Latest news with #RajarshiDasgupta
News18
3 days ago
- Business
- News18
Should You File ITR Even If Your Annual Income Is Within Exemption Limit? Know Income Tax Rules
Last Updated: Though there is no need to file ITR generally if your annual income falls under the exemption limit, there are certain conditions in which you might be required to file tax return. Income Tax Return Filing 2025: The ITR filing season 2025 is going on, with more than 1.23 crore income tax returns have already been filed so far. The deadline to file non-audit tax returns is September 15, 2025. According to income tax rules, those earning above Rs 2.5 lakh annually under old tax regime or more than Rs 3 lakh under new tax regime are required to file ITR. However, is it necessary under any circumstance to file ITR for those earning below these thresholds? Rajarshi Dasgupta, executive director (tax) of AQUILAW, said the minimum income needed to file an income tax return will depend upon the individual's age and opted tax regime. In the case of the old regime, individuals below 60 years of age with a gross income of more than Rs 2.5 lakh within a financial year need to file an ITR. For senior citizens (people aged between 60 to 80 years), the minimum gross income limit is Rs 3 lakh. While for super senior citizens(individuals aged above 80 years), the limit rises to Rs 5 lakh. 'However, the new regime requires all individuals to file returns only if their gross income exceeds Rs 3 lakh during the FY 2024-25," he added. As per the Income Tax Act, 1961, individuals are required to file an ITR only if their annual income exceeds the basic exemption limit mentioned herein above. However, there are certain conditions in which you might be required to file an ITR even if your income falls within the basic exemption limit, he said. 1. Bank deposits of more than 50 lakh 4. Professional income above Rs 10 lakh 5. Electricity bill exceeding Rs 1 lakh 6. TDS/TCS exceeding Rs 25,000 7. Income from foreign assets 8. Expenses on foreign travel, in case an individual spends Rs 2 lakh or more for himself or any other person during a financial year. 8. Resident taxpayers with overseas assets or signing authority. 'In addition to these, if an individual has income below taxable limit but has been subject to TDS / TCS, it will have to file its return of income to claim refund of the taxes. Also, if while arriving at its total income, it is claiming the losses of earlier years brought forward or wishes to carry forward its losses, it will have to file its return of income. Last and also very important is that a return needs to be filed in case someone needs to apply for a loan or visa or such other important matters," said Anita Basrur, partner at Sudit K Parekh & Co LLP. As per the Indian Tax Laws, every individual is required to file its return of income if its total income for the year exceeds the maximum amount not chargeable to tax. The total income is to be considered without giving effect to the exemption of long term capital gains (LTCG) or investments made to claim exemptions for LTCG or other Chapter VI-A deductions, he added. What Is the Old Tax Regime? The old tax regime is the income tax system that offers a wide range of exemptions and deductions, allowing taxpayers to reduce their taxable income by claiming benefits such as Section 80C (up to ₹1.5 lakh) for investments in PPF, ELSS, LIC, etc; house rent allowance (HRA); leave travel allowance (LTA); interest on home loan (Section 24); health insurance premium (Section 80D); education loan interest (Section 80E); and standard deduction (Rs 50,000 for salaried individuals). Old Regime Tax Slabs (FY 2024-25): Note: Rebate under Section 87A is available for taxable income up to Rs 5 lakh (i.e., no tax liability if total income is within Rs 5 lakh). What Is the New Tax Regime? Introduced in Budget 2020 and revamped in Union Budget 2023, the new tax regime offers lower tax rates but no major exemptions or deductions (except a few like NPS employer contribution and standard deduction from FY 2023-24). New Regime Tax Slabs (FY 2024-25) Note: Standard deduction of Rs 50,000 is allowed for salaried/pensioners from FY 2023-24 onwards, even under the new regime. Stay updated with all the latest business news, including market trends, stock updates, tax, IPO, banking finance, real estate, savings and investments. Get in-depth analysis, expert opinions, and real-time updates—only on News18. Also Download the News18 App to stay updated! First Published: Disclaimer: Comments reflect users' views, not News18's. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to our Terms of Use and Privacy Policy.
