Posted: March 18, 2017 Filed under: Co-operative Societies, Income Tax
If a property-owner is getting a rent of more than Rs50,000 per month (pm), then the rent-payer is required to deduct tax at source (TDS) @5%. It will create a trail for the income-tax (I-T) department to ensure that the property-owner has shown the rent in her/ his tax returns and has paid the taxes. Anyone earning more than Rs6 lakh a year as rental income must declare it in the tax returns; but people find ways to circumvent it. Hence, a new Section,194-I B, has been introduced in Budget 2017. The proposed change is effective 1 June 2017.
To make for easier compliance, it is proposed that the rent-payer need not obtain a TAN (tax deduction and collection account number) and is required to deduct the tax only once in a financial year. The TDS has to be deposited through a challan-cum-statement, for which the PAN of the property-owner is needed. The tenant is not required to file a separate TDS return for this purpose.
It has also been proposed that “tax shall be deducted on such income at the time of credit of rent, for the last month of the previous year, or the last month of tenancy if the property is vacated during the year, to the account of the payee, or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier.”
For example, if you are paying a rent of Rs55,000 per month, payment of the rent for March 2018 will need deduction of 5% TDS on the total rent paid for FY17-18. TDS will be 5% of Rs55,000 for 12 months, i.e., Rs33,000. It is to be deposited with the I-T department. So, for the March 2018 rent, you pay the property-owner Rs55,000 minus Rs33,000, that is Rs22,000. If you vacate the place before March 2018, you will deduct the 5% TDS during the last month of your rent payment.
If you are a property-owner who shows the rental income in your tax returns, you don’t have to worry. Property-owners can take credit of TDS against their total tax due while filing tax returns. However, anyone getting a rent of over Rs6 lakh a year but unwilling to show it in tax returns, is asking for trouble. According to the existing laws, any renter who claims tax exemption under HRA will have to furnish the PAN of the property-owner if the annual rent exceeds Rs1 lakh. Moreover, the data will be available at the time of stamp duty/lease registration. Those who receive rental income need to properly report the income as the I-T department can easily find this information.
Posted: May 16, 2016 Filed under: Income Tax, UID-Aadhaar
How to Link Pan Number with Aadhar Card
Both the PAN card as well as the Aadhar card are unique identification cards that serve as proof of identity that are necessary for registration and verification purposes. The Process to link your Aadhar number with PAN numner or Income Tax Return has been announced by Income Tax Department on July 13, 2015.
Income Tax Department(ITR) has given the facility to link Permanent Account Number (PAN) with the unique identification Number or Aadhar number. It helps you to eliminate the process of sending ITR – V to CPC(Centralised Processing Centre) in Bangalore.
Although PAN Card will be linked with Aadhar number only , if your personal details like Name, Gender, Date of Birth matches with Aadhar data as per PAN Data.
Income Tax Department will validate your name, date of birth, gender as per PAN and Aadhar Number with Centralized database of Unique Identification Authority of India(UIDAI). Please note that if the details do not match, the Aadhar number will not be linked to your PAN.
After the completion of Aadhar and PAN number linking process, you can e-verify your return if your mobile number is registered with UIDAI.
Please be noted that once you linked your Pan number with Aadhar card, you cann’t delinked it. As of now Income Tax Department has not given the facility to delinking PAN number with Aadhar. Follow the simple guide to link PAN number or Income Tax Return with Aadhar number(UID):
- Login to income tax e-Filing portal.
- When you logged into the e-filling portal, a pop up window appears on your screen to link your Aadhar Number.
- If the pop up window will not show automatically, you can go to profile settings under the main menu and click on the link that says Aadhar linked to PAN.
- Before entering the Aadhar card , be sure to verify your Name, Gender, Date of Birth should matches with PAN Card details.
- Income tax department will validate all your details and then after cross verifying all the details, enter your Aadhar number, text code.
Note: Don’t have Aadhar Card. Check guide on How to get Aadhar Card.
