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How to Save Capital Gains Tax on Property Sale in India

What is Capital Gains Tax on Property?

Capital Gains Tax on Property is the tax levied on profit earned from selling a residential or commercial property. The tax depends on how long you held the property before selling.

If you sell property at a price higher than your purchase cost, the profit is called Capital Gain, and it is taxable under the Income Tax Act.

Types of Capital Gains on Property

Short-Term Capital Gain (STCG)

If property is sold within 24 months of purchase:

  1. Profit is treated as Short-Term Capital Gain

  2. Taxed as per your income tax slab

Long-Term Capital Gain (LTCG)

If property is sold after 24 months:

  1. Profit is treated as Long-Term Capital Gain

  2. Taxed at 20% with indexation benefit

 

Indexation helps reduce taxable gain by adjusting purchase price with inflation.

How to Calculate Capital Gains on Property

Capital Gain = Sale Price – (Indexed Cost of Purchase + Improvement Cost + Transfer Expenses)

Example:

  1. Purchase Price: ₹40,00,000

  2. Sale Price: ₹70,00,000

  3. Indexed Cost: ₹55,00,000

Taxable Gain = ₹15,00,000

LTCG Tax @20% = ₹3,00,000 (approx.)

For accurate calculation, consult tax experts before filing.

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Exemptions to Save Capital Gains Tax

Section 54F – Invest Sale Proceeds

Applicable when selling assets other than residential property and investing in a new residential house.

Section 54EC – Invest in Capital Gain Bonds

You can invest up to ₹50 lakhs in specified bonds (NHAI / REC bonds) within 6 months to save tax.

Capital Gains Account Scheme (CGAS)

If you cannot invest before ITR filing due date, you must deposit funds in CGAS to claim exemption.

Tax Notice

Best Tax Saving Options for Salaried Employees in India (FY 2025-26)

Important Points to Remember

 

✔ Property holding period = 24 months
✔ Indexation reduces tax burden
✔ Exemptions must meet strict timelines
✔ TDS @1% applicable on property sale above ₹50 lakhs
✔ Proper documentation is mandatory

Common Mistakes to Avoid

 

  1. Not considering stamp duty value

  2. Missing exemption deadlines

  3. Incorrect indexation calculation

  4. Not depositing under CGAS

Professional guidance prevents tax notices.

Need expert tax planning assistance? Connect with verified professionals via Digihunter today.

Frequently Asked Questions

What is the capital gains tax rate on property in India?

LTCG is taxed at 20% with indexation. STCG is taxed as per income slab.

How can I avoid capital gains tax on property?

You can claim exemption under Sections 54, 54F, or invest in 54EC bonds.

What is the holding period for LTCG on property?

More than 24 months.

Is TDS applicable on property sale?

Yes, 1% TDS applies if sale value exceeds ₹50 lakh.

What is indexation benefit?

Indexation adjusts purchase price for inflation, reducing taxable gains.

Best Tax Saving Options for Salaried Employees in India (FY 2025-26)

Paying income tax is mandatory, but paying more than required is not. If you are a salaried employee, proper tax planning can legally reduce your tax liability and increase your take-home salary.

 

In this guide, we will explain the best tax saving options for salaried employees in India, along with smart strategies to maximize deductions under the Income Tax Act.

Why Tax Planning is Important for Salaried Employees?

Many salaried individuals start tax planning in February or March, which often leads to rushed investments. Instead, tax planning should begin at the start of the financial year to:

 

  1. Reduce taxable income legally

  2. Avoid last-minute investment mistakes

  3. Improve financial discipline

  4. Build long-term wealth

If you need professional assistance, you can consult experts through our

👉 https://digihunter.in/business-tax-filing/

👉 https://digihunter.in/personal-tax-filing/

Section 80C – Save Up to ₹1.5 Lakhs

 

Section 80C is the most popular tax-saving section for salaried employees. You can claim deductions up to ₹1,50,000 per financial year.

Best Investment Options Under 80C:

  1. Employee Provident Fund (EPF)

  2. Public Provident Fund (PPF)

  3. Equity Linked Saving Scheme (ELSS)

  4. Life Insurance Premium

  5. 5-Year Tax Saving Fixed Deposit

  6. Principal Repayment of Home Loan

  7. Children’s Tuition Fees

💡 Pro Tip: ELSS funds offer higher return potential with only a 3-year lock-in period.

Section 80D – Health Insurance Deduction

Medical expenses can affect your savings. Section 80D helps you save tax while securing your health.

