CBDT confirms News of Income Tax Return filing due date extension in Social Media is Fake
CBDT – extension in due date for non-tax audit cases is fake and there are no such plans to extend this deadline beyond 31st July, 2018
CIRCULAR No.4/2018
F.No.370889/25/2018 Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes
New Delhi, Dated 21st July, 2018
Order under section 139(1) of the Income-tax Act, 1961 (‘the Act’)
This Circular is issued in pursuant to 139(1) of the Tax Act, 1961 is to clarify that rumorsspreading across in media regarding extension in due date for non-tax audit is fake and no such plans to extend this deadline beyond 31st July, 2018. The department already received over 1 crore returns filed electronically.
As per Section 234F of the Income Tax Act, from 1st April 2018, the penalty for late filing income tax return would be as
(a) five thousand rupees, if the return is furnished on or the 31st day of December of the assessment year;
(b) ten thousand rupees in any other case:
Provided further that if the total income of the person not exceed five lakh rupees, the fee payable under this section shall not exceed one thousand rupees. Therefore, the assessees are hereby asked to file their ITRs before the due date to avoid the penalty.
(Sanyam Suresh Joshi)
DCIT, CBDT
Copy to:
1. PS to FM/OSD to FM/PS to MoS(F)/OSD to MoS(F)
2. PS to Secretary (Revenue)
3. Chairman, CBDT
4. All Members, CBDT
5. All Pr. DGsIT/Pr. CCsIT
6. All Joint Secretaries/CsIT, CBDT
7. Directors/Deputy Secretaries/Under Secretaries of CBDT
8. DIT (RSP&PR)/Systems, New Delhi
9. The C&AG of India (30 copies)
10. The JS & Legal Adviser, Ministry of Law & Justice, New Delhi
11. The Institute of Chartered Accountants of India
12. All Chambers of Commerce
13. CIT (M&TP), Official Spokesperson of CBDT
14. O/o Pr. DGIT (Systems) for uploading on official website
The income tax (I-T) has barred all Chartered Accountants (CAs) from valuing shares of closely-held companies.
Earlier, the fair market value of unlisted equity shares was calculated at the option of the company on either the book value on the valuation date or by the discounted cash flow method. Calculated by a merchant banker or a CA.
However, the Central Board of Direct Taxes has removed the CAs from the list of authorised professionals in this regard. From Thursday, only a merchant banker may do this. This change brings this provision at par with Rule 3 of the I-T Act, which says only a merchant banker may calculate the value of unlisted shares issued under Employee Stock Ownership schemes.
Interestingly valuation of shares may still be done by CAs under the Companies Act.
So, unlisted shares or unlisted companies may be sold or valued by a CA’s valuation but, for I-T purposes, it will require a merchant banker’s valuation report.
It is expected that the government is considering a qualifying course for valuation; only those who clear it may do valuation.
The CBDT today extended the deadline for the PAN-Aadhaar linking to June 30.
The policy-making body of the tax department issued an order extending the deadline from the current last date of March 31.
The order said the deadline for PAN-Aadhaar linking for filing I-T returns is being extended after “consideration of the matter”.
It is understood that the latest order by the Central Board of Direct Taxes (CBDT) has come in the backdrop of the Supreme Court, earlier this month, directing extension of the March 31 deadline for linking Aadhaar with various other services.
The apex court ordered for the extension in the deadline till the five-judge constitution bench delivers its judgment on petitions challenging the validity of the biometric scheme and the enabling law.
This is a fourth extension given by the government for individuals to link their Permanent Account Number (PAN) with their biometric ID (Aadhaar).
The government has now made quoting of Aadhaar mandatory for filing income tax returns (ITRs) as well as obtaining a new PAN.
Section 139 AA (2) of the Income Tax Act says that every person having PAN as on July 1, 2017, and eligible to obtain Aadhaar, must intimate his Aadhaar number to the tax authorities.
As per updated data till March 5, over 16.65 crore PANs, out of the total about 33 crore, have been linked with Aadhaar.
The earlier deadlines for linking the two databases were July 31, August 31 and December 31, 2017, with the last being March 31 this year.
The date you actually need to focus on is March 31, because that is the last day to file revised and belated income tax returns (ITR) for assessment years (AY) 2016-17 and 2017-18, with interest, if any, for late filing. This is not to be confused with the deadline for filing taxes for the current financial year, which is on or before July 31. Last year this deadline was extended till August, but the gesture may not be repeated.
