MoS Finance Confirms No Additional GST for Zomato, Swiggy, and Other Food Delivery Apps

Food delivery services like Zomato and Swiggy have become a significant part of our daily lives. From ordering a quick lunch to indulging in late-night snacks, these apps are a convenience many of us rely on. However, a recent question raised in the Rajya Sabha about the possibility of a new Goods and Services Tax (GST) on food delivery apps has sparked discussions. The good news for consumers is that there will be no new GST imposed on these services, at least for now.

The GST Clarification: No New Tax for Food Delivery Apps

On April 1, 2025, the Minister of State for Finance, responded to a question from a Rajya Sabha member, clearing the air on the issue. It was explained that the GST rates for food delivery apps, such as Zomato and Swiggy, are currently set by the GST Council, a body consisting of representatives from both the Union and state governments. He clarified that there would be no new GST imposed on food delivery services at this stage.

As of now, food delivery services are taxed at 5% under GST, but without the input tax credit. This applies to restaurant services whether ordered directly or via apps like Zomato and Swiggy. Additional services offered by these apps, such as platform fees, are currently subject to an 18% tax.

The GST Council’s Role in Deciding Tax Rates

The GST rates for various services, including food delivery, are decided by the GST Council. This council is made up of both Union and state government representatives who come together to discuss and set tax rates across various sectors. During the 55th meeting of the GST Council on December 21, 2024, the topic of imposing a separate GST on food delivery services was discussed. The council decided that the matter required further examination before any decision could be made.

Why No New GST for Food Delivery Services?

One of the main reasons for the government’s decision not to impose additional GST at this time is to ensure that food delivery services remain accessible and affordable for the masses. With the rise of online ordering, these apps have played a crucial role in supporting local businesses and offering convenience to consumers.

Any increase in tax rates could lead to higher prices, potentially affecting the affordability of meals for consumers, especially those who rely on these services regularly. The government is also considering the wider impact of such decisions, weighing the benefits of encouraging digital platforms against the need to maintain a stable and fair tax structure.

Conclusion

While there’s no immediate change in the taxation of food delivery services, the discussion is far from over. The GST Council’s decision to examine the issue further means that the topic will likely come up again in future meetings. As online food delivery continues to grow, the government may choose to re-evaluate its stance on taxation, depending on market trends, consumer demand, and the performance of the sector.

For now, consumers can rest easy knowing that food delivery apps like Zomato and Swiggy will not carry any additional GST burden, at least in the short term. The 5% GST on food services remains in place, ensuring a stable pricing structure for all involved.

 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.

Startup Mahakumbh to Strengthen Collaboration Between States and Startups

India’s startup ecosystem is growing rapidly, and a key event helping it thrive is the Startup Mahakumbh. This event, scheduled from April 3–5 at Bharat Mandapam in New Delhi, is set to bring together startups, investors, and government stakeholders to strengthen collaboration between states and startups. The aim is to create a platform that supports innovation, growth, and partnerships, especially for startups in Tier II and Tier III cities.

SIDBI’s Role in Boosting Startups

As India’s startup ecosystem grows, the focus is shifting to capital access, founder support, and policy initiatives, especially in Tier II and III cities. As per Inc42 reports, the government’s INR 10K crore Fund of Funds for Startups (FFS), managed by Small Industries Development Bank of India (SIDBI), has invested in over 1,200 startups through 153 Alternative Investment Funds (AIFs). SIDBI is also partnering with incubators, academic institutions, and state governments to boost startup activity in underserved areas.

Fund of Funds for Startups: Fueling Innovation

The Fund of Funds for Startups (FFS) is a major initiative helping to grow the startup ecosystem in India. As per Inc42 reports, this initiative has supported the formation of over 22 unicorns, with many more on their way. These funds have not only backed startups but have also helped bring in local investors, reducing India’s reliance on foreign capital.

SIDBI’s efforts also focus on making sure that startups in smaller cities have the resources they need to grow. Through partnerships with state governments, academic institutions, and incubators, SIDBI is promoting entrepreneurship beyond India’s main startup centres.

Startup Mahakumbh: A Platform for Growth and Collaboration

Startup Mahakumbh is a significant event set to empower India’s startups by offering them a chance to showcase their products and services to global decision-makers. This exposure will help startups attract investors and form valuable partnerships both locally and internationally.