  1. ₹25,000 deduction for self, spouse & children

  2. Additional ₹25,000 for parents (₹50,000 if senior citizens)

This is one of the smartest tax-saving options as it provides both financial protection and tax benefits.

House Rent Allowance (HRA)

If you are living in rented accommodation, you can claim HRA exemption. The exemption depends on:

  1. Actual HRA received

  2. 50% of salary (metro cities) / 40% (non-metro)

  3. Rent paid minus 10% of salary

Proper calculation ensures you maximize your exemption.

Confused about Old Tax Regime vs New Tax Regime?

Choosing the right regime can significantly reduce your tax liability.

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Section 24(b) – Home Loan Interest

If you have taken a home loan, you can claim:

  1. Up to ₹2,00,000 deduction on home loan interest (self-occupied property)

  2. Full interest deduction for rented property (with conditions)

This is highly beneficial for salaried employees owning a home.

National Pension System (NPS) – Extra ₹50,000 Deduction

Under Section 80CCD(1B), you can claim an additional deduction of ₹50,000 over and above 80C.

 

NPS helps in:

  1. Reducing current tax

  2. Building retirement corpus

  3. Long-term disciplined investment

Standard Deduction

All salaried employees automatically get a standard deduction (as per current budget provisions). This reduces taxable salary without requiring any investment.

Leave Travel Allowance (LTA)

You can claim LTA for travel expenses within India for yourself and family (as per rules). This is available twice in a block of four years.

Old Tax Regime vs New Tax Regime – Which is Better?

The right choice depends on:

 

  1. Your total income

  2. Eligible deductions

  3. Investment planning

  4. Home loan & insurance commitments

Most salaried employees with home loans and 80C investments benefit from the old regime, but calculation is essential before deciding.

 

👉 For accurate comparison and filing, check our ITR Filing Services for Salaried Employees on Digihunter.

Smart Tax Planning Tips for Salaried Employees

✔ Start tax planning in April
✔ Don’t invest only for tax saving — align with goals
✔ Maintain proper documentation
✔ Review salary structure with employer
✔ Take professional guidance

Conclusion

Tax saving is not about avoiding tax — it’s about smart financial planning. By using Sections 80C, 80D, 24(b), NPS, and HRA effectively, salaried employees can significantly reduce tax liability while building long-term wealth.

Professional advice ensures:

  1. Correct regime selection

  2. Maximum deductions

  3. Error-free ITR filing

  4. Avoidance of notices

Need expert tax planning assistance? Connect with verified professionals via Digihunter today.

FAQ Section

What are the best tax saving options for salaried employees in India?

The best options include Section 80C investments (EPF, PPF, ELSS), 80D health insurance, HRA exemption, NPS contributions, and home loan interest deduction under Section 24(b).

How can salaried employees reduce taxable income?

They can invest in tax-saving instruments, claim deductions, choose the correct tax regime, and plan investments at the beginning of the financial year.

Is the new tax regime better for salaried employees?

The new regime offers lower slab rates but removes most deductions. Employees with high deductions usually benefit more from the old regime.

Can I claim 80C and NPS together?

Yes. NPS offers an additional ₹50,000 deduction under Section 80CCD(1B) beyond the ₹1.5 lakh 80C limit.

When should salaried employees start tax planning?

Ideally in April, at the start of the financial year, to maximize savings and avoid last-minute tax-saving investments.

How to Save Income Tax in India (2026 Complete Guide)

Saving income tax legally is one of the smartest financial decisions you can make in 2026. With changing tax slabs, deductions, and investment options, proper tax planning can help you reduce liability while building long-term wealth.

 

In this complete guide, we will explain how to save income tax in India in 2026 using smart deductions, investment strategies, and regime selection.

Understanding Income Tax in India (2026)

Before planning tax savings, you must understand:

  1. Your income slab

  2. Old vs New Tax Regime

  3. Eligible deductions

  4. Investment-linked exemptions

Every financial year, taxpayers can reduce taxable income using approved deductions under the Income Tax Act.

If you are unsure about your eligibility, connecting with verified experts through Digihunter can simplify the process.

1️⃣ Choose Between Old vs New Tax Regime (2026)

One of the biggest decisions in tax planning is selecting the right regime.

