4 Jun 2023

New Annual Information Statement (AIS) – 50 Transactions reported in Income Tax Portal

***AIS shows both reported value and the value after considering taxpayer feedback under each section (i.e. TDS, SFT, Other information).***

The Income Tax Department has announced the roll-out of a new statement namely Annual Information Statement (AIS) which would provide you with almost all details about your financial transactions during the year. So far, the Income Tax Department has been issuing Form 26AS to provide information related to taxable income and tax deducted at source (TDS), which will now be replaced with the Annual Information Statement (AIS). The new AIS statement will provide comprehensive information of the taxpayer and will be significantly useful while preparing the tax return. The information will be provided in AIS after removing duplicate information and taxpayers can download such information in PDF, JSON, CSV formats.

A taxpayer can submit online feedback if the information is erroneous or refers to another person/year, or is duplicate. The list of Top 50 Transactions to be reported in the New Annual Information Statement are mentioned below.

1.Salary

Employer submits detailed breakup of salary, perquisites, profits in lieu of salary etc paid to the employee in Annexure II of the TDS statement (24Q) of the last quarter. This information is also provided by the employer to the employee (taxpayer) in Part B (Annexure) of Form 16. AIS displays all the financial transactions such as, salary income, dividend income, interest income from saving/fixed deposits, sale and purchase of securities, etc. With the help of all such financial information, it would be easy for a taxpayer to report the correct information in the income tax return

Rent Received

Tenants responsible for paying rent are liable to deduct tax at source on payment of rent. Deductor reports details of amount paid/credited, date of payment, details of Tax deduction made etc. in Form 26Q. This information is provided by the deductor to the deductee (taxpayer) in Form 16A. Tenant (Individual/HUF) paying a rent of more than 50,000 is liable to deduct tax while making payment to the landlord. Tenant reports details of rent paid amount paid/credited, property details, date of payment and tax deduction details etc. pertaining to rent paid in Form26QC.

Dividends

Dividend paid/declared by all companies (reporting entity) is reported under Statement of Financial Transactions (SFT). Company paying/distributing dividend is liable to deduct TDS from the amount paid subject to the threshold applicable in the act and report through form 26Q (quarterly statement). This information is provided by the deductor to the deductee (taxpayer) in Form 16A.

Interest from savings bank

Interest paid/credited/accrued on saving account is reported under Statement of Financial Transactions (SFT).

Interest from deposit

Bank/deductor at the time paying/crediting interest on deposits is liable to deduct tax from deposit holder paid subject to the threshold applicable in the act. This information is reported by the Bank/deductor in form 26Q (quarterly statement). This information is provided by the deductor to the deductee (taxpayer) in Form 16A.

Interest from others

Interest paid/credited/accrued on others (other than savings account, term deposit, recurring deposit) is reported under Statement of Financial Transactions (SFT). Bank/deductor at the time paying/crediting other interest (interest on securities) is liable to deduct tax from deposit holder paid subject to the threshold applicable in the act. This information is reported by the Bank/deductor in form 26Q (quarterly statement). This information is provided by the deductor to the deductee (taxpayer) in Form 16A

Interest from income tax refund

Interest received on Income Tax Refund in the financial year is liable to be taxed as Income from other sources.

Rent on plant & machinery

Tenant paying rent is liable to deduct tax at applicable rate as per the Act from rent paid. Details of rent on Plant & Machinery is reported by the deductor in TDS form 26Q. Tenant furnishes the details of rent paid on quarterly basis. This information is provided by the deductor to the deductee (taxpayer) in Form 16A.

Winnings from lottery or crossword puzzle

Payer is liable to deduct tax at applicable rate as per act from winnings from lottery or crossword puzzle etc. Information about winnings is reported by payer in TDS form 26Q. Information is reported on quarterly basis. Income is taxable at special rate. This information is provided by the deductor to the deductee (taxpayer) in Form 16A.

Winnings from horse race

Payer is liable to deduct tax at applicable rate as per act from winnings from Horse race. Information about winnings is reported by payer in TDS form 26Q. Information is reported on quarterly basis and is chargeable to tax at special rate. This information is provided by the deductor to the deductee (taxpayer) in Form 16A.

Receipt of accumulated balance of PF from employer u/s 111

Employer/recognised provided fund reports information about accumulated balance due to an employee in form 26Q. Information is reported on quarterly basis and is chargeable to tax at special rate. This information is provided by the deductor to the deductee (taxpayer) in Form 16A.

Interest from infrastructure debt fund

Information relating to interest paid is reported by payer in form 27Q. Information is reported on quarterly basis and is chargeable to tax at special rate. This information is provided by the deductor to the deductee (taxpayer) in Form 16A.

Interest from specified company by a non-resident u/s 115A(1)(a)(iiaa)

Interest on bonds and government securities

Income in respect of units of non-resident u/s 115A(1)(a)(iiab)

Information about income in respect of units of Non Resident is reported by payer in form 27Q. Information is reported on quarterly basis and is chargeable to tax at special rate. This information is provided by the deductor to the deductee (taxpayer) in Form 16A.

