#TaxLiability

[seemabhatnagar]

The Case of the Missing TDS: A Story of Tax Evasion and Justice

Harshdip Singh Dhillon v. Union of India Through Commissioner of Income Tax TDS

WP©10828/2019

Before Delhi High Court

The bench of Hon’ble Mr. Justice Girish Kathpalia & Hon’ble Mt. Justice Rajiv Shakdher allowed the Writ and set aside the demand notice dated 04.02.2019.

The Respondent were directed to allow credit of TDS deducted by his employer for the Assessment Year 2013-14 to the petitioner vide judgment dt. 04.01.2024.

Background

The petitioner-Harshdip Singh Dhillon has prayed for setting aside demand letter dated 04.02.2019 qua outstanding tax liability pertaining to the Assessment Year 2013-14 and for allowing credit to the petitioner against the Tax Deducted at Source (TDS) for the assessment year 2013-14 by his employer.

Respondent entered appearance through counsel and filed counter affidavit.

Facts

The petitioner was employed with Tulip Telecom Ltd. as Associate Vice-President during the period November 2011 to May 2013 and he resigned from service on 07.05.2013 with effect from 09.05.2013.

For assessment years 2011-12 and 2012-13, the employer of the petitioner deducted Tax at Source (TAS) on the salaries paid to petitioner but the deducted tax pertaining to the assessment year 2012-13 was not deposited by the employer with the Income Tax authorities.

The employer of petitioner also failed to issue the requisite TDS certificate, so the petitioner informed the concerned Income Tax Officials about the default, but no action was taken.

The petitioner filed a petition seeking winding up of the employer company by way of Company Petition under Section 433(e)&(f) read with Section 434 of the Companies Act, in which liquidator was appointed.

Instead of granting credit of the TDS pertaining to the assessment year 2012-13, the respondent issued intimation dated 03.12.2015, thereby raising demand of Rs.15,77,240/- against the petitioner towards outstanding tax liability.

The petitioner made various representations to the respondent/revenue informing them about the defaults on the part of his employer. Ultimately, the respondent/revenue issued the impugned demand notice dated 04.02.2019, thereby again raising a tax demand of Rs.15,36,220/- against the petitioner. Since the respondent/revenue did not clarify the situation despite being approached by the petitioner, the present petition was filed.

Submission of the Respondent

The respondent/revenue in its counter affidavit did not dispute that the petitioner had received salary after deduction of tax.

The amount due to the petitioner towards salary for the months of December 2012, January 2013 and March 2013 was not actually paid to the petitioner by his employer, so the employer had no obligation to deduct tax at source and consequently the respondent/revenue is under no obligation to allow credit of the same.

Issue

Whether any recovery towards the outstanding tax demand can be effected against the petitioner in view of the admitted position that the tax payable on his salary was being regularly deducted at source by his employer who did not deposit the same with the authorities.

Observation of Court

Since the petitioner accepted salary after deduction of income tax at source, it is his employer who is liable to deposit the same with the revenue authorities and on this count, the petitioner cannot be burdened.

We find no substantial question of law to be considered by us in this appeal.

Seema Bhatnagar

[alishajoy059]

Reverse Charge Mechanism under GST shifts the tax liability from the supplier to the recipient of goods or services. The recipient pays the tax directly to the government, self-assesses the tax, and can claim Input Tax Credit (ITC) if the goods or services are used for business purposes.

[farademetre]

Retirement Account Strategies to Reduce Taxes

Diversifying your retirement investments between pre-tax, post-tax Roth, and taxable accounts can provide you more flexibility in managing your tax obligation throughout retirement. Understanding the specific benefits and downsides of each account type is critical for maximizing your adjusted gross income and navigating changing tax rules.

[shinycolortragedy]

Dive into the ultimate resource for small business tax optimization and take your financial strategy to the next level. This comprehensive handbook covers everything you need to know about minimizing your tax liability and maximizing your savings. From understanding complex tax laws to implementing practical strategies, you'll learn how to structure your business for maximum tax efficiency, identify overlooked deductions, and navigate tax credits and incentives.