Old Tax Regime

✔ Allows deductions under 80C, 80D, HRA, home loan, etc.
✔ Best for people with investments and high deductions

 

New Tax Regime

✔ Lower tax rates
✔ Minimal deductions
✔ Simpler structure

Choosing the wrong regime can increase your tax liability. Proper comparison is essential.

2️⃣ Maximize Section 80C (Up to ₹1.5 Lakhs)

Section 80C remains one of the most powerful tools to save income tax.

Eligible investments include:

  1. Public Provident Fund (PPF)

  2. Employee Provident Fund (EPF)

  3. ELSS Mutual Funds

  4. Life Insurance Premium

  5. Home Loan Principal Repayment

  6. Tax Saving Fixed Deposits

Investing ₹1.5 lakh under 80C can significantly reduce taxable income.

3️⃣ Claim Section 80D (Health Insurance Deduction)

You can claim deductions for health insurance premiums:

  1. ₹25,000 for self and family

  2. Additional ₹25,000 for parents

  3. ₹50,000 if parents are senior citizens

This not only saves tax but protects your financial stability.

4️⃣ Use Home Loan Benefits (Section 24b + 80C)

If you have a home loan:

  1. ₹2 lakh deduction on interest (Section 24b)

  2. ₹1.5 lakh on principal (80C)

This is one of the biggest tax-saving benefits available in India.

5️⃣ Claim HRA (House Rent Allowance)

If you live in rented accommodation and receive HRA, you can claim exemption based on:

  1. Salary

  2. Rent paid

  3. City of residence

Many salaried individuals miss out on proper HRA calculation, leading to higher tax.

6️⃣ Capital Gains Tax Planning

If you sold property, shares, or mutual funds in 2026, capital gains tax applies.

 

You can save tax by:

  1. Reinvesting in residential property

  2. Investing in capital gain bonds

  3. Using indexation benefits (for long term assets)

Proper planning is crucial to avoid heavy capital gains tax liability.

7️⃣ National Pension System (NPS – Extra ₹50,000 Deduction)

Under Section 80CCD(1B), you can claim an additional ₹50,000 deduction over and above 80C by investing in NPS.

 

This makes NPS one of the most tax-efficient retirement tools.

8️⃣ Standard Deduction for Salaried Employees

Salaried individuals are eligible for standard deduction under applicable tax rules, which directly reduces taxable income.

9️⃣ Tax Planning for Business Owners (2026)

If you are self-employed or run a business:

  1. Claim business expense deductions

  2. Optimize GST compliance

  3. Plan depreciation benefits

  4. Structure salary vs dividend smartly

Professional tax planning is essential for business owners to avoid penalties and overpayment.

🔟 Start Planning Before March 31

Last-minute tax saving decisions often lead to poor investment choices.

 

Smart taxpayers start planning at the beginning of the financial year.

Common Mistakes to Avoid

❌ Investing randomly in March
❌ Ignoring regime comparison
❌ Not claiming eligible deductions
❌ Poor capital gains planning
❌ Filing ITR without review

Why Professional Tax Planning Matters in 2026

Tax laws are constantly evolving. A small mistake can cost thousands.

 

Digihunter focuses specifically on tax planning and financial services — connecting you with verified experts suited to your requirement.

 

Digihunter is a financial services facilitation platform operated by
FourV Technologies Pvt Ltd, helping individuals and businesses access structured tax consultation across India.

How to Save Income Tax in India (2026)

To summarize:
 
✔ Choose the correct tax regime
✔ Maximize 80C and 80D
✔ Use home loan and HRA benefits
✔ Plan capital gains carefully
✔ Consider NPS for additional deduction
✔ Avoid last-minute investments

 

The right tax strategy can help you legally reduce liability and grow wealth smarter.

Need Expert Tax Planning Assistance?

Connect with verified financial professionals through Digihunter and make smarter tax decisions in 2026.
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Personal Tax Filing

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Tax Notice

Who is Liable to Deduct Tax Under Income Tax Act 2025

Under the new Income-tax Act, 2025, the government has streamlined the rules regarding who must deduct Tax Deducted at Source (TDS). While Companies and Partnership Firms are almost always required to deduct TDS, the rules for Individuals and Hindu Undivided Families (HUFs) depend entirely on their Turnover or Gross Receipts in the preceding year.

Here is a complete breakdown of the turnover limits that trigger TDS liability under the new law.

 

1. The General Rule: “Specified Persons” (Business & Profession)

 

For most standard business payments—such as paying contractors, commission agents, brokers, or rent for business premises—an Individual or HUF is only liable to deduct TDS if they are classified as a “Specified Person”.