The event will focus on promoting public-private collaboration, ensuring startups gain not only capital but also essential guidance and networks. A key highlight of Startup Mahakumbh is its networking opportunities. Investor Connect sessions will allow startups to pitch directly to potential investors, opening doors to funding and partnerships. Additionally, mentorship workshops will provide early-stage entrepreneurs with expert advice, helping them avoid common mistakes and grow their businesses effectively.

The Future of Indian Startups

India’s startup ecosystem is on an exciting path, and initiatives like Startup Mahakumbh are making sure it continues to grow. With the right support from investors, government bodies, and academic institutions, India’s startups are set to compete on a global scale.

The success of initiatives like the Fund of Funds for Startups and events like Startup Mahakumbh will help shape the future of India’s innovation and entrepreneurship. These efforts are vital for fostering an environment of collaboration, which will drive the growth of startups across the country.

 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.

India’s $26 Billion IPO Plans in FY26 Face Reality Check – Reliance Jio and NSE Brace for Impact

The Indian IPO market, which saw robust fundraising in FY25, has started FY26 on a cautious note. Despite a strong pipeline of upcoming public offerings, the market has witnessed no fresh listings in the first week of the new financial year. However, four SME IPOs, including Desco Infratech, are set to make their stock market debut soon, bringing some activity to the otherwise slow start.

Major companies such as Reliance Jio, Zepto, and LG Electronics are in the process of finalising their listing plans, with the total IPO pipeline estimated to be worth nearly ₹2 lakh crore ($26 billion) in FY26.

SME IPOs Set to Debut This Week

4 SME IPOs are set to debut this week, with Desco Infratech listing on the BSE SME platform on April 2. Its IPO was subscribed 83 times, and shares are trading at a 3% premium. Shri Ahimsa Naturals and ATC Energies will debut on April 3, with Shri Ahimsa’s IPO subscribed 60 times. The company deals in caffeine anhydrous and herbal extracts, while ATC Energies manufactures lithium-ion batteries for energy storage. Identixweb, also debuting on April 3, adding momentum to the IPO market.

Will the IPO Market Rebound in FY26?

FY25 saw an impressive run in the primary market, with companies raising around ₹1.48 lakh crore. The first half of the fiscal year alone saw fundraising nearly double to ₹51,365 crore, while the second half witnessed an even stronger performance, with ₹97,160 crore being raised. Hyundai played a significant role in driving this momentum in the latter half of the year.

However, as the secondary market faced corrections and investor sentiment weakened, many companies postponed their listing plans. The start of FY26 has reflected this trend, with no major IPOs hitting the market in the first week.

Companies such as Reliance Jio, LG Electronics, and the National Stock Exchange (NSE) are expected to launch their IPOs, potentially making FY26 a landmark year for fundraising. However, these companies will need to ensure realistic valuations and strong fundamentals to attract investors in an increasingly cautious market.

Challenges Ahead for India’s $26 Billion IPO Pipeline

While the IPO pipeline looks promising, several challenges could impact the listing plans of major companies. Market volatility, global economic uncertainty, and concerns over high valuations may dampen investor enthusiasm. Additionally, regulatory scrutiny and evolving market dynamics could further influence the pace and success of IPOs.

Reliance Jio’s highly anticipated IPO, for instance, is expected to generate massive investor interest, but concerns over valuation and competitive pressures in the telecom sector could impact demand. Similarly, NSE’s highly anticipated IPO may face a delay of up to 2 years due to regulatory concerns raised by SEBI. While some issues are unrelated to the IPO, NSE must address these hurdles before proceeding.

Conclusion

The IPO market has always been a reflection of broader market sentiment. If the stock market stabilises and investor confidence strengthens, FY26 could see record-breaking fundraising activity.

While the start of the year has been slow, the pipeline of upcoming IPOs remains strong, and several high-profile listings could drive momentum in the coming months. For investors, the key will be to focus on fundamentally strong companies with sustainable growth prospects.

 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.

SBI Mobile and Internet Banking Services Offline for 3 Hours on April 1: Find Out Why?

Did you struggle with your online banking transactions today? If so, you weren’t alone. On April 1, 2025, State Bank of India (SBI), the country’s largest public sector bank, faced a significant technical disruption that affected millions of customers nationwide. Mobile banking services, fund transfers, and ATM operations were impacted, leaving users frustrated during one of the most crucial periods of the financial year.

