Tax Filing Requirements

“Sell in 12 states? You might owe 12 taxes.” What is “nexus”? Nexus is the point at which a state can require you to collect sales tax. Imagine it like this: if you’re “doing enough business” in a state that state raises its hand. Two main ways you get nexus Physical nexus You have people or property in the state. E.g. a worker, office, warehouse, inventory, pop-up booth. Economic nexus You sell “enough” into the state, even if there are no bodies there. The line is different in each state. It is often a dollar amount of sales but sometimes number of orders. Marketplace twist Sell on Amazon, Walmart, Etsy Warehouses can create nexus. Tax is collected for marketplace orders in many marketplaces. Your site is still your work. Quick checklist Have I sent a lot to this state this year Is my stock stored there? Is that a person or a pop-up for me there Do I sell digital goods or subscriptions there If so, yes, you may have nexus. Simple 5-step plan List the states you shipped to in the last 12 months. Visit the website for your specific state for its policies. If you’re past the line, register in that state. Begin charging the correct rate at checkout. File and pay on time; monthly, quarterly or yearly. Myths to avoid “I only sell online, so no tax.” No true. “Marketplace collects, so i’m done.” Those are the only orders. “I paid tax on inventory so I’m covered.” Different tax. Small sample you sell in Texas. You do a lot of shipping to Florida. No employees in Florida, but plenty of orders. This means you might have economic nexus in Florida. Register, collect Florida taxes on orders in Florida, file timely.

The “Big Beautiful Bill,” introduces several updates to the tax code aimed at encouraging investment and long-term planning. For Family Offices and high-net-worth individuals, the bill offers meaningful tools to enhance strategy, preserve capital, and support intergenerational continuity. A key provision increases the estate and gift tax exemption to $15 million per person in 2026, allowing couples to transfer up to $30 million without triggering estate taxes. This creates a window for families to shift appreciating assets into trusts and other structures designed for legacy planning. The bill also raises thresholds for the Alternative Minimum Tax and reinstates full bonus depreciation. Combined with higher Section 179 expensing limits, these changes improve flexibility for business owners and investors seeking to allocate capital efficiently and reinvest with confidence. Other elements include expanded reporting requirements for Opportunity Zones and a carve-out excluding 25 percent of interest income from qualified rural and agricultural lending. The bill maintains current capital gains rates and preserves the step-up in basis at death. Both remain central to estate and investment planning. Together, these provisions expand long-term planning options for those managing complex portfolios. Adjustments to the standard deduction and child tax credit provide modest relief to broader income groups. The bill does not address areas such as healthcare, education, or housing and includes no new revenue measures, which may prompt future fiscal debate. Tax policy continues to attract public interest. The 2012 Buffett Rule proposed that households earning over $1 million annually should not pay a lower effective tax rate than middle-income earners. Warren Buffett, referencing his own experience, said he paid a lower tax rate than his secretary and called that "outrageous." His comment is often cited in discussions about how the tax code treats capital income in comparison to wages. Some share Buffett’s concern, while others view the bill’s approach as a way to support investment, reward risk, and strengthen family planning. Reactions to the bill reflect a wide range of perspectives. Family Offices play a key role in building enterprise, guiding philanthropy, and sustaining long-term investment. Predictable tax policy supports better planning, reduces risk, and improves outcomes. Stability and clarity remain important for managing capital across generations. The “Big Beautiful Bill” provides tools for families engaged in strategic planning. As tax discussions continue, focusing on clarity, consistency, and shared contribution may help maintain economic strength and support planning across income levels. What is your view on the new bill? Does it achieve a workable balance between long-term strategy and broad-based fairness, or does it raise concerns about how opportunity is distributed?

In a recent case, the Honorable Supreme Court settled an important question regarding time-barred assessments under the Inland Revenue Act, No. 10 of 2006. 🔹 The Issue The taxpayer filed its return for Y/A 2009/2010 on 29-11-2010. Under Section 163(5)(a)(i), the Assessor had 2 years “from 30th November of the immediately succeeding year of assessment” to issue an assessment. The assessment was issued on 30-11-2012. The Court of Appeal held this was one day late and thus time-barred. 🔹 Supreme Court’s Analysis Applied Section 14(a) of the Interpretation Ordinance: When time is calculated “from” a date, that starting date is excluded. Therefore, the 2-year period began on 01-12-2010 and ended on 01-12-2012. The assessment dated 30-11-2012 was within time. 🔹 Key Takeaway This ruling underscores the importance of statutory interpretation in tax law. A single day and the use of the word “from” determined whether an assessment stood or fell. 📌 The Supreme Court reversed the Court of Appeal and held the assessment was valid and not time-barred. ✅ Practical Insight: Taxpayers and advisors must carefully consider how statutory deadlines are computed. The Interpretation Ordinance plays a critical role, and overlooking it can entirely change the outcome of a case. By: Prasad Dasanayaka

