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Sunday, March 23, 2014

IT department will bring digital signature to common taxpayer

In order to weed out the hassle of sending by post a hard copy of e-filed return, the Income Tax department has decided to bring in the facility of electronic signatures for taxpayers to endorse their bonafides.

The Central Board of Direct Taxes (CBDT), the apex office to formulate policies for the Income Tax department, has decided to implement the new mechanism by the end of the next financial year in March, 2015.

Official sources privy to the development told PTI that the CBDT will get in touch with the Union Ministries of Law and Communications and Information Technology to establish the legal position and technology requirements respectively before it operationalises the new protocols for the e-returns called 'ITRV'.

"It has to be seen what will be the procedure to obtain electronic or digital signature by the taxpayers. There should not be an additional cost or procedural burden for the taxpayer who opts to file his or her I-T return online," a senior official said.

In case of digital signatures (used by corporate entities as of now), a bonafide statement that verifies the identity of the sender, it is required to be created by paying a fee and this requires regular renewal, which is why this is being seen as a burden on salaried class and other categories of small taxpayers.

The department, within the same time-frame, is also desirous of enabling the e-filing of Tax Deducted at Source (TDS) statements through its official web portal which is used by taxpayers currently to file their electronic returns.

As per the norms in force at present, a taxpayer who files an e-return has to mandatorily send a copy of the same by post to the I-T department's Central Processing Centre (CPC) in Bengaluru.
However, in many cases the post would not reach the CPC and hence the tax department categorised the taxpayers return as null and void.

The department, sources said, wants to promote e-filing of I-T returns and it desires that e-filing should be "hassle free and sans any glitches", which will prompt more number of people to file their tax returns by this way.

The I-T department is also bolstered by the fact that more and more number of people are opting to file their returns online.

As per existing rules, the CPC, on receipt of the posted 'ITRV', sends an electronic acknowledgement to the tax return filer.

The problem arises when the document sent by post does not reach the CPC because of lapses on the part of the taxpayer or some other reason.

IT department can ask details even after clearing the assessment

Filing your taxation assessments is only one perhaps the Income Tax legislation. It is equally important to have your assessment completed in the returns filed. After filing I- T returns  , most tax payers don’t bother over it unless they have filed to get a tax refund.

Beneath tax laws, most returns are usually summarily assessed underneath section 143( 1) in the Income Tax Act . An intimation released under this section highlights in the event the tax officer has accepted each of the claims of your taxpayer as offered in his returning of income or otherwise.

Based on this kind of assessment, the tax payer are going to be either eligible to his refund or will have to pay additional income tax, as applicable. In instances where the tax officer feels how the returns should be scrutinised in larger detail, notices for typical assessment ( u/s 143( 3) in the Act) are released. Under the levy laws, there are time limits approved for issuing is aware for regular lab tests.

Further, the tax officers can also be empowered to initiate reassessments in cases where they are in the opinion that revenue has escaped analysis during either in the two types connected with assessments described previously mentioned.

In a new case that came up up for hearing ahead of the Delhi High Judge, the question that had been put up for decision was whether or not the tax officer can go with a case for reassessment, in which the summary assessment have been completed, in the absence of a firm notion that income chargeable to tax has steered clear of assessment.

The levy payer filed your return of revenue for assessment yr 2005- 06, which has been processed under portion 143( 1) in the Act. Subsequently, upon 26 March 2012, the tax policeman issued a see for reopening the assessment for that said year. While complying while using notice, the tax payer requested for that reasons recorded through the tax officer for reopening the analysis. For the claimed assessment year, the tax payer acquired filed the returning and offered money of   655, 000 since short- term cash gains (‘ STCG’).

During regular assessment for 200708, STCG declared through the tax payer were being treated as organization income from purchase and sale connected with shares.

Therefore, the tax policeman while reopening the situation for reassessment, said there ended up being omission or failure on the part of the tax payer to reveal truly and fully all material facts needed for assessment income. This tax payer objected stating he was earlier assessed under conclusion assessment. But the levy officer rejected your objection saying it is a settled law in which intimation under section 143( 1) is usually a summary processing connected with returns where there isn't a application of mind through the tax officer. For the first appellate level, the authority reversed the finding in the tax officer and held how the income was to get treated as STCG instead of as business revenue.

The reopening of your assessment is permitted within the Act if your tax officer has reason to believe that any revenue chargeable to levy has escaped assessment for virtually any assessment year. The scope in the phrase “ explanation to believe” have been considered by your Supreme Court in several decisions and has held that though a Court will not judge the adequacy in the reason provided through the tax officer, it must assess whether or not the belief will be based upon relevant and particular information that could lead to such a notion.

In the claimed case, the Honourable Large Court observed how the reassessment is not on the basis of new information or facts which have come to your fore now, but rather examination facts that were provided combined with the original return filed through the tax payer.