Let’s understand the reasons behind this temporary disruption, its impact on customers, and the statements from the bank and the National Payments Corporation of India (NPCI) regarding the outage.

SBI’s Mobile Banking and Internet Services Affected

SBI, which serves millions of customers across the country, was forced to shut down its digital banking services temporarily due to technical issues that coincided with the year-end financial activities. These activities are often complex and involve several systems working behind the scenes to close the accounts for the fiscal year and prepare for the new one.

According to reports from Downdetector, a platform that tracks service outages, complaints about SBI’s mobile banking surged significantly between 11:00 and 11:30 AM IST. A staggering 64% of these complaints were related to mobile banking issues, 33% to fund transfer problems, and 3% were linked to ATM services.

This disruption occurred as SBI customers struggled to access their accounts, process transactions, or make fund transfers. The issue arose during a time of high demand, as many users were managing their finances to transition into the new financial year, FY 2025-26.

SBI’s Response to the Issue

In response to the outage, SBI issued a statement on X (formerly Twitter), informing customers about the reason behind the disruption. The bank explained that the downtime was part of their annual closing activities, and digital services would be unavailable between 1:00 pm and 4:00 pm on April 1.

SBI advised customers to use UPI Lite and ATM channels during this time to ensure uninterrupted access to banking services. Although SBI attributed the disruptions to audit processes and year-end activities, there was no official confirmation about the exact cause of the glitches experienced earlier in the day.

NPCI’s Statement on the UPI System

Along with SBI’s announcement, the National Payments Corporation of India (NPCI) also took to X to address concerns from users experiencing intermittent transaction declines. The NPCI, which operates the UPI (Unified Payments Interface) system, clarified that the UPI infrastructure itself remained operational despite some transaction issues faced by certain banks.

NPCI stated, “Today, due to the financial year closing, some of the banks are facing intermittent transaction declines. The UPI system is working fine, and we are working with the concerned banks for necessary redressal.” This statement helped ease the concerns of many users who were worried about the UPI system’s overall functionality.

The Potential Impact of New UPI Rules

One of the potential reasons behind the issues could be the implementation of new UPI rules, which came into effect on April 1. These rules require mobile numbers to be actively linked to the user’s bank account in order for transactions to proceed smoothly.

As this rule was introduced on the very first day of the new financial year, it may have contributed to the difficulties many users faced during their banking activities. The timing of the new UPI rule, along with the annual closing processes of banks, created the perfect storm for this temporary disruption.

What’s Next for SBI and UPI Users?

While the disruptions on April 1 were frustrating for many users, it is important to note that such issues are not uncommon during the year-end closing activities. Banks like SBI, with their large customer base, face an increased load as they prepare for the transition to the new financial year.

For now, SBI has promised to work on resolving the issues, and the NPCI is coordinating with affected banks to address any remaining glitches. It’s important for customers to stay updated on any further developments and ensure that their UPI-linked mobile numbers are active to avoid transaction declines in the future.

 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.

Identixweb IPO Allotment Status

Identixweb IPO, a ₹16.63 crore book-built issue, runs from March 26 to March 28, 2025, with shares priced at ₹51-₹54. The BSE SME listing is scheduled for April 3, 2025, and allotment finalisation on April 1, 2025. Investors must apply for at least 2,000 shares (₹1,08,000), while HNIs require two lots (₹2,16,000).

The IPO comprises 30.80 lakh fresh shares and saw a 26.15x subscription by March 28, 2025, 5:00 PM. Beeline Capital Advisors is the lead manager, Skyline Financial Services is the registrar, and Spread X Securities is the market maker. Check Identixweb IPO allotment status online.

How to Check Identixweb IPO Allotment Status Online on BSE?

  • Go to the application status page.
  • Select “Equity” under the Issue Type.
  • Choose “Identixweb IPO” from the Issue Name dropdown.
  • Provide your Application Number or PAN.
  • Click on “I am not a robot” and Submit.

How to Check Identixweb IPO Allotment Status Online on the Registrar’s Website?

  • Go to the registrar’s official website.
  • Select “Identixweb IPO” from the company list.
  • Enter your Client ID, Application Number, or PAN.
  • Click on Submit.

