Implementation of Income Tax Cadre Restructuring - the process is nearing completion

"The status of Implementation of the Restructuring of Cadre was reviewed by the Chairperson and Member(P&V), CBDT on September 04, 20113. It was observed that the work assigned to various Sub-Committees engaged in the process is nearing completion." - CBDT.  Contents of CBDT letter reproduced below:-

Government of India

Directorate of Income-tax

Human Resource Development

Central Board of Direct Taxes

ICADR Building, Plot No 6, Vacant Kunj Institutional Area Phase-II, New Delhi.

F.No. HRD/CM/102/1/2013-14/ 2028

Dated : 05.09.2013

All CCsIT/ DGsIT (CCA)

Sub: Implementation of Cadre Restructuring- ACRs/APARs of Officers and Officials in your region - reg.

Madam/Sir,

     With reference to F.No.HRD/CM/102/3/2009-10(Pt)/1102 dated 2 July, 2013, I am directed to inform that the status of Implementation of the Restructuring of Cadre was reviewed by the Chairperson and Member(P&V), CBDT on September 04, 20113. It was observed that the work assigned to various Sub-Committees engaged in the process is nearing completion which, In turn, would be able the Board to decide the key component of manpower deployment amongst various Regions and constituent Directorates/ Offices of the Department.

2. In this connection, I am directed to invite your kind attention to para 7 of the earlier cited letter dated July 2013 which, inter alia, emphasized the preparation of all Cadre Controlling Authorities to complete promotion to various grades/ post as soon as the deployment orders are issued. For this purpose, it was requested to take up the exercise of updating APARs of all employees at the earliest. 

3. It is expected that necessary excercises in this regard would have been completed for updating of all ACRs till end of F.Y. 2011-12 in your Region. It is desired by the Chairperson that a communication indicating completion of updating of all APAR s upto 2011-12 is received from your Region by September 16, 2013 which may be routed through the Core Committee.

Yours faithfully,

sd/-

(Swati Joshi)

Addl DIT (HRD)

Source: http://irsofficersonline.gov.in
[http://irsofficersonline.gov.in/Documents/OfficalCommunique/1962013105104.PDF]

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Beware of fraud, fake mobile applications: I-T to taxpayers

After alerting taxpayers about fraudulent emails promising fake refunds and other services, the Income Tax department has now alerted people against fake mobile applications that compromise confidential financial information. 

The department has warned taxpayers that illegal "mobile applications" circulating in the webworld for smartphones, especially Android and BlackBerry phones, "may not be according to the department's data structure" and parameters. 

"Filers (people who file tax returns) using them are doing this at their own risk," the department said in its recent advisory issued to taxpayers. 

The fake mobile applications, according to sources, use the name and purpose of I-T returns to conceal their fraud identity and promise the gullible taxpayer in sharing his or her personal details as done under the legal I-T filings system. 

The I-T department, over the last few years, has constantly alerted taxpayers that the department never asks for detailed personal information of any person through e-mails or any other mode of communication on the Internet. 

"The Income Tax department does not request detailed personal information through e-mail. The I-T department does not send e-mail requesting your PIN numbers, passwords or similar access information for credit cards, banks or other financial accounts," the department had earlier issued the disclaimer. 

"It is important to inform and alert taxpayers in this age of Internet-based communications. With a spurt been seen in possession of smartphones, such fake applications and solicitations should be guarded against by taxpayers," a senior I-T department official said. 

The department's technology engineers are also in coordination with the national agency of computer and cyber security sleuths and anti-hacking agencies to weed out these issues, they said.

Source:The Economic Times

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Direct Tax Code Bill to be taken up by Cabinet

DIRECT TAX CODE BILL THAT SEEKS TO REPLACE EXISTING INCOME TAX RULES WILL BE TAKEN UP BY CABINET

The Cabinet is likely to consider Thursday the Direct Taxes Code (DTC) Bill, which seeks to overhaul the over 50-year old income-tax law, with minor rejigs in the draft, including in the income-tax slabs.

