Taxmen told to step up efforts for black money window success

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Income Tax Department has asked its officers to make “all out efforts” to attract potential declarants under the domestic black money window by assuring them of confidential and hassle-free disclosures.

In order to give wide publicity, the CBDT has also suggested putting up posters about the Income Declaration Scheme-2016, at places frequented by potential declarants, like club houses, posh markets, showrooms of high end products.

The four-pronged strategy prepared by the CBDT for the success of the scheme, includes single point contact to ensure confidentiality, setting up of facilitation centres across the country, giving wide publicity and monitoring at the highest level.

Finance Minister Arun Jaitley in Budget had announced a four-month window under the Income Declaration Scheme 2016. The scheme, which opened on June 1, allows domestic black money holders to declare ill-gotten wealth and come clean by paying a tax and penalty totalling 45 per cent.

“All out efforts are to be made to ensure the targeted taxpayers are well informed about the scheme and are adequately guided and facilitated for filing declarations so that they can avail maximum benefits under the scheme, which is under highest consideration of the government during the coming months,” the CBDT said in an office memorandum.

In order to ensure confidentiality of the declarants, the Central Board of Direct Taxes (CBDT) has said only Principal Commissioner or Commissioner Income Tax should act as a “single point of contact” for interacting with the declarants.

“Such Pr CIIT/CIT should be the one and only point of contact with the respective declarant. The idea is to ensure the declarant is not exposed to multiple persons in the office so that his confidentiality is not compromised and he is able to file the declaration in a hassle free manner,” it added.

The detailed action plan for the success of black money disclosure scheme was discussed at the annual conference of tax administrators last week.

In its strategy, CBDT has asked Principal Commissioners and Commissioners to provide all “procedural facilities” at the time of disclosure so as to avoid additional interaction with anyone else in the office.

“All records related to IDS-2016 must be kept in the personal custody of the respective Principal CIT /CIT officer in a safe and secure manner,” it said, adding officer with “good inter-personal skills” be deputed as ‘Facilitation Officer’ to answer queries related to the scheme.

In every city where Principal Commissioner is stationed, a “facilitation centre” in the nature of help desk may be opened for disseminating information about the scheme.

The CBDT has also asked its senior officers to hold “frequent meetings” with trade and industry bodies and professional associations, besides organising town halls and seminars.

In order to step up publicity for the scheme at local level, tax officers should disseminate information through posters in regional languages, stalls at local fairs.

In order to ensure monitoring at the highest level, CBDT said ‘IDS Banner’ will become functional next week on its website where the officers would upload their meeting details.

This will help compare the progress made in organising the campaign.

Last year the government came up with a similar scheme for persons having unaccounted black money abroad. Disclosures during that window were charged with a total tax and penalty of 60 per cent.

A total of Rs 4,147 crore of undisclosed wealth was declared during the 90-day foreign black money compliance window that ended September 30. At 60 per cent (30 per cent tax and 30 per cent penalty), the government got a net tax of Rs 2,500 crore from the declarations.

Source: http://www.financialexpress.com/article/economy/taxmen-told-to-step-up-efforts-for-black-money-window-success/294763/

Presumptive taxation: No audit for turnover up to Rs 2-cr

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Small businesses with a total turnover of up to Rs 2 crore will not be required to get their accounts audited if they opt for presumptive taxation scheme, the finance ministry said on Monday.

“The higher threshold (up to Rs 2 crore) for non-audit of accounts has been given only to assessees opting for presumptive taxation scheme under section 44AD,” the ministry stated.

Section 44AB of the Income Tax Act makes it obligatory for every person carrying on business to get his accounts of any previous year audited if his total sales, turnover or gross receipts exceed Rs 1 crore.

“However, if an eligible person opts for presumptive taxation scheme as per section 44AD(1) of the Act, he shall not be required to get his accounts audited if the total turnover or gross receipts of the relevant previous year does not exceed Rs 2 crore,” the statement said.

Finance Minister Arun Jaitley in the 2016-17 Budget had proposed to increase the turnover limit under the presumptive taxation scheme under section 44AD of the Income Tax Act to Rs 2 crore “which will bring big relief to a large number of assesses in the MSME category”.

Jaitley had said if the taxpayer opts for the presumptive taxation scheme, he has to remain in that scheme for 5 years.

