Income Tax Dept warns public against cash dealings of Rs 2 lakh or more saying that the receiver of the amount will have to cough up an equal amount as penalty. CBDT further extends the time for Linking PAN with Aadhaar till 30th June, 2018.

Missed the March 31 deadline to file income tax return? Here's what you can do

March 31, 2018 was the deadline to file income tax returns (ITR) for the financial year 2015-16 and 2016-17. In case you haven't filed your ITR for FYs 2015-16 and 2016-17, you cannot file a belated return anymore.

If you have not filed your returns for these two FYs, read on to find out what you can do now:

File a Condonation of delay request for specific cases:
The income tax department can allow taxpayers to file returns post the deadline for specific cases. "The Central Board of Direct Taxes (CBDT) has issued a circular in this regard where if the taxpayer has tax refund pending or wish to carry forward his losses and missed the deadline of filing of tax returns, then he can file an application to the Income tax commissioner or the prescribed authority," explains Abhishek Soni, CEO, tax2win.in, a tax-filing firm.

These are the parameters based on which applications can be accepted or rejected by the income tax department:
a) The claim is correct and genuine
b) Case is based on genuine hardship on merits
c) Income is not assessable in the hands of any other person under the Income Tax Act
d) The refund has arisen as result of excess tax deducted or tax collected at source, advance tax or self-assessment tax.

The time limit to file such application is six years from the end of the assessment year for filing the return. (Assessment year is the year immediately following the financial year). Therefore, for such taxpayers who have missed the deadline of March 31, 2018, can file such application by 31 March 2023 (for FY 2015-16) and 31 March 2024 (for FY 2016-17) . In case of belated tax refund, no interest will be paid by the department to you.

The application will have to be disposed by the department within six months from the end of the month in which the application is received as far as possible.

If taxes are also payable by youIf you have not paid taxes for FYs 2015-16 and 2016-17, then experts advice that one should at least pay all your taxes and interest along with it as applicable under section 234A, 234B or 234C, even if they cannot file the ITR post March 31, 2018.

If all taxes are paid but return not filedIf the taxes you are supposed to pay have been cleared but if you have not filed your ITR before March 31, 2018, then you do not have the option to file their ITR now or to apply for condonation of delay. However, the department can issue a notice under section 271F for levying of penalty on non-filing of ITR. The maximum penalty in such a case is Rs 5,000. No penalty will be levied if there is a genuine reason for such non-compliance and if the income tax officer is satisfied with the reasons, adds Soni.

Actions that tax department might take against youFor non-filing of return, the department can take various actions against you. This includes issuing a notice or in the worst case scenario, you might get prosecuted and get a maximum jail term of seven years.

Naveen Wadhwa, DGM, Taxmann.com says "If TDS has been deducted from your income and you have not filed your ITR, then department can issue you a notice under 142 (1) (i) for non-filing of returns. A penalty may also be levied by the assessing officer of Rs 5,000 for non-filing of income tax returns."
Every taxpayer is required to file ITR if his/her total income exceeds the basic exemption limit. The department can issue you a notice under section 148 for income escaping the assessment for non-filing of ITR. You will be required to respond to that notice on the income tax e-filing website as well as file your ITR to comply with the notice issued by the tax officer.

Penalties under such case will be levied for under-reporting of incomes. For FY 2015-16, a penalty of 100-300 percent of the tax payable amount will be levied as per the discretion of the assessing officer. For FY 2016-17, a penalty of 50 percent of the tax payable amount will be charged, adds Wadhwa.

Soni says, "If a person has at least paid his taxes along with interest even if he/she cannot file the ITR after March 31, 2018 then in such a case, chances are he/she might not be liable to pay penalty for under-reporting of income."

Read more at:economictimes.indiatimes.com
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Income tax department wants to know a little bit more about you

The income tax department wants more information from you about your finances and business. The new income-tax return forms released by the Central Board of Direct Taxes (CBDT) for filing returns for the financial year 2017-18 have several new columns. These new forms for various categories of taxpayers are Sahaj (ITR1) , Form ITR-2, Form ITR-3, Form Sugam -ITR-4, Form ITR-5, Form ITR-6, Form ITR-7, and Form ITR-V.

