Latest news with #TDS
Economic Times
2 hours ago
- Business
- Economic Times
UAE rule, wary I-T to deter dodgy crypto deals
Mumbai: In the lane to launder money, the skill to move cryptos to control companies and properties in Dubai has been honed over the past few years. But treading that alley would soon become tougher. Dual, albeit unrelated, developments in India and the UAE would force money movers to devise new tricks. First, Income tax (I-T) officials, hunting for illicit homes of Indians over the past six months, now strongly suspect that some property purchases were made with cryptocurrencies; second, a new regulatory regime in the Middle East country, would soon end payment in cryptos, other than stable coins, to freely buy goods and services. "When Indian residents use crypto to purchase real estate, they bypass Indian banking channels and FEMA scrutiny. But, under the new UAE regulations (expected from August), merchants would no longer accept crypto directly. Only entities licensed by the UAE Central Bank would be allowed to convert stablecoins to AED after collecting full KYC. While this framework ensures the buyer's identity is recorded, it remains unclear whether such data would be shared under the India-UAE tax treaty," said Purushottam Anand, founder of the law firm Crypto raiding a leading UAE developer having roots in Mumbai and clients across India, a northern office of the I-T department found that more than 460 buyers in the 650-odd property deals have no record of having remitted money through banks to acquire the properties. According to findings which were shared with other I-T centres two months ago, the arm of the UAE realtor which brokered the deals was aided by a network of 86 sub-brokers who later shared details with the tax office. According to tax circles, some of the clients had paid in cryptos, probably under the belief it would go untraced. Earlier this year, the department had found that hundreds of mule accounts were opened by a few persons in Kerala to deposit cash, use the money to buy cryptos -either on local platforms or through peer-to-peer transactions-and then move the coins to other wallets before encashing the them in UAE, or buying assets like properties, or transferring them to third parties. "When digital assets move from exchanges to P2P platforms or private wallets, monitoring becomes difficult, creating opportunities for illegal activities such as ransomware attacks, laundering, tax evasion, and potentially terrorist financing. Although the exchanges are required to report 'suspicious transactions', including withdrawals, with the Financial Intelligence Unit-India, such risks can be further addressed through stricter enforcement of TDS provisions, i.e. Sections 194S or 195, ensuring tax compliance for all crypto transactions, whether conducted on or off exchanges. Additionally, specifying the reporting entities and the format for disclosures under Section 285BAA will improve traceability," said Ashish Karundia, founder of the CA firm Ashish Karundia & Co. 'PAYMENT TOKEN REGULATIONS' The new 'Payment Token Services Regulation' lays down the rules and conditions established by the UAE Central Bank for granting a licence or registration for payment token services-which include payment token issuance, token conversion, and token custody and transfer. Under the rules no merchant or anyone in the UAE selling goods or services can accept a virtual asset unless it's a dirham payment token issued by a licensed issuer. Also, a bank cannot act as a payment token issuer. UAE is working on Dirham-linked stable coin (like USDT or Tether which is pegged to the dollar)."This would have implications for India which has close economic and financial ties with the UAE. By bringing digital assets such as payment tokens under a structured licensing and anti-money laundering framework, the regulation adds a layer of safety and transparency to cross-border digital financial flows. For Indian individuals and businesses engaging in the UAE's digital economy, on one hand this means greater clarity, reduced risk of fraud, and alignment with global best practices; on the other hand, the clear prohibition on anonymous crypto instruments like privacy tokens reinforces the global trend toward traceable and regulated digital transactions. This is something India is also actively pursuing through its own financial intelligence mechanisms. This would deter transactions in property, high value luxury products bought by Indians in UAE using crypto tokens," said Siddharth Banwat, partner at CA firm Banwat & Associates dealers said the UAE rules are not entirely fool-proof as coins can be routed through platforms in multiple jurisdictions whose cooperation would be vital to spot the trail. But the very presence of licensed intermediaries collecting and storing information would deter money movers.
