HENCY R SHAH AND ASSOCIATES

Zero Tax Does Not Mean Zero Compliance Myth: Zero tax means zero compliance. Reality: Compliance obligations continue even when tax payable is nil. Many taxpayers assume no liability removes reporting duties. Law does not support this view. Key situations where compliance still applies: Return filing: Income below taxable limit still requires filing in cases like foreign assets, high-value transactions, or loss carry forward. Example: Capital loss of Rs. 2 lakh needs return filing to carry forward. TDS and TCS: Deduction and collection provisions apply based on transaction nature, not final tax liability. Example: Payment to contractor above threshold triggers TDS under section 194C. Audit requirements: Turnover thresholds decide audit applicability. Profit or tax liability does not override this. Example: Business turnover above prescribed limit requires audit under section 44AB. Compliance reporting: Forms like Form 15CA, 15CB, or specified disclosures still apply. Example: Forei...

𝗠𝗬𝗧𝗛: Income below basic limit means no filing vs 𝗥𝗘𝗔𝗟𝗜𝗧𝗬: Filing may still be mandatory Many taxpayers skip filing when total income stays below the basic exemption limit. Law does not always permit this. Filing is required in specific cases, even with low income:   • Deposit in savings bank accounts exceeds ₹50 lakh in a year   • Foreign travel expense exceeds ₹2 lakh   • Electricity bill exceeds ₹1 lakh   • TDS or TCS exceeds ₹25,000, ₹50,000 for senior citizens   • Business turnover exceeds ₹60 lakh or professional receipts exceed ₹10 lakh   • Claim of refund due to TDS deduction 𝗘𝘅𝗮𝗺𝗽𝗹𝗲: Total income: ₹2,30,000 TDS deducted by bank on FD interest: ₹18,000 Tax payable after rebate: ₹0 Refund due: ₹18,000 Without filing, refund remains unclaimed. Funds stay with the government. 𝗡𝗼𝘄 𝗰𝗼𝗻𝘀𝗶𝗱𝗲𝗿 𝗮 𝘁𝗮𝘅 𝗽𝗮𝘆𝗮𝗯𝗹𝗲 𝗰𝗮𝘀𝗲: Total income: ₹2,80,000 Tax after rebate limit crossed due to special rate income or conditions Tax pa...

  Myth vs Fact: Salary TDS Means No Further Tax Liability Myth vs Fact: Salary TDS Means No Further Tax Liability Myth: Employer deducts TDS every month. Form 16 shows tax deducted. Employee believes tax is settled. This belief is common. This belief is wrong. Fact: TDS is only a provisional deduction. Final tax liability depends on total income and disclosures in the return. Neha earns Rs 8,50,000 salary. Employer deducts TDS of Rs 40,000 after standard deduction. Neha also has freelance income of Rs 1,20,000 not reported to employer. Revised income becomes Rs 9,70,000. Tax liability increases. TDS stays same. Gap leads to tax payable, interest under section 234B and 234C, and possible notice. Impact of not filing return and not paying tax: Interest under section 234A for delay in filing Interest under section 234B and 234C for short payment Late fee under section 234F up to Rs 5,000 Loss of refund if excess TDS exists Difficulty in loan processing due to missing ITR Notice fo...