E-filing: Over 50 lakh ITRs e-verified by Income Tax department

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The Income Tax department’s ambitious OTP-based ITR filing system for taxpayers has crossed the 50 lakh e-verification mark, while more than 39 lakh Aadhaar numbers have been successfully linked with the PAN database after the scheme was launched over six months back.

The new e-filing system, operationalised last year, allows online verification of a person’s Income Tax Returns (ITR) by using either the Aadhaar number, internet banking, ATM or email, thereby ending the practice of sending paper acknowledgment to the Centralised Processing Centre (CPC) of the IT department located in Bengaluru.

“The e-verification of ITRs recently crossed the 50 lakh figure which is a testimony to more and more people and entities opting for electronic filing of their IT returns. While sky is the limit here, getting these numbers just when the new year has begun will enable the government to usher in more and more facilities for e-filing of ITRs in the new financial year begining April 1,” a senior official said.

The official, quoting latest data of the week ending today, said a total of 50,10,282 ITRs have been e-verified, while Aadhaar linkages with the Permanent Account Number (PAN) has been achieved in 39,66,149 cases during the same period.

The online ITR filing portal of the department is available at http://incometaxindiaefiling.gov.in.

According to the rules notified in this regard by the Central Board of Direct Taxes (CBDT) in July last year, any taxpayer whose income is Rs 5 lakh or below per annum and has no refund claims can straightaway generate the ‘Electronic Verification Code’ (EVC) for e-filing and validating their ITR through their registered mobile number and e-mail ID with the department. They get a system generated One-Time Password (OTP) to validate their ITRs.

However, this simplified option will be subject to certain “restrictions” which have been prepared by the taxman based on the concerned taxpayer’s “risk criteria and profile” on a case-to-case basis.

These new measures would completely eliminate the need of sending the paper acknowledgment called ITR-V through post to the Bengaluru based CPC.

In other options, those taxpayers who have activated internet banking facility can also do the e-verification.

Once logged in to the banking portal, the taxpayer will be sent EVC on his mobile number provided to the official e-filing portal of the department which they will put in their ITR for final submission.

The Aadhaar database is also being used by the taxman to verify taxpayers’ credentials.

The department initiated these new technology-based measures in order to fully automate the e-filing system and also to end taxpayers’ grievances with regard to their ITR-V not reaching by post which led to their returns getting rejected.

Source: http://www.financialexpress.com/article/economy/e-filing-over-50-lakh-itrs-e-verified-by-income-tax-dept/191519/

All communication of tax scrutiny to be via e-mail from FY17

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

The I-T department in the recent times has taken a host of initiatives to reduce human interface between tax official and assessees and make the tax system non-adversarial

 

The income tax department is planning to carry out all communication related to the scrutiny of returns through e-mails from the next fiscal to reduce harassment of tax payers by eliminating interface between assessees and taxmen.

 

The I-T department, on a pilot basis, has already started scrutiny of returns through e-mails in 5 metropolitan cities- Delhi, Mumbai, Bengaluru, Ahmedabad and Chennai regions.

 

“We are working on a software so that all scrutiny communications can be stored in a specified server. Once it is ready, we will shift to e-environment as far as scrutiny, and all communications in this regard are concerned,” a top revenue department official told PTI.

 

The official further said that moving to e-scrutiny would help in combating corruption, as it would reduce the interface between assessee and tax officials. Also, he added that all the communication records with regard to scrutiny would be stored in one place and can be verified whenever needed.

 

“There has been an encouraging response to the pilot project undertaken by the tax department. From next fiscal we want to make all scrutiny communication through emails,” the official said.

 

The Central Board of Direct Taxes (CBDT) has already asked the officials to initiate the concept of using emails for corresponding with taxpayers.

 

The I-T department in the recent times has taken a host of initiatives to reduce human interface between tax official and assessees and make the tax system non-adversarial. These include directing field offices to raise only specific queries in income tax assessment cases picked up for scrutiny. It also directed expeditious completion of those scrutiny cases where income concealed is up to Rs.5 lakh.

 

The department had also stipulated that appeals before I-T commissioner should be filed in electronic format by those assessees who e-file their returns.

 

Source: http://www.livemint.com/Politics/q7dtcfDoj7LMFeJkTG1VRK/All-communication-of-tax-scrutiny-to-be-via-email-from-FY17.html

ITR-V verification deadline extended to 31st January

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If you missed your 120 days ITR-V verification deadline, there is good news. The income tax department has extended the verification deadline till 31st January.

If you missed your 120 days ITR-V verification deadline, there is good news. The income tax department has extended the verification deadline till 31st January.

Although it has not been officially notified yet, taxpayers have been receiving this information via email from the I-T department. However, you won’t be able to e-verify. Like old times, will have to physically mail the signed ITR V to CPC Bangalore.

“The electronic verification option gets switched-off automatically after 120 days of the taxpayer filing the return. However, the extended deadline to physically submit the ITR-V is open for all,” says Archit Gupta, founder and CEO, Cleartax.in. The 120 days countdown begins from the date the taxpayer submits their income tax returns forms.

The tax department had extended the filing deadline to September 7 this years. So, people who had filed on the last date still have a window of one day to e-verify. Post that you too will have to mail the ITR-V. The last date to do so will still remain 31st January.

Many individuals who, who had e-verified their return using Aadhar or Net banking, are receiving reminder letters from the CPC at Bangalore to physically send their ITR-V acknowledgement forms on or before the 31st of January, 2015.

“Those trying to e-verify their return once again with reference to the above are getting the message “No returns pending for e-verification” when they try to do so,” says Varun Advani, COO, makemyreturns.com. CAs advice them to re-send their ITR-Vs physically to the department before the deadline to aviod any further problems.