“The DTC Bill is on the agenda of the Cabinet meeting today,” a source said.

The exemption limit at Rs 2 lakh for individual tax payers is unlikely to be touched, but a new slab of 35 percent may be introduced for the super-rich.

Besides, Minimum Alternate Tax (MAT) may be levied on book profit and not on gross assets, sources said. Further, the Securities Transaction Tax (STT) is likely to be retained, as against the recommendation of the Standing Committee on Finance that the levy be abolished.

Among other things, the Standing Committee, headed by senior BJP leader Yashwant Sinha, had suggested raising the income-tax exemption limit to Rs 3 lakh from Rs 2 lakh proposed in the DTC Bill, 2010.

The DTC bill, which aims to rationalise tax rates to bring more people and companies under the tax net, was introduced in Parliament in 2010.

Finance Minister P Chidambaram had earlier said he intends to bring the DTC Bill in the Monsoon session of Parliament, following submission of the Standing Committee’s recommendations. The ongoing Monsoon session is scheduled to end on August 30.

The first draft prepared by Chidambaram in 2009 had proposed an income-tax slabs of Rs 1.6-10 lakh, Rs 10-25 lakh and Rs 25 lakh and above. Besides, corporate tax was proposed at 25 percent.

This was followed by the draft DTC Bill prepared by then-Finance Minister Pranab Mukherjee in 2010, which proposed the slabs at Rs 2-5 lakh, Rs 5-10 lakh and Rs 10 lakh and above and corporate tax at 30 percent.

The Standing Committee suggested slabs of Rs 3-10 lakh, Rs 10-20 lakh and Rs 20 lakh and above. On corporate tax, it recommended the rate be retained at 30 percent.

Source: The Economic Times

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Tax relief on treatment of serious diseases u/s 80DDB

GOVERNMENT OF INDIA

MINISTRY OF  HEALTH AND FAMILY WELFARE

RAJYA SABHA

UNSTARRED QUESTION NO-883

ANSWERED ON-13.08.2013

Tax relief on treatment of serious diseases

883 .     SHRI RASHEED MASOOD

Will the Minister of HEALTH AND FAMILY WELFARE be pleased to state:

(a) whether Government has formulated a policy for giving tax relaxation on the expenditure incurred in the treatment of cancer and other serious diseases;

(b) if so, the details thereof; and

(c) by when this policy will be implemented?

ANSWER

THE MINISTER OF HEALTH AND FAMILY WELFARE(SHRI GHULAM NABI AZAD)

(a)        Yes.

(b)        Under the provisions of section 80DDB of the Income-tax Act, 1961 (the ‘Act”), adeduction upto Rs.40,000/-, on account of medical treatment of specified diseases is allowed from the total income of the assessee. The limit is increased to Rs.60,000/- if the amount is paid on the treatment of a person who is of the age is 60 years or more. The diseases specified in the Rule 11DD of the Income-tax Rules, 1962 (the “Rules”) include malignant cancers and expenditure on its treatment is eligible for deduction under section 80 DDB.

Further, for the salaried class, as per section 17(2) of the Act, any amount paid by the employer in respect of any expenditure incurred by the employee on his medical treatment or treatment of any member of his family in respect of prescribed diseases is not treated as perquisite in the hands of the employee. The diseases prescribed under Rule 3A (2) of the Rules include cancer.

(c)        Does not arise in view of (a) and (b) above.

Source: Rajya Sabha Q&A

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Change in PAN card details: Things to know

The permanent account number (PAN) has to be quoted in the income tax returns and for various financial transactions, such as investments, and purchase/sale of property. As such it should be updated at all times. In case of an error in the photo or signature mismatch, the holder must ensure that a new, revised card bearing the same number is issued with the changes.

Application form The applicants have to fill the online 'Request for new PAN card and/or changes or correction in PAN data form' on the NSDL website (www.tin-nsdl.com). The holder must check the box on the left where the change/correction is required.

Acknowledgement: An acknowledgement screen will be displayed on submission, which the applicant must save, print and sign. The applicant must affix two colour photographs on this.