By collecting more specific information from taxpayers — from seeking details about allowances of salaried persons not exempt from tax to matching direct and indirect tax numbers of businesspersons — the income tax department aims to check tax evasion.
“There are more than 25 key changes in the new ITR forms than in the previous ones. Some of these changes clearly suggest that the focus of new ITR forms is to get more information from unlisted companies, trusts and taxpayers who have opted for presumptive taxation scheme. Further, the ITR forms also require the business entities to report the GST transaction which would help the department to independently reconcile the transactions reported by them in income-tax return and GST returns,” said Naveen Wadhwa of Taxmann.com.

Below are the details of some of the extra information income tax department seeks from taxpayers.

1. The new Sahaj form wants you to disclose specific details about your salary. It seeks an assessee's salary details in separate fields and in a breakup format such as allowances that are not exempt, value of perquisites, profit in lieu of salary and deductions claimed under section 16. Though these details are provided in the Form 16 of a salaried employee, now they have to be mentioned in the tax return for clarity of deductions.

2. The new Sahaj form also seeks details about income from property such as gross rent received/ receivable/ letable value; tax paid to local authorities; annual value; interest payable on borrowed capital; and income chargeable under the head house property.

3. Under the ITR-4, assessees who have presumptive income from business and profession will have to furnish their GST registration number and its turnover. This is aimed at checking tax evasion by comparing direct and indirect tax numbers.

4. Instead of the simple (ITR)-1 form, non-resident Indians (NRIs) will have file returns using the ITR-2 which seeks more information. NRIs will also have to provide details of one foreign bank account for refunds.
5. Certain types of taxpayers are now required to mention registration number of the firm of chartered accountant which has done audit for the tax return.

6. Businesses will have to disclose income from property.

7. Firms are required to quote Aadhaar number of their partners or members. Similarly, in case of a trust, Aadhaar number of related functionaries have to be mentioned.
Read more at:economictimes.indiatimes.com
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Interest exp. not deductible if shares acquired from borrowed fund were used for making long-term investments

Where assessee-company was not engaged in carrying on any business activity of acquisition of shares except making long-term investments, activity carried out by assessee was investment activity and accordingly expenditure incurred under head finance charges not incurred wholly and exclusively for purpose of business was not allowable under section 36(1)(iii)

Where dividend income earned by assessee was taxable under head 'Income from other sources', any expenditure incurred to earn dividend income including finance charges was to be allowable under section 57(iii)

Where once addition on which penalty has been levied is set aside to Assessing Officer for fresh consideration, it is as good as there is no addition for levy of penalty under section 271(1)(c)

Refer:[2018] 91 taxmann.com 431 (Mumbai - Trib.)
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CBDT releases new ITR Forms for AY 2018-19; ITR 4 asks for turnover reported in GST returns

The Central Board of Direct Taxes (CBDT) has released the new Income-tax return (ITR) Forms for Assessment Year 2018-19. The new ITR forms incorporates the changes made by the Finance Act, 2017 in the Income-tax Act. The new forms asks taxpayers to provide figures of Ind AS complaint financial statements, GSTR no., GST turnover, etc.

Refer:www.taxmann.com
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Clarification regarding applicability of standard deduction to pension received from former employer

Government of India 
Ministry of Finance 
Department of Revenue 
Central Board of Direct Taxes 
New Delhi, 5th April, 2018 

PRESS RELEASE 

Clarification regarding applicability of standard deduction to pension received from former employer 

Finance Act, 2018 has amended Section 16 of the Income–tax Act, 1961(“the Act”) to provide that a taxpayer having income chargeable under the head “Salaries” shall be allowed a deduction of Rs 40,000/- or the amount of salary, whichever is less, for computing his taxable income. Representations have been received seeking clarification as to whether a taxpayer, who receives pension from his former employer, shall also be eligible to claim this deduction. The pension received by a taxpayer from his former employer is taxable under the head “Salaries”. Accordingly, any taxpayer who is in receipt of pension from his former employer shall be entitled to claim a deduction of Rs 40,000/- or the amount of pension, whichever is less, under Section 16 of the Act.

