Theme: Money & Property

Who has to file Income Tax?

It is mandatory for every person to pay Income-tax. Income tax law defines the term ‘person’(( Section 2(31), Income Tax Act, 1961)) to include:

  • Individual. For example, a salaried employee etc.
  • Hindu Undivided Families (HUF). For example, a HUF including the joint family of Mr Rakesh, Mrs Rakesh and their sons pays tax as a separate entity.
  • Association of persons or body of individuals. For example, a housing cooperative society.
  • Firms. For example, a firm called TaxMann & Co-owned by Mr Rakesh and Mrs Rakesh.
  • LLPs. For example, ABC LLP. In an LLP, each partner is not responsible or liable for another partner’s misconduct or negligence.
  • Companies. For example, ABC Ltd., XYZ Ltd.
  • Local authority and any artificial juridical person not covered under any of the above. For example, University and Institutions, Municipal Corporations, etc.

Thus, from the definition of the term ‘person’, it can be observed that, apart from a natural person, i.e., an individual, other artificial entities like a company, HUF, etc. are liable to pay Income-tax. All association of persons, body of individuals, local authority, artificial juridical person will have to pay income tax even if they were formed with or without the objective of earning a profit, or income. (( Exception to Section 2(31), Income Tax Act, 1961)) However, certain institutions or entities in India do not have to pay tax under the law. Read here to find out more.

Precautions to be taken while renting a House

You must take certain precautions while renting a house. While trying to enter into an agreement to rent a house/flat, often the legal procedures for rent are not followed properly.

However, since it is a contract and involves an exchange of property and money it is important to understand the following while going through the processes of renting:

Your relationship with your landlord/licensor/tenant/licensee is a contractual relationship. This means that your legal relationship is based on negotiation and establishing clear terms.

However,

The principle of negotiation and establishing clear terms applies to both types of agreements, irrespective of these protections that are available.

You should ensure that you keep proof of what has been agreed upon or of any payments that have made.

This can be done by:

  • Having a written copy of an agreement
  • Having in writing anything discussed verbally either on paper/Whatsapp/Email/Messages (if possible) and
  • Keeping receipts for any payments (if possible)

This ensures that if any person disputes any payment or agreed terms you can show proof the payment of agreed terms.

Appointing an Executor for a Will

The person to whom you give the duty of carrying out the instructions given in your will, after your death, is called the executor of the will.

You can appoint any person who is of sound mind and who is above 18 years of age to be your executor. You must choose a person with whom you have full confidence and who is willing and capable of acting as the executor.

When you haven’t appointed an executor in your will, the court has the power to appoint an administrator who will execute your will.

Encash a cheque

Follow these steps to encash a cheque.

Analyse the type of cheque that has been issued to you.

Bearer Cheque

If it is a bearer cheque, then there will be no name written on the cheque. You can:

  • Go to any branch (in the city) of the bank that the cheque belongs to
  • Present it for clearance
  • The bank teller, will verify the details on the cheque and clear it
  • The cheque will be cleared then and there and you will get the cash

Order Cheque

If it is an order cheque it will have your name written on it. You can:

  • Go to any branch in the city of the bank that the cheque belongs to and
  • Present it for clearance
  • The bank teller, will verify the details on the cheque and clear it -The cheque will be cleared then and there and you will get the cash

Account Payee Cheque

If it’s an account payee cheque, then write your name, your account number and contact number at the back of the cheque, fill the deposit slip and exercise any of the following options.

Bank/ATM Dropbox Deposit

You can either go to an ATM of your bank or directly go to any branch of your bank where you have an account.

If the ATM of your bank has cheque deposit slips and a drop box, the most convenient option is to do the following:

  • Fill in the cheque deposit slip. A deposit slip has two parts; the smaller part that you fill and keep with yourself and the bigger part that you fill and deposit in the drop box, along with your cheque.
  • Tear your portion of the slip and keep it with yourself
  • Pin the cheque and other part of the deposit slip
  • Drop in into the ATM dropbox.