Income and long-term capital gain from units by an offshore fund u/s 115AB(1)(b)

Information about income and long-term capital gain from units payable to an off shore fund is reported by payer in form 27Q. Information is reported on quarterly basis and is chargeable to tax at special rate. This information is provided by the deductor to the deductee (taxpayer) in Form 16A.

Income and long-term capital gain from foreign currency bonds or shares of Indian companies u/s 115AC

Information about income and long-term capital gain from foreign currency bonds or shares of Indian companies is reported by payer in form 27Q. Information is reported on quarterly basis and is chargeable to tax at special rate. This information is provided by the deductor to the deductee (taxpayer) in Form 16A.

Income of foreign institutional investors from securities u/s 115AD(1)(i)

Information about income of foreign institutional investors from securities is reported by payer in form 27Q. Information is reported on quarterly basis and is chargeable to tax at special rate. This information is provided by the deductor to the deductee (taxpayer) in Form 16A.

Insurance commission

Information about insurance commission received is reported by the payer in Form 26Q on a quarterly basis. This information is provided by the deductor to the deductee (taxpayer) in Form 16A.

Receipts from life insurance policy

Receipts from life insurance policy are exempt under section 10(10D) subject to conditions specified therein. If such conditions are not met, the receipts become taxable and tax is also deducted u/s 194DA. The information is reported by the payer in Form 26Q on a quarterly basis. This information is provided by the deductor to the deductee (taxpayer) in Form 16A.

Withdrawal of deposits under national savings scheme

Withdrawals from NSS are taxable. Tax is also deducted on such withdrawals and reported in Form 26Q by the payer on a quarterly basis. This information is provided by the deductor to the deductee (taxpayer) in Form 16A.

Receipt of commission etc. on sale of lottery tickets

Commission on lottery business is subject to tax deduction under section 194G. The payer reports such information in Form 26Q on a quarterly basis. This information is provided by the deductor to the deductee (taxpayer) in Form 16A

Income from investment in securitization trust

Income from investment made in securitization trust is subject to tax deduction. The payer reports such information in Form 27Q on a quarterly basis. This information is provided by the deductor to the deductee (taxpayer) in Form 16A.

Income on account of repurchase of units by MF/UTI

Receipt of income on account of repurchase of units by MF/UTI is subject to tax deduction under section 194F. The payer reports such information in Form 26Q on a quarterly basis. This information is provided by the deductor to the deductee (taxpayer) in Form 16A.

Interest or dividend or other sums payable to government

Income from interest or dividend or other sums payable is not subject to tax deduction. The payer reports such information in Form 26Q on a quarterly basis. This information is provided by the deductor to the deductee (taxpayer) in Form 16A

Payment to non-resident sportsmen or sports association u/s 115BBA

Information pertaining to amount paid to non-resident sportsmen or sports association is reported by deductor in form 27Q. This information is provided by the deductor to the deductee (taxpayer) in Form 16A.

Sale of land or building

Sales consideration of immovable property transferred is reported under Statement of Financial Transactions (SFT). The information will be shown in AIS of all sellers to enable submission of feedback. Sale of immovable property is also reported in Form 61 where PAN is not furnished by the transacting party. PAN is populated based on aadhaar and other attributes of the person. Information related to receipts under specified agreement is reported by person making payment for specified agreement entered into. This information is provided by the deductor to the deductee (taxpayer) in Form 16A.

Receipts from transfer of immovable property

Information related to receipts from transfer of immovable property is reported by buyer of property in Form 26QB. This information is provided by the deductor to the deductee (taxpayer) in Form 16B.

Sale of vehicle

Sale of motor vehicle is reported in Form 61 where PAN is not furnished by the transacting party. PAN is populated based on aadhaar and other attributes of the person.

Sale of securities and units of mutual fund

In the SFT reporting of depository transactions, the estimated sale consideration for the debit transaction is determined on the best possible available price of the asset with the depository (e.g. end of day price). The taxpayer will be able to modify the sales consideration and other related information before filing the return. In the SFT reporting of depository transactions, the estimated sale consideration for the debit transaction is determined on the best possible available price of the asset with the depository (e.g. end of day price). The taxpayer will be able to modify the sales consideration and other related information before filing the return.

Off market debit transactions

In the SFT reporting of depository transactions, the depository reports details of off market debit transactions. The value of transaction is computed on the basis of end of day price of the security. In case, the consideration is available, the same is also shown.

Off market credit transactions

In the SFT reporting of depository transactions, the depository reports details of off market credit transactions. The value of transaction is computed on the basis of end of day price

Business receipts

Information pertaining to amount paid to contractor is reported by contractee in form 26Q. This information is provided by the deductor to the deductee (taxpayer) in Form 16A. Information pertaining to amount paid to the service provider is reported by recipient of services in form 26Q. This information is provided by the deductor to the deductee (taxpayer) in Form 16A

Business expenses

Information pertaining to purchase of alcoholic liquor is reported by tax collector in TCS form 27EQ (quarterly statement). This information is provided by the collector to the taxpayer in Form 27D.