(Surabhi Ahluwalia)

Commissioner of Income Tax

(Media & Technical Policy)

Official Spokesperson, CBDT
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CBDT notifies Income Tax Return Forms for Assessment Year 2018-19

Government of India 
Ministry of Finance 
Department of Revenue 
Central Board of Direct Taxes 
New Delhi, 5th April, 2018 

PRESS RELEASE 

CBDT notifies Income Tax Return Forms for Assessment Year 2018-19 The Central Board of Direct Taxes(CBDT) has notified Income Tax Return Forms (ITR Forms) for the Assessment Year 2018-19. For Assessment Year 2017-18, a one page simplified ITR Form-1(Sahaj) was notified. This initiative benefited around 3 crore taxpayers, who have filed their return in this simplified Form. For Assessment Year 2018-19 also, a one page simplified ITR Form-1(Sahaj) has been notified. This ITR Form-1 (Sahaj) can be filed by an individual who is resident other than not ordinarily resident, having income upto Rs.50 lakh and who is receiving income from salary, one house property / other income (interest etc.). Further, the parts relating to salary and house property have been rationalised and furnishing of basic details of salary (as available in Form 16) and income from house property have been mandated.

ITR Form-2 has also been rationalised by providing that Individuals and HUFs having income under any head other than business or profession shall be eligible to file ITR Form-2. The Individuals and HUFs having income under the head business or profession shall file either ITR Form-3 or ITR Form-4 (in presumptive income cases).

In case of non-residents, the requirement of furnishing details of any one foreign Bank Account has been provided for the purpose of credit of refund. Further, the requirement of furnishing details of cash deposit made during a specified period as provided in ITR Form for the Assessment Year 2017-18 has been done away with from Assessment Year 2018-19.

There is no change in the manner of filing of ITR Forms as compared to last year. All these ITR Forms are to be filed electronically. However, where return is furnished in ITR Form-1 (Sahaj) or ITR-4 (Sugam), the following persons have an option to file return in paper form:-

(i) an Individual of the age of 80 years or more at any time during the previous year; or

(ii) an Individual or HUF whose income does not exceed five lakh rupees and who has not claimed any refund in the Return of Income.

The notified ITR Forms are available on the official website of the Department www.incometaxindia.gov.in.


(Surabhi Ahluwalia)

Commissioner of Income Tax

(Media & Technical Policy)

Official Spokesperson, CBDT
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Working Group on Taxation Aspects of High Net Worth Individuals (HNWIs)


F.No.500/158/2017-FT&TR-III

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

(Foreign Tax &Tax Research-I Division)

New Delhi, dated the 3 April, 2018

OFFICE ORDER

Subject:-Working Group on Taxation Aspects of High Net Worth Individuals (HNWIs) -reg.

In recent times, there has been a trend of High Net Worth Individuals (HNWIs) migrating from their country of residence to other jurisdictions. Such HNWIs pose a substantial tax risk since they may treat themselves as non-residents for taxation purposes in the first jurisdiction even though they may have strong personal and economic ties with that jurisdiction. For examining the taxation aspects of such High Net Worth Individuals (HNWI), a Working Group has been constituted, with the approval of Chairman, CBDT, comprising of the following officers:

i) Ms Pragya Sahay Saksena, JS (FT&TR)-I

ii) Mr Amitav, ADG-I (Risk Assessment)

iii) Mr Zakir Thomas, CIT(OSD)(Inv.), CBDT

iv) Mr. Rajesh Bhoot, JS(TPL)-II, CBDT

v) Mr Navneet Manohar, Director(FT&TR)-III, CBDT

The Working Group shall be responsible to coordinate with various Divisions/Directorates of Board as well as field formation to formulate India’s position for various aspects related to taxation of migrating HNWIs. The Working Group shall also make recommendations for policy decision in respect of tax risks of the migrating HNWI population.

