15 Jun 2017

Aadhaar must for filing returns from July 1: CBDT

The CBDT today made it clear that Aadhaar will be a “must” for filing of Income Tax Returns or for obtaining a new PAN from July 1.

The policy—making body of the Income Tax Department issued a statement stating that the Supreme Court yesterday had only given a “partial relief” to those who do not have an Aadhaar or an Aadhaar enrolment ID, and the taxman, hence, will not “cancel” their Permanent Account Number (PAN).

The Central Board of Direct Taxes (CBDT) issued a three— point “effect of the judgement” of the apex court statement saying:

From July 1, 2017 onwards every person eligible to obtain Aadhaar must quote their Aadhaar number or their Aadhaar enrolment ID number for filing of income tax returns as well as for applications for PAN.

“Everyone who has been allotted permanent account number as on the 1st day of July, 2017, and who has aadhaar number or is eligible to obtain Aadhaar number, shall intimate his Aadhaar number to income tax authorities for the purpose of linking PAN with Aadhaar,” it said.

It explained what will happen in a case of “non-compliance” or where a person does not possess Aadhaar.

“Only a partial relief by the Court (SC) has been given to those who do not have Aadhaar and who do not wish to obtain Aadhaar for the time being, that their PAN will not be cancelled so that other consequences under the Income Tax Act for failing to quote PAN may not arise,” the CBDT said.

If the PAN is cancelled, then a person cannot do his normal banking and financial operations and hence this relief is given. But, it has been made clear that for filing of ITR or to obtain a new PAN, Aadhaar will be mandatory from July 1, a senior I—T official explained.

Senior officials said the apex court’s order given yesterday was “studied” by a high—level team of authorities from the Law Ministry, Finance Ministry, CBDT and the Income Tax Department after which this clarification has been issued.

Source: http://www.cainindia.org/news/6_2017/aadhaar_must_for_filing_returns_from_july_1_cbdt.html

3 Jun 2017

Tax evasion in India: Rs 1.4 lakh cr hunted down in 3 years, says CBDT

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

The Central Board of Direct Taxes (CBDT), the policymaking body of the income tax department, on Friday said that various law enforcing agencies have unearthed tax evasion of R1.37 lakh crore during the last three years as a result of over 23,000 searches and surveys. This led to criminal prosecution in 2,814 cases and arrest of nearly 4,000 persons.

The CBDT’s performance appraisal report comes after the expiration of government’s second scheme for income disclosure called Prime Minister Garib Kalyan Yojana (PMGKY).

Although the finance ministry is yet to announce the amount declared under the scheme, an analysis of tax collection numbers done by FE earlier this week showed that PMGKY may have garnered only a fraction of its predecessor scheme, under which a declaration of R55,000 crore of unaccounted money was made and close to R13,000 crore was collected as taxes and penalties in 2016-17.

This first scheme expired on September 30 last year while PMGKY came into effect in December and expired on March 31.

Explaining the actions taken over last three fiscals, the CBDT said that the Enforcement Directorate intensified its anti-money-laundering actions by registering 519 cases and conducting 396 searches culminating in arrests in 79 cases and attachment of properties worth Rs 14,933 crore.

Additionally, the government identified more than 245 benami transactions with provisional attachments of properties worth Rs.55 crore in 124 cases, the CBDT statement said. It added that the benami prohibition law which remained inoperative for last 28 years was made operational through a comprehensive amendment with effect from November 2016.

During 2013-14 to 2015-16, income tax investigations led to the detection of more than 1,155 shell companies used as conduits by over 22,000 beneficiaries. The amount involved in non-genuine transactions of such beneficiaries was more than Rs 13,300 crore, the CBDT said in a statement. It added that the ministry of corporate affairs issued more than 1 lakh notices for striking off names of defunct and non-compliant companies.

“A high-powered group has been set up for coordinating and monitoring the actions taken by departments concerned with the objective of eliminating the conduits of black money generation and application,” the CBDT said.

The board said that various steps have been taken to curb cash transactions including penalising cash transaction of more than Rs 2 lakh, limiting allowable cash expense up-to Rs 10,000 only, making Aadhaar mandatory for obtaining PAN and filing of income tax returns, and making PAN mandatory for cash deposits above Rs 50,000.

“The relentless crusade against black money will get further intensified in the coming days making the tax evaders and money launderers realise that they have to pay a heavy cost for their deviant behavior,” CBDT said.