 

You become a “Specified Person” if your turnover in the immediately preceding tax year exceeded the following limits:

 

  1. For Business Owners: If total sales, turnover, or gross receipts exceeded ₹ 1 Crore.
  2. For Professionals: If gross receipts from the profession exceeded ₹ 50 Lakh.

Impact: If you cross these limits, you must deduct TDS under Section 393 for payments like:

 

  1. Contractors: For work or labor supply [Table Sl. No. 6].
  2. Professionals: Fees for technical/professional services [Table Sl. No. 6].
  3. Commission/Brokerage: [Table Sl. No. 1].
  4. Rent (Business Use): For machinery, plant, or building [Table Sl. No. 2].

Compliance Form: You must file Form No. 140 (Quarterly TDS Return) for these deductions.

 

2. The “Big Buyer” Rule: TDS on Purchase of Goods

 

There is a special, higher turnover threshold for deducting TDS specifically on the purchase of goods (previously Section 194Q, now under Section 393).

 

  1. Turnover Limit: You are liable to deduct TDS only if your total sales, gross receipts, or turnover from business exceeded ₹ 10 Crore in the immediately preceding tax year.
  2. Transaction Threshold: If you meet the ₹10 Cr criteria, you must deduct 0.1% TDS when buying goods worth more than ₹ 50 Lakh from a resident seller.

 

3. The “No Turnover” Rule: High-Value Personal Payments

 

The new Act continues to catch high-value transactions by Individuals and HUFs even if they do not have a business or do not meet the audit turnover limits mentioned above.

 

In these specific cases, Turnover is Irrelevant. You must deduct TDS regardless of your business size:

 

  1. Rent for Residence: If you pay rent exceeding ₹ 50,000 per month for your residence. You must deduct 2% TDS.
  2. Buying Property: If you buy immovable property (house/land) valued over ₹ 50 Lakh. You must deduct 1% TDS.
  3. Personal Contractors/Professionals: If you pay more than ₹ 50 Lakh in a year to a contractor or professional for personal purposes.

Compliance Form: For these “No Turnover” cases, you do not need a TAN. You simply file Form No. 141 (Challan-cum-statement) using your PAN.

 

4. Summary Table: Do You Need to Deduct TDS?

 

Your StatusNature of PaymentTurnover Limit (Preceding Year)TDS Form
Individual / HUFContractors, Rent (Biz), Commission> ₹ 1 Crore (Business)> ₹ 50 Lakh (Profession)Form 140
Any BuyerPurchase of Goods (>₹50L value)> ₹ 10 CroreForm 140
Individual / HUFRent for Residence (>₹50k/pm)No Limit (Mandatory)Form 141
Individual / HUFBuying House (>₹50L value)No Limit (Mandatory)Form 141
Company / FirmAll Standard PaymentsNo Limit (Always Liable)Form 140

 

Conclusion

 

If you are a freelancer, small business owner, or salaried individual, check your receipts from the last financial year.

 

  1. Did you cross ₹ 50 Lakh (Profession) or ₹ 1 Crore (Business)? If yes, get a TAN and start deducting TDS on your business expenses.
  2. If not, you are safe from most TDS compliances, unless you are paying high rent (>₹50k/month) or buying a property.

MSME Registration online

MSME Registration Online in India – Complete Guide & Benefits

MSME registration (now known as Udyam Registration) is the process by which a business is officially recognised as a micro, small or medium enterprise by the Government of India. Upon completion:

  • You get a Udyam Registration Number and an online certificate with a QR code.

  • You don’t need to renew the registration.

  • The process is paperless and based on self-declaration.

  • It helps your business access government schemes, easier loans, subsidies, priority sector benefits, and more.

🧑‍💻 Who Can Apply?

You can apply if you are:

  • A sole proprietor, partnership firm, LLP, Company, Cooperative, Society, Trust etc.

  • Engaged in manufacturing, services, or both.

  • Meeting the MSME investment and turnover criteria (as defined in the guidelines).