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Business Standard
02-07-2025
- Business
- Business Standard
US to levy 1% remittance tax: What it means for NRIs and students
The US Senate on Tuesday passed President Donald Trump's 'One Big Beautiful Bill Act', bringing with it a new tax on overseas money transfers by non-citizens. The legislation, which takes effect on July 4, 2025, introduces a 1 per cent levy on remittances made through cash, money orders, or cashier's cheques. The rule will apply to anyone who isn't a US citizen—including Green Card holders, people on temporary visas such as H-1B or H-2A and foreign students. 'For example, if you send $1,160—or around ₹100,000—to your parents in India, you may have to pay ₹1,000 more in tax,' said Rajarshi Dasgupta, executive director – tax. 'That money will be collected by the remittance provider—be it Western Union, MoneyGram or a bank—and passed on to the US government every quarter,' he told Business Standard. In a relief for Indians, the tax rate was originally set at 5 per cent, but was reduced to 1 per cent in the final version of the Bill. Why it matters to India? Remittances play a key role in India's foreign income. According to the World Bank, India received $129 Billion in international remittances in 2024—the highest in the world. Mexico was second with just over $68 Billion. Nearly 28 per cent of India's remittance inflows in 2023-24 came from the United States alone. Several Indian states, including Kerala, Uttar Pradesh, and Bihar, rely heavily on these funds for household income. But there's been a recent shift in the pattern, particularly when it comes to money sent by students abroad. Remittances from students on the decline Funds sent by resident Indians under the Reserve Bank of India's Liberalised Remittance Scheme (LRS) fell 6.84 per cent to $29.56 Billion in 2024-25, down from $31.74 Billion the previous year. The steepest drop was seen in money remitted for education abroad. According to the RBI, these remittances fell 16 per cent—from $3.48 Billion to $2.92 Billion. 'Tighter work authorisation policies and recent visa rule changes in the United States have significantly disrupted traditional patterns of student mobility, with a direct impact on remittance flows,' Prof Venkataramanan, pro vice-chancellor at FLAME University told Business Standard. He added, 'Canada's move to cap study permits and require provincial attestation letters, alongside stricter financial documentation, has raised the entry threshold for students. The United States has paused visa interviews and announced aggressive visa revocations targeting certain nationalities. These factors are making families rethink the scale of investment in foreign education.' Families are more cautious about education loans and remittances Prashant A Bhonsle, founder and CEO of Kuhoo Finance, said the uncertainty around post-study work options is a growing concern for parents. 'Students and parents are questioning the return on investment when career security abroad becomes uncertain,' he told Business Standard. Visa processing delays are adding another layer of difficulty. 'For students still in India, delayed visa approvals mean postponed tuition and living expense payments. For those already abroad, uncertainty about their future makes them hesitant to send money back home,' Bhonsle explained. According to Pavan Kavad, managing director at Prithvi Exchange, recent visa policy changes in the UK and Australia are also linked to the remittance dip. 'Developed economies are facing employment challenges amid recession fears. Families are waiting for more clarity before transferring large sums abroad,' he said. Indian institutions and banks adjust to the shift Venkataramanan pointed out that some Indian banks and financial institutions are already adapting. 'Public and private banks are seeing more staggered disbursals of education loans instead of upfront payments. Families are aligning payments with semester confirmations, often waiting for visa approvals before committing,' he said. NBFCs and fintech firms, he added, are also reporting a drop in high-value remittances. Meanwhile, Bhonsle noted that tighter financial documentation rules abroad have made it harder for families to demonstrate the funds required for visa approvals. 'This has created larger upfront commitments that not all families can meet easily,' he said. Trust in the visa system is faltering Beyond the rules themselves, trust appears to be the larger issue. 'In the US, social media scrutiny, visa delays, and the new remittance tax all contribute to the sense that studying abroad is more financially risky,' Kavad said. That perception is prompting Indian families to either delay their plans or look at domestic alternatives. 'The slowdown has led financial institutions to take a more cautious and adaptive approach,' said Venkataramanan. 'We may be in a transitional phase rather than a terminal decline. If visa clarity improves and financial processes become more predictable, the flows could recover. Until then, families will continue to explore more stable options.'
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Business Standard
16-05-2025
- Business
- Business Standard
NRIs in US may soon have to pay ₹5,000 tax on every ₹1 lakh sent to India
If you're an NRI living in the United States and regularly send money home to India, a proposed new tax could soon make those transfers more expensive. The Republican-backed draft legislation, referred to as the 'Big Beautiful Bill', introduces a 5 per cent levy on all overseas remittances made by non-citizens. If passed, the rule could take effect from July 4, 2025, making you liable to pay an extra fee every time you send money abroad—from family support and education to healthcare and investments. 'For example, if you send $1,160—or around ₹100,000—to your parents in India, you may have to pay ₹5,000 more in tax,' said Rajarshi Dasgupta, executive director – tax. 'That money will be collected by the remittance provider—be it Western Union, MoneyGram or a bank—and passed on to the US government every quarter," he told Business Standard. Who will have to pay the tax You will be affected if you: Hold a visa such as H-1B, F-1, or J-1 Have a green card Are undocumented Use a remittance provider that is not formally approved by the US Treasury The only people exempt are verified US citizens or nationals, and only if they use a 'qualified' provider—one that has an official arrangement with the government to confirm your citizenship status. If you're a citizen but still get taxed by mistake, you'll need a valid Social Security Number (SSN) to claim it back later when you file your returns. Hardik Mehta, managing committee member, BCAS (Bombay Chartered Accountants' Society), said, 'The proposed development on excise tax on remittances outside the US can be seen as a replica of Indian TCS provisions on LRS remittances.' However, he pointed out that the mechanics of the levy require careful reading. 