However, with this dropbox option, you will not receive an acknowledgement from the Bank of the receipt of your cheque and deposit slip. This means that if the cheque is lost by any chance, you will not be able to find out about the status of the cheque from the bank. However, you can still stop your cheque through internet banking or by writing a letter to the Bank.
If the ATM of your bank branch does not have the dropbox facility, then you have to go to the bank and drop the cheque. The detailed procedure is given below.

ATM Deposit

Some ATM’s have the option to deposit the cheque in the ATM machine itself. Please follow the procedure set out in the machine and deposit it accordingly.

Bank Deposit
  • Fill a cheque deposit slip
  • Get the appropriate cheque deposit slip form amongst the various slips that are usually kept at the dropbox area of the branch. Make sure you have the proper slip.
  • Carefully fill in your bank account number, branch name, cheque amount etc. – Sign at the appropriate place. Also fill in details of the cheque, such as cheque number, bank from which the cheque is drawn, amount, date on which such cheque was drawn etc. Make sure that you fill in these details in the relevant places.
  • Tear your portion of the slip, pin both cheque and the other part of the slip and drop them in the dropbox.

Types of Consumer Complaints

Every person has a right to file the following types of consumer complaints under consumer protection law:

E-commerce complaints

“E-commerce” means buying or selling goods or services (including digital products) over digital or electronic networks(( Section 2(16), Consumer Protection Act, 2019.)). It includes the production, distribution, marketing, sale or delivery of goods and services by electronic means (( Electronic Commerce, WTO, accessed at https://www.wto.org/english/thewto_e/minist_e/mc11_e/briefing_notes_e/bfecom_e.htm#:~:text=Electronic%20commerce%2C%20or%20e%2Dcommerce,and%20services%20by%20electronic%20means%22.&text=These%20WTO%20bodies%20were%20instructed,WTO%20agreements%20and%20e%2Dcommerce.)). 

E-commerce entities, such as online shopping websites like Flipkart (( Ajay Kumar v. Flipkart Internet Private Limited, 2018 SCC OnLine NCDRC 549.)) and Amazon(( Kent RO Systems v. Amazon Seller Services, 2017 SCC OnLine Del 8016.)) , have long been treated as service providers who work for a profit(( Rediff.Com India Limited v. Ms. Urmil Munjal, 2013(2) C.P.C. 536.)). They have been held liable whenever there has been a violation of consumer rights. One of the major reforms brought about by the Consumer Protection Act, 2019 is that it lays down a set of rules to govern these e-commerce entities(( Consumer Protection (E-Commerce Rules), 2020.)):

  • E-commerce entities will have to respond within 48 hours of complaint.
  • Complaints can be made from any place, regardless of where the purchase was made.
  • E-commerce entities such as Amazon, Flipkart, are now required to display the details of the sellers, such as their legal name, geographic address, contact details, etc.
  • These entities must not directly or indirectly manipulate the goods’ prices, and must not adopt any unfair or deceptive methods of sale.
  • They are prohibited from exaggerating the qualities of a product, and posting fake reviews.
  • The law mandates the protection of consumers’ personal information so that personal details are kept confidential and the privacy of consumers is protected.

Complaints about misleading advertisements 

An advertisement is a promotion through television, radio, or any other electronic media, newspapers, banners, posters, handbills, wall-writing etc. A misleading advertisement says untrue things about the goods and services, which can mislead the consumer in  buying them(( Misleading Advertisements, Department of Consumer Affairs, accessed at https://consumeraffairs.nic.in/more/misleading-advertisements. These advertisements may make false claims about a product or services’ usefulness((Section 2(47)(f), Consumer Protection Act, 2019)) , quality and quantity(( Section 2(28)(ii), Consumer Protection Act, 2019)), or deliberately conceal important information about the product(( Section 2(28)(iv), Consumer Protection Act, 2019)) (such as known side-effects), etc. Advertisers can be sued for making misleading claims in their advertisements. These include claims of being the first toothpaste to have a certain beneficial composition when it actually isn’t(( Colgate Palmolive (India) Ltd. v. Anchor Health & Beauty Care P. Ltd., (2008) 7 MLJ 1119.)), or advertising schemes that seek to increase profits without passing on the benefit to the consumers(( Society of Catalysts v. Vodafone Essar Mobile Services Limited, LNIND 2008 SCDRCD 962.)), etc. 