Identixweb IPO Details

Identixweb IPO is a ₹16.63 crore book-built issue comprising 30,80,000 lakh fresh shares. The price band is set at ₹51-₹54 per share. Retail investors need ₹1,08,000 for one lot. Beeline Capital Advisors Private Limited manages the issue, with listing expected on BSE SME on April 3, 2025.

Allocation Quota for Identixweb IPO

The table below breaks down the Identixweb share allocation for different categories, highlighting the number of shares and their percentage of the total issue. However, the key focus remains on the quotas allocated to retail investors and HNIs, as they are the most relevant for individual investors.

Investor Category Shares Offered
Anchor Investor Shares 8,76,000 (28.44%)
Market Maker Shares 1,54,000 (5%)
QIB Shares 5,84,000 (18.96%)
NII (HNI) Shares 4,40,000 (14.29%)
Retail Shares 10,26,000 (33.31%)

Data Source: BSE-SME

Identixweb IPO – Overall Subscription Status

Category Subscription (times)
Non Institutional Investors 73.46
Retail Individual Investors(RIIs) 14.38
Qualified Institutional Buyers 11.19
Total shares 26.15

Note: The subscription details is as of day 3 i.e. March 28, 2025

Identixweb Business Overview

Identixweb Limited, originally incorporated as Goyani Infra Private Limited in 2017, is a technology-driven company specialising in SaaS-based digital solutions. It was rebranded in 2019 and became a public entity in 2023. Focused on Shopify application development, it offers over 10 conversion-optimised apps to enhance store functionality. The company also provides web and app development, UI/UX design, and custom software solutions using technologies like Node.js, PHP, and React.js.

Led by experienced promoters with over 13 years in Shopify development, Identixweb has expanded globally. It operates two subsidiaries: Munim ERP Private Limited in India, offering ERP solutions, and Identixweb LLC in the U.S., currently undergoing equity subscription. The company remains committed to innovative Shopify solutions.

Know more about IPO allotment status and check your application details online for the latest updates on share allocation.

 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.

Indian Media and Entertainment Industry Grows to ₹2.5 Trillion in 2024 Despite Slowdown

The Indian media and entertainment (M&E) industry continued its upward trajectory in 2024, reaching a total valuation of ₹2.5 trillion (US$ 29.14 billion), according to a report by the Federation of Indian Chambers of Commerce & Industry (FICCI) and EY. While this marks a 3.3% growth from the previous year, the pace has notably slowed compared to the 8.3% expansion in 2023. The industry’s contribution to India’s Gross Domestic Product (GDP) stood at 0.73%, reflecting its critical role in the country’s economy.

Key Factors Behind the Slowdown

The overall slowdown in growth can be attributed to multiple factors, including a decline in subscription revenues across television and print, a dip in theatrical admissions, and reduced global outsourcing demand for animation and VFX (visual effects) services. The Hollywood writers’ strike of 2023, coupled with financial challenges faced by international studios, further contributed to a 9% decline in India’s animation and VFX revenues. Additionally, higher Goods and Services Tax (GST) on real-money gaming impacted transaction gaming revenues, adding to the sector’s sluggish performance.

Digital Media Surpasses Television for the First Time

One of the most significant shifts in the industry has been the growing dominance of digital media. Indians collectively spent 1.1 trillion hours on their smartphones in 2024, averaging nearly 5 hours per day. Social media, gaming, and video streaming platforms accounted for nearly 70% of this screen time.

As a result, digital media surpassed television for the first time since 2019, establishing itself as the largest segment in the media landscape. Digital advertising grew by 17% to reach ₹70,000 crore (US$ 8.16 billion), making up 55% of the total advertising revenue.

Advertising and Events Drive Growth

Despite the overall slowdown, advertising revenues provided a bright spot, increasing by 8.1% in 2024. The organised events sector witnessed an even stronger performance, growing by 15% and surpassing the ₹10,000 crore (US$ 1.17 billion) mark for the first time. Major contributors to this surge included government and election-related events, weddings, and large-scale concerts featuring international artists.

The out-of-home (OOH) advertising market expanded by 10%, with digital OOH seeing a remarkable 78% jump, contributing 12% to the total segment revenues. Radio advertising also showed a positive trend, growing by 9% to ₹2,500 crore (US$ 291 million), backed by increased ad volumes and alternative revenue streams.

