Second Generation GST Reforms

by CA. Sandeep Choudhary

63662 57036

sandeepchoudharyfca@gmail.com

1. Bring Electricity under GST ambit. Scrap other taxes on power.

2. Bring petroleum products under GST. Reduce excise and sales tax correspondingly to retain total tax incidence at current levels.

3. Bring Real Estate under GST. Scrap stamp duties. Create suitable mechanism to allow homeowners to adjust GST on sale of a house with GST paid at the time of purchase, without requiring GST registration.

4. Merge 12% and 18% to 15%.

5. Identify limited number of luxury/ sin goods for higher rate. Bring down other items like cement to standard rate.

6. Amend GST Acts to delegate Rule-making power to GST Council instead of respective Governments. Reduce gap between de jure and de facto.

7. Stop forcing small businesses to get a fake address for registered office. Understand that electricity & water department have their own weird ways for names and addresses.

8. Provide a mechanism to rectify revenue-neutral errors (tax credit taken under wrong head or wrong period, tax paid under different head, error in name of relevant State etc) without hassle. When such errors are identified by authorities, they should be required to send a request to reclassify the item under the correct head instead of demanding tax. 

9. Require appellate officers to collate all types of appeals to identify areas where you can improve law to reduce litigation and bona fide errors. 

10. Open up GST Council meetings to public. Publish detailed minutes, including minutes of committee meetings.

Pacific Adventure

Sanskriti and Pranay were enjoying their boat ride in the Pacific. The blue waters stretched all around them. The only other object they could make out was a distant yacht. Then they saw a dolphin jump. They were both very excited; they had seen some dolphins in the distance but this one was frolicking in the water quite close to them. ‘I did not know dolphins were so huge’, said Pranay. ‘This is what, 3 metres long?’

‘Something like that’, replied Sanskriti, tilting her head. She waved and said ‘Hey-lo dolphin!’. Pranay sniggered and said ‘Hi dolphin, how are you doing, catch any nice fish today?’ while waving his hand. The dolphin suddenly turned and waved its flipper at them.

The children were amazed. The dolphin came closer, till it was almost touching the boat and said, ‘Naa! No particularly nice fish today. I did have two squids in the morning, though. Do you have any fish for me?’

Both the kids started talking simultaneously:

‘Wow! You can talk!’

‘Where did you learn that?’

‘Can all dolphins talk?’

‘Sorry! We don’t have any fish.’

‘Do you have any kids?’

‘We have some biscuits and chocolates.’

‘Are you married?’

‘We also have Kurkure.’

‘I don’t eat junk,’ said the dolphin. ‘I only eat healthy things like fish, shrimps and octopus. That is why I am so fit and can jump so smoothly’. It jumped over their little boat to make the point.

‘Wow!’ said Sanskriti. ‘I will also eat only healthy food from now and learn to jump like this. But I don’t want to eat shrimps and stuff. I will eat what is healthy for humans.’

‘You are a good kid. But what is this noise?’ The dolphin turned suddenly looking here and there.

Sanskriti raised her eyebrow at Pranay. He explained that dolphins can hear sounds that humans can’t. Sanskriti immediately countered, ‘What about you? Can you also hear sounds that humans can’t?’, and started laughing. Pranay gave a bored, exasperated look. Sanskriti kept laughing loudly till she saw some things jump out of water into the yacht at a distance.

‘You kids stay here. This looks ugly,’ the dolphin told them and disappeared beneath the water. The kids could now make out that some sort of fighting was going on in the yacht. They notice another boat coming near the yacht. Someone jumps from yacht into the water, dragging another person with him, and swims to the boat. Fight now breaks out in the boat and they are both again in the water. Finally, the dolphin knocks out the attacker while the other person gets back into the yacht.

The dolphin returns to the kids’ boat. ‘What was all that?’ asked Pranay. The dolphin shrugged its flipper.

‘You are bruised’, noted Sanskriti. Pranay pulled a bottle out of their first aid kit and poured something over the bruising. ‘What’s this?’ asked the dolphin. ‘It will help you heal,’ Sanskriti explained. She noted that while it seemed black initially, the dolphin was actually bluish-grey in colour.

‘I like you kids’, it said. ‘Have you ever had a dolphin ride?’

‘We would love that. But we can’t breathe under water,’ said Sanskriti.

‘Neither can I. That’s why I keep coming back to the surface. You need to take a deep breath when you surface and hold it when you are underwater’, replied the dolphin.

Pranay looked at Sanskriti mockingly and said, ‘You did not know this?’ Sanskriti replied ‘Me first!’ and jumped into the water. The dolphin stayed still as Sanskriti struggled and finally managed to sit on the dolphin.

Its skin was smooth and rubbery. Sanskriti had to lie on her tummy to try to hold its body with her arms and legs. ‘Remember, take a deep breath when your snout is in the air’, it said. ‘He he he, Sanskriti has a snout’, laughed Pranay. The dolphin dived.

‘Glug Glug Glug’

The dolphin surfaced.

‘Yehhhhhhhhh!!!’

The dolphin was back in the water.

‘Glug Glug Glug’

followed by

‘Yehhhhhhhhh!!!’

 

This went on for a few minutes. Then, Sanskriti dismounted and Pranay sat on the dolphin.

‘Glug Glug Glug’

‘Yehhhhhhhhh!!!’

‘Glug Glug Glug’

‘Yehhhhhhhhh!!!’

