Question 1

Who needs to file ITR in India?

Accepted Answer

You must file an income-tax return (ITR) if your gross total income (before deductions) exceeds the basic exemption limit — ₹3 lakh under the new regime, or ₹2.5 lakh under the old regime, for AY 2026-27. You must also file, even below that limit, if TDS/TCS of ₹25,000 or more was deducted, you hold foreign assets or earn foreign income, you deposited over ₹1 crore in a current account, spent ₹2 lakh+ on foreign travel, or want to carry forward a loss.

Question 2

What happens if you don't file ITR?

Accepted Answer

Not filing your ITR by the due date has escalating consequences. Immediately, you owe a late fee under Section 234F (₹5,000 if your income exceeds ₹5 lakh, ₹1,000 if below) and 1% per month interest under Section 234A on any unpaid tax. You also lose the right to carry forward most losses, and any refund is delayed. If you keep not filing, the department can issue notices, complete a best-judgment assessment, and — in serious cases of wilful default with tax due — even prosecute.

Question 3

How much income is tax-free in India for AY 2026-27?

Accepted Answer

Under the new tax regime for AY 2026-27 (the default), income up to ₹12 lakh is effectively tax-free for resident individuals, thanks to the enhanced Section 87A rebate. For a salaried person, the ₹75,000 standard deduction pushes the zero-tax point to about ₹12.75 lakh. Under the old regime, the basic exemption is ₹2.5 lakh (₹3 lakh for senior citizens, ₹5 lakh for super-seniors), but deductions like 80C and HRA can make a much higher income tax-free.

Question 4

How do I get an ITR refund and how long does it take?

Accepted Answer

An income-tax refund arises when the tax already paid on your behalf — TDS, advance tax or self-assessment tax — is more than your actual tax liability. To get it, file your ITR, report all income and the TDS shown in Form 26AS/AIS, e-verify the return within 30 days, and the refund is credited straight to your pre-validated bank account. Most refunds are processed within 7–30 days of e-verification, though complex returns take longer.

Question 5

Can I file ITR after the deadline?

Accepted Answer

Yes — missing the 31 July due date doesn't mean you can't file. You can file a belated return under Section 139(4), generally up to 31 December of the assessment year, paying a Section 234F late fee plus 234A interest. If you miss even that, an updated return (ITR-U) lets you file for up to four years from the end of the assessment year, with additional tax of 25% to 70%. The sooner you file, the less it costs.

Question 6

What is Form 26AS (and the AIS)?

Accepted Answer

Form 26AS is your consolidated annual tax statement on the income-tax portal. It shows all the TDS and TCS deducted against your PAN, the advance and self-assessment tax you paid, and your refunds. It's effectively the tax department's record of every rupee of tax credited to you. Always reconcile your ITR against Form 26AS — and the broader AIS — before filing, so the TDS you claim matches the department's records and you avoid a mismatch notice.

Question 7

Old vs new tax regime: which is better in 2026-27?

Accepted Answer

There is no single right answer — it depends on your deductions. After the 2025 Budget made the new regime's slabs much wider and the ₹12 lakh rebate generous, the new regime (the default for AY 2026-27) now wins for the large majority. The old regime wins only when your deductions are very large — in practice, usually a high HRA from renting in a metro plus full 80C, 80D and NPS. The only way to be sure is to compute your tax under both.

Question 8

Which ITR form should I file?

Accepted Answer

Pick by your income sources. Use ITR-1 (Sahaj) if you're a resident with income up to ₹50 lakh from salary, one house property and other sources like interest. Use ITR-2 if you have capital gains, more than one house, or foreign assets/income. Use ITR-3 for business or professional income with regular books, and ITR-4 (Sugam) if you opt for the presumptive scheme under Sections 44AD/44ADA/44AE.

Question 9

What is Input Tax Credit (ITC) in GST?

Accepted Answer

Input Tax Credit (ITC) lets a GST-registered business reduce the GST it owes on its sales by the GST it already paid on its business purchases. So you pay tax only on the value you add, not on the whole price. You can claim ITC only for invoices that appear in your auto-drafted GSTR-2B (which means the supplier filed their return and paid the tax), where the credit isn't blocked under Section 17(5), and within the time limit — generally 30 November of the year following the financial year.

Question 10

What is the GST registration turnover limit?

