared first on Tax Unplug.

In the Union Budget 2024 speech, Finance Minister Nirmala Sitharaman announced the extinguishment of the tax demands until Assessment Year 2015-16. Subsequent to the speech, the Central Board of Direct Taxes (CBDT) has released an order to remit and extinguish the tax demands under the Income Tax Act, 1961, Wealth Tax Act, 1957 or Gift Tax Act, 1958 [“Acts”].

1. Consequent upon the Finance Minister’s budget speech vide para 93 under the heading “Tax Proposals” during Union Budget 2024-25 dated February 01, 2024 and with concurrence of the Department of Expenditure accorded on file of even number vide note dated February 09, 2024, sanction of the Competent Authority in terms of Rule 18 of General Financial Rules, 2017 (GFRs) is hereby accorded to remit and extinguish the following claims to revenue, being tax demands under Income-tax Act, 1961 or Wealth-tax Act, 1957 or Gift-tax Act, 1958 (hereinafter referred as, ‘Acts’) which are outstanding as on January 31, 2024 (as indicated in column 2 below) with effect from the date on which such demands were created/ raised/ modified pertaining to the Assessment Years (as indicated in column 1 below) in respect of taxpayers/ assessees:-

The remission and extinguishment of above outstanding tax demand shall be subject to the maximum ceiling of Rs. 1,00,000/- (Rupees one lakh) for any specific taxpayer/ assessee for the following types of demand entries:-

a. Principal component of tax demand under the Income-tax Act, 1961 or corresponding provisions of Wealth-tax Act, 1957 or Gift-tax Act, 1958;

b. Interest, penalty, fee, cess or surcharge under various provisions of the Income-tax Act, 1961 or corresponding provisions, if any, of Wealth-tax Act, 1957 or Gift-tax Act, 1958.

1.2  The above remission and extinguishment of entries of outstanding direct tax demands shall not be applicable on the demands raised against the tax deductors or tax collectors under TDS or TCS provisions of the Income-tax Act. 1961.

2. Consequent to the aforesaid remission and extinguishment of entries of outstanding demand, there shall not be requirement of calculation of interest on account of delay in payment of demand under sub-section (2) of section 220 of the Income-tax Act, 1961 or corresponding provisions of Wealth-tax Act, 1957 and Gift-tax Act, 1958 and therefore, the same shall not be considered for the purpose of determining the ceiling of Rs. 1,00,000/- (Rupees one lakh).

3. If any tax liability arises against such a taxpayer/ assessee, as a result of application of sub-clause (xviii) of sub-section (24) of section 2 of the Income-tax Act, 1961, the same shall also be remitted and extinguished.

4.1 The above remission and extinguishment of entries of outstanding demand shall be carried out in respect of each demand entry falling within monetary limit as specified at para-1 above starting from the earliest assessment year to subsequent assessment year(s), subject to the condition that aggregate value of such demand entries shall not exceed the maximum ceiling of Rs. 1,00,000/- (Rupees one lakh) for any specific taxpayer/ assessee.

4.2 Further, in order to compute the aforesaid maximum ceiling of Rs. 1,00,000/- (Rupees one lakh), any demand entry having value more than the aforesaid monetary limits as specified in para-1 above shall not be taken into calculation.

4.3 Under no circumstance, fraction of any demand entry, whether its value is falling within the monetary limit as specified in para-1 above or not, shall be considered for remission and extinguishment to compute the aforesaid maximum ceiling of Rs. 1,00,000/- (Rupees one lakh).

5. The aforementioned remission and extinguishment of entries of outstanding demand shall not:-

(i) confer any right to claim credit of any of the remitted and extinguished demand by the taxpayer/assessee under Income-tax Act, 1961 or Wealth-tax Act, 1957 or Gift-tax Act, 1958 or any other law, where such benefit of remission and extinguishment has been allowed to such taxpayer/assessee, or

(ii) confer any right to claim refund of any sum by any taxpayer/assessee under Income-tax Act, 1961 or Wealth-tax Act, 1957 or Gift-tax Act, 1958 or any other law, or

(iii) have any effect on any criminal proceeding/s pending/ initiated or contemplated against the taxpayer/assessee under any Act or law and shall not be construed as conferring any benefit, concession or immunity to the taxpayer/assessee in any such proceedings under any Act or law other than as specifically provided in this order, where such benefit of remission and extinguishment has been allowed to such taxpayer/assessee.

6. As per the provisions of Rule 19(1) of General Financial Rules, 2017, the above remission and extinguishment of entries of outstanding tax demand under the aforesaid ‘Acts’ shall not have the requirement of audit.

7.1 This order shall be implemented by the Directorate of Income-tax (Systems)/ Centralized Processing Centre, Bengaluru (CPC), preferably within two months.

7.2 Rectification of any apparent mistake related to the implementation of this order, which may come to the notice shall be carried out by the CPC, Bengaluru and such rectification shall be considered to be the execution of this order.

8. The Central Board of Direct Taxes (CBDT)/Member (In-charge of Systems and Faceless Scheme), CBDT shall issue directions/ clarifications for any incidental actions required for proper implementation of this order.

To Download official order, click here.

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The post The CBDT has released an order to eliminate tax liabilities outstanding as of January 31, 2024, with a maximum limit of Rs. 1 Lakh per taxpayer. appeared first on Tax Unplug.