‘Glug Glug Glug’

‘Yehhhhhhhhh!!!’

They both had a lot of fun, and the dolphin enjoyed with them. When the kids were tired, they applied another round of medicine to the dolphin. It waved its flipper at them and disappeared beneath the water. They saw it surface near the yacht. ‘It is probably checking on the passenger it had saved’, they thought.

Happy Birthday Sanskriti

Lots of love from Papa

9^th March 2025

 

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Income Tax Bill: Transitional Provisions

by CA. Sandeep Choudhary

63662 57036

sandeepchoudharyfca@gmail.com

This article summarises the Transitional Provisions in the Income Tax Bill, 2025. An earlier article discussed some key features on the proposed law.

1. Proceedings already started under the 1961 Act will continue to be governed by that Act. Any notice or proceeding relating to period before 1st April 2026 will be carried out under the old law. Thus, if assessments of older periods are re-opened, they will be governed by the 1961 Act.

2. If you opted for Old Regime instead of the default New Regime, your choice shall continue to be applicable in the 2025 Bill. 

3. Interest provisions will be governed by 1961 Act till 31st March 2025 and by the new Bill thereafter. This means, that while the demand notice or refund order will be under the 1961 Act, part of the interest computation will be under the new Bill. 

4. If you have claimed any deduction in 1961 Act and its conditions are later violated, the corresponding amount will be added back to your income under the new law in the year of violation. For example, if you have received Capital Gains exemption in PY 2024-25 on account of investing in new capital asset and such asset is sold in TY 2026-27, the exemption granted earlier will become chargeable as Capital Gain in TY 2026-27. 

5. There is no specific provision which tells us what happens if the reverse happens. If some expenses are disallowed u/s 43B on grounds of non-payment, they are normally allowable under the year of payment. Similarly, if expense is disallowed on the grounds that TDS was not deducted, the expense is allowed in the year of payment. The Bill is silent where expense was disallowed under the 1961 Act and conditions for allowing expense after the new law comes into effect. It only covers the situations where an income is to be added in later years. 

6. Recognition to approved Charitable Trusts, etc (referred to as Registered Non-Profit Organisations in the new Bill) shall continue to be valid. 

7. MAT Credit under 1961 Act will continue to be available under the new law. Similarly, brought-forward losses and unabsorbed depreciation from 1961 Act will be allowable. The time limits for set-off of losses will remain unchanged. 

There is one important change here. For capital losses brought forward from 1961 Act, the distinction between Long-Term and Short-Term has been eliminated. Thus, in 1961 Act, Long-Term capital losses can be set-off against Long-Term Gains only. The same is the case for Long-Term loss under the new law. However, the Long-Term loss brought forward from 1961 Act will be available for set-off against both Long-Term and Short-Term Capital Gains under the new law. 

8. For search cases, the transition may result in a tricky situations.  Block assessment may be under one law, tax under normal provisions may be under another law. Determining the quantum of undisclosed income will require simultaneously juggling the provisions of both the laws. 

a. Where search is initiated prior to 1.4.2026, the 1961 Act will apply as if the new law had not been enacted. Thus, if search is initiated in March 2026, and the last Panchnama is drawn April 2026, the income of April 2026 till the date of signing will be taxed under the 1961 Act and not the new law. 

b. For searches initiated 1.4.2026 onwards, the entire Block Assessment will be governed by the new law. This will be so even though the income of a part of the Block Period was otherwise taxable under the 1961 Act. Since preceding 6 Tax Years are covered under Block Period, the old law will remain relevant till TY 2031-32 for search cases. 

9. Section 536(2)(a) and (b) are clumsily worded. These are important clauses in Transitional Provisions that provide finality to operations, orders, rights and obligations under 1961 Act. These clauses need to be properly worded.

10. Existing Instructions and Notifications will remain valid unless they are inconsistent with the new Act. The law is silent on the fate of existing Circulars.

11. Across laws, there is a large body of judgements confirming that old judicial precedents remain valid if the language and context is consistent. In the last decade, case laws have flowed smoothly in Company law from the 1956 Act to the 2013 Act and in Indirect Taxes from Service Tax to GST. 

Thus, case laws evolved over decades will remain applicable. However, minor changes in language will unnecessarily force fresh litigation, as discussed in preceding article.

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Income Tax Bill, 2025: Second Set of Observations

by CA. Sandeep Choudhary

63662 57036

sandeepchoudharyfca@gmail.com

This is my second post on the new Income Tax Bill, 2025. An earlier post captured my preliminary observations. 

1. Tax Holiday for 1 Year to all? 

The first section of the Bill says that the new law will call info effect from 1st April 2026. The last section says that the Income Tax Act, 1961 is hereby repealed. Since no separate date is given here, it means that the 1961 Act shall stand repealed from 1st April 2026. This creates a problem. 

Under section 4 of the 1961 Act, income tax is charged on Assessment Year (AY) basis for income in the previous year (PY). If the law stands repealed from 1st April 2026, there will be no AY 2026-27 in which tax on income of PY 2025-26 can be computed. And the 2025 Bill does not envisage taxing income for Tax Year 2025-26. A literal reading of the first and last sections of the 2025 Bill imply that there will be no Income Tax for the year 2025-26 for any person.  

Obviously, this is not how the situation will unfold. Section 535 of the Bill empowers the Central Government to issue 'Removal of Difficulties Order'. In 2017, similar powers in GST law were used to address obvious lacuna and implementation issues. We will see a repeat of issue of such orders in 2026-27. 