Accepted Answer

GST registration becomes mandatory once your aggregate annual turnover crosses ₹40 lakh for a supplier of goods or ₹20 lakh for a supplier of services (₹20 lakh and ₹10 lakh respectively in special-category states). It is also compulsory — regardless of turnover — for anyone making inter-state taxable supplies, selling through an e-commerce operator, or liable to pay tax under reverse charge. You can also register voluntarily below the limit. Registration on the GST portal is free.

Question 11

How do I file GSTR-3B?

Accepted Answer

GSTR-3B is the summary GST return where you declare your total sales, claim input tax credit, and pay the net tax. To file it: log in to the GST portal, select the return period, enter your outward supplies and tax in Table 3.1, claim eligible ITC (matched to GSTR-2B) in Table 4, set off the liability against ITC and cash, and file with DSC or EVC. Monthly filers' due date is the 20th of the following month; quarterly (QRMP) filers file by the 22nd or 24th.

Question 12

What is a GST DRC-01 notice and how do I reply?

Accepted Answer

A DRC-01 is a show-cause-cum-demand notice the GST department issues — under Section 73 (where there's no fraud) or Section 74 (where fraud or wilful suppression is alleged) of the CGST Act — when it believes you underpaid GST or claimed input tax credit you weren't entitled to. You reply in Form DRC-06 within the time stated (usually 30 days), attaching your reconciliation and explanation; or, if the demand is correct, you pay it via DRC-03 to close the matter.

Question 13

What is a 143(1) income-tax notice?

Accepted Answer

A Section 143(1) intimation is an automated message the income-tax department sends after processing your ITR. The computer compares your return with its own calculation (and your Form 26AS/AIS) and tells you one of three things: you're due a refund, you owe a demand, or there's no change. It is NOT a scrutiny notice — it's routine, and almost every filed return gets one. You only need to act if it shows a demand or an adjustment you disagree with, generally within 30 days.

Question 14

How do I register a company in India online?

Accepted Answer

Registering a company in India is fully online through the MCA's SPICe+ form. In short: get a Digital Signature Certificate (DSC) for the directors, apply for Director Identification Numbers (DIN), reserve the company name in SPICe+ Part A, then file SPICe+ Part B with the MOA, AOA and the AGILE-PRO form (which also gets you GST, EPFO, ESIC and a bank account). The Certificate of Incorporation, PAN and TAN are issued together, usually in 7–15 working days. There is no minimum capital requirement.

Question 15

What is the minimum capital for a Private Limited company?

Accepted Answer

There is no minimum paid-up capital requirement for a Private Limited company in India. The Companies (Amendment) Act 2015 removed the old ₹1 lakh rule, so you can legally incorporate with as little as ₹1 of paid-up capital. In practice, most founders set ₹1 lakh authorised capital and contribute a smaller paid-up amount (often ₹10,000–₹1,00,000) to keep stamp duty low while looking credible to banks and investors.

Question 16

How long does company registration take in India?

Accepted Answer

Registering a Private Limited company in India typically takes 7 to 15 working days once all your documents are in order. The time depends on how fast the name is approved, whether the directors' Digital Signature Certificates (DSC) and Director Identification Numbers (DIN) are ready, and how quickly the MCA processes the SPICe+ form. An LLP usually takes a similar 10–15 working days.

Question 17

Pvt Ltd vs LLP: which should you choose?

Accepted Answer

Choose a Private Limited company if you plan to raise equity funding, issue ESOPs to employees, or scale with investors — it's the structure venture capitalists expect. Choose an LLP if you want limited liability with much lighter compliance and you have no plans to raise external equity, such as a professional-services firm or a family business. Both give you limited liability and a separate legal identity; the real difference is funding versus compliance.

Question 18

What is anticipatory bail and how do I apply?

Accepted Answer

Anticipatory bail is pre-arrest bail you can ask a court for when you genuinely fear being arrested in a non-bailable case. Under Section 482 of the BNSS 2023 (which replaced Section 438 of the old CrPC), you apply to the Court of Session or the High Court. If the court grants it, the police cannot send you to jail in that case — if you are arrested, you must be released on the bail terms the court has fixed.

Question 19

How do I file an FIR (and what if police refuse)?

Accepted Answer

To file an FIR, go to the police station that has jurisdiction and give the information about a cognizable offence — orally or in writing. The officer must write it down, read it back to you, and give you a free copy (Section 173 BNSS). If the police refuse, send your complaint in writing to the Superintendent of Police, or approach a Magistrate under Section 175(3) BNSS, who can order the police to register and investigate.

