Under Section 9 of Income-tax Act, 1961, income could be subject to tax in India if the institution has some business connection in India or if the fee paid qualifies as royalty or fees for technical services
* I am a pensioner from my earlier employment and currently working with another employer. Can I claim standard deduction from both my the sources of income?
No, standard deduction is allowed from the total salary income in a financial year only once irrespective of the number of sources of salary income. Hence, you can claim it only once during a year.
* What are the repercussions of not filing ITRs for the last three years?
There are various adverse consequences of non-filing of Income Tax Return (ITR) under the Income-tax Act, 1961. The person shall be liable for penalty of `5000 under Section 271F. Further, if any tax is due, he/she shall be liable to pay interest @ 1% per month till the date of payment of taxes. In case the tax payable is less than the TDS, if any, deducted; the refund for taxes paid above cannot be claimed. If there are any losses available in these returns, those will not be allowed to be carried forward.
Also, if income is within the taxable slabs and return is not filed, then penalty for concealment of income under Section 271(1)(c) from 100% to 300% of the tax due can also be levied for financial year 2015-16 and before. For FY 2016-17 and onwards, the penalty could be levied under Section 270A in the range of 50-200%. A notice of prosecution under Section 276CC can also be issued under which imprisonment may extend up to seven years.
* We are an Indian domestic company. If we are giving affiliation fees to a foreign educational institution/ university, does it attract TDS?
Under Section 9 of Income-tax Act, 1961, income could be subject to tax in India if the institution has some business connection in India or if the fee paid qualifies as royalty or fees for technical services. However, under the Double Taxation Avoidance Agreements entered into by India with other countries, the fees paid to foreign education institutions are generally exempt from tax. Since, you haven’t disclosed to which country the said university belongs and what are the terms of the affiliation fees, these factors will need to be considered for forming a conclusive opinion and the withholding tax shall be made accordingly.
The writer is partner, Ashok Maheshwary & Associates LLP. Send your queries to email@example.com