Income Tax return Due date extended to 05.08.2016

Order under Section 119 of the Income-tax Act, 1961

NEW DELHI: The last date for filing income-tax returns has been extended to August 5. 

Tax returns for 2015-16 (assessment year 2016-17) were originally to be filed by July 31. But in view of the day-long strike at public sector banks, the deadline has been extended to August 5. 

On consideration of reports of Bank strike on 29th July, 2016 (Friday) and the 31st July, 2016 (Sunday), being a Bank-Holiday, in order to avoid any inconvenience to the taxpayers while making payment of taxes pertaining to returns of income for Assessment Year 2016-2017, which are required to be filed by 31st July, 2016 as per provisions of Section 139(1) of Income-tax Act, 1961, the Central Board of Direct Taxes, in exercise of powers conferred under section 119 of the Income-tax Act, 1961, hereby extends the ‘due-date’ for filing such returns of Income from 31st July, 2016 to 5th August, 2016, in case of taxpayers throughout India who are liable to file their Income-tax return by the said `due-date’

For Jammu and Kashmir, the deadline will be August 31 in view of the ongoing turmoil in the state. "In view of today's bank strike and disturbance in J&K, the due date of IT return filing is being extended," Revenue Secretary Hasmukh Adhia said in a tweet on Friday.

Income Tax, income tax due date, Income tax due date for A.Y 2016-17, Income tax return due date, income tax return, Income Tax Due Date Extended

Read more »

Gift Tax: All you want to know about Gift Tax

"The greatest gift that you can give to others is the gift of unconditional love and acceptance" - Brian Tracy. 

Having said that, let's accept that we all are equally pleased to receive worldly presents as well. And as we live in this materialistic world where gift exchanges are often in cash or kind, let us not forget about the taxman who keeps a close eye on all such transactions. 
While gifts from certain people or presents received on certain occasions are non-taxable, you will have to pay a cut to the taxman at other times. Here is what the Income Tax Act has to say on getting gifts. 

TAX-FREE PRESENTS 

Gifts received from certain specified relatives are not taxable. Here, according to the I-T Act, 'relatives' mean the spouse of the individual, siblings of self or spouse or parents, any lineal ascendant or descendant of the individual as well as the spouse and the spouses of all these persons. Also, if the gift is received by a Hindu Undivided Family (HUF), any member of the said family is regarded as a specified relative for the HUF. 

1. Gifts received on Marriage-Individuals receiving gifts on his / her marriage are not liable to pay tax on such gift whether received from relatives or non-relatives. However, the gifts received by the parents or other relatives of the individual getting married are not tax exempt. 

2. Inherited Gifts - Any gift received under a will or by way of inheritance, or in contemplation of death of the payer is not taxable in the hands of the recipient. 

3. Gifts from specified institutions: A gift received from a specified local authority would not be taxable. Similarly, a gift received from a duly registered specified trust/ institution (e.g. registered religious or charitable trust) or from any specified fund / foundation/university / hospital or medical institution (e.g. the Prime Minister's National Relief Fund, the National Foundation for Communal Harmony, etc.) is not taxable. 

THE TAXABLE PRESENTS

As per the I-T Act, cash or specified moveable property such as shares, securities, jewellery, paintings, sculptures, any work of art or immoveable property ( land, building or both) received by an individual or a HUF is considered taxable. 

1. Cash - If aggregate amount is equal to or less than Rs 50,000 then nothing is taxable. In case the value exceeds INR 50,000, the whole amount will be taxable. 

2. Immovable Property:

3. Moveable property - The taxability is same as above except fair market value (FMV) is replaced by stamp duty. The FMV is determined as per the prescribed valuation rules. 

GIFTS RECEIVED FROM EMPLOYER 

Gift, voucher or token received by an employee or member of his household on ceremonial occasion or otherwise from the employer, is not taxable provided the value thereof is less than Rs 5,000 during a financial year. The ceremonial occasion could be birthday, anniversary of employee, festivals, etc. 

If the value of such gift/ voucher/ token is Rs 5,000 or more, the full amount is treated as taxable salary in the hands of employee. Further, any gift received in cash or convertible in money (cash cheque) from employer shall be fully taxable income in the hands of the employee. 

INCOME EARNED FROM GIFTS - CLUBBING PROVISIONS 

An important point to note is that even though the gift received may not be taxed in the hands of receiving individual, in view of the abovementioned exceptions, the income subsequently earned from such gift might be taxable either in the hands of the individual gifting the item or the person receiving it. For instance, any income arising from the asset transferred by an individual to his/ her spouse other than for adequate consideration is taxable income. Such income is then clubbed in the hand .. 