- At last, Click on Link Now.
- After validation, Aadhar number will be linked to your PAN number.
Note: Aadhar will be linked only if the details match.
How to generate EVC through Income Tax site?
- Go to e-File tab and select “Generate EVC”.
Note: There are two ways to generate EVC(Electronic verification Code). One is via your Netbanking account or second is via your registered email address/phone number. These steps works for second method.
- Enter the EVC received on your registered email address/mobile number.
- Click on e-verify return under the E-file tab.
- There will be four options. Choose first option: “I already have an EVC and I would like to Submit EVC”. Provide the EVC in the text box. Click Submit.
- Download the Acknowledgement document. Your e-filing is complete. No further action is required from your end now.
Note: In future, Aadhar card not only will be useful but also mandatory to avail benefits of various government schemes and services. I recommend you to check numerous other benefits of having Aadhar Card.
Contributed by Anuradha Chawla – AadharCard.in
Posted: April 3, 2016 Filed under: Income Tax
CBDT has released New Income Tax return form for assessment year 2016-17.Last year income tax department has released the Final Income tax return form in last week of June ,due to which Income tax return due date has extended and lately due date in audit cases was also extended after the court interference .We have not gone through Income tax forms in detailed but ITR-1 and ITR-2 are more or less is same as it were last year.
However for assessment year 2016-17, the tax department has now included a schedule on asset and liabilities which will have to be filled by individuals and HUFs, or Hindu Undivided Families, where total income exceeds Rs.50 lakh. It has also asked individuals and HUFs to provide details of pass-through income from business trust or investment fund in ITR form 2 and ITR form 2A.
Further Income tax return filing rule has been changed to some extend and now ITR form 4S (for presumptive income ) is now can be filed by Firms other than Limited liability firms .
INCOME-TAX (NINTH AMENDMENT) RULES, 2016 – AMENDMENT IN RULE 12 AND SUBSTITUTION OF FORMS SAHAJ (ITR-1), ITR-2, ITR-2A, ITR-3, SUGAM (ITR-4S), ITR-4, ITR-5, ITR-6, ITR-7 AND ITR-V
NOTIFICATION NO. SO 1262(E) [NO.24/2016 (F.NO.370142/2/2016-TPL)], DATED 30-3-2016
In exercise of the powers conferred by section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:—
1. (1) These rules may be called the Income-tax (9th Amendment) Rules, 2016.
(2) They shall come into force with effect from the 1st day of April, 2016.
2. In the Income-tax rules, 1962,—
(1) in rule 12,—
||after the word, brackets, figure and letter “sub-section (4E)”, the words, brackets, figure and letter “or sub-section (4F)” shall be inserted;
||for the figures “2015”, the figures “2016” shall be substituted;
||in clause (ca), after the words “Hindu undivided family”, the words “or a firm, other than a limited liability partnership firm,” shall be inserted;
||in clause (g), after the word, brackets, figure and letter “sub-section (4E)”, the words, brackets, figure and letter “or sub-section (4F)” shall be inserted;
||in sub-rule (5), for the figures “2014”, the figures “2015” shall be substituted.
(2) in Appendix-II, for “Forms Sahaj (ITR-1), ITR-2, ITR-2A, ITR-3, Sugam (ITR-4S), ITR-4, ITR-5, ITR-6, ITR-7 and ITR-V”, the following forms shall respectively be substituted, namely:—
Download ITR forms for AY -2016-17
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- Forms Sahaj (ITR-1),
- Sugam (ITR-4S),
Read more: INCOME TAX RETURN FORM AY 2016-17 NOTIFIED | SIMPLE TAX INDIA
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Posted: November 23, 2015 Filed under: Income Tax
Filing income tax returns has always been confusing for most first timers. Even those who have filed IT returns before face many issues filing the return on time. Here are 14 helpful initiatives taken by the Income Tax department to simplify the life of tax payers.
