I-T Dept to share taxpayer info with 10 central intelligence, probe agencies
Delhi : The Income Tax Department will sign an MoU with counter-terrorism platform National Intelligence Grid (NATGRID) to facilitate automatic exchange of information linked to bank accounts, PAN, tax returns and any other “mutually agreed” information with 10 agencies — Central Bureau of Investigation, Directorate of Revenue Intelligence, Enforcement Directorate, Central Board of Indirect Taxes & Customs, Cabinet Secretariat, Intelligence Bureau (IB), Directorate General of GST Intelligence, Narcotics Control Bureau (NCB), Financial Intelligence Unit (FIU), and National Investigation Agency (NIA). In a separate order, the Central Board of Direct Taxes (CBDT) also notified four agencies — Cabinet Secretariat, IB, NCB and NIA — for disclosure of any information regarding tax assesses under Section 138 (1) of the Income-tax Act. At present, the Income Tax Department already shares information on tax assessees with over 50 notified agencies, including Registrar of Companies, Director of FIU, officers of the rank of Joint Director and above dealing with Foreign Exchange Management Act and Prevention of Money Laundering Act in the Enforcement Directorate, and Securities and Exchange Board of India.
Govt dumps new GST return system; to continue with modified version of existing one
Delhi : The government plans to improve existing GST return filing system instead of rolling out a new model. The new system was supposed to be launched on 1 October this year. Yogendra Garg, Principal Commissioner, GST Policy at CBIC, while speaking at a webinar hosted by Assocham, said that the move is aimed at making compliance much easier. The GST Network, the IT support of the GST regime, is working on modifying and improving the current returns and will soon announce an advanced version of the existing system. They are going to introduce a new form GSTR 2B, which like the GSTR 2A will have details of purchases of the company or business with added information on input tax credits. The existing GSTR 1 form, which captures sales-related information, will be more detailed. The Form GSTR 3B, which gives the tax computation, will be auto-populated. Read more
Govt keen on one-time restructuring of loans by RBI: Sources
Delhi : The government is keen on the Reserve Bank allowing a one-time restructuring of loans by banks, because of the stress being faced by many borrowers in the wake of the COVID-19 pandemic, sources in the government told CNBC-TV18. Sources said that the decision on restructuring and the details of such a move would be up to the RBI. Many bankers have been vocal in their plea for a one-time restructuring of the loans, rather an extension of the moratorium by the RBI. Initially, the RBI allowed banks to grant a moratorium on term loans to their borrowers till May 31, and later extended the deadline to August 31. The six-month moratorium allows borrowers a breather by pausing EMI payments and helping them conserve cash. At the same time, it also allows banks to keep such accounts standard. But the relief is limited in nature. Banks fear that come August 31st, when the moratorium is lifted, many may not have sufficient capital to start paying immediately. This may lead to a rise in defaults. Instead, what banks have sought is a one-time restructuring of accounts. This will allow them to ease repayment terms for borrowers genuinely impacted by COVID-19 and match the repayment with their cash flows, thereby averting a default.
Govt plans to reduce number of PSU banks to just five: Report
Delhi : India is looking to privatise more than half of its state-owned banks to reduce the number of government-owned lenders to just five as part of an overhaul of the banking industry, government and banking sources said. The first part of the plan would be to sell majority stakes in Bank of India, Central Bank of India, Indian Overseas Bank, UCO Bank, Bank of Maharashtra and Punjab & Sind Bank, leading to an effective privatisation of these state-owned lenders, a government official said. “The idea is to have 4-5 government owned banks,” said one senior government official. At present, India has 12 state-owned banks. The government official said that such a plan would be laid out in a new privatisation proposal the government is currently formulating, and this would be put before the cabinet for approval. India’s Finance ministry declined to comment on the matter. The government is working on a privatisation plan to help to raise money by selling assets in non-core companies and sectors when the country is strapped for funds due to lack of economic growth caused by the coronavirus pandemic. Several government committees and the Reserve Bank of India have recommended that India should have not more than five state-owned banks. “The government has already said that there will be no more mergers (between state-owned banks) so the only option for them is to divest stakes,” a senior official at a state-owned bank said. Last year, the government had merged ten state-owned banks into four, creating a handful of larger banks in the process.
