Clarification regarding the Income Declaration Scheme 2016

Press Information Bureau 

Government of India

Ministry of Finance

Clarification regarding the Income Declaration Scheme 2016 

Fifth Set of Frequently Asked Questions (FAQs) was issued yesterday clarifying certain issues relating to Income Declaration Scheme,2016 (the Scheme). Clarification has been sought as to whether the answer number 4 of the said FAQ shall apply to all assets declared under the Scheme or it is limited to only immovable property. As explained in the said answer, the clarification was issued considering the fact that investment in an immovable property may be funded partially from undisclosed and partially from disclosed sources. In such cases, if the property is sold in near future, gains from part of the property may be long term and the balance may be short term. This shall cause undue hardship to the declarant. Therefore, the clarification issued relates only for determination of holding period of immovable property. 

In view of the above, it is again clarified that answer number 4 of the said FAQ shall only be applicable for determining holding period of an immovable property for which the date of acquisition is evidenced by a deed registered with any authority of the State Government. However, for assets other than immovable property declared under the Scheme, the holding period shall start from 01.06.2016 for purpose of computation of capital gains. 

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Central Govt. setup a Committee to simplify the provisions of the Income Tax Rules

Central Govt. setup a Committee to simplify the provisions of the Income Tax Rules

Government Sets-Up A Committee to Simplify The Provisions of The Income Tax Act, 1961

The Government of India has constituted a Committee with a view to simplify the provisions of the Income Tax Act, 1961, with the following composition:

(i) Justice R.V. Easwar, (Retd.), former Judge, Delhi High Court and former President, ITAT – Chairman

(ii) Shri V.K. Bhasin, former Law Secretary – Member

(iii) Shri Vinod Jain, Chartered Accountant – Member

(iv) Shri Rajiv Memani, Consultant – Member

(v) Shri Ravi Gupta, Sr. Advocate – Member

(vi) Shri Mukesh Patel, Tax-Advocate – Member

(vii) Shri Ajay Bahl, Consultant – Member

(viii) Shri Pradip P. Shah, Investment Adviser – Member

(ix) Shri Arvind Modi, IRS (IT:81009) – Member

(x) Dr. Vinay Kumar Singh, IRS (IT:95006) – Member

The Terms of Reference (ToR) of the Committee shall be as follows:

i) To study and identify the provisions/phrases in the Act which are leading to litigation due to different interpretations;

ii) To study and identify the provisions which are impacting the ease of doing business;

iii) To study and identify the areas and provisions of the Act for simplification in the light of the existing jurisprudence;

iv) To suggest alternatives and modifications to the existing provisions and areas so identified to bring about predictability and certainty in tax laws without substantial impact on the tax base and revenue collection; and

The Committee shall set its own procedures for regulating its work. The Committee can also work in Sub-Groups and the draft prepared by the Sub-Groups can then be approved by the whole Committee. The Committee will put its draft recommendations in the public domain. After stakeholder consultations, the Committee will formalise its recommendations. The Committee can give its recommendations in batches. The First Batch containing as many recommendations as possible shall be submitted by 31st January, 2016.

The Term of the Committee shall be for a period of one year from the date of its constitution.

Source: PIB News

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Electronic Filing of Income Tax Returns for 2015-16 Commences

Press Information Bureau

Government of India

Ministry of Finance

Electronic Filing of Income Tax Returns for 2015-16 Commences; ITR 1-Sahaj, 2 and 2A can be Used by Individuals or HUF Whose Income Does not Include Income from Business;

ITR 4S – SUGAM can be Used by an Individual or an HUF Whose Income Includes Business Income Assessable on Presumptive Basis; Taxpayers Requested to E-File Their Returns Early to Avoid the Rush Closer to the Last Date of Filing.

The Income Tax Department has released the software for preparing the Income Tax Return forms 1- SAHAJ, 2, 2A and 4S- SUGAM for AY 2015-16. The e-filing of these return forms has been enabled on the e-filing website-https://incometaxindiaefiling.gov.in.