✅ Documents/Details Usually Required

You’ll need:

  1. Aadhaar Number (of proprietor/partner/director)

  2. PAN (linked to business)

  3. GSTIN (if applicable based on turnover)

  4. Basic business details (name, address, activities, investment, turnover)

  5. Mobile number & email (to receive OTP and certificate)

✅Step-by-Step Guide to Register Online

  1. Visit the official Udyam Registration portal (link above).

  2. Click “New Registration”.

  3. Enter Aadhaar number and verify via OTP.

  4. Enter your PAN, GSTIN (if any), business name, address, activity type, etc.

  5. Self-declare your investment and turnover details.

  6. Submit the form.

  7. After verification, you’ll get your Udyam Registration Certificate online.

Goods and Services Tax (GST) Services in India

Private Limited Company

Startup Registration

Home

🔗 Official MSME / Udyam Registration Portal

👉 https://www.udyamregistration.gov.in/ 

This is the only authorised government portal for MSME registration; do not pay anyone for online registration — it’s free.

GSTR-7 Filing Mandatory for NIL Returns also as per Notification No. 17/2024

(Last Updated On: December 5, 2024)

Advisory on mandatory Sequential Filing of GSTR-7 Returns as per Notification No. 17/2024

Dec 4th, 2024.

 

Multiple tickets have been received regarding sequential filing of return in Form GSTR-7. Taxpayers are referencing FAQs for the same, wherein “it is not mandatory” is mentioned.

 

To clarify, It is to inform that following changes have been introduced in the return filing process for GSTR-7 with effect from 01.11.2024 onwards.

Sequential Filing of GSTR-7:

As per Notification No. 17/2024-Central Tax, dated 27th September 2024, effective from the 01.11.2024, GSTR-7 filing has been made sequential from the October tax period. Hence, GSTR-7 return is to be filed in chronological order, beginning with the return period of October 2024. It is pertinent to mention that for a month in which no deduction have been made, deductors need to file NiL return for the same month.

 

For any further assistance, taxpayers may contact the GST helpdesk.

 

Thanking You,
Team GSTN

High Risk Transaction (Pan and Non-PAN) cases AY 2023-24 new Guidelines

Directorate of Income Tax (Systems),
ARA Centre, Ground Floor, E-2 Jhandewalan Extension,
New Delhi-110055

Insight Instruction No. 74 Date. 19.01.2024

No. DGIT(S)-ADG(S)-2l

High Risk Transaction (Pan and Non-PAN) cases/2023-24

To,
All Principal Chief Commissioner(s) of Income Tax/ CCsIT
All Principal Director Generals(s) of Income Tax / DGsIT
All Principal Commissioner(s) of Income Tax/ CsIT/ CsIT (Admin & TPS)/ CsIT (TDS)
All Principal Director (s) of Income Tax / DsIT

 

Sir / Madam,

Sub: Dissemination of High-Risk transaction and High-Risk Non-PAN Transaction cases on the Verification module of Insight portal — reg.

Kindly refer to the above.

  1. The Board approved Risk Management Strategy (Cycle-3) has been executed for the identification of potential cases for action u/s. 148/148A of the Income Tax Act, 1961.
  2. In this regard, potential cases pertaining to AY 2017-18 to AY 2020-21 identified on the basis of risk assessment of verification reports uploaded in the STR module, have been disseminated to field formations with below mentioned case types on the Verification module of the Insight portal.
S. No.Case typeCase assigned to
a)High-Risk TransactionJAG
b)High-Risk Transaction (Non-PAN)Pr. CCIT(CCA)
  1. Navigation path for accessing these cases is Insight Portal >> Verification Module >> Verification stage >> “Case type” (Under verification).
  2. For the case type “High Risk Transaction”, users can initiate proceedings u/s 148/148A from the activity panel on the case detail screen to create a worklist pendency of cases u/s 148/148A on the Assessment module of ITBA. Subsequent proceedings/activities can be performed on the ITBA portal in the usual manner. [For Non-PAN Cases proceedings may be initiated as per instruction no. F.No.225/40/2021/ITA-II Dated 26.03.2021]
  3. Underlying Information related to the case, mentioned in para 5 above, has been made visible in the Profile View of Insight Portal. Navigation path for accessing the underlying information is Insight Portal >> Taxpayer Profile View >> Taxpayer Annual Summary (TAS) » Information >> Uploads.
  4. For the case type “High Risk Transaction (Non-PAN)”, the underlying Information and documents related to these cases can be viewed by clicking on the hyperlink under `Non-PAN Entity Id’.
  5. In this regard, appropriate action may be initiated in accordance with the relevant provisions u/s 148/148A of the Income-tax Act, 1961 and directions issued by the Board in this regard.
  6. In case of technical difficulty, users may contact:

(i) Helpdesk number — 1800-103-4216 or

(ii) Write to helpdesk@insight.gov.in.

