eReturn Intermediary

Overview

Income Tax Department (ITD) has launched a new scheme for improving interface with the taxpayers. This scheme titled "Electronic Furnishing of Return of Income Scheme, 2004" enables authorized intermediaries to electronically file Income Tax returns on behalf of the taxpayers. This scheme is available to any taxpayer who is assessed or assessable to tax at any of the 60 cities specified by ITD.

Under this scheme an eligible person, at his option, may furnish his return of income which he is required to furnish under sub-section (1) of section 139 of the Act for the assessment year 2004-05 and any subsequent year, through the above-mentioned authorized intermediaries.

These entities that are authorized to file Income Tax returns in electronic form on behalf of taxpayers are called e-Return Intermediaries. e-Return Intermediaries are appointed by ITD.

NSDL has been appointed as the Registrar for processing applications for registration as e-Return Intermediary by eligible entities.

NSDL has setup a web-based facility for online registration of e-Return Intermediaries.

The entities desirous of acting as e-Return Intermediaries may determine their eligibility and ensure that they have met the pre-requisites required for submitting the application. The eligibility criteria and pre-requisites are prescribed by ITD.

Eligible Entities

1. A registered company or a statutory body being an employer which:
   
   
   • has a valid Tax Deduction Account Number (TAN);
   • has at least 100 employees having taxable income as per the last return of tax deducted at source furnished by it;
   • has furnished the return of tax deducted at source within the time prescribed under the Act for the last three years.
   
   
   
2. A firm of Chartered Accountants which:
   
   
   • has, for at least last three years, been in practice in the matters relating to direct taxes.
   • has returned total income of two lakh rupees or more in each of the last two years.
   
   
   
3. A firm of Advocates which:
   
   
   • has, for at least last three years, been in practice in the matters relating to direct taxes
   • has returned total income of two lakh rupees or more in each of the last two years.
   
   
   
4. A Chartered Accountant who;
   
   
   • has, for at least ten years, been in practice in the matters relating to direct taxes;
   • has returned total income of two lakh rupees or more in each of the last two years.
   
   
   
5. An Advocate who:
   
   
   • has, for at least ten years, been in practice in the matters relating to direct taxes;
   • has returned total income of two lakh rupees or more in each of the last two years.
   
   
   
6. A registered company / bank which:
   
   
   • has a net worth of five crore rupees or more
   • is engaged in the business of providing financial services during the last five years

   Pre-requisite

   
   
7. The entity must have Digital Signature Certificate (Class II or Class III) from any of the licensed Certifying Authorities specified by NSDL (currently TCS, IDRBT, SafeScrypt, MTNL and nCode) for the purpose of digitally signing the application and the returns uploaded online.
   
   The digital certificate must be in the name of the applicant. If the digital certificate is in the name of an employee / partner of the applicant, then an authorisation letter by the applicant should be provided on the letterhead of the applicant to NSDL.
   
   
8. Hardware
   
   
   • Intel Pentium IV or above
   • 256 MB RAM
   • UPS power backup for minimum 30 minutes
   • A screen resolution of 800 x 600 pixels and display of 256 colours
   • CD writer/ other backup devices like DAT drive
   • 20 GB free hard disc space exclusive for ITD
   
   
9. Software Requirements
   
   
   • Windows 98 or Windows NT 4.0 Server/ Workstation or Windows 2000
   • Professional/ Server/ Advanced Server or Windows XP
   • Anti-virus (Macfee or Symantec)
   • Internet Explorer 6.0 or above/ Netscape 5.0 or above
   
   
10. Internet Connectivity
    
    
    • Dialup connection 56.6 kbps or above/ ISDN/ Leased Line
    
    
11. The system used to log-on to the computer system of the ITD:
    
    
    • should have no resident/ running programs (other than what is allowed by ITD) ;
    • should have in place security procedure to ensure that there is no misuse.
    
    
12. The entity should have necessary archival, retrieval and security policy for the e-returns that are filed through him.
    
    
13. The entity should submit a due diligence certificate from a certified ISA or CISA professional in the prescribed format that it has the necessary computing infrastructure.
    
    
14. The entity or its Principal / responsible officers, must not have been convicted for any professional misconduct, fraud, embezzlement or any criminal offence by any court in India or by any professional body, as the case may be.
    

Registration - Fee

Particulars Amount (Rs.) Interest Free Security Deposit *(Refundable) 25,000/- Application processing Fee # (Non-Refundable) 2,000/- Correction/ Modification Processing Fee # (Non-Refundable) 500/- Renewal Fee # (Non-Refundable) 2,000/-

*Interest Free Security Deposit will be refunded if the application is rejected or if a registered e-Return Intermediary surrenders its registration or allows the registration to lapse.
# Service Tax will be applicable (at present it is 12.24%).

Notes:

1. The correction / modification facility is provided to the e-Return Intermediaries to correct/ modify any details submitted in the application after it has already been submitted to NSDL.
2. Registration is valid for two years. The renewal will be effective from first of April. In case the initial application has been submitted between April and September, for the purpose of renewal it will be assumed that the intermediary was registered for the whole of that financial year. If the application has been submitted between October and March, for the purpose of renewal it will be assumed that the intermediary was registered from the next financial year.