𝐌𝐚𝐬𝐭𝐞𝐫 𝐭𝐡𝐞 𝟒𝟒 𝐂𝐥𝐚𝐮𝐬𝐞𝐬 𝐨𝐟 𝐓𝐚𝐱 𝐀𝐮𝐝𝐢𝐭 𝐊𝐞𝐲 𝐅𝐨𝐫𝐦𝐬 𝐅𝐨𝐫𝐦 𝟑𝐂𝐀: For audits conducted under other laws (e.g., Companies Act). 𝐅𝐨𝐫𝐦 𝟑𝐂𝐁: For audits not mandated by other laws. 𝐅𝐨𝐫𝐦 𝟑𝐂𝐃: A comprehensive statement detailing income, deductions, and compliance. 𝐄𝐥𝐢𝐠𝐢𝐛𝐢𝐥𝐢𝐭𝐲 𝐟𝐨𝐫 𝐓𝐚𝐱 𝐀𝐮𝐝𝐢𝐭: 𝐁𝐮𝐬𝐢𝐧𝐞𝐬𝐬𝐞𝐬: Turnover > ₹1 crore (or ₹10 crores if cash transactions ≤5%). 𝐏𝐫𝐨𝐟𝐞𝐬𝐬𝐢𝐨𝐧𝐚𝐥𝐬: Gross receipts > ₹50 lakhs. 𝐂𝐨-𝐨𝐩𝐞𝐫𝐚𝐭𝐢𝐯𝐞 𝐒𝐨𝐜𝐢𝐞𝐭𝐢𝐞𝐬: Income exceeding the basic exemption limit. 𝐁𝐮𝐬𝐢𝐧𝐞𝐬𝐬 𝐋𝐨𝐬𝐬𝐞𝐬: Turnover > ₹1 crore if income exceeds the basic threshold. 𝐖𝐡𝐨 𝐂𝐚𝐧 𝐂𝐨𝐧𝐝𝐮𝐜𝐭 𝐭𝐡𝐞 𝐀𝐮𝐝𝐢𝐭? 𝐂𝐡𝐚𝐫𝐭𝐞𝐫𝐞𝐝 𝐀𝐜𝐜𝐨𝐮𝐧𝐭𝐚𝐧𝐭𝐬 (𝐂𝐀𝐬): Must hold a valid Certificate of Practice (COP). Each CA can conduct up to 60 audits per year 𝐃𝐮𝐞 𝐃𝐚𝐭𝐞𝐬: File by Sept30th and Oct 31st for transfer pricing audits. 𝐂𝐨𝐧𝐬𝐞𝐪𝐮𝐞𝐧𝐜𝐞𝐬 𝐨𝐟 𝐍𝐨𝐧-𝐂𝐨𝐦𝐩𝐥𝐢𝐚𝐧𝐜𝐞: Penalties up to ₹1.5 lakhs or 0.5% of turnover clauses for better understanding: 𝟏-𝟔: 𝐆𝐞𝐧𝐞𝐫𝐚𝐥 𝐈𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧 1️⃣ Name 2️⃣ Address 3️⃣ PAN 4️⃣ Status (Individual, Firm, etc.) 5️⃣ Previous year for audit 6️⃣ Assessment year 𝟕-𝟏𝟏: 𝐀𝐮𝐝𝐢𝐭 & 𝐀𝐜𝐜𝐨𝐮𝐧𝐭𝐢𝐧𝐠 𝐌𝐞𝐭𝐡𝐨𝐝𝐬 7️⃣ Nature of business/profession 8️⃣ Section under which audit applies 9️⃣ Firm partners/members 🔟 Changes in partners/members 1️⃣1️⃣ Accounting method (mercantile/cash) 𝟏𝟐-𝟏𝟒: 𝐓𝐮𝐫𝐧𝐨𝐯𝐞𝐫, 𝐏𝐫𝐨𝐟𝐢𝐭 & 𝐋𝐨𝐬𝐬 𝐈𝐧𝐟𝐨 1️⃣2️⃣ Profit and loss details 1️⃣3️⃣ Conversion of capital assets into stock-in-trade 1️⃣4️⃣ Turnover/gross receipts breakup 𝟏𝟓-𝟐𝟐: 𝐃𝐞𝐝𝐮𝐜𝐭𝐢𝐨𝐧𝐬, 𝐃𝐞𝐩𝐫𝐞𝐜𝐢𝐚𝐭𝐢𝐨𝐧 & 𝐄𝐱𝐞𝐦𝐩𝐭𝐢𝐨𝐧𝐬 1️⃣5️⃣ Capital assets acquired 1️⃣6️⃣ Non-allowable amounts (Section 40) 1️⃣7️⃣ Expenses not allowable under other sections 1️⃣8️⃣ Employee payments 1️⃣9️⃣ Depreciation 2️⃣0️⃣ Loans and deposits 2️⃣1️⃣ Deductions (Section 32AC, 35AD, etc.) 2️⃣2️⃣ Other disallowed expenditure 𝟐𝟑-𝟐𝟗: 𝐓𝐚𝐱 𝐏𝐚𝐲𝐦𝐞𝐧𝐭𝐬, 𝐓𝐃𝐒 & 𝐓𝐂𝐒 2️⃣3️⃣ Payments to related parties 2️⃣4️⃣ TDS/TCS compliance 2️⃣5️⃣ Interest payable 2️⃣6️⃣ Non-account payee payments 2️⃣7️⃣ Investments/donations deductions 2️⃣8️⃣ Capital expenses in P&L 2️⃣9️⃣ Prior period income/expenditure 𝟑𝟎-𝟑𝟕: 𝐒𝐩𝐞𝐜𝐢𝐟𝐢𝐞𝐝 𝐓𝐫𝐚𝐧𝐬𝐚𝐜𝐭𝐢𝐨𝐧𝐬 3️⃣0️⃣ GAAR tax avoidance 3️⃣1️⃣ Cash payments > ₹10,000 3️⃣2️⃣ Deemed income (Sections 41, 43B) 3️⃣3️⃣ Related party transactions 3️⃣4️⃣ TDS compliance 3️⃣5️⃣ Section 43CA/50C compliance 3️⃣6️⃣ Specified domestic transactions 3️⃣7️⃣ Transfer pricing 𝟑𝟖-𝟒𝟐: 𝐂𝐨𝐦𝐩𝐥𝐢𝐚𝐧𝐜𝐞 𝐰𝐢𝐭𝐡 𝐎𝐭𝐡𝐞𝐫 𝐋𝐚𝐰𝐬 3️⃣8️⃣ CENVAT credit 3️⃣9️⃣ Service Tax compliance 4️⃣0️⃣ Excise, Customs compliance 4️⃣1️⃣ Pending litigation 4️⃣2️⃣ GST compliance 𝟒𝟑-𝟒𝟒: 𝐄𝐱𝐩𝐞𝐧𝐝𝐢𝐭𝐮𝐫𝐞𝐬 & 𝐈𝐧𝐜𝐨𝐦𝐞 4️⃣3️⃣ Breakup of expenditures, profits, etc. 4️⃣4️⃣ Expenditure split between registered/unregistered suppliers under GST

