At last, the wait ends: GST Appellate Tribunal (GSTAT) ready to begin accepting appeals

In a major development for the Goods and Services Tax (GST) framework, the Goods and Services Tax Appellate Tribunal (GSTAT) is set to become operational for accepting appeals before the end of September 2025 and will begin hearings before the end of December 2025.

This long-awaited step will establish a dedicated and structured mechanism for GST dispute resolution across India, addressing one of the most critical gaps in the tax system since GST’s rollout in 2017.

 

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Key Highlights

  • Start of Operations: GSTAT will start accepting appeals before September-end and conduct its first hearings by December 2025.
  • Backlog Appeal Limitation: A special window until 30th June 2026 has been recommended for filing backlog appeals, ensuring that pending cases get a proper redressal mechanism.
  • Principal Bench as National Authority: The Principal Bench of the GSTAT will also serve as the National Appellate Authority for Advance Ruling (NAAAR), providing consistency in rulings across states.

Importance of GSTAT

  1. Robust Dispute Resolution
    • With lakhs of GST-related disputes pending across High Courts and lower authorities, GSTAT will function as the dedicated appellate forum for taxpayers.
  2. Consistency in Rulings
    • By doubling as the National Appellate Authority for Advance Ruling, it will bring uniformity and clarity in advance rulings, reducing state-wise interpretation conflicts.
  3. Ease of Doing Business
    • A transparent and speedy appellate framework will boost business confidence, reduce litigation costs, and enhance India’s ranking on global ease of doing business indices.
  4. Certainty for Taxpayers
    • Clear and time-bound resolution of appeals will help businesses plan their tax liabilities better and avoid prolonged uncertainty.

The operationalization of the Goods and Services Tax Appellate Tribunal (GSTAT) marks a significant institutional strengthening of India’s GST regime. By creating a specialized appellate body, ensuring uniformity in advance rulings, and setting a firm timeline for resolving disputes, the Council has addressed a long-standing demand of businesses and professionals.

 

This move is expected to enhance trust, transparency, and stability in GST administration, paving the way for a smoother tax environment and reduced litigation in the years ahead.

Festive Bonanza for the Nation: Fresh GST Rates Declared in 56th GST Council Meeting – What’s Costlier, What’s Cheaper

The Government of India has announced the Next-Gen GST Reform, positioned as a historic Diwali gift for the nation. With the vision of building an Aatmanirbhar Bharat and making life easier for citizens, the reform brings sweeping changes that reduce taxes on essential goods, agriculture, healthcare, education, and more. It also focuses on simplifying compliance processes for businesses.

1. Relief on Daily Essentials

Households will now save significantly on everyday items:

  • Hair Oil, Shampoo, Toothpaste, Toilet Soap, Toothbrushes, Shaving Cream: Reduced from 18% to 5%
  • Butter, Ghee, Cheese & Dairy Spreads: Reduced from 12% to 5%
  • Pre-packaged Namkeens, Bhujia & Mixtures: Reduced from 12% to 5%
  • Utensils: Reduced from 12% to 5%
  • Feeding Bottles, Napkins for Babies & Clinical Diapers: Reduced from 12% to 5%
  • Sewing Machines & Parts: Reduced from 12% to 5%

2. Support for Farmers & Agriculture

Agriculture has been given a major boost with lower GST on key inputs:

  • Tractor Tyres & Parts: Reduced from 18% to 5%
  • Tractors: Reduced from 12% to 5%
  • Bio-Pesticides, Micro-Nutrients: Reduced from 12% to 5%
  • Drip Irrigation System & Sprinklers: Reduced from 12% to 5%
  • Agricultural, Horticultural or Forestry Machines for Soil Preparation, Cultivation, Harvesting & Threshing: Reduced from 12% to 5%

 

3. Healthcare Sector Relief

Healthcare has been prioritized with several items either exempted or taxed lower:

  • Individual Health & Life Insurance: Reduced from 18% to Nil
  • Thermometers: Reduced from 12% to 5%
  • Medical Grade Oxygen: Reduced from 12% to 5%
  • All Diagnostic Kits & Reagents: Reduced from 12% to 5%
  • Glucometers & Test Strips: Reduced from 12% to 5%
  • Corrective Spectacles: Reduced from 12% to 5%

4. Affordable Education

To make education more affordable, key learning tools are exempted:

  • Maps, Charts & Globes: Reduced from 12% to Nil
  • Pencils, Sharpeners, Crayons & Pastels: Reduced from 12% to Nil
  • Exercise Books & Notebooks: Reduced from 12% to Nil
  • Erasers: Reduced from 5% to Nil

5. Automobiles Made Affordable

Vehicle costs are set to decline with lower GST rates:

  • Petrol & Petrol Hybrid, LPG, CNG Cars (up to 1200 cc & 4000 mm): Reduced from 28% to 18%
  • Diesel & Diesel Hybrid Cars (up to 1500 cc & 4000 mm): Reduced from 28% to 18%
  • 3-Wheeled Vehicles: Reduced from 28% to 18%
  • Motorcycles (350 cc & below): Reduced from 28% to 18%
  • Motor Vehicles for Transport of Goods: Reduced from 28% to 18%

6. Savings on Electronics & Appliances

Electronic goods for households will become cheaper:

  • Air Conditioners: Reduced from 28% to 18%
  • Televisions (above 32”, including LED & LCD TVs): Reduced from 28% to 18%
  • Monitors & Projectors: Reduced from 28% to 18%
  • Dishwashing Machines: Reduced from 28% to 18%

7. Process Reforms for Ease of Doing Business

The Next-Gen GST Reform not only reduces rates but also simplifies compliance for businesses:

  • Registration:
    • Automatic registration within 3 working days for applicants identified as non-risky.
    • System based on data analytics to determine eligibility.
    • Taxpayers exceeding ₹2.5 lakh per month ITC and opting for the scheme will be scrutinized.
  • Refunds:
    • Provisional refunds through a risk-based system.
    • Faster refund processing especially for exports, zero-rated supplies, and inverted duty structure cases.

8. Vision of the Reform

The government envisions this reform as a step toward making taxation better and simpler. It eases the cost of living for citizens, supports MSMEs and startups, and boosts overall consumption. As Prime Minister Narendra Modi highlighted, this initiative will not only provide relief to households but also give a new momentum to India’s economy.

✅ In summary: The Next-Gen GST Reform is a comprehensive package—reducing GST rates on essentials, agriculture, healthcare, education, electronics, and automobiles, while also simplifying compliance. It aims to make daily living more affordable and business operations more efficient, marking a new chapter in India’s tax landscape.

September 2025 Compliance Schedule (GST, Income Tax & MCA)

September is one of the most crucial months in the compliance cycle. This month brings together GST filings, Income Tax advance tax, audit reports, and MCA annual compliances. Missing a date can lead to penalties, interest, and loss of credibility with regulators.

Here is the detailed compliance calendar for September 2025.

