CBDT extends the due date for filing ITRs & Tax Audit Reports from 30 th September to 31, October 2019

by | posted in: Corporate & Business Advisory Services, Corporate Updates, Economy, Business Updates, Corporate Affairs, Income Tax,e-Filing- Individuals, Firms, Companies | 0

The Central Board of Direct Taxes (CBDT) has decided to extend the deadline for filing of ITRs and Tax Audits Reports by a month. Given the relentless demands by Chartered Accountants (CAs) and tax consultants, the CBDT has given a breather till October 31. It will also provide some respite to smaller companies too, who are struggling with GST filings.

Last night, the CBDT tweeted: “On consideration of representations recd from across the country, CBDT has decided to extend the due date for filing of ITRs & Tax Audit Reports from 30th Sep, 2019 to 31st of Oct, 2019 in respect of persons whose accounts are required to be audited. Formal notification will follow”.

This category of ITR is to be filed by those entities that are assessed under section 44AB of the Income Tax Act such as companies, partnership firms, proprietorship among others and their accounts are to be audited before filing.

The new deadline is also required because the CBDT has been intermittently changing the background software required for filing the ITRs.

There was a change in the ITR 6 software utility. Since all tax-filing is now software-driven, the CBDT will require some time to rework the filing process due to the changes in the software.

The old belief that there would be loss in revenue of the Government, if there is a delay in filing ITRs and Tax Audit Reports is wrong as a considerable share of revenue has already got collected due to Tax Deducted at Source and Advance Tax payments.

Filing ITRs and Tax Audit Reports is primarily an administrative exercise to inform the Income Tax Department about the payable tax. By extending the deadline, there would be no revenue loss to the Government. It will give some relief to the CAs fraternity and smaller companies who are struggling with various tax compliances, he said.

 

Read the Original CBDT Notification

File revised tax returns after rectifying errors

by | posted in: Corporate & Business Advisory Services, Corporate Updates, Income Tax,e-Filing- Individuals, Firms, Companies | 0

Most of us collate all information relating to our annual income, investments and tax deducted at source (TDS) before proceeding to file our income tax returns. However, the income tax filing process is a fairly comprehensive exercise. We might miss disclosing an income due to oversight, or claim an exemption or deduction that is not due. What are the options available to us if we make a mistake while filing returns?

We may make an error due to insufficient information or mis-match between Form 16 / Form 16 A and Form 26 AS or any other reason. Errors may also occur in our calculation. The income tax law allows us to file a revised return, correcting the omission or mistake made by us in the original return.

Filing a revised return

You can file a revised return at any time before the end of the assessment year, or before completion of the assessment, whichever is earlier.

For example, for the AY 2019-20, you can file a revised return till 31 March 2020. However, if your assessment is concluded before that date, you cannot file a revised return after completion of your assessment. An income-tax assessment is made through a notice issued by the assessing officer where your income and taxes are determined through assessment proceedings. In some situations this assessment may be completed before the end of the assessment year. If this is the case, you can no longer revise your return.

The revised return has to be filed in the same manner as an original return. While filing, a taxpayer has to choose the option: ‘Revised u/s 139(5)’. A taxpayer has to quote the acknowledgement number and date of filing of the original return while filing the revised return. The revised return substitutes the original return.

You may have filed an original return within the due date, or you may have filed after the due date. A return filed after the due date is called a ‘belated return’. You can revise both—a return filed within the due date or a belated one. The time limit for revising is the same for both as discussed above, i.e., before the end of the assessment year or before completion of assessment, whichever is earlier.

You can revise your income tax return any number of times. However, you are required to mention the acknowledgement number of the original return filed. You must note that ‘revised return’ is an opportunity for revision allowed by the income tax department. Hence, one must not misuse it and revise a return only in the case of a mistake or omission in the original return filed. If you are making errors with revisions, it’s in your interest to seek professional help for your return filing.

As is done with an original return, do remember to e-verify your ‘revised return’ as well. Your ‘revised return’ would not be valid if the same is not e-verified. You can e-verify the ‘revised return’ using an OTP (one-time password) based on Aadhaar or net banking or EVC (electronic verification code). You can also send a signed copy of the ITR V to the Centralized Processing Centre, Bengaluru, within 120 days of filing the ‘revised return’.

Missed Income Tax Return (ITR) Filing Deadline? Here Are Your Options

by | posted in: Corporate & Business Advisory Services, Income Tax,e-Filing- Individuals, Firms, Companies | 0

Individuals having an annual income of up to Rs2.5 lakh are not required to file income tax returns, according to Income Tax department.

Missed the August 31 deadline for filing income tax return (ITR) for financial year 2018-19 (assessment year 2019-20)? Well, you don’t need to worry as you can still file a belated return. The Income Tax (I-T) department has, however, stipulated a penalty fee ranging from Rs. 5,000 to Rs. 10,000 for filing a belated income tax return, according to its website – incometaxindia.gov.in. A belated return of income is furnished under section 139(4) of the Income Tax Act. The amount of penalty payable by the assessees filing a late return increases based on the degree of delay.

Here are key things to know about belated income tax return (ITR):
1. Any person who has not furnished a return of income within the time period allowed under section 139(1) of Income Tax Act can furnish return for any previous year – at any time before the end of the relevant assessment year or before completion of the assessment, whichever is earlier, according to I-T department.

2. A belated return attracts late filing fees under section 234F of the Income Tax Act.

3. Income Tax rules state that a fine of Rs. 5,000 is applicable if an individual files ITR after due date but before December 31.

4. The penalty increases to Rs. 10,000 if the asseesee file the return next year between January 1 and March 31.

5. Those who have an annual income of Rs. 5 lakh, however, are required to pay Rs. 1,000 for filing ITR after the due date.

What are the income tax exemption limits for an individual?

There are three categories of individual taxpayers- individuals (below the age of 60 years) which includes residents as well as non-residents, resident senior citizens (60 years and above but below 80 years of age) and resident super senior citizens (above 80 years of age). Individuals having an annual income of up to Rs. 2.5 lakh are not required to file income tax returns. For senior citizens (individuals between 60 years and 80 years of age), the limit is Rs. 3 lakh, and for very senior citizens (aged above 80 years), the limit is Rs. 5 lakh, according to the taxman.

The Income Tax Department has, on its website, laid out a step-by-step guide for assessees to prepare and submit their income tax return (ITR) online.

 

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

by | posted in: Corporate Updates, Economy, Business Updates, Corporate Affairs, Income Tax,e-Filing- Individuals, Firms, Companies | 0
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

by | posted in: Accounting Standards, Audit, Due Diligence, Company Incorporations, e-filing of MCA Returns, Corporate & Business Advisory Services, Corporate Updates, Economy, Business Updates, Corporate Affairs, Income Tax,e-Filing- Individuals, Firms, Companies | 0

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

by | posted in: Corporate & Business Advisory Services, Corporate Updates, Economy, Business Updates, Corporate Affairs, Income Tax,e-Filing- Individuals, Firms, Companies | 0
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

==============================================================================

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

by | posted in: Corporate & Business Advisory Services, Corporate Updates, Economy, Business Updates, Corporate Affairs, Income Tax,e-Filing- Individuals, Firms, Companies | 0

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.