ITR 1-SAHAJ, 2 and 2A can be used by individual or HUF whose income does not include income from business. ITR 4S – SUGAM can be used by an individual or HUF whose income includes business income assessable on presumptive basis. The elaborate details of the persons who can use these forms are available in the instructions for filling the forms.

The facility for pre-filling of information for these return forms is available in the software for preparing the return forms. When the taxpayer exercises this option and just fills in his PAN, then personal information and information on taxes paid and TDS will be auto-filled in the form. Taxpayers are requested to use the return preparation software available free of cost under the ‘Downloads’ section on the home page of the Income Tax Department’s e-filing website-https://incometaxindiaefiling.gov.in. The use of Departmental software will ensure preparation of error-free returns thereby avoiding any need for future rectification due to data validation mistakes.

Taxpayers are requested to e-file their returns early to avoid the rush closer to the last date of filing.

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Income Tax exemption limit may go up to Rs 5 lakh: Budget Expectation

The Budget FY16 may carry an assurance, possibly fortified by a new insertion into the Income Tax Act, that the 2012 retrospective amendments to tax laws won’t be invoked afresh for transactions that were consummated prior to the changes.

According to sources who were privy to the Budget discussions, finance minister Arun Jaitley may also raise the overall personal income tax exemption level by R1 lakh to R5 lakh.

While the basic exemption limit for individuals (other than senior citizens) could go up from R2.5 lakh to R3 lakh, the investment limit for claiming deduction under Section 80C will increase to R2 lakh from R1.5 lakh at present. The present higher limits for senior citizens would be correspondingly raised.

Sources said that the two measures, together, could result in an annual revenue loss of around R30,000 crore to the government and a corresponding boost to household savings, but added that the revenue loss could be stemmed with the current focus on compliance.

The immunity to past cases from the much-decried retrospective amendments implies the following: Besides Vodafone and over a dozen other similar high-profile cases in the courts/under arbitration already and the Cairn India’s case, tax liabilities from these amendments could arise only for indirect transfer of Indian assets after March 2012, when the amendments were introduced in the I-T Act.

In his first Budget presented in July last, Jaitley said the government would avoid retrospective amendments to the extent possible, and added that all new cases (except those with courts) that arose from the 2012 changes in the I-T Act that overrode a Supreme Court ruling, would be referred to a high-level committee at the Central Board of Direct Taxes for sort of a third party overview. This hasn’t made the foreign investors any happier who wanted these retroactive changes to be withdrawn.

In fact, not many cases came up before the CBDT committee as the field officers have turned cautious.

The new proposal to shield past cases from any adverse effect from the controversial tax proposals will make the panel’s role more redundant, even as the government hopes that it would soothe investor sentiments. In parallel, the cases which are pending with courts, involving tax demands of tens of thousands of crores, will be pursued and taken to their logical (judicial) conclusion.

Meanwhile, sources added, the CBDT has identified 35 lakh people who have made substantial transactions but have not filed income tax returns and is slated to send letters and notices to them in the coming months seeking explanations. This is part of a process to bring more people into the tax net and could give a fillip to revenue mop-up.

Jaitley, however, is unlikely to alter the income tax rates in the Budget; while some new tax exemptions are on the anvil, several existing ones are set to be scrapped.

Winds of change

 Retrospective amendments of 2012 won’t be invoked afresh for transactions prior to the changes

Besides some high-profile court cases, tax liabilities from these amendments could arise only for indirect transfer of Indian assets after March 2012

  Basic I-T exemption limit for individuals may go up to R3 lakh and the investment limit for deduction under Section 80C may rise to R2 lakh

Source : Financial Express

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NMC urges FM to raise IT exemption limit to 5Lakh and for Merger of DA

JAMMU: The National Mazdoor Conference today asked Union Finance Minister Arun Jaitley to raise the income tax exemption limit to Rs 5 lakh.

