HENCY R SHAH AND ASSOCIATES

𝗟𝗼𝘀𝘀 𝗶𝗻 𝗕𝘂𝘀𝗶𝗻𝗲𝘀𝘀. 𝗙𝗶𝗹𝗶𝗻𝗴 𝗦𝘁𝗶𝗹𝗹 𝗠𝗮𝘁𝘁𝗲𝗿𝘀. 𝘔𝘺𝘵𝘩: 𝘼 𝙡𝙤𝙨𝙨 𝙢𝙚𝙖𝙣𝙨 𝙣𝙤 𝙄𝙣𝙘𝙤𝙢𝙚 𝙏𝙖𝙭 𝙍𝙚𝙩𝙪𝙧𝙣 𝙞𝙨 𝙧𝙚𝙦𝙪𝙞𝙧𝙚𝙙. 𝘙𝘦𝘢𝘭𝘪𝘵𝘺: 𝙁𝙞𝙡𝙞𝙣𝙜 𝙤𝙗𝙡𝙞𝙜𝙖𝙩𝙞𝙤𝙣𝙨 𝙘𝙤𝙣𝙩𝙞𝙣𝙪𝙚 𝙚𝙫𝙚𝙣 𝙬𝙝𝙚𝙣 𝙥𝙧𝙤𝙛𝙞𝙩 𝙞𝙨 𝙣𝙞𝙡 𝙤𝙧 𝙣𝙚𝙜𝙖𝙩𝙞𝙫𝙚. 𝐊𝐞𝐲 𝐟𝐚𝐜𝐭𝐬 𝐮𝐧𝐝𝐞𝐫 𝐈𝐧𝐜𝐨𝐦𝐞 𝐓𝐚𝐱 𝐥𝐚𝐰: • Section 139(1) links filing to income thresholds and specific conditions, not only profit. • Loss returns filed within due date enable carry forward of losses under sections 72, 73, 74. • Business loss carry forward requires timely filing. Delay leads to loss of set off benefit in future years. • Turnover based compliance still applies. Tax audit under section 44AB depends on turnover and profit ratios, not only net income. • Banks and financial institutions often request filed returns for credit assessment, even in loss years. 𝘌𝘹𝘢𝘮𝘱𝘭𝘦: A business reports a loss of ₹5,00,000 in FY 2025-26. If the return is filed w...

 𝙁𝙞𝙡𝙞𝙣𝙜 𝙍𝙚𝙩𝙪𝙧𝙣𝙨 𝙄𝙨 𝙈𝙤𝙧𝙚 𝙏𝙝𝙖𝙣 𝙋𝙖𝙮𝙞𝙣𝙜 𝙏𝙖𝙭 𝘔𝘺𝘵𝘩: Filing is only about paying tax. 𝘙𝘦𝘢𝘭𝘪𝘵𝘺: Filing builds financial records, supports refunds, and preserves loss carry forward. 𝐖𝐡𝐲 𝐟𝐢𝐥𝐢𝐧𝐠 𝐦𝐚𝐭𝐭𝐞𝐫𝐬: •𝙍𝙚𝙛𝙪𝙣𝙙 𝙘𝙡𝙖𝙞𝙢𝙨 TDS and advance tax often exceed final liability. Filing enables refund processing with interest under section 244A. •𝙇𝙤𝙨𝙨 𝙘𝙖𝙧𝙧𝙮 𝙛𝙤𝙧𝙬𝙖𝙧𝙙 Business loss, capital loss, and house property loss require timely filing under section 139(1). Delay leads to loss of set off in future years. •𝙁𝙞𝙣𝙖𝙣𝙘𝙞𝙖𝙡 𝙩𝙧𝙖𝙘𝙠 𝙧𝙚𝙘𝙤𝙧𝙙 ITR acts as income proof for loans, visas, and tenders. Lenders and institutions rely on filed returns, not informal records. •𝘾𝙤𝙢𝙥𝙡𝙞𝙖𝙣𝙘𝙚 𝙩𝙧𝙖𝙞𝙡 Regular filing reduces scrutiny risk and supports smooth assessment proceedings. 𝘌𝘹𝘢𝘮𝘱𝘭𝘦 A trader reports a short term capital loss of ₹2 lakh in FY 2024-25 and files return on time. The loss is set off agains...