So if you are yet to file older ITRs, “there’s still time” to “come clean” as a recent advertisement put out by the income tax department reminds folks. The ad goes on to exhort companies, firms, LLPs, trusts, associations and political parties (whose income prior to claim of exemptions exceeds the minimum chargeable to tax) to file taxes. Similarly, individuals earning over Rs 2.5 lakh have to pay income tax while the exemption limit for senior citizens (aged 60-80 years) is Rs 3 lakh and that for very senior citizens (over 80 years) is Rs 5 lakh.
“If you have deposited large amounts of cash in your bank account or made high value transactions, please consider the same while filing income tax returns,” says the communication, adding that “Non-filing or incorrect filing of return of income may result in penalty and prosecution”. The easy way to do it is online, either by logging into the tax department’s e-filing website (incometaxindiaefiling.gov.in) or the likes of Cleartax.com and Taxspanner.com, which are far more user friendly. Keep in mind that failure to file returns for the AY 2017-18 by March 31 means no second chances.
Belated filing, of course, poses serious drawbacks. Not only do you lose the opportunity to avail of select exemptions and carry forward losses (other than house property loss) for the assessment years for which ITR were not filed, you may have to shell out extra as interest under section 234A, perhaps even sections 234B and 234C, which deal with advance tax. The latter is applicable on all individuals with a tax liability exceeds Rs 10,000 after your employer has deducted the TDS.
For any defaults in filing your ITR, according to Cleartax, “you will be charged an interest amount of 1% per month (simple interest) on the tax amount outstanding. This interest will be calculated from the due date applicable to you for filing of return of the applicable year till the date that you actually file your return.”
Here’s an example. Assume your total tax outstanding is Rs 1 lakh and you forgot to file your return. Your tax liability will calculated at 8% (8 months late till the end of the assessment year on March 31) of Rs 1 lakh, or Rs 8,000, over and above the tax amount that you are due to pay in any case.
That apart, “a penalty of Rs 5,000 shall be levied under section 271F”, says the FAQ on the income tax website. With effect from AY 2018-19, a new section 234F will come into play, under which the penalty for ITRs furnished on or before December 31 is Rs 5,000, but double that amount for later filings. However, penalty “shall be levied @ Rs 1,000 if total income does not exceed Rs 5,00,000” and if the tax evaded “exceeds Rs 25 lakh the punishment could be 6 months to 7 years” adds the website.
Also keep in mind that silly mistakes often creep in when one is trying to beat a deadline, like erroneously leaving a mandatory field empty or forgetting to report interest income. So make sure no discrepancies creep in while filing your returns, else you could be staring at a demand notice from the taxman, which means extra paperwork for you.
Thankfully, at least this headache will disappear from the next assessment year on. Earlier this month the CBDT announced that demand notices won’t be issued in cases of a minor mismatch between a taxpayer’s ITR and the corresponding tax credit data collected from banks and other financial institutions.
The Union Budget 2018-19 has rationalised the I-T Act provision relating to prosecution for failure to furnish returns.
Seeking to crackdown on shell companies, the government has proposed to remove exemption available to firms with tax liability of up to Rs 3,000 from filing I-T returns beginning next fiscal.
The Union Budget 2018-19 has rationalised the I-T Act provision relating to prosecution for failure to furnish returns.
Thus, a managing director or a director in charge of the company during a particular financial year could be liable for prosecution in case of any lapse in filing I-T returns for any financial year beginning April 1.
“The income tax departments would now track investments by these companies. Also, the focus will be on those firms that show less profit and also those who file I-T returns for the first time,” a senior finance ministry official said.
There are around 12 lakh active companies in the country, out of which about 7 lakh are filing their returns, including annual audited report, with the ministry of corporate affairs. Of this, about 3 lakh companies show ‘nil’ income.
The Section 276CC of the Income Tax Act provided that if a person wilfully fails to furnish in due time the return of income, he shall be punishable with imprisonment and fine.
However, no prosecution could be initiated if the tax liability of an assessee does not exceed Rs 3,000.
The government has amended the provision with effect from April 1, 2018 and removed the exemption available to companies.
“In order to prevent abuse of the said proviso by shell companies or by companies holding benami properties, it is proposed to amend the provisions… so as to provide that the said sub-clause shall not apply in respect of a company,” it said.