Complaints about unfair trade practices

Unfair trade practices have a broad definition under the consumer protection law. They include false statements about the goods’ standard, quality and quantity, and the marketing of used/second-hand goods as new goods. It also includes false claims about a warranty, or the warranty period being scientifically untested, etc. This has resulted in several lawsuits, one involving a noodle-maker labelling its packets with false lead content(( M/S Nestle India Limited v. The Food Safety and Standards Authority of India, W.P. L. No. 1688 of 2015.)), replacing the labels of pharmaceutical drugs to extend the expiry period(( Pooja Roy v. Krishnango Bhattacharya, C.R.R 2796 of 2008, Calcutta H.C.)), marketing adulterated goods with different ingredients than stated on the label(( Consumer Guidance Society v. Amway India Enterprises, (2007) C.C 140 of 2007.)), etc.

Complaints about restrictive trade practices

Restrictive trade practice means a trade practice which tends to manipulate the price, or delivery, of goods, which affect the flow of supplies in the market. This leads to the consumers facing unfair costs or restrictions. This is usually done in some of the following ways: price fixing, dealing exclusively, restricting the resale values of sold goods, mandating that buying one good or service entails buying other goods or services. One real-life example of this is the inbuilt price of delivery and fixing electronic goods. This ensures that the consumer ends up paying for the service, whether they want to or not, making them bear unfair costs.

Complaints about defective goods

Defective goods are goods(( Sections 2(10) and 2(11), Consumer Protection Act, 2019.)) with any fault, imperfection or shortcoming in the quality, quantity, purity or standard which is required to be maintained by the seller, under the law in force. Some examples are adulterated or imperfectly brewed beverages, malfunctioning machinery, misshapen artifacts, etc.

Complaints about spurious goods

Spurious goods are those which are falsely claimed to be genuine(( Section 2(43), Consumer Protection Act, 2019)) or are fake or imitative of real, original goods. These are often of inferior quality and infringe upon the trademarks and copyrights of legal owners of the original goods. A crucial example is that of medicines or cheap make-up products found in local markets. Often, spurious medicines are marketed under another drug’s name, or imitate/substitute another drug in a deceptive way(( Drugs and Cosmetics FAQs, Integrated Grievance Redressal Mechanism, accessed at https://consumerhelpline.gov.in/faq-details.php?fid=Drugs%20and%20Cosmetics.)).

Charging above the MRP (Maximum Retail Price)

Overcharging generally occurs in covert ways, when sellers charge the consumer more than what is prescribed as the Maximum Retail Price of a product. It is a gross violation of consumer rights.

Complaints about food

Presently, the law also addresses grievances related to food products. For example, customers can file their grievances about packaged food like the presence of adulterant, expired goods, missing FSSAI license, etc. or serving issues like the lack of hygiene, presence of pests, etc. at the Food Safety Connect Portal.

 

Who can complain?

A complaint (( Section 2(6), Consumer Protection Act, 2019.)) about a product or service can be filed by (( Section 2(5), Consumer Protection Act, 2019.)) a number of persons under the law, such as:

  • People who buy goods or use services for themselves or for their own work in exchange for a payment. (( Section 2(7),The Consumer Protection Act, 2019 (Act 35 of 2019)) For example, if a person takes an Uber cab to work, they are a consumer of a service. If a person buys a car to use it as a taxi and drives it themselves for earning their livelihood, they are a consumer of goods.
  • People who use the goods and services with the permission of the buyer who bought such goods for self-consumption or self-employment in exchange of a payment. For example, if a person buys a soap and that soap is used by their family members. All these people are consumers of the soap and can file a complaint in case of any defect in the soap.
  • A person who buys goods for commercial purposes can file a complaint during the warranty period of the goods (( Super Computer Centre vs Globiz Investment Pvt. Ltd., 3 (2006) CPJ 256 NC)). For example, if a person buys a computer system for their company and finds any defect in the system within the warranty period of the system, they will be a consumer.
  • Multiple consumers (( Section 2(7), Consumer Protection Act, 2019.)) who share similar grievances or issues. For example, if multiple people wish to complain about the service standards at a restaurant.
  • A registered or recognized voluntary association of consumers (( Section 35(1)(b), Consumer Protection Act, 2019.)) can also file a complaint.
  • Legal guardian of a consumer who is a minor. Legal guardian includes a parent or a relative or a person lawfully bestowed with parental obligations.
  • Legal representative of a consumer in case the consumer has passed away.
  • The Central or State Government can file a complaint.
  • The Central Consumer Protection Authority can take notice of a consumer grievance under the direction of the Central Government(( Section 18(2)(a), Consumer Protection Act, 2019.)). Under the law, this is known as the power to take a case suo motu (on its own) 8(( Section 18(2)(a), Consumer Protection Act, 2019.)).

Banks’ responsibility to prevent Online Bank Fraud

Banks must ask their customers to mandatorily register for SMS alerts for electronic banking transactions. Wherever available, they must ask their customers to register for e-mail alerts, for electronic banking transactions.

The SMS alerts shall mandatorily be sent to the customers, while email alerts may be sent, wherever registered in the event of an electronic banking transaction. To facilitate the customers to report any unauthorized use of their electronic banking services, banks must provide customers with 24×7 access through multiple channels (at a minimum, via website, phone banking, SMS, e-mail, Instant Voice Response, a dedicated toll-free helpline, reporting to home branch, etc.) for reporting unauthorised transactions that have taken place and/ or loss or theft of payment instrument such as card, etc. Banks have to also enable customers to instantly respond by ‘Reply’ to the SMS and e-mail alerts so that the customers are not required to search for a web page or an e-mail address to notify the objection to an electronic transaction.

Banks have to also provide a direct link for lodging the complaints, with specific option to report unauthorised electronic transactions on the home page of their website. The loss/ fraud reporting system should ensure that immediate response (including auto response) is sent to the customers acknowledging the complaint along with the registered complaint number. The banks must record the time and date of delivery of the alerts and receipt of customer’s response, if any.

The banks cannot offer the facility of electronic transactions, other than ATM cash withdrawals, to customers who do not provide mobile numbers to the bank. On receipt of report of an unauthorised transaction from the customer, banks must take immediate steps to prevent further unauthorised transactions in the account.

How do I address a land measurement dispute?

If there is a dispute between owners who have land next to each other about the measurements of their plots, they can resolve it by getting assistance from the government surveyor to conduct a joint survey. The ownership documents and the information in the revenue records have to be looked into while settling such a dispute. You can find them in the Record of Rights (RoR) at your local tehsildar’s office or online, if the state has digitized RoRs available. Any encroachment by one party on the land of another has to be removed. For instance, such encroachments may consist of building a fence that trespasses into another’s property, extending a building beyond one’s own property boundaries, overhanging tree branch protruding into neighbors’ property which could potentially cause injury/damage, etc.

If that is not done, the aggrieved party can go to court.

Is it more beneficial to register an immovable property on a woman’s name?

Yes, it is more beneficial to register an immovable property on a woman’s name, as many states and banks have introduced financial benefits for women buying property. As a result, buying property in a woman’s name can bring many advantages such as:

Income Tax Returns or Forms (ITR)

An Income Tax Return (ITR) is a form through which the details of income earned by a person in a financial year, and taxes paid on such income are communicated to the Income Tax Department.

Depending on the nature and status of income, different ITR forms are prescribed for different classes of taxpayers.(( Rule 12, Income Tax Rules, 1962)) Every taxpayer has to file tax returns under one specific ITR form only, and you have to choose the ITR form applicable to you. Filing the wrong ITR form will be considered as incorrect and defective.