Source: http://www.financialexpress.com/economy/tax-evasion-in-india-rs-1-4-lakh-cr-hunted-down-in-3-years-says-cbdt/620151/

12 May 2017

CBDT online facility to link Aadhaar with PAN

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

The Income-Tax Department has launched an online facility to link Permanent Account Numbers with Aadhaar.

It was reported that taxpayers were finding it difficult as their names did not match in both systems (Eg. Names with initials in one and expanded initials in another). Responding to such grievances,the Department has come out with a simple solution now.

Under the facility, the taxpayer will have to provide the PAN and Aadhaar number, which then will be verified from the Unique Identification Authority of India, and then the two will be linked.

Visit www.incometaxindiaefiling.gov.in and click on the link at left pane -> Link Aadhaar. Provide PAN, Aadhaar no. and ENTER NAME EXACTLY AS GIVEN IN AADHAAR CARD and submit. After verification from UIDAI, the linking will be confirmed.

“In case of any minor mismatch in Aadhaar name provided, Aadhaar one time password (OTP) will be required,” as per the clarification from Central Board of Direct Taxes (CBDT). The taxpayers must ensure that the date of birth and gender in PAN and Aadhaar are exactly same for the facility to work.

In case the Aadhaar name is different from the name in PAN, then the linking will fail. The taxpayer will then be prompted to change the name in either the Aadhaar or in the PAN database.

Assessees can use the new utility https://onlineservices.tin.egov-nsdl.com/Aadhaar_Seeding/ for Aadhar – PAN linking on NSDL website. The Aadhaar one time password (OTP) will be generated for the above validation.

To update your PAN details, please visit NSDL: https://www.onlineservices.nsdl.com/paam/endUserRegisterContact.html ;

To update your Aadhaar card details, please visit UIDAI: https://ssup.uidai.gov.in/web/guest/update

Please use the simplified process to complete the linking of Aadhaar with PAN asap. This is required for E-Verification of Income Tax returns using Aadhaar OTP.

1 May 2017

Government to soon make Aadhaar compulsory for regulatory filings under Companies Act

by K.Sundar | posted in: 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

*Govt’s plan to make Aadhaar mandatory for key managerial personnel in filings under Companies Act is aimed at tackling issues of bogus identities, shell companies and money laundering*

The government will soon make quoting of Aadhaar number compulsory for key managerial personnel and directors in regulatory filings under the Companies Act.

The move, primarily aimed at tackling the issue of bogus identities, comes at a time when authorities are bolstering measures to deal with the menace of shell companies, suspected to be used for laundering illicit funds.

Moving towards implementation of the Aadhaar requirement under the companies law, the corporate affairs ministry has already asked individual stakeholders to obtain Aadhaar at the earliest for “integrating their details with MCA21”. MCA21 is the portal through which filings required under the Companies Act are submitted to the ministry.

An official said the ministry has started work for implementing a framework to make quoting of Aadhaar compulsory in the filings made under the companies law. “We will roll it out pretty fast. It will be done in a phased manner,” the official said.

The idea is to have a system in place which would help in identifying the stakeholders whose name come up in the filings made through MCA21. The move also assumes significance against the backdrop of instances where authorities have found discrepancies in personal details provided by individuals in the regulatory filings.

According to the official, having Aadhaar number along with the filings would help ascertain the authenticity of the individuals. With respect to foreign entities, a separate system would be worked out by the ministry. There are more than 16 lakh registered companies.

While asking individual stakeholders to obtain Aadhaar at the earliest, the ministry had emphasised that information in Aadhaar should be in harmony with PAN (permanent account number).

“When implemented, all MCA21 services shall be available based on Aadhaar-based authentication only,” the notice, issued earlier this month, said.

Individual stakeholders, including “DIN (director identification number) holders/directors/key managerial personnel” as well as certain professionals have been asked to obtain Aadhaar.

Professionals of the institutes of chartered accountants, company secretaries and cost accountants have been asked to get Aadhaar as early as possible. This would be applicable irrespective of whether the individual is in “employment or in practice”.
As many as 8-9 lakh registered companies are not filing annual returns with the ministry and are a potential source of money laundering, revenue secretary Hasmukh Adhia said on Saturday.

