Tax resolution scheme: CBDT to write to 2.59 lakh taxpayers

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Keen to bring down the number of tax litigations, the Income Tax Department will soon write to over 2.59 lakh taxpayers asking them to avail the one-time dispute resolution scheme to settle their cases.

And to cut down on communication time, the Central Board of Direct Taxes (CBDT) will use email to communicate with the appellants.

“We have estimated that each Commissioner of I-T (appeal) would have about 300-400 litigations pending before them. We will send these assessees emails informing about the benefits of the dispute resolution scheme,” an official told PTI.

The direct tax dispute resolution scheme, introduced from 1 June, seeks to address the issue of pending litigation before commissioner of I-T (appeal). The scheme is open till 31 December.

As per I-T department data, there were 73,402 appeals with tax effect above Rs.10 lakh and 1,85,858 appeals with tax effect below Rs.10 lakh which are pending before commissioner of I-T (appeal) as on 29 February.

Thus, 2,59,260 appellants are eligible for the benefit of this scheme. “The publicity drive will not be as massive as the IDS. Since we know who our target assessees are, we will send them pamphlets and also emails. Also we will paste some pamphlets outside the CIT (appeals) office,” the official added.

Armed with a Rs.100 crore budget for advertisement of income disclosure scheme (IDS) and disputes resolution scheme, the tax department will now launch a publicity drive for entities which are locked in a litigation. Besides, the CBDT will soon come out with over two dozen FAQs based on the queries it has received from various stakeholders, including chartered accountants and industry chambers.

As per the scheme, a taxpayer who has an appeal pending before the CIT (appeals) can settle his/her case by paying the disputed tax and interest up to the date of assessment. No penalty in respect of cases with disputed tax up to Rs.10 lakh will be levied. For cases exceeding Rs.10 lakh, 25% of penalty would be levied and any pending appeal against a penalty order can also be settled by paying 25% of the minimum of the imposable penalty.

“Litigation is a scourge for a tax-friendly regime and creates an environment of distrust in addition to increasing the compliance cost of the taxpayers and administrative cost for the government,” finance minister Arun Jaitley had said in his budget speech.

In a first-of-its-kind nationwide publicity drive, the I-T department had tied up with seven airlines including Air India and Vistara to publicise one-time black money compliance window by printing the scheme’s details on the back of boarding passes.

Source: http://www.livemint.com/Politics/s28nm7vx4fQrNG3ldoqm0L/Tax-resolution-scheme-CBDT-to-write-to-259-lakh-taxpayers.html