Source: http://www.business-standard.com/article/economy-policy/presumptive-taxation-no-audit-for-turnover-up-to-rs-2-cr-116062001050_1.html

Startups get much awaited tax exemptions

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In a major incentive, startups can now issue shares to investors at higher than fair value without worrying about tax consequences.

The Central Board of Direct Taxes (CBDT) has notified the much awaited tax exemption on investments above fair market rate for startups.
“The exemption provided to startups from the ‘rigour’ of section 56(2)(viib) of Income Tax Act has been long awaited,” Amit Maheshwari, Partner Ashok Maheshwary and Associates LLP, said.

The effect of the CBDT’s notification is that in case a startup gets investment from resident angel investors, family offices or funds which were not registered as venture capital funds, it will not be taxed even if the investment is made in excess to the fair value.

“It has been a long standing industry demand to abolish this Angel tax,” Maheshwari said.

A startup is a company in which the public are not “substantially interested” and conforms to certain conditions as prescribed by the Department of Industrial Policy and Promotion (DIPP) in February this year.

Under Indian tax law, if an Indian company receives share subscription amount from an Indian resident which exceeds the fair value of shares, then the excess amount is taxed as income of the Indian company, said Rajesh H Gandhi, Partner, Deloitte Haskins and Sells LLP.

“The notification now exempts startups from this rigorous provision. This is a welcome relaxation and would ensure that startups can issue shares to investors at higher than fair value without worrying about any tax consequences,” Gandhi said.

A similar exemption already exists for Venture Capital Funds (VCFs).

Maheshwari said this Angel tax still poses threat to earlier investments which could be perceived as being overvalued in light of the declining valuations globally and in India.

Last week, the DIPP has launched a portal and mobile app through which startups can gather all latest updates on various notifications, circulars issued by various departments and different funding agencies.

In January, Prime Minister Narendra Modi had unveiled a slew of incentives to boost startup businesses, offering them a tax holiday and inspector raj-free regime for three years, capital gains tax exemption and Rs 10,000 crore corpus to fund them.

Source: http://www.businesstoday.in/current/corporate/startups-get-much-awaited-tax-exemptions/story/233953.html

Double taxpayer base to 100 million, PM tells taxmen

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Prime Minister Narendra Modi (right) and Finance Minister Arun Jaitley at the first Rajasva Gyan Sangam in New Delhi.

Prime Minister Narendra Modi pitched for nearly doubling of tax base to 10 crore assesses while addressing tax officers in the first ever Rajasva Gyan Sangam that kick-started on Thursday.

Modi outlined a five-point charter for tax administrators – RAPID, which stands for Revenue, Accountability, Probity,  Information and Digitisation to reform the taxation system in the country.

MODI’S FOUR COMMANDMENTS FOR TAX DEPARTMENT:
  • Increase tax base to 100 million people from 54.3 million now
  • Focus on RAPID: Revenue, Accountability, Probity, Information and Digitisation
  • Ensure simplification and go for total digitisation
  • Turn Gyan Sangam into a Karma Sangam, so ideas generated here lead to concrete action on the ground

 

In an hour-long interaction, he urged officers to build a ‘bridge of confidence’ between tax payers and tax officials, stressing on incorporating a sense of trust in the system so that they pay taxes without fear or harassment.

 

“While there should be respect for the rule of law among all citizens, and even fear of the long arm of the law for those who evade taxes, people should not fear tax administrators,” Modi said in his interaction with tax officers.

 

Citing the example of the “Give it up” initiative for voluntarily giving up gas subsidy, he said that the tax base too could be increased significantly, provided the tax administrators can demonstrate the leadership to bring about a change.

 

This is for the first time that the two boards — Central Board of Direct Taxes and Central Board of Excise and Customs — came together for the joint conference.  Earlier they held separate conferences with the Finance Minister as the chief guest.

 

Modi said that tax officials should act like “mentors of taxpayers” and not treat them as “tax evaders”.

 

“People of India are inherently honest. If you build trust then people will pay taxes and you will be able to achieve the target,” Modi said.

 

The conclave will deliberate on a host of issues related to taxpayer services and effective implementation of fiscal laws and government policies with discussions around government’s financial inclusion initiatives, ensuring a transparent tax regime for businesses and foreign investors besides issues and challenges being faced by the two tax departments.


