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Hency R Shah & Associates Chartered Accountants, Anjar (2026)

23/08/2026

𝗧𝗵𝗲 𝗧𝗗𝗦 𝗧𝗿𝗮𝗽: 𝗪𝗵𝘆 𝗧𝗮𝘅 𝗟𝗶𝗮𝗯𝗶𝗹𝗶𝘁𝘆 𝗡𝗲𝗲𝗱𝘀 𝗙𝗶𝗻𝗮𝗹 𝗦𝗲𝘁𝘁𝗹𝗲𝗺𝗲𝗻𝘁

Deduction of TDS does not remove the legal obligation to calculate final income tax liability and submit annual income tax returns under the Income Tax Act.

A consultant earns 150 Lakhs, and the client deducts 10% (15 Lakhs) as TDS. Assuming this covers all tax liabilities is a costly mistake. TDS is only a temporary advance payment. Under the Income Tax Act, final liability depends on total income, including investments and progressive tax slabs. If the consultant falls into the 30% tax bracket, they still owe an additional 20% tax, plus applicable surcharges and cess.

𝘚𝘦𝘵𝘵𝘭𝘪𝘯𝘨 𝘵𝘩𝘦 𝘧𝘪𝘯𝘢𝘭 𝘴𝘵𝘢𝘵𝘦𝘮𝘦𝘯𝘵 𝘳𝘦𝘲𝘶𝘪𝘳𝘦𝘴 𝘵𝘩𝘳𝘦𝘦 𝘴𝘱𝘦𝘤𝘪𝘧𝘪𝘤 𝘴𝘵𝘦𝘱𝘴:

𝟭. 𝗥𝗲𝗰𝗼𝗻𝗰𝗶𝗹𝗲 𝗔𝗻𝗻𝘂𝗮𝗹 𝗜𝗻𝗳𝗼𝗿𝗺𝗮𝘁𝗶𝗼𝗻 𝗦𝘁𝗮𝘁𝗲𝗺𝗲𝗻𝘁 (𝗔𝗜𝗦) 𝗱𝗮𝘁𝗮 𝘄𝗶𝘁𝗵 𝗙𝗼𝗿𝗺 𝟮𝟲𝗔𝗦.
Confirm every deduction entry accurately appears against the Permanent Account Number. Uncredited tax deductions require immediate correction requests with the deductor.

𝟮. 𝗔𝗴𝗴𝗿𝗲𝗴𝗮𝘁𝗲 𝘁𝗼𝘁𝗮𝗹 𝗮𝗻𝗻𝘂𝗮𝗹 𝗶𝗻𝗰𝗼𝗺𝗲 𝗳𝗿𝗼𝗺 𝗮𝗹𝗹 𝘀𝘁𝗿𝗲𝗮𝗺𝘀.
Combine salary, professional revenue, bank interest, rental income, and capital gains. Calculate total tax using the applicable slab rates.

𝟯. 𝗖𝗼𝗺𝗽𝗮𝗿𝗲 𝘁𝗼𝘁𝗮𝗹 𝘁𝗮𝘅 𝗹𝗶𝗮𝗯𝗶𝗹𝗶𝘁𝘆 𝗮𝗴𝗮𝗶𝗻𝘀𝘁 𝘁𝗼𝘁𝗮𝗹 𝗧𝗗𝗦 𝗰𝗿𝗲𝗱𝗶𝘁𝘀.
If total liability exceeds TDS credits, pay the remaining amount as advance tax or self-assessment tax. If TDS credits exceed total liability, file the income tax return to claim an official refund.

Failing to file an income tax return leads to specific statutory penalties under Section 234F. Interest charges under Section 234A, Section 234B, and Section 234C accumulate monthly on unpaid tax balances.

Does annual income align with the tax credits shown in Form 26AS this financial year? Share thoughts and questions in the comments section below.

16/08/2026

𝗧𝗮𝘅 𝗥𝗲𝗮𝗹𝗶𝘁𝘆 𝗖𝗵𝗲𝗰𝗸: 𝗔𝗿𝗲 𝗙𝗮𝗺𝗶𝗹𝘆 𝗠𝗼𝗻𝗲𝘆 𝗧𝗿𝗮𝗻𝘀𝗳𝗲𝗿𝘀 𝗧𝗮𝘅 𝗙𝗿𝗲𝗲?

Many taxpayers assume all money transfers between family members skip tax liability entirely. The Income Tax Act 2026 maintains strict rules regarding financial transactions among relatives. While genuine gifts to specified close relatives remain exempt from tax, specific conditions trigger tax consequences.

