Latest news with #Taxmann
Mint
2 days ago
- Business
- Mint
How spousal maintenance is taxed after divorce
NEW DELHI : While a failed marriage causes immense emotional distress, its financial and tax implications can't be understated. In India, a court decides how much maintenance one spouse will pay to the one earning less or having no income at all. The maintenance could be in different forms: one-time, periodic, or transfer of assets. Different types will have different tax treatment. However, it must be noted that the Income Tax Act,1961, does not contain specific provisions on the same. Relevant case laws, along with analogous provisions, are used to determine its taxability. Tax on maintenance The lump sum maintenance a spouse receives is not taxable. It is tax-exempt because it is considered a capital receipt, which does not fall within the ambit of the Income Tax Act. Sometimes, a spouse might prefer regular maintenance, that is, a monthly payment. Regular maintenance is taxable as 'income from other sources" as it is considered a revenue receipt, said chartered accountant Naveen Wadhwa, vice-president, research and advisory division at Taxmann, an online source for taxation research. However, chartered accountant Ashish Karundia has a different view. "The periodic payments are the very condition of divorce, based on which the court issues the divorce decree. The spouses remain married at the time when the periodic payments are agreed, so no question of taxation on this amount for them being relatives. Since divorce was agreed upon on this very condition, the amount remains tax-free even after the divorce decree is issued," he said. Any fresh arrangement, not part of the initial divorce decree, will be taxable. For example, spouses may demand enhanced compensation adjusted against inflation. 'The enhanced amount becomes taxable in the hands of the receiving spouse because it happens after the divorce decree was issued," Karundia added. Tax on transfer of assets Suppose a spouse transfers property to the other spouse as part of maintenance. Under Section 47 of the Income Tax Act, a transfer to a former spouse as part of a divorce settlement is not regarded as a 'transfer" for capital gains purposes. However, if the former spouse generates income from it via receiving rent or sale, it will be taxed in his or her hands. "If a property is gifted between spouses, no capital gains tax arises to the donor. The recipient spouse will not be taxed either on the value of the gifted property because a spouse falls within the definition of relative. However, the clubbing provisions will apply to any income generated further on the same," Wadhwa said. 'It ceases to apply if the transfer is made in connection with an agreement to live apart, in which case the income from the property would be taxable in the hands of the recipient ex-spouse," he added. If property is transferred after the divorce has taken place (excluding a transfer that had been agreed upon as a precondition), it will be taxed in the hands of the receiving spouse. Separation Any kind of maintenance will not be taxable if a couple lives separately without divorce because, in the eyes of the law, the spouses are still married and would qualify as relatives, Karundia said. Can a paying spouse claim a tax deduction? It is not possible. Maintenance is considered a personal expense and not tax-deductible for the payer. However, some courts might consider your post-tax salary instead of gross salary when deciding the amount of alimony. It is important to note that deductions such as employee provident fund, insurance premiums will not be excluded from your salary when the court determines your income. 'Different courts look at it differently. It is up to the spouse and the lawyer to present their case wisely. For example, a person earning ₹1 lakh a month may have to pay ₹20,000 in taxes. If a court asks him to pay 50% of his gross salary, ₹50,000 per month will go to the spouse, ₹20,000 in taxes, and he will be left with only ₹30,000. That said, the court may only consider his post-tax salary, that is, ₹80,000," Karundia said. In cases where the court has specifically ordered that a certain property will go to the spouse, the income out of such property will be taxable in his or her hands directly. The paying spouse will not have to add such income to his or her taxable income. For example, a spouse owns a two-floor house. 'If the court orders that rental income from one of the floors will belong to the other spouse, it will be taxable in the latter's hands. This arrangement is called an overriding charge, that is, redirecting income to the other party before it becomes taxable for the original recipient," Karundia added.
