7 Indian Income Tax Notices You must know

Whenever we receive an Income Tax notice, we tend to get worried and look for help. Income Tax notice is nothing but a letter seeking clarification on something. If you are a salaried person then not only filing the ITR but also replying to such notices can be done by yourself but if it is a company then things might get complicated and you might need professional assistance. Some are simple income tax notice for not filing the return while some are complex notices for verification of claims.

This post talks about different kinds of Indian Income Tax notices. Read about these Income Tax notice formats for better understanding and to be able to reply to it with ease.

Section 131(1A)

If the department feels that you are concealing your income then you will receive this notice which intimates you that an enquiry on this matter will be initiated and the Assessing Officer will have the authority to impound your books of accounts and other related documents.

Section 139(9)

In this type, the ITR filed is defective for which complete error description is shared along with the probable solution shared by AO for rectification. Duration of 15 days is given to respond from date of intimation or else the ITR gets rejected. You can agree or disagree and respond to the same. For this, you must know all the IT rules to follow.

Section 142(1)

If the return is not filed on time or the AO wants to go through the papers that verify the claims made in ITR, the notice for preliminary enquiry is made. The duration to serve the income tax notice 142(1) is before the end of relevant year of assessment. In case the assessee has not filed the return then time limit is not valid in that scenario.

Section 143(2)

In case the AO is not convinced or the assessee has failed to provide documents against the above mentioned notice then notice u/s 143(2) is send. In this case, AO may ask the assessee to personally attend his office or produce required documents for detailed scrutiny. The duration to serve this notice is before expiry of 6 months from financial year end in which return has been furnished.

Use the template for Income Tax Notice Reply Letter Format Under Section 221(1) to create a personalized format.

Section 148

This type of notice is issued when even after the assessment, AO feels that some part of your income has not been assessed. In this case, the assessee may be asked for filing ITR for relevant assessment or reassessment or re-computation. The duration to serve the notice is 4 years counting from end of relevant assessment year if the amount for income escaped assessment is Rs. 1 lakh. The duration is 6 years if the amount is above Rs. 1 Lakh.

Section 156

This notice is served in case there is any kind of tax or fine or penalty is due from taxpayer. This notice is served mostly after the assessment of the return. The taxpayer is suppose to deposit the dues within duration of 30 days from ITR notice. There is no limit for serving this kind of notice.

Section 245

This type of notice is issued when some kind of tax refund is adjusted against tax demand due from the end of the taxpayer. This is more like an intimation from the department and therefore, it doesn’t have any time limit to serve.

Therefore, always read the notice and understand the section under which it has been issued to have complete clarity on what action you are required to take.

 

Guidelines on Applying for IEC for Commercial Import Export of Goods

IEC Code, also known as Import Export Code is a 10 digits code that is issued by Director General of Foreign Trade. If any person who wishes to start with an export or import business in India has to have this IEC certificate to begin the trading at commercial level.

This post talks about everything you need to know about applying for import export license online.

Documents Required for IE code | Import Export Code Application

Keep the following documents ready for a hassle-free and quick application IEC Application Form, the first three being compulsory for all:

  • PAN Card
  • Photograph of Applicant
  • Bank Certificate Copy
  • Memorandum of Association
  • Extract of Board Resolution
  • RBI Approval Letter if the applicant is an NRI

Some more forms might be required to filled specific to your condition.

Steps for IEC Registration Online

You can very conveniently apply for IED Code for individuals or companies following the steps mentioned below:

  • Go to the website of Director General of Foreign Trade: http://dgft.gov.in/
  • For IEC Registration online, click on “Online Application” and select IEC from the drop down menu
  • Click on Online IEC Application
  • Fill in your PAN details to login
  • Select New IEC Application Details and fill the IEC Application Form along with uploading the documents.
  • Fill in details on branch and director
  • Make online payment for IEC application

Don’t forget to download, save and print the form once the procedure is complete.

Guidelines to Know IEC Application Status

To know IEC code status, here are the steps to follow:

  • Keep the Ecom Ref. No. handy which is on the application print out.
  • Use the Ecom Ref. No. to track the IEC Application status online. You can find this under Query Option.

Just follow these steps and you will have your 10 digit IEC Code to start your export import business with ease.

 

Rights a Daughter Holds in Father’s Property if There is No will

Usually the distribution of property amongst all the sons and daughters is stated very clearly in will to avoid any chaos, confusion or feud later but if the father dies without a will then what is the basis of property distribution after father’s death.

In this post we shall talk about distribution of property after death if there is no will in India in context of daughters.

  • Amendment of 2005

There was a time when only sons were entitled to be the successors of their parents’ property. But after the amendment made in 2005, now daughters can also claim their rights in the property of their father, in case he has died without a will.

