Deadline to file income tax return for FY2018-19 extended to August 31

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Highlights
1. The finance ministry has extended the deadline for filing income tax return
2. New deadline for ITR submission for FY 2018-19 extended to August 31
3. This year CBDT had extended the deadline for employers to file their TDS returns
4. If the ITR is filed between January 1 and March 31, then late filing fees of Rs 10,000 will be levied

The finance ministry has extended the deadline for filing income tax return (ITR) for FY2018-19 by individuals to August 31, 2019 from July 31, 2019. The extension is a much needed relief as there were multiple problems being faced by individuals in filing returns by July 31. July 31 was the deadline to file income tax returns for most individuals and HUFs. This is that category of individuals and HUFs who are not mandatorily required to get their accounts audited for tax purposes.

Many chartered accountant/tax practioner societies had appealed to the government to extend the ITR filing deadline to provide sufficient time to individuals to file ITR properly. There are many reasons for this.

This year CBDT had extended the deadline for employers to file their TDS returns, i.e., Form 24Q, from May 31, 2019 to June 30, 2019 and consequently deadline of issuing Form 16 by the employer was also extended from June 15, 2019 to July 31, 2019. Consequently, employees wait employees waiting to get their Form 16s to file their ITRs were left with only 21 days to file their tax return by the earlier deadline of July 31.

If the ITR is not filed by an individual before the expiry of the deadline, which is usually July 31, then the individual would have to pay a late filing fee of Rs 5,000, if filed by December 31. If the ITR is filed between January 1 and March 31, then late filing fees of Rs 10,000 will be levied.

With extension of the deadline, individuals will have more time to file their ITRs without worrying about late filing fees.

Even though it is easier to fill salary details in ITR-1 this year as individuals are required to just copy-paste the same from Form 16, sources of interest income are required to be provided in greater detail. This could be a tedious process.

Further, while the tax department has started providing pre-filled XML for ITR forms 1 to 4, the pre-filled XML file for ITR-2 does not contain salary details which individuals have to fill-in by themselves. ITR-2 asks individuals to provide detailed break-up of salary such as basic, HRA and so on received by choosing the options from the drop-down menu.

The calculation of long-term capital gains (LTCG) tax on equity shares and equity mutual funds is also a complicated process due to the grandfathering clause which came into effect from FY2018-19 onwards. In addition to that, individuals were also required to provide details such as ISIN code/Folio number, name of shares/units and so on for sale of equity shares and equity mutual funds. However, later on this was made optional.

Read Original Circular

Source: Economic Times

Income tax department eyes over Rs 100 bn from ‘struck off’ firms

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The income-tax (I-T) department is estimating tax recovery of over Rs 100 billion from companies that have been struck off from records of the Registrar of Companies (RoC) last year.

The tax department is in the process of filing a petition before the National Company Law Tribunal (NCLT) for restoration of registration in as many as 50,000 such companies.

The RoCs had struck off 300,000 companies after it was found they had not filed their statutory returns. Directors of these companies have been prohibited from holding directorships in any other company.
The move follows Central Board of Direct Taxes’ (CBDT) directive to identify, process and file petition to restore these companies by August 31. The board also asked the Ministry of Corporate Affairs (MCA) not to oppose the restoration application in the tribunal, as such a move would refrain them from launching tax recovery proceedings against these firms.
“Several of these companies are restricted to operate their bank accounts and movable and immovable properties until they are restored. The restoration will compel these firms to make relevant disclosures of credentials under Companies Act, and then accordingly tax proceeding will be initiated for tax recovery,” said an I-T official.

Tax industry experts, too, believe that restoration is essential to recover taxes due from these firms.

“The tax department is contesting the strike off of so-called companies as in several cases there would be pending tax demands that cannot be recovered if the company is not active. Also, even in cases where genuine companies have been struck off, with the best intentions, the companies would not be able to pay the tax dues as all their assets including bank accounts would be non-operational,” said Amit Maheshwari, partner at Ashok Maheshwary & Associates LLP.

The I-T department is of the view that these companies abused their corporate structure by creating multi-layering during  demonetisation for cash deposits. I-T probe also reveals that many individuals have used these firms for siphoning money or converting undisclosed cash to legitimate money post the note ban.