The first meeting of the Working Group shall be held at 10:30 AM on 06.04.2018 at the Conference Hall, 8th Floor, Hudco Vishala Building, Bhikaji Cama Place, New Delhi. The members of the Working Group may kindly make it convenient to attend the meeting.

(Pooja Hali)

Under Secretary (FT &TR-III (2))

Telefax: 26179269
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CBDT Stipulates Tight Time Frame For AOs &CsIT(A) In Central Action Plan

The CBDT has issued a document titled the “Central Action Plan” in which time limits have been prescribed for various activities to be done by the AOs and CsIT(A) in the first quarter (April 2018 to June 2018) of FY 2018-19.

The CBDT has inter alia stipulated that disposal of assessments in at least 25 cases (20 in International Taxation cases) per Assessing Officer of limited scrutiny, set-aside assessment, reopened assessment u/s 147 and OCM scrutiny must be done by 30th June 2018.

Similar time limites are stipulated for replying to Audit Objections, TDS collection/ reconciliation, Investigation Units, International Taxation, Transfer Pricing Units and LTUs.

CIT (Appeals) have been directed to ensure disposal of pending appeals through ITBA- starting from the oldest year to the year following and so on, so as to attain a total disposal of 150 appeals of less than Rs.10 lakh per CIT (A). The time limit for this 30th June 2018.

Refer:http://itatonline.org
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Processing of returns under section 143(1) of the Income-tax Act which are pushed to the Assessing Officers by the CPC

F.No. 225/53/2018/ITA.II
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
North Block, New Delhi,

dated the 28th of March, 2018

To

All Principal Chief-Commissioners of Income-tax

Sir/Madam,

Subject: –Processing of returns under section 143(1) of the Income-tax Act which are pushed to the Assessing Officers by the CPC-reg.-

Section 143(1D) of the Income Tax Act, 1961 (Act) was brought in the statute from 01.07.2012 which provided that processing of the returns shall not be necessary where a notice u/s 143(2) of the Act has been issued. The provisions of section 143(1D) were subsequently amended vide Finance Act 2017 with effect from 01.04.2017 by inserting a proviso which states that provisions of this sub-section shall cease to apply to returns furnished for Assessment Year 2017-18 and onwards.

2.Thus from Assessment Year 2017-18, discretion of Assessing Officer in processing returns under scrutiny has been completely removed and therefore, all returns have to be processed as per provisions of section 143(1) of the Act. This is irrespective of the fact whether in cases under scrutiny, the Assessing Officer is contemplating taking recourse under section 241A of the Act to withhold the refund so arising on ground of concern for recovery of revenue.

3.The CBDT has launched software for processing of returns on Income-tax Business Application (ITBA) which has been functioning since 31st October, 2017. The returns pushed to the Assessing Officer for processing by the CPC are required to be processed electronically on the ITBA. However, in exceptional circumstances, whenever returns cannot be processed because of technical difficulties in functioning of ITBA, in order to provide an uninterrupted taxpayer service, the Assessing Officer can also manually process the return that is pushed to them by the CPC with prior administrative approval of Pr. CIT. However, before taking up the return for processing manually, the difficulty being faced in processing the return electronically on ITBA on a case to case basis would be referred to the Pr. DGIT (System,) who shall satisfy himself that due to technical difficulties the return cannot be processed electronically on ITBA within a reasonable period &thereafter, permit manual processing in that case. However, in all such cases, the Assessing Officers have to mandatorily upload the same in the system.

4. To avoid any arbitrariness, the returns of Assessment Year 2017-18 and onwards which are pushed by the CPC to the Assessing Officer for processing, as far as possible, shall be handled in a chronological manner.

(Rajarajeshwari R)
Under Secretary-ITA.II, CBDT
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Govt. raises tax-free gratuity ceiling to Rs. 20 Lakhs.

The Government vide notification S.O. 1420 (E) dated 29.03.2018 has increased the limit of amount of gratuity payable to an employee under section 4(3) of the Payment of Gratuity Act, 1972 from the existing limit of Rs. 10 Lakh to Rs. 20 Lakhs

Refer:corporatelaws.taxmann.com
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