Rent payments

Information is reported by person making payment in form 26QC. This information is provided by the deductor to the taxpayer in Form 16C

Miscellaneous payments

Information is reported by person making payment in form 26QD. This information is provided by the deductor to the taxpayer in Form 16D. Purchase of bank drafts or pay orders may be reported in Form 61 if PAN is not furnished by the transacting party. PAN is populated based on aadhaar and other attributes of the person

Cash deposits

Information pertaining to cash deposits in an account other than current account is reported by reporting entity in form 61A. The information will be shown in AIS of all account holders to enable submission of feedback. Information pertaining to cash deposits in current account is reported by reporting entity in form 61A. The information will be shown in AIS of all account holders to enable submission of feedback.

Cash withdrawals

Information pertaining to Cash withdrawals from current account is reported by reporting entity in form 61A. The information will be shown in AIS of all account holders to enable submission of feedback. Sometimes, cash withdrawals from accounts other than current account are reported by the Reporting Entity in SFT-004. The information will be shown in AIS of all account holders to enable submission of feedback. Information pertaining to Cash withdrawals is reported by reporting entity through TDS statement 26Q. This information is provided by the deductor to the taxpayer in Form 16A.

Cash payments

Information pertaining to Cash payments for goods and services is reported by reporting entity in form 61A. Information pertaining to Purchase of bank drafts or pay orders or banker’s cheque in cash is reported by reporting entity in form 61A. Information pertaining to Purchase of prepaid instruments in cash is reported by reporting entity in form 61A.

Outward foreign remittance/purchase of foreign currency

Information of outward foreign remittance is reported by authorised dealer in form 15CC. Information about Remittance under LRS for educational loan taken from financial institutions mentioned in section 80E (Third proviso to Section 206C(1G)) is reported by authorised dealer through TCS form 27EQ for specified foreign remittances made by remitter PAN.Information about Remittance under LRS for purpose other than for purchase of overseas tour package or for educational loan taken from financial institution (Section 206C(1G(a))) is reported by authorised dealer through TCS form 27EQ for specified foreign remittances made by remitter PAN.

Receipt of foreign remittance

Information relating to payment of royalty or fees for technical services etc., paid to non- residents is reported by deductor in form 27Q. This information is provided by the deductor to the deductee (taxpayer) in Form 16A. Information is reported by authorised dealer in form 15CC for foreign remittances made by remitter PAN. Information of receipt of foreign remittance by a remittee is reported by authorised dealer in form 15CC.

Foreign travel

Information is reported by deductor in TCS form 27EQ (quarterly statement). This information is provided by the collector to the taxpayer in Form 16D. Payment in connection with travel to any foreign country may be reported in Form 61 if the PAN is not furnished by the transacting party. PAN is populated based on aadhaar and other attributes of the person.

Purchase of immovable property

Information relating to immovable property is reported by the Property Registrar through SFT. The information will be shown in AIS of all buyers to enable submission of feedback. Buyer at the time of making payment towards purchase of property is liable to deduct tax from the amount paid to the seller subject to the threshold applicable. This information is reported in form 26QB. Seller of property reports the details of property buyer in schedule CG of ITR. Payment for purchase of immovable property may be reported in Form 61 if the PAN is not furnished by the transacting party. PAN is populated based on aadhaar and other attributes of the person.

Purchase of vehicle

Information is reported by deductor in TCS form 27EQ (quarterly statement). This information is provided by the collector to the taxpayer in Form 16D. Payment for purchase of motor vehicle may be reported in Form 61 if the PAN is not furnished by the transacting party. PAN is populated based on aadhaar and other attributes of the person.

Purchase of time deposits

Information relating to Purchase of Time deposits is reported by reporting entity (such as the bank) in the Statement of Financial Transaction (SFT). Information pertaining to investment in Time deposit is reported in Form 61 where PAN is not furnished by the transacting party. PAN is populated based on aadhaar and other attributes of the person.

Purchase of securities and units of mutual funds

Information is reported by reporting entity in the Statement of Financial Transaction (SFT). Purchase of shares (including share application money). Information is reported by reporting entity in the Statement of Financial Transaction (SFT). Information is reported by reporting entity (such as mutual fund companies) in the Statement of Financial Transaction (SFT).

Credit/Debit card

Information pertaining to application for issuance of credit/debit card is reported in Form 61 where PAN is not furnished by the transacting party. PAN is populated based on aadhaar and other attributes of the person.

Balance in account

Details of bank account other than saving and time deposits opened during the year , as reported in Form 61. Bank account with balance exceeding 50,000 at the closing of Financial year, as reported in Form 61.

Income distributed by business trust

Information relating to income from units of a business trust is reported by payer in form 27Q. Information is reported on quarterly basis and is chargeable to tax at special rate.

Income distributed by investment fund

This information is reported by the deductor in Form 26Q on a quarterly basis

The Income Tax Department tracks more comprehensive information about assessees & this facilitates financial transactions from many income sources and expenditures to be captured, in more detail. This needs to be reconciled while filing ITR and proper records to be maintained by all for above list of items, as these are scrutinized by tax department.

Annual Information Statement functionality – Video

2 Apr 2023

What happens if Pan Card is not linked to Aadhaar ?

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

***Linking Aadhar with PAN will allow your income tax returns to be processed. The PAN card of a person will become inoperative when it is not linked to an Aadhaar card.***

It has become a mandatory process to link your PAN with Aadhaar. This is an important process because this will allow your income tax returns to be processed. Linking of your PAN with Aadhaar is also required if you are carrying out banking transactions for amount of Rs.50,000 and above.