Question 20

Cheque bounce: what is Section 138 NI Act and the procedure?

Accepted Answer

Section 138 of the Negotiable Instruments Act makes the dishonour of a cheque for insufficient funds a criminal offence. If a cheque bounces, the payee must send a written demand notice within 30 days of the return memo; the drawer then gets 15 days to pay; if they don't, the payee can file a complaint in the Magistrate's court within the next 30 days. Punishment can extend to two years' imprisonment, a fine of up to twice the cheque amount, or both.

Question 21

What replaced the IPC? (BNS 2023 explained)

Accepted Answer

From 1 July 2024, India replaced its three colonial-era criminal laws with new ones. The Bharatiya Nyaya Sanhita (BNS) 2023 replaced the Indian Penal Code (IPC), the Bharatiya Nagarik Suraksha Sanhita (BNSS) 2023 replaced the Criminal Procedure Code (CrPC), and the Bharatiya Sakshya Adhiniyam (BSA) 2023 replaced the Indian Evidence Act. The section numbers changed — for example, cheating under IPC 420 is now BNS 318(4), and murder under IPC 302 is now BNS 103.

Question 22

How can I save tax on my salary (legally)?

Accepted Answer

How much tax you can save depends on your regime. Under the old regime you can legally cut salary tax with HRA, the ₹1.5 lakh Section 80C limit (EPF, PPF, ELSS, life insurance, tuition), an extra ₹50,000 NPS under 80CCD(1B), health insurance under 80D, and ₹2 lakh of home-loan interest under Section 24(b). Under the new regime, deductions are mostly gone, but you get a ₹75,000 standard deduction, the ₹12 lakh rebate, and employer NPS under 80CCD(2). The first step is always to compute both regimes and pick the cheaper one.

Question 23

How is HRA exemption calculated?

Accepted Answer

HRA (House Rent Allowance) exemption under Section 10(13A) is the least of three amounts: (1) the actual HRA you received, (2) the rent you paid minus 10% of your basic salary, and (3) 50% of your basic salary if you live in a metro (Delhi, Mumbai, Kolkata, Chennai) or 40% if you live anywhere else. Whichever is smallest is the exempt amount; the rest of your HRA is taxable. It applies only if you actually pay rent, and only under the old tax regime.

Question 24

How do I claim a TDS refund?

Accepted Answer

If more TDS was deducted on your income than your actual tax liability, you get the excess back by filing your income-tax return. Report all your income and the TDS shown in Form 26AS/AIS, compute your real tax, and the difference becomes your refund. Once you e-verify the ITR, the refund is credited directly to your pre-validated bank account — usually within 7–30 days. To stop unnecessary TDS in future (e.g. on FD interest when you're below the taxable limit), file Form 121 with the bank — it replaced Forms 15G/15H from 1 April 2026.

Question 25

Who has to pay advance tax and when?

Accepted Answer

You must pay advance tax — tax paid during the year rather than at the end — if your total tax liability for the year, after subtracting TDS, is ₹10,000 or more. It's paid in four instalments: 15% by 15 June, 45% (cumulative) by 15 September, 75% by 15 December and 100% by 15 March. Resident senior citizens with no business income are exempt. Paying short or late attracts interest under Sections 234B and 234C.

Question 26

How is crypto taxed in India?

Accepted Answer

Profits from crypto and other Virtual Digital Assets (VDAs) are taxed at a flat 30% under Section 115BBH, plus surcharge and cess — regardless of your income slab. The only deduction allowed is the cost of acquisition (not even exchange fees). You cannot set off crypto losses against any other income, against gains on other coins, or carry them forward. On top of this, a 1% TDS under Section 194S is deducted on transfers above the threshold.

Question 27

How are capital gains taxed in India?

Accepted Answer

Capital gains tax depends on the asset and how long you held it. For listed shares and equity mutual funds, gains within 12 months are short-term (STCG), taxed at 20%; beyond 12 months they are long-term (LTCG), taxed at 12.5% on the amount above a ₹1.25 lakh annual exemption. Property and unlisted assets held over 24 months are long-term, taxed at 12.5% (with a grandfathering option for older property). The rules changed for transfers on or after 23 July 2024.

Question 28

Is Udyam (MSME) registration free?