Telangana HC strikes down unsigned SCNs & Final Orders! In a significant ruling, the Telangana High Court has quashed show cause notices (SCNs) and final orders issued by GST officers, despite being uploaded on the GST portal, for lack of physical or digital signatures. The Court emphasized that a notice or order can only attain legal validity when it is authenticated - bearing the signature, name, designation, jurisdiction, and address of the Proper Officer. Referring to Rule 142 of the CGST Rules, which mandates these details in Forms DRC-01 and DRC-07, the HC rejected the contention that Sections 73 and 74 of the GST Act do not explicitly require signatures. Applying the strict interpretation principle in taxation laws, the Court held that unsigned notices/orders cannot be deemed valid, as reaffirmed by Supreme Court rulings. It also dismissed the argument that assessment proceedings cannot be invalidated on “technical grounds”. While granting relief to petitioner, the Court has given liberty to the GST department to issue fresh notices - this time, duly signed and authenticated. A crucial decision reinforcing procedural integrity in tax administration! So next time you receive an SCN / Order, ensure you look for the signature! Case: Bigleap Technologies and Solutions Pvt. Ltd. [TS-101-HC(TEL)-2025-GST] Follow MyTaxPort™️ for insightful content! LinkedIn | LinkedIn Guide to Creating #GST #TaxLaw #HighCourt #Compliance #TaxpayersRights #CaseLawUpdate #GSTUpdate