In order to provide some more time to tax payers, Central Board of Direct Taxes (CBDT) has extended the date for linking the PAN and Aadhaar to June 30,2023.

* * * * * * * * * * *

Government of India
Ministry of Finance
Department of Revenue Central Board of Direct Taxes

New Delhi, 28th March, 2023

PRESS RELEASE

Last date for linking of PAN-Aadhaar extended

In order to provide some more time to the taxpayers, the date for linking PAN and Aadhaar has been extended to 30th June, 2023, whereby persons can intimate their Aadhaar to the prescribed authority for Aadhaar-PAN linking without facing repercussions. Notification to this effect is being issued separately.

Under the provisions of the Income-tax Act, 1961 (the ‘Act’) every person who has been allotted a PAN as on 1st July, 2017 and is eligible to obtain Aadhaar Number, is required to intimate his Aadhaar to the prescribed authority on or before 31st March, 2023, on payment of a prescribed fee. Failure to do so shall attract certain repercussions under the Act w. e.f. 1st April, 2023. The date for intimating Aadhaar to the prescribed authority for the purpose of linking PAN and Aadhaar has now been extended to 30th June, 2023.

From 1st July, 2023, the PAN of taxpayers who have failed to intimate their Aadhaar, as required, shall become inoperative and the consequences during the period that PAN remains inoperative will be as follows:

(i) no refund shall be made against such PANS;

(ii) interest shall not be payable on such refund for the period during which PAN remains inoperative; and

(iii) TDS and TCS shall be deducted / collected at higher rate, as provided in the Act.

The PAN can be made operative again in 30 days, upon intimation of Aadhaar to the prescribed authority after payment of fee of Rs 1,000.

Those persons who have been exempted from PAN-Aadhaar linking will not be liable to the consequences mentioned above. This category includes those residing in specified States, a non-resident as per the Act, an individual who is not a citizen of India or individuals of the age of eighty years or more at any time during the previous year.

it is stated that more than 51 crore PANS have already been linked with Aadhaar till date.

PAN can be linked with Aadhaar by accessing the following link
https://eportal.incom et ax. goy ntiecifoservices/#/pre-login/b nk-aadhaar

(Surabhi Ahluwaiia)

Pr. Commissioner of Income Tax
(Media & Technical Policy) &
Official Spokesperson, CBDT

1 Mar 2023

Linking PAN & Aadhaar before March 31, is mandatory

by K.Sundar | posted in: Corporate & Business Advisory Services, Corporate Updates, Cross Border Transactions, M&As, Joint Ventures, Income Tax,e-Filing- Individuals, Firms, Companies | 0

*Govt has declared March 31, 2023 as the deadline for linking PAN and Aadhaar.*
*Failing to link will make PAN inactive.*

It is mandatory to link Permanent Account Numbers (PAN) to Aadhaar by March 31, 2023.

The last date to link Permanent Account Number (PAN) to Aadhaar is nearing soon. According to the Central Board of Direct Taxes (CBDT), the apex body of the Income Tax department, it is mandatory to link Aadhaar to Permanent Account Numbers (PAN) by March 31 this year, failing which the PAN will become ‘inoperative’ on April 1. The previous deadline for linking was March 31, 2022, but the government extended it with a Rs. 1000 penalty fee.

PAN and Aadhaar are both unique identification cards that serve as proof of identity and are required for verification.

Benefits of linking PAN with Aadhaar

– Multiple PAN Cards: Linking of PAN and Aadhaar eliminates the possibility of an individual having more than one PAN Card, thereby reducing fraudulent activities.

– Prevent Tax Evasion: The Income Tax Department will be able to detect any form of tax evasion after PAN is linked with Aadhaar.

-Income Tax Returns: The process of filing income tax returns will become significantly simpler because individuals will no longer be required to provide proof that they have filed their income tax returns. Since Aadhaar holds all the information about an individual including biometric verification, the linking will initiate a faster return filing process.

– Linking your Aadhaar to PAN will prevent the tax return process from being cancelled and will also help in summarising one’s taxes attached to the Aadhaar for furture references.

Steps to link PAN with Aadhaar via web portal:

1. Visit the Income Tax e-filing official websites- eportal.incometax.gov.in or incometaxindiaefiling.gov.in

2. Register on the portal with your PAN as the user ID if not registered already.

3. Log into the portal.

4. A pop-up window will appear to link PAN with Aadhaar or go to ‘Profile Settings’ on the Menu bar and click on Link Aadhaar.

5. Relevant details like name, date of birth, and gender will already be mentioned as per the PAN card details.

6. Verify the details with Aadhaar. If the details match, enter the Aadhaar number and click on the link now button.

7. A message will pop up saying that the Aadhaar has been successfully linked to the PAN.

Other methods of linking PAN with Aadhaar:

1. People can also visit the following websites for the linking process- https://www.utiitsl.com/ and https://www.egov-nsdl.co.in/

2. Through SMS: Type the following message UIDPAN<12 digit Aadhaar><10 digit PAN>. The message can be sent to 567678 or 56161.

