CBDT allows One Time Relaxation for Verification of Tax Returns

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-Through this one time relaxation scheme, ITR for FY 2014-15 to FY 2018-19 can be verified, on or before 30th September 2020.
– All such verified ITRs shall be processed on or before 31st December 2020.
– ITRs can be verified digitally through EVC or by sending duly signed a copy to CPC Bangalore.
The Central Board of Direct Taxes (CBDT) on Monday notified the one-time relaxation for verification of tax return for the Assessment Year 2015-16, 2016-17, 2017-18, 2018-19 and 2019-20, which are pending due to non-filing of ITR- V form and processing of such returns.

It has been brought to the notice of CBDT that a large number of electronically filed ITR still remains pending with the Income-Tax Department for want of receipt of a valid ITR-V Form at CPC, Bengaluru from the taxpayers concerned.

In law, consequences of non-filing the ITR-V within the time allowed is significant as such a return is/can be declared Non-est in law. Thereafter, all the consequences for non-filing a tax return, as specified in the Income-tax Act,1961 follow.

“The CBDT, in the exercise of powers under section 119 of the Act, in case of returns for Assessment Years 2015-16, 2016-17, 2017-18, 2018-19 and 2019-20 which were uploaded electronically by the taxpayer within the time allowed under section 139 of the Act and which have remained incomplete due to non-submission of ITR-V Form for verification, hereby permits verification of such returns either by sending a duly signed physical copy of ITR-V to CPC, Bengaluru through speed post or through EVC/OTP modes as listed in para 1 above.

Such verification process must be completed by 30.09.2020,” the circular said.

However, the circular clarified that this relaxation shall not apply in those cases, where during the intervening period, the Income Tax Department has already taken recourse to any other measure as specified in the Act for ensuring filing of a tax return by the taxpayer concerned after declaring the return as Non-est.

“CBDT also relaxes the time-frame for issuing the intimation as provided in the second proviso to sub-section (1) of Section 143 of the Act and directs that such returns shall be processed by 31.12.2020 and intimation of processing of such returns shall be sent to the taxpayer concerned as per the laid down procedure.

In refund cases, while determining the interest, provision of section 244A (2) of the Act would apply,” the circular said.

Read the Original Circular of CBDT

Get income tax refund in one day from 2020

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Highlights
– The Cabinet on Wednesday cleared an ambitious Rs 4,242 crore project for e-filling and centralised processing of income tax return, which will allow taxpayers to get a refund in one day through a pre-filled tax return form, the Times of India reported.
– Currently, the average time taken for return processing and giving a refund is 63 days, which will get reduced to one day, Railway Minister Piyush Goyal, said.

By 2020 taxpayers will have their income tax filing system run not by “Sarkari” IT teams but by IT major Infosys. The union cabinet on Wednesday cleared a Rs 4240 crore worth proposal that promises to trim down processing of returns from the current average of 63 days to just one day.

In a post cabinet briefing, Railways Minister Piyush Goyal said that the “Integrated E-filing and Centralised Processing Centre 2.0 Project” of the Income Tax Department is likely to be completed in 18 months. He added that the system will be launched for operations after a three month testing period.

The minister said that Infosys was not handpicked but was selected after a bidding process was carried out.

They key element of the proposed system is that it cuts down the physical intervention by the Income Tax department in the return filing and refund process.

The government feels that smoother, transparent and accountable tax filing system with less official interface will go a far way in improving tax compliance.

The government handled an unprecedented volume of tax returns in the current fiscal. Goyal said a whopping amount of 1.83 lakh crore has been issued as tax refund. Refunds are issued after a cumbersome scrutiny process. The government is bound to pay interest in case of a delay. The new system will result in speedy refunds which will be credited directly to taxpayers’ bank account. The faster system will reduce refund time for taxpayers and cut down government’s outgo.

The taxpayer friendly.e-filing and Centralised Processing Centre (CPC) projects will have end-to-end automation of all processes within the I-T Department. Goyal said that the idea is to “promote voluntary compliance”.

The old system CPC-ITR 1.0 has been given an extension and sanction of Rs 1450 crore for the year 2018-2019. This system will be used till the new one becomes operational.

 

Source: Times of India

One nation, one tax department: I-T takes cue from GST

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The move, which will require a change in the income tax law, would also end the relevance of various geographic divisions in the form of wards and circles.

The one-nation, one-tax principle that underlines the goods and services tax (GST), set to be rolled out on July 1, could be adopted in a much more broader sense by the income tax department through a path-breaking initiative on jurisdiction-free assessment.

This would mean that a taxpayer in Mumbai could be assessed by an income tax officer located in Patna, a significant leap toward eradicating corruption by reducing the need for face-to-face contact between citizens and tax officials to the absolute minimum besides speeding up processing.

The move, which will require a change in the income tax law, would also end the relevance of various geographic divisions in the form of wards and circles with the whole country becoming one jurisdiction. This, it is hoped, will put an end to a system in which bribery is said to be used as a tool to ease processes through human intervention.


