Ajeet Mishra

Mastering Finance

[Ajeet Mishra @caajeetmishra]

Income Tax Act 2025 Series
Section 1

[ᴬʸᵃⁿ ᴷʰᵃⁿ👁️‍🗨️ @Mr_AYAN__KHAN_7]

✱ 𝐓𝐀𝐆𝐋𝐈𝐍𝐄 𝐑𝐄𝐕𝐄𝐀𝐋𝐄𝐃 ✱

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[Ajeet Mishra @caajeetmishra]

@Mr_AYAN__KHAN_7 Tg

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@MrSuffuHun Wwwww

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@BJPforGenZ Yes

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@AshwiniVaishnaw Assembler not manufacturer

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@Tejasvi_Surya He bhagwan

[Ajeet Mishra @caajeetmishra]

@elonmusk Bro cocking whole the country.

[Ajeet Mishra @caajeetmishra]

@IncomeTaxIndia thanks

[Ajeet Mishra @caajeetmishra]

Hi @IncomeTaxIndia ,

I have received some fees for consultany but, the tds returns have not has not filed by that person.
Can you pls advise me what shall I do?
Tomorrow is the last date for filings.

I can share all details if required..

[Ajeet Mishra @caajeetmishra]

⚖️ Hindu Law: Dayabhaga vs Mitakshara

Dayabhaga School
📍 Prevalent mainly in West Bengal & Assam
➡️ No right in ancestral property by birth.
➡️ Children acquire a share only after the father’s death.
➡️ Father and his brothers are coparceners during his lifetime.

Mitakshara School
📍 Prevalent in most other parts of India
➡️ Right in ancestral property arises by birth.
➡️ Every child born into the family acquires a share in the family property.

📌 Key difference:
Dayabhaga → Right by succession
Mitakshara → Right by birth

#HinduLaw #HUF #Dayabhaga #Mitakshara #LawStudents #LegalAwareness

[Ajeet Mishra @caajeetmishra]

🏠 HUF: A Separate Tax Entity You Should Know About

A Hindu Undivided Family (HUF) is treated as a separate “person” for income-tax purposes and can have its own PAN, bank account and income.

How does an HUF work? 👇

👤 Karta — Manages the affairs and property of the HUF
👨‍👩‍👧 Coparceners — Members with rights in joint family property, including daughters
🏡 Formation — An HUF is not created by contract; it arises under Hindu law
💰 Income — Can earn income from property, business and other sources
📄 Compliance — Files its own income-tax return

Tax advantages 💡

✅ Separate tax identity from its members
✅ Separate tax slabs applicable to HUF
✅ Eligible deductions where the relevant provisions permit
✅ Can hold qualifying family/joint-family assets and investments

⚠️ Important: Simply creating an HUF does not automatically make every asset or income taxable in the HUF. The source and ownership of the asset/income matter.

📌 For AY 2026–27, the new tax regime is the default regime for HUFs, with the option to opt for the old regime subject to applicable conditions.

HUF can be a useful tool for family wealth and tax planning—but it needs proper structuring.

#HUF #HUFTax #IncomeTax #TaxPlanning #Taxation #PersonalFinance #WealthManagement #India #Finance #TaxTips

[Ajeet Mishra @caajeetmishra]

The main benefits of an HUF (Hindu Undivided Family) are:

💰 1. Separate tax identity

An HUF is treated as a separate taxable person. It can have its own PAN, bank accou.nt and ITR, separate from the Karta and other members.

📊 2. Separate tax computation

The HUF's eligible income is taxed separately from the individual income of its members. This can potentially reduce the family's overall tax burden when properly structured.

🏠 3. Holding family/ancestral assets

Eligible ancestral or joint-family property can be held by the HUF, allowing income such as rent or other eligible income to be assessed in the HUF.

📈 4. Investments

An HUF can, subject to applicable rules, make . applicable provisions of the Income-tax Act. However, the availability of a particular deduction depends on the tax regime and the nature of income.