Workflow boost for accountants, advisory firms

by | posted in: Accounting Standards, Audit, Due Diligence, Corporate & Business Advisory Services, Corporate Updates, Economy, Business Updates, Corporate Affairs, Income Tax,e-Filing- Individuals, Firms, Companies | 0
Plans are afoot to train 20,000 chartered accountants by March 2017 in different aspects of the GST
Corporate India is just about getting started to get their businesses ready for the goods and services tax ( GST) regime. This has opened up a sizable business opportunity for tax experts, advisory firms, and law firms. What has come as a shot in the arm for chartered accountants and cost accountants is the mandatory need for tax audits for certain companies under the GST regime.
Under Section 42 ( 4) of the draft Model GST Law, businesses with to- be- prescribed turnover have to get their accounts audited by a chartered accountant or a cost accountant. Accordingly, the Institute of Chartered Accountants of India ( ICAI) is preparing to boost training for its members to enable them to make the most out of the opportunity. “ Plans are afoot to train 20,000 chartered accountants by March 2017 in different aspects of the GST for conducting impact studies and filing of GST returns,” says Madhukar N Hiregange, senior partner, Hiregange & Associates, and chairman of indirect tax committee at the ICAI. To start with, over the next two months, around 500 trainers will go through the GST programme.
In the coming months, some key areas of work for accountancy professionals would relate to conducting impact studies for clients, taking companies through GST registration and the transition process, filing taxes and getting tax refunds, ensuring there are no mismatches in the tax input- output chain. Even though the new indirect tax system will come into effect from April 2017, tax experts expect the transition opportunity to last for the next two years.
“Compliance will become a major area of practice for accountants,” says Hiregange. He expects many companies to outsource their tax compliance work to tax consultancies and chartered accountancy firms.
In the coming months, businesses would have to re- jig their IT systems and also make businesses of their suppliers, distributors and sellers GSTcompliant.
The challenge for small and mid- sized companies would be to come up to speed with technology requirements under the GST regime. “ Many companies would need hand- holding while interacting with the GST Network, the IT backbone, in filing tax returns and in claiming returns,” says Hiregange. That may spawn small firms specialising in GST- related compliance issues. The ICAI is also looking at revising its syllabus by November this year in keeping with the latest changes in the indirect tax system.
Sensing the business opportunity that is up for grabs, most corporate law firms are ramping up their indirect tax practice. For instance, Lakshmikumaran & Sridharan, a law firm that has been advising the GST Network, has put in place a special team of 20- odd tax experts to tackle GST- related issues. “ In addition, there are 150- 200 tax lawyers across the country taking up sector- specific indirect tax related issues,” says a spokesperson from the law firm.
Similarly, accounting and advisory firms, especially the ‘big four’, are betting big on the opportunity. EY, for instance, has a team of 800- odd tax and advisory professionals working on GST. “ This year, we anticipate an increase of 25 per cent in our current headcount for GST,” said a company spokesperson. Many of these professionals come with expertise in supply chain, analytics, technology and processes.
According to Nitin Atroley, partner and head of sales & markets at KPMG, the firm set up a special team with members from different countries like Malaysia, Singapore and Australia that have earlier gone through the process of adopting GST.
Prashant Raizada, partner, indirect tax, BDO India, feels the challenge to transition to the new tax regime would be most felt by small and mediumsized enterprises. “ In Tier2and – 3 cities, businesses may not be that well versed in use of technology,” said Raizada. It will be busy days ahead for tax experts, accountants and consultants, as well as their clients as they get up to speed with the GST regime.

I-T returns: Top 1% earned 18% of income

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The top 1 per cent of earning individuals who filed tax returns earned about 18 per cent of the total income in financial year 2011-12, according to the latest data on income tax released by the income-tax department recently.

The bottom half of the earning individuals earned just about 21 per cent of the total income shown in the returns, the data showed, highlighting stark income inequality. However, in between there is a big chunk of middle class. It is this class, which was addressed by Prime Minister Narendra Modi in his Independence-Day speech when he said he would further mitigate their problems with the income-tax department.  The top 1 per cent of the individuals were those who earned Rs 25 lakh and above, while the bottom 50 per cent made up of those who earned up to Rs 2.5 lakh. In between, there was a middle class, constituting about 49 per cent of the total tax payees. Their income was around 61 per cent of the total.

Three individuals filed returns showing income of more than Rs 500 crore in the financial year 2011-12. About 35,616 individuals earned more than Rs 1 crore as taxable income during that year.  These individuals  made it to the super-rich category, for which an additional surcharge of 10 per cent was introduced in the financial year 2013-14. The super-rich surcharge imposed on taxable income of more than Rs 1 crore, has since then been raised to 15 per cent.

India’s Gini Coefficient, a measure of inequality, stands at 0.38. The higher the coefficient, ranging between zero and one, the higher is inequality. However, it should be noted that agriculture income is exempted from income tax.

As many as 1,33,000 individuals reported zero taxable income in 2011-12.  Maximum individuals or about 38 per cent individual return filers (10.8 million individuals) were in the taxable income bracket of Rs 1.5-2.5 lakh.

About 33 per cent of the 46.5 million taxpayers in the country paid taxes but did not file returns in assessment year 2012-13.

