TDS rates may be recast

The government is considering a proposal to streamline rates applicable for tax deducted at source (TDS).

This follows a recommendation from the income tax (I-T) department that TDS rates should be structured in three slabs of between one and five per cent for any stream of income.

TDS is final tax payable by an assessee receiving any income as salary, contract fee or dues. It is deducted by the taxpayer while paying the dues to the assessee.

At present, there are multiple tax rates for TDS starting from one per cent to over 30 per cent.

Also, some rates are specified in individual sections that deal with the tax treatment of a particular income and others are included in separate schedules, making TDS payments difficult to monitor.

Time and manpower are also wasted as a result of the multiplicity of rates, the I-T department has argued, so streamlining would make monitoring easier and less time-consuming.

TDS, however, has emerged as an important source of revenue, contributing almost 33 per cent to tax collections. To compensate for the revenue loss from streamlining rates, the I-T department has suggested bringing more income streams under the TDS ambit.

For instance, the department is considering bringing reinsurance commission received from insurance firms under the TDS umbrella, as also rental income paid for vessels of shipping companies that are chartered.

The latter, however, is subject to a Bombay High Court ruling that TDS was not applicable for ships, transport vehicles and freight or charter hire payments.

Source : Business Standard.

New Pension Scheme may get Tax benefits in the budget.

With the new pension system attracting lukewarm response from citizens, interim regulator PFRDA expressed hope that the Budget would provide tax exemption to individuals at the time of entry to encourage them to opt for the scheme.
However, the government might take some more time to provide tax benefits for those opting for NPS at the time of withdrawal, a senior Pension Fund Regulatory and Development Authority (PFRDA) official told PTI.

"Exit stage may take a longer time for examination, but at entry stage (of NPS) we expect to come in the next budget," he said. The regulator has sought tax exemption for individual subscribers at all stages of the pension scheme-- contributions, returns and withdrawal-- in line with other provident fund schemes.

However, there is no notification yet on entry-stage exemption, the official added.

PFRDA further said that the tax exemption issue at entry stage is under the active consideration of the government and expects the Budget to come out with some clarifications on the issue and that will give boost to the NPS.

The NPS was extended to all citizens from May one this year, but evoked lukewarm response with only 400 persons opening pension accounts so far.

"May be with the budget certain clarification will come on the nature of investment in this particular scheme. Once those clarifications come, probably we will get more subsriber joining us," he added.

While contribution, returns and withdrawals under Public Provident Fund (PPF), Employee Provident Fund (EPF) and General Provident Fund (GPF) are exempted from tax, in case of the New Pension System (NPS), these tax benefits are not provided to individual subscribers.

For organisations, tax is exempted at the entry and return stage.

Besides, the PFRDA has also asked the government to bear the cost of maintaining accounts of policy holders under the New Pension System, a move that will further encourage people to opt for the scheme.

Source : business Standard.

How to open the ITR V and what is the document open password ?

The ITR Vs generated by the systems are password protected now for increased security level for the benefit of the taxpayers.

Please note that you will receive your ITRV/ITR ACK PDF file in a zip format. Please note that the ITRV/ITR ACK PDF document is password protected to ensure it is accessed by the appropriate user. The password is a combination of the pan(in lower case) and the date of birth in the format ddmmyyyy. For example, 1) if the pan is AAAAA0000A and the date of birth is 10-Jan-2008, then the password will be aaaaa0000a10012008 Please note that you will need Adobe Acrobat reader to open the password protected PDF file.

ITR V s to be sent to Bangalore now. After transmitting your return data electronically, You will have to sent the signed copy of ITR V to Income Tax Department , CPC, Post Box No - 1, Electronic City Post Office. Bangalore - 560100, Karnataka within thirty days.

No Form ITR-V shall be received in any other office of the Income-tax Department or in any other manner.

Please remember to update your correct email id/phone no. etc because the Dept. is adopting modern technologies of communication and why not take advantages of that ?

The days of loitering on the corridors of the Income Tax offices are coming to an end soon.

Efiling for A.Y. 2009-10 enabled for ITR 1/2/3/4, ITR 'V' s to be submitted to Bangalore.

E-Filing for AY 2009-10 has been enabled for ITR-1, ITR-2, ITR-3, ITR-4 forms.

Please furnish the Form ITR-V to the Income-tax Department by mailing it to Income Tax Department , CPC, Post Box No - 1, Electronic City Post Office, Bangalore - 560100, Karnataka within thirty days after the date of transmitting the data electronically. No Form ITR-V shall be received in any other office of the Income-tax Department or in any other manner.


View the Dept. Circular.
Efiling for ITR-5, ITR-6, ITR-8 forms will be enabled shortly.