Accepted Answer

Yes — Udyam (MSME) registration on the official government portal is completely free and paperless. You register using only your Aadhaar and PAN; there are no documents to upload and no government fee. Be careful: many private websites mimic the official portal and charge for it — use only udyamregistration.gov.in. Registration gives you a permanent Udyam Registration Number and unlocks real MSME benefits.

Question 29

Why are rent agreements made for 11 months?

Accepted Answer

Rent agreements are almost always made for 11 months because of one legal rule: under the Registration Act, any lease of immovable property for a term of one year or more must be compulsorily registered — which means paying stamp duty and registration charges and a trip to the sub-registrar. An 11-month term stays just below that one-year threshold, so the landlord and tenant can keep a valid, renewable agreement without mandatory registration.

Question 30

What comes under Section 80C and how much can I save?

Accepted Answer

Section 80C lets you deduct up to ₹1.5 lakh a year from your taxable income (under the old regime) for specified investments and expenses — EPF, PPF, ELSS mutual funds, life-insurance premiums, NSC, 5-year tax-saving FDs, Sukanya Samriddhi, children's tuition fees and home-loan principal repayment. The ₹1.5 lakh ceiling is shared across Sections 80C, 80CCC and 80CCD(1) combined. Depending on your slab, fully using it can save you up to about ₹46,800 in tax.

Question 31

How much can I claim under Section 80D for health insurance?

Accepted Answer

Section 80D (old regime) lets you deduct health-insurance premiums: up to ₹25,000 for yourself, spouse and children, plus another ₹25,000 for parents — and that second limit rises to ₹50,000 if your parents are senior citizens. So if both you and your parents are 60+, you can claim up to ₹1,00,000 in total. A ₹5,000 sub-limit for preventive health check-ups is included within these amounts.

Question 32

How do I check my ITR refund status?

Accepted Answer

You can check your ITR refund status in two places. On the income-tax e-filing portal (incometax.gov.in), log in and go to Services → 'Know Your Refund Status', or e-File → Income Tax Returns → View Filed Returns. Alternatively, use the NSDL/Protean refund-status page with your PAN and assessment year. The status tells you whether the refund is processed, paid, partially adjusted against a demand, or failed (most often due to an unvalidated bank account).

Question 33

What is the GST composition scheme and who can opt for it?

Accepted Answer

The GST composition scheme lets small businesses pay GST at a low flat rate on their turnover instead of the regular rates, with much simpler quarterly compliance. The flat rates are 1% for traders and manufacturers, 5% for restaurants (not serving alcohol), and 6% for eligible service providers. It's open to businesses with turnover up to ₹1.5 crore (₹75 lakh in special-category states), and a separate ₹50 lakh limit for service providers — but you can't claim input tax credit, charge GST separately, or make inter-state sales.

Question 34

What is presumptive taxation under 44AD and 44ADA?

Accepted Answer

Presumptive taxation lets small businesses and professionals declare their income as a simple fixed percentage of their receipts — without maintaining detailed books of account or getting a tax audit. Under Section 44AD, eligible businesses with turnover up to ₹3 crore declare 8% of turnover as income (6% for digital/banking receipts). Under Section 44ADA, professionals with gross receipts up to ₹75 lakh declare 50% of receipts as income. You file ITR-4 and pay advance tax in a single instalment by 15 March.

Question 35

What is TDS on property purchase under Section 194-IA?

Accepted Answer

When you buy immovable property (other than agricultural land) worth ₹50 lakh or more, you — the buyer — must deduct 1% TDS on the sale consideration under Section 194-IA, deposit it to the government using Form 26QB within 30 days from the end of the month of payment, and give the seller a Form 16B certificate. Importantly, the 1% applies to the entire amount, not just the part above ₹50 lakh, and you don't need a TAN — your PAN is enough.

Question 36

How do I link PAN with Aadhaar?

Accepted Answer

Link your PAN with Aadhaar on the income-tax e-filing portal (incometax.gov.in) under 'Link Aadhaar'. Since the free deadline has passed, you first pay a ₹1,000 late fee under Section 234H (via e-Pay Tax, minor head 500), then submit your PAN and Aadhaar; the status updates in a few days. It matters because an unlinked PAN becomes 'inoperative' — you can't file your ITR, your TDS is deducted at higher rates, and refunds are withheld.

Question 37

What are the EPF withdrawal rules and is it taxable?