Minister of state for finance Jayant Sinha in a briefing after the first session said, “Prime Minister laid out certain goals and objectives for the officials to increase the tax base to 10 crore from 5.43 crore at present.”

 

Sinha said of the 25 crore households in the country, 15 crore are agriculturalists and hence the remaining 10 crore should be under the tax net.

 

Modi in his speech said 92% of tax department revenue comes from TDS, advance tax and self assessment tax, while the remaining 8% comes after scrutiny.

 

He said if 42,000 officials of CBDT are engaged for ensuring direct tax revenue, then the tax net should increase further.

 

Stating that the country is filled with “aspirational people”, Modi urged the taxmen to take steps so that people find it easier to pay taxes here.

 

Prime minister emphasized that people in India mostly pay taxes and the number of people who want to evade it is less.

 

“People don’t have problem in paying tax. So there is no question of tax evasion. The issue is how much cooperative are we in dealing with people. He said you should behave like mentors with the people rather than evader… If you become taxpayer friendly, then taxes will automatically come to you,” Modi said.

 

During the brainstorming session, he pressed officers to move towards digitisation besides making tax administration better and efficient.

 

The two-day Gyan Sangam is being attended by close to 250 officers of the rank of Principal Chief Commissioners, Chief Commissioners and Principal Commissioners from CBDT and 170 from the CBEC.

 

During the interaction, Modi said if someone Googles ‘how to pay taxes in India’, there will be seven crore results. If the question of ‘how not to pay taxes in India’ is put to Google, there would be 12 crore feeds.

 

The tax officials in their interaction with the prime minister gave a host of suggestions, which included to setting up of National Tax Facilitation Act to regulate basic norms of tax collection.

 

Ideas and views were expressed on diverse subjects such as digitization, voluntary tax compliance, facilitation for taxpayers, increasing the tax base, upgradation of digital and physical infrastructure for tax administrators etc.

 

Modi urged officers to turn the Gyan Sangam into a Karma Sangam, so that the ideas generated from this conference lead to concrete action on the ground.

 

As many as 15 officers from the CBDT and CBEC posed their questions to Prime Minister on various issues being faced by them in their regular work.

 

The issues included dilemma over whether officials should act as law enforcement agency or taxpayer friendly agency while collecting due taxes from people.

 

They also raised the issue of voluntary tax compliance, increasing tax base, upgradation of digital and physical infrastructure for tax administrators.

 

Source: http://www.business-standard.com/article/economy-policy/double-taxpayer-base-to-100-mn-pm-to-taxmen-116061600867_1.html

Modi impact! Switzerland to ease tax info exchange norms on stolen data

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Switzerland today said it will relax norms for providing information to foreign nations seeking banking details about their citizens on the basis of ‘stolen data’, a move that would benefit India in its fight against the black money menace.

 

In the case of stolen data, Swiss authorities would extend assistance on tax matters to other countries provided such information was procured through normal administrative assistance channels or from public sources.

 

The proposal, which has been adopted by the Swiss Federal Council, also comes at a time when India is making efforts to bring back unaccounted money stashed by its citizens overseas. The issue of black money also figured during the discussions between Prime Minister Narendra Modi and Swiss President Johann Schneider-Amman earlier this week.

 

The Swiss government today said the practices with regard to “stolen data are to be eased”.

 

“It should become possible to respond to requests if a foreign country obtained the stolen data via normal administrative assistance channels or from public sources,” it said in a release.

 

However, administrative assistance is still not possible if a country actively acquired the stolen data outside of administrative assistance proceedings.

 

In this regard, the Federal Council today adopted the dispatch on amending Tax Administrative Assistance Act.

The Bill is expected to be discussed by the Swiss Parliament this year.

 

Known for its banking secrecy practices, Switzerland has been facing international pressure as countries step up efforts to curb illicit fund flows.

 

In 2013, the Federal Council had suggested easing administrative assistance practices in the case of stolen data but at that time, the proposal was rejected by majority of the cantons, parties and business associations.

 

Since then, international practice has established that exceptions to the exchange of information would be tolerated only on a very restricted basis, the release said.

 

“For instance, the exchange of information could be refused if it is incompatible with public policy, such as in the case of requests motivated by racist, political or religious persecution,” it added.

 

The Swiss government emphasized it intends to respond to future requests that are based on data obtained by the requesting state from another state through normal administrative assistance channels or from public sources.