Yours faithfully,

 

(Manish Mishra)


Addl. Director General (Systems)-2

 

Copy to:

 

  1. PPS to Chairman, Member (IT &Rev), Member (S&FS), Member (L), Member (TPS), Member (A&J), Member (Admn.) CBDT and DGIT (Systems)-2, New Delhi for information.
  2. Nodal Officer of irsofficersonline.gov.in, DG systems corner, ITBA, Insight i-Library.

GST Notice not valid if date of Personal Hearing not mentioned : High Court

HIGH COURT OF MADHYA PRADESH

Concord Tieup (P.) Ltd.

v.

State of Madhya Pradesh

SHEEL NAGU AND DWARKA DHISH BANSAL, JJ.

WRIT PETITION NO.26956 OF 2022

APRIL  25, 2023

Sanjay Mishra, Adv. for the Petitioner. Darshan Soni, Adv. for the Respondent.

 

ORDER

Dwarka Dhish Bansal, J.– By way of this writ petition under Article 226 of the Constitution of India, challenge has been made to the order dated 24.08.2022 (Annexure P/4) passed under section 74 of the MPSGST/CGST Act, 2017 and section 20 of IGST Act, 2017 by Deputy Commissioner, Audit Wing, Jabalpur upholding the tax, interest and penalty mentioned in the show cause notice dated 22.07.2022 (Annexure P/3).

Learned counsel for the petitioner submits that upon issuance of notice/intimation of tax ascertained as being payable under Section 74(5) of the M.P.G.S.T. Act (in short “the Act”), reply was submitted on 23.06.2022, thereafter show cause notice under Section 74 of the Act dated 22.07.2022 (Annexure P/3) was issued making mention about personal hearing to the effect that “you may appear before the undersigned for personal hearing either in person or through authorized representative for representing your case on the date, time and venue, if mentioned in table below”, but no date, time and venue for personal hearing was shown in the notice. He submits that as per Section 75(4) of the Act, before passing the impugned order, personal hearing was necessary, which is mentioned in the notice itself, as such in absence of personal hearing, the order dated 24.08.2022 (Annexure P/4) is not sustainable. In support of his submissions, he placed reliance on the coordinate Bench decision of Allahabad High Court in the case of Bharat Mint & Allied Chemicals Vs. Commissioner of Commercial Tax, 2022 (59) G.S.T.L. 394 (All.). The relevant paragraphs of which are quoted as under:-

5. We have carefully considered the submissions of learned counsel for the parties.

Question

The two question involved in this writ petition are as under :-

  1. We have perused the show cause notice dated 09.09.2021 in which it has been mentioned as under:

“You may appear before the undersigned for personal hearing either in person or through representative for representing your case on the date, time and venue, if mentioned in the table below.”

  1. In the table below the aforementioned lines, date, time and venue of personal hearing has not been mentioned. Section 75(4) of the Act, 2017 provides that opportunity of personal hearing shall be granted where a request is received in writing from the person chargeable with tax or penalty or where any adverse decision is contemplated against such person.
  2. Section 75(4) of the Act, 2017 reads as under:

“An opportunity of hearing shall be granted where a request is received in writing from the person chargeable with tax or penalty, or where any adverse decision is contemplated against such person.”

    1. From perusal of Section 75(4) of the Act, 2017 it is evident that opportunity of hearing has to be granted by authorities under the Act, 2017 where either a request is received from the person chargeable with tax or penalty for opportunity of hearing or where any adverse decision is contemplated against such person. Thus, where an adverse decision is contemplated against the person, such a person even need not to request for opportunity of personal hearing and it is mandatory for the authority concerned to afford opportunity of personal hearing before passing an order adverse to such person.”
    2. Learned counsel appearing for the respondents supports the impugned order and prays for dismissal of the writ petition, although has failed to justify the impugned order on the ground of non-affording of personal hearing to the petitioner. However, he submits that the petitioner has alternative remedy of appeal against the impugned order, therefore, no interference is warranted in the limited scope of Article 226 of the Constitution of India.
    3. Heard learned counsel for the parties and perused the record.
  1. The show cause notice dated 22.07.2022 (Annexure P/3) issued under Section 74 of the Act, itself shows that before passing final order dated 24.08.2022 (Annexure P/4), the intention of the respondents was to give personal hearing to the petitioner as required under the law, but in the table given below, captioned as “Details of personal hearing etc.”, no Date, Time and Venue of personal hearing has been shown and in front of columns 3,4&5 of Date, Time and Venue, NA has been mentioned, which is sufficient to infer that no personal hearing was given to the petitioner before passing the impugned order dated 24.08.2022.
  2. So far as argument raised by counsel for the respondents regarding availability of alternative remedy of appeal, is concerned, it is well settled that when due opportunity of hearing, as required under the law, has not been afforded and principle of natural justice has not been followed, then the question of availability of alternative remedy does not come in the way for exercising jurisdiction under Article 226 of the Constitution of India.
  3. In view of the aforesaid and following the law laid down by the co-ordinate Bench of Allahabad High Court in the case of Bharat Mint & Allied Chemicals (supra), the impugned order is not sustainable and deserves to be and is hereby quashed and the matter is remitted back to the Deputy Commissioner, Audit Wing, Jabalpur for passing order afresh, after giving personal hearing to the petitioner as indicated above.
  4. Resultantly, writ petition succeeds and is allowed. No order as to the costs.
  5. Interim application(s), if any, shall stand disposed off.