CBDT to start sharing depreciation, turnover info of small biz with MSME Ministry
Delhi : The income tax department will soon start sharing data related to depreciation, sales and gross turnover of micro, small and medium enterprises with the MSME Ministry. The Central Board of Direct Taxes (CBDT) has directed Principal Director General of Income Tax (Systems) to share information with the MSME Ministry. Section 138 of Income Tax Act empowers income tax authorities to share information/ details of its taxpayers with other government agencies, as may be notified. The information to be shared include depreciation on plant and machinery as reported in ITR3, 5 and 6, sales/gross receipts of business as reported in ITR-3, 5 and 6; and gross turnover/gross receipts as reported in ITR-4. “To facilitate the process of furnishing information, Principal Director General of Income-tax (Systems) would enter into a Memorandum of Understanding (‘MoU’) with Notified Authority of Ministry of MSME, Government of India which inter-alia would include the mode of transfer of data. Maintenance of confidentiality, mechanism for safe preservation of data, weeding out after usage etc,” the CBDT order dated July 14 said.
Tax dept disposes 7,116 assessments under first phase of faceless scrutiny scheme
Delhi : The Income Tax department has disposed of 7,116 cases under the first phase of faceless assessment system, an official source said. Since its launch on October 7, 2019 and implementation of first phase, faceless scrutiny assessment scheme has provided for assessment of income tax in electronic mode, where taxpayers need not see face-to-face any tax officer or visit an I-T office and can e-file reply on the income tax portal. The source said in the first phase of faceless assessment, a total of 58,319 cases were assigned in an automated way randomly and these were kept away from the geographical jurisdiction of the case, based on computer algorithms.
IT dept to launch e-campaign for taxpayers who have not filed returns, have discrepancies in filings
Delhi : The Income Tax Department will be beginning with an e-campaign from Monday for taxpayers who are “either non-filers or have discrepancies/deficiency in their returns for the FY 2018-19,” Ministry of Finance said in a statement on Saturday. The 11-day campaign, which would end on July 31, 2020, will help taxpayers to validate their tax or financial transaction information online with the tax department particularly in order to “promote voluntary compliance, so that they do not get into notice and scrutiny process etc.” Identified taxpayers will get an email or text message for verifying their financial transactions-related information with the IT department sourced from Statement of Financial Transactions (SFT), Tax Deduction at Source (TDS), Tax Collection at Source (TCS), Foreign Remittances (Form 15CC) etc.
New Form 26AS is the Faceless hand-holding of the Taxpayers – https://content.pib.iostechtools.com/1639593/web.html
CBDT to start e-campaign on Voluntary Compliance of Income Tax for FY 2018-19 from 20th July, 2020 : https://content.pib.iostechtools.com/1639664/web.html
Withdrawing cash and not filing ITR? Now pay TDS on cash withdrawals above Rs 20 lakh
Delhi : The Income Tax Department has facilitated a new functionality for banks and post offices through which they can ascertain the TDS applicability rates on cash withdrawals above Rs 20 lakh in case of a non-filer and above Rs 1 crore in case of a filer of the income tax return (ITR). So far, more than 53,000 verification requests have been executed successfully on this facility. CBDT today said that this functionality available as “Verification of applicability u/s 194N” on http://www.incometaxindiaefiling.gov.in since 1st July 2020 is also made available to the banks through web-services so that the entire process can be automated and be linked to the banks’ internal core banking solution. Explaining the details of this facility, CBDT said that now banks/post offices have to only enter the PAN of the person who is withdrawing cash for ascertaining the applicable rate of TDS. On entering PAN, a message will be instantly displayed on the departmental utility: “TDS is deductible at the rate of 2% if cash withdrawal exceeds Rs 1 crore” (if the person withdrawing cash is a filer of the income-tax return) and “TDS is deductible at the rate 2% if cash withdrawal exceeds Rs 20 lakh and at the rate of 5% if it exceeds Rs 1 Crore” (if the person withdrawing cash is a non-filer of ITR). CBDT said that the data on cash withdrawal indicated that a huge amount of cash is being withdrawn by the persons who have never filed ITRs.
One time relaxation for Verification of Income Tax Return
1) CBDT through circular no. 3/2020 dated 13th July 2020 given one time opportunity to taxpayers whose Income Tax Return’s was filed online but verification was pending.
2) Now any taxpayer whose ITR is pending for verification can verify their ITR on or before 30th September 2020.
3) ITR for FY 2014-15 to FY 2018-19 can be verified through this one time relaxation scheme
4) All such verified ITRs shall be processed on or before 31 December 2020.
5) ITRs can be verified through EVC or by sending duly signed hard copy to CPC Bangalore.