Time of India
3 hours ago
- Business
- Time of India
UAE rule, wary I-T to deter dodgy crypto deals
Mumbai: In the lane to launder money, the skill to move cryptos to control companies and properties in Dubai has been honed over the past few years. But treading that alley would soon become tougher. Dual, albeit unrelated, developments in India and the UAE would force money movers to devise new tricks. First, Income tax (I-T) officials, hunting for illicit homes of Indians over the past six months, now strongly suspect that some property purchases were made with cryptocurrencies; second, a new regulatory regime in the Middle East country, would soon end payment in cryptos, other than stable coins, to freely buy goods and services. "When Indian residents use crypto to purchase real estate, they bypass Indian banking channels and FEMA scrutiny. But, under the new UAE regulations (expected from August), merchants would no longer accept crypto directly. Only entities licensed by the UAE Central Bank would be allowed to convert stablecoins to AED after collecting full KYC. While this framework ensures the buyer's identity is recorded, it remains unclear whether such data would be shared under the India-UAE tax treaty," said Purushottam Anand, founder of the law firm Crypto Legal. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Unlock full 2025 solar power in Bangladesh — install, maintain, upgrade Solar Panels | Search Ads Learn More Undo After raiding a leading UAE developer having roots in Mumbai and clients across India, a northern office of the I-T department found that more than 460 buyers in the 650-odd property deals have no record of having remitted money through banks to acquire the properties. According to findings which were shared with other I-T centres two months ago, the arm of the UAE realtor which brokered the deals was aided by a network of 86 sub-brokers who later shared details with the tax office. Live Events According to tax circles, some of the clients had paid in cryptos, probably under the belief it would go untraced. Earlier this year, the department had found that hundreds of mule accounts were opened by a few persons in Kerala to deposit cash, use the money to buy cryptos -either on local platforms or through peer-to-peer transactions-and then move the coins to other wallets before encashing the them in UAE, or buying assets like properties, or transferring them to third parties. "When digital assets move from exchanges to P2P platforms or private wallets, monitoring becomes difficult, creating opportunities for illegal activities such as ransomware attacks, laundering, tax evasion, and potentially terrorist financing. Although the exchanges are required to report 'suspicious transactions', including withdrawals, with the Financial Intelligence Unit-India, such risks can be further addressed through stricter enforcement of TDS provisions, i.e. Sections 194S or 195, ensuring tax compliance for all crypto transactions, whether conducted on or off exchanges. Additionally, specifying the reporting entities and the format for disclosures under Section 285BAA will improve traceability," said Ashish Karundia, founder of the CA firm Ashish Karundia & Co. 'PAYMENT TOKEN REGULATIONS' The new ' Payment Token Services Regulation ' lays down the rules and conditions established by the UAE Central Bank for granting a licence or registration for payment token services-which include payment token issuance, token conversion, and token custody and transfer. Under the rules no merchant or anyone in the UAE selling goods or services can accept a virtual asset unless it's a dirham payment token issued by a licensed issuer. Also, a bank cannot act as a payment token issuer. UAE is working on Dirham-linked stable coin (like USDT or Tether which is pegged to the dollar). "This would have implications for India which has close economic and financial ties with the UAE. By bringing digital assets such as payment tokens under a structured licensing and anti-money laundering framework, the regulation adds a layer of safety and transparency to cross-border digital financial flows. For Indian individuals and businesses engaging in the UAE's digital economy, on one hand this means greater clarity, reduced risk of fraud, and alignment with global best practices; on the other hand, the clear prohibition on anonymous crypto instruments like privacy tokens reinforces the global trend toward traceable and regulated digital transactions. This is something India is also actively pursuing through its own financial intelligence mechanisms. This would deter transactions in property, high value luxury products bought by Indians in UAE using crypto tokens," said Siddharth Banwat, partner at CA firm Banwat & Associates LLP. Crypto dealers said the UAE rules are not entirely fool-proof as coins can be routed through platforms in multiple jurisdictions whose cooperation would be vital to spot the trail. But the very presence of licensed intermediaries collecting and storing information would deter money movers.
