Advance tax collection for Q3 down 22%

Advance tax collections declined by over 22 per cent to Rs 42,600 crore in the third quarter of the current fiscal as compared to Rs 54,900 crore in the same period last fiscal, mainly on account of expected subdued performance by India Inc.

Advance tax is paid by companies, firms and individuals based on their income projections for the financial year. Companies and firms pay advance tax in four installments – June 15, September 15, December 15 and March 15.

Individuals pay in three installments – September 15, December 15 and March 15.

Overall advance tax collections were down by 2.6 per cent at Rs 1,13,000 crore till December in the current financial year as compared to Rs 1,16,000 crore in the corresponding period last fiscal.

Total direct tax collections were up 11.5 per cent at Rs 2,32,000 crore till December 24 of this fiscal from Rs 2,08,000 crore in the earlier year.

The direct tax collection was up by over 40 per cent in the corresponding period last year, indicating pressure on the tdirect ax collections due to the impact of the economic slowdown.

Corporate tax collections rose 15.3 per cent to Rs 1,50,000 crore from 1,30,000 crore.

Source : Business Standard.

Migration of PAN

An Overview

 When an assessee is moved from one place to another or his jurisdiction is transferred from one A.O. to another, his PAN is to be transferred to the new Assessing Officer. This process is named as ‘Migration of PAN’ in Income Tax term.

 It is the responsibility of the Commissioner holding jurisdiction of the PAN to transfer it to the new charge, either on request of the assessee or the new A.O.

 For Individual assessee, the new A.O.(Where PAN to be transferred) can make an online request to send the PAN under his jurisdiction. If the current A.O.(where the PAN belongs now) has no objection and he does not take any online activity within 10 days, the PAN will automatically be migrated to the new Assessing Officer.

 

As I have mentioned earlier, the above mentioned automated process is available for individual PAN only, PANs of other categories to be transferred only by the Commissioner holding previous jurisdiction.

 Difficulty in Migration of certain Corporate PAN

 It is noticed very often that the transferor CIT is not being able to migrate some specific Corporate PANs to any other charge. Whenever he proceeds to transfer out a particular PAN, a message appears “This PAN is being processed under DT 01 Suvida Scheme” and he can not initiate the process.

As in the very first year of mandatory efiling for corporate assesses, the returns were processed centrally in a ward for all returns under a particular range. The Designated Assessing Officer for this purpose had to process the return and then to transfer it to it’s parent jurisdiction. There are some PANs processed under DAO but not transferred out to Jurisdictional Assessing Officer. These PANs can not be migrated unless returned to parent jurisdiction. 

Laptop for Income Tax Officers, nothing for staff ??

Central Board of Direct Taxes has decided to award laptop to each and every officers of the Income Tax Dept. as incentive for achieving the target collection figure for the year 2006-07. 1% of extra collection over the target which amounts to Rs 195 Crores is being awarded as incentive. All officers of ITO and above will be getting laptop worth Rs 50,000 each. The distribution is expected to begin next week. The remaining amount is learnt to make office premises airconditioned {what supposed to be done by the Dept’s own fund} and to purchase/hire operational vehicles{which is normally used by the senior officers for their personal use}.

 

Surprisingly, the staff members are not getting anything till today. According to sources a portion of staff members may be given Rs 500/-per month to reimburse their mobile expenditure but no official communication is there. It seems that officers are only responsible for achieving the target. But the fact is this that the staff who work round the clock to help the Assessing Officers [A large number of those who can not properly turn on their computer also].

 

The promotee officers association[ITGOA] is silent on this discrimination though a number of their members, the A.O.s, P.S are denied from their part of incentive.

 

And more surprisingly the staff association [ITEF] is also not vocal about this injustice. They agitate in each and every issue of any discrimination but totally silent in this issue, probably for some vested interest.

 

The Dept. is on the way of fully computerization and it is the staff members who actually work on Departmental softwares who are not considered fit for getting the laptop. It is a pity that a large number of promotee officers who are in the fag end of their service and hardly know their own user id and password {which has been given to staff unofficially to work on his behalf} will be awarded with state of art laptop.

 

Hope the P.M. who is also in charge of Finance Ministry now will intervene and take necessary judicious action.

Please post your comment on this issue.

Central Govt. Employees may go to indefinite strike

The National Executive of the Confederation met on 13.12.08 as per the notice issued.  The meeting was presided over by Com. S.K.Vyas.  The meeting reviewed the implementation of the decision taken at the meeting held at New Delhi on 26^th August, 2008.  Taking into account that most of the affiliates have endorsed the decision taken to organize an indefinite strike action in pursuance of the 20 point charter of demands.