Note: if any proceeding has been started against taxpayers considering that return for such year has not been filed by taxpayer then benefit of relaxation can not be availed
CBDT asks taxmen to process income tax returns filed up to AY 2017-18 with refund claims by October 31
Delhi : The income tax department on Friday asked officers to process returns filed up to the assessment year (AY) 2017-18 with refund claims by October 31, 2020. In an order, the Central Board of Direct Taxes (CBDT) extended the time given to the tax officers to process such returns, which were not picked up for scrutiny, from earlier date of December 31, 2019. “To mitigate genuine hardship being faced by the taxpayers on this issue, Board … hereby relaxes the timeframe…and directs that all validly filed returns up to the assessment year 2017-18 with refund claims which could not be processed and which have become time barred…can be processed now with prior administrative approval of principal CCIT/CCIT concerned and intimation of such processing…can be sent to the assessee by October 31, 2020,” the CBDT said. In order to clear old-pending income tax refunds of taxpayers till the financial year 2016-17, the CBDT had issued an order last year allowing taxpayers to file claim for their pending refunds till and issuance of such refunds by tax authorities by December 31, 2019. Nangia & Co LLP Partner Shailesh Kumar said, “This is a welcome step from the government, which will not only allow taxpayers to receive their legitimate refunds, but more importantly help them improve their liquidity in these stressed times due to COVID-19.”
TDS on Cash Withdrawal..Read More
Tax Alert! Your share trading, other data will now be with Income Tax Department
Delhi : Many retail investors trade in equities on a regular basis, resulting in small capital gains or losses. But many of them used to casually ignore mentioning the details in their Income Tax Return (ITR). Due to unavailability of data on capital gains, the Income Tax Department was also not in a position to detect the non-disclosure. However, things are now going to change as a formal Memorandum of Understanding (MoU) was signed today between the Central Board of Direct Taxes (CBDT) and market regulator Securities and Exchange Board of India (SEBI), via a video conference, for exchange of data between the two organisations. This will facilitate sharing of data and information on automatic, regular, request and suo moto basis between the two authorities. In fact, to make disclosure of information on equity and equity related transactions stringent, the Income Tax (I-T) Department had added a new sheet in relevant ITR Forms last year in the midst of the Income Tax Return (ITR) filling session, named Schedule 112 A – From sale of equity share in a company or unit of equity oriented fund or unit of a business trust on which STT is paid under section 112A – while modifying the ITR on July 11, 2019. In her first Budget, Finance Minister Nirmala Sitharaman had also mentioned that the Form 26AS would contain the data related to capital gain/loss as well and the SEBI will be asked make arrangements to furnish data related to transactions made in equities and equity-oriented schemes of respective PAN holders.
TDS form amended! Banks to report Tax Deducted at Source if you withdraw over Rs 1 crore
Delhi : The income tax department has amended the TDS form, making it more comprehensive and mandating deductors to state reasons for non-deduction of tax. As per the amended form, banks will also have to report Tax Deducted at Source (TDS) for cash withdrawals above Rs 1 crore. Through a notification, the Central Board of Direct Taxes (CBDT) has amended Income Tax Rules to include TDS on e-commerce operators, dividend distributed by mutual funds and business trusts, cash withdrawals, professional fees and interest. Nangia & Co LLP Partner Shailesh Kumar said with this notification, the government has revised the format of forms 26Q and 27Q, where details of TDS amount deducted and deposited on various resident and non-resident payments are required to be filled. Form 26Q is used for quarterly filing of TDS returns on any payment other than salary to Indian residents by the government or corporates operating in India. Form 27Q is used for quarterly filing of TDS returns electronically on any payment other than salary to non- residents, including NRIs and foreigners. Except for government deductors, it is mandatory for all other deductors to mention their PAN in the form.
The income tax department has amended the TDS form, making it more comprehensive and mandating deductors to state reasons for non-deduction of tax. As per the amended form, banks will also have to report Tax Deducted at Source (TDS) for cash withdrawals above Rs 1 crore.
Through a notification, the Central Board of Direct Taxes (CBDT) has amended Income Tax Rules to include TDS on e-commerce operators, dividend distributed by mutual funds and business trusts, cash withdrawals, professional fees and interest.
Nangia & Co LLP Partner Shailesh Kumar said with this notification, the government has revised the format of forms 26Q and 27Q, where details of TDS amount deducted and deposited on various resident and non-resident payments are required to be filled.
Form 26Q is used for quarterly filing of TDS returns on any payment other than salary to Indian residents by the government or corporates operating in India.
