CBDT signs 4 more APAs with taxpayers in August

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The Central Board of Direct Taxes (CBDT) signed four more advance pricing agreements (APAs) in August with Indian taxpayers as it looks to reduce litigation by providing certainty in transfer pricing.

The four APAs entered into during August, 2017 pertain to various sectors of the economy like telecom, banking, manufacturing and education, an official statement said today.

“Out of these four agreements, three are unilateral and one is a bilateral,” it said.

According to the statement, the bilateral APA is for international transactions between an Indian company and a UK-based company and this is the eighth bilateral APA with the United Kingdom and 13th overall (the other five being with Japan).

With the signing of these four agreements, the total number of APAs entered into by CBDT has reached 175, the statement said, adding, “this includes 162 unilateral APAs and 13 bilateral APAs.”

Besides, in the current financial year, a total of 23 APAs (2 bilateral and 21 unilateral) have been signed till date, the statement noted.

The APA provisions were introduced in the Income-tax Act in 2012 and the “rollback” provisions were introduced in 2014.

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

The statement pointed out that since its inception, the APA scheme has been well-accepted by taxpayers and that has resulted in more than 800 applications (both unilateral and bilateral) being filed so far in five years.

Noting that the progress of the APA scheme strengthens the government’s resolve of fostering a non-adversarial tax regime, the statement said the Indian APA programme has been appreciated nationally and internationally for being able to address complex transfer pricing issues in a fair and transparent manner.

 

Source: Times of India

Income Tax Return Filings Grew 25%, Says Government

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Income tax collection showed a surge. The number of returns filed as on August 5, 2017, grew to 2.82 crore as compared to 2.26 crore last year, the government said.

The number of Income Tax Returns (ITRs) filed for 2016-17 year grew by 25 per cent to 2.82 crore, as increased number of individuals filed their tax returns post demonetisation, the tax department said today. The growth in ITRs filed by individuals is 25.3 per cent with over 2.79 crore returns having been received up to August 5 as against over 2.22 crore returns filed in the corresponding period last fiscal.

“As a result of demonetisation and Operation Clean Money, there is a substantial increase in the number of Income Tax Returns (ITRs) filed,” an official statement said. The total number of returns filed as on August 5 stands at over 2.82 crore as against over 2.26 crore filed during the corresponding period of 2016-17. This was an increase of 24.7 per cent compared to growth rate of 9.9 per cent in the previous year.

The last date for filing of income tax returns by individuals and HUFs, who need not get their accounts audited, was August 5.

The finance ministry said that the number of ITRs filed showed that substantial number of new tax payers have been brought into the tax net subsequent to demonetisation. The effect of demonetisation is also clearly visible in the growth in direct tax collections, it said.

Advance tax collections of personal income tax (other than Corporate Tax) as on August 5 showed a growth of about 41.79 per cent over the corresponding period in 2016-17. Personal Income Tax under Self Assessment Tax (SAT) grew at 34.25 per cent over the corresponding period in 2016-17.

“The above figures amply demonstrate the positive results of the government’s commitment to fight the menace of black money,” it added.

The Central Board of Direct Taxes (CBDT), which is the apex policy making body of the I-T department, is committed in its resolve to eradicate tax evasion in a non-intrusive manner and widening of tax base.

To fight the menace of black money, the government had on November 8, 2016, demonetised old 500 and 1000 rupee notes and asked holders of such notes to deposit in bank accounts. The I-T department had then launched operation clean money to clamp down on unaccounted money funnelled into bank accounts post demonetisation.

 

Source: http://www.ndtv.com/business/notes-ban-impact-income-tax-return-filings-grew-25-collections-jump-1734604

Direct tax collection rises fastest since 2013-14

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The Income Tax Department’s time series data of direct taxes for 2016-17 estimates the government has collected ₹8,49,818 crore as income tax on individuals and businesses, recording a 14.5 per cent growth, the highest rise since 2013-14.

Personal income taxes rose 21.4 per cent, but taxes on corporate incomes grew more slowly at 7 per cent.

The biggest rise was reported under the head of ‘other direct taxes’, which includes collections on account of Income Declaration Scheme 2016 and Pradhan Mantri Garib Kalyan Yojana 2016, schemes for declaring previously undisclosed income. Collections under this head is estimated to have risen 1,348 per cent to ₹15,624 crore.