The bottom line then, in the joy of giving and receiving, lies in not forgetting about the tax implications. Some caution is advised as the section on 'gifts' under the Income Tax Act is a tricky one. 

Source: ET.

Follow @studycafe1

Read more »

Change in Limit for Income Tax Advance Ruling

NOTIFICATION NO. 73/2014

Income-tax

Dated- 28^th day of November, 2014

S. O. (E). - In exercise of the powers conferred by sub-clause (iia) of clause (b) of section 245N of the Income-tax Act; 1961 (43 of 1961), the Central Government hereby specifies a resident, in relation to his tax liability arising out of one or more transactions valuing rupees one hundred crore or more in total which has been undertaken or proposed to be undertaken, being such class of persons, as applicant for the purposes of Chapter XIX-B of the said Act.

1.      This notification shall come into force on the date of its publication in the Official Gazette.

[F. No. 142/6/2014-TPL]

(Gaurav Kanaujia)

Director to the Government of India

Subscribe to Studycafe by Email

Read more »

No More Frivolous Or High-Pitched Assessments Allowed: CBDT To AOs

The CBDT has issued an Office Memorandum dated 07.11.2014 setting out 12 steps that have to taken by the department to ensure a “non-adversarial tax regime”. One of the important points made is that Assessing Officers must cease issuing “long and non-specific questionnaire” and making assessments without proper basis. It has been emphasized that each Range Head has to ensure that “frivolous additions or high-pitched assessments” are not made by the AOs. Important directives have also been given with regard to the withholding of refunds, recovery of demand, passing of remand orders and filing of appeals. At the end, the CBDT has warned that officers have to adhere to the instructions scrupulously and that non-adherence will be viewed seriously and disciplinary action initiated.

Subscribe to Studycafe by Email

Read more »

INCOME TAX OMBUDSMAN

INCOME TAX OMBUDSMAN

WAY TO SEEK REDRESSAL OF YOUR GRIEVANCES

Have you been in trouble to get your refund from the tax authorities? Or been harassed time and again for an income-tax scrutiny year after year? Is there a permanent account number you have been waiting for years? If yes, there’s a way to get your grievances resolved.

Income Tax Ombudsman:

An ombudsman is a government official charged with representing the interests of the public by investigating and addressing complaints reported by individual citizens. The government has appointed former I-T officials or officials from the Indian Revenue Service as income-tax ombudsman. These officers are independent of the jurisdiction of the income-tax department and hence, operate as an independent arbiter.

Objective of Tax Ombudsman:

The Ombudsman is governed by, and has to act within, the framework of the Income Tax Ombudsman Guidelines, 2006 (“Guidelines”). The Ombudsman is an independent body and comprises of former Income Tax officials or officials from the Indian Revenue Service. These officers have been empowered to settle grievances and take up matters to the highest authority, with the sole aim of resolving it. They act as an arbitrator and are independent of the jurisdiction of the income-tax department.

Grounds for filing Complaints to Ombudsman:

The ombudsman can help you resolve issues linked to delay of tax refunds, such as if your refund came without a cheque or refund voucher, delay in updation of tax demand registers due to which tax-assessee was harassed etc.  Illustrative list is as below:

ü  Delay or discrepancy in tax refunds.

ü  Allotment of PAN and issues of PAN Card

ü  Impolite behavior of tax officials.

ü  Interest waiver.

ü  Seizure of account books by department i.e. issues relating to release of books of accounts and asset after the completion of the proceedings.

ü  Scrutiny selection procedure and failure to communicate reasons thereof.

ü  Erroneous demand matters/assets attachments causing harassment to assessee.

ü  Cases related to interest waiver, rectification applications, appeal effects etc.

ü  Issues relating to allotment of Permanent Account Number.

ü  Non credit of tax paid, including tax deducted at source.

ü  Non-acknowledgement of letters or documents sent to the Department.

ü  Conduct of proceedings beyond working hours at the IT offices.

ü  Matters concerning circulars of Central Board of Direct Taxes about the Income Tax Administration.

ü  Other administrative matters that have been violated.

ü  For further details, please refer to clause 9 of the Guidelines.

Time limit for complaint to Ombudsman:

No complaint can be made:

     a)       12 months after the reply was received from the superior authority;

    b)       13 months after the representation was submitted to the superior authority but no reply was received.

Who can file a complaint?

The ombudsman’s doors are open to anyone facing a problem related to issues listed in clause 9 of the Guidelines but the Ombudsman will not take cognizance of the complaint if it has been the subject matter of:

     ·         An earlier settlement made by the Ombudsman

OR

     ·         An appeal, revision, reference or writ before any Income-tax authority or a court of law. 