This reassessment, in your court’s opinion, amount to a review or change connected with opinion carried out in the last assessment year 2005- summer. The Court also observed that inside tax payer’s scenario, the order in the tax officer to convert the STCG in to business income for AY 2007- 08 have been reversed in additional appellate stages. Within the light of most of these facts, the tax officer had not been right in reopening the situation.

The court further observed how the section which encourages the tax policeman to reopen an instance makes no distinction between an buy passed by regular assessment as well as the intimation issued underneath summary assessment. The court although not conforming to your tax officer’s watch, that summary assessment won't involve any request of mind through the tax officer, held that in case this was true then it would in effect spot a tax payer as their return was prepared under summary assessment inside a more vulnerable position than inside a case where the full fledged scrutiny assessment manufactured.

The tax payer doesn't have a choice or is not capable of control whether their particular filed return is usually put to critique or is summarily evaluated. The court also reiterated the observation manufactured in an earlier ruling that in case the summary assessment should be only an intimation instead of assessment, then your tax officers could possibly never reopen such cases, as re- opening of a case is permitted only an assessment have been done.

Under the machine of electronic filing of taxation assessments, summary assessments are completed considerably quicker and intimations u/s 143( 1) in the Act is issued to a lot of tax payers. On receipt of this intimation, the tax payer should make an effort to carefully understand the reason behind rejection of any kind of particular claim through the tax officer along with accordingly accept a similar or file to get a rectification.

Friday, March 21, 2014

Interest rates for PPF and SCSS scheme wef 1 April 2014 notified

Reserve bank of India notified interest rates on PPF scheme as well as Senior citizen saving scheme 2004(SCSS). RBI issued a note dated 21 March 2014 regarding notified of interest rates for PPF and SCSS scheme. Full note is as under.

Please refer to our circular RBI/2011-12/359 dated January 20, 2012 regarding interest rates on small savings schemes, wherein it was indicated that as per Government’s decision on revision of interest on small savings schemes, the interest rates on various small savings schemes for every financial year will be notified by the Government before April 1st of that year.
The Government of India has now vide their Office Memorandum (OM) No. 6-1/2011-NS.II dated 4th March 2014, advised the rate of interest on various small savings schemes for the financial year 2014-15. Accordingly, the rates of interest on PPF, 1968 and SCSS, 2004 for the financial year 2014-15, effective from April 01, 2014, on the basis of the interest compounding/payment built-in in the schemes, will be as under:

Rate of Interest w.e.f.
Rate of Interest w.e.f. 01.04.2014
5 Year SCSS, 2004
9.2% p.a.
9.2% p.a.
PPF, 1968
8.7% p.a.
8.7% p.a.

The contents of this circular may be brought to the notice of the branches of your bank operating the PPF, 1968 and SCSS, 2004 schemes. These should also be displayed on the notice boards of your branches for information of the PPF, 1968 & SCSS, 2004 subscribers.
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Thursday, March 20, 2014

ITR V due date for ay 2012-13 and 2013-14 has been extended

There are many taxpayers who have uploaded their Income Tax Returns (without digital signature Certificate) for A.Y. 2OI,z-Lg [filed between 1.4.2012 to 31.10.2013 and for A.Y. 2013-14 [filed between 01.4.2013 to 31.10.2013, but have either not filed the corresponding ITR-V or have filed it with the local Income-Tax Office. ITR-V is accepted only at CPC, Bengaluru by ordinary or speed post. Therefore an opportunity is being given to such taxpayers to regularize their Income-tax returns. 

All Such taxpayers may mail the ITR-V, by 31st March, 2014, by ordinary post or speed post at Post Bag No. I, Electronic city Post Office, Bengaluru-560100 (Karnataka). Taxpayers who have filed their ITR-V with the local Income-tax office may again mail their ITR-V to the CPC by 31st March, 2014. Those taxpayers who have earlier mailed their ITR-V, but have not received the acknowledgement e-mail from the CPC, may mail their ITR-V to the CPC again. 

The ITR-V form should be mailed to the CPC only at the above address by ordinary post or speed post. Taxpayers may note that no other place or form of delivery will be accepted. 

Taxpayers may also note that without acknowledgement of the ITR-V from the CPC it would not be possible for the Income -tax Department to process the Income-tax returns or issue any refunds there from, as these would be treated as not having been filed with the Department.

Tuesday, March 18, 2014

New rules of wealth tax for benefiting landonwers

Most people believe paying income tax on income and filing an IT return by the due date signifies 100% compliance with the laws. However, some taxpayers have no idea of another form regarding direct tax, and that is charged on their particular wealth.

Wealth tax is usually a direct tax levied on individuals, Hindu Undivided Family (HUFs) and firms (other than non-profit companies) featuring net wealth well over R30 lakh upon March 31 of the year. Currently, money tax is payable with 1%. Under the particular proposed Direct Income taxes Code (DTC), the threshold limit to levy wealth tax could be raised from Rs.30 lakh to help Rs. 1 crore.