Official data say that 35,000 companies deposited and withdrew cash worth over Rs 170 billion after the note ban, through about 60,000 bank accounts.

It was noticed that the accounts that had negligible balance on November 8, 2016, have seen significant cash deposits and withdrawal during this period.

According to people with knowledge of the matter, along with restoration, the I-T department will also start issuing notices to these firms under Section 179 of the I-T Act, which makes the company’s directors/promoters liable to pay dues on behalf of the firm, without adjudication by the court.

Further, tax recovery officers have been asked to conduct survey operations on select firms where the tax demand is high. In cases where assets or bank accounts are lying abroad, the department will seek the foreign tax authority’s assistance to recover tax claims with the provisions in the relevant treaty, said another senior official.

Sources said that in a meeting of a task force on shell companies set up by the Prime Minister’s Office, on November 30 last year, the director general of corporate affairs (DGCoA) had suggested that the tax department approach RoCs for taking up the matter of reviving these companies. It was also suggested that revenue considerations should weigh in favour of restoring them.

Apart from these companies, another set of above 200,000 firms have been sent notices and action will soon be taken against them. However, the tax department wants MCA to keep them posted before striking off any company, since there could be tax dues.

 Taxing Affair
  • I-T pursuing restoration of 50,000 struck-off companies
  • RoCs had struck off 300,000 companies, prohibited their directors from holding directorship in other firms
  • Tax industry experts believe that restoration is essential for recovery of taxes from these firms
  • Restoration will allow companies to operate bank account, assets
  • After restoration, I-T to issue notices under Section 179 of I-T Act
  • Directors/promoters would be liable to pay tax dues
  • These firms abused corporate structure to facilitate significant cash transactions post note ban

Source: Business Standard

CBDT to share data with GST department to trap tax evaders

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Highlights
• This move will apply for all those assessees who have business income and file the returns specified for those with this income i.e. ITR 3 to ITR -7.
• Before sharing any information, the income tax authority shall determine that such information is necessary for the GSTN authority to perform its functions.

The government on Tuesday authorized the income tax department to share details including sales and profits that businesses have reported in their income tax returns with GSTN, the company that processes Goods and Services Tax (GST) returns, to scale up scrutiny and check tax evasion.

The move will allow direct and indirect tax authorities to zero in on discrepancies in the information that business have disclosed in their respective tax return forms and nail tax evaders. The move comes as part of tightening of anti-evasion measures after the GST Council gave several relaxations in recent months to ease the rigors of tax compliance to businesses, especially to small ones. A formal system of data sharing between direct and indirect tax authorities means businesses have to be extra careful while filling up their tax returns and avoid mismatches. The move is significant considering that businesses did not show enthusiasm in opting for a single window tax facility for corporate tax, service tax and central excise in 2006 under the name Large Taxpayer Unit as they apparently preferred to avoid simultaneous scrutiny by different tax authorities.

An office order issued by the Central Board of Direct Taxes (CBDT) on Tuesday authorized the Principal Director General of Income Tax (systems) or Director General of Income Tax (systems) to share specified data with an officer of GSTN. The designated officers from both sides will also decide ways of simultaneous exchange of information

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Order.  F. No. 225/105/2019/ITA.ll              Order Under Section 138(1)(a) of the Income Tax Act, 1961

F. No. 225/105/2019/ITA.ll
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes

New Delhi, the 30th  April, 2019

Order In exercise of powers conferred under section 138(1)(a) of the Income tax Act, 1961 (‘Act’), for purposes of sub-clause (i) of section 138(1)(a) of the Act, the Central Board of Direct taxes (‘CBDT’) hereby directs that Principal Director General of Income-tax (Systems) or Director General of Income-tax (Systems), New Delhi shall be the specified income-tax authority for furnishing information respecting assessees to the Nodal Officer, Goods and Services Tax Network (‘GSTN’).