Key exemptions under the Income Tax Act 2026 apply to linear ascendants, linear descendants, spouses, and siblings. Gifts received from these specific individuals do not attract income tax in the hands of the receiver.

Tax implications in few scenarios.

𝗦𝗰𝗲𝗻𝗮𝗿𝗶𝗼 𝟭: 𝗜𝗻𝗰𝗼𝗺𝗲 𝗦𝗽𝗼𝘂𝘀𝗮𝗹 𝗖𝗹𝘂𝗯𝗯𝗶𝗻𝗴 𝗥𝘂𝗹𝗲𝘀

Transferring income-generating assets to a spouse triggers clubbing provisions. A spouse transfers rental property or fixed deposit funds to another spouse without adequate consideration. The receiving spouse earns interest or rental income from that asset. The law attributes this income back to the transferring spouse. The transferring spouse pays income tax on that earning at their applicable slab rate.

𝗦𝗰𝗲𝗻𝗮𝗿𝗶𝗼 𝟮: 𝗡𝗼𝗻-𝗦𝗽𝗲𝗰𝗶𝗳𝗶𝗲𝗱 𝗥𝗲𝗹𝗮𝘁𝗶𝘃𝗲𝘀

Financial gifts from non-specified relatives incur direct tax liability. Cousins, uncles, aunts, and extended family members do not fall under the tax-free relative definition. Transfers exceeding 50,000 rupees in a financial year from non-specified family members become fully taxable under income from other sources.

𝘋𝘰𝘤𝘶𝘮𝘦𝘯𝘵𝘢𝘵𝘪𝘰𝘯 𝘳𝘦𝘲𝘶𝘪𝘳𝘦𝘮𝘦𝘯𝘵𝘴 𝘶𝘯𝘥𝘦𝘳 𝘤𝘶𝘳𝘳𝘦𝘯𝘵 𝘳𝘶𝘭𝘦𝘴:

1. Maintain clear gift deeds for high-value asset transfers.

2. Execute all transfers via traceable banking channels.

3. Record cash transactions within the strict statutory limits to avoid separate penalty provisions.

Share observations or questions in the comments below.

15/08/2026

Happy Independence Day from all of us at Hency R Shah & Associates Chartered Accountants.
We celebrate the values of independence, responsibility, and trust that guide our work with clients and communities.
Thank you for your partnership together we’ll keep building a stronger, prosperous India.
Jai Hind!

09/08/2026

𝗖𝗮𝘀𝗵 𝗜𝗻𝗰𝗼𝗺𝗲 𝗖𝗼𝘂𝗻𝘁𝘀. 𝗔𝗹𝗹 𝗦𝗮𝗹𝗲𝘀 𝗠𝘂𝘀𝘁 𝗕𝗲 𝗥𝗲𝗽𝗼𝗿𝘁𝗲𝗱.

𝗠𝘆𝘁𝗵: Only bank income matters. Cash can be ignored.
𝗥𝗲𝗮𝗹𝗶𝘁𝘆: All business income, including cash and digital receipts, must be reported in books and returns.

A common misconception persists regarding business receipts. Many taxpayers assume tax authorities focus solely on bank transfers and digital payments, leaving cash transactions unmonitored.

𝘛𝘩𝘦 𝘓𝘢𝘸 𝘙𝘦𝘲𝘶𝘪𝘳𝘦𝘴 𝘍𝘶𝘭𝘭 𝘙𝘦𝘱𝘰𝘳𝘵𝘪𝘯𝘨
Section 5 of the Income Tax Act mandates the inclusion of total income from all sources. Every rupee earned through cash sales, digital transfers, checks, or barter transactions forms part of taxable turnover.

𝗧𝗮𝘅 𝗱𝗲𝗽𝗮𝗿𝘁𝗺𝗲𝗻𝘁𝘀 𝘁𝗿𝗮𝗰𝗸 𝗰𝗮𝘀𝗵 𝗳𝗹𝗼𝘄 𝘁𝗵𝗿𝗼𝘂𝗴𝗵 𝗺𝘂𝗹𝘁𝗶𝗽𝗹𝗲 𝗿𝗲𝗽𝗼𝗿𝘁𝗶𝗻𝗴 𝗺𝗲𝗰𝗵𝗮𝗻𝗶𝘀𝗺𝘀:
1. Annual Information Statement (AIS) records high-value cash deposits in bank accounts.
2. Statement of Financial Transactions (SFT) reports cash purchases of goods or services exceeding two lakh rupees.
3. Vendor and customer ledgers reveal discrepancies during audit cross-examinations.