📌 Important Due Dates

  • 7 Sept (Sunday)
    • Deposit of TDS/TCS for August 2025
    • Payment of Equalisation Levy for August 2025
  • 10 Sept (Wednesday)
    • GSTR-7 (TDS under GST) for August 2025
    • GSTR-8 (TCS by e-commerce operators) for August 2025
  • 11 Sept (Thursday)
    • GSTR-1 (Monthly) for August 2025
  • 13 Sept (Saturday)
    • Invoice Furnishing Facility (IFF) for August 2025 (QRMP taxpayers)
    • GSTR-6 (Input Service Distributor) for August 2025
    • GSTR-5 (Non-resident taxable persons) for August 2025
  • 15 Sept (Monday)
    • 2nd Instalment of Advance Tax for AY 2025-26 (45% cumulative)
    • Form 24G (by Govt deductors) for August 2025
    • Form 3BB (stock exchange transactions) for August 2025
    • ITR filing (Non-audit cases) for AY 2025-26 – Final extended deadline
  • 20 Sept (Saturday)
    • GSTR-3B (Monthly) for August 2025
    • GSTR-5A (OIDAR/non-resident online service providers) for August 2025
  • 25 Sept (Thursday)
    • GST PMT-06 payment for August 2025 (QRMP taxpayers)
  • 30 Sept (Tuesday)
    • Tax Audit Report (Form 3CA/3CB-3CD) for AY 2025-26
    • Audit Report of Trusts/Institutions (Form 10B/10BB) for AY 2025-26
    • Annual General Meeting (AGM) for FY 2024-25 under MCA
    • DIR-3 KYC (Director e-KYC) under MCA

🧾 Detailed Break-up

A. GST Compliances

  • 10 Sept – GSTR-7 & GSTR-8: For deductors of GST TDS and e-commerce operators collecting GST TCS.
  • 11 Sept – GSTR-1: Outward supplies for August (monthly filers).
  • 13 Sept – IFF (for QRMP taxpayers), GSTR-6 (ISD), GSTR-5 (NRTP).
  • 20 Sept – GSTR-3B (monthly) and GSTR-5A (OIDAR).
  • 25 Sept – PMT-06: Monthly tax deposit for QRMP scheme.

Checklist:
✔ Reconcile invoices with e-invoices and e-way bills.
✔ Ensure vendor compliance before ITC lock-in.
✔ Match GSTR-1 and GSTR-3B with books.

B. Income Tax Compliances

  • 7 Sept – Deposit TDS/TCS and Equalisation Levy for August.
  • 15 Sept – Advance Tax (45% cumulative), Form 24G, Form 3BB, and ITR for non-audit cases (final extended date).
  • 30 Sept – Tax Audit Reports (44AB) and Audit Reports for Charitable/Religious Trusts (Form 10B/10BB).

Checklist:
✔ Advance tax calculation should include capital gains, F&O, and interest income.
✔ Match TDS challans with Form 26AS and AIS.
✔ Ensure UDIN is generated for audit reports.

C. MCA Compliances

  • 30 Sept –
    • AGM for FY 2024-25 (as per Section 96 of the Companies Act).
    • Filing of DIR-3 KYC for directors.

Checklist:
✔ Finalise financial statements and Board’s Report in time.
✔ Ensure proper notice (21 clear days) before AGM.
✔ Directors to complete e-KYC with valid mobile and email OTPs.

September 2025 is a packed month for professionals, businesses, and corporates. From GST returns to advance tax and from tax audits to AGMs, almost every compliance stream has critical deadlines. Staying ahead with a checklist and calendar ensures smooth operations and avoids penalties.

10 Major Warning Signs Officers Track During a GST Audit | Documents & Records Verified by Authorities

Audit under GST is conducted to ensure that taxpayers have correctly paid taxes, claimed Input Tax Credit (ITC) in compliance with the law, and filed returns properly. Section 65 of the CGST Act, 2017 along with Rule 101 of the CGST Rules, 2017 provides the framework for departmental audits.

 

Audit in GST should verify the correctness of the facts and figures declared in the returns vis-a-vis books of accounts and returns filed by the taxpayers. Self- assessed declarations may contain hidden deviations. These deviations may be the result of omission, error, or deliberate action by a taxpayer.

Audit in GST should intend to evaluate the credibility of self-assessed tax liability of a taxpayer based on the twin test of accuracy of their declaration and the accounts maintained by the taxpayer

Legal Framework

Section 65 – Audit by Tax Authorities

  • Audit can be initiated by the Commissioner or an authorized officer.
  • It may be conducted at the taxpayer’s premises or at the department’s office.
  • At least 15 working days’ prior notice must be given (Form GST ADT-01).
  • Audit to be completed in 3 months (extendable by 6 months with written reasons).
  • Officer may demand records, explanations, and facilities to complete the audit.
  • Findings to be communicated in Form GST ADT-02 within 30 days of audit completion.
  • If discrepancies found → proceedings may be initiated under Section 73, 74, or 74A.

Rule 101 – Key Audit Aspects

  • Covers one financial year or part/multiples thereof.
  • Verification includes books of accounts, GST returns, ITC claims, tax rates, and refunds.
  • Discrepancies to be shared with the taxpayer for reply before finalization.

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Documents & Records Examined During GST Audit

During audit, officers typically examine the following categories of records:

Sale Invoice is in the top of the list to know the nature of business, GST Rates etc.

A. Invoices & Core Records

  • Sales invoices, purchase invoices, debit/credit notes.
  • Value of Supply, Time of Supply
  • Advance receipts and payments records.
  • Stock register – opening, inward, outward, and closing balances.
  • Delivery challans and job work challans.

B. GST-Specific Records

  • ITC register (eligible ITC claimed) and verification of ineligible/blocked ITC under Section 17(5).
  • GST rates applied – cross-check with HSN/SAC codes.
  • Liability on Reverse Charge Mechanism (RCM): expenses where RCM is applicable vs ITC claimed on RCM payments.
  • Post-sale discount adjustments (whether ITC reversed or credit notes issued properly).
  • E-way Bills – matching with outward/inward supply data.
  • Additional Place of Business records – movement of goods from/to additional premises and is this added on GST Portal or not
  • Export transactions – LUT/Bond, shipping bills, realization of foreign currency.
  • Purchases from “risky suppliers” (flagged for fake ITC or defaulting).

C. Financial Records

  • Books of account: ledgers, journals, cash book, bank book.
  • Balance sheet, profit & loss account, trial balance.
  • Fixed asset register and depreciation schedules (with ITC reversal where applicable).
  • Internal audit or statutory audit reports.
  • Miscellaneous income sources: scrap sales, insurance claims, forex gains, etc.

D. GST Returns & Reconciliations

  • GSTR-1, GSTR-3B, GSTR-2B, and annual returns GSTR-9/9C.
  • Reconciliation of Books of Accounts vs GST Returns.
  • Turnover reconciliation with Income Tax returns (Form 26AS, ITR, audited financials).
  • Check for sudden jump in turnover compared to previous periods.
  • Verification of refunds claimed and sanction orders.