2.  The data/information to be furnished by the specified income-tax authority shall be: (a)  Request based exchange of data, wherein, important financial fields which are captured in the Income Tax Returns (ITRs) such as (i) status of filing of ITR; (ii) turnover; (iii) gross total income, (iv)turnover ratio; (v) GTI range; (vi) turnover range and (vii) any other field, the modalities of which shall be decided by the concerned specified authorities. (b)  Spontaneous exchange of data, the modalities of which shall be decided by the concerned specified authorities. (c)  Automatic exchange of data, the modalities of which shall be decided by the concerned specified authorities.

While furnishing the information, the specified income-tax authority shall form an opinion that sharing of such information is necessary for the purposes of enabling the specified authority in GSTN to perform its functions under the Goods and Services Tax.
3.  To facilitate the process of furnishing information, Principal Director General of Income-tax (Systems) or Director General of Income-tax (Systems) would enter into a Memorandum of Understanding (‘MoU’) with nodal officer, GSTN, which inter-alia would include modalities of exchange of data, maintenance of confidentiality, mechanism for safe preservation of data, weeding out after usage etc. The time line for furnishing information shall also be decided by Pr. Director General of Income-tax (Systems) or Director General of Income-tax (Systems) in consultation with concerned nodal officer and included in the said MoU.
4.  A copy of MoU shall be forwarded to this division for record purposes.
5.  This issues with the approval of Chairman, CBDT.
(Rajarajeswari R.) Under Secretary,
(ITA-Il), CBDT

Income Tax Return Forms for Salaried Class, Professionals and self-employed individuals available for e-filing

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The Income Tax Department has informed that the tax return forms i.e, ITR-1 and ITR-4 for the salaried persons, Professionals, and self-employed individuals are available in the official portal for e-filing.

It also said that the other forms for Companies and other entities will be available in the portal shortly.

“ITR 1 & 4 for AY 2019-20 is available for e-Filing. Other ITRs will be available shortly,” the department said.

The department has enabled ITR-1 which is largely used the salaried class of taxpayers with income up to Rs 50 lakh from salary, one house property only and additional income such as interest earned from fixed deposits, recurring deposits among others.

ITR-4 for professionals and self-employed individuals who have opted for the presumptive income scheme was launched in the e-portal.

A few days ago, the Central Board of Direct Taxes (CBDT) had notified the income tax return forms for the year 2019-20.

Last year, the Government brought numerous reforms in the tax return forms.

Last year, the number of ITR Forms have been reduced from nine to seven forms.

The ITR Forms ITR-2, ITR-2A and ITR-3 have been rationalized and a single ITR-2 has been notified in place of these three forms.

All seven ITRs are to be filed electronically on the official web portal of the department -https://www.incometaxindiaefiling.gov.in – except for some category of taxpayers.

From this year onwards, the quoting of Aadhaar with the income tax return is mandatory for e-filing after the latest Supreme Court verdict wherein the Apex Court overruled the judgment of the Delhi Court allowing the manual filing of tax return without mentioning Aadhaar number.

 

CBDT warns Cash Transactions above Permissible Limits

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CBDT warns Cash Transactions above Permissible Limits

With a view to promoting cashless transactions, the Central Board of Direct Taxes ( CBDT ) has issued an advisory on its official website regarding cash transactions over and above the prescribed limits specified under the law.

 

The advisory issued by the Board remind the taxpayers to not accept cash of two lakh or more in aggregate from a single person in a day or for one or more transactions relating to one event or occasion.

 

One of the major steps introduced by the Government after the demonetization was to restrict cash transaction above Rs. 2 lakh rupees.

 

Under the Finance Act, 2017, the amounts in excess of Rs. 20,000 or more shall be received or repaid in cash for transfer of Immovable Property and amount more than Rs. 10,000/- in cash relating to the expenditure of business/profession was also banned.

 

Further, amount in excess of Rs. 2,000/- in cash cannot be donated to a registered trust /political party.

 

The department further reminded that the contravention may result in the levy of tax/ penalty.

 

The CBDT advisory said that any payment made in cash on account of the premium on health insurance facilities is not allowable as a deduction under section 80D of the Income Tax Act.

 

“Any information regarding black money including information about undisclosed income/ assets (both in India as well as abroad) and Benami transactions can be given to the jurisdictional Director General/ Pr. General of Income Tax (Investigation),” it said.