👨‍👩‍👧 6. Family wealth management

It can provide a structured mechanism for managing eligible family assets and wealth across generations.

⚠️ Important

HUF should not be created merely to save tax. The source and ownership of assets are critical. For example, transferring a member's self-acquired property to an HUF can trigger specific tax consequences, including clubbing provisions.

In short: HUF can provide a separate tax identity and a framework for managing genuine joint-family assets, but its tax benefits depend heavily on how it is formed and funded. 1

[Ajeet Mishra @caajeetmishra]

🇮🇳 Why was a Constitutional Amendment needed for GST?

Before GST, the Constitution divided taxation powers between the Centre and States under Article 246.

GST required a new framework where both Centre and States could levy GST on the same supply.

📌 Article 246 — divided legislative powers between the Union and States.

📌 Article 246A — specifically empowers Parliament and State Legislatures to make laws on GST, with Parliament having exclusive power over inter-State supplies.

This constitutional change was introduced through the 101st Constitutional Amendment Act, 2016, paving the way for GST from 1 July 2017.

👉 In simple words: GST needed a Constitutional amendment because the existing division of taxation powers was not sufficient for a dual GST system.

#GST #IndianTax #Constitution #Article246 #Article246A #Taxation #TaxKnowledge #Finance #CA #FinancialLiteracy

[Ajeet Mishra @caajeetmishra]

📖 Income-tax Act, 2025 — Income Deemed to be Received

Section 7 specifies certain amounts that are deemed to be received during a tax year, even if they may not be physically received.

💰 Deemed Receipt

The following can be deemed to be received:

🔹 Annual accretion to an employee's recognised provident fund balance, to the extent specified under the Act.

🔹 Transferred balance in a recognised provident fund, subject to the prescribed provisions.

🔹 Employer's contribution to an employee's account under a specified pension scheme.

📈 Dividend — Which Tax Year?

The Act also specifies when dividend income is treated as income of a tax year:

Regular Dividend
➡️ Taxable in the tax year in which the dividend is declared, distributed or paid, as applicable.

Interim Dividend
➡️ Taxable in the tax year in which the dividend is unconditionally made available to the entitled shareholder.

💡 Simple Example

If an interim dividend is made unconditionally available to a shareholder on 15 March 2027:

📌 It is treated as income of the Tax Year 2026–27.

Key takeaway:
Tax law can treat certain amounts as “received” even without actual physical receipt, and the timing of dividend taxation depends on the type of dividend.

#IncomeTaxAct2025 #Dividend #Taxation #IncomeTax #ProvidentFund #TaxLaw #TaxTips #IndianTax #Finance #CA

[Ajeet Mishra @caajeetmishra]

📖 Income-tax Act, 2025 — Residential Status in India 🇮🇳

Your residential status determines which income may be taxable in India.

👤 Individual — When are you Resident?

You are generally Resident in India if:

🔹 You stay in India for 182 days or more during the tax year; OR

🔹 You stay in India for 60 days or more during the tax year AND for 365 days or more during the preceding 4 tax years.

✈️ Special rules

The 60-day test doesn't apply in certain cases, including an Indian citizen leaving India:

🚢 As a crew member of an Indian ship
💼 For employment outside India

For an Indian citizen/PIO visiting India, the 60-day threshold can become 120 days where specified income exceeds ₹15 lakh (excluding foreign-source income).

🚨 Deemed Resident

An Indian citizen can be deemed resident if:

🇮🇳 Citizen of India
🌍 Not liable to tax in any other country due to domicile/residence or similar criteria
💰 Total income exceeds ₹15 lakh, excluding foreign-source income

🏠 HUF / Firm / AOP

Generally Resident, unless the control and management of affairs is wholly outside India.

🏢 Company

A company is resident if:

🇮🇳 It is an Indian company, OR
📍 Its Place of Effective Management (POEM) is in India.