So, no, Nirmala Ji is not giving a tax break to all. However, since the Removal of Difficulties Order will be issued after the new law comes into effect, it creates some ambiguity for income for the PY 2025-26. 

2. Petty Changes?

As noted in the earlier post, Explanations and Proviso have either been converted into separate clauses or clubbed with the underlying provision using the word 'where'. Similarly, the word 'notwithstanding' has been replaced by 'irrespective of'. In a law where every word, punctuation mark and nuance gets heavily litigated, this can be problematic. 'Proviso' are a well-understood concept, they limit, modify or explain the main part. That is to say, it is restricted in scope to the underlying provision in which it is carving out a change.  Converting a Proviso into a separate clause can expand the scope of its text, which may not be the intention here. 

Other minor changes may have more impact. Replacing 'reasonably attributable' with 'attributable', 'wholly or substantially the whole' with 'wholly or substantially' change the scope of the provisions. 

Currently, the law permits taxpayers to apply for lower of NIL rate of TDS. In practice, even where NIL rate is ought, tax authorities impose a small rate of say, 0.5%. The new Bill converts this de facto position into de jure: the Bill provides only for application for lower rate and not NIL rate. It could be argued that NIL is indeed a lower rate, but it is likely that when the utility is updated, the option to fill the requested rate will not permit zero figure.  

3. Unpaid Taxes

U/s 43B of the 1961 Act, unpaid taxes are disallowed even if the amount was not payable in the PY under the relevant law. Thus, GST of March 2024 payable in April 2024 but not paid by due date of filing return would be disallowed in the computation of income for PY 23-24.  No such provision has been provided under the corresponding section 37 of the 2025 Bill. A taxpayer could therefore make the argument that the GST liability for March 2027 is not a sum payable in the TY 26-27 and hence need not be added back even if it remains unpaid on the due date of filing return. 

4. Indexation for Real Estate

In the Budget for 2024, the benefit of indexation u/s 48 was proposed to be removed. Correspondingly, a lower rate of 12.5% was mooted. After much brouhaha, a further amendment was introduced stating that old provisions will apply if they result in lower tax for land/ building. Thus, indexation continues to be applicable for land/ building in many cases. The new section 72 of the 2025 Bill simply states that indexation will be applicable in 'prescribed cases'. This is a case of excessive delegation of legislative power to tax department.  

5. No Refund if Return not Filed within Due Date?

Filing of Income Tax Return (ITR) is covered u/s 263 of the new Bill. Section 263(1)(ix) states that a person intending to make a claim of refund shall file return on or before due date. It appears that a person filing belated return may not be eligible for refund. No such restriction exists under the 1961 Act. Even the refund provisions in the new Bill do not refer to any such condition. The condition is flowing from the section on filing of returns. 

6. No addition by CPC on the basis of TDS info

Currently, when ITR is processed by CPC, it has the power to make additions based on information in Form 26AS, Form 16A and Form 16. This power has not been given to the CPC in the new Bill. This appears contrary to the general trend of speedy automation. 

7. Drafting Anomalies  

a. For presumptive taxation, eligible assessee is defined under section 58(10). The conditions here should have been cumulative. However, in the current draft, each condition ends with the word 'or' instead of 'and'. This would imply that the taxpayer can claim various deductions currently not available under presumptive taxation, and is probably not whatthe Govt intends to do.  

b. Now that the New Regime is the default option, the charging section in the Bill could have directly referred to it. However, section 4 of the new Bill continues to refer to Finance Acts for charge of Income Tax. Surprisingly, the clause 'subject to the provisions of this Act' has been removed. Thus, the charging section does not refer to the New Regime or any of the special rates (such as for Capital Gains). 

c. In Royalty payable by Non-Resident, the 1961 Act refers to income from any source in India. The new Bill refers to income from any source outside India. This is an obvious error. 

c. Section 78(3) of the new Bill defines the word 'assessable' for the purposes of the section. However, the word in not used in the section. 

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New Income Tax Bill: Preliminary Observations

by CA. Sandeep Choudhary

63662 57036

sandeepchoudharyfca@gmail.com

Draft of the new Income Tax law is out now. My preliminary observations:

1. The new Income Tax Bill, 2025 is expected to come into effect from 1st April 2026. Unlike the earlier effort of 'Direct Tax Code' 15 years ago, this is essentially a re-writing and re-arranging of the existing provisions of the Income Tax Act, 1961. 

There is no new levy, heads of income are the same, the due dates, computation and details are the same. 

The re-writing is welcome. The law had become very clumsy over time, as it is amended at least once every year. 

It is also a missed opportunity, a lot of language could have been simplified.

2. The useless terminology of 'assessment year' and 'previous year' is being junked in favour of 'tax year'. This is a welcome change, there was never a good reason for having these two terms.

3. Filing of ITR to be mandatory for business with TURNOVER above 5 Lakhs under the new Income Tax Bill. So, no tax upto income of 12 Lakhs. But if your sales exceeds 5 Lakhs (income of Rs. 40k annually using the presumptive income rule), you must file ITR.

4. For salaries, the tax provisions in the 1961 Act are scattered all over the place: some provisions are given under the head 'Salaries', some under section 10 (Exemptions) while others are given under separately issued Income Tax Rules, 1962. Now, everything has been put together in one table.