𝘊𝘰𝘯𝘴𝘦𝘲𝘶𝘦𝘯𝘤𝘦𝘴 𝘰𝘧 𝘜𝘯𝘳𝘦𝘱𝘰𝘳𝘵𝘦𝘥 𝘊𝘢𝘴𝘩 𝘙𝘦𝘤𝘦𝘪𝘱𝘵𝘴
Omitting cash sales leads to severe penalties under Section 270A for misreporting income. Penalties reach 200 percent of the tax payable on under-reported amounts. Unreported cash also triggers prosecution under Section 277.

𝗕𝗲𝘀𝘁 𝗣𝗿𝗮𝗰𝘁𝗶𝗰𝗲𝘀 𝗳𝗼𝗿 𝗕𝘂𝘀𝗶𝗻𝗲𝘀𝘀𝗲𝘀
Maintain a daily cash book to record all receipts and payments.
Issue official receipts for every cash transaction.
Reconcile cash balances weekly against physical inventory movements.
Deposit daily cash collections into business bank accounts promptly.

Which accounting method helps your business track daily cash sales accurately? Share insights in the comments.

02/08/2026

𝗟𝗼𝘀𝘀 𝗶𝗻 𝗕𝘂𝘀𝗶𝗻𝗲𝘀𝘀. 𝗙𝗶𝗹𝗶𝗻𝗴 𝗦𝘁𝗶𝗹𝗹 𝗠𝗮𝘁𝘁𝗲𝗿𝘀.

𝘔𝘺𝘵𝘩: 𝘼 𝙡𝙤𝙨𝙨 𝙢𝙚𝙖𝙣𝙨 𝙣𝙤 𝙄𝙣𝙘𝙤𝙢𝙚 𝙏𝙖𝙭 𝙍𝙚𝙩𝙪𝙧𝙣 𝙞𝙨 𝙧𝙚𝙦𝙪𝙞𝙧𝙚𝙙.
𝘙𝘦𝘢𝘭𝘪𝘵𝘺: 𝙁𝙞𝙡𝙞𝙣𝙜 𝙤𝙗𝙡𝙞𝙜𝙖𝙩𝙞𝙤𝙣𝙨 𝙘𝙤𝙣𝙩𝙞𝙣𝙪𝙚 𝙚𝙫𝙚𝙣 𝙬𝙝𝙚𝙣 𝙥𝙧𝙤𝙛𝙞𝙩 𝙞𝙨 𝙣𝙞𝙡 𝙤𝙧 𝙣𝙚𝙜𝙖𝙩𝙞𝙫𝙚.

𝐊𝐞𝐲 𝐟𝐚𝐜𝐭𝐬 𝐮𝐧𝐝𝐞𝐫 𝐈𝐧𝐜𝐨𝐦𝐞 𝐓𝐚𝐱 𝐥𝐚𝐰:
• Section 139(1) links filing to income thresholds and specific conditions, not only profit.

• Loss returns filed within due date enable carry forward of losses under sections 72, 73, 74.

• Business loss carry forward requires timely filing. Delay leads to loss of set off benefit in future years.

• Turnover based compliance still applies. Tax audit under section 44AB depends on turnover and profit ratios, not only net income.

• Banks and financial institutions often request filed returns for credit assessment, even in loss years.

𝘌𝘹𝘢𝘮𝘱𝘭𝘦:
A business reports a loss of ₹5,00,000 in FY 2025-26. If the return is filed within due date, the loss becomes eligible for set off against future profits. If filing is delayed, this benefit is lost.

Compliance is not linked only to profit. Filing preserves tax positions and supports future planning.

What is commonly missed in loss years. Carry forward rules or audit triggers?

26/07/2026

𝙁𝙞𝙡𝙞𝙣𝙜 𝙍𝙚𝙩𝙪𝙧𝙣𝙨 𝙄𝙨 𝙈𝙤𝙧𝙚 𝙏𝙝𝙖𝙣 𝙋𝙖𝙮𝙞𝙣𝙜 𝙏𝙖𝙭
𝘔𝘺𝘵𝘩: Filing is only about paying tax.
𝘙𝘦𝘢𝘭𝘪𝘵𝘺: Filing builds financial records, supports refunds, and preserves loss carry forward.

𝐖𝐡𝐲 𝐟𝐢𝐥𝐢𝐧𝐠 𝐦𝐚𝐭𝐭𝐞𝐫𝐬:
•𝙍𝙚𝙛𝙪𝙣𝙙 𝙘𝙡𝙖𝙞𝙢𝙨
TDS and advance tax often exceed final liability. Filing enables refund processing with interest under section 244A.

