CA Unfiltered

Back with another deep dive—this time into a deceptively simple tax rebate that’s anything but straightforward. Section 87A may look like a quick win, but when special rate incomes enter the picture, things get interesting. Tax rebate under Section 87A has been a key relief for resident individuals with lower income. However, its interaction with special rate incomes such as short-term capital gains (STCG) and long-term capital gains (LTCG) has caused significant confusion. Let’s break it down by regime. 1. What is Rebate u/s 87A? Available only to resident individuals . Under the old tax regime : Applicable if total income ≤ ₹5,00,000. Maximum rebate: ₹12,500. Under the new tax regime (Sec. 115BAC(1A)) : Applicable if total income ≤ ₹7,00,000. Maximum rebate: ₹25,000 (with marginal relief for slightly higher income). The rebate reduces tax liability , not income. 2. New Tax Regime – Special Rate Incomes Are Excluded The Finance Act, 2023 inserted a proviso under Section 87A (ef...

Welcome back, after a short break, I’m back with a full-fledged blog—this time diving deep into a real-world international tax scenario that perfectly blends law, finance, and strategic thinking Lufthansa German Airlines v. Department of Income Tax Delhi High Court Judgment | 7th October 2002 This landmark judgment by the Delhi High Court is a powerful example of how international taxation principles operate under a Double Taxation Avoidance Agreement (DTAA). It covers critical concepts such as  profit attribution ,  pool arrangements ,  Permanent Establishment , and  treaty interpretation . Case Background Lufthansa German Airlines, a German-based international airline operating flights to and from India, was assessed by the Indian Income Tax Department on certain profits earned through rendering technical and ground handling services under the International Airlines Technical Pool (IATP) arrangement. The dispute centered on whether these profits quali...

It’s been a while since I last shared a post, but I’m excited to be back with something timely and insightful. Learning about the U.S. taxation system has been on my personal study list for quite some time, and I’m thrilled to finally dive into it. If you’ve ever wondered how the U.S. taxation system operates, this blog is for you. Why Taxes Matter Taxes are the lifeblood of a country’s governance. In the U.S., tax revenues support everything from national defense to public schooling, infrastructure, and healthcare. In 2024, the Internal Revenue Service (IRS) collected nearly $4.9 trillion, with individual income tax alone accounting for over $2.6 trillion—more than half of the country’s total revenue. A Layered Tax Structure The U.S. tax system functions at three levels: federal, state, and local. The IRS operates at the federal level, while each state—and often each local government—has its own set of tax rules. This decentralization means someone living in Texas (which has no state ...

Hi everyone! I know it’s been a while since my last blog post (life got a little busy!) — but here I am, finally back to share something that I recently tried for the first time — closing an LLP . Since this was my first attempt at handling the closure process, I thought it would be useful to jot down my experience and key learnings in case any of you are planning to go through the same process. So here’s a simple, pointer-wise breakdown of the process and my takeaways:  1️⃣ Understanding the Basics • The LLP (Limited Liability Partnership) I worked on had been inactive for a while, and the partners wanted to close it formally. • Strike off application is the most common route if the LLP is inactive and there are no pending liabilities. • Relevant section: Rule 37 of LLP Rules, 2009 . • The simplified process for striking off an LLP is prescribed under Form 24 . (You can refer to the MCA portal for latest filing guidelines and circulars.) 2️⃣ Pre-requisites — What You Need Before S...

After my CA exams were over, I had a small list of topics I wanted to explore—and ITR-U (Updated Return) was one of them. I had never filed it before and planned to understand it properly once I got some free time. Little did I know, the opportunity to learn it would come sooner than expected—and not through books, but through real work. Once I resumed work post-exams, my principal asked me to file a return for a client. At first, I didn’t realize it was an updated return . It was only when I started going through the client’s files that I noticed the previous year’s return hadn’t been filed at all. That’s when it clicked—this wasn’t a regular return. It had to be filed under ITR-U. Like I always do when I come across something new, I turned to ChatGPT for some guidance. It gave me all the necessary information: the process, applicable sections, and steps involved. With that support, I filed my first ITR-U . Here’s What I Learned: Select the Correct Section You need to select ...