Consolidated List

  • Annual report and Director‘s report (if any)
  • Profit & Loss A/C
  • Balance Sheet and Trial balance if maintained
  • Notes to accounts
  • Tax Audit Report
  • Statement of income tax TDS.
  •  List of HSN /SAC of the goods /or services in respect of the business.
  • Reconciliation statement in respect of Form GSTR 9, GSTR-1 AND GSTR 3B
  • Suppliers list with GSTIN (where applicable)
  • Ledger accounts of the suppliers
  • Statement of sales party wise and POS wise.
  • Supply for which tax paid in RCM.
  • Bank Statement for the period under audit
  • Stock register
  • Other documents and records as applicable as provided in section 35 of the Act

Key Points for Taxpayers to Remember

  • Maintain organized records for invoices, ledgers, and returns.
  • Regularly reconcile ITC with GSTR-2B and block ineligible ITC.
  • Check correct GST rates based on HSN/SAC classification.
  • Monitor expenses under RCM and claim ITC only if payment made.
  • Ensure e-way bill compliance and consistency with supply data.
  • Be cautious about dealing with “risky suppliers” flagged by the department, Check the status of GST registration and return filing on GST Portal before doing business with any new supplier
  • Regularly reconcile turnover between GST returns, books of account, and Income Tax filings.

Revised TDS Rates for FY 2025-26

Tax Deducted at Source (TDS) is one of the most important compliance requirements under the Income Tax Act, 1961. Every year, the government notifies updated rates and provisions that taxpayers, businesses, and professionals must follow while deducting and depositing TDS. For the financial year 2025-26 (AY 2026-27), the TDS rates cover payments such as salary, interest, rent, professional fees, contracts, and more. This updated TDS Rate Chart 2025-26 will help you understand at what rate tax needs to be deducted, thresholds, and key compliances to avoid penalties.

Under Income Tax Act 2025 TDS Rates are covered under Section 390 to 430 and Table chart are used

Rates for tax deduction at source*

[For Assessment year 2026-27]