•𝙇𝙤𝙨𝙨 𝙘𝙖𝙧𝙧𝙮 𝙛𝙤𝙧𝙬𝙖𝙧𝙙
Business loss, capital loss, and house property loss require timely filing under section 139(1). Delay leads to loss of set off in future years.

•𝙁𝙞𝙣𝙖𝙣𝙘𝙞𝙖𝙡 𝙩𝙧𝙖𝙘𝙠 𝙧𝙚𝙘𝙤𝙧𝙙
ITR acts as income proof for loans, visas, and tenders. Lenders and institutions rely on filed returns, not informal records.

•𝘾𝙤𝙢𝙥𝙡𝙞𝙖𝙣𝙘𝙚 𝙩𝙧𝙖𝙞𝙡
Regular filing reduces scrutiny risk and supports smooth assessment proceedings.

𝘌𝘹𝘢𝘮𝘱𝘭𝘦
A trader reports a short term capital loss of ₹2 lakh in FY 2024-25 and files return on time. The loss is set off against gains in later years, reducing future tax outflow.

𝑄𝑢𝑖𝑐𝑘 𝑐ℎ𝑒𝑐𝑘:
• Return filed before due date
• All income sources reported
• TDS matched with Form 26AS and AIS
• Loss schedules filled correctly

What is the most common mistake seen in return filing, missing income, wrong TDS claim, or late filing?

19/07/2026

𝗥𝗲𝗳𝘂𝗻𝗱 𝗠𝘆𝘁𝗵 𝘃𝘀 𝗥𝗲𝗮𝗹𝗶𝘁𝘆: 𝗙𝗶𝗹𝗶𝗻𝗴 𝗗𝗿𝗶𝘃𝗲𝘀 𝗥𝗲𝗳𝘂𝗻𝗱𝘀

𝘔𝘺𝘵𝘩: 𝙍𝙚𝙛𝙪𝙣𝙙𝙨 𝙘𝙤𝙢𝙚 𝙖𝙪𝙩𝙤𝙢𝙖𝙩𝙞𝙘𝙖𝙡𝙡𝙮.
𝘙𝘦𝘢𝘭𝘪𝘵𝘺: 𝘼 𝙫𝙖𝙡𝙞𝙙 𝙧𝙚𝙛𝙪𝙣𝙙 𝙛𝙤𝙡𝙡𝙤𝙬𝙨 𝙖 𝙘𝙤𝙧𝙧𝙚𝙘𝙩𝙡𝙮 𝙛𝙞𝙡𝙚𝙙 𝙧𝙚𝙩𝙪𝙧𝙣.

Income Tax data shows a large share of pending refunds relate to returns not filed, filed late, or filed with errors in TDS and income reporting. The system processes refunds after verification of Form 26AS, AIS, and return data.

𝘒𝘦𝘺 𝘵𝘳𝘪𝘨𝘨𝘦𝘳𝘴 𝘧𝘰𝘳 𝘳𝘦𝘧𝘶𝘯𝘥 𝘥𝘦𝘭𝘢𝘺 𝘰𝘳 𝘥𝘦𝘯𝘪𝘢𝘭:
• Return not filed within due date
• Mismatch between Form 16, 26AS, and AIS
• Incorrect bank details or pre-validation failure
• Wrong selection of ITR form
• Unverified return after filing

𝗘𝘅𝗮𝗺𝗽𝗹𝗲:
Income ₹6,50,000, TDS deducted ₹75,000.
Eligible tax liability ₹62,400.
Refund ₹12,600 arises only after correct filing and verification.

𝗣𝗿𝗮𝗰𝘁𝗶𝗰𝗮𝗹 𝘀𝘁𝗲𝗽𝘀:
• Reconcile Form 16 with AIS and 26AS before filing
• Select correct ITR form based on income type
• Validate bank account on portal
• Complete e-verification within time limit

Has the return been filed and verified for FY 2025-26?

Share a Yes or No in comments.

12/07/2026

𝗧𝗵𝗲 𝗠𝗼𝘀𝘁 𝗖𝗼𝗺𝗺𝗼𝗻 𝗠𝗶𝘀𝘁𝗮𝗸𝗲 𝗜𝗻𝘃𝗲𝘀𝘁𝗼𝗿𝘀 𝗠𝗮𝗸𝗲 𝗔𝗳𝘁𝗲𝗿 𝗘𝗮𝗿𝗻𝗶𝗻𝗴 𝗣𝗿𝗼𝗳𝗶𝘁𝘀

Last week, a client walked into my office with a smile.
“Madam, this year I earned well from the stock market.”

I nodded. “Great. How much tax have you planned for it?”
Silence.

He paused… then said,
“I thought profit is profit… tax toh return mein dekh lenge.”