The actual tax is payable upon residential house (including a new guest house, but excluding commercial complexes and residential properties discrete for minimum regarding 300 days in a year), jewellery, gold and also other precious metals, including articles created from precious metals, yachts, boats and plane (other than those utilised by the taxpayer pertaining to commercial purposes), downtown land, cash in hand well over Rs. 50, 000 for people and HUFs and motor cars (other than those employed in taxpayer's hiring business or used because stock-in-trade).

The Central Board of Direct   taxes (CBDT) has given a circular providing explanatory notes to amendments by the Finance Act, 2013. The key changes with respect to wealth tax are the following:

1) Exemption regarding agricultural land located in urban areas on the definition of ‘assets’

2) Provisions to facilitate electronic digital filing of annexure-less come back of net money

3) The classification of ‘assets’ includes urban land located in the jurisdiction regarding municipality or cantonment mother board, or land located in a notified spot. However, certain categories of urban land (such as land what is the best construction of a building just isn't permissible, land held pertaining to industrial purpose and land held because stock in trade) have been excluded from madness. No specific exemption has become provided to gardening land in urban areas.

4) As money tax is levied only on useless assets, there was no intention to help levy it upon agricultural land, which can't be termed as a good unproductive asset.

In view of the previously mentioned, the definition regarding urban land has now been amended through the Finance Act, 2013/CBDT sale paper to exclude metropolitan land, which is labeled as agricultural land in government records and employed for agriculture. The move to exclude urban agricultural land is undoubtedly a big relief.

The electronic submitting of annexure-less return is additionally a significant amendment.

The Wealth tax Act offers up furnishing a give back of net wealth within a prescribed form and it has to be verified. Previously, certain documents in addition to reports were forced to be furnished combined with the return of net wealth under the provisions of the Wealth Tax React, read with the provisions of Money tax Rules.

Granted these changes, it's clear that the costa rica government has been getting various steps to make sure compliance. If you are liable to spend wealth tax, it’s important which you comply in order to avoid any surprises through the tax department.

Deductor has the right on interest on excess TDS deposited and refunded by govt.

The object behind insertion of section 244A is that an assessee is entitled to payment of interest for money remaining with the Government which would be refunded. There is no reason to restrict the same to an assessee only without extending the similar benefit to a resident/ deductor who has erroneously deducted tax at source /deducted excess TDS and deposited the same before remitting the amount payable to a non-resident/ foreign company.

• Section 240 of the Act provides for refund of any amount that becomes due to an assessee as a result of an order in appeal or any other proceedings under the Act.

• The phrase "other proceedings under the Act" is of wide amplitude. The other proceedings under the Act would include orders passed under section 154 (rectification proceedings), orders passed by the High Court or Supreme Court under section 260 (in reference), or order passed by the Commissioner in revision applications under section 263 or in an application under section 273A.

• In the instant case ,the deductor/assessee had paid taxes pursuant to a special order passed by the assessing officer/Income Tax Officer. In the appeal filed against the said order the assessee has succeeded and a direction is issued by the appellate authority to refund the tax paid.

• The amount paid by the resident/ deductor was retained by the Government till a direction was issued by the appellate authority to refund the same.

• When the said amount is refunded it should carry interest in the matter of course. As held by the Courts while awarding interest, it is a kind of compensation of use and retention of the money collected unauthorizedly by the Department.

• When the collection is illegal, there is corresponding obligation on the revenue to refund such amount with interest in as much as they have retained and enjoyed the money deposited.

• Even the Department has understood the object behind insertion of section 244A, as that, an assessee is entitled to payment of interest for money remaining with the Government which would be refunded. There is no reason to restrict the same to an assessee only without extending the similar benefit to a resident/ deductor who has deducted tax at source and deposited the same before remitting the amount payable to a non-resident/ foreign company.

• The State having received the money without right, and having retained and used it, is bound to make the party good, just as an individual would be under like circumstances.

• The obligation to refund money received and retained without right implies and carries with it the right to interest.

• Whenever money has been received by a party which ex ae quo et bono ought to be refunded, the right to interest follows, as a matter of course.

• The deductor is entitled to interest under section 244A(b) from the date of payment of TDS i.e. date of deposit of TDS with Govt.

Friday, March 14, 2014

Advance tax calculator for financial year 2013-14 and 2014-15

Advance tax is the tax what we need to pay in advance. The second installment liability of advance tax is coming on 15 December. So it is high time for calculating the advance tax liability and pay.

You need to pay advance tax only if the taxable amount is more than Rs. 10000 in the financial year. Advance tax is paid in three times in a year and last date to pay advance tax is as under.

15 September-30%

15 December- 30%

15  March- 40%

So many people face computing advance tax liability a complex issue as it needs many more calculation before finalizing advance tax liability. So this is an excel based calculator which makes your task easy.

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