Accepted Answer

You can withdraw your full EPF balance at retirement or after two months of unemployment, and take partial advances for things like buying a home, a medical emergency, marriage or education. The key tax rule is the 5-year test: EPF withdrawal is completely tax-free if you've completed 5 years of continuous service; if you withdraw before 5 years, it's taxable and 10% TDS applies if the amount is ₹50,000 or more (20% without PAN).

Question 38

How is an NRI taxed in India?

Accepted Answer

An NRI (Non-Resident Indian) is taxed in India only on income that is earned or received in India — for example salary for services rendered in India, rent from Indian property, capital gains on Indian shares or property, and interest from NRO accounts. Income earned abroad is not taxed in India at all. An NRI must file an Indian ITR if their Indian income exceeds the basic exemption limit, and can use the DTAA (tax treaty) to avoid being taxed twice on the same income.

Question 39

How do I register a trademark in India?

Accepted Answer

To register a trademark in India, first do a public search to check the name/logo is available, then file Form TM-A online with the Trade Marks Registry under the relevant class(es) of goods or services (the official fee is roughly ₹4,500–₹9,000 per class). Once filed, you can use the ™ symbol; after the Registry examines it, it's published in the journal, and if unopposed, registered — after which you can use the ® symbol. A registered trademark lasts 10 years and is renewable indefinitely.

Question 40

How do I register a startup and get DPIIT recognition?

Accepted Answer

Registering a startup in India is really two steps. First, incorporate a legal entity — a Private Limited company (via SPICe+), an LLP (via FiLLiP), or a registered partnership — on the MCA portal. Second, apply free for DPIIT Startup recognition on the Startup India portal. If your entity is up to 10 years old, has turnover under ₹100 crore, and is working on innovation or a scalable business, recognition unlocks tax holidays, angel-tax exemption, self-certification of labour laws, and easier access to government schemes and tenders.

Question 41

What is professional tax and who has to pay it?

Accepted Answer

Professional tax is a small tax levied by some state governments on salaried employees, professionals and businesses for the privilege of earning a living in that state. It's not levied everywhere — states like Maharashtra, Karnataka, West Bengal and Tamil Nadu charge it, while Delhi, Haryana and UP don't. For salaried people, the employer deducts it from salary and deposits it. The amount is slab-based on income and capped by the Constitution at ₹2,500 per year, and it's deductible from your taxable salary under Section 16(iii).

Question 42

How do I send a legal notice in India?

Accepted Answer

A legal notice is a formal written communication that states your grievance and your demand, served before you take someone to court — often prompting them to settle without litigation. It should clearly set out the facts, the legal basis for your claim, your specific demand, and a deadline (usually 15–30 days) to comply. Have an advocate draft it on letterhead, send it by registered post with acknowledgement due (and optionally email/courier), and carefully keep proof of dispatch and delivery.

Question 43

How do I file a consumer complaint in India?

Accepted Answer

Under the Consumer Protection Act 2019, you can file a consumer complaint online through the e-Daakhil portal (edaakhil.nic.in) or in person at the District, State or National Consumer Commission, depending on the value of your claim. The smart first step is to send the company a written complaint; if it's not resolved, file with the relevant commission within 2 years of the problem arising, paying a small fee. You can represent yourself — a lawyer isn't mandatory.

Question 44

How do I file an RTI application?

Accepted Answer

Under the Right to Information Act 2005, any citizen of India can ask a public authority for information. You address your application to the Public Information Officer (PIO) of the relevant department, state your questions clearly, and pay a ₹10 fee (by IPO, demand draft or court-fee stamp, or online via rtionline.gov.in for central government bodies). The PIO must reply within 30 days — or within 48 hours if the matter concerns someone's life or liberty.

Question 45

Who is eligible for gratuity and how is it calculated?

Accepted Answer

Under the Payment of Gratuity Act, you're eligible for gratuity after completing 5 years of continuous service with the same employer (the 5-year rule is waived if employment ends due to death or disablement). It's calculated as: (last drawn basic salary + DA) × 15/26 × number of completed years of service. For employees covered by the Act, gratuity up to ₹20 lakh is exempt from income tax.

Question 46

How can I save capital gains tax on selling property?