Time of India
8 hours ago
- Business
- Time of India
ITR e-filing FY 2024-25: What is the benefit of pre-filled ITR forms on the income tax portal? Top points
ITR filing FY 2024-25: Pre-filling of ITR forms has several advantages. (AI image) Income Tax Return Filing FY 2024-25: The Income Tax Department has been aiming to make the e-filing of income tax returns easier for taxpayers, and one such step in that direction is pre-filled ITR forms. If you have been filing tax returns, you would know that the ITR forms have been pre-filed on the tax portal for some years now. With pre-filled ITR forms, the Income Tax Department aims to enhance accuracy, encourage timely filing of income tax returns and reduce compliance burden on taxpayers. The process of filing electronic Income-tax Return forms by taxpayers has evolved over a period of time and we have seen that every year Central Board of Direct Taxes (CBDT) introduces new features in the process to enhance user experience, reduce revenue leakage and ensure full compliance. 'The Government has strived to achieve a mature ITR filing process wherein all the information is accurately pre-filled in the form and taxpayers' role is limited to verification of the information. In order to achieve this level of automation, the CBDT has invested in the technology upgradation, mandated various agencies to share data with CBDT which is filtered and used to prepare a pre-filled ITR,' says Preeti Sharma, Partner, Tax & Regulatory Services, BDO India LLP. Also Read | ITR filing FY 2024-25: Do you need to file your income tax return if TDS has been deducted? Explained Preeti Sharma explains that till last year, your pre-filled ITR form was automatically capturing the following information: Personal Information, such as name, PAN, date of birth, address, etc. Income details, which have been reported by registered persons in India under a Statement of Financial Transactions such as Salary, from Form-16 submitted by employers Interest income, from Banks & Financial Institutions Reports Dividend income, from Companies & Mutual Funds Reports Tax payment details (TDS, TCS and advance tax) The IT Department can also track sale and purchase of land or immovable properties, with the tax deduction or collection requirements that have been introduced in India recently. The CBDT has already launched online utility for ITR-1 (Sahaj - Available for Individuals & HUF) and ITR-4 (Available for Individuals & HUF with Presumptive Business or Professional Income) with limited enhancements. However, the new online form ITR-2, ITR-3 for Individual tax-payers is still to be launched. According to Preeti Sharman, it is likely to be more advanced with pre-filled data such as: Pre-filled Capital Gains schedule – mapping the information received from brokers & Depository Reports and scrip wise bifurcation of capital gain rather than a cumulative amount. Pre-filled Deductions tab, which have been reported by the employer. Update of all the bank account numbers already linked with your PAN and Aadhaar in the Bank's systems. This pre-filling of ITR forms has the following advantages: Minimizing human efforts and errors Full disclosure of income Easy access to past records – for comparison purpose / reporting of previous year's income / carry forward of previous year's losses Reduced litigation as any mismatch of details reported in tax return with information available with the tax department is addressed at this stage only. Pre-filled ITRs makes it easier for a taxpayers' to file ITR correctly without in-depth knowledge of taxation, thereby reducing the dependence on experts (for simple cases). Also Read | Income Tax Return e-filing: Can you keep switching between new and old tax regime every year? What taxpayers should know Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
&w=3840&q=100)
Business Standard
11 hours ago
- Business
- Business Standard
Taxman knows more than you think: Here's why clean ITR filing matters