Charter of demand

Part I. 6^th CPC related issues

 

1.         Grant Rs 10000 as minimum wage as per 15 ILC Norms.

 

2.         Grant minimum fitment benefit of 2.625 times of pre-revised basic pay to bring about uniform rise of 40% in emoluments and raise grade pay to 50% of the maximum of the pre-revised scales in respect of PB 1,2 & 3 as has been done in the case of PB 4.

 

3.         No abolition of Gr.D. Posts and functions. Lift ban on recruitment, fill up all vacant posts and scrap screening Committee.

4.         Grant 10% of pay+ Grade pay as minimum benefit on promotion or financial up gradation.

 

5.         Fix the date of effect of all allowances as 1.1.2006.

 

6.         No performance related pay or bonus scheme

 

7.         Revise the Transport and daily allowances as demanded by the staff side JCM National Council.

 

8.         Remove the condition of 6 months for applying the uniform date of Ist July as increment dates.

 

9 .        ACP to be on hierarchical system obtaining in each department.

 

10.        Retain and improve CGHS and make insurance scheme optional

.

11.        Implement flexitime working hours for women/disabled employees as recommended by the 6 CPC.

 

12.        Direct all the Departmental Heads to settle 6^thCPC related department specific demands/problems within a stipulated time and remove clause (iv) of OM No.13019/2/2008-Estt.(L) dated 18^th Nov. 2008 on Child Care Leave.

 

13.        Grant civil servant status and Pension to 'Gramin Dak-Sevaks.'

 

14.         No reduction in the commutation value and restoration of full pension after 12 years.

 

15.        Compute the pension entitlement on the basis of notional pay as on 1.1.1996

Part II

Demands pending settlement for long in the National Council JCM

1.   No outsourcing or contractorisation  of Govt. functions.

 

2. Grant statutory defined pension scheme to the employees recruited after 1.1.2004 and  withdraw the PFRDA Bill from Parliament.

 

3. Implement the Board of Arbitration Awards.

 

4.Remove the arbitrary 5% ceiling and 3 years condition on compassionate appointment and withdraw court cases and absorb all waitlisted RRR candidates.

 

5. Implement the revision of bonus ceiling @ 3500/- in the case of  all personnel employed by the Government including casual/contingent and daily rated workers and Grameen Dak Sewaks. Replace adhoc bonus  with the PLB and remove the 60 days ceiling.

Departmental demands:

1.         Place the non-metric Group D Staff in PB I with grade pay of Rs 1800/- as per 6CPC recommendations within three months.

2.         Place the Inspectors, AOs Gr III and Private Secretaries who were in the pre revised pay scale of Rs. 6500-10500 in the grade pay of Rs. 4600/- as per the notification of the Government vide Clause (v) of Section I of Part B dated 29.8.2009.

3.         Integrate the excess staff car drivers in the mainstream cadres depending upon their     educational qualification.

4.         Grant grade pay of Rs 2000/- to LDCs on par with the Notice Servers.

5.         Place all Tax Assistants and Steno Gr.III with requisite qualification in PB 2 with grade pay of Rs 4200/- immediately and others on completion of residency period of three years.

6.         Grant Grade pay of Rs 4600/- to Office Superintendents.

7.         Grant grade pay of Rs 4800/- to Inspectors, Administrative Officers and PSs.

8.         Place Income-tax Officers in PB 3 with grade Pay of Rs 5400/-.

9..        Restructure the Cadre of Administrative Officers as suggested by the JCA.

10.        Accord notional effect of pay revision to Inspectors and ITOs from 1.1.1996.

 

 

 The indefinite strike will commence from 20^th January, 2009.

Source : CONFEDERATION OF CENTRAL GOVERNMENT EMPLOYEES AND WORKERS

Cadre Review and Restructuring of Income tax Department

Cadre Review and Restructuring of Income tax Department In light of the DoPT, Government of India, decisions pursuant to the 6th Central Pay Commission recommendation, a Cadre Review exercise has been initiated for restructuring of Income tax Department to enable and equip the Department to meet challenges of today and tomorrow. A Cadre Review committee has been constituted in this regard. The report shall be submitted to CBDT within 3 months.

See here for Official Order.

Section 80C, tax planning and investments

Learning how to plan your taxes is a major part of choosing an investment strategy. In this article we will look at Section 80C, one of the most important provisions for investors in the tax laws.

What is Section 80C?

The government, in order to encourage savings, gives tax breaks to certain financial products as discussed in Section 80C of the Income Tax Act. These investments are often referred to as 80C investments.

Up to a limit of Rs 1 lakh, the money that you invest in these products is deductible which means that you don't have to pay income tax on it. Thus if you are in the 30 per cent tax bracket and you invest the maximum allowed you save Rs 30,000 in taxes.

There are a wide range of investments you can make to claim the Section 80C benefit. To keep things simple we will focus on two categories: Small savings schemes and ELSS (equity linked savings schemes). Other 80C products include your provident fund, the repayment of principal on your home loan and your life insurance premium.