5. Some long-winding provisions, such as Cost of Acquisition, TDS, Advance Tax have been put in a tabular form. This is better than the existing arrangement, though the tables are still clumsy. There are small changes in unexpected places. A thorough clause-by-clause word-by-word comparision is required even if it is an exercise in re-writing and re-arranging sections.

6. The 1961 Act will not be completely dead. One of the goals of the Govt was to reduce the number of words in the new Bill. So, in many places, they say that this thing will be governed by 1961 Act. Completely reduces the number of words here, but now you need to refer to 2 laws.

a. The Bill defines income to include, inter alia, income referred to under section 2(24) of Income Tax Act, 1961. This is just lazy. What stops the draftsmen from copy-pasting the whole definition? 

b. For tax breaks to industrial undertakings engaged in infrastructure, the Income Tax Bill says that deduction as per old section 80-IA will continue to be available, "as if the said Act had not been repealed". If that is how you want to proceed, then why repeal in the first place.

c. Similarly, sections 80-IA, 80-IAB, 80-IB, 80-IBA, 10AA of the 1961 Act will remain undead "as if the said Act had not been repealed".

d. Many provisions simply give reference to 1961 Act: list of approved institutions for deduction of interest on educational loan, definition of hotels and convention centres, UTI administrator, reconstituted plot in Andhra Pradesh Capital City. These are NOT transitional provisions. The draftsmen had a target for number words and just said, 'yeh cheej purana wala mein padh lo'.

7. You may have heard that Explanations and Provisos have been eliminated. All that has happened is one of the two things:

a. They have been converted into clauses. 

b. The words 'Explanation' and 'Provided that' have been replaced by the word 'where'. This does not simplify the language. It merely makes the sentences longer and clumsier.

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Foreign Stock Options and RSUs: ITR & DTAA

by CA. Sandeep Choudhary

63662 57036

sandeepchoudharyfca@gmail.com

If your employer issues you stocks/ RSUs outside India, multiple disclosures are required while filing Income Tax Return (ITR) in India. This post considers how to file your ITR and how to claim relief from Double Taxation. 

[This post assumes that the employee is resident in India and employer is a foreign company listed in US. However, many points will apply in other cases also.]

Why This is Important

1. Failure to disclose foreign assets and foreign income correctly can result in penalties and prosecution under the Income Tax Act. A lot of employees fail to consider that holdings in foreign stocks/ RSUs require a facility akin to a trading account, a demat account and a bank account outside India.  

2. Foreign asset or foreign income not disclosed in ITR is automatically assumed to be black money. This applies even if tax was paid/ deducted on such asset or income. Under the 'Black Money Act' [Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015], even such tax-paid assets become taxable at 30%. There is an additional penalty of 3 times this tax, and a penalty of Rs. 10 lakhs for failing to disclose the foreign asset/ income. 

3. Sometimes, an income get taxed twice: first in US at the time of payment, and secondly in India on the grounds that you are resident here and therefore your global income is taxable here. India and US have a Double Taxation Avoidance Treaty (DTAA). The Income Tax Act also has other provisions for tax relief. If you handle your tax filing correctly, you can reduce your tax liability by ensuring that each income is taxed only once.  

 

Documents You Will Need 

The first thing to do is to ensure all relevant documents are in one place. These include:

1. A statement provided by your employer containing details of stocks/RSU: grant date, vesting date, market value of vested stock, number of units sold to cover tax on vesting date, etc. This statement will typically be a spreadsheet.

2. The stocks/ RSUs issued by your employer are held in demat form. You need 15 months' statement from your broker-dealer. If you are filing ITR for FY 24-25, you need these statements for the 15 month period from 1st January 2024 to 31st March 2025. [Tax computations are on Financial year basis, but some disclosures are on Calendar Year basis]

3. Form no. 16 and Form no. 12BA issued by the employer. Form no. 16 contains details of your salary and tax deducted, including tax on stocks/ RSUs. Form no. 12BA will have the details of stocks/ RSUs vested during the year and is typically in the same pdf as your Form no. 16. 

4. IRS Form 1042-S for any tax deducted in US. 

Filling up the ITR

Now that you have all the documents in place, we can start putting them in the ITR. 

Salary

The most important head is also the easiest. The value of stocks/ RSUs vested during the year goes under the heading 'Value of perquisites as per section 17(2)' within Gross Salary. 

Employees are often under the impression that they have paid tax in US on vested stock/ RSUs. This is incorrect. The tax is paid to Govt. of India and is reflected in your Form no. 16 and Form no. 12BA. 

Capital Gains

1. If you have disposed of any part of your holdings, you need to provide details here. This Schedule has 2 parts: Short-Term and Long Term. Each parts contains some tables for sale of land and building, various securities, followed by a table for sale of other assets. This last table has 2 parts: shares other than quoted shares, and assets other than unquoted shares. 

Please note that in this ITR schedule, 'quoted shares' refers to shares listed in India and not to shares of your employer listed outside India. Even 'shares of a company other than quoted shares' refers to shares of Indian companies. Your sale needs to be disclosed as that of 'assets other than unquoted shares'. Similarly, any special rates for LTCG/ STCG on listed equity are not applicable for foreign stocks/ RSUs. 

2. Even if you have not disposed any of your holdings, this schedule needs to be filled up if any stock/ RSU has vested during the year. To illustrate, suppose you are eligible for vesting of 10 shares. Your employer sells 4 shares on your behalf to cover income tax on such vesting, and 6 shares get credited in your holdings. This sale is a reportable transaction. It does not affect your tax liability since there is no income-- cost and sale value are the same-- but still needs to be disclosed.  