Documents: It is mandatory to provide identity and address proofs with the change request. Any changes or corrections in the card details should be supported by relevant documents, as required by the income tax rules.

Fee: The fee for processing the change request is Rs 85, besides the applicable service tax. It can be paid through demand draft, cheque, credit/debit card or via Net banking.

Points to note

> If one loses a PAN card and is applying for a new one, all the columns in the application form must be filled without ticking any box in the left margin. A copy of an FIR must also be submitted along with the form.

> The acknowledgement, payment and documents should reach NSDL within 15 days of filing the online application.

Source : The Economic Times

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Tax Deductors Who Default In Depositing TDS by Due Date Shall be Liable for Prosecution: CBDT

Tax Deductors Who Default In Depositing TDS by Due Date Shall be Liable for Prosecution: CBDT

It has come to the notice of Income Tax Department that many times the tax deductors, after deducting TDS from specified payments, are deliberately not depositing the taxes so deducted in Government account and continue to deploy the funds so retained for business purposes or for personal use. Such retention of Government dues beyond the due date is an offence liable for prosecution under Section 276B of the Income Tax Act, 1961. The defaulter, if convicted, can be sentenced to Rigorous Imprisonment (RI) for a term which can extend upto seven years.

The TDS units of Income Tax Department have been taking up prosecution proceedings in suitable cases where TDS has been retained beyond the due date. The Central Board of Direct Taxes has partly modified existing guidelines for identification of cases for launching prosecution. As per the revised guidelines, the criterion of minimum retention period of 12 months has been dispensed with. For the benefit of public at large, it is now clarified that defaulters, who have retained the TDS deducted and failed to deposit the same in Government account within due date, shall be liable for prosecution, irrespective of the period of retention.

However, the offence u/s 276B of the Income Tax Act can be compounded by Chief Commissioner having jurisdiction on the case, either before or after the launching of prosecution proceedings. In the recent past, several defaulters have submitted petitions for compounding of such offences and compounding orders have also been passed by the Competent Authority in suitable cases.

Source : PIB  (Release ID :97697)

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Last date for filing Income Tax returns extended to Aug 5

 The government on 31 July 2013 (Wednesday) extended the last date for filing of income tax returns by five days to August 5.

The due date, which was Wednesday, has been extended in wake of “unprecedented surge” in number of I-T returns being filed electronically.

“As a measure of taxpayer’s convenience, it has been decided to extend the due date of filing of returns from July 31, 2013 to August 5, 2013,” the Finance Ministry said.

As per the Central Board of Direct Taxes (CBDT), there has been an unprecedented surge in number of returns being e-filed.

This year till July 30, about 92 lakh returns have been electronically filed, which is 46.8 per cent higher than the returns e-filed during the corresponding period last fiscal.

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INCOME TAX RETURNS - FAQ

VIEW : INCOME TAX RETURNS - FAQ

Source : http://incometaxindia.gov.in/etds_faqs.asp

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Little-known tax deductions you might have missed while filing returns

Paying more tax than is due is bad enough. It's worse if you don't even know you have overpaid and are eligible for a refund. Many youngsters are not conversant with tax rules and fail to fully utilise the deductions available to them.

Tax filing portal Taxspanner.com studied last year's returns and found that nearly 51 per cent of salaried taxpayers had not fully used the tax-saving limit under Section 80C. Only one of the four taxpayers had claimed the full deduction for health insurance under Section 80D.

Here are some little-known deductions available to taxpayers. Make sure you claim them when you file your returns this year. If you have already done so, you can file a revised one to claim the deduction you missed.

1. Home loan repayment under Section 80C

If you are paying a hefty home loan EMI, chances are that you will find it difficult to put money in tax-saving options. Take heart. While the interest paid on the home loan is deductible under Section 24b, even the principal portion gets you tax benefits under Section 80C.