Income Tax department of India recently launched some useful initiatives that are tax-payer friendly. These not only help the tax-payer to communicate with the department in a simpler way but also help the department in keeping track of financial transactions by tax payers.
Here are 14 initiatives recently launched by the income tax department that will definitely make the work easy for both the parties –
1. E Sahyog
The recently launched eSahyog initiative enables small taxpayers to interact with the department over email. The paperless initiative will enable IT department to send notices to assessees via email. The step will save them from physically appearing before the tax authorities. It is an online tool to resolve any mismatches in IT returns of taxpayers whose returns have not been selected for scrutiny, without visiting the IT Office.
2. Pan Camps
The government had announced in the last Budget that quoting of PAN (Permanent Account Number) will be mandatory for any purchase or sale exceeding Rs. 1 lakh. The expansion of the number of PAN card holders would help the government implement this budget proposal. Currently there are 23 crore people with PAN card in India.
To facilitate people to get PAN cards, the government plans to launch camps across the country. Since not everyone, especially in the rural areas, possesses a PAN card, such camps might enable people to get access to it easily.
3. Tax return preparer scheme
Would you believe it if we told you that the ITD offers you a tax filing service at your door steps, which consists of trained and certified professionals who can help you file your tax return free of cost or at a minimal fee? Introducing TRPS. Launched in 2006 by the Income Tax Department, TRPS scheme assists small and marginal taxpayers in preparing and filing their tax returns by creating a company of ‘Tax Return Preparers’ (TRPs). They can charge a maximum fee of Rs. 250, or sometimes nothing. Here is how you can find a TRP.
4. Tax refund in 7-10 days
In September 2015, Income Tax Department announced that it will now process and send tax refunds in a short time of 7-10 days. Earlier, taxpayers had to wait for months, or in some cases, even years to get the refund. The step was initiated after the department’s latest technology upgrade of electronic and Aadhaar-based Income Tax Return (ITR) verification. With the introduction of new technology, the department wants to eliminate human interference in taxpayers services to enable faster and hassle-free processing of ITRs and refunds.
5. Simplified IT forms
In May, 2015, The Finance Ministry gave a big relief to the tax payers by introducing a new, simplified three-page income tax return (ITR) forms. They also dropped the controversial provision for mandatory disclosure of foreign trips and dormant bank accounts which are not operational during the last three years. The new forms — ITR 2 and ITR 2A — had only three pages which brought paperwork down to a great extent for the tax payers. The new ITRs replaced the 14-page form that were notified earlier this year.
6. Relief for Travellers
With regard to foreign travel details, it is now proposed that only the passport number, if available, will be required to be furnished in ITR-2 and ITR-2A. There would be no requirement to provide details of foreign trips/expenditure. This would bring relief to all individuals who travel extensively.
7. Clarification on the applicability of MAT
The Government of India accepted the recommendation of the A.P. Shah committee to clarify the total inapplicability of MAT to FII/FPIs not having a place of business/ permanent establishment in India. The confusion over MAT erupted after the tax department sent notices to 68 FIIs demanding Rs. 602.83 crores as MAT dues. The committee was quick to recommend the inapplicability of MAT, which was further affirmed by a circular from CBDT.
8. Electronic Verification of Income Tax Returns
Taxpayers have also appreciated the new initiative of Electronic Verification of the Income Tax Return through Aadhaar card linkage and Net-banking. The testimonials affirm user-friendliness and removal of the hassle of sending the hard copy of the ITR-V form to Bengaluru. Taxpayers have also reported that the process of e-verification shortens the time taken for processing of the return and issue of refund. Salaried employees claimed that they were able to file their tax returns in under ten minutes.