Accepted Answer

You can legally save long-term capital gains tax on a property sale by reinvesting the gain, mainly under three sections. Section 54 exempts gains reinvested in another residential house (buy within 1 year before or 2 years after the sale, or build within 3 years). Section 54F does the same when you sell any other long-term asset and reinvest the net proceeds in a house. Section 54EC exempts gains up to ₹50 lakh invested in specified NHAI/REC bonds within 6 months. If you can't reinvest before filing, park the gain in a Capital Gains Account Scheme.

Question 47

How are ESOPs taxed in India?

Accepted Answer

ESOPs (Employee Stock Option Plans) are taxed at two stages. First, when you exercise the options, the difference between the share's fair market value (FMV) and the price you pay is taxed as a salary perquisite at your slab rate, and your employer deducts TDS on it. Second, when you later sell the shares, the gain over the FMV-at-exercise is taxed as capital gains. Employees of DPIIT-recognised eligible startups can defer the perquisite tax for up to five years.

Question 48

What is a HUF and how does it save tax?

Accepted Answer

A Hindu Undivided Family (HUF) is treated as a separate taxpayer in India, distinct from its individual members. It exists automatically in a Hindu, Sikh, Jain or Buddhist family. Because it has its own PAN and gets its own basic exemption limit and deductions (80C, 80D and more), a family can split certain income between the individual members and the HUF — so the same income is spread across two exemption limits and slabs, legally reducing the total tax.

Question 49

When is a tax audit under Section 44AB required?

Accepted Answer

A tax audit under Section 44AB is mandatory if your business turnover exceeds ₹1 crore — raised to ₹10 crore where at least 95% of both your receipts and payments are digital (non-cash). For professionals, it kicks in when gross receipts exceed ₹50 lakh. It's also required if you opt out of the presumptive scheme (44AD/44ADA) by declaring profits below the deemed rate while your income exceeds the basic exemption. The audit is done by a Chartered Accountant and reported in Form 3CA/3CB and 3CD.

Question 50

What is an e-way bill and when is it required?

Accepted Answer

An e-way bill is an electronic document you must generate, before transport begins, for moving goods worth more than ₹50,000. It's created on the e-way bill portal (ewaybillgst.gov.in), carries a unique 12-digit e-way bill number (EBN), and is valid for a period based on distance — broadly one day per 200 km. The supplier, recipient or transporter can generate it, and the person carrying the goods must have it available during transit.

Question 51

Who can claim maintenance and how?

Accepted Answer

Under Section 144 of the BNSS 2023 (which replaced Section 125 of the old CrPC), a wife (including a divorced wife who hasn't remarried), minor children, and parents who can't support themselves can claim monthly maintenance from a person who has sufficient means but neglects or refuses to maintain them. You apply to a Magistrate; the relief is meant to be quick and is in addition to the (often larger) remedies available under the personal laws.

Question 52

How do I file for divorce in India?

Accepted Answer

There are two routes. A mutual-consent divorce (Section 13B of the Hindu Marriage Act) is when both spouses agree to separate — it needs at least one year of marriage, a period of living apart, and two court motions, and usually takes 6–18 months. A contested divorce is filed by one spouse on a specific legal ground — such as cruelty, desertion (2+ years), adultery or conversion — and takes longer because it involves evidence and a trial.

Question 53

How do I register property in India?

Accepted Answer

To register property in India, you execute a sale deed and present it at the sub-registrar's office that has jurisdiction over where the property is located, within four months of executing it, under the Registration Act 1908. You pay stamp duty (which varies by state, typically 4–7% of the property value) plus a registration fee (usually around 1%). Both buyer and seller, along with two witnesses and their ID/PAN, must be present for biometric verification.

Question 54

How do I make a valid will in India?

Accepted Answer

Making a valid will in India is simpler than most people think. Any person of sound mind aged 18 or above can make one. It must be in writing, clearly state how your assets are to be distributed and to whom, be signed by you (the testator), and be attested by at least two witnesses who actually see you sign. A will needs no stamp paper, and registration is optional — though registering it with the sub-registrar adds strong protection against later disputes.

Question 55

Who has to generate GST e-invoices?

Accepted Answer

GST e-invoicing is mandatory for any business whose aggregate annual turnover has crossed ₹5 crore in any financial year from 2017-18 onwards. Such businesses must generate an Invoice Reference Number (IRN) and a signed QR code on the Invoice Registration Portal (IRP) for their B2B supplies, exports and credit/debit notes. Once you're covered, you stay covered. B2C invoices are currently outside the mandate.