Income Tax Forms

ITR forms can be downloaded on the Income Tax Department website. You will receive an Acknowledgement Form from the Income Tax Department when the data of the Return of Income in Forms ITR-1 (SAHAJ), ITR-2, ITR-3, ITR4 (SUGAM), ITR-5, ITR-6, ITR-7, is both filed and verified.

ITR-1 (SAHAJ)

Individuals residing in India having a total income of up to 50 lakh have to file this ITR Form. You are a resident if you have lived(( Section 6, Income Tax Act, 1961)):

  • in India for at least 182 days in the previous year
  • in India for at least 365 days in the four years before the previous year, and in India for at least sixty days in the previous year

You have to fill this form when the source of the income is from your:

  • Salary or pension
  • One house property
  • Other sources like interest etc. (not including lottery winnings, income from race horses etc.)
  • Agricultural income up to Rs 5,000

If you are a person who is not residing in India, or a director in a company,(( ITR-1, Income Tax Department website, available at https://www.incometaxindia.gov.in/forms/income-tax%20rules/2020/itr1_english.pdf)) or a person who has income from any source outside India, the ITR-1 form is not applicable.

ITR-2

This form is applicable to:

For example, if Rama is a director in a company, then she will have to file tax returns under ITR-2, because she is not covered under ITR-1. Further, you have to fill this form when the source of the income is from your:

  • Capital gains
  • More than one house property
  • Foreign income/foreign assets

ITR-3

This form is only applicable to:

  • An individual or a Hindu Undivided Family (HUF) to whom forms ITR-1, ITR-2, and ITR-4 are not applicable, and
  • Whose income comes from profits and gains of a business or profession.

For instance, if Shyam is a partner at a firm and earns more than Rs 50 lakh annually, then he will have to file ITR-3.

ITR-4 (SUGAM)

This form is applicable to individuals, HUFs and firms (excluding Limited Liability Partnerships) residing in India who have a total yearly income of up to Rs 50 lakh.

ITR-4 is applicable when the source of the income is:

  • Business1
  • Profession (( Section 44ADA, Income Tax Act, 1961))
  • Salary or pension
  • One house property
  • Other sources like interest etc. (not including lottery winnings and income from racehorses)

Further, a person who is not residing in India or a director of a company need not fill this ITR-4 Form.

ITR-5

This form is applicable to the following:

  • Firm
  • LLP (Limited Liability Partnership)
  • Association of Persons/Body of Individuals
  • Artificial Juridical Person (( Section 2(31)(vii), Income Tax Act, 1961))
  • Local authority(( Section 2(31)(vi), Income Tax Act, 1961))
  • Representative assessee. A representative assessee could be an agent of a non-resident, the guardian of a minor/person of unsound mind, a trustee etc. who is authorised to receive or manage income on behalf of another person. (( Section 160(1), Income Tax Act, 1961))
  • Cooperative society
  • Societies registered under the Societies Registration Act 1860.

It is not applicable(( Sections 139(4A, 4B, 4C and 4D), Income Tax Act, 1961)) to individuals, HUF, a company and those persons filing ITR-7.

ITR-6

This form is applicable to companies, other than those companies claiming tax exemption for charitable or religious reasons.(( Section 11, Income Tax Act, 1961)) Further, you can find a list of tax-exempted institutions here.

ITR-7

This form is applicable to persons (including companies) such as:

  • Every person receiving income from property held under trust, or for charitable or religious purposes (( Section 139(4A), Income Tax Act, 1961))
  • Political parties (( Section 139(4B), Income Tax Act, 1961))
  • News agencies, mutual funds, trade unions etc. (( Section 139(4C), Income Tax Act, 1961))
  • Universities or colleges (( Section 139(4D), Income Tax Act, 1961))

ITR-Verification Form

You have to fill this form in situations where you have filed the data of the Return of Income in Forms ITR-1 (SAHAJ), ITR-2, ITR-3, ITR-4(SUGAM), ITR-5, ITR-7, but not verified electronically. Read more here.

  1. Section 44AD and 44AE, Income Tax Act, 1961 [↩]