Subscription Revenues Continue to Decline

The traditional subscription-based revenue model faced significant challenges in 2024. Pay TV lost between 6 to 7 million homes as consumers continued their shift toward digital platforms like YouTube and connected TV services. Subscription revenues for print media also declined by 1%, though print advertising revenues managed a modest 1% increase, driven by premium ad formats. Digital revenues remained under 5% of the total print industry revenue, underscoring the slow transition of print businesses into the digital age.

Industry Outlook: Growth Expected in 2025

Despite the challenges faced in 2024, the M&E industry is projected to grow at a faster pace in 2025, with an estimated expansion of 7.2%, taking the total industry size to ₹2.68 trillion (US$ 31.24 billion). Industry leaders remain optimistic about the sector’s long-term potential, with ongoing digital adoption, increasing ad revenues, and evolving consumer preferences expected to drive growth.

Conclusion

India’s media and entertainment industry stands at a pivotal juncture, balancing between digital transformation and the challenges of declining traditional revenue streams. While 2024 saw slower growth, the industry’s resilience and adaptability signal a promising future. With digital media continuing to reshape consumer behaviour and new advertising opportunities emerging, the sector is well-positioned for sustained expansion in the coming years.

 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Indira IVF Cancels ₹3,500 Crore IPO Amid SEBI Concerns Over Founder’s Biopic Tumko Meri Kasam

Indira IVF, a leading fertility treatment provider, has temporarily withdrawn its plans for a ₹3,500 crore initial public offering (IPO) after concerns raised by the Securities and Exchange Board of India (SEBI). The regulator questioned the timing of a biopic on the company’s founder, which was released shortly after the confidential filing of the IPO.

The development has drawn attention to SEBI’s strict approach in ensuring fair market practices and preventing indirect promotional activities during an IPO process.

SEBI Flags Biopic Timing as a Concern

The controversy centres around a Bollywood biopic based on the life and journey of Indira IVF’s founder, which was released just weeks after the company confidentially filed for an IPO. The film, a fictionalised account of the founder’s contributions to fertility treatment in India, was seen as a potential promotional tool that could influence investor sentiment. SEBI took note of the close timing between the movie Tumko Meri Kasam release and the IPO filing, leading to concerns over indirect brand promotion before public disclosures.

Why Did Indira IVF Pull Back Its IPO?

Following SEBI’s concerns, Indira IVF chose to withdraw its pre-filed draft red herring prospectus (DRHP). The company clarified that this decision was based on various factors and commercial considerations, rather than a direct directive from SEBI. However, sources suggest that the scrutiny around the biopic played a significant role in this move. There is no official confirmation on when the company might re-attempt its market debut.

Understanding Confidential IPO Filing

Confidential IPO filing is a mechanism introduced by SEBI in December 2022 that allows companies to submit IPO plans privately, keeping financial and operational details undisclosed until they choose to go public. This approach helps protect sensitive business information while offering flexibility in IPO planning.

Several major companies, including Indira IVF, Physicswallah Ltd., Swiggy Ltd., Credila Financial Services Ltd., and Vishal Mega Mart Ltd., have opted for this route to prepare for their market debut without immediate public scrutiny. However, SEBI closely monitors the process to ensure compliance and prevent indirect promotional activities that may influence investor perception.

How SEBI Regulates IPO-Related Promotions

SEBI enforces strict guidelines to maintain fairness and transparency in the stock market. During an IPO process, any form of indirect promotion that could influence investors before full public disclosure is discouraged. The timing of promotional campaigns, media coverage, and related activities are closely monitored to prevent unfair advantages.

What Happens Next for Indira IVF?

With the IPO plans put on hold, Indira IVF is expected to reassess its market strategy and address any regulatory concerns before making another attempt. The company has not provided a timeline for when it might refile its DRHP, but industry experts suggest it may wait until SEBI’s concerns are fully resolved.

Conclusion

The withdrawal of Indira IVF’s ₹3,500 crore IPO underscores SEBI’s vigilance in maintaining transparency in the stock market. The timing of a promotional biopic raised concerns about indirect investor influence, leading the company to step back and reassess its IPO strategy.

As the market evolves, regulatory bodies continue to ensure fair play, reinforcing investor confidence in public listings. For companies planning to go public, adhering to strict guidelines and avoiding perceived conflicts of interest remain crucial to a successful listing.