A high-level internal report of the Central Board of Direct Taxes (CBDT) recommended the move, which is under active consideration, a senior official told Economic Times.

“We are looking at it,” the CBDT official said.

The government may consider implementing the process in the next financial year.

 

The Catalyst
The key catalyst for such a significant reform is the massive shift toward e-filing of returns, which is already jurisdiction-free with returns going to the Central Processing Centre in Bengaluru.

In the last financial year, over 42.1 million tax returns had been filed online by February. The number of e-returns processed by then was 43 million, which included some backlog from previous years.

Multiple Benefits
In line with this move towards e-processing, the income tax department may even opt for e-scrutiny for all limited scrutiny cases where assesses can explain the transactions in question over email, the official said.

A complete jurisdiction-free environment would make geography redundant and the income tax department completely faceless for taxpayers. Any review or scrutiny of return could happen anywhere in India through an electronic interface, ensuring that the payee is not forced to interact with officials. “A taxpayer would not need to have any physical interface with his assessing officer,” said the official cited above.

CBDT had earlier constituted a seven-member committee to formulate a Standard Assessment Procedure for e-scrutiny to promote greater certainty, transparency and accountability. The board has in recent times taken a number of initiatives to reduce the face-to-face contact between tax officials and assessees and make the system non-adversarial.

These include directing field offices to raise only specific queries in income tax assessment cases picked up for scrutiny. It also directed the expeditious completion of those scrutiny cases where income concealed is up to Rs 5 lakh. “Jurisdiction-free assessment will help the tax department plan and allocate assessment work across the country,” said Jiger Saiya, partner, direct tax, BDO India.

Source: http://economictimes.indiatimes.com/articleshow/59026099.cms

I-T refunds rise by a whopping 41.5%, government issues 1.62 cr refunds worth Rs 1.42 lakh cr

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The income tax department has issued refunds to the tune of Rs 1.42 lakh crore so far this fiscal till February 10, 41.5 per cent higher than last year’s.

The income tax department has issued refunds to the tune of Rs 1.42 lakh crore so far this fiscal till February 10, 41.5 per cent higher than last year’s. The Centralised Processing Centre (CPC) of the tax department has already processed over 4.19 crore income tax returns (ITRs) and issued over 1.62 crore refunds during the current financial year up to February 10, 2017.

“The amount of refunds issued at Rs 1.42 lakh crore is 41.5 per cent higher than the corresponding period last year,” an official statement said. As much as 92 per cent of the refunds issued are below Rs 50,000 due to the high priority given to expeditious issue of refunds to small taxpayers.

Only 2 per cent of refunds less than Rs 50,000 remain to be issued. A majority of these cases relate to recently-filed ITRs or where the taxpayer’s response to the department is awaited.

The department also advised taxpayers to verify and update their e-mail address and mobile number on the e-filing portal to receive electronic communication.

“CBDT is committed to ensuring best possible taxpayer services through its e-governance programmes and increasing the coverage and scope of electronic filing and processing of various forms and applications,” the statement said.

As a result of emphasis on expeditious issue of refunds, 92 per cent of all I-T returns were processed within 60 days, demonstrating the Central Board of Direct Taxes’ (CBDT) commitment to faster and more efficient taxpayer service.

As many as 4.01 crore ITRs were e-filed till February 10, 2017, an increase of 20 per cent over the previous year.

Also, more than 60 lakh other online forms were filed with an increase of nearly 41 per cent compared with the previous year.

In April-January, the total direct tax collection grew 10.79 per cent to Rs 5.82 lakh crore led by robust collections in personal income tax.

File income tax return (ITR) even if your income is not taxable

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Many people think it an avoidable headache to file income tax returns, when their income falls below the taxable limit, or when tax is deducted at source or when no taxes are due. They also unnecessarily fear some notice will come from Income Tax Department every year, once they have started filing income tax return.

Here are the benefits of filing the income tax return that show you that it’s always better to file the return every year, even if your income  is not taxable.

  1. Helps as Standard Income Proof

In simple words, a tax return is a summary document or declaration about the results of all your financial transactions undertaken during the tax year. It consolidates the income under all sources and calculates the taxes due after allowing all eligible deductions.

ITR is considered and accepted by various agencies as a proof of your income, not only in India but also globally. If you are looking for higher education or employment abroad, ITR is the largely accepted income proof.

PAN – Permanent Account Number, issued by the Income Tax authority is not only a prerequisite for filing ITR but is also now mandatory for all financial transactions – from opening a bank account, or purchasing mutual funds to real estate for investment. So it makes sense to get yourself one and file the tax return.

  1. Helps Loan application:

At the time of applying for a home loan or vehicle loan or education loan, most banks ask the applicant to furnish copies of tax returns for the past 2-3 years. This helps banks understand your financial position and ability to repay the loan. Providing a copy of returns receipts helps in faster approval of your loan application

Apart from a good credit history (or past repayment track), the fact that you are filing your ITR regularly gives you speedier access to credit and at better terms, although not necessarily a larger line of credit, but surely a better rate.