Particulars TDS Rates (in %)
1. In the case of a person other than a company
1.1 where the person is resident in India-
Section 192: Payment of salary Normal Slab Rate
Section 192A: Payment of accumulated balance of provident fund which is taxable in the hands of an employee. 10
Section 193: Interest on securities
a) any debentures or securities for money issued by or on behalf of any local authority or a corporation established by a Central, State or Provincial Act; 10
b) any debentures issued by a company where such debentures are listed on a recognised stock exchange in accordance with the Securities Contracts (Regulation) Act, 1956 (42 of 1956) and any rules made thereunder; 10
c) any security of the Central or State Government;[i.e. 8% Savings (Taxable) Bonds, 2003 and 7.75% Saving (Taxable) Bonds, 2018, Floating Rate Savings Bonds, 2020 (Taxable) or any other notified security] 10
d) interest on any other security 10
Section 194: Income by way of dividend 10
Section 194A: Income by way of interest other than “Interest on securities” 10
Section 194B: Income by way of winnings from lotteries, crossword puzzles, card games and other games of any sort, or from gambling or betting of any form or nature whatsoever. 30
Section 194BA: Income by way of winnings from any online game 30
Section 194BB: Income by way of winnings from horse races 30
Section 194C: Payment to contractor/sub-contractor
a) HUF/Individuals 1
b) Others 2
Section 194D: Insurance commission 5
Section 194DA: Payment in respect of life insurance policy 2
Section 194EE: Payment in respect of deposit under National Savings scheme 10
Section 194F: Payment on account of repurchase of unit by Mutual Fund or Unit Trust of IndiaNote: The provisions of this section are not applicable with effect from 01-10-2024 20
Section 194G: Commission, etc., on sale of lottery tickets 2
Section 194H: Commission or brokerage 2
Section 194-I: Rent
a) Plant & Machinery 2
b) Land or building or furniture or fitting 10
Section 194-IA: Payment on transfer of certain immovable property other than agricultural land 1
Section 194-IB: Payment of rent by individual or HUF not liable to tax audit 2
Section 194-IC: Payment of monetary consideration under Joint Development Agreements 10
Section 194J:  Fees for professional or technical services:i)  sum paid or payable towards fees for technical servicesii)  sum paid or payable towards royalty in the nature of consideration for sale, distribution or exhibition of cinematographic films;iii)  Any other sumNote: With effect from June 1, 2017 the rate of TDS would be 2% in case of payee engaged in business of operation of call center. 2210
Section 194K: Income in respect of units payable to resident person 10
Section 194LA: Payment of compensation on acquisition of certain immovable property 10
Section 194LBA(1): Business trust shall deduct tax while distributing, any interest received or receivable by it from a SPV or any income received from renting or leasing or letting out any real estate asset owned directly by it, to its unit holders. 10
Section 194LBB: Investment fund paying an income to a unit holder [other than income which is exempt under Section 10(23FBB)] 10
Section 194LBC: Income in respect of investment made in a securitisation trust (specified in Explanation of section 115TCA) 10
Section 194M: Payment of commission (not being insurance commission), brokerage, contractual fee, professional fee to a resident person by an Individual or a HUF who are not liable to deduct TDS under section 194C, 194H, or 194J.Tax shall be deducted under Section 194M with effect from 1/09/2019 when aggregate of sum credited or paid during a financial year exceeds Rs. 50 lakh. 2
Section 194N: Cash withdrawal during the previous year from one or more account maintained by a person with a banking company, co-operative society engaged in business of banking or a post office:i) in excess of Rs. 1 crore#ii) in excess of Rs. 20 lakhs** for those persons who have not filed return of income (ITR) for three previous years immediately preceding the previous year in which cash is withdrawn, and the due date for filing ITR under section 139(1) has expired. The deduction of tax under this situation shall be at the rate of:a) 2% from the amount withdrawn in cash if the aggregate of the amount of withdrawal exceeds Rs. 20 lakhs during the previous year; orb) 5% from the amount withdrawn in cash if the aggregate of the amount of withdrawal exceeds Rs. 1 crore during the previous year.# The threshold limit of Rs. 1 crore is increased to Rs. 3 croresif the withdrawal of cash is made by co-operative society. 22/5
Section 194-O: Payment or credit of amount by the e-commerce operator to e-commerce participant 0.1
Section 194P: Deduction of tax by specified bank in case of senior citizen having age of 75 or more Tax on total income as per rate in force
Section 194Q: Payment for purchase of goods of the aggregate value exceeding Rs. 50 lakhsNote: TDS is deductible on sum exceeding Rs. 50 lakhs 0.1
Section 194R: Deduction of tax in case any benefit or perquisite is provided and aggregate value of such benefit/perquisite exceeds Rs. 20,000Note: Benefit or perquisite should be arising from business or the exercise of a profession by such resident. 10
Section 194S: Payment on transfer of Virtual Digital AssetNote: No tax shall be deducted under this provision in the following circumstance:• If the consideration is payable by any person (other than a specified person) and its aggregate value does not exceed Rs. 10,000 during the financial year.• if the consideration is payable by a specified person and its aggregate value does not exceed Rs. 50,000 during the financial year.Specified person means:(a) An individual or a HUF, whose total sales, gross receipts or turnover does not exceed Rs. 1 crore in case of business or Rs. 50 lakhs in case of a profession, during the financial year immediately preceding the financial year in which virtual digital asset is transferred;(b) An individual or a HUF who does not have any income under the head profits and gains of business or profession. 1
Section 194T: Payments of any sum in the nature of salary, remuneration, commission, bonus or interest to a partner of the firm.Note:(1) This provision is effective from 01-04-2025(2) No deduction if aggregate of such sum paid/payable does not exceed Rs. 20,000 during the financial year. 10
Any Other Income 10
1.2 where the person is not resident in India*-
Section 192: Payment of Salary Normal Slab Rate
Section 192A: Payment of accumulated balance of provident fund which is taxable in the hands of an employee. 10
Section 194B: Income by way of winnings from lotteries, crossword puzzles, card games and other games of any sort or from gambling or betting of any form or nature whatsoever. 30
Section 194BA: Income by way of winnings from any online game 30
Section 194BB: Income by way of winnings from horse races 30
Section 194E: Payment to non-resident sportsmen/sports association 20
Section 194EE: Payment in respect of deposits under National Savings Scheme 10
Section 194F: Payment on account of repurchase of unit by Mutual Fund or Unit Trust of IndiaNote: The provisions of this section are not applicable with effect from 01-10-2024 20
Section 194G: Commission, etc., on sale of lottery tickets 2
Section 194LB: Payment of interest on infrastructure debt fund 5
Sec. 194LBA(2): Payment of the nature referred to in  Section 10(23FC)(a) 5
Section 194LBA(2): Payment of the nature referred to in  Section 10(23FC)(b) 10
Section 194LBA(3): Payment of the nature referred to in section 10(23FCA) by business trust to unit holders 30
Section 194LBB: Investment fund paying an income to a unit holder [other than income which is exempt under Section 10(23FBB)]. 30
Section 194LBC: Income in respect of investment made in a securitisation trust (specified in Explanation of section115TCA) 30
Section 194LC: Payment of interest by an Indian Company or a business trust in respect of money borrowed in foreign currency under a loan agreement or by way of issue of long-term bonds (including long-term infrastructure bond) 5 or 4* or 9*** In case where interest is payable in respect of Long-term Bond or Rupee Denominated Bond listed on recognised stock exchange located in IFSC** Where money borrowed from a source outside India by issuing a long-term bond or rupee-denominated bond on or after 01-04-2023, which is listed only on a recognised stock exchange located in an IFSC
Section 194LD: Payment of interest on rupee denominated bond of an Indian Company or Government securities to a Foreign Institutional Investor or a Qualified Foreign Investor 5
Section 194N: Cash withdrawal during the previous year from one or more account maintained by a person with a banking company, co-operative society engaged in business of banking or a post office:i) in excess of Rs. 1 croreii) in excess of Rs. 20 lakhs** for those persons who have not filed return of income (ITR) for three previous years immediately preceding the previous year in which cash is withdrawn, and the due date for filing ITR under section 139(1) has expired. The deduction of tax under this situation shall be at the rate of:a) 2% from the amount withdrawn in cash if the aggregate of the amount of withdrawal exceeds Rs. 20 lakhs during the previous year; orb) 5% from the amount withdrawn in cash if the aggregate of the amount of withdrawal exceeds Rs. 1 crore during the previous year.   22/5
Section 194T: Payments of any sum in the nature of salary, remuneration, commission, bonus or interest to a partner of the firm.Note:(1) This provision is effective from 01-04-2025(2) No deduction if aggregate of such sum paid/payable does not exceed Rs. 20,000 during the financial year. 10
Section 195: Payment of any other sum to a Non-resident
a) Income in respect of investment made by a Non-resident Indian Citizen 20
b) Income by way of long-term capital gains referred to in Section 115E in case of a Non-resident Indian Citizen, 12.5
c) Income by way of long-term capital gains referred to in sub-clause (iii) of clause (c) of sub-Section (1) of Section 112 12.5
d) Income by way of long-term capital gains as referred to in Section 112A exceeding Rs. 1,25,000 12.5
e) Income by way of short-term capital gains referred to in Section 111A 20
f) Any other income by way of long-term capital gains [not being long-term capital gains referred to in sections 10(33), 10(36)]: 12.5
g) Income by way of dividend from a unit in International Financial Services Centre 10
h) Income by way of dividend [Other than (g)] 20
i) Income by way of interest payable by Government or an Indian concern on moneys borrowed or debt incurred by Government or the Indian concern in foreign currency (not being income by way of interest referred to in Section 194LB or Section 194LC) 20
j) Income by way of royalty payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern where such royalty is in consideration for the transfer of all or any rights (including the granting of a licence) in respect of copyright in any book on a subject referred to in the first proviso to sub-section (1A) of Section 115A of the Income-tax Act, to the Indian concern, or in respect of any computer software referred to in the second proviso to sub-section (1A) of Section 115A of the Income-tax Act, to a person resident in India 20
k) Income by way of royalty [not being royalty of the nature referred to point h) above] payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern and where such agreement is with an Indian concern, the agreement is approved by the Central Government or where it relates to a matter included in the industrial policy, for the time being in force, of the Government of India, the agreement is in accordance with that policy 20
l) Income by way of fees for technical services payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern and where such agreement is with an Indian concern, the agreement is approved by the Central Government or where it relates to a matter included in the industrial policy, for the time being in force, of the Government of India, the agreement is in accordance with that policy 20
m) Any other income 30
Section 196A: Income in respect of units of non-resident 20