“We urged Union Finance Minister to raise the Income Tax exemption limit to Rs five lakh,” National Mazdoor Conference (NMC) President Subash Shastri said while addressing a series of rallies at Kanjali and Bomyal in Nagrota Block here today.

Shastri also appealed he Finance Minister to announce non inclusion of amount of DA to calculating income tax as the DA instalments are released by the government from time to time to utilise the impact of price rise and inflation.

Shastri emphasised the need for immediate merger of 50 per cent DA into basic pay and pension as per the recommendations of the Fourth Pay Commission.

He added that all these burning issues impacting both the Central and State Governments Employees and pensioners should be addressed by the Union Finance Minister while presenting the budget for 2015-16 in the coming Budget Session of Parliament beginning on 23rd of this month.

He also demanded immediate release two DA instalment of 17 per cent in favour of State Government Employees and pensioners, pointing out that while Central Government is about to release another instalment 6 per cent DA in favour of its employees and pensioners from Jammu 2015 but it is unfortunate that the salaried class in the state has not got the benefit previous two DA instalments.

He also demanded early regularisation of the 62,000 daily rated workers beside release of their wages without any further delay.

Source:www.economictimes.indiatimes.com

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Income Tax – Don’t panic if your return is under taxman's scrutiny

For most taxpayers, scrutiny or audit of tax return means long-drawn hassles, furnishing multiple documents and negotiating with officials. Tax returns are randomly selected for scrutiny, where the income-tax officer seeks additional information to verify the taxable income as stated by the assessee. The notice is given under Section 143(2) of Income-Tax Act, asking the assessee to visit the department’s office and produce additional documents. A receipt of a notice does not indicate any crime; it simply means an investigation to find out if any income has escaped assessment.

An individual need not panic if his case is up for scrutiny and must reply to all queries raised either through a letter or by appearing in person. The tax official can demand salary certificate or Form 16, which gives details of gross salary paid and taxes deducted, rent receipts and rent agreement with the landlord, if any rent exemption is claimed, and bank statements. The TDS certificate in Form 16A must be preserved and produced before the income-tax official.

The income-tax department can send the notice within a year from the end of the month in which the assessee filed the return. The notice has a predefined format with the taxpayer’s name, address, Permanent Account Number and the year for which it has been issued, as well as the date and time when the taxpayer should appear before the income-tax officer.

The assessee can also take help from a chartered accountant and produce all documentary evidence to support the tax positions in his return. If one plans to send an authorised representative, a valid power of attorney in his favour is required. If the assessee or his representative cannot be present, an adjournment application should be filed before the date of hearing.

In most cases, the tax official will look into the bank details of the taxpayer and examine cases of interest-free loans, if any, interest earned from fixed deposits, capital gains from mutual funds, etc. Documents supporting them must be preserved for at least three previous financial years and must be produced on demand. Tax experts say most assessees do not preserve these documents and do not even bother to update their passbooks.

The income-tax official will also look at any windfall gains the taxpayer may have received. Proper records should be maintained of the gifts received, including gift deed, as gifts received from non-relatives over R50,000 would be taxable as income of the receiver. However, gifts from relatives and those received on marriage of the individual are exempt without any limit.

After examining the details, the income-tax official will forward the assessment order and the taxpayer’s file to the commissioner of income tax or the additional commissioner. For the income-tax department, the scrutiny and assessment must be completed within 21 months from the end of the relevant assessment year. One must cooperate with income-tax officials as failure to do so will lead to completion of assessment on a “Best Judgment” basis, which means the department can confirm the assessment and finalise one’s income and tax liability.

Source: Financialexpress

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Indian Tax System and Effect on Central Government Employees.

Comrades,

                 The Central Government has been informing the general public that crores  of  rupees were spent on salary and pension of  Central Government Employees. In fact the following are facts out of total revenue of Central Government the share of  CG Employees towards Salary, perks and pension amount is just 10.47 % of the total revenue of the Central Government which was earlier 16% at the.time of 6th CPC.   They are in forming that 7th CPC will cost exchequer Rs 25,000/ thousand crores which will effect Central Government finances.   