Form 27Q is used for quarterly filing of TDS returns electronically on any payment other than salary to non- residents, including NRIs and foreigners. Except for government deductors, it is mandatory for all other deductors to mention their PAN in the form.
Kumar said “the new forms are more comprehensive and require payers to report not only those cases where TDS is deducted, but also cases where TDS is not deducted for any reason. Separate codes have been provided to cover different situations of deduction of TDS at lower rate/ non-deduction of TDS.”
The revised forms and rules also seek to incorporate reporting for new sections of TDS inserted in the Income Tax Act, such as Section 194N for cash withdrawals, Section 197A permitting non-deduction of TDS in various situations, among others.
In the 2019-20 budget, the government had introduced a TDS levy of 2 per cent on cash withdrawals of more than Rs 1 crore from a bank account in one financial year to discourage business payments in cash.
India changes digital tax form to include new levy on foreign e-commerce
Delhi : The income-tax department has introduced changes to the form used to pay equalisation levy, to include the option of paying up the new 2% levy on digital transactions conducted in India by foreign e-commerce companies. The new levy was introduced in the Union Budget and was made effective from April 1, with the first instalment payment due on July 7. The IT department has amended the challan ITNS 285 – which is used to pay the levy – through an online mechanism. The changes now include ‘e-commerce operator for e-commerce supply or services’ under type of deductor category, and permanent account number of PAN of the deductor or the e-commerce company has been sought. Importantly, the modified challan provides for ‘Outside India’ option while seeking the address details of the payee, enabling foreign companies to key in details and make the payment due.
GST regime may undergo 2 major reforms this year
Delhi : The Goods and Services Tax (GST) regime is expected to see two major reforms in its fourth year–rationalisation of tax rates based on prudence rather than political considerations, and further easing of compliance–people aware of the matter said. The people said three-slab GST rates instead of four could be considered–8%, 18%, and 28% in place of current slabs of 5%, 12%, 18%, and 28%. They said the GST Council is also considering correcting duty distortions for sectors like textile, furniture, and fertiliser, where taxes on inputs are more than the finished goods. “Both the reduction in tax slabs and correction of inverted duty structure would lead to both increase and decrease in tax rates of some items. As the economy is still recovering from nationwide lockdown due to the coronavirus pandemic, the council may take a decision on rate rationalisation at an appropriate time so that both businesses and consumers would not be adversely affected. Read more
Govt. to levy interest@1 % p.m. on delayed payments in Government e-marketplace
In order to improve the discipline and timeliness of payments to vendors, especially MSMEs, the government decided to levy a 1% interest per month on late payments for purchases made on the government e-marketplace (GeM). The charge of the interest shall be prorated for the period of delay. The amount collected shall be deposited in an account maintained by GeM. The levy of interest in delayed payment will be applicable for all procurements made from 01.10.2020.
Rationalisation, decriminalisation, digitsation: The three-pronged view to reduce MSME compliance burden
Delhi : Over 90 per cent of India’s enterprises are MSMEs. The nation’s 63 million MSME enterprises contribute approximately 28 per cent of the GDP, 45 per cent of manufacturing output and 40 per cent of exports. The sector engages over 111 million people which makes it the second biggest employer after agriculture. Globally, it is agreed that the growth of MSMEs is key to economic revival. It is often assumed that MSMEs do not have to worry about compliances. However, it could not be farther from the truth. The burden of compliance for MSMEs is disproportionately high while their resources are limited. They need to deal with 27 licenses, registrations, permissions and consent orders. Such enterprises can be pulled up by at least 20 different inspectors under various Acts. To meet these obligations they need to work with multiple consultants.Read more
SEBI extends time limit for filling FY 19-20 financials till 31 July 2020
In view of dealing with the hampered situation of businesses in this epidemic situation of COVID- 19, Securities Exchange Board of India (SEBI) decided to extend the time limit for filling financials of listed entities for F.Y. 19-20 upto 31 July 2020. Earlier, SEBI had given time to file the financials by 30 June 2020 vide circular dated 19 March 2020.
CBIC’s tweet: Late fee capped at Rs. 500 for each GSTR-3B from July, 2017-July, 2020; No Late Fee for Nil GSTR 3B
GSTN’s Tweet: Late fees paid for Feb-Jul 2020 in excess will be re-credited in due-Course
GSTN tweeted that any late fees which were paid in excess of limit mentioned in Notification 57/2020 shall be re-credited in due course.
CBIC introduces Electronic Communication of PDF based copies of Shipping Bills & E- Gate Pass for Exports Read More