Yahoo
2 days ago
- Business
- Yahoo
EY India and Taxmann unveil AI-powered tax research platform
EY India and Taxmann have collaborated to launch an AI-powered platform tailored for tax and legal professionals. The platform offers research, document analysis, and response generation capabilities, built on EY's technology platform for the tax domain. The responses generated by are based on original, verifiable content from India's largest tax and legal library, owned and maintained by Taxmann. EY said that its expertise in tax consulting and technology ensures the platform is robust, reliable, and user-friendly. In addition, it developed the platform considering India's tax landscape. In its initial phase, features an 'Ask Bot' that processes natural language queries and delivers structured responses with links to relevant sections, rules, circulars, case law, and expert commentaries. The platform is capable of researching complex topics, extracting insights from intricate legal documents, and identifying similar legal precedents using sophisticated pattern recognition. It also integrates with Microsoft Word, offering a comprehensive tool for tax professionals. is set to expand with a 'Draft Bot' that will validate legal notices from tax authorities, identify potential issues, and generate comprehensive draft responses supported by statutory provisions and relevant case law. The platform's privacy-first architecture ensures complete confidentiality of user data and generated content through enterprise-grade encryption protocols, EY added. Taxmann managing director Rakesh Bhargava said: 'This launch represents our commitment to empowering tax and legal professionals with tools that enhance both efficiency and accuracy. 'By combining our decades of tax and legal content expertise with the proven AI technology of EY, we are delivering a solution that truly understands the requirements of Indian Tax and legal professions.' EY India national tax leader Sameer Gupta said: 'India's tax ecosystem has undergone a remarkable digital transformation, setting global benchmarks in technology-led governance, and EY is a trusted leader in tax technology in India. 'With AI driving the next wave of tax transformation, our collaboration with Taxmann reflects a shared vision to empower tax and legal professionals with AI for greater speed, efficiency and smarter decision-making based on authentic data.' In February 2025, EY Global Delivery Services, a division of EY, expanded its presence in Tamil Nadu by opening its first office in Coimbatore. The new office at the KCT Tech Park, covering 22,000 ft², will serve as a hub for AI, data analytics, cloud services, cybersecurity, digital and quality engineering, ERP systems, and financial services platforms. "EY India and Taxmann unveil AI-powered tax research platform " was originally created and published by International Accounting Bulletin, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
News18
5 days ago
- Business
- News18
Taxmann, EY India launch AI-powered platform for tax, legal professionals
Agency: PTI Last Updated: New Delhi, Jul 18 (PTI) Taxmann and EY India on Friday announced their collaboration to launch an advanced AI-powered platform designed for tax and legal professionals. offers research, document analysis, and response generation capabilities built on EY's technology platform for the tax domain. The responses generated by are grounded in original, verifiable content from Taxmann, backed by enterprise-grade privacy and security of EY tax technology, EY India said in a statement. EY India National Tax Leader Sameer Gupta said 'with AI driving the next wave of tax transformation, our collaboration with Taxmann reflects a shared vision to empower tax and legal professionals with AI for greater speed, efficiency and smarter decision-making based on authentic data". EY India's tax technology practice supports over 3,300 corporates, processing transactions worth more than USD 600 billion annually. Taxmann Managing Director Rakesh Bhargava said this launch represents our commitment to empowering tax and legal professionals with tools that enhance both efficiency and accuracy. PTI JD TRB 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.