How are complaints resolved?

The ombudsman mediates between the income-tax department and the tax-payer or tax assessee and seeks to settle the issue and pass a decision also called ‘award’, based on the income-tax rules and guidelines.

PROCESS TO ADDRESS GRIEVANCES THROUGH OMBUDSMAN

Step 1:-No direct complaint to Ombudsman:

Before filing a complaint to Ombudsman, one needs to write a letter to the Income Tax Officer superior than the one complained against and if: -

    Ø  Such authority rejects the complaint

    Ø  The complainant does not receive any reply within one month or

    Ø  The complainant is not satisfied with the reply given to him by such authority then

Complaint can be made to ombudsman within one year of receipt of reply or if no reply is received, within 13 months of submission of letter.

Step 2:-Submission of Documents and Details to Ombudsman

There is no set format for addressing the complaint to the ombudsman. However, your complaint must be in writing and should mention the following:

     ·         Your name, address and PAN

     ·         Facts and details about the grievance- date wise complaints filed, responses, and the time          gap involved etc.

     ·         Income-tax authority against who you are complaining

     ·         Copies of the letter of the first complain made to the income-tax authorities and its result.

     ·         Other documents such as relevant income proof supporting your claim and complaint.

     ·         The relief requested from the Ombudsman.

The application can be filed through personal submission / post / E-Mail. However, when you are sending an electronic complaint, you have to sign the same in the ombudsman’s office “at the earliest opportunity.” If, the complainant is represented by an authorized representative then, power of attorney to represent the complainant has to be filed before the Ombudsman. Three sets of the documents are required to be filed.

Step 3:-Resolving of Complaints

The Ombudsman acts as an intermediary between the Income Tax Department and the tax payer. It tries to resolve the issue by hastening the process. Ombudsman will try to solve the problem by making settlement between the Complainant and the concerned authorities. If the complaint is not settled by agreement, he shall pass an Award. The award mentioned above shall consist of 2 components:

     •         Directions to the concerned Income Tax Authority for performance of its obligations

   •         A token compensation amount not exceeding Rs 1000/- for the loss suffered by the complainant.

Decision of the Ombudsman:

All decisions taken by ombudsman would be in line with the prevailing tax laws and only if the submitted documents are deemed fit. The decision of the Ombudsman thus has to be abided by the Income Tax Department and the tax payer.

Once the Ombudsman decision is passed, tax payers need to make known their acceptance of the “full and final settlement” within 15 days of receiving the letter stating the ombudsman’s decision, or as per the time frame mentioned in the letter. If one fails to do so, the “award proposed shall lapse and be of no effect”.

OMBUDSMAN OFFICES

Currently there are 12 offices for ombudsman, located in Mumbai, Pune, New Delhi, Ahemdabad, Chennai, Bangalore, Kolkata, Hyderabad, Kanpur, Chandigarh, Bhopal and Kochi. To locate your nearest Ombudsman click on the link given below:

http://www.incometaxindiapr.gov.in/incometaxindiacr/home.jsp?p1=ombudsman_contacts

Complaints addressed to the Ombudsman could be sent to the nearest Ombudsman Office. For Rajasthan, the office for Ombudsman grievances is Ahemdabad, Address: Room No.104, 1^st Floor, Nature View Bldg, Ashram Road, Ahemdabad. Contact person is Dr. Kalyan Chaudhary, Income Tax Ombudsman. Contact Details: Ph.No. 079-26581495, Fax: 26581376, Email: ahmd-itombuds .

Your Complaint Helps Other:

After you complain to the ombudsman, not only will it benefit you, but also benefit others. The ombudsman is asked to make a note of the problem areas for taxpayers, which is then sent to the Central Board of Direct Taxes (CBDT) and the Union Finance Ministry. The information is periodically submitted to the Central Board of Direct Taxes and the Finance Ministry. Ombudsman also reports to the CBDT about the officials found to have defaulted in their regular duties.

Thus, approaching the ombudsman can help the government and authorities better our tax process.

Disclaimer:

The information contained in this write up is to provide a general guidance to the intended user. The information should not be used as a substitute for specific consultations. I recommend that professional advice is sought before taking any action on specific issues.

Read more »

CBDT Orders Transferring And Posting Of Commissioners of Income-tax

Vide Order No. 195 of 2014 dated 03.11.2014, the CBDT has ordered the transfer and posting of several officers in the grade of Commissioner of Income Tax with immediate effect and until further orders. Vide Order No. 196 of 2014 dated 03.11.2014, the CBDT has ordered local changes in the grade of Commissioner of Income-tax.