'While the tax is to be paid by the remitter, the bill also talks about giving credit of the said tax on the basis of SSN in the US. In that case it would function akin to the concept of advance tax payment,' Mehta said. India expected to feel the biggest impact India, which received $125 billion in remittances in 2023, is the world's largest recipient of money from overseas. According to official figures, nearly 28 per cent of this came from the United States. 'With billions in annual remittances and a large share from US-based NRIs, this friction could significantly reduce inflows, impacting foreign exchange reserves and potentially accelerating currency depreciation,' Dasgupta said. According to India's Ministry of External Affairs, around 4.5 million Indians live in the US—including about 3.2 million persons of Indian origin. Many send money regularly to support parents, cover education and medical expenses, or invest in property in cities like Mumbai, Hyderabad and Kochi. Dinkar Sharma, company secretary and partner at Jotwani Associates, told Business Standard, 'On paper, this might look like a small surcharge, but in practice, it marks a severe disruption to the trust, intention, and flow of transnational financial support.' What could change for you * You'll pay 5% more each time you send money abroad * You may have fewer choices of remittance providers, especially if they're not 'qualified' * If you're a US citizen, you'll need to check whether your provider is approved—or risk paying and claiming a refund later * If you're planning large transfers, you may want to do them before July 2025 'From the NRI perspective, if you're working in the US and planning to return to India eventually, you're effectively earning 5% less on every dollar sent home,' said Dasgupta. 'Remittance habits will need to be restructured, and large or planned transfers should ideally be completed before July.' He added that careful documentation of transactions will become even more important—not just for tax filings, but also to avoid legal and financial complications later. How families in India could be affected For families in smaller cities or rural areas that rely on this money, the new tax could hit hard. 'For families in tier-II and tier-III cities in India that depend on such remittances to cover basic expenses, this is not a trivial reduction—it could mean the difference between continuing education or dropping out, affording medicines or deferring treatment, paying rent or defaulting on EMIs,' said Sharma. He warned of a broader ripple effect, particularly in sectors like real estate, banking and consumer goods, which are often fuelled by NRI spending. 'Remittances are not speculative capital flows—they are deeply personal acts of economic solidarity that sustain intergenerational aspirations,' Sharma said. Why experts call the tax unfair Critics have called the tax regressive, saying it punishes migrants for supporting their families. 'Unlike capital gains or income tax, this levy is applied on post-tax earnings—money that has already been subjected to federal and state taxation in the US,' said Sharma. 'There's no service being offered by the government in exchange. It is, in essence, a pure extractive measure that penalises people for helping their families or investing in their homeland.' Democrats in Congress have raised objections, saying the Bill could disproportionately harm immigrant communities and low-income families who depend on remittances. Sharma added, 'The economic rationale is thin; the political overtones are loud. Remittances are not just economic transactions, they are acts of care and responsibility across borders. Taxing them sends the wrong message—not just to immigrants, but to the world.'
News18
22-04-2025
- Business
- News18
Income Tax: Your ITR This Year Will Be Compared With Last Year; Know How You Can Avoid Trouble
Last Updated: The government has amended Section 143 of the Income Tax Act to allow comparison of a taxpayer's current ITR with their previous year's return. As the income tax filing 2025 is expected to be rolled out soon, there is a new rule this year that every income tax return (ITR) filer must know. According to the Finance Act 2025, your this year's ITR will be compared with the ITR you filed last year. This change is aimed at tightening tax compliance, reducing under-reporting, and enabling better scrutiny of income and deduction patterns. 'In a move aimed at tightening tax compliance, the government has amended Section 143 of the Income Tax Act to allow comparison of a taxpayer's current ITR with their previous year's return. This change enables the income tax department to flag discrepancies or sudden changes in income, deductions, or tax liability at the preliminary processing stage itself," said Rajarshi Dasgupta, executive director (tax) of AQUILAW. Section 143 of the Income Tax Act provides for a summary assessment of the ITR filed wherein the primary aspect of verification pertains to arithmetical accuracies and consistencies in the information shared within the return itself. 'After summary assessment, the ITR could be subject to detailed scrutiny. Earlier, such comparisons were typically reserved for detailed scrutiny cases. With this amendment, the department can now assess inconsistencies right at the time of routine return processing under Section 143(1)," Dasgupta added. He added that such verification at the early stages will definitely boost the correctness of returns filed wherein the information furnished in returns having a bearing or reference from a previous year's return will be checked expeditiously. This shall help the department as well as the taxpayers wherein notices can be avoided with penal implications in case bonafide errors are corrected on the basis of such comparison. 1. Ensure income from all heads is accurately reported and supported by documents such as Form 16, bank statements, rent agreements, or capital gain statements. 2. If you're claiming new deductions or a higher deduction amount, ensure that it's well-documented and legitimate. A sudden spike in deductions could invite further inquiry. 3. Reconcile your TDS details before filing the return to avoid discrepancies. 4. If high-value transactions such as cash deposits, mutual fund purchases, and property deals are absent in your previous ITR but present this year, ensure that they are disclosed and justified, especially if they contribute to a significant increase in income or asset holdings. 5. If you have capital or business losses from the previous year and wish to carry them forward, ensure that they were properly reported in last year's ITR. 6. Any inconsistency — like claiming deductions under the old regime after opting for the new one — can lead to the return being marked defective. 8. If your income has drastically dropped or risen — due to job loss, career switch, inheritance, or any other reason — attach relevant disclosures or explanations in the ITR form or in response to queries raised post-filing.