3. Visiting nearby PAN service centres: The linking process can also be done manually by visiting the nearby PAN service centre.

Unable to link ?

– You may be unable to link your PAN to Aadhaar in some cases. The most common reason for rejection is a mismatch between the information in your PAN and Aadhaar. Ideally, your demographic information (name, gender, and date of birth) should match in both the documents.

– If there is a minor mismatch between your Aadhaar Name and the actual data in Aadhaar, a One Time Password (Aadhaar OTP) will be sent to the mobile phone registered with Aadhaar. Ensure that PAN and Aadhaar have the same date of birth and gender.

– In a rare case where Aadhaar name is completely different from name in PAN, then the linking will fail and you will be prompted to change the name in either Aadhaar or in PAN database.

– However, once the corrections have been made, you will able to link the PAN and Aadhaar.

Source: PAN Aadhaar Linking

17 Nov 2022

Link PAN with Aadhaar to prevent being inoperative from 1st April 2023?

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

**According to CBDT, if the linking is not done by March 31, 2023, the PAN cards of such users will become inactive from April 1, 2023.**

“As per the Income Tax Act, 1961, the last date to link PAN with Aadhaar is 31.3.2023 for all PAN card holders, who do not fall in the exempted category.

If not linked with Aadhaar, PAN will become inactive,” tweeted the CBDT through the IT department’s handle, adding that such users won’t be able to use PAN starting April 1, 2023.

The Central Board of Direct Taxes (CBDT), the apex body of the Income Tax department, has urged Permanent Account Number (PAN) card holders who are yet to link their PAN with Aadhaar card, to do so by March 31 next year, or else the former will be deactivated.

Steps to link PAN card with Aadhaar card:

In the Income Tax portal, enter your PAN and Aadhaar number on the required fields and then click on ‘Validate’

If the message ‘PAN is already linked with the Aadhaar or with some other Aadhaar’ pops up on your screen, it means your Adhaar is already linked with PAN

If your PAN is not linked to your Aadhaar and you have paid a challan on the NSDL Portal

The fee payment for PAN-Aadhaar Linkage needs to be made through e-Pay Tax functionality available on e-filing Portal

If you have bank account in any of the designated banks in the tax portal, you can follow below mentioned steps:

Provide your PAN, Confirm PAN and Mobile number to receive OTP

Post OTP verification, you will be redirected to a page showing different payment tiles

Click Proceed on the Income Tax portal

Select AY and Type of Payment – as other Receipts (500) and Continue

Enter the amount as Rs. 1000 under ‘Others’ field in tax break-up and proceed with further steps

If you have other bank accounts (bank that is not designated for payment through e-Pay tax), please follow below steps:

Click on hyperlink ‘Click here to go to NSDL (Protean) tax payment page for other banks’ given below on e-Pay tax page to redirect to Protean (NSDL) portal

Click Proceed under Challan No./ITNS 280

Select (0021) Income Tax (Other than Companies) under Tax Applicable (Major Head)

Select (500) Other Receipts) under Type of Payment (Minor Head)

Provide other mandatory details and Proceed

You are required to wait 4-5 working days before submitting the linkage request if the payment details are not authenticated on the e-filing portal and if you have already paid the amount on the NSDL portal.

After the payment, the information will be validated by electronic filing

You will receive a pop-up notification stating that “Your payment details are verified” after confirming your PAN and Aadhaar.

Click the Link Aadhaar option, and then enter the 6-digit OTP received on your mobile phone number

After successfully submitting your request for an Aadhaar-PAN link, you may now check its status.

Here is how you can check PAN and Aadhaar linkage status

Visit “https://www.incometax.gov.in/iec/foportal/” and under the ‘Quick Links’ section, click on ‘Link Aadhaar Status’.

Enter your PAN and Aadhaar Number, and then click on the ‘View Link Aadhaar Status’ option.

Your PAN and Aadhaar linkage status will be displayed on the screen upon successful validation.

PAN Holders should note that they need to check the status again if the UIDAI is still processing their request to link PAN and Aadhaar for confirmation.

Source: Link Aadhaar – Manual

25 Jun 2021

Government grants further extension in timelines of Income tax compliances

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

Government grants further extension in timelines of Income tax compliances

The Government has granted further extension of timelines of compliances under Income Tax Act.

It has also announced tax exemption for expenditure on COVID-19 treatment and ex-gratia received on death due to COVID-19. The details are as follows:

A.Tax exemption

Many taxpayers have received financial help from their employers and well-wishers for meeting their expenses incurred for treatment of Covid-19. In order to ensure that no income tax liability arises on this account, it has been decided to provide income-tax exemption to the amount received by a taxpayer for medical treatment from employer or from any person for treatment of Covid-19 during FY 2019-20 and subsequent years.
Unfortunately, certain taxpayers have lost their life due to Covid-19. Employers and well-wishers of such taxpayers had extended financial assistance to their family members so that they could cope with the difficulties arisen due to the sudden loss of the earning member of their family. In order to provide relief to the family members of such taxpayer, it has been decided to provide income-tax exemption to ex-gratia payment received by family members of a person from the employer of such person or from other person on the death of the person on account of Covid-19 during FY 2019-20 and subsequent years. The exemption shall be allowed without any limit for the amount received from the employer and the exemption shall be limited to Rs. 10 lakh in aggregate for the amount received from any other persons.