Incomplete disclosures or incomes later comes to backbite taxpayers in the form of notices, penalties and interest. A CHECKLIST of data to share with your tax advisor while filing an ITR: Use this one-pager with your advisor: 🔸 Basic info (PAN, Aadhaar, bank, AIS/TIS, 26AS) 🔸 Salary proofs (Form 16, deductions) 🔸 House property (rent receipts, loan statements) 🔸 Capital gains (broker statements, buy/sell deeds) 🔸 Business/Profession (P&L/BS for ITR-3; presumptive for ITR-4) 🔸 Other & exempt income docs 🔸 Foreign assets/income (ITR-2/3 only) 🔸 Assets & Liabilities (ITR-2/3 if total income > ₹1 crore) 🔸 Advance/Self-assessment tax challans Important note: ITR-1/4 allow only LTCG u/s 112A up to ₹1.25 lakh; else use ITR-2/3. Save this, organise your folder and file with confidence. Part of the income tax ready reckoner series for the 1 Finance Magazine.

Solving TDS headaches one step at a time ft. Income Tax Department. Just imagine this scenario: You earned Rs 10 lakhs in FD interest during FY 2023-24. But the bank incorrectly deducted TDS at 10% in FY 2024-25 instead. The result? You cannot claim TDS credit of Rs 1 lakh in FY 2023-24, unless the bank rectifies their TDS return. This throws your entire tax calculations for a toss, for no fault of your own. We all know how much hassle it is to follow up with banks to rectify even the smallest anomaly. This would cause needless problems to the taxpayer and lead to notices from Income tax. Budget 2023 had proposed to remove this lacuna and section 155(20) was inserted in the tax law. The new section said that the TDS credit can be claimed upon an application to the Income tax department (without getting the deductor involved) in the form, to be prescribed. Now, vide Notification No. 73/2023 dated August 30, 2023, the CBDT has prescribed Rule 134 and Form 71 to implement the said section. Here are the procedural aspects: 📌 How to Submit: Form No. 71 must be submitted to PDGIT (Systems), the DGIT (Systems), or an authorized person designated by them. Stick to the prescribed submission channels for a smooth process. 📌 Digital: You can also submit Form No. 71 electronically. Whether you use a Digital Signature Certificate (DSC) or an Electronic Verification Code (EVC) depends on your filing method. 📌 Policies in Place: PDGIT (Systems) and the DGIT (Systems) have your back. They will specify procedures and formulate security, archival, and retrieval policies to safeguard your forms. 📌 Forward to AO: The Form No. 71 you submit will be forwarded to the Assessing Officer (AO) by PDGIT (Systems), DGIT (Systems), or their authorized representatives. 📌 Effective Date: Rule 134 takes effect from October 1, 2023. This new Form No. 71, is set to make life easier for countless taxpayers. All in all, this is a good move which has been made to simplify an age-old problem of mismatched TDS credits. We'll get more clarity on ease of getting approval post October, when the actual filing starts. #IncomeTax #TDSIndia #IndiaTaxAmendment #ComplianceEase #TaxReforms #TaxFiling #TaxCompliance

The Hon'ble Delhi High Court has quashed show cause notice and orders with delayed adjudication, while highlighting the obligation of tax authorities to conclude adjudication with due expedition. The Court observed that "A statute enabling an authority to conclude proceedings within a stipulated period of time 'where it is possible to do so' cannot be treated as a license to keep matters unresolved for years." Important aspects to note are: - Adjudicating authorities are bound to act with reasonable speed and not allow matters to remain pending indefinitely - Any delay in adjudication must be supported by sufficient reasoning and cannot stem from procedural lethargy - Transferring SCNs to the "call book" without conducting regular reviews does not absolve authorities from their duty to expedite proceedings #GSTLaw #Judgment #DelhiHighCourt #Adjudication #SCN #IDTupdate #jurisprudence

CBDT Makes All Income Tax Offences Compoundable: Relief for Taxpayers! The Central Board of Direct Taxes (CBDT) has recently revised the guidelines for compounding income tax offences, making all tax offences compoundable and significantly relaxing procedural requirements. This move is expected to ease the burden on taxpayers facing prosecution and encourage voluntary compliance. Key takeaways: a. All offences are now compoundable, provided they are not involved in anti-national or terrorist activities. b. No more time limit on applications. Earlier it was 36 months of prosecution initiation. c. Multiple applications allowed d. Lower compounding fees, making it easier for taxpayers to settle cases efficiently e. Faster & simplified process, ensuring quick resolutions of tax disputes. This is a major relief for businesses and individuals who may have unknowingly committed tax defaults. The initiative reflects the government’s focus on reducing litigation, increasing compliance, and providing an opportunity for genuine taxpayers to correct past mistakes without facing criminal prosecution. #IncomeTax #CBDT #TaxCompliance #Business #TaxReforms #EaseOfDoingBusiness