&w=3840&q=100)
Business Standard
7 days ago
- Business
- Business Standard
HRA exemption glitch in ITR utility: What salaried taxpayers must do
The income tax department's ITR utilities for Assessment Year 2025-26, released late last week, are facing a critical glitch that could impact lakhs of salaried taxpayers claiming House Rent Allowance (HRA) exemption. Himank Singla, a chartered accountant, flagged the issue on X, highlighting that the utility wrongly asks taxpayers to enter their 'place of work' instead of 'place of residence' to compute HRA exemption under Section 10(13A). 'If you live in a metro but work in a non-metro, entering your work city will reduce your exemption incorrectly and vice versa,' Singla wrote. Under the Income Tax Act, 50 per cent of salary qualifies as HRA exemption for metro cities (Delhi, Mumbai, Chennai, Kolkata) and 40 per cent for non-metros. The exemption is determined by where the taxpayer lives, not where they are employed. How are taxpayers impacted? 'This mismatch can lead to reduced HRA exemptions and inflate taxable income for those living in metros but working elsewhere,' said Vishwanathan Iyer, senior associate professor of Finance at Great Lakes Institute of Management, Chennai. 'It may also trigger defective return notices from the tax department in cases of over-claimed exemptions.' Employees opting for the old tax regime are particularly vulnerable, explained Naveen Wadhwa, vice-president at Taxmann. 'Until the utility is fixed, taxpayers should enter their place of residence in the field asking for place of work to ensure accurate computation,' he suggested. What to do if you've already filed? Taxpayers who have already filed using the faulty utility can revise their returns. 'You can file a revised return without penalty if done before the deadline,' said Iyer, adding that proof of residence and rent receipts must be retained. Wadhwa also advised filing a grievance with the Centralised Processing Centre (CPC) as an alternate remedy. Wait for a fix or act now? Experts are divided on whether taxpayers should wait for the department to release an updated utility. 'It is safer to compute HRA manually and file now to avoid missing the due date,' said Suresh Surana, chartered accountant. Niyati Shah of 1 Finance, however, suggested waiting or using an offline JSON utility. 'Filing now with incorrect data may result in reduced refunds or defective return notices, leading to double the effort later,' she cautioned.
&w=3840&q=100)
Business Standard
08-07-2025
- Business
- Business Standard
Exemption limits, forms: Income Tax rule changes for NRIs this year
Non-resident Indians (NRIs) need to pay attention to changes in filing Income Tax returns (ITR) this year, including a higher threshold for capital gains tax and asset disclosures. Who is as NRI According to the Income-Tax Department, an individual's residential status is the first factor in determining tax liability. If a person has spent less than 182 days in India in a financial year, she is typically considered a non-resident and taxed accordingly. Higher threshold for reporting assets Previously, individuals filing a form called ITR-2 had to disclose assets and liabilities if their total income exceeded Rs 50 lakh. This threshold has now been increased to Rs 1 crore, offering relief to many NRIs. Naveen Wadhwa, vice-president at Taxmann, said that 'NRIs using ITR-2 are still required to report their Indian assets and liabilities if they cross this new limit. Foreign assets are not reportable for NRIs in ITR-2.' Capital gains split by transaction date Wadhwa explained that from July 23 last year, India's capital gains tax regime has changed. Older tax rates apply for transactions before that date, and revised ones later. The new ITR-2 allows taxpayers to report capital gains separately for both periods, simplifying compliance for NRIs. Deductions, exemptions NRIs can claim deductions under Sections 80C and 80D and enjoy exemptions on interest earned from NRE and FCNR accounts, according to Vishwanathan Iyer, senior associate professor - finance & accreditation at Great Lakes Institute of Management, Chennai. They can avail of tax relief under Double Taxation Avoidance Agreements by submitting a Tax Residency Certificate (TRC) and Form 10F to Indian payers. Common mistakes by NRIs in ITR filing S R Patnaik, partner and head of taxation at law firm Cyril Amarchand Mangaldas, said that NRIs often misclassify their residential status or forget to update banks and mutual funds about their NRI status. 'Timely filing of TRC and Form 10F is crucial to claim lower TDS rates and avoid discrepancies in Form 26AS,' he added. 'They also tend to use the wrong ITR form or misreporting Indian income such as interest earned in NRO accounts,' said Amit Bansal, partner at Singhania & Co, a global legal consultancy firm. He advised NRIs to maintain travel records, inform Income-Tax Department promptly, and consult a professional to ensure correct classification and filing. Foreign income and reporting: What's mandatory? 'If you're an NRI for tax purposes, your foreign income is not taxable in India,' Patnaik said. 'Also, unlike residents, NRIs are not mandated to disclose foreign bank accounts or assets under Schedule FA. However, they may do so voluntarily.' What NRIs should do -Check if their taxable Indian income exceeds Rs 2.5 lakh annually. They have to file tax return if it does. -Ensure all documents, including TRC and Form 10F, are ready. -Verify if you fall under the new capital gains tax slabs based on your transaction dates.