[usnewsper-business]

New IRS Tax Brackets: How They Affect Your Taxes #incometaxbrackets #IRStaxbrackets #standarddeduction #taxliability #taxseason

[ippasrichaandco]

Knowing how much to pay in taxes can also help to avoid penalties and interest charges, as well as ensure that the business is compliant with all applicable tax laws. Additionally, a thorough understanding of your tax situation can help you make informed decisions about your business's investments and operations, allowing you to maximize profits while minimizing taxes.

Keep up with ever-changing tax regulations. Get the support you need to reduce your tax liability and optimize costs.

[srishticonstructions]

Understanding  LTCG Tax Regulations 2024 Budget Announcement

What Is LTCG Tax?

Long-term capital gains (LTCG) tax is a tax levied on profits from the sale of assets held for a longer duration, typically more than one year. In India, the LTCG Tax Regulations 2024 have introduced significant changes that affect how property owners and investors calculate their taxes.

For instance, if you sell a property purchased for ₹50 lakhs and sell it for ₹70 lakhs after three years, the profit of ₹20 lakhs is subject to LTCG tax. Under the previous regime, this was taxed at 20%, but following the LTCG Tax Regulations 2024, the rate has been reduced to 12.5% for properties sold after July 23, 2024, but without indexation benefits.

How Budget LTCG Tax Regulations 2024 Changes Affect Property Owners

a. No Additional Tax For Pre-July 23, 2024 Property Purchases

Individuals who purchased properties before July 23, 2024, will not incur additional tax due to the changes in the LTCG Tax Regulations 2024. They can choose to calculate their tax using either the old scheme (20% with indexation) or the new scheme (12.5% without indexation), whichever is more beneficial. This means if you bought a property for ₹40 lakhs and sold it for ₹60 lakhs, you can opt for the tax that results in a lower liability.

b. The Government's Response To The LTCG Tax Regulations 2024 Amendments

The government has acknowledged the backlash regarding the removal of indexation benefits. As a response, the Finance Minister stated that the LTCG Tax Regulations 2024 amendments will allow taxpayers to choose the most beneficial tax structure, ensuring they are not worse off due to the new rules.

c. Reduction In LTCG Tax Rate

The reduction of the LTCG tax rate from 20% to 12.5% is a significant change aimed at easing the tax burden on property sellers. For example, if you sold a property for ₹80 lakhs, the tax under the new regime would be ₹10 lakhs (12.5% of ₹80 lakhs), compared to ₹16 lakhs under the old regime.

d. Impact On Property Owners With Minimal Price Appreciation

For property owners who have not seen substantial price appreciation, the new LTCG Tax Regulations 2024 can be beneficial. If a property bought for ₹45 lakhs is sold for ₹48 lakhs, the profit of ₹3 lakhs would result in a much lower tax burden under the new regulations compared to the previous rules.

e. Simplification Of Capital Gains Tax Structure

The simplification of the capital gains tax structure is a key aspect of the LTCG Tax Regulations 2024. The government aims to treat all asset classes equally, making it easier for taxpayers to understand their liabilities. This means that whether you are selling real estate or stocks, the process of calculating your LTCG tax calculation will be more straightforward.

Navigating the New LTCG Tax Regulations 2024 for Property Owners

The simplification of the capital gains tax structure is a key aspect of the LTCG Tax Regulations 2024. The government aims to treat all asset classes equally, making it easier for taxpayers to understand their liabilities. This means that whether you are selling real estate or stocks, the process of calculating your LTCG tax calculation will be more straightforward.

At Srishti Constructions, we understand the importance of these regulations and are committed to providing our clients with the best guidance on real estate investments. As the landscape of property taxation evolves, we are here to help you make informed decisions that align with your financial goals.

Key Takeaways

The LTCG Tax Regulations 2024 have reduced the tax rate on property sales from 20% to 12.5%.

Property owners can choose between the old and new tax schemes for properties sold before July 23, 2024.

The amendments aim to simplify the capital gains tax structure and provide relief to taxpayers.

Srishti Constructions is dedicated to helping clients navigate these changes effectively.

[sechlercranberry]

A business succession plan can protect the value of the company, provide for a smooth transition to a new owner or manager, reduce tax liabilities, and prevent conflicts among family members or partners.

[raccountants]

The Art of Accounting: What is a notice of Assessment and What does it contain?

