Question 1

Who needs to file ITR in India?

Accepted Answer

You must file an income-tax return (ITR) if your gross total income exceeds the basic exemption limit (₹3 lakh under the new regime for AY 2026-27), if TDS/TCS was deducted, if you hold foreign assets or earn foreign income, 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

Missing the ITR deadline triggers a late fee under Section 234F (₹5,000 if income exceeds ₹5 lakh, ₹1,000 if below), 1% per month interest under Section 234A on unpaid tax, loss of the right to carry forward most losses, and delayed refunds. Persistent non-filing can lead to notices, best-judgment assessment and, in serious cases, prosecution.

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, income up to ₹12 lakh is effectively tax-free for resident individuals because of the enhanced Section 87A rebate. With the ₹75,000 standard deduction, a salaried person earning up to about ₹12.75 lakh can pay zero tax. Under the old regime, the basic exemption is ₹2.5 lakh (₹3 lakh for seniors, ₹5 lakh for super-seniors).

Question 4

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

Accepted Answer

An income-tax refund arises when your TDS, advance tax or self-assessment tax paid exceeds your actual liability. File your ITR, e-verify it within 30 days, and the refund is credited directly to your pre-validated bank account. Most refunds are processed within 7–30 days of e-verification, though complex returns can take longer.

Question 5

Can I file ITR after the deadline?

Accepted Answer

Yes. If you miss the 31 July due date you can file a belated return under Section 139(4), generally up to 31 December of the assessment year, with a Section 234F late fee and 234A interest. After that, you can still file an updated return (ITR-U) for up to four years from the end of the assessment year, with additional tax of 25–70%.

Question 6

What is Form 26AS?

Accepted Answer

Form 26AS is your consolidated annual tax statement on the income-tax portal. It shows all TDS and TCS deducted against your PAN, advance and self-assessment tax you paid, and high-value transactions reported to the department. Always reconcile your ITR against Form 26AS and the AIS before filing to avoid a mismatch notice.

Question 7

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

Accepted Answer

For most taxpayers without large deductions, the new regime (the default for AY 2026-27) wins — income up to ₹12 lakh is effectively tax-free and the slabs are lower. The old regime beats it only when your total deductions (80C + 80D + HRA + home-loan interest) are large, typically above ₹3.5–4 lakh. Always compute both before choosing.

Question 8

Which ITR form should I file?

Accepted Answer

Use ITR-1 (Sahaj) if you are resident with income up to ₹50 lakh from salary, one house property and other sources. Use ITR-2 if you have capital gains, more than one house or foreign assets. Use ITR-3 for business or professional income, and ITR-4 (Sugam) for presumptive income 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 sales by the GST it already paid on business purchases. You can claim ITC only for invoices that appear in your auto-drafted GSTR-2B, where the supplier has paid the tax, and within the time limit (generally 30 November of the following year).

Question 10

What is the GST registration turnover limit?

Accepted Answer

GST registration is mandatory once aggregate annual turnover crosses ₹40 lakh for goods or ₹20 lakh for services (₹20 lakh and ₹10 lakh respectively in special-category states). Registration is also compulsory — regardless of turnover — for inter-state suppliers, e-commerce sellers, and those liable under reverse charge. Voluntary registration is allowed below the limit.

Question 11

How do I file GSTR-3B?

Accepted Answer

GSTR-3B is the monthly or quarterly GST summary return. Log in to the GST portal, select the return period, enter outward supplies and tax, claim eligible ITC (matched to GSTR-2B), 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; QRMP filers file quarterly.

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 issued under Section 73 (no fraud) or Section 74 (fraud) of the CGST Act when the department believes you underpaid GST or wrongly claimed ITC. You must reply in Form DRC-06 within the time stated (usually 30 days), with supporting reconciliation, or pay the demand to close it.

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. It compares your return with its own computation and shows whether you have a refund, a demand, or no change. It is not a scrutiny notice — but if it shows a demand or mismatch, you must review and respond within 30 days.

Question 14

How do I register a company in India online?

Accepted Answer

Company registration in India is fully online through the MCA's SPICe+ form. The steps: obtain a Digital Signature Certificate (DSC) for directors, apply for Director Identification Numbers (DIN), reserve the company name (Part A), and file SPICe+ Part B with the MOA, AOA and AGILE-PRO (for GST, EPFO, ESIC and bank account). The Certificate of Incorporation, PAN and TAN are issued together.

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. You can incorporate with as little as ₹1 of paid-up capital. Most founders choose ₹1 lakh authorised capital and a smaller paid-up amount for practical reasons.

