Tax Law Questions and Answers in India

Tax questions in India divide between direct tax under the Income Tax Act, 1961 and indirect tax under the Central Goods and Services Tax Act, 2017 and corresponding state legislation.

The most common questions concern notices — what a Section 143(2) scrutiny notice or a Section 148 reassessment notice means and how long you have to respond — along with GST registration thresholds, input tax credit denials, TDS obligations, capital gains on property sale and the exemptions available, and the appeal route through the Commissioner (Appeals) and the Tribunal.

Not every communication from the department is an adverse action. A Section 143(1) intimation is a computational check; a Section 139(9) notice flags a defective return that can be corrected; a Section 142(1) notice asks for information. A Section 148 notice, by contrast, reopens an assessment and must be preceded by the procedure the amended law requires, which is itself frequently the ground on which reopening is challenged.

On capital gains, the distinction between short-term and long-term changes both the rate and the exemptions available. Reinvestment relief on a residential house under Section 54, and on other long-term assets under Section 54F, comes with strict timelines for purchase or construction, and with a capital gains account deposit requirement where the money is not deployed before the return due date.

Under GST, input tax credit is the recurring flashpoint. Credit depends on the supplier having actually reported and paid, on the invoice appearing in the recipient's auto-populated statement, and on the recipient paying the supplier within the prescribed period. Mismatches produce demands even where the recipient has done nothing wrong, which is why supplier compliance is a commercial issue and not only an accounting one.

Tax matters run on strict statutory deadlines. A notice ignored for the response period costs far more than the same notice answered on time.