Govt gets Rs 2,428 cr from black money disclosures

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The national exchequer received Rs 2,428.4 crore in payments from disclosures made during a three-month long compliance window under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act last year, bolstering tax revenue collections.

This is 97 per cent of the amount due from 644 declarations made from holders of black money stashed overseas by December 31, the last day of payment.

The amount included tax and penalty on the declarations made under the three-month compliance window that ended September 30 last year on total disclosures of Rs 4,147 crore.

This added to government’s gross tax revenue collection, which touched 66 per cent of Budget Estimates for the full financial year till December, a sharp uptick from 52.4 per cent till November.

Even as government targets a fiscal deficit of 3.9 per cent during 2015-16, it is expecting a shortfall of Rs 30,000-40,000 crore in direct taxes this financial year. Besides, lower than expected nominal GDP (gross domestic product) growth at close to eight per cent will exert further pressure on the fiscal deficit target.

“The amount collected under black money disclosure is Rs 2,428 crores (97 per cent of amount due) by December 31, which was the last date of payment. The total tax revenue collected up to December this year is Rs 9.5 lakh crore, 66 per cent of Budget Estimates,” said Revenue Secretary Hasmukh Adhia in a tweet.

Source: http://www.business-standard.com/article/economy-policy/govt-gets-rs-2-428-cr-from-black-money-disclosures-116010700025_1.html

Government extends tax residency rule – Place of Effective Management

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A deadline for comments on the draft guidelines to determine the tax residency of a foreign company has been extended to January 9.

The government felt the need to determine a company’s place of effective management due to lack of detail in the Income Tax Act leading to the possibility of tax avoidance.

“Representations requesting for extension of the last day for submitting comments and suggestions, have been received and considered,” according to a government statement announcing the extension of the deadline for comments on the issue, earlier slated for January 2.

The Place of Effective Management (POEM) of a company, as the concept was called, was introduced in the Finance Act, 2015 to determine the tax residency of a foreign company.

The draft guidelines for what defines a company’s place of effective management, released on December 23, defines the POEM as “a place where key management and commercial decisions that are necessary for the conduct of the business of an entity as a whole are, in substance made.”

“Section 6(3) of the Income-tax Act, 1961, prior to its amendment by the Finance Act, 2015, provided that a company is said to be resident in India in any previous year, if it is an Indian company or if during that year, the control and management of its affairs is situated wholly in India. This allowed tax avoidance opportunities for companies to artificially escape the residential status under these provisions by shifting insignificant or isolated events related with control and management outside India,” according to draft guidelines issued by the Central Board of Direct Taxes.

“As per the amendment brought in by the Finance Act, 2015 a foreign company will be regarded as a tax resident of India, if its POEM in that year is in India,” according to a report by Deloitte and CII.

According to the Deloitte report, there is ambiguity around some of the provisions in the guidelines, such as the duration for which a company has India as a place of effective management. “A question may still arise that for a foreign company to be resident in India, is it necessary that the POEM should be situated in India throughout the financial year under consideration or mainly in India.

Similarly, the term “key management and commercial decisions” in the definition of POEM seems to be causing some confusion.

“Unlike, for instance, the UK, India does not define the term ‘key management and commercial decisions’ and therefore these are undefined and subjective.

In the UK, judicial precedents and tax rules lay emphasis on whether directors/officers taking major decisions are independent, are empowered to take these or whether such directors/officers are acting under the influence or direction of shareholders,” Mr.Alex Postma, Leader–Global and EMEIA International Tax Services, EY had said in a note.

Enterprises have become increasingly mobile and technology and connectivity are as important as never before in their global competence. This poses risks that a travelling executive may create significant unforeseen tax burdens in India,” Mr. Postma added in his note.

Source: http://www.thehindu.com/business/Economy/government-extends-tax-residency-rule-deadline/article8055070.ece

Singapore pips Mauritius as India’s top FDI source

by | posted in: Corporate & Business Advisory Services, Corporate Updates, Cross Border Transactions, M&As, Joint Ventures, Economy, Business Updates, Corporate Affairs, India & International - Corporate updates | 0

Singapore has replaced Mauritius as the top source of foreign direct investment (FDI) into India during the first half of the current financial year.

During April-September 2015, India has attracted $6.69 billion (Rs 43,096 crore) FDI from Singapore while from Mauritius, it received $3.66 billion (Rs 23,490 crore), according to data from the Department of Industrial Policy and Promotion (DIPP).

Foreign investment from Singapore was $2.41 billion in the year-ago period.

According to experts, the Double Taxation Avoidance Agreement (DTAA) with Singapore incorporates Limit-of-Benefit (LoB) clause, which has provided comfort to foreign investors based there to invest in India.

“Investors are preferring Singapore to Mauritius as the LoB clause in India-Singapore treaty provides substance and certainty,” said Krishan Malhotra, head of tax and an expert on FDI with corporate law firm Shardul Amarchand and Mangaldas.

FDI from Singapore during the first six months of the current financial year is also more than what it had invested in India for the whole of 2013-14 ($5.98 billion). India had attracted $6.74 billion foreign investment during 2014-15.

Overall, Singapore accounts for 15 per cent of the total FDI India received between April 2000 and September 2015. However, Mauritius makes up 34 per cent of FDI during the same period.

Sectors that attracted the highest foreign investment during April-September 2015 include computer software and hardware ($3.05 billion), trading ($2.30 billion), services and automobile ($1.46 billion each) and telecommunications ($659 million).

Foreign investment is crucial for India, which needs about $1 trillion by March 2017 to overhaul infrastructure such as ports, airports and highways, and to boost growth.

Source: http://www.business-standard.com/article/economy-policy/singapore-pips-mauritius-as-india-s-top-fdi-source-115120700040_1.html