Question 56

What is GSTR-9 and who must file it?

Accepted Answer

GSTR-9 is the annual GST return that consolidates all your monthly or quarterly GSTR-1 and GSTR-3B filings for the whole financial year into one summary. It is mandatory for regular taxpayers whose aggregate turnover is above ₹2 crore (optional below that), and is due by 31 December of the following financial year. Taxpayers above ₹5 crore must also file GSTR-9C — a reconciliation statement between their audited accounts and the annual return.

Question 57

What is the Section 80E education loan deduction?

Accepted Answer

Section 80E (old regime) lets you deduct the entire interest you pay on an education loan taken for higher studies — for yourself, your spouse, your children, or a student for whom you're the legal guardian. Unlike 80C, there is no upper limit on the amount of interest you can deduct. You can claim it for up to 8 consecutive years from the year you start repaying, or until the interest is fully paid, whichever comes first.

Question 58

How is dividend income taxed in India?

Accepted Answer

Since FY 2020-21, dividends are taxed directly in the hands of the shareholder at their normal slab rate — the old dividend distribution tax (paid by companies) was abolished. The company deducts 10% TDS under Section 194 if your total dividend from it crosses ₹10,000 in a year (raised from ₹5,000 by Budget 2025) (20% if you haven't given your PAN). You report dividends under 'income from other sources' in your ITR and claim the TDS as credit.

Question 59

Is gift money taxable in India?

Accepted Answer

It depends on who gave it and how much. Under Section 56(2), if the total value of gifts you receive from non-relatives in a year exceeds ₹50,000, the entire amount (not just the excess) is taxed as 'income from other sources' at your slab rate. But gifts from specified relatives, gifts received on the occasion of your marriage, and anything received under a will or by inheritance are fully exempt — no matter how large.

Question 60

What is TCS on foreign remittance under LRS?

Accepted Answer

Under the RBI's Liberalised Remittance Scheme (LRS), banks collect TCS (Tax Collected at Source) on foreign remittances once your total crosses ₹10 lakh in a financial year. Rates changed on 1 April 2026 under section 394(1) of the Income Tax Act 2025: education or medical treatment above ₹10 lakh is now 2% (down from 5%), an overseas tour package is a flat 2% with no threshold, and education funded by a loan from a section 80E institution is exempt. Investments, gifts and general travel remain 20% above ₹10 lakh. Crucially, this TCS is not an extra cost — it's a prepaid credit you adjust against your income-tax or get refunded.

Question 61

How do I register a partnership firm in India?

Accepted Answer

A partnership firm is created by a partnership deed and is governed by the Indian Partnership Act 1932. Registration with the Registrar of Firms is technically optional — but strongly advisable, because an unregistered firm cannot sue to enforce its rights in court. To register, you prepare a written, stamped partnership deed signed by all partners, get the firm's PAN, and file the registration application (Form 1) with the deed and partner KYC at your state's Registrar of Firms.

Question 62

What is a One Person Company (OPC)?

Accepted Answer

A One Person Company (OPC) is a company that can be owned by a single person. It was introduced under the Companies Act 2013 so a solo founder could get the benefits of a company — limited liability and a separate legal identity — without needing a second shareholder, as a Private Limited requires. An OPC needs one member (who can also be the sole director) plus a mandatory nominee, who steps in if the member dies or becomes incapacitated. Its compliance is lighter than a Private Limited's.

Question 63

What's the difference between a legal heir certificate and a succession certificate?

Accepted Answer

They sound similar but serve different purposes. A legal heir certificate — issued by the Tahsildar or revenue authority — simply identifies who the heirs of a deceased person are, and is used to transfer property, claim pension, PF, gratuity and insurance. A succession certificate — issued by a civil court — is specifically needed to collect the deceased's debts and securities (bank deposits, shares, bonds) when the person died without a will. Knowing which one you need saves time and money.

Question 64

How are mutual funds taxed in India?

Accepted Answer

It depends on the type of fund and how long you hold it. For equity mutual funds (65%+ in Indian equities), gains within 12 months are short-term, taxed at 20%; beyond 12 months they are long-term, taxed at 12.5% on the amount above a ₹1.25 lakh annual exemption. Debt mutual funds bought on or after 1 April 2023 are taxed entirely at your slab rate, regardless of holding period — the old long-term indexation benefit no longer applies to them.

Answers to India's most-asked tax & legal questions