9. Tax Relief to shopkeepers for using Digital Payment System
A unique tax reform that the Finance Ministry is working on actively now is the proposal of offering tax relief to shopkeepers as well as consumers for using the digital payment system. Shopkeepers will be incentivized if their sales exceed a minimum threshold limit for card transactions. As of now many business establishments, including shopkeepers, prefer cash transactions over card or any other electronic form of payment. The excessive use of cash is seen as one of the reasons for a bustling illegitimate parallel economy. This new proposal will not only establish digital transactions, it would also help in clamping down on black money and fake transactions. The offer of tax incentives to both users and shopkeepers makes it a win-win situation.
10. Pre-filled Tax Return Forms
As part of efforts to popularize the electronic mode of filing Income Tax Returns (ITRs), the CBDT is planning to provide “pre-filled” return forms to filers which will have an automatic upload of data on income and other vitals of a taxpayer.
11. Improvement in Taxpayer services
Taxpayer services will be improved to a great extent with CBDT announcing that recommendations of a government-appointed panel on reforms in tax administration will be implemented soon. The TARC (Tax Administration Reform Commission) had also recommended industry-based jurisdiction instead of the current system of territorial revenue collection for direct taxes in the country for which the Board has constituted a committee recently
12. Faster resolution of grievances
The disposal rate of grievances received this fiscal till 22 July through the centralized public grievance redress and monitoring system has increased to 85%, the tax department said. The department will also set up an additional 58 aayakar seva kendras to provide services to tax payers. At present, there are 250 such centers.
13. Establishment of online platform Sevottam
The Income Tax Department has set up its internal online platform known as Sevottam, connecting all Income Tax offices in the country. The details of each consumer grievance will be updated in the platform every day. There will be day to day monitoring by the department on this, to ensure that grievance resolutions are fast and time bound.
14. Taxpayer-friendly steps taken when needed
The CBDT had extended the last date for filing tax returns for the residents of Gujarat due to the disturbances caused in the state over reservations. Consequently, it also issued an order extending the due date for the residents of all the states of India when High Courts of different states ruled varied judgments on the same, so as to avoid discrimination amongst the tax payers.
Special thanks to Raghavendra Prabhu, Raghav Subramani and Vidit Chaudhary from KPMG for their important inputs.
Posted: July 23, 2015 Filed under: Income Tax
New forms, additional information, completely paperless filing…. the Finance Ministry has introduced several changes in the way taxpayers will file their returns this year. As a taxpayer you need to be aware of these changes lest you file an incorrect return that gets rejected or results in a scrutiny notice.
Many taxpayers tend to believe that if they have no tax liability or have already paid all taxes, they need not file their returns. “It does not really matter whether you have paid any taxes or not.
Even if all your taxes are paid through TDS by the employer and bank or you have paid an advance tax, you still need to file returns if your annual income exceeds Rs 2.5 lakh,” says Archit Gupta, Founder and CEO, ClearTax.in. But before we get there, let’s look at the major changes in this year’s tax filing rules.
Who needs to file tax returns?
If the gross taxable income after exemptions, but before deductions, exceeds the basic exemption of Rs 2.5 lakh, you need to file your tax return.
Click Here for the detailed article from Economic Times, on the deadlines, forms, methodology, foreign income and assets and much more
Posted: May 24, 2015 Filed under: Income Tax
While talking to my acquaintances around me I gather an impression that majority of the salaried people feel that they are not required to file their income tax returns as tax is already deducted from their salaries. This is not correct legal position. Payment of taxes and filing of income tax return are two separate obligations. There is another misconception that if I miss the deadline of 31st July, I cannot file my return later on as the deadline is sacrosanct and a now or never thing.
In this article I will explain the legal position concerning individual tax payers as regards requirement of filing the income tax return.
Do I need to file my income tax return?
Income tax filing and payment of income tax payment are two different obligations. it is better to file income tax before due date as it saves you from possible penal actions and allows you to make the most of provisions of Income Tax Act.
Who is required to file the IT returns?
So to start with, you are required to file your income tax return if your gross total income is more than the basic exemption limit. For the year ended 31st March 2015 this is Rs. 2.5 lakhs for an ordinary individual, Rs. 3 lakhs for an individual over 60 years and Rs. 5 lakhs for an Individual above 80 years.