That’s the problem.

People are actively investing, trading, building wealth, but when it comes to taxation, there’s complete confusion.

So I explained it to him in the simplest way possible:

How your stock market income is actually taxed (FY 2025-26)
𝘓𝘰𝘯𝘨 𝘛𝘦𝘳𝘮 (𝘏𝘰𝘭𝘥𝘪𝘯𝘨 > 12 𝘮𝘰𝘯𝘵𝘩𝘴)
𝗚𝗮𝗶𝗻: 12.5% tax after ₹1.25 lakh exemption
𝗟𝗼𝘀𝘀: Can be set off against LTCG, carry forward 8 years

𝘚𝘩𝘰𝘳𝘵 𝘛𝘦𝘳𝘮 (𝘏𝘰𝘭𝘥𝘪𝘯𝘨 < 12 𝘮𝘰𝘯𝘵𝘩𝘴)
𝗚𝗮𝗶𝗻: 20% flat tax (no slab benefit)
𝗟𝗼𝘀𝘀: Set off against STCG/LTCG, carry forward 8 years

𝘐𝘯𝘵𝘳𝘢𝘥𝘢𝘺 𝘛𝘳𝘢𝘥𝘪𝘯𝘨
𝗚𝗮𝗶𝗻: Treated as speculative business income, taxed at slab rates
𝗟𝗼𝘀𝘀: Can be set off only against speculative income, carry forward 4 years

𝗣𝗹𝘂𝘀:
Dividend income and derivatives trading are taxed at normal slab rates

By the end of the discussion, he said something interesting:
“Madam, I wish someone had told me this earlier… I would have planned better.”
That hit me.

As professionals, our role is not just fili
It’s making taxation understandable for people who are trying to grow.

Because awareness is the first step of tax planning.
And honestly, it starts with simplifying it for ourselves first.

05/07/2026

𝗠𝘆𝘁𝗵: 𝗢𝗻𝗹𝘆 𝗙𝗼𝗿𝗺 𝟭𝟲 𝗶𝘀 𝗺𝗮𝗻𝗱𝗮𝘁𝗼𝗿𝘆 𝘁𝗼 𝗳𝗶𝗹𝗲 𝗮 𝗿𝗲𝘁𝘂𝗿𝗻. 𝘃𝘀 𝗥𝗲𝗮𝗹𝗶𝘁𝘆: 𝗦𝗮𝗹𝗮𝗿𝘆 𝘀𝗹𝗶𝗽𝘀, 𝗔𝗜𝗦, 𝗮𝗻𝗱 𝗯𝗮𝗻𝗸 𝗿𝗲𝗰𝗼𝗿𝗱𝘀 𝗰𝗮𝗻 𝗮𝗹𝘀𝗼 𝗵𝗲𝗹𝗽.

Form 16 Is Not the Full Picture

Last week, a salaried client shared Form 16 and expected the return to be filed in minutes.

During review, the team requested salary slips, AIS, Form 26AS, and bank statements.

The response was immediate. Form 16 already given. Why ask for more?

The detailed check told a different story.

Salary slips showed HRA, LTA, and reimbursements with tax treatment different from the final payroll summary.

AIS reflected savings interest, fixed deposit interest, and dividend income not appearing in Form 16.

Form 26AS showed TDS entries from banks which were not considered.
Bank statements confirmed interest credits and a few high value transactions.
One small capital gain entry was visible in AIS from mutual fund redemption.

Form 16 is issued by the employer. It covers salary paid and TDS deducted by that employer. It does not include income from banks, investments, or other sources.

Income Tax Act require reporting of all income. AIS and 26AS act as system level checks. Any mismatch between return data and these records can lead to automated notices.

Practical approach followed at our firm:

• Match Form 16 with AIS and Form 26AS
• Verify salary components with payslips and exemptions claimed
• Reconcile interest, dividend, and capital gains with bank and AIS data
• Review deductions under Chapter VI A with proper proof
• Cross check tax payments, TDS, and refund position

Complete data leads to accurate reporting. Accurate reporting reduces mismatch risk and future notices.

01/07/2026

Happy Chartered Accountants Day!

Today we celebrate the profession that stands for trust, discipline, accuracy, and responsibility. Chartered Accountants do more than manage numbers they help businesses grow, support compliance, and bring clarity in a constantly changing financial world.

To every CA, CA student, and finance professional, your dedication keeps the profession strong and respected. Your work may often happen behind the scenes, but its impact is felt everywhere.

Wishing all Chartered Accountants a proud and meaningful CA Day.

Hency R Shah & Associates Chartered Accountants

23/08/2026

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