The official said that as many as 5 lakh are companies not filing returns and they could be a potential source of money laundering. “These could be small firms which are engaged in honest business, but there could be some which are a potential threat. We have to look into the data.”
Nangia & Co Managing Partner Rakesh Nangia said though the amendment has been brought about to prevent abuse by shell companies/benami properties, checks similar to those placed in the law for invoking GAAR, should be in place to avoid genuine hardship.
“Though the taxman may be driven by compulsions to ensure proper tax compliance, care must be taken while taking such action. In most developing countries, prosecution for tax matters is applied only in cases of serious tax frauds and not in general compliance matters,” Nangia said.
The Budget announcement follows the recommendation of the task force on shell companies, which was set up in February last year.
In the government’s fight against black money, shell companies have come to the fore as they are seen as potential for money laundering.
Till the end of December 2017, over 2.26 lakh companies were deregistered by the MCA for various non-compliances and being inactive for long.
Shell companies are characterised by nominal paid-up capital, high reserves and surplus on account of receipt of high share premium, investment in unlisted companies, no dividend income and high cash in hand.
Also, private companies as majority shareholders, low turnover and operating income, nominal expenses, nominal statutory payments and stock in trade, minimum fixed asset are some of the other characteristics.
Since last year, the Central Board of Direct Taxes (CBDT) — the apex policy making body of the I-T department — has been sharing with the MCA specific information like PAN data of corporates, Income Tax returns (ITRs), audit reports and statement of financial transactions (SFT) received from banks.
The soon-to-be rolled out pan India e-assessment system for scrutiny cases of taxpayers will not be applicable to instances where a raid has been conducted against an assessee by the Income Tax (IT) department, the CBDT has said.
It has added that the current system of manual assessment will continue in cases, where the books of accounts or original documents have to be examined, the taxman has to conduct a third-party investigation and where the tax officer has to examine a witness.
It will also be applicable to cases where the taxman has issued a show-cause notice to the assessee, “contemplating any adverse view”, and cases where the taxpayer has requested for a “personal hearing” to explain the matter to the assessing officer.
The Central Board of Direct Taxes (CBDT), the policy- making body of the IT department, issued an instruction yesterday to further explain how the system would work, once fully operational.
“…It is hereby directed that except for search-related assessments, proceedings in other pending scrutiny assessment cases shall be conducted only through the e-proceeding facility…,” the instruction said.
It added that in ranges where the IT offices were not equipped with computer infrastructure and Internet services as of now, the taxman should “complete only 10 per cent of the scrutiny cases having the potential to effect recovery during the current year itself”.
If an assessee objects to the electronic assessment, it may be “kept on hold” for the time being, the instruction said.
Finance Minister Arun Jaitley had, in his budget speech, announced that the process of electronic assessment of tax returns would be launched in the country, which would “almost eliminate person-to-person contact, leading to greater efficiency and transparency”.
CBDT Chairman Sushil Chandra, during a recent interview with , had said the e-assessment procedure would henceforth be handled by two officers, instead of the current system involving a single assessing officer (AO).
The functionality to conduct the e-proceedings would be available for all types of notices, questionnaires and letters issued under various sections of the I-T Act, the CBDT had said earlier.
Direct tax collections during the first nine-and-a-half months of the current fiscal have risen by 18.7% to Rs 6.89 lakh crore, the tax department said on Wednesday.
The collections till January 15, 2018 represent over 70% of the Rs 9.8-lakh-crore revenue target from direct taxes, the Central Board of Direct Taxes (CBDT) said in a statement.
Gross collections (before adjusting for refunds) have increased by 13.5% to Rs 8.11 lakh crore during April, 2017 to January 15, 2018. Refunds amounting to Rs 1.22 lakh crore have been issued during this period.
Stating that there has been “consistent and significant” improvement in the position of direct tax collections during the current fiscal, the CBDT said the growth rate of total gross collections has improved from 10% in Q1, to 10.3% in Q2, to 12.6% in Q3 and to 13.5% as on January 15, 2018.
Similarly, the growth rate of total net direct tax collections has climbed up from 14.8% in Q1, to 15.8% in Q2, to 18.2% in Q3 and to 18.7% as on January 15, 2018.
The growth in corporate tax collections has risen from 4.8% in the first quarter of current fiscal to 10.1% in Q3 and 11.4% as on January 15, 2018.
Similarly, the growth rate of net corporate tax collections increased from 10.8% in Q2 to 17.4% in Q3 and to 18.2% as on January 15, 2018.