The sharper rise in personal income taxes has also meant its share in the direct tax collection has increased to over 40 per cent for the first time since 2002-03 and the share of taxes on corporate incomes have fallen below 60 per cent. These estimates are based on provisional data, which the department has extracted from Online Tax Accounting System (OLTAS) and Principal Chief Controller of Accounts under the Central Board of Direct Taxes, and are bound to be revised after the returns for the last fiscal year is reconciled.

Saturday August 5 was the last day for filing of returns by those who are not required to get their accounts audited. Others can file their returns before March 31, 2018, for incomes earned in 2016-17.

Total tax collection

The growth in direct tax collections notwithstanding, its share in total tax collection has fallen below 50 per cent for the first time in 10 years. The share of direct taxes in the total taxes was estimated at 49.7 per cent for 2016-17, after staying well above 50 per cent between 2007-08 and 2015-16. This reversal in trend may be attributed to increase in collection under service tax.

The time series data also estimates that the gross tax receipts before reducing refunds made through the year rose 17 per cent to ₹10,12,506 crore, the highest jump seen since 2010-11. This included a 24 per cent jump in self-assessment tax (a bulk of which is taxes paid by unincorporated businesses), 14 per cent rise in tax deducted at source (TDS) and 15 per cent increase in advance tax payments.

Incidentally, TDS growth has slowed from 22 per cent reported for 2015-16, while advance tax payments growth has risen from 9 per cent reported then. TDS accounted for 36 per cent of the taxes collected in the last fiscal year and advances taxes accounted for 41 per cent. Income tax laws require a bulk of the taxes on incomes of individuals and businesses to be paid in advance on a quarterly basis.

The Income Tax Department has estimated the number of assesses for 2016-17 at 6.27 crore, of which about 95 per cent or 5.93 crore were individual assessees. The number of assessees grew just about 2 per cent from 2015-16.

On State-wise basis, Maharashtra continued to contribute a bulk of the direct taxes, accounting for about 37 per cent of the collection. Delhi accounted for 12.8 per cent of the taxes collected and Karnataka about 10.1 per cent.

Source: http://www.thehindubusinessline.com/economy/direct-tax-collection-rises-fastest-since-201314/article9805948.ece

Now, India Inc vendors under I-T lens, firms asked to give payment details

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The income-tax (I-T) department has asked large corporate entities, including multinational firms, to furnish details of employees off the payroll to check whether they are filing tax returns after deduction at source, or TDS.

According to I-T officials, many lawyers, chartered accountants, consultants, and designers — not on the payroll of companies — have not filed I-T returns (ITR), fearing they would have to disclose their full income.

The move is part of the government’s efforts to increase the tax base and nab potential evaders. The deadline for filing returns for the assessment year (AY) 2017-18, to track income in the fiscal year 2016-17 (FY17), is July 31.

Such professionals who could be potential evaders have been identified through a complete tax profiling, by linking their banks and transaction details.

The tax department, through its non-filer monitoring system, has identified about 13.7 million people with potential tax liabilities who have not filed returns. A preliminary examination of the data has revealed that many third-party vendors in different tax brackets have not been filing returns, while some have been inconsistent in doing so.

“Such measures are part of the second phase of the tax department’s Operation Clean Money, to bring those who have declared unaccounted cash and deposits after demonetisation under the tax net,” said a senior official of the Central Board of Direct Taxes (CBDT). Sources said the CBDT had set the target of adding 10 million taxpayers in the current financial year (FY18).

Under provisions of Section 194 (C) of the I-T Act, a company has to deduct tax at source at the rate of 10 per cent on payments made to professionals or for technical services, if their bill is Rs 30,000 or more.

“The efforts of the tax department to expand the taxpayer base are understandable. Tracking TDS is an important tool to check whether people have filed their taxes,” said Sanjay Sanghvi, partner, Khaitan & Co.

During 2015-16, there were only 55.9 million people in the country who paid income tax. Last year, the tax department had added 9.1 million taxpayers, expanding the base to 65 million.

The government had recently amended the provisions in the I-T rules dealing with the filing of returns. Those not filing on time will have to pay a fine.

For instance, for people earning below Rs 5 lakh annually, missing the deadline will make them liable to a fine of Rs 1,000; those with earnings above Rs 5 lakh annually will have to cough up Rs 5,000 as penalty.

At present, there is no fine if the returns are filed with a delay within the AY. Official data suggest that about 5 million companies registered in the country, of which only 690,000 filed I-T returns last year.

Source: Business Standard