GST Number can not be denied if t two persons have been carrying on their business in same premises : High Court

HIGH COURT OF MADRAS
Bio Med Ingredients (P.) Ltd.
v.
Assistant Commissioner (ST) / Commercial Tax Officer*
KRISHNAN RAMASAMY, J.
W.P. NO. 28811 OF 2023
W.M.P. NO. 29632 OF 2013
NOVEMBER 1, 2023

Ms. Aparna Nandakumar for the Petitioner. Ms. Amrita Dinakaran for the Respondent.


ORDER


1. When the matter was taken up for hearing on an earlier occasion, i.e. on 13-10-2023, this Court has passed the following order:-
“This petition has been filed by the petitioner seeking to call for the records of the impugned order in Form – GSTREG05 in Ref. No. ZA330923068624C dated 15-9-2023 and quash the same.
(A). Ms. Amrita Poonkodi Dinakaran, learned Government Advocate takes notice for the respondents.
(B). Learned counsel for the petitioner submitted that the petitioner-Company initially submitted an application for GST registration on 31-7-2023 and the same was rejected by the 1st respondent without assigning any reason. Therefore, the petitioner Company once again applied for GST registration on 22-8-2023, which was also came to be rejected stating that both the lessor and lessee have been running business in the same premises, which was not acceptable.
(C). She would further submit that the petitioner has been running its business in the same land which comprised to an extent of three acres. The respondents without conducting any physical verification had erroneously rejected the application of the petitioner Company and hence, the present writ petition has been filed.
(D). Learned Government Advocate appearing for the respondents seeks some more time to get instructions and file counter.
(E). Considering the above submissions, this Court directs the respondents to visit the petitioner Company and find out as to whether the petitioner is carrying on business separately in a portion of land or not and report the same before this Court in the next date of hearing.
(F). Post the matter on 31-10-2023. 
2. The learned Government Advocate appearing for the respondents would submit that in compliance of the above said direction, the officials of the respondent-Department visited the petitioner’s place of business and during such visit they found that two persons have been carrying on their business in the same premises with two separate GST Numbers and there is no demarcation of the properties referred by the petitioner.
3. Refuting the same, learned counsel for the petitioner would submit that though in the place, where, the petitioner is going to conduct the business, exists some other Company being run by some other person, however, the properties have been demarcated and in regard to such demarcation, records are available and the same would be filed before this Court.
4. In view of the rival submissions made by the petitioner, this Court in the interest of justice is inclined to pass the following order:-

     (i) In the event, the property referred to by the petitioner, where, the Petitioner-Company is going to run its business either demarcated or not, the respondents are directed to issue GST registration number to the petitioner within one week from the date of receipt of a copy of this order. In case, if there is no demarcation of the property, the petitioner-Company is directed to demarcate the property within a period of one (1) week time from the date of issue of GST number.
    (ii)The petitioner shall demarcate the property and file the demarcation report on 27-11-2023.
5. With the above direction, this Writ Petition stands disposed of. No costs. Consequently, connected Miscellaneous Petition is closed.
6. List the case before this Court on 27-11-2023 for Reporting Compliance of this order by both parties.

CBIC Instruction No. 05/2023-GST Section 74(1) cannot be invoked merely on account of non-payment of GST

Judgment of the Honourable Supreme Court in the case of Northern Operating Systems Private Limited (NOS).

