Income Tax

Income Tax is a mandatory levy imposed by the Government of India on an individual’s or entity’s earnings. It is governed by the Income-tax Act, 1961 and is applicable on an annual basis. The tax assessment year runs from 1st April to 31st March of the following calendar year.

Who is Liable to Pay Income Tax?

Under the Income Tax Act, the term “person” includes:
✔ Individuals
✔ Hindu Undivided Families (HUFs)
✔ Associations of Persons (AOPs) & Bodies of Individuals (BOIs)
✔ Firms, LLPs, and Companies
✔ Local Authorities
✔ Artificial Juridical Persons

Key Tax Registrations & Approvals

To ensure compliance, taxpayers are required to obtain certain registrations and approvals from the Income Tax Department:

🔹 Permanent Account Number (PAN): A 10-digit alphanumeric identification number issued to every taxpayer. It is mandatory for filing income tax returns and conducting major financial transactions.

🔹 Tax Deduction Account Number (TAN): A 10-digit alphanumeric code required for persons responsible for deducting or collecting tax at source (TDS/TCS). As per Section 203A of the Income Tax Act, 1961, quoting TAN is essential on all TDS returns.

🔹 Lower/Nil TDS Certificate: If the estimated tax liability of a taxpayer is lower than the standard TDS deduction, they can apply for a certificate directing the deductor to withhold tax at a reduced or nil rate.

🔹 Tax Residency Certificate (TRC): A resident taxpayer can apply for a TRC using Form 10FA, which is submitted to the Assessing Officer (AO) along with supporting documents. Upon verification, the AO issues Form 10FB as proof of tax residency.

🔹 Gratuity Trust Approval: As per Section 36(1)(v) & Section 40A(7) of the Income-tax Act, 1961, employer contributions to a gratuity fund are tax-deductible only if the fund is approved by tax authorities. Employers must obtain this approval to claim tax benefits.

How VPS & Associates Can Help

At VPS & Associates, we provide expert services in accounting, taxation, audit, and financial advisory for businesses and individuals. Whether you need assistance with tax compliance or financial planning, our team is here to help.

Contact us today!

☎️ Landline: 040 – 29801299
📲  Mobile no: 8886359392 / 9030931302