It also provides the impression to the lender that you are a law abiding citizen and will repay the loan within time.

3. Helps claiming your tax refund:

Filing of ITR also helps your claiming of Tax Refund! In the case of salaried employees or those who have sold property, where Tax is deducted at source at standard rate, you can claim refund if the tax outgo has been more than the actual tax payable. You must file your tax returns if you wish to claim tax refunds. Not doing so would lead to forgoing the refund.

Generally, your employer deducts taxes on your estimated income based on the declaration that you have submitted. Apart from this, taxes are also deducted at source on various other incomes such as interest, commission, rent, and others, at a standard rate. When you club all these incomes with your salary, and also consider tax deductions as applicable to you, the final tax rate applicable may turn out to be different from the TDS rate. Owing to this you may either have to pay more tax or expect a refund.

Thus, filing ITR is not always about paying tax. It can be used as a means to reduce your tax liability!

  1. Helps Carry forward of losses:

Income tax laws allow you to carry forward and set off certain losses (losses from business income, depreciation, capital gains) against future gain or income. These losses can be carried forward for eight consecutive years immediately succeeding the year in which the loss is incurred. Even if you have taxable income this year, you might have losses to carry forward that can be adjusted against gains in later years when you actually have higher incomes.

  1. Visa processing:

If you are planning to immigrate to another country or explore an overseas job opportunity, then prepare yourself in advance. Most embassies and consulates require you to furnish copies of your tax returns for the past couple of years at the time of the visa application. This is especially applicable when applying for visa for the US, the UK, Canada or Europe.

  1. Helps in Statutory Compliance:

This also helps in statutory compliance, when you need to file tax returns.

The income tax department requires you to file a tax return in case your gross total income exceeds Rs.2.5 lakh (Rs.3 lakh for tax payers older than 60 years and Rs.5 lakh for those older than 80 years) in the financial year. Further, even if you do not have taxable income but if you qualify as a ‘resident’ individual and have any asset or financial interest in an entity located outside of India, then also it is mandatory for you to file.

What if you don’t file your taxes? If you are required to file your returns but miss it, then the tax officer may impose a penalty of up to Rs.5,000 (under section 271F). And if you owe some taxes and still don’t file it, then you may be liable to pay additional interest (section 234A), along with other penalties for avoiding taxes.

IDS: CBDT issues circular endorsing validity of e-declarations

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The CBDT has issued an order endorsing the legal validity of the e-declarations made under the ongoing domestic black money window, known as the Income Declaration Scheme (IDS).

With only a month left for the IDS to close on September 30, the Central Board of Direct Taxes (CBDT) said for those entities who make declarations of their domestic untaxed assets in the online mode, the Commissioner rank officer of its Central Processing Centre (CPC) in Bengaluru will be “deemed” as the authority for receiving such declarations under the relevant sections of the I-T Act.

“In continuation to Circular No 19 of 2016, dated 25th May, 2016, the Commissioner of Income-tax, Centralised Processing Centre, headquartered at Bengaluru shall exercise the concurrent powers and functions in respect of the declaration referred to in section 183 of the Finance Act, 2016 which has been furnished electronically under digital signature and shall also be deemed to be the Principal Commissioner or the Commissioner for the purposes of section 186 of the Finance Act, 2016 in respect of such declaration,” the CBDT said.

The CPC based in Bengaluru is the nodal wing of the tax department to receive online filings and Income Tax Returns.

There are two options to file black money declarations under the one-time IDS, one by filling up physical form before a Principal Commissioner of Income Tax in any part of the country and the other by the official e-filing portal of the I-T department.

“The circular has been brought out to endorse the legal validity of IDS declarations made by the e-filing website. It was issued keeping in mind the legal requirement,” a senior official said.

The CBDT, till now, has issued five sets of clarifications or frequently asked questions (FAQs) containing answers to various questions on the implementation of the IDS.

The government, sometime back, had extended the deadline for payment of tax and penalty under IDS and allowed declarants to pay the amount in three instalments by September 30 next year.

The first instalment of 25 per cent under the IDS 2016 will have to be paid by November 2016, followed by another 25 per cent by March 31, 2017.

The remaining amount will have to be paid to the exchequer by September 30, 2017.

Earlier the tax, surcharge and penalty under the black money disclosure window were required to be paid by November 30.

The scheme was announced by the government with an aim to bring out black money from the domestic economy.

The government had come out with a similar scheme for Indians holding undisclosed income abroad.

The scheme will apply to undisclosed income whether in the form of investment in assets or otherwise, pertaining to financial year 2015-16 or earlier.

Source: http://www.thehindu.com/business/Economy/ids-cbdt-issues-circular-endorsing-validity-of-edeclarations/article9056076.ece