Necessary legislative amendments for the above decisions shall be proposed in due course of time.

B.Extension of Timelines

In view of the impact of the Covid-19 pandemic, taxpayers are facing inconvenience in meeting certain tax compliances and also in filing response to various notices. In order to ease compliances to be made by taxpayers during this difficult time, reliefs are being provided through Notifications nos. 74/2021 & 75/2021 dated 25^th June, 2021 Circular no. 12/2021 dated 25^th June, 2021. These reliefs are:

1.Objections to Dispute Resolution Panel (DRP) and Assessing Officer under section 144C of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) for which the last date of filing under that section is 1^st June, 2021 or thereafter, may be filed within the time provided in that section or by 31^st August, 2021, whichever is later.

2.The Statement of Deduction of Tax for the last quarter of the Financial Year 2020-21, required to be furnished on or before 31^stMay, 2021 under Rule 31A of the Income-tax Rules,1962 (hereinafter referred to as “the Rules”), as extended to 30^th June, 2021 vide Circular No.9 of 2021, may be furnished on or before 15^th July, 2021.

3.The Certificate of Tax Deducted at Source in Form No.16, required to be furnished to the employee by 15^th June, 2021 under Rule 31 of the Rules, as extended to 15^th July, 2021 vide Circular No.9 of 2021, may be furnished on or before 31^st July, 2021.

4.The Statement of Income paid or credited by an investment fund to its unit holder in Form No. 64D for the Previous Year 2020-21, required to be furnished on or before 15^th June, 2021 under Rule 12CB of the Rules, as extended to 30^th June, 2021 vide Circular No.9 of 2021, may be furnished on or before 15^th July, 2021.

5.The Statement of Income paid or credited by an investment fund to its unit holder in Form No. 64C for the Previous Year 2020-21, required to be furnished on or before 30^thJune, 2021 under Rule 12CB of the Rules, as extended to 15^th July, 2021 vide Circular No.9 of 2021, may be furnished on or before 31^st July, 2021.

6.The application under Section 10(23C), 12AB, 35(1)(ii)/(iia)/(iii) and 80G of the Act in Form No. 10A/ Form No.10AB, for registration/ provisional registration/ intimation/ approval/ provisional approval of Trusts/ Institutions/ Research Associations etc., required to be made on or before 30^th June, 2021, may be made on or before 31^stAugust, 2021.

7.The compliances to be made by the taxpayers such as investment, deposit, payment, acquisition, purchase, construction or such other action, by whatever name called, for the purpose of claiming any exemption under the provisions contained in Section 54 to 54GB of the Act, for which the last date of such compliance falls between 1^st April, 2021 to 29^thSeptember, 2021 (both days inclusive), may be completed on or before 30^th September, 2021.

8.The Quarterly Statement in Form No. 15CC to be furnished by authorized dealer in respect of remittances made for the quarter ending on 30^th June, 2021, required to be furnished on or before 15^thJuly, 2021 under Rule 37 BB of the Rules, may be furnished on or before 31^stJuly, 2021.

9.The Equalization Levy Statement in Form No. 1 for the Financial Year 2020-21, which is required to be filed on or before 30^th June, 2021, may be furnished on or before 31^stJuly, 2021.

10.The Annual Statement required to be furnished under sub-section (5) of section 9A of the Act by the eligible investment fund in Form No. 3CEK for the Financial Year 2020-21, which is required to be filed on or before 29^th June, 2021, may be furnished on or before 31^stJuly, 2021.

11.Uploading of the declarations received from recipients in Form No. 15G/15H during the quarter ending 30^th June, 2021, which is required to be uploaded on or before 15^th July, 2021, may be uploaded by 31^st August,2021.

12.Exercising of option to withdraw pending application (filed before the erstwhile Income Tax Settlement Commission) under sub-section (1) of Section 245M of the Act in Form No. 34BB, which is required to be exercised on or before 27^th June, 2021, may be exercised on or before 31^st July, 2021.

13.Last date of linkage of Aadhaar with PAN under section 139AA of the Act, which was earlier extended to 30^th June, 2021 is further extended to 30^th September, 2021.

14.Last date of payment of amount under Vivad se Vishwas (without additional amount) which was earlier extended to 30^th June, 2021 is further extended to 31^st August, 2021.

15.Last date of payment of amount under Vivad se Vishwas (with additional amount) has been notified as 31^st October, 2021.

16.Time Limit for passing assessment order which was earlier extended to 30^th June, 2021 is further extended to 30^th September, 2021.

17.Time Limit for passing penalty order which was earlier extended to 30^th June, 2021 is further extended to 30^th September, 2021.

18.Time Limit for processing Equalisation Levy returns which was earlier extended to 30^th June, 2021 is further extended to 30^th September, 2021.

22 Jun 2021

New TDS rules to be applicable from July 1- Highlights

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

*As per the new rules, a higher TDS will be imposed for those who have not filed Income Tax Return (ITR) for the last two years under certain conditions.*

Till date, TDS was deducted only on the notified nature of payments. From 1^st July,2021, businesses are required to deduct TDS on purchase of goods along with the current scope of TDS deduction applicable on notified nature of payment or expenditure. With the insertion of a new section ‘194Q’, the buyer is liable to deduct TDS on the goods purchases and remit it to the Government.

