There is no provision in the Income Tax Act that caps or limits the amount an individual can spend on personal household expenses in a financial year. However, the source of funds for these expenses must be explainable and consistent with the taxpayer’s declared income. If the expenses appear disproportionate to the income reported, the… (read more)

An order rejecting or dismissing a revision petition under Section 264 is not an appealable order before the ITAT under Section 253 of the Income-tax Act. Under Article 226 of the Constitution of India, you can file a writ petition before the jurisdictional High Court challenging the dismissal of your revision petition. The High Court… (read more)

It can be argued that tenancy rights acquired free after Assessment Year 2017-18 are not taxable under Section 56(2)(x) because they do not squarely fit the definition of "immovable property" (land or building) as outlined in the section. However, this depends on the specific facts: If the acquisition involves only the tenancy rights and not… (read more)

Thank you for reaching out with your query. I’ll do my best to clarify your situation regarding the Long-Term Capital Gains (LTCG) exemption and the Capital Gains Account Scheme (CGAS) based on the details you’ve provided. To address your question about securing a 100% exemption on the LTCG of approximately INR 30–32 lakhs from selling… (read more)

The right to appeal is a statutory right under the Income Tax Act, 1961 (Section 246A), and filing an appeal is not contingent upon pre-payment of the disputed tax amount. The appeal can be submitted within 30 days of receiving the assessment order or demand notice, using Form 35, along with the applicable filing fee… (read more)

The implication on the retiring Partner is that he or she will faces capital gains tax (LTCG/STCG) on the excess of consideration over their capital account, calculated at book value. No revaluation means a potentially lower payout and gain, but also less economic recognition of asset appreciation. As regards the Partnership Firm, there is no… (read more)

Reopening an assessment under Section 147 of the Income Tax Act requires the Assessing Officer (AO) to have "reason to believe" that income chargeable to tax has escaped assessment. This belief must be based on tangible material and not mere suspicion or unverified third-party information. In your client’s case, the IT Department relied on information… (read more)