Small savings schemes

These include the public provident fund (PPF) and National Savings Certificate (NSC). They offer a return of around 8 to 8.5 per cent which is quite low compared to typical returns in equity products. Furthermore, there is a relatively long lock-in period, 15 years for the PPF and 6 years for the NSC. Their main advantage is that they offer a guaranteed return unlike equity-based products.

Equity linked savings schemes

These are basically mutual funds which are specially created to provide tax benefits. As with regular mutual funds there is no guaranteed return and you can lose money in a period of falling stock prices as has happened in the first half of 2008. However, ELSS usually provides a higher return than small savings schemes and also a lower lock-in period of three years.

Examples of ELSS include Franklin India Taxshield and HDFC Taxsaver. More you will find in our other blog bestmutualfundindia.blogspot.com. As with regular mutual funds, these schemes pursue a range of investment strategies: For instance, some may focus on large cap stocks while others may focus on small and mid cap stocks. It makes sense to invest in more than one scheme to diversify some of your risk.

Making a choice

How do you decide to allocate your Rs 1 lakh 80C limit? This will depend on your other financial decisions; for example whether you have taken a home loan or purchased life insurance. As to the decision between small savings schemes and ELSS two of the most important factors are your attitude to risk and inflation.

As recent months have shown so clearly, stock markets are a lot riskier than small savings schemes. However, the flip side is that riskier investments like stocks offer a higher rate of return particularly over the long run. From the perspective of a young investor who may not need most of her/his investment money till retirement it probably makes sense to tilt towards riskier assets.

The other important consideration when evaluating returns is to adjust for inflation.

In other words, if your investment generates a return of 8 per cent and inflation is 7 per cent, then your inflation-adjusted return is only one per cent. When inflation moves into double digits you are actually making a negative inflation-adjusted return, as is happening currently. This is a fundamental problem with any investment product that offers a fixed return at a time of high and rising inflation.

By contrast stocks are a better hedge against inflation especially in the long run. Though inflation increases the costs of firms it also allows them to charge a higher price to their customers thereby protecting profits to some extent. This in turn means that stock prices and equity-based products can offer better protection from inflation over a number of years though not necessarily in the short run.

What about the element of timing when it comes to equity schemes? For instance, stocks have clearly taken a pounding in the last six months. However this doesn't necessarily mean it's a bad time to invest in stocks; valuations in some companies look quite attractive now and over a three-year horizon you could see decent returns.

From the point of view of the average investor it's probably best to take timing out of the picture by following a systematic investment plan which means you invest a fixed amount every month.

Small savings schemes and ELSS each have their advantages and disadvantages. Based on your investment strategy and particularly your attitude towards risk you have to choose how much to invest in them as part of your Section 80C investments.

Latest news about enhanced Grade Pay to Inspectors and some other posts.

In the matter of assigning higher Grade Pay to Inspectors etc. the following development has take place  :

a)         orders to cover ADI(OL) have already been issued

b)         the case of A.O and P.S being common category has been delinked

and is being dealt with such categories in other departments and it will

be settled as and when DOPT takes a final decision in the matter.

c)                  In this case of Inspectors, the Deptt. of expenditure has raised certain

queries over the functions of the feeder cadres and the same is being

replied. The Board has strongly supported the case of Inspectors.

In respect of the three awards, the Board has already taken up the matter with the DOPT for holding a formal meeting to finally clinch the issue.

 The minutes of the meeting between CBDT and staff side indicating that mobile phone facilities would be provided to all employees connected with operational work has been issued.

Source : Income Tax Employees Federation.

Upgradation in computerization in Income Tax Dept.

Income Tax dept is in the job of massive upgradation. It has decided to consolidate it’s distributed databases in different locations into a central database. The central database is located at New Delhi. This will make it’s day to day activities simpler. The assesses will also be benefited like migration of PAN from one centre to another will be easier in the new system. The process of consolidation is already on and being carried on a phase by phase manner. More than half of the centres has already been consolidated and the whole exercise is likely to be completed by January next year.

 

They have also taken a significant step in networking. All Income Tax offices in the country is now going to be ON Line. The IT people will assess the returns with it’s Departmental software all over the country. M/s Bharti Airtel has been entrusted with the network expansion. The Dept has switched over from the state owned BSNL to Airtwl for this purpose. They will provide State of Art technology with a back up line in each location for uninterrupted service. Leased lines and VSAT technology for remote locations are being used for this purpose.

 

The Dept software for assessment – AST is also being upgraded to cope with the new envioronment. This exercise is being looked after by TCS. Greater security has been introduced in the system by providing RSA secure token to each user to prevent any unauthorized access to the sensitive data of the database.

 

Te whole system upgradation including supply of hardware is being provided by IBM. They will also manage the troubleshooting of the system in no time to enable the taxmen to focus on their job.