For individuals, salary income constituted about half the total income, while business income represented 33.4 per cent. Of the 31.2 million returns filed, 28.9 million or 92 per cent were individual taxpayers.

Amid pressure from celebrated economist Thomas Piketty and Chief Economic Advisor Arvind Subramanian, the revenue department has released the revised set of income tax data for assessment year 2012-13, omitting about 150,000 returns to bring consistency of data within various categories. In cases where more than one returns were submitted, the values of the latest returns have been considered.

Income tax deductions totalling Rs 1.35 lakh crore significantly lowered taxable income of individuals, making up for 11 per cent of total gross income for individuals. For companies, the deductions were about 7.1 per cent of total gross income.

According to a recent write up by Revenue Secretary Hasmukh Adhia and CEA Subramanian, the total tax foregone on all income taxes amounted to 0.4 per cent of gross domestic product in 2011-12. The government had in the Budget announced a plan to phase out corporate tax deductions and exemptions, putting a sunset date in most cases. It plans to reduce corporate tax to 25 per cent from 30 per cent currently by 2019.

With the government taking efforts to encourage individuals to file returns, about 155,000 filed zero-income returns in 2011-12. Filing of returns is mandatory to avail loans.

About 3.7 per cent of the population and 9.1 per cent of the workforce were part of the individual income-tax system the assessment year 2012-13. There were 44 million individual income taxpayers and 0.65 million corporate taxpayers that year. These include those tax payers also who did not file returns but paid tax through tax deducted at source (TDS).

Source: http://www.business-standard.com/article/economy-policy/i-t-returns-top-1-earned-18-of-income-116081601347_1.html

Over 75 lakh taxpayers availed e-verification facility for filing Income Tax Returns

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Over 75 lakh taxpayers availed the e-verification facility of their income tax returns filed till August 5 against around 33 lakh taxpayers last year till September 7, which will ensure faster processing of their returns. In all 226.98 lakh e-returns were filed in FY 2016-17 as compared to 70.97 lakh for the same period in FY 2015-16. The number is higher because last year the date of filing had been extended to September 7.

By September 7, 2015 nearly 207 lakh returns had been filed, which yields 9.8% rise in e-filing this year. Aadhaar based e-verification was used by 17.68 lakh taxpayers during the current year as against 10.41 lakh taxpayers during the same period in 2015-16, finance ministry said in a statement.

“In addition to these, 3.32 lakh returns were digitally signed. Thus, over 35% of taxpayers have already completed the entire process of return submission electronically,” it added. The forms that are not electronically verified have to be physically mailed to processing centre in Bengaluru before they can be processed.

The revenue department is encouraging all taxpayers who have submitted their returns to e-verify them as an easy alternative to sending their ITR-V form to CPC, Bengaluru.

The government said tax refunds of Rs 14,332 crore have been issued this year till August 5. “The Central Processing Centre (CPC) Bengaluru has already issued over 54.35 lakh refunds totaling to Rs 14,332 crore have been issued this year till August 5. “The Central Processing Centre (CPC) Bengaluru has already issued over 54.35 lakh refunds totaling to Rs 14,332 crore which includes 20.81 lakh refunds for AY 2016-17 (current year returns) totaling to Rs 2,922 crore till August 5, 2016,” the statement said.

Source: http://economictimes.indiatimes.com/articleshow/53607133.cms

 

CBDT signs bilateral APAs with Japanese trading firm arm

by | posted in: Corporate & Business Advisory Services, Corporate Updates, Cross Border Transactions, M&As, Joint Ventures, Income Tax,e-Filing- Individuals, Firms, Companies, India & International - Corporate updates | 0

The Central Board of Direct Taxes has signed bilateral advance pricing agreements with Indian arm of a Japanese trading company, a move that will help bring down transfer pricing disputes relating to intra-group transactions.