This is a godsend for taxpayers, who have not been able to exhaust their Rs 1 lakh saving limit under Section 80C because of the home loan EMI. The deduction for the interest paid on a home loan is capped at Rs 1.5 lakh only in case of a self-occupied house. If you have bought a second house for investment and have rented it out, the entire interest during a given year can be claimed as a deduction. This brings down the effective rate of borrowing for the buyer.

2. 30 per cent standard deduction of rental

If you let out your house, the rent is added to your income and taxed at the normal rate applicable to you. However, there is a 30 per cent standard deduction from this income. So, if you receive a rent of Rs 10,000 per month, the total rent for the year would be Rs 1.2 lakh. Of this, Rs 36,000 would be the standard deduction and you will have to pay tax only on Rs 84,000.

3. Carry forward and adjust capital losses

Certain short-term or long-term capital losses you made during the year can be adjusted against other gains. If you lost money in stocks, equity funds or gold last year, you can set off the loss against short-term capital gains or taxable long-term capital gains from the sale of property, gold or debt funds. If you are unable to adjust the entire loss, you can carry it forward for up to eight financial years.

Suppose you lost Rs 80,000 in stocks and gold funds in 2012-13 and managed to adjust Rs 30,000 against gains from debt funds. You can carry forward the unadjusted loss of Rs 50,000 and keep doing so against other gains till 2020-21. However, you can adjust only short-term losses from stocks and equity funds in this manner. If you have held the stocks and funds for more than one year, the losses cannot be adjusted.

Also, one cannot set off short-term gains from stocks against long-term capital losses from other assets. However, both short-term and long-term losses from other assets, such as gold, property and debt funds, can be adjusted. The taxpayers who earned capital gains from fixed maturity plans (FMPs) and debt funds will find this particularly useful.

4. Use indexation for long-term gains

Do you know you can use inflation to bring down your tax? The indexation benefit can be used to adjust the buying price of an asset to the inflation during the period of holding. If this sounds Greek to you, here's an example.

Suppose you invested Rs 2 lakh in an FMP, in March 2010, and got Rs 2.8 lakh when the plan matured in March 2013. You will have to pay 10 per cent tax on the Rs 80,000 earned as capital gain. However, if you take the indexation route, the 35 per cent inflation during the holding period will adjust your buying price upwards to Rs 2.7 lakh. Even though the gain of Rs 10,000 will be taxed at a higher rate of 20 per cent, the overall tax will be only Rs 2,000, compared with the Rs 8,000 payable, if you were to take the flat 10 per cent option.

Calculating the tax according to the indexation option requires a bit of math, but can be very rewarding.

5. Medical insurance of parents

The premium of your health insurance policy is deductible up to Rs 15,000 under Section 80D. However, you are eligible for an additional deduction of Rs 15,000 if you have insured your parents as well. If even one of them is a senior citizen, the limit of deduction is even higher at Rs 20,000.

6. Illness and disability

If you have a dependant, who suffers from any of the diseases specified under Section 80DDB, you can claim a deduction of Rs 40,000. The deduction is higher at Rs 60,000 if the patient is a senior citizen. The diseases include, neurological ones (dementia, dystonia musculorum deformans, motor neuron disease, ataxia, chorea, hemiballismus, aphasia and Parkinson's disease), malignant cancers, full-blown AIDS, chronic kidney failure and haematological disorders (haemophilia and thalassaemia). Dependants can include spouse, children, parents and siblings.

However, the patient should be wholly or mainly dependent on the taxpayer and should not have separately claimed any sum from an insurance company for the illness. Similarly, if a taxpayer suffers from a disability, he can claim deduction of Rs 75,000 under Section 80U. If he has a disabled dependant, he can claim the deduction under Section 80DD.

Disability includes blindness, low vision, leprosy, hearing impairment, loco-motor disability, mental retardation and mental illness. A minor disability won't get any tax benefits; the disability should be at least 40 per cent. If the disability is over 80 per cent, the deduction is Rs 1 lakh.

Source : The Economic Times

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Know About PAN Card

PAN explained.......

PAN is a 10 digit alpha numeric number, where the first 5 characters are letters, the next 4 numbers and the last one a letter again.

These 10 characters can be divided in five parts as can be seen below.