Section 196B: Income from units referred to in section 115AB(1)(i) 10
Section 196B: Long-term capital gain on transfer of units referred to in section 115AB, 12.5
Section 196C: Income by way of interest or dividends in respect of bonds or GDR referred to in section 115AC 10
Section 196C: Long-term capital gain arising from transfer of bonds or GDR referred to in section 115AC 12.5
Section 196D: Income of foreign Institutional Investors from securities (not being dividend or capital gain arising from such securities)Note: Tax shall be deducted at the rate provided under DTAA if same is lower than the existing TDS rate of 20%. 20
Section 196D(1A): Income in respect of securities referred to in section 115AD(1)(a) payable to specified fund [referred to in clause (c) of Explanation to section 10(4D)]
Note: Since recipient of income is a specified fund, surcharge & health and education cess shall be nil.		 10
2. In the case of a company-
2.1 where the company is a domestic company-
Section 193: Interest on securities
a) any debentures or securities for money issued by or on behalf of any local authority or a corporation established by a Central, State or Provincial Act; 10
b) any debentures issued by a company where such debentures are listed on a recognised stock exchange in accordance with the Securities Contracts (Regulation) Act, 1956 (42 of 1956) and any rules made thereunder; 10
c) any security of the Central or State Government;[i.e. 8% Saving (Taxable) Bonds, 2003 and 7.75% Saving (Taxable) Bonds, 2018, Floating Rate Savings Bonds, 2020 (Taxable) or any other notified security] 10
d) interest on any other security 10
Section 194: Dividend 10
Section 194A: Income by way of interest other than “Interest on securities” 10
Section 194B: Income by way of winnings from lotteries, crossword puzzles, card games and other games of any sort or from gambling or betting of any form or nature whatsoever. 30
Section 194BA: Income by way of winnings from any online game 30
Section 194BB: Income by way of winnings from horse races 30
Section 194C: Payment to contractor/sub-contractor
a) HUF/Individuals 1
b) Others 2
Section 194D: Insurance commission 10
Section 194DA: Payment in respect of life insurance policyw.e.f. 1/9/2019, the tax shall be deducted on the amount of income comprised in insurance pay-out 2
Section 194EE: Payment in respect of deposit under National Savings scheme 10
Section 194F: Payment on account of repurchase of unit by Mutual Fund or Unit Trust of IndiaNote: The provisions of this section are not applicable with effect from 01-10-2024 20
Section 194G: Commission, etc., on sale of lottery tickets 2
Section 194H: Commission or brokerage 2
Section 194-I: Rent
a) Plant & Machinery 2
b) Land or building or furniture or fitting 10
Section 194-IA:Payment on transfer of certain immovable property other than agricultural land 1
Section 194-IC:Payment of monetary consideration under Joint Development Agreements 10
Section 194J:  Fees for professional or technical services:iv)   sum paid or payable towards fees for technical servicesv)   sum paid or payable towards royalty in the nature of consideration for sale, distribution or exhibition of cinematographic films;vi)   Any other sumNote: With effect from June 1, 2017 the rate of TDS would be 2% in case of payee engaged in business of operation of call center. 2210
Section 194K : Income in respect of units payable to resident person 10
Section 194LA: Payment of compensation on acquisition of certain immovable property 10
Section 194LBA(1): Business trust shall deduct tax while distributing, any interest received or receivable by it from a SPV or any income received from renting or leasing or letting out any real estate asset owned directly by it, to its unit holders. 10
Section 194LBB: Investment fund paying an income to a unit holder [other than income which is exempt under Section 10(23FBB)] . 10
Section 194LBC: Income in respect of investment made in a securitisation trust (specified in Explanation of section115TCA) 10
Section 194M: Payment of commission (not being insurance commission), brokerage, contractual fee, professional fee to a resident person by an Individual or a HUF who are not liable to deduct TDS under section 194C, 194H, or 194J.Tax shall be deducted under Section 194M with effect from 1/09/2019 when aggregate of sum credited or paid during a financial year exceeds Rs. 50 lakh. 2
Section 194N: Cash withdrawal during the previous year from one or more account maintained by a person with a banking company, co-operative society engaged in business of banking or a post office:iii)   in excess of Rs. 1 croreiv)   in excess of Rs. 20 lakhs** for those persons who have not filed return of income (ITR) for three previous years immediately preceding the previous year in which cash is withdrawn, and the due date for filing ITR under section 139(1) has expired. The deduction of tax under this situation shall be at the rate of:a)   2% from the amount withdrawn in cash if the aggregate of the amount of withdrawal exceeds Rs. 20 lakhs but not exceeding Rs. 1 crore during the previous year; orb)   5% from the amount withdrawn in cash if the aggregate of the amount of withdrawal exceeds Rs. 1 crore during the previous year. 22/5
Section 194-O: Payment or credit of amount by the e-commerce operator to e-commerce participant 0.1
Section 194P: Deduction of tax by specified bank in case of senior citizen having age of 75 or more Tax on total income as per rate in force
Section 194Q: Payment to resident for purchase of goods of the aggregate value exceeding Rs. 50 lakhsNote: TDS is deductible on sum exceeding Rs. 50 lakhs 0.1
Section 194R: Deduction of tax in case any benefit or perquisite is provided and aggregate value of such benefit/perquisite exceeds Rs. 20,000Note: Benefit or perquisite should be arising from business or the exercise of a profession by such resident. 10
Section 194S: Payment on transfer of Virtual Digital AssetNote: No tax shall be deducted under this provision in the following circumstance:• If the consideration is payable by any person (other than a specified person) and its aggregate value does not exceed Rs. 10,000 during the financial year.• if the consideration is payable by a specified person and its aggregate value does not exceed Rs. 50,000 during the financial year.Specified person means:(a) An individual or a HUF, whose total sales, gross receipts or turnover does not exceed Rs. 1 crore in case of business or Rs. 50 lakhs in case of a profession, during the financial year immediately preceding the financial year in which virtual digital asset is transferred;(b) An individual or a HUF who does not have any income under the head profits and gains of business or profession. 1
Any Other Income 10
2.2 where the company is not a domestic company*-
Section 194B: Income by way of winnings from lotteries, crossword puzzles, card games and other games of any sort or from gambling or betting of any form or nature whatsoever. 30
Section 194BA: Income by way of winnings from any online game 30
Section 194BB: Income by way of winnings from horse races 30
Section 194E: Payment to non-resident sports association 20
Section 194G: Commission, etc., on sale of lottery tickets 2
Section 194LB: Payment of interest on infrastructure debt fund 5
Section 194LBA(2): – Payment of the nature referred to in  Section 10(23FC)(a) 5
Section 194LBA(2): Payment of the nature referred to in  Section 10(23FC)(b) 10
Section 194LBA(3): Business trust shall deduct tax while distributing any income received from renting or leasing or letting out any real estate asset owned directly by it to its unit holders. 35
Section 194LBB: Investment fund paying an income to a unit holder [other than income which is exempt under Section 10(23FBB)]. 35
Section 194LBC: Income in respect of investment made in a securitisation trust (specified in Explanation of section115TCA) 35
Section 194LC: Payment of interest by an Indian Company or a business trust in respect of money borrowed in foreign currency under a loan agreement or by way of issue of long-term bonds (including long-term infrastructure bond) 5 or 4* or 9*** In case where interest is payable in respect of Long-term Bond or Rupee Denominated Bond listed on recognised stock exchange located in IFSC ** Where money borrowed from a source outside India by issuing a long-term bond or rupee-denominated bond on or after 01-04-2023, which is listed only on a recognised stock exchange located in an IFSC;
Section 194LD:Payment of interest on rupee denominated bond of an Indian Company or Government securities to a Foreign Institutional Investor or a Qualified Foreign Investor 5
Section 195: Payment of any other sum
a) Income by way of long-term capital gains referred to in sub-clause (iii) of clause (c) of sub-Section (1) of Section 112 12.5
b) Income by way of long-term capital gains as referred to in Section 112A exceeding Rs. 1,25,000 12.5
c) Income by way of short-term capital gains referred to in Section 111A 20
f) Any other income by way of long-term capital gains [not being long-term capital gains referred to in sections 10(33), 10(36) and 112A] 12.5
d) Income by way of dividend from a unit in International Financial Services Centre 10
e) Income by way of dividend [Other than (d)] 20
f) Income by way of interest payable by Government or an Indian concern on moneys borrowed or debt incurred by Government or the Indian concern in foreign currency (not being income by way of interest referred to in Section 194LB or Section 194LC) 20
g) Income by way of royalty payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern after the 31st day of March, 1976 where such royalty is in consideration for the transfer of all or any rights (including the granting of a licence) in respect of copyright in any book on a subject referred to in the first proviso to sub-section (1A) of Section 115A of the Income-tax Act, to the Indian concern, or in respect of any computer software referred to in the second proviso to sub-section (1A) of Section 115A of the Income-tax Act, to a person resident in India 20
h) Income by way of royalty [not being royalty of the nature referred to in point f) above] payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern and where such agreement is with an Indian concern, the agreement is approved by the Central Government or where it relates to a matter included in the industrial policy, for the time being in force, of the Government of India, the agreement is in accordance with that policy—
A. where the agreement is made after the 31st day of March, 1961 but before the 1st day of April, 1976 50
B. where the agreement is made after the 31st day of March, 1976 20
i) Income by way of fees for technical services payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern and where such agreement is with an Indian concern, the agreement is approved by the Central Government or where it relates to a matter included in the industrial policy, for the time being in force, of the Government of India, the agreement is in accordance with that policy—
A. where the agreement is made after the 29th day of February, 1964 but before the 1st day of April, 1976 50
B. where the agreement is made after the 31st day of March, 1976 20
j) Any other income 35
Section 196A: Income in respect of units of non-resident 20
Section 196B: Income from units referred to in section 115AB(1)(i) 10
Section 196B: Long-term capital gain on transfer of units referred to in section 115AB 12.5
Section 196C: Income by way of interest or dividends in respect of bonds or GDR referred to in section 115AC 10
Section 196C: Long-term capital gain arising from transfer of bonds or GDR referred to in section 115AC 12.5
Section 196D(1): Income of foreign Institutional Investors from securities (not being dividend or capital gain arising from such securities)Note: Tax shall be deducted at the rate provided under DTAA if same is lower than the existing TDS rate of 20%. 20
Section 196D(1A): Income in respect of securities referred to in section 115AD(1)(a) payable to specified fund [referred to in clause (c) of Explanation to section 10(4D)]Note: Since recipient of income is a specified fund, surcharge & health and education cess shall be nil. 10