               Secondly the Central Government Employees are paying tax for every rupee they earn including the all allowances, in fact the 5th CPC has recommended that the Central Government should not deduct any Income tax on these allowances. apart from income tax, all other taxes are also imposed just like other employees. 

               Further the  Fifth Central Pay commission in its report vide para no105.12 has said that  Dearness allowance should be paid free of net taxes as the DA is paid for compensation against price rise. The all allowances should also be paid net of taxes which has been examined by 5th CPC in para no 167.   

              Today according to various media reports, only 2 to 3 percent of Indians pay any income tax at all. In December, India’s finance minister, Palaniappan Chidambaram, said that 2.89 percent of the population (about 36 million people) filed income taxes. (In contrast, in the U.S., about 45 percent of the population pays taxes, which means that, despite India’s much-larger population, more Americans than Indians actually pay taxes.)  CLICK HERE FOR DETAILS . 

            Totally a Central Government employees pay upto 30% of their salary as all forms of tax to the Central Government, even if these is any increase of salary upto 40% then also,part of the increase will also go to  Central Government as revenue.

           India's tax revenues nearly  about Rs 14 lakh crore currently  can be increased to over Rs 40 lakh crore. if proper taxation policy is adopted , that means  majority of citizens of the country  should be uniformly taxed.           

              Corporate tax collection is  at Rs 2.05 lakh crore, the personal Income Tax collection, however, was  at Rs 1.19 lakh crore that is just 10% of the total revenue collection.

               According to Central Government sources  Corporates owe over Rs 2.46 lakh crore in taxes, total tax dues to the Central Government is around Rs 5 to 6 lakhs crores. The amount paid to CG employees for the 7th CPC is just 5% of tax dues to the Central Government.  CLICK HERE FOR REPORT   so there should not be much financial panic on  7th CPC impact on common man.

            If these dues are properly collected then Central Government can spend lot of money on the welfare schemes and also pay the Central Government Employees being a model employer handsomely pay us  on par with the global market,  Software companies.

           So comrades , the Indian tax   system should be re modeled so that proper tax system is there and every citizen of India should   have uniform tax policy and Central Government revenue should also improve and also the Government Employees are paid need based minimum wage or a decent wage, also filling up of vacant post in Central Government will also give employment  to younger generation. 

Comradely yours

(P.S.Prasad)

General Secretary

Source:http://karnatakacoc.blogspot.in/

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INCOME-TAX DEDUCTION FROM SALARIES DURING THE FINANCIAL YEAR 2013-14 UNDER SECTION 192 OF THE INCOME-TAX ACT, 1961.

CIRCULAR NO : 08 /2013 

F.No. 275/192/2013-IT(B) 

Government of India 

Ministry of Finance 

Department of Revenue 

Central Board of Direct Taxes 

 New Delhi, dated the 10th October, 2013 

SUBJECT: INCOME-TAX DEDUCTION FROM SALARIES DURING THE FINANCIAL YEAR 2013-14 UNDER SECTION 192 OF THE INCOME-TAX ACT, 1961.

Reference is invited to Circular No.08/2012 dated 05.10.2012 whereby the rates of deduction of income-tax from the payment of income under the head "Salaries" under Section 192 of the Income-tax Act, 1961(hereinafter ‘the Act’), during the financial year  2012-2013, were intimated. The present Circular contains the rates of deduction of income-tax from the payment of income chargeable under the head "Salaries" during the financial year 2013-2014 and explains certain related provisions of the Act and Income-tax Rules, 1962 (hereinafter the Rules). The relevant Acts, Rules, Forms and Notifications are available at the  website of the Income Tax Department- www.incometaxindia.gov.in. 

2. RATES OF INCOME-TAX AS PER FINANCE ACT, 2013: 

As per the Finance Act, 2013, income-tax is required to be deducted under Section 192 of the Act from income chargeable under the head "Salaries" for the financial year 2013-14 (i.e. Assessment Year 2014-15) at the following rates: 

To view the order click here....

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