Here is the analysis of the new section ‘194Q’ with more details:

Section 194Q, applies to any buyer who is responsible for paying any sum to any resident seller for the purchase of any goods of the value or aggregate of value exceeding fifty lakh rupees in any previous year. The buyer, at the time of credit of such sum to the account of the seller or at the time of payment, whichever is earlier, is required to deduct an amount equal to 0.1% of such sum exceeding fifty lakh rupees as income tax.

Finance Act, 2021 has inserted two new sections 206AB and 206CCA which mandates tax deduction (206AB) or tax collection (206CCA) at *a higher rate in the case of specified persons with respect to tax deductions (other than under sections 192, 192A, 194B, 194BB, 194LBC, and 194N) and tax collections.

* The higher rate is twice the prescribed rate or five percent whichever is higher.

“For these sections, specified person means a person who has not filed the return of income for two years in which tax is required to be deducted, for which the time limit of filing return under section 139(1) has expired, and his/her aggregate of tax deducted at source is Rs 50,000 or more in each of these two previous years.”

In nutshell, TDS of Rs 50,000 or more has been made for the past two years but no return of income has been filed, the rate of TDS will be double the specified rate or five percent, whichever is higher.

However, this provision will not be applicable for the transactions where the full amount of tax is required to be deducted, e.g. salary income, payment to a non-resident, lottery, etc. Also, the specified persons will not include a non-resident who does not have a permanent establishment in India.

Additionally, the Finance Act has introduced Section 194Q, which mandates that any person, being a buyer responsible for paying any sum to any seller (being a resident) for purchase of any goods (including capital goods), where the value of such goods, exceeds Rs 50 lakh in any previous year, will be required to pay TDS at the rate of 0.1 percent. In case of non-furnishing of PAN/Aadhaar by deductee, TDS will be charged at the usual rate or five percent whichever is higher.

These new TDS rules will impact the cash flows of non-filers of the income tax return.

To check such non-filers, CBDT has introduced a new tool “Compliance Check for Section 206AB & 206CCA” to ease the compliance burden of the tax deductor.

Under this tool, the deductor can feed the PAN of the deductee on the reporting portal and verify whether any deductee is compliant as per section 206AB of the Act and also whether the individual deductee has linked his/her Aadhar with PAN or not.

The response will be visible on the screen for a PAN search, which can be downloaded in PDF format. For bulk search, the response would be in the form of a downloaded file which can be kept for record.

What will be the result of not deducting/depositing TDS: –

As per section 40(ia) of the Income Tax Laws an amount has been paid to a resident on which TDS is to be deducted but not deducted and if deducted and the same is not deposited before the expiry of the time provided for furnish of ITR under section 139(1) then the 30% of the amount on which TDS is to be deducted and deposited will be added to the income of that person.

This provision will also be applicable to TDS falling under section 194Q of TDS so wherever the provisions of TDS are applicable, TDS must be deposited as the amount of purchase of goods is always very high and 30% of that is added back to the income of the Assessee then the tax on such amount will be very high. So be careful and deduct and deposit the TDS keeping in mind the provision of addition of this 30% to the income.

Compliance Check Functionality Utility

14 Nov 2020

GSTN Portal now displays Annual Aggregate Turnover for Previous Financial Year

by K.Sundar | posted in: Accounting Standards, Audit, Due Diligence, Corporate & Business Advisory Services, Corporate Updates, Economy, Business Updates, Corporate Affairs, Income Tax,e-Filing- Individuals, Firms, Companies | 0

In a statement, the Department of Revenue (DoR) reiterated that there will be no extra compliance burden on the taxpayers for GST turnover displayed in the Form 26AS, which is an annual consolidated tax statement that can be accessed from the income-tax website by taxpayers using their Permanent Account Number (PAN).

Prime Minister Narendra Modi launched GST into operation on the 1 st of July, 2017. GST was publicised as ‘one nation, one tax’ by the government, aimed to provide a simplified, single tax regime. GST is a dual levy where the Central Government levies and collects Central GST (CGST) and the State levies and collects State GST (SGST) on intra-state supply of goods or services. Centre also levies and collects Integrated GST (IGST) on inter-state supply of goods or services. The GST Portal is a website where all the compliance activities of GST can be done before and after GST login. Activities such as the GST registration return filing, payment of taxes, application for refund, etc. can be done on the GST Portal.

GSTN, recently launched many new features on GSTN portal. One of its features is that GSTN portal is now showing aggregate annual turnover for previous financial year after logging in to the portal.

The GST turnover is being shown in 26AS just for the information of the taxpayer. DoR acknowledged that there may be some differences in GSTR-3Bs filed and the GST shown in the Form 26AS but it can’t happen that a person shows turnover of crores of rupees in GST and doesn’t pay a single rupee of income tax.

The DoR said that the notified Income Tax Return for the current AY 2020-21 already requires reporting of GST outward supplies in the Schedule GST.