“The Central Board of Direct Taxes (CBDT) entered into a bilateral advance pricing agreement (APA) on August 2, 2016, with Indian subsidiary of a Japanese trading company. This is the first bilateral advance pricing agreement with a Japanese company having a rollback provision in it,” a finance ministry statement said today.
Overall, it is fourth bilateral APA signed by CBDT.

Signing of the pact is an important step towards ascertaining certainty in transfer pricing matters of MNC cases and dispute resolution, the statement noted.

The APA scheme was introduced in the Income-Tax Act in 2012 and the rollback provision in 2014.

The scheme intends to provide certainty to taxpayers in the domain of transfer pricing by specifying methods of pricing and setting the prices of international transactions in advance.

Its progress strengthens the government’s mission of fostering a non-adversarial tax regime, the statement said.

CBDT expects more APAs to be concluded and signed in the near future.

An APA, usually for multiple years, is signed between a taxpayer and the tax authority (CBDT in India) on an appropriate transfer pricing methodology for determining the price and ensuing taxes on intra-group overseas transactions.

Source: http://www.business-standard.com/article/pti-stories/cbdt-signs-bilateral-apas-with-japanese-trading-firm-arm-116080400879_1.html

Today is the last day to file Income tax return, know easy steps if you haven’t filed yet

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The last date for filing income-tax returns was extended to August 5, and it ends today. Tax returns for 2015-16 (assessment year 2016-17) were originally to be filed by July 31. But in view of the day-long strike at public sector banks, the deadline was extended to August 5. However, the deadline for Jammu and Kashmir will be August 31 in view of the ongoing turmoil in the state.

The return is mandatory if your taxable income is above Rs 2,50,000.

The Revenue Authorities have introduced new reporting requirements for FY 2015-16 for Assets and Liabilities for individuals with income above Rs 50,00,000. In case of this, the individual has to disclose the cost value of all the assets above the specified amount, in the tax form, as well as disclose the debts associated with these assets- land, building, cash-in-hand, jewellery, bullion, vehicles, yachts, boats and any aircraft owned. It is advisable that you retain the purchase receipt of any of these assets.

It has almost become a ritual for people to delay filing their income tax returns till the last date and for the government to extend the same due to “popular demand”. However, the long queues that used to be another annual feature of the tax filing week has become a thing of the past due to the growing popularity of income tax e-filing.

The incometaxindiaefiling.gov.in has made it really easy for people to file their returns from the comfort of their homes.

If you have not yet filled you returns, here are some easy and essential steps to do it before the time ends.

Step 1: Select the right form: You have to select the form based on your source of incomes. So ITR-1 is for salaried individuals whose get a salary or a pension along with income from a house/property or from other sources, things like lottery. This is not for those with multiple houses/properties, income from winning a lottery, agricultural income of above Rs 5000, income from business. Tax payers filing for double tax relief should also not use this.

ITR-2A, introduced this year, is for those individuals who have income from more than one house property. ITR-2 can be used by individuals with no income from business / profession. ITR-3 is for individuals partnering in a firm, but not for those earning income from a proprietorship form. ITR-4 is for those individual earning income from a proprietorship firm. ITR-5 and 6 are for use by companies alone.

Step 2: Get your Form 16 ready: This form given by your employer shows your saving as well as the tax deducted. There will be multiple forms if you have changed jobs over the assessment year.

Step 3: Additional documents: You might need your bank statements, interest certificates, and your housing loan certificate (in case of housing loan).

Step 4: Download Form 26AS from the e-filing website to see which taxes are deducted at source

Step 5: Filing/uploading: Individuals with over Rs 5,00,000 income have to e-file their tax returns. You will get an automatic acknowledgement once the return is successfully uploaded. Verify this and submit the acknowledgement online, ideally with e-verification. This completes the process of filing your income-tax return.

Source: http://indianexpress.com/article/business/business-others/income-tax-return-filling-last-date-steps-to-file-it-2955207/