Note: In the above example, the company sold 40% of your vesting to cover tax outgo. If you are in 30% bracket, the company deposited only 31.2% tax (including cess) as TDS. The balance amount will remain lying with your broker-dealer in US. Unfortunately, employees are typically unaware of such cash balances lying idle.

3. Date-wise break-up (upto 15th June, 15th Sept, 15th Dec, 15 March, 31st March) of Capital Gains is required for Advance Tax interest calculations. 

Income from Other Sources

1. You should check if your employer-company gives dividend. If yes, such dividend income needs to be disclosed within income from other sources. [A lot of employees fail to note that once shares vest, they become shareholders in their employer-company and are eligible for dividends distributed by the company. Dividend money lies idle with the broker-dealer in such cases.] 

2. In some cases, your broker-dealer may pay interest on the cash balance (from surplus for sale for vesting or dividends). Such interest income is taxable under the head 'Income from Other Sources'. If the surplus is invested in mutual funds, you need to disclose the same under Capital Gains when such MF units are sold. 

Note: Broker-dealer will deduct some tax on your dividend and interest in US. You need to disclose the gross amount as Income from Other Sources. To illustrate, if dividend is $100, withholding tax is $25 and $75 is the net credit, then income to be disclosed in $100 and not $75. 

3. Withholding tax on dividend and interest will be deducted by your broker-dealer. He will issue IRS Form 1042-S containing details of such income and tax. 

4. Date-wise break-up (upto 15th June, 15th Sept, 15th Dec, 15 March, 31st March) of dividend income is required for Advance Tax interest calculations.  

5. All disclosure here is on Financial Year Basis. 

Schedule EI: Exempt Income

This Schedule has a heading 'Income not chargeable to tax as per DTAA'. However, this is not applicable to our case: we are seeking 'relief from tax' and not exemption. 

Schedule FSI: Income outside India and Tax Relief

Here, you need to disclose any income which has suffered withholding tax in US and is now being taxed in India. For example, if you have received dividends on your stock holdings or interest on cash balance in US, you can claim relief from tax here. 

1. If you have a Taxpayer Identification Number in US, mention the same. Else, give your passport number. 

2. Withholding tax has to be converted to Indian Rupees using TT Buy rate at the end of preceding month. If tax is withheld on say 15th June, you need the TT Buy rate of 31st May. 

3. Mention the Income earned outside India and the tax payable on such income (e.g. 30% plus 4% cess).

4. Tax Relief applicable is lower of tax withheld in US and tax payable in India. 

5. Mention the specific article number of the DTAA between US and India under which relief is claimed. 

6. All disclosures here are on Financial Year basis. 

  

Schedule TR: Tax Relief

This basically repeats the figures mentioned in Schedule FSI. Repeat the relief claimed figure under the head 'DTAA applicable'. 

Once you fill up Schedule FSI and Schedule TR, the ITR utility will reduce your tax liability to the extent of relief claimed. However, you need to file a separate form for DTAA attaching various documents for claiming relief (discussed below separately). If this additional form is not filed, your tax relief claim will get rejected when ITR is processed; and you will get a demand notice/ reduced refund. 

Schedule FA: Foreign Assets

Here, you need to provide the following:

1. Name and address of your broker-dealer

2. Account number

3. Account Opening date

4. Peak Balance during the calendar year (For FY 2024-25, Calendar Year 2024)

5. Balance as on 31st December (not 31st March)

6. Gross interest during the Calendar Year (not Financial Year)

Schedule AL: Assets and Liabilities

If your Total Income exceeds Rs. 50 lakhs, you need to disclose your assets here. Include your foreign stock holding and cash balances here. Note that in this Schedule, disclosure is for balance as on 31st March while in Schedule FA, disclosure is for 31st December. 

Form for DTAA

Once ITR is ready, you need to prepare a separate form [Form no. 67] for DTAA. You need to attach the following:

1. A statement providing details of nature of income, amounts, tax withheld in US, conversion to Indian currency. 

2. All IRS Form 1042-S showing income and tax withheld during the Financial Year. 

3. Statements issued by your broker-dealer during the 15 month period. 

Make sure data in both ITR and Form no. 67 is consistent. You are now ready for filing. First, the Form no. 67 needs to be filed. File ITR after this Form has been filed. 

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Nineteen Years Later: An Alternate Ending

Mr. Vernon Dursley and Mrs. Petunia Dursley of number four, Privet Drive were proud to say that they were perfectly normal, thank you very much. They were the last people you’d expect to be involved in anything strange or mysterious, because they just didn’t hold with such nonsense.

Unfortunately for them, ‘such nonsense’ had a way of creeping into the lives of the Dursleys. You could even say that much of their life for last three decades had involved dealing with things that were ‘strange or mysterious’, much to their dislike.

You would think finding a one-year-old kid on your doorstep was sufficiently strange. In the very least, they thought it was as strange as it gets, but then things started getting stranger and mysteriouser. The new kid, Harry Potter, started finding new ways to make their lives miserable. Initially, it was little things like growing hair overnight and letting loose a snake on their son Dudley. Then, Harry’s mysteriously unkempt buddy gave Dudley a tail. No, not a ‘tale’ of monkeys and crocodiles. A literal pig’s ‘tail’ protruding out of Dudley’s bottom. Soon, strange and mysterious things were trying to kiss Dudley to death. By the time Harry told Dursleys that their life was in danger and they should go into hiding, Dudley was willing to believe him despite his father’s concern that Harry was just trying to get hold of their house. Thankfully for them, Harry Potter got on with his life and killed somebody else.