𝗥𝗲𝗳𝘂𝗻𝗱 𝗠𝘆𝘁𝗵 𝘃𝘀 𝗥𝗲𝗮𝗹𝗶𝘁𝘆: 𝗙𝗶𝗹𝗶𝗻𝗴 𝗗𝗿𝗶𝘃𝗲𝘀 𝗥𝗲𝗳𝘂𝗻𝗱𝘀 𝘔𝘺𝘵𝘩: 𝙍𝙚𝙛𝙪𝙣𝙙𝙨 𝙘𝙤𝙢𝙚 𝙖𝙪𝙩𝙤𝙢𝙖𝙩𝙞𝙘𝙖𝙡𝙡𝙮. 𝘙𝘦𝘢𝘭𝘪𝘵𝘺: 𝘼 𝙫𝙖𝙡𝙞𝙙 𝙧𝙚𝙛𝙪𝙣𝙙 𝙛𝙤𝙡𝙡𝙤𝙬𝙨 𝙖 𝙘𝙤𝙧𝙧𝙚𝙘𝙩𝙡𝙮 𝙛𝙞𝙡𝙚𝙙 𝙧𝙚𝙩𝙪𝙧𝙣. Income Tax data shows a large share of pending refunds relate to returns not filed, filed late, or filed with errors in TDS and income reporting. The system processes refunds after verification of Form 26AS, AIS, and return data. 𝘒𝘦𝘺 𝘵𝘳𝘪𝘨𝘨𝘦𝘳𝘴 𝘧𝘰𝘳 𝘳𝘦𝘧𝘶𝘯𝘥 𝘥𝘦𝘭𝘢𝘺 𝘰𝘳 𝘥𝘦𝘯𝘪𝘢𝘭: • Return not filed within due date • Mismatch between Form 16, 26AS, and AIS • Incorrect bank details or pre-validation failure • Wrong selection of ITR form • Unverified return after filing 𝗘𝘅𝗮𝗺𝗽𝗹𝗲: Income ₹6,50,000, TDS deducted ₹75,000. Eligible tax liability ₹62,400. Refund ₹12,600 arises only after correct filing and verification. 𝗣𝗿𝗮𝗰𝘁𝗶𝗰𝗮𝗹 𝘀𝘁𝗲𝗽𝘀: • Reconcile Form 16 with AIS and 26AS before filing • Select correct ...

𝗧𝗵𝗲 𝗠𝗼𝘀𝘁 𝗖𝗼𝗺𝗺𝗼𝗻 𝗠𝗶𝘀𝘁𝗮𝗸𝗲 𝗜𝗻𝘃𝗲𝘀𝘁𝗼𝗿𝘀 𝗠𝗮𝗸𝗲 𝗔𝗳𝘁𝗲𝗿 𝗘𝗮𝗿𝗻𝗶𝗻𝗴 𝗣𝗿𝗼𝗳𝗶𝘁𝘀 Last week, a client walked into my office with a smile. “Madam, this year I earned well from the stock market.” I nodded. “Great. How much tax have you planned for it?” Silence. He paused… then said, “I thought profit is profit… tax toh return mein dekh lenge.” That’s the problem. People are actively investing, trading, building wealth, but when it comes to taxation, there’s complete confusion. So I explained it to him in the simplest way possible: How your stock market income is actually taxed (FY 2025-26) 𝘓𝘰𝘯𝘨 𝘛𝘦𝘳𝘮 (𝘏𝘰𝘭𝘥𝘪𝘯𝘨 > 12 𝘮𝘰𝘯𝘵𝘩𝘴) 𝗚𝗮𝗶𝗻: 12.5% tax after ₹1.25 lakh exemption 𝗟𝗼𝘀𝘀: Can be set off against LTCG, carry forward 8 years 𝘚𝘩𝘰𝘳𝘵 𝘛𝘦𝘳𝘮 (𝘏𝘰𝘭𝘥𝘪𝘯𝘨 < 12 𝘮𝘰𝘯𝘵𝘩𝘴) 𝗚𝗮𝗶𝗻: 20% flat tax (no slab benefit) 𝗟𝗼𝘀𝘀: Set off against STCG/LTCG, carry forward 8 years 𝘐𝘯𝘵𝘳𝘢𝘥𝘢𝘺 𝘛𝘳𝘢𝘥𝘪𝘯𝘨 𝗚𝗮𝗶𝗻: Treated as...

Myth: Only Form 16 is mandatory to file a return. vs Reality: Salary slips, AIS, and bank records can also help. Form 16 Is Not the Full Picture Last week, a salaried client shared Form 16 and expected the return to be filed in minutes. During review, the team requested salary slips, AIS, Form 26AS, and bank statements. The response was immediate. Form 16 already given. Why ask for more? The detailed check told a different story. Salary slips showed HRA, LTA, and reimbursements with tax treatment different from the final payroll summary. AIS reflected savings interest, fixed deposit interest, and dividend income not appearing in Form 16. Form 26AS showed TDS entries from banks which were not considered. Bank statements confirmed interest credits and a few high value transactions. One small capital gain entry was visible in AIS from mutual fund redemption. Form 16 is issued by the employer. It covers salary paid and TDS deducted by that employer. It does not include income from banks, i...

HRA EXEMPTION: MYTH VS REALITY Rohit reviewed Form 16 and felt relieved. HRA received during the year looked fully exempt. Rent receipts were in place. Case closed. During tax review, numbers told a different story. Exemption was not equal to HRA received. Law applied three tests. What matters under Income Tax Act 2025 and Rules 2026: Actual HRA received from employer Rent paid minus 10 percent of salary 50 percent of salary for metro cities or 40 percent for non metro The lowest value decided the exemption. Salary for this purpose includes basic plus DA where terms of employment include DA. Rohit paid moderate rent in a non metro city. Result: a portion of HRA became taxable. Common gaps seen in practice: Salary definition ignored while computing limits City classification missed Rent paid to relatives without proper documentation No rent agreement or inconsistent payment trail Claim made despite living in own house Quick checklist before filing return: Confirm city category based on ...