Source: http://www.livemint.com/Politics/NP94WgZQMTjunu2fxs1qwN/Govt-to-soon-make-Aadhaar-compulsory-for-regulatory-filings.html

16 Apr 2017

CBDT allots PAN and TAN in a day for ease of doing business

by K.Sundar | posted in: Company Incorporations, e-filing of MCA Returns, Corporate Updates, Economy, Business Updates, Corporate Affairs, Income Tax,e-Filing- Individuals, Firms, Companies | 0

*In another move to improve ease of doing business in India, the Income Tax Department has tied up with the Corporate Affairs Ministry to issue PAN and Tax Deduction Account Numbers within a day.*

In another move to improve ease of doing business in India, the Income Tax Department has tied up with the Corporate Affairs Ministry (MCA) to issue Permanent Account Numbers (PAN) and Tax Deduction Account Numbers (TAN) within a day, an official said on Tuesday.

“The Central Board of Direct Taxes has tied up with MCA to issue Permanent Account Number (PAN) and Tax Deduction Account Number (TAN) in one day,” a Finance Ministry statement said here.

“Applicant companies submit a common application form SPICe (INC 32) on the MCA portal and once the data of incorporation is sent to the Central Board of Direct Taxes by MCA, the PAN and TAN are issued immediately without any further intervention from the applicant,” it said.

During the last fiscal ended March 31, “19,704 newly incorporated companies were allotted PAN in this manner,” it added. During March 2017, of the 10,894 newly incorporated companies, PAN was allotted within four hours in 95.63 per cent of the cases and within one day in all cases.

Similarly, TAN was allotted to all such companies within four hours in 94.7 per cent cases, and within one day in 99.73 per cent cases, the Ministry said.

The Income Tax Department has also introduced the electronic PAN Card (E-PAN), which is sent by e-mail, in addition to the issue of the physical PAN Card, to all applicants, including to the individuals who have been allotted PAN, the statement added.

Source: http://www.financialexpress.com/economy/cbdt-allots-pan-and-tan-in-a-day-for-ease-of-doing-business/623873/

14 Apr 2017

Operation Clean Money 2.0: I-T to probe deposits of Rs 5-10 lakh now

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

Following a poor response to the Pradhan Mantri Garib Kalyan Yojana (PMGKY), an income declaration scheme, the Income Tax (I-T) department is set to launch another drive to catch hold of tax evaders who could have deposited large sums during the demonetisation drive.

While the first phase of the so-called Operation Clean Money scrutinised cash deposits of over Rs.10 lakh, the second phase will examine deposits between Rs 5 lakh and Rs 10 lakh.

A data analytics firm has already started the analysis of such cash deposits made during demonetisation drive. The information will soon be sent to the Central Board of Direct Taxes (CBDT), which will decide further course of action.

Tax officials said that the action plan for the second phase has been prepared by the I-T department. A high-level meeting of senior CBDT officials will take place in Mumbai on Friday to make further deliberations.

This will be the first such meetings, where tax officials from across the country will brainstorm, since the PMGKY scheme ended on March 31.

Sources said statement of financial transaction (SFTs) submitted by banks after demonetisation is being sent for data analysis.

Under the SFTs, banks and post offices have been mandated to submit all information on cash deposits in current accounts of Rs 12.5 lakh and above during demonetisation. The tax department is said to have received SFTs from over 200 public, private and cooperative banks for 50 days after demonetisation before January 31.

“The data tally will be done by matching the cash deposits with the tax profile of the persons. It could be a massive exercise as numbers of depositors under this range would be very high,” said an I-T official.

The second phase data is crucial for examination of cash deposits by the tax department, as it will be more accurate and upgraded.

“So far we have been getting information on only very high-value transactions from the Financial Intelligence Unit. With the SFT, we will be able to get data on all deposits in the set limit,” an official explained.

In the first phase of the operation covering seven million PAN (permanent account number) card holders depositing high-denomination currency notes of Rs 500 and Rs 1,000, the department has identified 1.8 million persons who had made suspicious deposits over Rs 10 lakh during the 50-day demonetisation period. Their deposits aggregated to Rs 4.17 lakh crore.

Unlike the first phase, the operation will focus on identifying multiple accounts and PAN numbers, which could be of a single person and on those who have used dormant accounts for benami transactions.

“We observed several cases where persons deposited their unaccounted old currency in someone else’s bank account. Such cases will be probed under the newly enforced Benami Transactions Act,” said the official cited above.

Under the Act, violators could be prosecuted and sentenced to rigorous jail term of up to seven years.