The meaning of each number has been explained further.

1. First three characters are alphabetic series running from AAA to ZZZ

2. Fourth character of PAN represents the status of the PAN holder.

• C — Company
• P — Person
• H — HUF(Hindu Undivided Family)
• F — Firm
• A — Association of Persons (AOP)
• T — AOP (Trust)
• B — Body of Individuals (BOI)
• L — Local Authority
• J — Artificial Juridical Person
• G — Government
3. Fifth character represents first character of the PAN holder’s last name/surname.

4. Next four characters are sequential number running from 0001 to 9999.

5. Last character in the PAN is an alphabetic check digit.

Nowadays, the DOI (Date of Issue) of PAN card is mentioned at the right (vertical) hand side of the photo on the PAN card. .........!

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New Rules of filing Tax returns

The tax authorities have introduced several new guidelines for filing returns this year. Find out how these changes are likely to impact you.

First they made it compulsory for businesses to e-file their tax returns. Then they made it mandatory for taxpayers with incomes of over 10 lakh to take the online route. This year, the income tax authorities have cast a wider net and made e-filing compulsory if your taxable income is above 5 lakh a year.

The lowered threshold represents one of the key changes in the tax filing rules this year. Some of these are mere tweaks, such as mentioning your bank's IFSC number, instead of the MICR code, in the return. However, some of these variations are tectonic, such as the mandatory e-filing for incomes above 5 lakh a year. In the following pages, ET Wealth explains the new rules and how they will affect the way you file your tax return this year.

E-filing tax returns 

The change has spawned a massive opportunity for tax e-filing portals. These websites charge individual taxpayers between 200 and 4,000 for uploading their tax returns. You can also do it for free on the official website of the Income Tax Department. However, private tax filing portals hand-hold the taxpayer through the process. They guide you while filling the form and even correct you if you make a mistake.

Filing tax returns online is easy. 

The average taxpayer won't take more than 30-40 minutes to enter all the details and upload the return. However, the average taxpayer also harbours several misconceptions about e-filing . Tax returns are picked up for scrutiny through a computer assisted selection procedure that has no human intervention. If the computer detects certain discrepancies in the return, it raises the red flag and the individual gets a notice. In fact, there is a greater probability that a return filed offline will get picked up for scrutiny . The information in your physical return is ultimately fed to the computer by operators. A typing error at this stage can introduce a discrepancy in the return, leading to a notice being sent to you.

This problem can be avoided when you file online because the chances of going wrong are lesser. The e-filing portals further reduce the risk of errors by calculating the tax as you fill in the form. Some e-filing companies , such as Taxspanner, even verify your return for a small fee. If you are ready to shell out 200, the portal will check if you have entered correct information and alert you when you are going wrong. Tax professionals go through your return form, tallying the numbers and cross-checking the information before it is uploaded.

Choose the right form

The online filing data reveals that more than 32% of the 2 crore individual taxpayers used the basic ITR 1, also known as Sahaj, to file their returns last year. Only 11% used the more complicated ITR 2. These statistics indicate that a lot of taxpayers who should have used ITR 2 filed their returns using the simpler Sahaj form. The income level does not matter; what is important is the source of income. For instance , if one had made capital gains or earned rent from more than one house, he should have used ITR 2.

If you have not filed your return for last year as well, you can do so now. A return filed after the due date is a delayed return. If you file your delayed return before you get a notice, you have a better chance of getting away lightly. The taxman will not take you to task for not filing your returns, just give you a mild rap for waking up late.

Automatic choice for e-filers

For some online tax filers, choosing the right form is not an issue. "A taxpayer has to just enter what he has earned under different heads of income and the portal automatically chooses the applicable form," says Sudhir Kaushik, co-founder and CFO of Taxspanner.com. For instance, if the person has only income from salary and no exempt income, his return will be filed using ITR 1, but if he made some capital gains, has rental income from more than one house or his exempt income exceeds 5,000, ITR 2 will have to be used.

