Income Tax

Income Tax is levied by the Government of India on the income of every person. The provisions governing the Income-tax are covered in the Income-tax Act, 1961. Income-tax is levied on the annual income of a person. The year considered under the Income-tax Law is the period starting from 1st April and ending on 31stMarch of next calendar year. Income-tax is to be paid by every person. For the purpose of charging Income-tax, the term 'person' includes Individual, Hindu Undivided Families [HUFs], Association of Persons [AOPs], Body of individuals [BOIs], Firms, LLPs, Companies, Local authority and any artificial juridical person not covered under any of the above.

As per Income Tax Act, certain registrations and pre-approvals to be obtained from the tax department. Some of them are -

Permanent Account Number (PAN): Permanent Account Number (PAN) is a ten-digit alphanumeric identification number allotted to every taxpayer. It is mandatory to quote PAN on return of income and other important financial transactions.

Tax deduction Account Number (TAN): TAN or Tax Deduction and Collection Account Number is a 10 digit alpha numeric number required to be obtained by all persons who are responsible for deducting or collecting tax. Under Section 203A of the Income Tax Act, 1961, it is mandatory to quote Tax Deduction Account Number (TAN) allotted by the Income Tax Department (ITD) on all TDS returns.

Lower Tax (TDS) Certificate: As per the provisions of the Income Tax Act, TDS/ TCS is required to be deducted at the prescribed rate at the time of making the payment. In case, the estimated tax liability of a person is lower than the TDS amount, then he has an option of applying to the department for a certificate directing TDS deductor to deduct tax at a lower/nil rate than the prescribed rate.

Tax Residency Certificate: A resident taxpayer can file an application in Form 10FA to the Assessing Officer (‘AO’) for obtaining a TRC in India. The application form along with supporting documents has to be submitted to the AO. The New Rule provide that the AO, on receipt of the application and on being satisfied of the particulars contained therein, should issue the TRC to the resident assessee in Form 10FB.

Gratuity trust: According to section 36(1)(v) read with section 40A(7) of Income-tax Act, 1961, any sum paid by the employer by way of contribution towards gratuity fund is allowable as expenditure if the gratuity fund is approved by the tax authorities. In practice, the employer files an application with tax authorities to obtain approval for the gratuity trust.

We at Balakrishna and Co., have the experience of obtaining various registrations and approvals from the tax department. In case you need our services, kindly contact us at or call 9845721255.

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  • Balakrishna & Co|Chartered Accountants,
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  • 10th Cross, Wilson Garden, Bangalore - 27.

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