[alishajoy059]

“Residential status in India dictates income tax liability. It classifies individuals as Residents or Non-Residents based on physical presence, influencing taxation on global income for Residents. Understanding these classifications is crucial for tax compliance and optimizing financial strategies.”

[thxnews]

UK Tax Gap Remains at Record Low of 4.8%, Reveals HM Revenue and Customs

  A Steady Trend in Tax Compliance

The UK's tax collection agency, HM Revenue and Customs (HMRC), has announced that the country's unpaid tax amount has continued to remain at a record low of 4.8%. This revelation comes from the annual publication of the Measuring Tax Gaps report, which estimates the difference between the expected and actual tax payments. Notably, this figure matches last year's revised estimate, indicating a consistent trend in tax compliance. Upholding Public Services through Proper Tax Payments Jonathan Athow, HMRC's Director General for Customer Strategy and Tax Design, stressed the significance of tax collection in funding essential public services. He emphasized that it is crucial for everyone to pay their fair share of taxes, ensuring the sustainability of public amenities and infrastructure. According to Athow, the latest figures demonstrate that the majority of taxpayers and businesses fulfill their tax obligations responsibly.  

Long-Term Reduction in the Tax Gap

The Measuring Tax Gaps report, published annually, reveals a notable long-term decrease in the tax gap. This gap represents the difference between expected and collected tax amounts. Over the years, factors such as errors, insufficient care, tax evasion, and criminal activities have contributed to this gap. Since the 2005-2006 tax year, the tax gap has declined significantly from 7.5% to the current 4.8% in 2021-2022.   Monetary Impact and Contributing Factors In terms of monetary value, the most recent figures indicate a difference of £36 billion in the 2021-2022 tax year, compared to £31 billion in the previous year. The tax gap has remained at 4.8% due to an increase in estimated tax liabilities from £643 billion in 2020-2021 to £739 billion in 2021-2022. The report also highlights the composition of the tax gap by different groups and types of tax.   Groups and Types Contributing to the Tax Gap The report reveals that small businesses represent the largest portion of the tax gap, accounting for 56% (£20.2 billion). They are followed by criminals, large businesses, and mid-sized businesses, each contributing 11% (£4.1 billion, £3.9 billion, and £3.8 billion, respectively). Wealthy individuals make up 5% (£1.7 billion), while all other individuals contribute 6% (£2.1 billion) to the overall tax gap. When examining the types of tax, Income Tax, National Insurance contributions, and Capital Gains Tax collectively make up 35% (£12.7 billion) of the total tax gap. Corporation Tax (CT) now stands as the second-largest component at 30% (£10.6 billion), with revised estimates based on new data. The Value Added Tax (VAT) gap has shown a consistent downward trend, declining from 14.0% (£11.9 billion) in 2005-2006 to 5.4% (£7.6 billion) currently.   Addressing Behavioral Factors and Enhancing Transparency The report identifies several behavioral reasons for the tax gap, including failure to take reasonable care (30%), errors (15%), evasion (13%), legal interpretation (12%), criminal attacks (11%), and non-payment (9%). HMRC values transparency and publishes the report to foster public trust in the tax system. Transparency informs HMRC's priorities, enabling focus on areas with the greatest potential for improvement.  

Ensuring Accuracy and Integrity in Reporting

It's worth noting that HMRC's tax gap estimates are considered official statistics produced in accordance with the Code of Practice for Statistics, guaranteeing objectivity and integrity. These estimates undergo an annual review to incorporate updated data and methodologies, ensuring the accuracy of the findings. The Measuring Tax Gaps 2023 report supersedes the 2022 report, initially estimating a 5.1% tax gap but revised to 4.8%. These reports shape HMRC's work, emphasizing transparency and providing insight for significant improvements in tax compliance.   Sources: THX News & HM Revenue & Customs. Read the full article

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Don’t guess your tax liabilities—analyze them! Get expert analysis now! For more info visit www.syriaccpa.com #taxliability #taxservices #taxhelp #TaxPreparation #SyriacCPA

[cadeveshthakur]

TDS ki कक्षा|Part 3|Interest, Fees, Penalty, Prosecution, Expense Disallowance under TDS|Income Tax