 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

HRA Tax Exemption: Can You Claim It for Society Maintenance Charges?

Many salaried employees in India live in housing societies where they pay rent to their landlords and an additional maintenance fee to the society. A common question that arises is whether these maintenance charges qualify for tax exemption under the House Rent Allowance (HRA) provisions. Let’s break down the details in a simple and engaging way.

Understanding HRA and Its Tax Benefits

HRA is a key component of many employees’ salary structures, providing tax benefits to those living in rented accommodation. Under Section 10(13A) of the Income Tax Act, salaried employees can claim tax exemption on HRA if they pay rent and receive HRA as part of their salary.

However, this exemption applies strictly to rent payments for residential accommodation. Any other expenses, such as electricity, maintenance, or utility charges, are not explicitly covered under this provision.

Can You Claim HRA Tax Exemption on Maintenance Charges?

The Income Tax Act does not specifically mention whether maintenance charges can be considered part of rent for HRA exemption. Experts have differing opinions on this matter:

  • View 1: Since maintenance charges are mentioned in some rent agreements, they could be treated as part of rent. Some taxpayers believe they should be eligible for exemption.
  • View 2: Tax authorities may disallow maintenance charges for HRA exemption since the law explicitly states that only rent payments qualify.

How Is HRA Tax Exemption Calculated?

HRA exemption is determined by taking the lowest of the following amounts:

  1. Total HRA received from the employer.
  2. 50% of the basic salary for those in metro cities or 40% for non-metro cities.
  3. Actual rent paid minus 10% of the basic salary.

For example, if an employee in Delhi receives ₹3,00,000 in HRA annually, has a basic salary of ₹7,20,000, and pays ₹30,000 per month in rent, the exemption will be calculated as follows:

  • HRA received: ₹3,00,000
  • 50% of salary: ₹3,60,000
  • Rent paid minus 10% of salary: ₹2,88,000

The lowest amount (₹2,88,000) is exempted, and the remaining ₹12,000 is taxable. Since maintenance charges are not included in rent, they cannot be added to increase the exemption amount.

What Should You Do?

Since maintenance charges do not qualify for HRA exemption, it is advisable to:

  • Separate rent and maintenance charges in agreements and payments.
  • Keep proper records of rent receipts and payments.
  • Consult a tax expert if you are unsure about your eligibility.

How to Claim HRA Exemption

You can claim HRA tax exemption in two ways:

  1. Through your employer: Submit rent receipts and landlord details while filing investment declarations. The exemption will be adjusted in your salary, reducing TDS.
  2. At the time of filing ITR: If you did not claim HRA through your employer, you can still do so in your income tax return. However, you must manually calculate and submit the required proof.

Conclusion

While HRA provides significant tax relief to salaried individuals, it applies strictly to rent payments. Maintenance charges, even if included in rental agreements, do not qualify for exemption. To ensure a smooth tax filing process, tenants should keep their payments organised and consult a tax professional for any uncertainties. Understanding these rules can help avoid tax complications and make the most of available exemptions.

 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Income Tax Dept Sends Notices for Non-Deduction of TDS on Rent Above ₹50,000/Month

The Income Tax Department has recently issued notices to several taxpayers across India who have been paying rent of ₹50,000 or more per month but failed to deduct Tax Deducted at Source (TDS). This move is aimed at ensuring compliance with tax laws and preventing revenue leakage. If you are a tenant paying such a high amount in rent, it is crucial to understand your obligations under the Income Tax Act to avoid penalties and legal troubles.

Why Are Taxpayers Receiving Notices?

According to tax experts, many individuals who claimed House Rent Allowance (HRA) in their tax filings for the assessment years 2023-24 and 2024-25 have received notices. The notices indicate that while these taxpayers claimed HRA, they did not deduct TDS on the rent paid to their landlords. The tax authorities have advised them that now is the right time to file an updated return and reduce their HRA claims to avoid potential penalties.

Understanding TDS on Rent

As per the Income Tax Act, if you are a tenant paying a monthly rent of ₹50,000 or more, you are required to deduct TDS at a specified rate before making the payment to your landlord. The current TDS rate on rent is 2%, effective from October 2024. Previously, the applicable rate was 5%.

This means that if your rent is ₹50,000, you must deduct ₹1,000 (2% of ₹50,000) before paying the remaining amount to your landlord. The deducted amount must then be deposited with the Income Tax Department.