To Download the Order click here

Read more »

Tax Audit Report- More Compliances needed Key Changes / Amendment in Form 3CD

Introduction

CBDT has vide notification no. 33/2014 dated 25.07.2014 revised the format of Tax Audit Report (referred as TAR) to be furnished under section 44AB of the Income tax Act 1961 with effect from 25.07.2014.

The revised report has added some new clauses and amended few existing clauses to increase/improve disclosure requirements. The new form requires tax auditor to furnish more and detailed information in the new form for tax audit report.

Changes:

Major changes have been made with a view to have more information and analysis in standard forms. Many details will have to be furnished in comprehensive, tabular and analytical forms.

Some changes are to incorporate new provisions or more provisions which are in force but were not covered in TAR. The style and pattern of signature has also been changed and more information is required about the person signing the report.

Effective date:

The amended forms shall come into force w.e.f. 25.07.2014. The existing Form No. 3CA, Form No. 3CB and Form No. 3CD have been substituted vide notification no. 33/2014 dated 25.07.2014 with immediate effect. CBDT has withdrawn old utility of form No. 3CD. Taxpayers and CAs are advised to await the release of the new schema and utility to submit in the newly notified aforementioned Forms and advised that any upload using the old Forms will not be valid even for previous AYs in view of the notification of CBDT. CBDT is expected to release new schema and updated utility for e-filing soon.

Key Changes/Amendments made in the Tax audit Report:

Some of major changes having impact of reporting requirements and more detailed working are as follows:

FORM 3CA:

1.     Now we have to mention the period for which profit & loss account/ Income and expenditure account has been prepared. This assumes importance if accounts are prepared for more than or less than 12 months.

2.     In the opinion part, now apart from mentioning that particulars in Form 3CD give a true and correct view we also have to mention our observations/ qualifications if any.

FORM 3CB:

Changes made are similar to that in Form 3CA as mentioned above.

FORM 3CD:

Now it has 41 clauses against 32 clauses prior to this notification. The key changes made in Form 3CD are addition of some new clauses thereby requiring more disclosures and doing away with certification by client/ auditee. Listed below are the all modifications/ additions made in Form 3CD.

To see the changes in the clauses click here

These forms have to be signed (with Seal) by a person eligible to sign the report as per the provisions of section 44AB of the Income Tax Act, 1961.

Further, “Annexure 1” to Form 3CD has been removed from reporting because some of information were found in audited accounts and also in the form of IT Return filed by assessee. Therefore, the omission of Annexure 1 as an annexure makes no impact on reporting requirement or collection of information.

Conclusion:

The attached modificaiton increases the responsibilities of the Chartered Accountants while performing the Tax Audit, as from now the Auditor has to ensure enhanced compliances than earlier. As per revised TAR forms, tax audit will a require lot of additional time for checking various aspects, collection of information not fully disclosed by client’s staff, elaborate checking is needed, method of cross verifications will have to be adopted, more responsibility has been casted upon tax auditors.

As disclosure requirements are also increased substantially, the auditor can no longer just rely on the certification received from the client, as the amendment requires specific disclosures to be made.

Disclaimer: The information contained in this write up is to provide a general guidance to the intended users. The information should not be used as a substitute for expert consultations. An author recommends that professional advice should be sought before taking any action on specific issues.

Download revised Form 3CA 3CB and 3CD 


Author of this article is Harsha Ramnani. She is practicing Chartered Accountant. She can be reached at harsha.ramnani01@gmail.com

Read more »

CBDT To AOs: Respect Taxpayer’s Time And Don’t Make Them Wait

The CBDT has issued an Office Memorandum dated 22.08.2014 in which it has pointed out that some AO’s issue notices to taxpayers/ witnesses/ representatives etc. indicating a standard time of appointment. Thus, many persons called for hearing etc on a day by an officer are given the same time for appearance and the persons are made to wait for their turn. It is pointed out that such actions, apart from causing avoidable inconvenience to the taxpayers/ witnesses/ representatives etc cause great embarrassment to the Government. All officers have been advised to strictly maintain the appointment schedule in spirit with the Citizen’s Charter, 2014 of the Department which specifically provides that the Department shall endeavour “to adhere to the schedule of appointments with taxpayers”. All Supervisory officers, i.e. the CCsIT, CsIT and the Addl. CsIT have been requested to ensure that officers reporting to them strictly comply with this instruction and avoid fixing multiple appointments at the same time. Instances of disregard to these instructions may be viewed seriously, it is added.

Read more »