GST & Income Tax FAQ

Businesses with aggregate turnover exceeding ₹20 lakh (₹10 lakh for special category states like Mizoram, Tripura, Manipur, Nagaland) must register under GST. For exclusively inter-state suppliers of goods, registration is mandatory regardless of turnover. Service providers have a uniform ₹20 lakh threshold across India.

PAN card, Aadhaar of the proprietor/partners/directors, proof of business premises (electricity bill, property tax receipt, or rent agreement), bank account details with cancelled cheque, and passport-size photographs. For companies and LLPs, additionally provide the certificate of incorporation, MOA/AOA or LLP Agreement, and board resolution authorising the signatory.

GSTR-2B is an auto-drafted, static statement showing Input Tax Credit (ITC) available to a taxpayer based on returns filed by their suppliers. It is generated on the 14th of every month. ITC can only be claimed if it appears in GSTR-2B — monthly reconciliation of your purchase register against GSTR-2B is critical before claiming credit in GSTR-3B.

Late fee under Section 47 of the CGST Act is ₹50 per day (₹25 CGST + ₹25 SGST) for taxpayers with tax liability, capped at ₹10,000 per return. For NIL returns, the late fee is ₹20 per day (₹10 CGST + ₹10 SGST). Additionally, interest at 18% per annum applies on unpaid tax from the due date.

All regular GST taxpayers (excluding composition dealers) must file GSTR-9 annual return. Taxpayers with aggregate annual turnover above ₹5 crore must also file GSTR-9C — a self-certified reconciliation statement. Below ₹5 crore, GSTR-9C is optional.

No. ITC is available only on purchases from GST-registered suppliers who have charged GST on their invoice. Additionally, even for registered suppliers, ITC is blocked if the supplier has not filed their GSTR-1, causing the credit to be absent from your GSTR-2B.

Common triggers: discrepancies between GSTR-1 (outward supplies declared) and GSTR-3B (tax paid), excess ITC claimed vs GSTR-2B credits, under-reported turnover in GSTR-9 vs GSTR-1, mismatches in e-way bill data vs returns, or risk-based selection by the GST department's analytics system.

Small taxpayers with turnover up to ₹1.5 crore (₹75 lakh for service providers under Section 10(5)) can opt for the composition scheme, paying a flat tax rate (1% for traders/manufacturers, 5% for restaurants, 6% for service providers). Composition dealers cannot collect GST from customers, issue tax invoices, or claim ITC.

For individuals, HUFs, and firms not requiring audit: 31 July 2026. For taxpayers requiring tax audit under Section 44AB: 31 October 2026. For assessees with international transactions requiring transfer pricing audit: 30 November 2026. Belated returns can be filed by 31 December 2026 with a late fee.

The new default regime under ITA 2025 offers lower slab rates but disallows most exemptions and deductions. The old regime retains HRA, LTA, 80C, 80D, home loan interest (Section 24b), and other deductions. JBA evaluates both regimes for every client to determine the more tax-efficient option based on their income profile and investment pattern.

Advance tax applies when estimated tax liability (after TDS) exceeds ₹10,000. Payment schedule: at least 15% by 15 June, 45% by 15 September, 75% by 15 December, and 100% by 15 March. Interest under Section 234C applies at 1% per month on each instalment shortfall. Section 234B applies if total advance tax paid is below 90% of assessed tax.

LTCG on listed equity shares and equity mutual funds exceeding ₹1.25 lakh per financial year is taxed at 12.5% without indexation. Short-term capital gains (held less than 12 months) are taxed at 20%. Gains on debt mutual funds are taxed at applicable slab rates based on a 24-month holding period threshold.

Under Section 44AD, eligible businesses (turnover up to ₹3 crore, or ₹3.75 crore if 95%+ receipts/payments are digital) can declare 8% (6% for digital receipts) of turnover as presumptive income, eliminating the need for detailed bookkeeping. If you opt out of 44AD, you must maintain regular books and get a tax audit for the next 5 years.

You can file a belated return by 31 December of the assessment year with a late fee of ₹5,000 (₹1,000 if total income is below ₹5 lakh). Losses (except house property loss) cannot be carried forward if the return is filed late. A belated return can be revised once before the end of the assessment year.

First, verify the notice on the e-proceedings portal. Note the type: Section 143(2) limited/complete scrutiny, Section 148 reassessment, or Section 142(1) for document production. Engage your CA immediately, collate all supporting documents for disputed items, and file a detailed response within the deadline. Non-response triggers ex-parte assessment with additions and penalties.

With all KYC documents in order, MCA processes SPICe+ applications within 2–5 working days. Name reservation via RUN takes 1–2 days. Total turnaround including PAN and TAN allotment is typically 7–10 business days from the date of document submission.

There is no minimum paid-up capital requirement under the Companies Act 2013 (post-2015 amendment). You can start with ₹1 as authorised and paid-up share capital. In practice, most new companies start with ₹1 lakh.

Annual MCA filings: AOC-4 (financial statements), MGT-7 (annual return), ADT-1 (auditor appointment). Board level: minimum 4 board meetings per year and 1 AGM within 6 months of financial year end. Plus income tax return, TDS returns, and GST returns as applicable.

A Pvt Ltd company has shareholders and directors (can be different people), equity structure preferred by investors, stricter annual compliance requirements, and allows ESOPs. An LLP has only partners, simpler compliance, no dividend distribution on profit sharing, and is preferred by professional services firms. Both provide limited liability protection.

Yes. An NRI or foreign national can be a director, subject to obtaining a DIN. However, at least one director must be an Indian resident (physically present in India for at least 182 days in the previous calendar year). Foreign directors must provide notarised and apostilled identity proof.

A business with gross turnover exceeding ₹1 crore (₹10 crore if 95%+ transactions are digital) must obtain a tax audit. A professional with gross receipts exceeding ₹50 lakh must get a tax audit. Taxpayers who opt into presumptive taxation and then opt out are also required to get a tax audit for the relevant year and 5 subsequent years.

A statutory audit under the Companies Act 2013 examines the truth and fairness of financial statements and results in an auditor's report filed with MCA. A tax audit under Section 44AB covers 44 specific financial particulars in Form 3CD (purchases, turnover, loans, depreciation, TDS compliance etc.) and is filed on the Income Tax portal by 31 October.

Penalty under Section 271B of the Income Tax Act 2025: 0.5% of the total turnover or gross receipts, or ₹1,50,000, whichever is lower. The penalty can be waived if there is a reasonable cause for the failure (e.g., auditor resignation close to the deadline, natural calamity).

TDS on professional services (lawyers, doctors, engineers, management consultants) is 10% under Section 194J. For technical services (not professional), the rate is 2%. The threshold is ₹30,000 per financial year per payee. For directors' fees (not salary), TDS at 10% applies without any threshold.

Q1 (April–June): 31 July; Q2 (July–September): 31 October; Q3 (October–December): 31 January; Q4 (January–March): 31 May. Late filing fees under Section 234E: ₹200 per day until the return is filed, capped at the TDS amount for that quarter.

No. TDS is applicable only on the base amount (excluding GST) as clarified by CBDT Circular No. 23/2017. If GST is shown separately in the invoice, TDS is deducted only on the taxable value. If the invoice does not show GST separately, TDS applies on the total invoice amount.

The deductor faces: (1) interest at 1.5% per month from the date of deduction to the date of actual payment under Section 201(1A); (2) penalty under Section 271C equal to the TDS amount not deposited; (3) prosecution under Section 276B for wilful failure to deposit TDS, punishable with rigorous imprisonment of 3 months to 7 years plus fine.