Consequences of Non-Compliance

If tenants do not deduct and pay TDS on rent, they are considered ‘assessees in default’ under the Income Tax Act. This can lead to interest charges of 1% to 1.5% per month, extra fines depending on the delay, and possible legal action by the Income Tax Department for continued non-compliance.

Exception to the Rule

There is an exemption from this requirement if the landlord has already declared the rental income in their tax returns and paid the applicable taxes. If the tenant can provide documentary proof of this, they will not be considered in default and will not be liable for any penalties.

However, many landlords may be reluctant to share private financial documents, making it difficult for tenants to claim this exemption. To avoid complications, tenants are strongly advised to deduct and deposit TDS as required by law.

What Should Tenants Do Now?

If you have received a notice from the Income Tax Department regarding TDS non-compliance on rent, here are some steps you should take:

  1. Check your rent payments: Review your rental agreements and confirm whether your monthly rent exceeds ₹50,000.
  2. Verify TDS deductions: If you have not deducted TDS, consider filing an updated return and making necessary adjustments.
  3. Consult a tax expert: Seek professional advice to ensure compliance and avoid potential fines.
  4. Deduct TDS going forward: To prevent future issues, ensure that you deduct and remit TDS on rent payments as per the prescribed rate.

Conclusion

The recent crackdown by the Income Tax Department highlights the importance of adhering to tax regulations. Tenants paying high rent must be vigilant about their TDS obligations to avoid hefty penalties. Understanding the rules and taking proactive measures can help taxpayers stay compliant while avoiding unnecessary legal hassles.

 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

India’s IT Industry Sees Rapid Growth: Expected to Reach ₹24.3 Lakh Crore in FY25

India’s Information Technology (IT) sector has witnessed extraordinary growth over the past decade, emerging as a major contributor to exports and employment. The industry has expanded rapidly, with its revenue surging from ₹10,13,148 crore (US$ 118 billion) in FY15 to a projected ₹24,29,838 crore (US$ 283 billion) in FY25. According to the National Association of Software and Services Companies (NASSCOM), export revenue is also expected to reach ₹19,23,264 crore (US$ 224 billion), reinforcing India’s position as a global IT hub.

Government Initiatives Driving Growth

The Indian government has played a crucial role in supporting the IT sector through various initiatives and policy measures. Some of the key steps taken include:

  • Software Technology Parks of India (STPI) Centres: The establishment of 67 STPI centres across the country has provided IT companies with infrastructure support, encouraging regional growth.
  • 100% Foreign Direct Investment (FDI): Allowing full FDI in the IT sector has attracted global investment and boosted innovation.
  • National Policy on Software Products 2019 (NPSP 2019): This policy has been instrumental in promoting indigenous software product development and enhancing global competitiveness.

Skill Development and Workforce Expansion

To keep up with the industry’s rapid expansion, the government has launched several skill development programmes to train IT professionals and bridge the talent gap. Notable initiatives include:

  • National Institute of Electronics & Information Technology (NIELIT): With 55 centres across India, NIELIT has been instrumental in providing specialised IT training.
  • FutureSkills PRIME: This initiative focuses on upskilling professionals in emerging technologies such as artificial intelligence (AI), cloud computing, and cybersecurity.

Boosting Startup Ecosystem and Innovation

The Indian startup ecosystem has flourished, thanks to dedicated government efforts aimed at nurturing innovation and entrepreneurship. Some of the key initiatives include:

  • Technology Incubation and Development of Entrepreneurs (TIDE 2.0): This programme provides financial and technical support to technology startups.
  • Startup Accelerator of MeitY for Product Innovation, Development, and Growth (SAMRIDH): Focused on product-based startups, SAMRIDH offers mentorship and funding support.
  • India AI Mission: This initiative promotes AI research and development, further strengthening India’s position in emerging technologies.

Conclusion

India’s IT sector continues to be a key driver of the global digital economy, with its contribution extending beyond software services. The industry has diversified into areas such as fintech, e-commerce, and digital transformation, catering to both domestic and international markets.

With ongoing policy support and a focus on emerging technologies, India’s IT industry is set to maintain its upward trajectory. The sector’s continued expansion will further boost employment, enhance exports, and reinforce India’s status as a global technology powerhouse.

 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.