For a while, the Dursleys thought their life could once again go back to normal, and for a few glorious years (to them), it was. Dudley got married, and had a son they named Piddly. When he was two years old, Vernon Dursley threw his grandson in the air hoping to catch him mid-air. Piddly rose three feet in the air and just remained there. His grandfather waited for a few seconds before sitting down in his chair in despair; Piddly immediately fell down and everyone blamed Vernon for being careless with the kid.

Vernon resolved to live in peace with the fact that Piddly suffered from the M-word, but his resolved was tested every day. To his horror, his son Dudley seemed to delight in the child’s abnormality. He told the kid tales of Uncle Harry, of owl post from a weird school, and a train from platform nine and three quarters at King’s Cross, how weird people shouted down their phone and popped out of their fireplace. Vernon disapproved of Dudley’s enthusiasm for nonsense, but kept his quiet. Meanwhile, Piddly was getting enamoured with the school named after a wart on a hog where he would learn how to be weird.

The owl post came, and Piddly danced the whole day. Two days later, a professor from the Hogwart’s School for Witchcraft and Wizardry came to explain the muggles all about the school for magic, or at least as much the muggles could be expected to understand.

Piddly was excited to finally meet someone from the school; Dudley was nervous, his previous interactions with wizards had not been particularly good. Piddly’s mother and grandparents were rather sceptical to begin with, but even they had to admit that for a weird fellow from a weird school, the professor was conducting himself in a dignified and courteous manner.

“I am impressed by how relaxed you are upon hearing about a school for learning magic,” said Professor Neville Longbottom.

“My cousin went to the school, he used to live with us, so it is not much of a shock,” replied Dudley.

“Oh! Which year did he graduate? I might know him.”

“I am not sure he graduated at all,” roared Vernon. “His cousin Harry was a problem child all along.”

The professor looked at them quizzically. “Harry?,” he cried, “Did you say Harry? You don’t mean Harry Potter, do you? Wait, you guys are the muggles Harry Potter grew up with? I wish Minerva had told me this before she sent me here.”

While Vernon was irritated by the professor’s reaction, he was not particularly surprised. People suffering from the M-word never appreciated how much the Dursleys had suffered on account of Harry Potter. He wanted to lash out at the professor, but stopped when he noticed the wizard smile as he pull something out of his pocket.

“Your uncle Harry and I were together at Hogwart’s,” said Neville to Piddly. He looked relaxed, even gleeful. “We were both in Gryffindor’s House, I am now the head of that House. He was a naughty kid, he and his friends cost us a lot of points with their nocturnal roaming. I tried to stop them once but his friend Hermione petrified me. Petrificus totalus, now that’s a simple yet effective spell.”

Vernon was rapidly losing his comfort with a man who seemed so happy reminiscing about being petrified with spells. Neville now held in his hand what looked like a gold coin. Dudley asked him what it was. The professor explained it was a coin of Dumbledore’s Army and he was using it to summon Harry Potter.

“What army? You never said you were in the Army, you said you taught herbs at that place,” Vernon shouted.

The professor opened his mouth to reply but closed it as he heard the familiar ‘pop’. It was quickly followed by a second ‘pop’.

*

Harry Potter and Ginny took in the scene with some confusion. The Dursleys looked at them with bewilderment. The professor smiled. “I believe some introductions are in order. Piddly, this is your uncle Harry. And that’s your Aunt Ginny. Harry, this is Piddly, the son of your beloved cousin. I was just telling him how Hermione petrified me when I tried to stop you guys from roaming about illegally at night.”

Harry just stared at Neville in amazement. It was Ginny who spoke. “They are muggles. Why are you telling them all this? Whatever happened to that International Statute of Wizarding Secrecy?”

“Why do you think I am here, Ginny? Just before Hogwart’s is to re-open, why am I sitting here talking to a ten-year old and his muggle family,” the professor asked Ginny with an exaggerated innocence. He then turned to Piddly and said as if explaining a difficult concept to a student, “If you want to understand what the victims of Petrificus spell look like, why, just look at the expression on your uncle’s face.”

Harry Potter just stood still for a few seconds. “No,” he finally said, softly. Then he repeated the ‘no’ with some excitement in his voice. He looked at Vernon in delight and said a loud ‘no’. Then, he turned to Petunia, who had been quite all this while. He laughed loudly and bellowed ‘no’ at the top of his voice. Finally, he turned to Dudley, who simply said ‘Yes’.

Ginny meanwhile had already seated herself beside Piddly. “Welcome,” she said to him in a conspiratorial tone, “Welcome to our world”. Piddly looked delighted. Ginny then added in a slightly louder voice, “And don’t you believe this man trying to tell you how he was the good boy trying to stop his naughty friends. He was the worst.”

“What do you mean, ‘I was the worst’? I was the proverbial good boy. Everyone knows that. And you can ask any student, I always abide by the rules and I try to be fair to all,” Neville defended himself, but even Vernon noticed that his voice was already faltering.

“And what would the students today know about your deeds in the day, Professor? Would they know about you riding illegally on invisible beasts, breaking into the Ministry of Magic, and smashing their entire collection of Time-Turners to smithereens?” Ginny was in her elements now. Neville would soon be regretting using the coin.