Therefore, the information displayed in Form 26AS would provide ease of compliance to the taxpayers in filling Schedule GST.

The revenue department has noticed that many unscrupulous persons are trying to avail or pass on input tax credit fraudulently by generating fake invoices and has already formulated a strategy for identifying these fake invoice generators which inter alia takes into account the income tax profiles of the suspected fake invoice generators.

These persons in most of the cases never file their income tax returns or disclose very meagre taxable income in the income tax return.

The suspected fake invoice generators are being identified for serious action under GST and other laws including suspension of their GST registration based on the fact that whether their income tax payment commensurate with the expected profit margin on turnover reported by them in the GST returns, the DoR said.

What “aggregate turnover” means?

“Aggregate turnover” is the aggregate value of all taxable supplies, exports of goods or/and services or both, exempt supplies and interstate supplies of persons having the same PAN, to be computed on all India basis. However, such taxable supplies do not include the value of inward supplies on which GST is being paid under reverse charge basis. The aggregate turnover also excludes Central tax, State tax, Union territory tax, Integrated tax and cess.

Basically, sum of the following shall be considered as an aggregate turnover:

Value of all taxable supplies of goods and services
Value of all Inter-state supplies
Value of all exempt supplies of goods and services
Value of all export of goods or services or both

However, the following items would be excluded from Turnover:

Inward supplies on which taxes are paid under reverse charge
Taxes and cesses under GST
Interstate supply of services
Transactions which are neither supply of goods or service.
Supplies provided outside India or received outside India

Extrapolation of Turnover at GSTIN level (for those who have not filed all the returns as per their eligibility or liability)

GSTIN-wise GSTR-3B turnover for FY 2019-2020 has been extrapolated by the formula: >> Total turnover declared as per all GSTR-3B filed / No. of GSTR-3B filed) X No. of GSTR-3B eligible or liable to be filed
GSTIN-wise CMP-08 outward supply has been extrapolated by the formula: >> Total outward supply declared as per all CMP-08 filed / No. of CMP-08 filed) X No. of CMP- 08 eligible or liable to be filed
Added both the values of S. No. (a) and S. No. (b).

For those taxpayers who have filed all the returns as per their respective eligibilities, value of S. No. (c) will be the actual turnover)

Aggregation of extrapolated turnover at PAN level or Annual Aggregate Turnover Resultant values as per S.No. (c) above are aggregated or rolled up at PAN level to arrive at the Annual Aggregate Turnover.

What is the relevance of knowing aggregate turnover?

The aggregate turnover is a crucial parameter for determining the following aspects:

Determining whether registration is required or not-

Aggregate Turnover is relevant for a person to determine threshold limit to obtain registration under GST.
Threshold turnover limit for exclusively supply of goods = Rs 40 lakh (Rs 20 lakh in case of supplies effected from special category states)
Threshold turnover limit for supply of Services or (goods and services both): Rs 20 lakh (Rs 10 lakh in case of supplies effected from special category states)

Determine the limit of composition levy – Threshold limit to opt for composition scheme: Rs 1.5 crore in a financial year (Rs 75 lakh in case of supplies effected from special category states).

To determine a “Taxable person” – Section 2 of CGST Act defines the “taxable person” as a person who has obtained registration or is liable to register as per section 22 and 24 of CGST Act. Here the Section 22 provides a liability to register when the tax payer’s turnover exceeds the limit as determined in certain cases. This is again based on aggregate turnover.

Calculation of Late fee –

Under section 33 any registered taxable person person who fails to file the return u/s 30 i.e Annual return shall be liable to pay late fees of Rs. 100 for every day when such failure continues subject to a maximum of an amount of 0.25% of his aggregate turnover.
This can escalate the amount of late fee because aggregate turnover will include all supplies except reverse charge.

To determine whether Audit is required –

Registered persons with an aggregate turnover exceeding the prescribed GST audit limit of Rs 2 Crore during a financial year are liable for GST Audit. The turnover limit of Rs 2 Crore is same for the registered tax persons across all States and UTs. Thus, no separate turnover limit is defined for Special Category States for GST Audit.

Therefore, it is advised to carry on the computation of aggregate turnover accurately as the same will be used at a number of places which will in turn determine the tax liability of a person.

Permanent Account Number (PAN)

New Annual Information Statement (AIS) – 50 Transactions reported in Income Tax Portal

What happens if Pan Card is not linked to Aadhaar ?

Linking PAN & Aadhaar before March 31, is mandatory

Link PAN with Aadhaar to prevent being inoperative from 1st April 2023?

Government grants further extension in timelines of Income tax compliances

New TDS rules to be applicable from July 1- Highlights

GSTN Portal now displays Annual Aggregate Turnover for Previous Financial Year

Income Tax Bill, 2025 to replace Income Tax Act, 1961: Key Changes

MCA extends deadline for mandatory Demat of Private Company shares until 30th June 2025

Budget-2025: A Roadmap for economic growth and inclusive development

Government waives late fee for delayed GST filings

Latest Update on ITR (U) Form: What You Need to Know

CBDT extends deadline for furnishing belated / revised ITRs for Asst Year 2024-25 to January 15th, 2025

CBDT extends due date for filing ITR of Audited Accounts till November 15,2024