 

“The consultation revealed that the cantons are virtually all rallying behind the proposal, while the numbers of advocates and opponents in the political parties and organisations appear broadly balanced.

 

“The Federal Council is adhering to the proposal in view of this outcome, as it believes that the proposal is necessary to safeguard Switzerland’s interests,” it noted.

 

Last month, Switzerland started the process for an ordinance to put in place a mechanism for automatic exchange of tax information.

 

During Modi’s visit to Switzerland earlier this week, Swiss government assured India of stepped up cooperation with regard to black money issue.

 

“Combating the menace of black money and tax evasion is also our shared priority. We discussed the need for an early and expeditious exchange of information to bring to justice the tax offenders.

 

“An early start to negotiations on the Agreement on Automatic Exchange of Information would be important in this respect,” Modi had said at a joint media interaction with Schneider-Amman.

 

Under the bilateral treaty for administrative assistance and exchange of information with Switzerland, India has sought details about numerous individuals and companies from the Alpine nation as part of its crackdown against those stashing illicit funds there.

 

Source :http://economictimes.indiatimes.com/articleshow/52691230.cms

 

As income-tax returns filing date nears, 7 documents to be kept ready

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The income-tax returns filing season is fast approaching with the initial deadline being July 31. 

The income-tax returns filing season is fast approaching with the initial deadline being July 31. You must be among those preparing to file your returns. But most tax assessees who are required to e-file their returns keep deferring till the last moment.

 

However, even if you are procrastinating, you need to be prepared with all the details that you need to provide in your tax returns. And for that you need a lot of documents to be with you. It may not easy to source these documents at the last moment since some have to obtained from your office, some come by mail and others need to be downloaded. And even if you have all of documents with you, you need to have them filed in a file that is easy to locate.

 

So what are these documents that you need to keep handy at the time of filing? FeMoney asked tax expert Sudhir Kaushik, Co-founder and CFO, Taxspanner.com on documents that are a must in hand. “Keeping documents like Form 16, Form 26AS and home or education loan certificates for obtaining deductions would ensure that your tax filing is hassle-free and complete,” Kaushik said.

 

Here are a list of documents that Kaushik says one should be ready with while filing tax returns:

 

Form-16 and Form-16A

Form-16 is the most basic source of information about the income earned and the tax deducted from your salary during the year. In case you have worked for more than one employer during the financial year 2015-16 then you must collect your Form 16 from all of them. Form 16-A form is also called a Tax Deducted at Source (TDS) certificate and is issued by banks for interest income, capital gains of NRIs, etc. If you have rental income and your landlord has deducted TDS on rent then you should collect Form-16A from the landlord too. Similarly, if you have any commission or professional income, TDS certificate for the same should also be collected.

 

Form-26AS

Your income from all sources, tax deductions and any high-value transaction(s) are reported in this form. I-T department sends notices if the ITR filed by the taxpayer does not match with the information available in Form-26AS. You should get your Form 26AS and match details with your ITR before filing it. If there is some mismatch, you should fix those errors and then file your return. You can download Form-26AS from your net banking account, directly from income-tax department’s website.

 

Bank statements from all bank accounts

You should verify that all the bank transactions carried out during the financial year with respect to income earned, investments made, expenses etc. have been declared in the appropriate sections of your return. This would show dividend income or gifts received above Rs 50,000 on which tax needs to be paid.

 

Home/education loan interest certificates

If you have taken any home/education loan then collect their interest certificate from the lender to claim the right deduction.

 

Investment proofs not submitted to employer

It is possible that some of the investments made by you during the financial year have not been included in the Form-16 issued to you. For example, if you invested in tax-saving tools such as life insurance, Public Provident Fund after proof submission deadline set by your employer, proofs of these investments would not have been submitted to your employer. For such investments, you need to have the proofs for reference while preparing your return.

 

Share/mutual fund transaction statements

These are required to enter details like sale date, purchase date, quantity and amount for computing capital gains/loss.

 

Tax payment challan(s)

If you have paid advance tax and/or self assessment tax then you need to enter the details of the same in your return for accurate computation of tax liability.

Source: http://www.financialexpress.com/article/personal-finance/income-tax-returns-filing-date-july-31-nears-7-documents-to-be-kept-ready/277141/