POEM = where key management and commercial decisions for the business as a whole are, in substance, made.

🌎 Not Ordinarily Resident (NOR)

An individual/HUF can qualify as Not Ordinarily Resident based on specified past residential history.

Special NOR rules also apply to certain Indian citizens/PIOs visiting India and Indian citizens who are deemed residents.

📌 Key takeaway:

Residential status ≠ Citizenship

Your days in India + past stay + specific circumstances determine your residential status for tax purposes.

#IncomeTaxAct2025 #ResidentialStatus #Resident #NRI #RNOR #IncomeTax #TaxLaw #Taxation #POEM #IndianTax #Finance

[Ajeet Mishra @caajeetmishra]

📖 Income-tax Act, 2025 — What is Included in Total Income?

Section 5 explains what income is included in the total income of a tax year, based on the person's residential status.

🇮🇳 Resident

A resident's total income generally includes:

💰 Income received or deemed to be received in India

📍 Income accruing or arising in India

🌍 Income accruing or arising outside India

However, for a Not Ordinarily Resident (NOR), foreign income is included only when it is derived from:

➡️ A business controlled in India, or
➡️ A profession set up in India

🌎 Non-Resident

A non-resident's total income generally includes:

🇮🇳 Income received or deemed to be received in India

📍 Income accruing or arising, or deemed to accrue or arise, in India

Foreign income that neither accrues in India nor is received in India is generally outside the scope of total income for a non-resident.

⚠️ Two Important Rules

Balance Sheet Rule:
Foreign income doesn't become “received in India” merely because it is recorded in a balance sheet prepared in India.

No Double Inclusion:
If income has already been included because it accrued/arose, it cannot be included again merely because it is subsequently received in India.

📌 Simple formula:

Resident → Indian income + specified foreign income

NOR → Indian income + specified foreign business/profession income

Non-Resident → Income received in India + income accruing in India

#IncomeTaxAct2025 #TotalIncome #ResidentialStatus #IncomeTax #TaxLaw #Taxation #NRI #IndianTax #Finance #TaxTips

[Ajeet Mishra @caajeetmishra]

📖 Income-tax Act, 2025 — What is a “Tax Year”?

The Income-tax Act, 2025 introduces the concept of “Tax Year”.

📅 What is a Tax Year?

A Tax Year means the 12-month period of a financial year starting from 1 April.

For example:

1 April 2026 → 31 March 2027 = Tax Year

🏢 New Business or Profession?

If a business or profession is set up for the first time during a financial year, the tax year begins from the date of setting up.

Similarly, if a new source of income comes into existence during the financial year, the tax year begins from the date that source comes into existence.

📌 Example:

Business started on 1 September 2026.

➡️ Tax Year = 1 September 2026 to 31 March 2027

🔥 Key takeaway

Tax Year = Financial Year period beginning 1 April.

For a newly established business/profession or newly arising source of income, the first tax year starts from the date it begins and ends on 31 March.

#IncomeTaxAct2025 #TaxYear #IncomeTax #TaxLaw #Taxation #Finance #IndianTax #TaxTips #CA

[Ajeet Mishra @caajeetmishra]

📖 Income-tax Act, 2025 — What is a “Zero Coupon Bond”?

A Zero Coupon Bond is a bond that meets specific conditions under the Act. 👇

🔹 Conditions

1️⃣ Issuer must be specified

The bond must be issued on or after 1 June 2005 by:

🏗️ Infrastructure Capital Company
🏦 Infrastructure Capital Fund
💰 Infrastructure Debt Fund
🏢 Public Sector Company
🏦 Scheduled Bank

2️⃣ No payment before maturity

No payment or benefit should be received or receivable before maturity or redemption from the specified issuer.

3️⃣ Government notification

The bond must be specified by the Central Government through notification.

💡 In simple words

Zero Coupon Bond = No periodic interest/benefit + payment generally at maturity, subject to the conditions prescribed under the Income-tax Act.