“You were there with me, so was Harry,” cried Neville, before realising what he was saying.

“I never said I was a good boy. Or good girl. I wasn’t. But you were the one who pulled the sword out of the hat and slashed off the head of a snake in front of the whole school.”

“That snake was bad.”

“It hadn’t harmed you. Or anyone you knew.”

“It had killed Snape.”

“When did you find that out?” asked Ginny gleefully.

Neville paused to think when he came to know that the snake had killed Professor Snape. The whole thing was somewhat fuzzy, but Ginny was correct in guessing that when Neville had killed the snake, he did not really know anything about it.

“Harry asked me to kill it. ‘Kill the snake’, that’s what he said to me, you can ask him. Back me up here, Harry.”

“I did,” Harry offered with an easy laugh. “I told him that if he got the chance, he should kill the snake. Well, Neville got the chance, and he killed the snake. It was the most exciting moment of my life, and I have had a few adventures.”

“When do we get to kill snakes with swords?” Piddly asked with enthusiasm brimming from his voice. “Hopefully, never,” answered Professor Neville Longbottom.

“Yeah! The school has all cleaned up,” said Ginny with a wry smile to Piddly. “They don’t hang students with chains and torture them, so you will miss the dungeons Neville and I were routinely sent to. As a student, your Professor Neville was leading a low-level mutiny against the school.”

Piddly looked at Neville with respect bordering on reverence. Neville felt uncomfortable with the child’s expression and explained, “Well, that was before Harry and his friends returned to school and there was a full-fledged war.” He looked again at Piddly and frowned, he was not sure he had said a smart thing.

Ginny turned to Vernon and said, “You really don't have anything to worry. My son Fred is in the third year. The school is all safe now: no one killing unicorns to drink their blood, no basilisk to kill you with their eyes, no dementors in school, no werewolves, no dragons to steal eggs from, no kidnapping of students by mermaids, no professors attacking headmasters, no grave-braking, no tortures.”

Harry laughed. “If you are trying to assure Uncle Vernon, you are doing a spectacularly bad job.” Ginny laughed too. Harry turned to Piddly and said, “It’s all good, kid. You are in for seven years of fun and adventure.”

“I would prefer if you forget all the stuff they said about me,” said Neville. “I don't want you to be spreading stories about me in the school.”

“Just stay away from the wicked influence of this naughty professor here,” said Ginny with a wink. She held Harry by the elbow and turned, there was a small ‘pop’, and they were gone.  

Kangaroo Ride

You know what happened once? When Tunnu Bhaiya and Tintin were very small, they were backpacking across Australia. They saw a mumma kangaroo hopping with a tiny joey in her pouch. Do you know a joey is? Kids of kangaroos are known as joeys. So the mumma kangaroo hopped away, and as she was hopping, her tiny joey fell out from the pouch and the mumma kangaroo did not notice it. Tunnu Bhaiya and Tintin cried, “Hey! Joey fell down! Joey fell down!” but the mumma kangaroo hopped away.

Tunnu Bhaiya and Tintin were concerned. They quickly decided what to do. What they decided was that Tunnu Bhaiya will stay with joey to protect it from wild animals, while Tintin will run upto mumma kangaroo and tell her what had happened.

So Tunnu Bhaiya stayed with joey and Tintin ran after mumma kangaroo. She ran and ran, and as she got closer, she once again cried, “Joey fell down! Joey fell down!”

Finally, mumma kangaroo noticed that someone was shouting behind her. She stopped. Then she heard “Joey fell down! Joey fell down”. She looked into her pouch. “What! Joey fell down!” she said. By then, Tintin reached her. She was panting as she said “Joey fell down!”

Mumma kangaroo was scared! “Wild animals will eat my joey”, she said.

Tintin explained to her, “No, Tunnu Bhaiya is there with joey. Joey is safe”.

“Where is joey”, asked mumma kangaroo.

“Come”, said Tintin.

Tintin jogged back to Tunnu Bhaiya. Tunnu Bhaiya was very happy to see Tintin coming back with mumma kangaroo following her. When mumma kangaroo reached them, joey immediately jumped into her pouch and disappeared.

“Thank you so much”, mumma kangaroo said. “You both are such good kids. I am terrified to even think of what would have happened if you had not seen joey fall down. If there is anything I can do for you, do tell me.”

Joey poked with head out to hear what Tunnu Bhaiya and Tintin would say. The two kids conferred. Mumma kangaroo and joey watched them whispering animatedly. Finally, Tunnu Bhaiya and Tintin asked mumma kangaroo if they could have a ride on her back.

“Sure”, said mumma kangaroo. But I can’t balance both of you at the same time. I can carry you one by one.”

So Tunnu Bhaiya helped Tintin climb on the back of mumma kangaroo. Joey jumped out saying he will keep Tunnu Bhaiya company and watch. “Hold tight”, mumma kangaroo said. Then she started hopping.

“WHEEEEEEEEEEE!!!”

“AAAHHH!!!”

“WHEEEEEEEEEE!!!”

“AAAH!”

“WHEEEEEEEEEE!!!”

“AAH!”

Tintin wheeeeeeed every time mumma kangaroo was in the air and aaahed every time she landed. Tunnu Bhaiya and joey laughed.

When mumma kangaroo reached back, Tintin came down and took joey from Tunnu Bhaiya. Tunnu Bhaiya climbed now.

“WHEEEEEEEEEEE!!!”

