Deadline for filing revised or belated income tax return for past 2 assessment years is March 31

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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.

Source: Business Today

Only Rs 12,000-cr Input Credit claims valid

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GST regime allows tax credit on stock purchased during the previous tax regime

The government on Friday said only Rs 12,000 crore of the Rs 65,000 crore of input tax credit claimed by assessees for the pre-GST stocks were valid.

The governments, both the Centre and states, had got Rs 95,000 crore of revenues from the goods and services tax (GST) for July, the first month of the indirect taxation system. But after claims of Rs 65,000 crore were made for refunds of taxes paid on stocks lying with businesses as of June 30, the government was startled, as that would  have meant just Rs 30,000 crore of revenues from GST, which would be shared between the Centre and the states. The finance ministry said Rs 95,000 crore was the amount actually paid in cash, other than availing credit.


The Press Trust of India reported the government has estimated valid transitional credit claims of taxpayers in July were just Rs 12,000 crore and not Rs 65,000 crore, as previously claimed. This would give the government a short in the arm in its efforts to mop-up additional resources to perk up a subdued economy.

 

Only Rs 12,000-cr credit claims valid

The GST regime allows tax credit on stock purchased during the previous tax regime. This facility is available only up to six months from the date of the GST roll-out. Even these claims could be adjusted in future months, a statement by the finance ministry suggested.

An expert explained that some of the credit available in earlier taxes would be blocked in the new regime. For instance, he said, the credit for taxes paid on purchasing vehicles were not available for businesses under the new tax unless it was a dealership or business of carrying passengers. Also, credits claimed might be under litigation and, therefore, it might not be available to the assessee to carry forward or for utilisation.

Earlier in the day, the finance ministry had issued a statement to allay concerns about high transitional credit claims, saying the Centre’s revenue kitty would not go down because of these claims. It said claims worth Rs 65,000 crore does not mean that businesses would have used all of this for payment of their output tax liability for July. In other words, the credit, which now stands reduced to Rs 12,000 crore could be utilised for future tax liability.

On how the government would stagger the adjustment, Abhishek Rastogi of Khaitan & Co cited the example of banking services. In the earlier regime, banks had to pay a centralised service tax. Under GST, they will pay state-wise tax as well. So adjusting credit for pre-GST stocks may take some time as tax liability in one centre, which used to pay earlier taxes, might not be as huge this time.

The ministry also said Rs 65,000-crore transition credit claimed was “not incredibly high” as Rs 1.27 lakh crore of credit of central excise and service tax was lying as closing balance as of June 30, 2017.

The statement said some assessees would have committed a mistake in filing the form TRAN-1 and hence, the government will allow facility of revision of TRAN-1 by the middle of October.

The GST Council has already extended by a month the date for filing TRAN-1 form till October 31.

Archit Gupta, CEO of ClearTax said while the move to extend the deadline is a good step, there would be confusion to reconcile the credit available in the old regime with the one in the GST system.

Source: Business Standard