 

The CBDT has recently announced a new scheme called Income Tax Informants Rewards Scheme 2018 through which the department will reward up to 5 crore rupees to informants.

 

The scheme regulates grant and payment of reward to a person who is an informant under this scheme.

 

Also, the Benami Transactions Informants Reward Scheme 2018 has been announced for regulating grant for informants giving information relating to benami property actionable under Prohibition of Benami Property Transactions Act, 1988, as amended by Benami Transactions (Prohibition) Amendment Act, 2016.

CBDT further extends due date for filing IT Returns & Tax Audit Reports up to 31 October.

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The Central Board of Direct Taxes (CBDT) has further extended due date for filing Income Tax Returns and Audit Reports to October 31st.

The due date for filing of Income Tax Returns and Audit Reports for Assessment Year 2018-19 is 30th September, 2018 for certain categories of taxpayers.

The CBDT had earlier extended the date for filing of Income Tax Returns and various reports of Audit to 15th October 2018.

Upon consideration of representations from various stakeholders, CBDT further extends the ‘due date’ for filing of Income Tax Returns as well as reports of Audit (which were required to be filed by the said specified date) from 15th October, 2018 to 31st October, 2018 in respect of the said categories of taxpayers.

However, as specified in earlier order dated 24.09.2018, assessees filing their return of income within the extended due date shall be liable for levy of interest as per provisions of section 234A of the Income-tax Act, 1961.

CBDT extends deadline for filing ITRs with audit reports to Oct 15, 2018

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The government has extended last date for filing of income tax returns (ITRs) for those taxpayers who are required to file their returns along with audit reports from Sept 30 to Oct 15, 2018.

 

The text of the notification by CBDT is as below:

CBDT has extended the due date for filing Income Tax Returns and audit reports from 30th September 2018 to 15th October 2018. However, there shall be no extension of the due date for purpose of Explanation 1 to section 234A (Interest for defaults in furnishing return) of the Act and the assessee shall remain liable for payment of interest as per provisions of section 234A of the Act.

                                  In its tweet, the income tax department has posted – “CBDT extends due date for filing of Income Tax Returns & audit reports from 30th Sept,2018 to 15th Oct, 2018 for all assessees liable to file ITRs for AY 2018-19 by 30.09.2018,after considering representations from stakeholders.”

 

However, it adds that “Liability to pay interest under section 234A of Income Tax Act will remain.” It is important to note that if one has any unpaid tax liability then penal interest on the same may be leviable.

Typically, tax practitioner bodies ask for an extension from the government, saying they needed more time to file returns for entities where tax audit report or transfer pricing report or other audit reports are required to be filed as per the law.

Even last year, on consideration of representations from various stakeholders and to facilitate ease of compliance by the taxpayers, CBDT had extended the ‘due-date’ for filing Income Tax Returns with audit reports as prescribed under the Income-tax Act,1961 from 31st October, 2017 to 7th November, 2017 for AY 2017-18.

Tax audit is a review of accounts of taxpayers with business or profession from an income tax point of view such as incomes, deduction, compliance with tax laws, etc. Taxpayers with turnover exceeding Rs 1 crore in business (not opted for presumptive taxation scheme) or whose gross professional income is over Rs 50 lakh need to get a tax audit done. Tax audit report needs to be filed on or before the 30 September of the subsequent financial year in case of taxpayers who have not entered into an international transaction.

Some chartered accountants have argued that they have been busy filing returns of individual tax payers like the salaried class till August 30. Consequently they have had little time to devote to preparing the audit reports for those tax payers whose accounts are required to be compulsorily subjected to tax audit. The number of clauses in the audit reports have also increased thereby increasing the time required, they have pointed out. For these reasons they had requested an extension of the deadline for filing tax returns with audit reports.

Highlights:

  • An audit is a review of accounts of taxpayers with business or profession from an income tax point of view such as incomes, deduction, compliance with tax laws, etc.
  • Those with turnover exceeding Rs 1 cr in business or whose gross professional income is over Rs 50 lakh need to get a tax audit done.
  • It is important to note that if one has any unpaid tax liability then penal interest on the same may be leviable.

CBDT Notification