“AAAHHH!!!”

“WHEEEEEEEEEE!!!”

“AAAH!”

“WHEEEEEEEEEE!!!”

“AAH!”

“Why is he doing wheeeee and aaah like this”, Tintin asked joey. Joey said, “You were also doing like this only”. Both of them giggled.

When Tunnu Bhaiya jumped down, joey quickly hopped back into his pouch. Tunnu Bhaiya and Tintin thanked mumma kangaroo for the ride, mumma kangaroo thanked them again for helping her out, they waved goodbye to joey who waved back. Both Tunnu Bhaiya and Tintin felt it was the best ride they had ever ride. They would remember it forever.

The Story of the Mela

A long time ago, two sadhus prayed and bathed at the confluence of the rivers Ganga and Yamuna. They were brothers, Kumbh and Nikumbh. They were learned men, revered by all.

The brothers had decided to go into meditation: The elder brother Kumbh would travel to the Himalayas while Nikumbh would retreat by the sea into the ancient temple of the Sun.  As they parted, they decided to meet again at the confluence of the holy rivers in the future, and share their experiences.

“It would take me a few months to reach my chosen spot in the Himalayas, a few years to meditate, and then a few months to come back here. When Jupiter returns to its current position travelling through the 12 groups of stars, we too shall return”, said Kumbh.

“We will instruct and learn from each other, and our learnings will be a blessing to the world. If you do not find me here, you must assume the worst, because there is no way I will break my word to my dear brother.”

Nikumbh promised Kumbh to meet him at the agreed time. “If poor health prevents me from coming back, I shall send word”, he said. They departed from the confluence, walking along the banks of Ganga, to their respective destinations.

On the fourth day of his travel, Nikumbh reached Banaras and stayed at an ashram where students learnt and recited the Vedas. The sadhus and the students welcomed Nikumbh with the respect due to a learned man. They asked him to tell them tales of yore that carried the wisdom of their ancestors. Nikumbha told them the story of a little kid who rejected all temptations and insisted that the God of Death tell him what happens after death.

Even as he spoke, Nikumbh was struck by realization of his own mortality – how could he know what would happen by the time Jupiter returned to its spot, for the distant planet takes 4,333 days to travel through the 12 constellations! Who knew when the God of Death would pull a little string and snatch his soul away? What did a God on a buffalo care about promises made by men?

Nikumbh was not afraid of death, he was afraid of disappointing his brother Kumbh. If he did not return, would his dear brother think that he had forgotten his promise?

He spoke aloud his fears. The eldest of the sadhus replied, “No one knows what would happen in the time Jupiter completes a cycle, and no one knows what would happen tomorrow. You do not know if you will live long enough to keep your promise, and I do know if I will live long enough to complete this sentence.”

“I cannot rid you of your fears, but I will assure you of this: when Jupiter returns to the Bull, some disciples from our Ashram will travel to the holiest of confluences and seek out Kumbh. If they find him, they will inform your learned brother how you remembered him and the pact. They will take a dip at the spot where the waters of the two great rivers meet, just as you did before you bid goodbye to your brother.”

Greatly relieved by these words of sadhu, Nikumbh continued on his journey. He visited several ashrams, mathhs and temples and met many sadhus and priests, and they all offered to carry his words to his brother Kumbh in the year Jupiter retuned to the Bull. He left the banks of Ganga, he walked through dense forests, he climbed up steep hills, he climbed down deep ravines, he waded through water one day, he strode without water on another, he travelled through grasslands, he walked in meadows full of flowers, he trudged through abandoned villages by dry rivers, he bypassed teeming towns near gushing rivers, he walked, he walked, he walked till he reached the derelict temple of the Sun. There, he sat down with his legs crossed, and meditated.

Meanwhile, his elder brother Kumbh travelled along the Ganga travelling through the towns of Kannauj and Haridwar to reach the Shivaliks. He told the sadhus of these places ancient stories of the kid who did not know his father but grew to know the ultimate truth, of the golden womb that created everything, the proud king of gods who changed his form for a man’s wife, and of the two sages of yore who discussed the number of gods. He told them about his brother and they offered to travel to the city of confluence in the year Jupiter returned to the Bull, to tell Nikumbh that Kumbh remembered his promise and to take the holy bathe that is salvation to the soul.

Kumbh continued on his journey through the Shivaliks, into ever-higher mountains of Himalayas, till he saw an ice-cave shaped like a cow’s mouth from which the sacred water gushed out. There, he sat down with his legs crossed, and meditated.

Twelve years passed, and Jupiter having completed a cycle, was back amidst the group of stars that together look like a bull to some people. The sadhus and disciples reached the confluence, some carrying the message of Kumbh, and others seeking Kumbh, and all bathing in the holy waters.

Seeing so many learned men in one place, the kings joined them in taking a dip, and then the ministers and the traders and the goldsmiths and the blacksmiths, the cobblers and the barbers, the horsemen and cow-herders, the farmers and the potters, they all gathered there and took a dip in the holy waters. This was the first Mela.

The kings asked the sadhus the reason for what they were doing. The sadhus replied they were there for Kumbh since Jupiter had returned to its spot in the Bull and they had bathed in the confluence because they believed that a dip in the holy waters absolved them of all sins of this life and of lives past. And since then, every time Jupiter completes a cycle, people gather at the confluence for Kumbh and to bathe in the holy waters. If you ask them, they will tell you that it is a tradition so old that nobody knows how it started. But now you know.