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IT Rules changes

  • April 23, 2022
  • Posted by: OptimizeIAS Team
  • Category: DPN Topics
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IT Rules changes

Subject: Economy

Section: Fiscal Policy

Why in the  news?

Four new criteria added by the I-T Department to the rules for filing ITR.

Details:

  • If an individual’s total sales, turnover or gross receipts in the business exceeds Rs 60 lakh during the previous year, or
  • If an individual’s total gross receipts in profession exceeds Rs 10 lakh, or
  • If an individual’s aggregate of TDS and TCS is Rs 25,000 or more, or
  • If the person’s deposit in one or more savings bank accounts is Rs 50 lakh or more during the previous year,

Given any of the four conditions – the individual has to file returns as per the new rule

Benefits:

  • Such norms will capture all assessees incurring high value transactions but not filing returns because their taxable income is less than the basic exemption limit.
  • Reduce tax non compliance and tax evasion.
  • Increased transparency
  • Increase tax base

Tax Deducted at Source and Tax Collected at Source

Both are incurred at the source of income. However:

  • TDS-Tax Deducted at Source 
    • TDS is the tax which is deducted on a payment made by a company to an individual, in case the amount exceeds a certain limit.
    • TDS deduction is applicable on payments such as salaries, rent, professional fee, brokerage, commission, etc.
    • TDS is applicable only on payments that exceed a certain amount.
    • Example-Let’s say Mr.X works at a company. His company deducts a tax on monthly salary at the applicable rate before they make him the final payout. The amount that is deducted in this manner is TDS.
  • TCS –Tax Collected at Source
    • TCS is the tax which is collected by sellers while selling something to buyers.
    • TCS deduction is applicable on sales of goods like timber, scrap, mineral wood, and so on.
    • TCS is applicable on sales of specific goods which don’t include production or manufacturing material.
    • Example-Mr.Y is a mineral wood trader. He sells some mineral wood to Mr.Z. While making the sale, Mr.Y collects 5 percent tax; this sum collected by Mr.Y from the customer is called TCS.
economy IT Rules changes
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