📌 Important: Not every bond that doesn't pay regular interest automatically qualifies as a “Zero Coupon Bond” under the Income-tax Act. The statutory conditions must be satisfied.

#IncomeTaxAct2025 #ZeroCouponBond #Bonds #IncomeTax #TaxLaw #Taxation #Investment #Finance #IndianTax #TaxTips

[Ajeet Mishra @caajeetmishra]

📖 Income-tax Act, 2025 — What is a “Virtual Digital Asset” (VDA)?

The definition of Virtual Digital Asset (VDA) is broad and covers various forms of digital assets. 👇

💻 What can be a VDA?

🔹 Crypto assets
Digital information, code, numbers or tokens representing value that can be transferred, stored or traded electronically.

🔹 NFTs 🎨
Non-Fungible Tokens and other tokens of a similar nature.

🔹 Other notified digital assets
The Central Government may specify additional digital assets by notification.

🔹 Crypto-assets using distributed ledger technology
Digital representations of value relying on a cryptographically secured distributed ledger or similar technology to validate and secure transactions.

⚠️ Important

The definition specifically excludes Indian currency and foreign currency from the relevant digital-token category.

The Central Government also has the power to:

➡️ Specify additional digital assets as VDAs
➡️ Exclude digital assets from the definition, subject to specified conditions

📌 Simple takeaway:

VDA = Crypto + NFTs + specified digital assets + qualifying crypto-assets

The definition is intentionally broad to cover evolving forms of digital assets.

#IncomeTaxAct2025 #VDA #VirtualDigitalAsset #Crypto #NFT #CryptoTax #IncomeTax #TaxLaw #Taxation #DigitalAssets #IndianTax

[Ajeet Mishra @caajeetmishra]

📖 Income-tax Act, 2025 — What is a Short-Term Capital Asset?

A Short-Term Capital Asset (STCA) is generally a capital asset held for not more than 24 months immediately before its transfer.

But there is an important exception 👇

📊 12-Month Rule

The holding period is 12 months for:

📈 Securities listed on a recognised stock exchange in India
🏦 Units of Unit Trust of India
📊 Units of an equity-oriented fund
💰 Zero-coupon bonds

💡 What does this mean?

General capital assets → ≤ 24 months = Short-Term

Specified listed securities/funds → ≤ 12 months = Short-Term

🔄 Special holding-period rules

The Act also provides specific rules for determining the holding period in cases such as:

🔹 Inheritance / succession
🔹 Amalgamation
🔹 Demerger
🔹 Demutualisation of stock exchanges
🔹 Business trust units
🔹 Mutual fund consolidation
🔹 Rights issues
🔹 Bonus securities
🔹 ESOPs / sweat equity
🔹 Electronic Gold Receipts
🔹 Conversion of certain assets

📌 Key takeaway:
Don't determine the holding period simply by looking at the purchase date. In certain transactions, the law requires the previous holding period or a specifically prescribed date to be considered.

#IncomeTaxAct2025 #CapitalGains #ShortTermCapitalGain #STCG #IncomeTax #TaxLaw #Taxation #StockMarket #Investing #IndianTax

[Ajeet Mishra @caajeetmishra]

📖 Income-tax Act, 2025 — Who is a “Person of Indian Origin”? 🇮🇳

Under the Act, “Person of Indian Origin” (PIO) means an individual:

👤 Who was born in undivided India, OR

👨‍👩‍👧 Whose parent was born in undivided India, OR

👴 Whose grandparent was born in undivided India.

💡 In simple words

You may qualify as a Person of Indian Origin even if you were not born in India, provided your parent or grandparent was born in undivided India.

📌 Key point:
The definition specifically refers to “undivided India”, which is broader than present-day India.

#IncomeTaxAct2025 #PersonOfIndianOrigin #PIO #IncomeTax #TaxLaw #Taxation #IndianTax #Finance #TaxTips