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 documents are in order. The timeline depends on name-approval speed, the directors' DSC and DIN readiness, 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, issue ESOPs or scale with investors — it is the structure VCs expect. Choose an LLP if you want limited liability with lighter compliance and no plan to raise external equity, such as a professional services or family partnership. Both give limited liability and a separate legal identity.

Question 18

What is anticipatory bail and how do I apply?

Accepted Answer

Anticipatory bail is pre-arrest bail you can seek when you reasonably fear arrest for a non-bailable offence. Under Section 528 of the BNSS 2023 (formerly Section 438 CrPC), you apply to the Sessions Court or High Court, which can grant bail in advance on conditions. If granted, you cannot be taken into custody on that accusation without the court's leave.

Question 19

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

Accepted Answer

To file an FIR, go to the police station with jurisdiction and give the information about a cognizable offence orally or in writing; the officer must record it, read it back, and give you a free copy (Section 173 BNSS). If the police refuse, you can send the complaint in writing to the Superintendent of Police, or approach a Magistrate under Section 175(3) BNSS who can direct registration.

Question 20

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

Accepted Answer

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

Question 21

What replaced the IPC? (BNS 2023 explained)

Accepted Answer

From 1 July 2024, three new criminal laws replaced the colonial codes: the Bharatiya Nyaya Sanhita (BNS) 2023 replaced the Indian Penal Code, the Bharatiya Nagarik Suraksha Sanhita (BNSS) 2023 replaced the CrPC, and the Bharatiya Sakshya Adhiniyam (BSA) 2023 replaced the Indian Evidence Act. Section numbers changed — for example, IPC 420 (cheating) is now BNS 318(4).

Question 22

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

Accepted Answer

Under the old regime you can legally cut salary tax by claiming HRA, the ₹1.5 lakh Section 80C limit (EPF, PPF, ELSS, life insurance, children's tuition), ₹50,000 extra NPS under 80CCD(1B), health insurance under 80D, and home-loan interest under Section 24(b). Under the new regime, the main levers are the ₹75,000 standard deduction and employer NPS under 80CCD(2).

Question 23

How is HRA exemption calculated?

Accepted Answer

HRA exemption under Section 10(13A) is the least of three amounts: (1) the actual HRA received, (2) rent paid minus 10% of your basic salary, and (3) 50% of basic salary if you live in a metro (Delhi, Mumbai, Kolkata, Chennai) or 40% for a non-metro. The exemption applies only if you actually pay rent and is available under the old regime.

Question 24

How do I claim a TDS refund?

Accepted Answer

If more TDS was deducted than your actual tax liability, you claim the excess back by filing your income-tax return. Report all income and the TDS shown in Form 26AS/AIS, compute your real tax, and the difference becomes your refund. After you e-verify the ITR, the refund is credited to your pre-validated bank account, usually within 7–30 days.

Question 25

Who has to pay advance tax and when?

Accepted Answer

You must pay advance tax if your total tax liability for the year, after TDS, is ₹10,000 or more. It is paid in four instalments: 15% by 15 June, 45% by 15 September, 75% by 15 December and 100% by 15 March. Resident senior citizens without business income are exempt. Shortfalls attract 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, with no deduction allowed except the cost of acquisition. You cannot set off crypto losses against any other income or carry them forward. A 1% TDS under Section 194S applies on transfers above the threshold.

Question 27

How are capital gains taxed in India?

Accepted Answer

Capital gains tax depends on the asset and holding period. For listed equity and equity mutual funds, gains within 12 months are short-term (STCG) taxed at 20%, and beyond 12 months are long-term (LTCG) taxed at 12.5% above a ₹1.25 lakh annual exemption. Property and unlisted assets held over 24 months are long-term, taxed at 12.5% without indexation (with grandfathering options).

Question 28

Is Udyam (MSME) registration free?

Accepted Answer

Yes — Udyam (MSME) registration on the official government portal is completely free and paperless, using only your Aadhaar and PAN. No documents need to be uploaded and there is no government fee. Avoid third-party websites that charge for it. Registration gives you a permanent Udyam Registration Number and unlocks MSME benefits.

Question 29

Why are rent agreements made for 11 months?

Accepted Answer

Rent agreements are usually made for 11 months because, under the Registration Act, a lease of one year or more must be compulsorily registered — which means stamp duty and registration charges. An 11-month agreement stays below that threshold, so landlords avoid mandatory registration while keeping a valid, renewable document.

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