The CBDT is believed to be setting up a separate department, which will only deal with benami transactions. “Considering the importance of the Act, the tax department is likely to start this as a pilot project from Delhi and Mumbai,” said another tax official with direct knowledge.

Sources said that the tax department could completely ignore deposits less than Rs 5 lakh in the second phase. Also, data mining and the entire exercise would go on for two years. However, the biggest concerns with the information would be that a large number of people who deposited the cash during the demonetisation drive are not registered with the tax portal.

Source: http://www.business-standard.com/article/economy-policy/operation-clean-money-2-0-i-t-to-probe-deposits-of-rs-5-10-lakh-now-117041301293_1.html

1 Apr 2017

Aadhaar for PAN and tax return filing – Likely challenges for foreigners and Indian citizens abroad

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

Aadhaar is a unique identification number issued by the Indian government to every individual resident of India. It is based on demographic and biometric data of the individual and thus no duplicate number can be issued to the same individual.

Proposal to make Aadhaar mandatory for PAN and tax return filing

As a part of efforts to make the financial system more transparent and to curb the menace of black money, the Finance Minister has proposed changes to the Finance Bill,2017, whereby Aadhaar (Aadhaar number / Enrolment ID) would be mandatory, effective July 1 2017, for filing income tax returns and for application for PAN. This will be applicable to every person eligible to obtain Aadhaar. Exclusion for specified categories will be notified.

Additionally, all persons who are allotted PAN as on July 1, 2017, and eligible for Aadhaar number, would need to intimate their Aadhaar number to such authority in the form and manner as may be prescribed, on or before a date to be notified. PAN issued earlier will become invalid if a person fails to intimate his /her Aadhaar number within the prescribed time limit.

Who is eligible for Aadhaar enrolment?

As per the Aadhaar (Targeted Delivery of Financial and other Subsidies, Benefits and Services) Act, 2016, every resident is eligible to obtain an Aadhaar number by submitting his/her demographic and biometric information as part of the enrolment process. The central government may notify other categories of individuals who may be entitled to obtain an Aadhaar number.

Further, a ‘resident’ is defined to mean an individual who has resided in India for 182 days or more in aggregate in 12-month period immediately preceding the date of application for enrolment.

As Aadhaar enrolment is based on residency rather than citizenship, foreign nationals meeting the test of resident as defined above, will be eligible to obtain Aadhaar.

Likely challenges for foreign nationals

Documentation requirement for enrolling for Aadhaar

There is a list of documents that can be accepted as proof of identity and proof of address at the time of enrolling. While a passport would suffice as a proof of identity, there could be challenges with the documentation for proof of address. While there are 35 different documents prescribed for address proof, foreign nationals working in India may qualify for limited documents such as an Indian bank account statement, credit card statement and landline telephone bill or rental agreement. Many foreign nationals do not have bank accounts in India or live in employer-provided accommodations.

Sharing biometrics details

Foreign nationals could also have concerns in sharing their biometrics details with the government.

Likely challenges for Indian citizens abroad

As the person has to be present in India for submitting biometric information, Indian citizens who are overseas, may face challenges in providing biometric details for enrolling for Aadhaar.

Employers could also be challenged with TDS compliance for Indian employees working abroad and on India payroll where the employee’s PAN becomes invalid due to non-intimation of Aadhaar within the prescribed time.

Indian citizens qualifying for Aadhaar but yet to apply, may be unable to file their tax return in time. As a consequence, they may be exposed to additional interest, fee and penalty. Also, they may not be eligible to carry forward capital loss.

Expectation from the government

Considering the underlying objective of linking Aadhaar with PAN and the challenges especially for foreign nationals, should they be excluded from this additional requirement?

Alternatively, detailed guidelines specifying categories of foreign nationals requiring Aadhaar with relaxed timeframe should be prescribed to address the sentiments of foreign nationals in India. Further, the government should consider providing wider alternatives towards address proof such as Residential Permit.

There should also be provision of suitable options overseas for Aadhaar enrolment / relaxed time frame for Indian citizens living / working abroad.

Hopefully, these challenges would be appropriately considered by the government and necessary changes in the regulation / procedure be made available before the proposed deadline of July 1, 2017.

Source: http://www.businesstoday.in/current/economy-politics/aadhaar-for-pan-and-tax-return-filing-likely-challenges-for-foreigners-and-indian-citizens-abroad/story/249072.html

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