  • Equal Rights in Property

The property transfer after father’s death then happens amongst all his children, irrespective of the gender, and his widow, if any. Now daughters possess an equal right at par with sons in their ancestral property.

  • Equal Rights Whether Married or Unmarried

Whether the daughter is married or unmarried, the rights of the daughter in her father’s property will always exist.

  • Rights of Children of Daughter

As per the amendment, the children of the daughter will also possess equal rights in the property of her father.

  • Exception to this Amendment

There is only one exception to this amendment and that is if the father had died before this change was made in 2005 then in that case, this change cannot be enforced.

 

6 Important Things to Know Before You Invest in FD

Fixed Deposits or FD are a popular investment because it promises safe and secure returns. In the last few years, there has been an attractive increase in the interest rates of FDs which have added on to their popularity. Almost all banks offer FDs and some even offer online FDs but before moving with your decision, it is very important that you know few important things.

In this post, we have put together 6 very important things to consider before investing in a Fixed Deposit to ensure healthy returns and lowest risks.

Decide on the Tenure

Tenure is one of the most important factors to consider. You have the liberty of making a fixed deposit for any tenure you wish to ranging from a year or two to eight to ten years. Calculate the time when you might be needing the money and accordingly decide on what tenure you wish to go for because if you withdraw the money before your FD matures, you will not get the same rate of interest. Depending upon the requirement of money in future, you can always plan your FDs. Also go for LIC FD calculators, FD calculators etc. to help you decide better.

Study and Compare Different Banks

Different banks offer different rates of interests on FDs. Therefore, it is very important for you to study different FD interest rates 2018 offered by different banks for a particular tenure for which you want to invest your surplus funds. This is important so that you know which bank is offering the best deal which can get you maximum returns. You can use the FD calculator to reach on to a conclusion.

The More the Better

Do not invest all your money in one fixed deposit. Rather invest it in different banks by splitting the amount into different parts. This would save you from breaking the one big FD at time of need or emergency as you can break one of the FDs by paying the premature penalty on a smaller amount. Therefore, all your other FDs will stay secure and will get you best benefits at the time of maturity.

Tax Saving Fixed Deposit

If you don’t wish to pay any tax on your earnings from FD then you can opt for tax saving FD. This kind of FD comes with a lock in period of 5 years. Therefore, for 5 years you cannot break your FD. And in case, you happen to break your tax saving FD before maturity then you will not be able to enjoy the benefits of tax deduction on your investment. Investing in this type of FD is safe only when you are very sure that you will not need to break your FD before maturity. You can use tax saver FD calculator to calculate your earnings.

You may be interested to read: Important Points for Investing in Fixed Deposits

Premature Withdrawals Attract Penalty

If there is a financial emergency and you break your fixed deposit before maturity then you are subject to pay some penalty for premature withdrawals. Therefore, always be very sure while you withdraw money before maturity because not only you will have to pay the penalty but the interest rates might also vary on your FD.

Tax on FDs

Another important thing that you must know is that whatever interest you will earn on your fixed deposit, it will be liable for tax payment. But this will again depend upon the tax bracket you will fall into.

 

GST Applicable on Freelancers, Service Providers, YouTubers, Bloggers in India

After the announcement of GST, all the service providers, freelancers, youtubers and bloggers will have to pay 18% GST. Impact of GST on bloggers, freelancers etc. has been explained in this post. We have covered everyone starting from freelance GST India to GST for Amazon affiliates, GST blog, GST freelance export, PayPal freelance GST, GST for Adsense etc. to give a clear picture of the situation.

GST on Service Providers, Bloggers, Freelancers, Youtubers Within India

They will have to apply 18% GST on their services which they will be charging their clients and will then submit to the Government.

  • Intra- State

There will be two components of GST: CGST (9%) and SGST (9%)

Exemption: If yearly turnover is less than 20 lakh then GST registration is not mandatory. This limit is 10 lakh for Arunachal Pradesh, Assam, J & K, Manipur, Sikkim, Mizoram, Nagaland, Meghalaya, Tripura, Himachal Pradesh, Uttarakhand.

  • Inter- State

Single component of GST will be there: IGST (18%)

Exemption: If yearly turnover is less than 20 lakh then GST registration is not mandatory. This limit is 10 lakh for Arunachal Pradesh, Assam, J & K, Manipur, Sikkim, Mizoram, Nagaland, Meghalaya, Tripura, Himachal Pradesh, Uttarakhand.

GST on Service Providers, Bloggers, Freelancers, Youtubers Outside India

In this case, 0% GST will be applicable on the services. But GST registration will be required if the turnover is above 20 lakhs.

There are two ways in which services can be exported outside India:

  • Charging IGST on export services and then claim refund
  • Without payment of IGST on export services by using LUT (Letter of Undertaking)

Other GST Related Formats