Question 1

What is the due date for filing ITR for salaried individuals?

Accepted Answer

For salaried individuals and those not requiring an audit, the ITR filing due date is 31st July of the assessment year. For FY 2025-26, the due date is 31st July 2026. Late filing attracts a penalty of Rs 5,000 under Section 234F (Rs 1,000 if income is below Rs 5 lakh).

Question 2

Which ITR form should I use for filing my return?

Accepted Answer

ITR-1 (Sahaj) is for salaried individuals with income up to Rs 50 lakh. ITR-2 is for individuals with capital gains or foreign income. ITR-3 is for business/profession income. ITR-4 (Sugam) is for presumptive taxation under Section 44AD/44ADA. Companies use ITR-6, and trusts use ITR-7.

Question 3

What are the benefits of the new tax regime vs old regime?

Accepted Answer

The new regime offers lower slab rates with a basic exemption of Rs 3 lakh and a standard deduction of Rs 75,000. However, it does not allow most deductions like Section 80C, 80D, HRA, etc. The old regime has higher rates but allows all deductions. Choose based on your total deductions - if they exceed Rs 3.75 lakh approximately, the old regime may be better.

Question 4

How is advance tax calculated and when should I pay it?

Accepted Answer

Advance tax is payable if your total tax liability exceeds Rs 10,000 in a financial year. It must be paid in four instalments: 15% by June 15, 45% by September 15, 75% by December 15, and 100% by March 15. Failure to pay results in interest under Sections 234B and 234C.

Question 5

Who needs to register for GST?

Accepted Answer

GST registration is mandatory if your aggregate turnover exceeds Rs 40 lakh (Rs 20 lakh for services, Rs 10 lakh for special category states). It is also mandatory for interstate suppliers, e-commerce operators, casual taxable persons, and those making taxable supplies via e-commerce platforms regardless of turnover.

Question 6

What are the different types of GST returns?

Accepted Answer

Key GST returns include: GSTR-1 (outward supplies, monthly/quarterly), GSTR-3B (summary return with tax payment, monthly/quarterly), GSTR-9 (annual return), GSTR-9C (reconciliation statement for turnover above Rs 5 crore), GSTR-4 (composition scheme), and GSTR-5 (non-resident taxable persons).

Question 7

How does Input Tax Credit (ITC) work under GST?

Accepted Answer

ITC allows you to claim credit for GST paid on purchases against GST collected on sales. To claim ITC: the supplier must have filed their return, the invoice must appear in your GSTR-2B, you must have received the goods/services, and you must have paid the supplier within 180 days. ITC is not available on blocked credits like food, beverages, and personal expenses.

Question 8

What is the QRMP scheme in GST?

Accepted Answer

The Quarterly Return Monthly Payment (QRMP) scheme allows taxpayers with turnover up to Rs 5 crore to file GSTR-1 and GSTR-3B quarterly instead of monthly. However, tax must still be paid monthly using the PMT-06 challan by the 25th of the following month. This reduces the compliance burden for small businesses.

Question 9

Should I register as a Proprietorship, LLP, or Private Limited?

Accepted Answer

Proprietorship is simplest with minimal compliance but offers no liability protection. LLP provides limited liability with moderate compliance and is ideal for professional firms. Private Limited offers maximum credibility, limited liability, easy fundraising, and is best for startups and growth businesses but has higher compliance requirements including annual filings, board meetings, and audits.

Question 10

What compliances are required for a Private Limited Company?

Accepted Answer

A Pvt Ltd company must: hold at least 4 board meetings per year, file annual return (Form MGT-7) and financial statements (Form AOC-4) with MCA, maintain statutory registers, conduct annual general meeting within 6 months of FY end, file income tax return, comply with GST if applicable, deduct and deposit TDS, and get accounts audited annually.

Question 11

When is a tax audit mandatory under Section 44AB?

Accepted Answer

Tax audit under Section 44AB is mandatory when: business turnover exceeds Rs 1 crore (Rs 10 crore if cash transactions are below 5% of total), professional gross receipts exceed Rs 50 lakh, or if you opt out of presumptive taxation under Section 44AD/44ADA. The audit report must be filed by September 30 of the assessment year.

Question 12

What is the difference between statutory audit and tax audit?

Accepted Answer

Statutory audit is mandated by the Companies Act 2013 for all companies, focusing on whether financial statements give a true and fair view. Tax audit under Section 44AB of the Income Tax Act verifies whether taxable income is correctly computed. Both serve different purposes and have different applicability criteria, but often the same CA can perform both.

Question 13

What are the reporting requirements under FEMA for NRIs?

Accepted Answer

NRIs must report foreign investments through forms like FC-GPR (for share issuance), FC-TRS (for share transfers), and ODI returns. Annual Return on Foreign Liabilities and Assets (FLA) must be filed by July 15. Immovable property transactions have specific conditions under FEMA. Non-compliance attracts penalties up to three times the amount involved.

Question 14

Can NRIs invest in India and what are the limits?

Accepted Answer

Yes, NRIs can invest in India through: Portfolio Investment Scheme (PIS) for listed securities, Foreign Direct Investment (FDI) in unlisted companies (subject to sectoral caps), NRE/NRO bank accounts, immovable property (residential and commercial, not agricultural), and government securities. All investments must comply with FEMA regulations and RBI guidelines.

Question 15

What are the startup tax benefits available in India?

Accepted Answer

DPIIT-recognised startups can avail: 3-year tax holiday out of 10 years under Section 80-IAC (for startups incorporated after April 2016), angel tax exemption on share premium, carry forward of losses on change of shareholding under Section 79, capital gains exemption under Sections 54EE and 54GB, and accelerated depreciation. Turnover should not exceed Rs 100 crore in any year.

Question 16

What are the major TDS rates and thresholds for FY 2025-26?

Accepted Answer

Key TDS rates: Salary (Section 192) - as per slab rates; Professional fees (194J) - 10% above Rs 30,000; Rent (194-I) - 10% for land/building above Rs 2.4 lakh/year; Contract payments (194C) - 1% individual, 2% others above Rs 30,000 single/Rs 1 lakh aggregate; Interest (194A) - 10% above Rs 40,000 (Rs 50,000 for senior citizens).

Question 17

What happens if TDS is not deducted or deposited on time?

Accepted Answer

Non-deduction: The expense is disallowed to the extent of 30% under Section 40(a)(ia). Late deduction: Interest at 1% per month from due date to date of deduction. Late deposit: Interest at 1.5% per month from deduction date to deposit date. Late filing of TDS return: Fee of Rs 200/day under Section 234E, subject to maximum of TDS amount.

Question 18

What is the process for winding up a company in India?

Accepted Answer

A company can be wound up voluntarily (if solvent) by special resolution and declaration of solvency, or by the NCLT (if insolvent). For voluntary winding up: pass special resolution, appoint liquidator, file forms with ROC, settle liabilities, distribute surplus. The process typically takes 6-12 months. Alternatively, a dormant company can apply for striking off under Section 248.

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