Instruction No. 05/2023-GST

F. No. CBIC-20004/3/2023-GST

Government of India Ministry of Finance

Department of Revenue

Central Board of Indirect Taxes and Customs

GST Policy Wing

New Delhi, dated the 13th December 202

 

To, All the Principal Chief Commissioners / Chief Commissioners / Principal Commissioners /Commissioners of Central Tax All the Principal Directors General/ Directors General of Central TaX

Madam/Sir,

 

Subject: Judgment of the Hon’ble Supreme Court in the case of Northern Operating Systems Private Limited (NOS).

Attention is invited to the Hon’ble Supreme Court’s judgment dated 19.5.2022 in the case of CC, CE & ST, Bangalore (Adj.) etc. Vs. Northern Operating Systems Private Limited (NOS) in Civil Appeal No. 2289-2293 of 2021 on the issue of nature of secondment of employees by overseas entities to Indian firms and its Service Tax implications. Representations have been received in the Board that, subsequent to the aforesaid judgment, many field formations have initiated proceedings for the alleged evasion of GST on the issue of secondment under section 74(1) of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as the ‘CGST Act’).

2.1The matter has been examined by the Board. It appears that the Hon’ble Supreme Court in its judgment inter-alia took note of the various facts of the case like the agreement between NOS and overseas group companies, and held that the secondment of employees by the overseas group company to NOS was a taxable service of ‘manpower supply’ and Service Tax was applicable on the same. It is noted that secondment as a practice is not restricted to Service Tax and issue of taxability on secondment shall arise in GST also. A careful reading of the NOS judgment indicates that Hon’ble Supreme Court’s emphasis is on a nuanced examination based on the unique characteristics of each specific arrangement, rather than relying on any singular test.

2.2Hon’ble Supreme Court in the case of Commissioner of Central Excise, Mumbai Versus M/s Fiat India(P) Ltd in Civil Appeal 1648-49 of 2004 has given the following observation- “ 66. ………..Each case depends on its own facts and a close similarity between one case and another is not enough because either a single significant detail may alter the entire aspect. In deciding such cases, one should avoid the temptation to decide cases (as said by Cardozo) by matching the colour of one case against the colour of another. To decide, therefore, on which side of the line a case falls, the broad resemblance to another case is not at all decisive.”

2.3It may be relevant to note that there may be multiple types of arrangements in relation to secondment of employees of overseas group company in the Indian entity. In each arrangement, the tax implications may be different, depending upon the specific nature of the contract and other terms and conditions attached to it. Therefore, the decision of the Hon’ble Supreme Court in the NOS judgment should not be applied mechanically in all the cases. Investigation in each case requires a careful consideration of its distinct factual matrix, including the terms of contract between overseas company and Indian entity, to determine taxability or its extent under GST and applicability of the principles laid down by the Hon’ble Supreme Court’s judgment in NOS case.

3.1 It has also been represented by the industry that in many cases involving secondment, the field formations are mechanically invoking extended period of limitation under section 74(1) of the CGST Act.

3.2 In this regard, section 74 (1) of CGST Act reads as follows: “(1) Where it appears to the proper officer that any tax has not been paid or short paid or erroneously refunded or where input tax credit has been wrongly availed or utilized by reason of fraud, or any wilful-misstatement or suppression of facts to evade tax, 

3.3 From the perusal of wording of section 74(1) of CGST Act, it is evident that section 74(1) can be invoked only in cases where there is a fraud or wilful mis- statement or suppression of facts to evade tax on the part of the said taxpayer. Section 74(1) cannot be invoked merely on account of non-payment of GST, without specific element of fraud or wilful mis-statement or suppression of facts to evade tax. Therefore, only in the cases where the investigation indicates that there is material evidence of fraud or wilful mis-statement or suppression of fact to evade tax on the part of the taxpayer, provisions of section 74(1) of CGST Act may be invoked for issuance of show cause notice, and such evidence should also be made a part of the show cause notice.

4.The above aspects may be kept in consideration while investigating such cases and issuing show cause notices.

5. Difficulties, if any, in implementation of these instructions may be informed to the Board (gst-cbec@gov.in)
 
(Sanjay Mangal)
Principal Commissioner (GST) Copy to:
1.The Joint Secretary, GST Council Secretariat, New Delhi, for circulating the same to all States/ UTs for information and necessary action at their end.
2.Webmaster, CBIC (for uploading under ‘Instructions’ on www.cbic.gov.in).