__________________________

Dates Announced for the 56th GST Council Meeting in September 2025

As India gears up for the festive season, all eyes are on the upcoming 56th GST Council Meeting scheduled in September 2025 in New Delhi. The meeting comes in the backdrop of Prime Minister Narendra Modi’s “Diwali gift”announced on Independence Day—sweeping GST reforms aimed at simplifying the tax structure and reducing rates to ease the burden on citizens. With a proposal to shift most goods into the lower 5% and 18% slabs, the Council’s deliberations are expected to play a crucial role in shaping how and when these reforms will be rolled out, making this session one of the most significant in recent years.

Know the announcements by PM Modi:

 

 

 

The Goods and Services Tax (GST) Council has officially notified that its 56th meeting will be held on:

  • Wednesday, 3rd September 2025 (from 11:00 AM onwards)
  • Thursday, 4th September 2025 (from 11:00 AM onwards)

at New Delhi.

Officers’ Meeting Prior to Council Meeting

Ahead of the Council meeting, an Officers’ Meeting has also been scheduled for:

  • Tuesday, 2nd September 2025 (from 11:00 AM onwards) in New Delhi.

Agenda and Venue

  • The detailed agenda items and venue for the 56th GST Council Meeting and the Officers’ Meeting will be communicated in due course of time.
  • The Hon’ble Members of the GST Council have been requested to attend the meeting.

Why This Meeting is Important?

The GST Council meetings are crucial as they decide on:

  • Rate rationalisation and structural changes
  • Clarifications on GST law and compliance
  • IT system upgrades and taxpayer facilitation
  • Policy measures impacting both businesses and consumers

With India’s dynamic indirect tax system, the 56th GST Council meeting is expected to bring key policy directions and reforms that may shape the GST landscape ahead of FY 2025-26.

July 2025 GST & Tax Compliance Schedule

As we step into July 2025, several key tax and regulatory deadlines are scheduled for the month. With new rules under GST, extended ITR deadlines, and labour law filings, staying on top of compliance is critical to avoid penalties and interest.

Here’s your complete compliance guide for July 2025, covering GST, TDS/TCS, Income Tax, EPF/ESIC, and other legal returns.

🔷 1. GST Compliance – July 2025

✅ Key Deadlines:

📆 Date 📋 Form 📌 Details
10 July GSTR-7 / GSTR-8 For TDS deductors and e-commerce operators (June 2025)
11 July GSTR-1(M) Monthly filers (June 2025)
13 July GSTR-1(Q) / GSTR-6 / GSTR-5 QRMP Scheme GSTR-1(Q1: Apr–Jun) , ISD & non-residents
18 July CMP-08 Quarterly return for composition dealers (Q1: Apr–Jun)
20 July GSTR-3B/GSTR-5A Monthly filers (June 2025)
22 / 24 July GSTR-3B Quarterly filers (state-wise staggered dates) (Q1: Apr–Jun)
31 July Pending GST Returns Final opportunity to file pending GST returns older than 3 years (per new rule effective 1st July 2025)

⚠️ Important GST Updates:

  • From 1st August 2025, returns older than 3 years from due date cannot be filed.
  • Auto-populated data from GSTR-1/IFF in GSTR-3B will be locked from July 2025 return period
  • Late filing or ITC mismatches can result in notices, penalties, or loss of credit.

🧾 2. TDS / TCS & Income Tax Compliance – July 2025

📆 Important Due Dates:

📅 Date 🧾 Compliance
7 July Deposit of TDS & TCS for June 2025
15 July – Issue Q1 TCS statement (Form 27EQ)
– Issue Form 16B/16C/16D for May 2025
– Upload Form 15G/15H declarations
– Q1 Advance Tax for 44AD/44ADA taxpayers
– File Form 10BBB, 3BB (stock exchanges)
30 July – TDS/TCS challan-cum-statements (194IA/IB/IM/IS)
– Issue TCS Certificate (Form 27D)
31 July – File Q1 TDS returns (Form 24Q, 26Q, 27Q)
– Last date to pay self-assessment tax for AY 2025–26 (non-audit) to avoid interest under Section 234A/B/C
– ITR filing due date has been extended to 15 September 2025, but tax must be paid by 31 July

🚨 Alert:

Even though the ITR filing deadline for individuals (non-audit) is extended to September 15, you must pay your tax dues by 31 July 2025 to avoid interest or penalty.

🏢 3. Labour Law & Miscellaneous Compliance – July 2025

📅 Date 📄 Compliance / Region
1 July Half-yearly return under Factory Act (Ladakh)
5 July Kerala Labour Welfare Fund contribution
10 July Professional Tax RC payment (Andhra Pradesh, MP, Telangana)
14 July Industrial establishment half-yearly returns (Assam)
15 July PF & ESI payment and return due (Pan India)
Factory Act half-yearly returns (multiple states)
20–30 July State-wise returns under CLRA, PT, LWF, etc.