TDS ki कक्षा TDS Knowledge series Part 3 @cadeveshthakur #tds #incometax #cadeveshthakur #trending #viral TDS compliance and the consequences associated with it. In this video, we’ll explore various sections of the Income Tax Act related to TDS (Tax Deducted at Source) and discuss the implications for defaulting taxpayers. Here’s the content breakdown: 📌 Timestamps 📌 00:00 to 00:56 Introduction 00:57 to 02:46 Content Part3 02:47 to 03:54 Example 03:55 to 08:48 Assessee in default 08:49 to 11:00 example 11:01 to 17:07 late fees 17:08 to 23:40 interest 23:41 to 31:51 how to calculate interest & fees 31:52 to 37:00 penalties 37:01 to 38:30 prosecution 38:31 to 39:43 disallowance 1. Section 201: Assessee in Default o Explanation of what constitutes an “assessee in default.” o Consequences for failure to deduct or pay TDS. o Key points:  Interest (Section 201(1A)): When a deductor fails to deduct tax at source or doesn’t deposit it to the Government’s account, they are deemed an assessee in default. They become liable to pay simple interest:  1% per month (or part of a month) on the amount of tax from the date it was deductible to the date of deduction.  5% per month (or part of a month) on the amount of tax from the date of deduction to the date of actual payment.  Interest as Business Expenditure: Clarification that interest paid under Section 201(1A) cannot be claimed as a deductible business expenditure.  Penalty (Section 221): If a person is deemed an assessee in default under Section 201(1), they are liable to pay penalty under Section 221 in addition to tax and interest under Section 201(1A). The penalty amount cannot exceed the tax in arrears.  Reasonable Opportunity: The assessee has the right to be heard and prove that the default was for good and sufficient reason. 2. Section 234E: Late Fee for TDS/TCS Returns o Explanation of late fees for non-filing or late filing of TDS/TCS returns. o Due dates for filing TDS/TCS returns. o Late fee calculation: INR 200 per day until the default continues (not exceeding the TDS/TCS amount). o FAQs on Section 234E. 3. Section 276B: Prosecution for Failure to Deduct TDS o Overview of prosecution provisions for non-compliance with TDS obligations. 4. Disallowance of Expenses (Section 40(a)(i)/(ii)) o Explanation of disallowance of expenses if TDS is not deducted or paid. #youtubevideos #youtube #youtubeviralvideos #tdsfreecourse #freecourse #taxdeductedatsource #TDSCompliance #IncomeTax #TaxDeduction #TCSReturns #LateFiling #Penalty #BusinessExpenditure #TaxLiabilities #FinancialCompliance #TaxPenalties #TaxationLaws #AssesseeInDefault #InterestPayment #TaxProcedures #LegalObligations #TaxAwareness #TaxEducation #FinancialLiteracy #TaxPlanning #TaxConsultancy #TaxAdvisory #TaxProfessionals #TaxUpdates #TaxGuidance #TaxTips #TaxAccounting #TaxFiling #TaxReturns #TaxPolicies #TaxChallenges #TaxSolutions #TaxExperts #TaxCompliance #TaxAware #TaxMistakes #TaxConsequences #TaxPenalties #TaxKnowledge #TaxRules #TaxRegulations #TaxBestPractices #TaxManagement #TaxUpdates #TaxNews #TaxInsights #TaxGuidelines #TaxCode #TaxEnforcement #TaxEnforcementActions #TaxPenaltyProvisions #TaxPenaltyLaws #TaxPenaltyGuidance #TaxPenaltyExplained #TaxPenaltyFAQs #TaxPenaltyCompliance #TaxPenaltyAvoidance #TaxPenaltyMitigation #TaxPenaltyResolution #TaxPenaltyAdvice #TaxPenaltyConsulting #TaxPenaltyExperts #TaxPenaltyHelp #TaxPenaltyTips #TaxPenaltyEducation #TaxPenaltyAwareness #TaxPenaltyPrevention #TaxPenaltyManagement #TaxPenaltyStrategies #TaxPenaltyUpdates #TaxPenaltyNews For more detailed videos, below is the link for TDS ki कक्षा TDS Knowledge series https://www.youtube.com/playlist?list=PL1o9nc8dxF1RqxMactdpX3oUU2bSw8-_R