Frequently Asked Questions
Clear, structured answers to common questions on direct tax, GST compliance, company registration, and international tax laws.
Direct Tax & ITR
What is the difference between Financial Year (FY) and Assessment Year (AY)?
A Financial Year (FY) is the 12-month period (April 1 to March 31) during which you earn your income. The Assessment Year (AY) is the immediately subsequent financial year in which that income is assessed and taxed. For example, income earned in FY 2024-25 is assessed in AY 2025-26.
What is the penalty for filing an Income Tax Return after the deadline?
Filing a belated return attracts a late fee under Section 234F of up to ₹5,000 (₹1,000 if total income is up to ₹5 lakhs), interest on unpaid taxes under Section 234A at 1% per month, and the forfeiture of the right to carry forward business and capital losses.
What is the difference between Form 26AS, AIS, and TIS?
Form 26AS reports taxes deducted (TDS) and collected (TCS). The Annual Information Statement (AIS) is a comprehensive record of all financial transactions—including stock trades, mutual fund sales, high-value purchases, and interest. The Taxpayer Information Summary (TIS) condenses AIS figures into processed totals used for pre-filling your return.
GST (Goods & Services Tax)
Can I claim Input Tax Credit on personal expenses or office refreshments?
No. Section 17(5) of the CGST Act explicitly blocks Input Tax Credit on goods and services used for personal consumption, food and beverages, outdoor catering, health services, and passenger motor vehicles (subject to narrow commercial exceptions).
What is the deadline for filing monthly GSTR-1 and GSTR-3B?
For monthly filers, GSTR-1 (outward supplies) is due on or before the 11th of the succeeding month. GSTR-3B (summary return and tax payment) is due on or before the 20th of the succeeding month.
What is e-Invoicing and who must comply?
E-invoicing involves registering B2B invoices on the government Invoice Registration Portal (IRP) to generate an Invoice Reference Number (IRN) and QR code. It applies to registered businesses with aggregate turnover exceeding statutory thresholds (currently ₹5 crores) in any preceding financial year.
Business Registration
How long does it take to register a Private Limited Company in India?
Once all identity documents, address proofs, and Digital Signatures are compiled, company incorporation through the MCA SPICe+ system typically takes between 5 to 7 working days.
Can a foreigner or NRI be a director in an Indian company?
Yes. Foreign nationals and NRIs can serve as directors and hold equity, provided the company has at least one director who is a resident of India (who has stayed in India for a minimum of 182 days in the financial year).
Is a commercial office address required to register a company?
A residential address can be used as the registered office of a company or LLP, provided a recent electricity/utility bill, rent agreement, and an explicit No Objection Certificate (NOC) from the property owner are submitted.
International & NRI Tax
What is the USD 1 Million Scheme for NRIs?
Under RBI/FEMA regulations, a Non-Resident Indian (NRI) or Person of Indian Origin (PIO) is permitted to remit up to USD 1,000,000 per financial year out of balances held in their NRO account (e.g., from property sale, inheritance, or rent), supported by Form 15CA and Form 15CB certification.
Why is TDS deducted at 20%+ when an NRI sells property in India?
Under Section 195 of the Income-tax Act, payments to non-residents are subject to withholding tax at source on the full sale value unless the NRI obtains a Lower TDS Certificate (Form 13) from the Assessing Officer based on actual capital gains.
Corporate Secretarial & MCA Compliance
What is the penalty for not filing MCA annual returns on time?
Delayed filing of Form AOC-4 (financial statements) and Form MGT-7 (annual return) incurs a mandatory late fee of ₹100 per day per form under the Companies Act, 2013, with no upper cap.
What is the annual DIR-3 KYC requirement?
Every director holding an active Director Identification Number (DIN) must complete annual DIR-3 KYC on or before September 30 each year to keep their DIN active and avoid a ₹5,000 restoration penalty.
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