🆕 4. Major Compliance Changes Effective July 2025

🔸 GST Returns Time-Barred After 3 Years

  • From 1 July 2025, no GST return can be filed after 3 years from its original due date
  • E.g., Return for June 2022 (due in July 2022) will be time-barred after 31 July 2025

🔸 ITR Filing Deadline Extended – But Tax Payment Not

  • ITR filing deadline for non-audit taxpayers = 15 September 2025
  • But to avoid Section 234A/B/C interest, pay final tax by 31 July 2025

ROC (Companies & LLP) Annual Compliance

For FY ending 31 Mar 2025, with standard AGM by 30 Sep 2025 :

Form / Act Due Date
AGM (All companies except OPC) By 30 September 2025
ADT-1 (Auditor Appointment) Within 15 days post-AGM → 15 October 2025
AOC-4 (Financial Statements) Within 30 days of AGM → 30 October 2025
MGT-7 / MGT-7A(Annual Return) Within 60 days of AGM → 29 November 2025
DPT-3 (Return of Deposits) Due 30 June 2025
DIR-3 KYC (Director KYC) Due by 30 September 2025
MSME-1 (Half-yearly return) 30 Apr 2025 & next by 31 Oct 2025
CRA-4 (Cost Audit) Within 30 days of report receipt
MGT-14 (Resolutions) Within 30 days of passing

Penalties are hefty—₹100 per day with no cap for late AOC-4/MGT-7 filings; director disqualification & legal consequences apply .

Stay alert this July! With so many deadlines and new restrictions kicking in, compliance is more important than ever. Whether you’re filing GST returns, TDS, or your income tax, follow the timeline to avoid unnecessary penalties.

Key GST Updates Effective from 1st July 2025

As the new quarter begins, taxpayers must prepare for critical GST compliance reforms taking effect from 1 July 2025. These include non-editable GSTR-3B, a 3-year filing cut-off, and upgraded e-way bill systems, along with the closing window for the GST Amnesty Scheme and GSTR-4 filing grace period.

✅ 1. GSTR-3B Will Become Non-Editable (New Auto-Population Rule)

Effective From: Returns for July 2025 period (filed in August 2025)

  • GSTR-3B liability values will be auto-populated from GSTR-1, IFF, or GSTR-1A
  • These values will be non-editable
  • Errors must be corrected via Form GSTR-1A (newly introduced) before filing GSTR-3B

📌 Action Required: Carefully review GSTR-1/IFF data and amend via GSTR-1A if needed
📅 Reference Advisory Date: 7th June 2025

✅ 2. 3-Year Limit for Filing Past GST Returns (No More Backfiling)

Effective From: 1 August 2025 (for returns due ≥3 years ago)

Returns covered:

GST Return Type Blocked From Filing After
GSTR-1 / IFF June 2022
GSTR-3B June 2022
GSTR-4 FY 2021–22
GSTR-5 to GSTR-8 June 2022
GSTR-9 / 9C FY 2020–21

🛑 If not filed by 31st July 2025, these returns will be permanently barred from the portal.

📅 Reference Advisory Date: 18th June 2025

✅ 3. E-Way Bill Portal 2.0 Goes Live (Inter-Operable with 1.0)

Launch Date: 1 July 2025
New Portal: ewaybill2.gst.gov.in

🔄 Fully integrated with E-Way Bill 1.0 for:

  • Generating or extending E-Way Bills
  • Updating vehicle or transporter info
  • Creating consolidated E-Way Bills
  • API-based access for businesses

✅ Syncs both portals in real-time
✅ Ensures business continuity during outages

📅 Reference Advisory Date: 16th June 2025

⏳ 4. GSTR-4 Filing Deadline: 30 June 2025

  • GSTR-4 (for composition taxpayers) for FY 2024–25 must be filed by 30 June 2025
  • After 30 June, returns can still be filed but with late fees
  • Avoid penalty by filing on or before deadline

🚨 5. GST Amnesty Scheme Ends on 30 June 2025

If you have old pending GST returns, late fees, or are eligible for reduced penalties, take advantage of the GST Amnesty Scheme before it expires.

🔐 Last Date to Avail Amnesty: 30 June 2025
📝 Covers non-filers and delayed filers with partial or full waiver of late fee (as per scheme conditions)

 

🧾 Summary: What You Need To Do Before 1 July 2025

Task Deadline Action
File GSTR-4 for FY 2024–25 30 June 2025 Avoid late fees
Avail GST Amnesty Scheme 30 June 2025 File pending returns with reduced late fees
File returns older than 3 years 31 July 2025 Prevent permanent block from 1 August
Prepare for non-editable GSTR-3B From 1 July 2025 Start using GSTR-1A for corrections
Update E-Way Bill APIs From 1 July 2025 Use new portal for improved functionality

🗓️ GST DUE DATES FOR JULY 2025

📆 Due Date 🧾 Form 📝 Description
10 July GSTR‑7 TDS return under GST
10 July GSTR‑8 TCS return by e-commerce operators
11 July GSTR‑1 Monthly return for outward supplies (turnover > ₹5 Cr)
13 July GSTR‑1
& GSTR-5		 QRMP scheme (for June Qtr)
13 July GSTR‑6 GSTR‑3B
20 July GSTR‑3B
& GSTR-5A		 Monthly return (taxpayers > ₹5 Cr or opted for monthly)
22 July GSTR‑3B Quarterly filers (QRMP) for Group A states (Chhattisgarh, MP, Gujarat, Maharashtra, Karnataka, Goa, Kerala, TN, Telangana, Andhra Pradesh, etc.)
24 July GSTR‑3B Quarterly filers (QRMP) for Group B states (Delhi, Punjab, Haryana, HP, JK, UP, Uttarakhand, WB, NE states, Bihar, Jharkhand, Rajasthan)
30 July ITC-04 Job work declaration for April–June 2025 (if applicable)
15 Costly GST Mistakes You Could Be Making While Filing Your Returns! Don’t Miss This Check

Even well-intentioned taxpayers face GST penalties due to complex rules and overlooked compliances. Here are 15 major GST return violations—many of which are not visible at surface level but can cause notices, ITC reversal, interest, or even audit.

1. ❌ Wrong Filing in GSTR-1 Auto-Populates Incorrect GSTR-3B

Once you file GSTR-1 wrongly, it auto-fills 3B, and with portal restrictions increasing, manual corrections may not be allowed. Avoid mismatch in output tax and outward supplies.

2. ⚠️ Non-Reversal of ITC under Rule 37A – Supplier Didn’t Pay Tax

Rule 37A mandates reversal of ITC if the supplier doesn’t deposit GST in their GSTR-3B by the 30th November of the next financial year. Recipient must track compliance of vendors or risk reversal and interest!

3. 📉 No Reconciliation with GSTR-2B

2B is the final document for eligible ITC—not 2A. Ignoring reconciliation will lead to over-claimed ITC, which the system or officers can catch, leading to reversal with penalty.