Some taxpayers underreport income or inflate deductions in order to save money that goes to the government. But experts warn that this is a high-stakes gamble in today's data-driven tax environment. With the Income Tax Department now armed with sophisticated tools and deep access to financial information, from your bank transactions and property deals to your stock market activity, there's little room to hide. Taxman's eyes everywhere: What the department already knows 'The Income Tax Department gets financial data from multiple channels, banks, mutual funds, employers, registrars, and more,' says Suresh Surana, charter accountant. This includes: TDS/TCS details from Form 24Q/26Q High-value transactions under the Statement of Financial Transactions (SFT) Integrated PAN-linked records from property sales, share investments, and foreign remittances Salary, rent, capital gains, and GST data through the Annual Information Statement (AIS) and Form 26AS According to Kinjal Bhuta, secretary of the Bombay Chartered Accountants' Society, the department also uses 'AI tools, regulatory data-sharing, and even social media activity' to detect suspicious patterns. Common mistakes (and misdeeds) that can trigger trouble From fudging rent receipts to ignoring side income, many taxpayers, especially salaried and self-employed, unknowingly (or knowingly) cross the line. 'False Section 80C claims, hiding freelance income, or underreporting cash sales are frequent issues,' says Sudhir Kaushik, chief executive officer of TaxSpanner. Surana adds that claiming deductions without valid proofs or routing business income through personal accounts is another red flag. Bhuta also warns against 'non-disclosure of foreign assets, ignoring bank interest, or assuming that TDS alone covers tax obligations.' Penalties can be steep, even jail time Taxpayers caught misreporting face penalties under Section 270A: 50 per cent of tax due for underreporting 200 per cent if it's deemed wilful misreporting 'In extreme cases,' says Surana, 'Section 276C can trigger prosecution with jail up to seven years if tax evasion exceeds Rs 25 lakh.' Kaushik concurs, 'With AIS and digital tracking, ignorance is no longer a valid excuse.' Staying safe: Honest filing starts with these steps Experts say the best protection is vigilance. Cross-check prefilled ITRs with your Form 16, AIS and TIS Report all income salary, capital gains, FD interest, foreign income Correct mismatches, if any, and maintain proof for deductions 'Even exempt income like agricultural earnings should be disclosed,' says Bhuta. TaxBuddy's founder, Sujit Bangar adds, 'AIS should be your checklist. If a transaction appears there, explain or report it.' As Kaushik puts it, 'Tax transparency is tighter than ever. The best strategy is to stay ahead by being accurate.'
&w=3840&q=100)
Business Standard
11 hours ago
- Business
- Business Standard
Digital payments for ads or software? Here's where TDS may surprise you
Freelancers, small business owners, and e-commerce sellers are increasingly relying on digital platforms for advertising, software, and sales. But these payments often come with tax obligations that many overlook, especially under India's Tax Deducted at Source (TDS) rules. Experts say a good starting point is identifying whether the payment is made to an Indian or foreign company. 'This is crucial, as domestic payments are governed by Sections 194C and 194J, while international ones fall under Section 195,' says Ankit Jain, partner at a chartered accountancy firm, Ved Jain and Associates. Domestic versus foreign payments: Know your provider For payments to Indian providers, such as digital ad agencies or cloud service resellers: Section 194C applies to ad contracts; TDS at 2 per cent if the annual payment exceeds Rs 30,000. Section 194J applies to professional or technical services like AWS or Zoom; TDS at 10 per cent. Exemption: 'TDS isn't required if you aren't under tax audit or are a non-corporate entity,' notes Jain. For foreign providers, such as Google, Meta, or SaaS platforms: TDS under Section 195 applies, but rates vary depending on the Double Taxation Avoidance Agreement (DTAA). You must also file Form 15CA/CB, even if TDS isn't deducted; failure attracts a penalty of Rs 1 lakh. Common mistakes to avoid According to Ritika Nayyar, partner at a law firm, Singhania & Co., many taxpayers: Wrongly assume no TDS is needed if the provider is foreign. Skip filing Form 15CA/CB if no TDS is deducted. Misapply DTAA benefits without obtaining a Tax Residency Certificate. Ignore changes in TDS law or documentation requirements. Selling online? Know your 1 per cent TDS rule Platforms like Amazon, Flipkart, and Zomato deduct 1 per cent TDS on seller earnings under Section 194-O. 'This amount reflects in your Form 26AS and can be claimed as a credit while filing returns,' says Nayyar, adding that, 'Maintaining accurate sales and TDS records is key.' Can small users avoid TDS? Yes, in many cases. If your turnover is below Rs 1 crore (business) or Rs 50 lakh (profession), you're generally not liable to deduct TDS. Also, individuals or HUFs paying for personal use are exempt from TDS obligations. But for international payments, no basic exemption exists, warns Jain. 'All such cases must be evaluated carefully, especially when claiming DTAA benefits.'
