Tax updates

*Zero Tax up to Rs. 12.75 Lakh, But Short-Term Capital Gains Aren't Exempt! 🚨*

The Union Budget 2025 has brought relief to salaried individuals, exempting income up to Rs. 12.75 lakh from tax under Section 87A. However, there's a catch - Short-Term Capital Gains (STCG) on equity shares or mutual funds aren't eligible for this rebate and are taxed at a flat 15% rate.

*Key Points:*

- *Section 87A Rebate*: Applies only to income taxed under normal slab rates, not special rate incomes like STCG, LTCG, or business income.
- *STCG Taxation*: Taxed at 15% flat rate, regardless of total income or 87A rebate eligibility.
- *Examples*:
- Salary: Rs. 10 lakh + STCG: Rs. 2 lakh = Tax on STCG: 15% of Rs. 2 lakh = Rs. 30,000.
- Only STCG: Rs. 4 lakh = Tax: 15% of Rs. 4 lakh = Rs. 60,000 + cess.
- *Why Excluded?*: Prevents misuse, ensures fair tax revenue, and maintains market discipline.

*Implications:*

- Salaried individuals with no trading income benefit from zero tax up to Rs. 12.75 lakh.
- Investors and traders must pay STCG tax separately, without rebate benefits.

Consult a tax expert for personalized advice.

MCA Cracks Down on Non-Compliance: ₹2.5 Lakh Penalty for Missing Business Commencement Declaration.
The Ministry of Corporate Affairs (MCA) has imposed a penalty of ₹2.5 lakh on a private limited company and its directors for failing to file the mandatory 'Declaration for Commencement of Business' (Form INC-20A) within the prescribed time. This declaration is required under Section 10A of the Companies Act, 2013, for companies with share capital, and must be filed within 180 days from incorporation .

*Case Details*
- The company, incorporated over a year ago, failed to file Form INC-20A, violating statutory compliance norms.
- The Registrar of Companies (RoC) invoked Section 10A read with Section 454 of the Companies Act, 2013, to impose penalties for such defaults.

*Penalties Imposed*
- *Company Penalty*: ₹50,000 for failure to comply with Section 10A.
- *Officers in Default*: ₹1,00,000 each on both directors, totaling ₹2,00,000.
- *Total Penalty*: ₹2.5 lakh.

*Key Takeaways*
- Companies must strictly adhere to post-incorporation compliance, especially timely filing of Form INC-20A.
- Failure to comply may result in hefty penalties and even disqualification of directors in extreme cases.
- The penalty must be paid individually via e-payment on the MCA portal within 90 days.