4. 💸 Purchase from Cancelled GSTINs

Claiming ITC on purchases from suppliers whose GSTIN is cancelled is invalid. This is easy to overlook unless vendor status is regularly checked on the portal.

5. 🔐 Non-Compliance with Rule 86B

If monthly turnover exceeds ₹50 lakh, 1% of GST must be paid in cash. Ignoring this can lead to system restrictions or filing blockage.

6. 📆 Failure to Pay Vendors Within 180 Days

Under Section 16(2), if payment isn’t made within 180 days, ITC must be reversed with interest, and can only be reclaimed after actual payment. This is a red flag in assessments.

7. 🧮 ITC Reversal for Exempt Supplies Not Done (Rule 42/43)

If you deal in both taxable and exempt goods/services, a proportionate reversal under Rule 42 (inputs/services) & 43 (capital goods) is mandatory, but frequently skipped.

8. 🪙 Miscellaneous Incomes Not Reported

Scrap, commission, penalties, forex gains — all such miscellaneous incomes are taxable. They must be disclosed in outward supplies or else mismatches will occur with ITR.

9. 🔍 No GST Paid on Advance Received

For certain goods and all services, GST is applicable on advance receipt. If not declared properly, mismatches between books and GSTR-1/3B arise.

10. 🧾 RCM Liability Ignored on Common Expenses

Expenses like freight (GTA), advocate fees, rent from unregistered persons, director remuneration may attract RCM. Not discharging this liability = non-compliance + ITC ineligibility.

11. 🧯 Incorrect Valuation of Related Party Transactions

Even if no consideration is involved, GST valuation rules apply to transactions with sister companies, branches, or directors. Use open market value or Rule 28 provisions.

12. 🧷 Late GSTR-1 Filing – No Late Fee, But Notice Still Possible

Many think they’re safe if no late fee shows on portal, but officers can issue notice under Section 46 or 122, demanding penalty for late filing.

13. 🧾 Capital Goods Supplied but ITC Not Reversed as per Rule 40(2)

When capital goods or plant & machinery are sold, transferred, or disposed of, the remaining Input Tax Credit must be reversed.

As per Rule 40(2) of CGST Rules, ITC is reduced by 5% per quarter (or part) from the date of invoice till the date of disposal. If not reversed or taxed correctly, this attracts GST audit objections and recovery with interest.

Example: If a machine purchased in Jan 2023 is sold in June 2025 (i.e., 10 quarters later), 50% of ITC (5% × 10) must be reduced from the originally claimed ITC, and only the balance can be retained or taxed on the transaction value—whichever is higher.

14. 📊 Wrong HSN/SAC Code Reporting

Incorrect HSN/SAC leads to rate mismatch, especially now with auto-mapping of e-invoices & e-way bills. Mandatory HSN disclosure applies to most taxpayers.

15. 🧾 Incorrect Reporting in Table 4 of GSTR-3B

Misplacing RCM ITC, import ITC or credit notes in wrong heads can lead to mismatches in GSTR-9 and audit flags.

 

Situations Where ITR Filing Won’t Be Required in 2025

Every year, the Income Tax Department of India updates its rules and requirements for filing Income Tax Returns (ITR). For Assessment Year 2025-26 (Financial Year 2024-25), it’s important to understand who is exempt from filing ITRbased on their income sources and limits.

In this article, we will explain which individuals do not need to file ITR in 2025, and under what conditions this exemption is allowed.

 

Individuals with Income Below the Taxable Limit

If your total income from all sources is below the basic exemption limit, you are not required to file an ITR.

Basic Exemption Limits (FY 2024-25):

Category New Tax Regime Old Tax Regime
Individuals below 60 years ₹3,00,000 ₹2,50,000
Senior Citizens (60–80 years) ₹3,00,000 ₹3,00,000
Super Senior Citizens (above 80 years) ₹3,00,000 ₹5,00,000

Example: If a 59-year-old individual has an annual income of ₹2.90 lakh and does not claim any deductions or exemptions, they are not required to file ITR.

Individuals with Only Interest or Pension Income and No TDS

If your income comes only from savings account interest, fixed deposits, or pension and no TDS has been deducted, and your income is within the exemption limit, then filing ITR is not mandatory.

Individuals with Only Agricultural Income (Below Limit)

If you have only agricultural income, and it is below ₹5,000, you are not required to file ITR.

However, if your agricultural income exceeds ₹5,000, and your non-agricultural income exceeds the basic exemption limit, ITR filing becomes mandatory under the rule of partial integration.

 

Housewives or Students with No Taxable Income

If a housewife or student has no taxable income or only receives gifts, allowances, or pocket money from family (which are not taxable), then there is no need to file an ITR.

NRIs with No or Minimal Indian Income

Non-Resident Indians (NRIs) who do not earn income in India, or whose Indian income is less than ₹2.5 lakh, are not required to file an ITR.

Income Only from Dividends and Savings Interest Below Limit

If your income comes only from dividends and savings interest and it remains below the basic exemption limit, then filing ITR is not necessary.

ITR Filing Not Required for Specified Senior Citizens – Section 194P

Section 194P of the Income Tax Act (introduced from FY 2021–22) provides relief to certain senior citizens (75 years or above) from filing ITR if the following conditions are met:

Eligibility for ITR Exemption under Section 194P:

  1. The individual is a Resident Senior Citizen aged 75 years or above.
  2. The senior citizen has only pension income and interest income from the same bank.
  3. The senior citizen has submitted a declaration to the bank in a prescribed form.
  4. The bank is a specified bank notified by the Income Tax Department.
  5. The bank computes and deducts tax on such income after giving effect to deductions (like 80C, 80D, etc.).

✅ If all conditions are satisfied, the senior citizen is not required to file an ITR. The bank is responsible for deducting the appropriate tax.

📌 Example:

Mr. Sharma, aged 77, earns:

  • ₹4.8 lakh pension,
  • ₹1 lakh interest from the same SBI branch,
  • Submits Form 12BBA to SBI for deductions and tax computation.

👉 In this case, SBI will deduct tax, and Mr. Sharma is exempt from filing ITR.

Situations Where ITR Filing is Mandatory Despite No/Zero Income

Even if your income is below the exemption limit, you must file ITR if:

  • You are a director in a company or partner in an LLP
  • You have deposited over ₹1 crore in a bank account in a year
  • You spent over ₹2 lakh on foreign travel
  • Your electricity bill exceeds ₹1 lakh in a year
  • TDS Deducted of Rs.25000 or more (Rs.50000 for senior citizens)
  • If Turnover of business is 60 Lakh or more and receipts from profession is 10 lakh of more
  • You are claiming a tax refund

Exemption from ITR filing is available to specific categories of taxpayers based on their income type and amount. If you fall under any of the above categories and your income is below the threshold, you are not required to file an ITR.

However, filing ITR is always beneficial, even when not mandatory. It helps in:

  • Getting loans
  • Visa applications
  • Income proof for future references
  • Claiming TDS refunds

Therefore, take an informed decision after understanding your income structure.