The word gross total income is not the same as the income on which your tax liability is calculated. Gross total income is the income calculated before any deduction under Sections like 80 C, 80 CCC, 80 CCD, 80 CCG, 80D, 80E, 80EE, 80G and 80 GGA and 80 TTA is availed. The deductions cover various items like contribution towards PF, NPS and PPF, payment of School fee for your children, premium for your life and health insurance. This also covers purchase of NSC, home loan repayment, rent paid etc. as well as interest on saving bank account.
So even if you may not have any tax liability after availing above deductions, you still need to file your tax return in case your gross total income before such deductions exceeds the amount of basic exemption applicable in your case. You need to file return in case you own any asset outside India or you are an authorized signatory for any account located outside India . This becomes applicable to those of you, without you noticing it, who had gone outside India on deputation or employment and had opened a bank account and did not close the bank account.
If you have any investments like shares, bonds or mutual fund units of foreign companies, you also are required to file return irrespective of your income level for the year. So in case you have received shares of a foreign company as ESOP as part of your compensation package, you are covered under this provision and file the return.
What is the last date for filing of my income tax return?
In case you are required to file return as discussed, the due date is July 31. The due date is applicable generally in case of individual tax payers. However in case you are carrying on a business and your accounts are required to be audited, the due date gets extended till 30th September. Even for the people who are working partners in partnership firms, whose accounts are audited, the due date is 30th September.
What happens if you miss the deadline?
In case you file your current income tax return after due date i.e. 31st July, 2015 you will not be able to revise your income tax return in case any omission or error is detected. You also will have to pay penal interest on the amount of tax for the period of delay in case any tax is still payable. Another consequence of missing the deadline would be that, in case you have business loss or capital gains loss in the current year, you will not be able to carry it forward to be set of in subsequent years.
Do I pay any penalty if you do not file the return by due date?
There is no penalty if you fail to file your return by 31st July, 2015 and file the same byMarch 31, 2016. However if your income is taxable and you fail to file your return of income by March 31, 2016, the same can be filed only by 31st March 2017. However in such a situation the income tax officer can levy a penalty of Rs. 5,000 after giving you an opportunity to explain your case. So from the above discussion it becomes clear that even if you do not have any tax liability or appropriate taxes have been deducted from your income, you are still required to file your return. Moreover it is better to file the return by the due date to avoid any complication later on.
By Balwant Jain is a CA, CS and CFP.
Presently working as Company Secretary of Bombay Oxygen Corporation.
Posted: February 24, 2015 Filed under: Finance & Investments, Income Tax
Depositors in the ‘Sukanaya Samridhi’ scheme, notified by the government in November 2014, can now avail tax benefits under Section 80C of the Income Tax Act.
The maximum deposit under the scheme for planning the future of the girl child will be ₹1.50 lakh in a financial year. Apart from this scheme, an individual also has the option of getting tax benefits through investments in National Savings Certificates, five-year Post Office Time Deposits, Public Provident Fund, Life Insurance, Equity-Linked Tax Saving Scheme, Five-year Tax Saving Bank Fixed Deposits or even principal repayment of home loan under Section 80C.
As per a Finance Ministry notification, tax benefits for the Sukanya Samridhi scheme have come into effect from January 21, which means anyone investing on after the said date will get tax benefits.
The scheme prescribes opening of a deposit account with post offices in the name of girl child by her biological parents or legal guardian. One girl will have one account, while the parent can open such an account for a maximum of two girl children till the age of 10.
However, if there are twin girls, then the facility will also be available for the third girl child.
Though the account will mature in 21 years from the date of opening of account, one can withdraw half the balance (at the end of preceding financial year) for higher education and marriage.
There is one condition — this withdrawal will be possible only after the girl attains the age of 18 years. The account will be closed if a girl marries before the scheme’s maturity period.