However, taxpayers who upload their returns through the official Income Tax Department website will have to be more careful about the form they use. Delhi-based Kuldip Kaushik used the ITR 1 last year, but since he had dividend income of over 5,000 for the year 2012-13 , he will have to use ITR 2 this year.

If a taxpayer uses the wrong form and the mistake is discovered by the tax authorities, the return may be rejected . Every year, thousands of defective returns are sent back to taxpayers. A defective return is not an earth shattering matter. If you get a notice, you will have to file a revised return within 15 days. If you meet the deadline, the return is treated as valid. Get delayed and your return will become invalid and you will have to file afresh.

"If you discover on your own that you have made a mistake in the return or used the incorrect form, you can file a revised return to rectify the mistake ," says Vineet Agrawal, director KPMG. Your new return will overule the previous one if the assessment has not been completed.

Check your TDS details

Before you sit down to file your returns this year, spend a few minutes to check whether the tax you paid for last year has been correctly credited to your name. The Form 26AS has details of the tax deducted on behalf of the taxpayer and can be easily checked online. Noida-based Brijendra Singh wishes he had done so last year. The former army officer got a tax notice because of a clerical error by his bank. The TDS paid on his income from fixed deposits was credited to another PAN by mistake. Though he was eventually given credit for his TDS, Singh is not taking any chances this year. He has diligently matched all his TDS details with his Form 26AS online.

Checking your tax credit details online is child's play if you have a Net banking account with any of the 35 banks that offer this facility. Otherwise you can go to the official website of the Income TaxDepartment and click on 'View Your Tax Credit' . First-time users will have to register but it takes less than five minutes before you can log on and view your details. "It is necessary that taxpayers check their TDS when they file their returns," says Kuldip Kumar of PwC.

Forms seek more information

If salaried people are feeling jittery about using the more detailed ITR 2, imagine what partners in firms and businessmen are going though. In an attempt to dig deeper for undisclosed income, the government has made it mandatory for partners, professionals and businessmen with an income of over 25 lakh to furnish details of their assets and liabilities. There is a new 'Schedule AL' in the ITR 3 and ITR 4. If the taxpayer's income exceeds 25 lakh during the year, he will have to declare his assets and liabilities.

Read More: http://timesofindia.indiatimes.com

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EXEMPTION FROM FILING ITR (INCOME TAX RETURN) NOT EXTENDED THIS ASSESSMENT YEAR 2013-14 – CBDT

Income Tax Department issues press release to clarify that unlike previous year Salaried Employees with Total Income up to Rs.5 lakhs too have to file ITR (Income Tax Return) this year viz., Assessment year 2013-14.

The full text of Press Release issued by CBDT (Cenral Board of Direct Tax) is as follows:

The CBDT has, vide notification dated 1-05-2013, made E-filing of Return compulsory for Assessment Year 2013-14 for persons having total assessable income exceeding Five lakh rupees.

The CBDT vide its earlier notifications had exempted salaried employees having total income up to Rs. 5 lakhs including income from other sources up to Rs. 10,000/- from the requirement of filing return of income for assessment year 2011-12 and 2012-13 respectively. The exemption was available only for the assessment year 2011-12 and 2012-13. The exemption was giving considering ‘paper filing of returns’ and their ‘processing through manual entry’ on system.

However, this year the facility for online filing of returns has been made user-friendly with the advantage of pre-filled return forms. These E-filed forms also get electronically processed at the central processing centre in a speedy manner. Hence, the exemption provided during the last two years is not being extended for assessment year 2013-14. Taxpayers are encouraged to file their returns electronically. E-filing is an easy, fast and secure method of filing of income tax return. Moreover, Digital signature is not mandatory for these taxpayers and they can transmit the data in the return electronically by downloading ITRs, or by online filing and thereafter submit the verification of the return in From ITR-V acknowledgement after signature to Central Processing Centre.

The processing for E-filed returns is faster. From 25th July to 31st July 2013 (Except 27th and 28th July being holidays), Special Return Receipt Counters are opened in IT Offices (FOR SALARIED TAX PAYERS)

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