Registration - Procedure

1. An eligible entity shall register online with NSDL at www.tin-nsdl.com by filling up the Registration Form as per the guidelines provided. Physical applications shall not be entertained.
   
   
2. On confirmation of the application an acknowledgment screen containing a unique 15-digit acknowledgment number shall be displayed.
   
   
3. The applicant shall save and print this acknowledgment. The duly signed acknowledgment along-with proof for fulfillment of eligibility criteria, due diligence certificate and requisite payment (application fee plus security deposit) should be sent to NSDL.
   
   
4. Payment can be made either by Cheque or Demand Draft in favour of 'NSDL - ERI' for Rs.27,245/- [interest free security deposit Rs.25,000/- plus application fee Rs.2,245/- (inclusive of service tax currently 12.24%)]. Demand Draft shall be payable at MUMBAI. Applicants making payment by cheque shall deposit a local cheque (drawn on any bank) with any HDFC Bank branch across the country (except Dahej). The cheque should be deposited in the account number '5422320001766'. Name of the applicant and acknowledgment number should be mentioned on the reverse of the Cheque / Demand Draft. List of HDFC Bank Branches
   
   
5. The above-mentioned documents should be sent to NSDL at 'e-Return Intermediary Cell, National Securities Depository Limited, Trade World, 'A' Wing, 4th Floor, Kamala Mills Compound, Senapati Bapat Marg, Lower Parel (W), Mumbai - 400013'.
   
   
6. Superscribe the envelope with 'APPLICATION FOR e-RETURN INTERMEDIARY - ACKNOWLEDGMENT NUMBER' (e.g. 'APPLICATION FOR e-RETURN INTERMEDIARY - 880010100000011').
   
   
7. Acknowledgment along with requisite documents and payment should reach NSDL within 15 days from the date of online application.
   
   
8. On receipt of requisite documents and realisation of payment NSDL will assign a user-id and password. NSDL will also intimate a URL provided to access the ITD web-site specified for upload of data in prescribed format (schema) as provided in e-Filing Schema Developer's Guide . The user-id & password along-with the URL will be intimated by email at the email address provided in the application form.
   
   
9. On receipt of the user-id and password the applicant may log-in to the ITD site and conduct the data transmission test as directed in the ITD site.
   
   
10. On successful completion of this test, ITD will enable the applicant for filing of e-Returns as per the scheme.
    
    
11. For this purpose ITD will provide a unique e-Return Intermediary Identification Number (ERIIN) and password to the applicant.
    
    
12. Status of application will be intimated by e-mail at the e-mail id provided in the application form.
    
    
13. If the application is rejected, NSDL shall refund the security deposit retaining the application processing fee.
    
    
14. For any future correspondence with NSDL the applicant should quote the user-id and password assigned by NSDL.
    

Role & Responsibility

The e-return intermediary shall:

1. ensure that the assessee is an eligible person under this scheme;
2. ensure that the assessee has quoted a correct and valid permanent account number;
3. ensure that the particulars of advance tax, self assessment tax and tax deducted at source are in accordance with the documents enclosed;
4. ensure that the paper return of income has been properly filled-in and duly verified by the assessee, and the enclosures required to be filed with the return of income are enclosed;
5. ensure accuracy of the data entry while transcribing the return of income and during its transmission;
6. ensure that the electronic portion of the return of income is transmitted on or before the due date for filing the return of income;
7. ensure that the paper return is filed with the Assessing Officer having jurisdiction over the concerned assessee;
8. retain for a period of one year from the end of the relevant assessment year the electronic data of the return of income and the information relating to the provisional receipts issued in respect of the returns filed through it;
9. provide to the assessee a paper copy of the e-return submitted by it and the acknowledgement receipt of paper return filed by e-Return Intermediary to the Assessing Officer;
10. maintain confidentiality of the information that comes to its possession during the course of implementation of this scheme and shall not part with any such information to anyone, except with the prior written permission of the assessee or the assessing officer;
11. ensure that all his employees, agents, franchisees, etc., adhere to the provisions of this scheme;
12. promptly inform the Registrar of any change in the particulars given in the application filed by it for registration;
13. abide by the instructions issued by the e-Return Administrator (ITD), from time to time, for proper implementation of this scheme.

Inconsistency in eTDS return

INCONSISTENCIES IN ETDS RETURNS

INCONSISTENCY IN QTRLY ETDS/ETCS STATEMENT

Directrote General of Income tax(systems) is serving letters regarding inconsistency in the quarterly etds and etcs returns submiited by assessees.Formats of Table showing inconsistencies is given ABOVE.Wording of the letter issued nowhere suggests that you have to file a correction/revise ETDS/ETCS return but we should file,as PAN ledger of the deductees from whom we have deducted the tax will not be completed unless correct PAN is not given in etds return,and tax credit to deductee may be denied .So to avoid such thing and to create a transparent and hassle free tax system we should file correction return and also suggest others to do so.


HOW MATCHING IS DONE

When ever tds/tcs deposited by challan in bank, bank will issue a CIN (challan identification No) and upload the following data to the data base of Tin(tax information network) nsdl .


1-bank bsr code
2- CIN
3- date
4- amount detail(basic,surcharge,ecess,hsc,interest etc)
5- assessment year
6- company /non company nature
7- tax nature tcs/tds
8-tan of deductor
9-section code under which amount has been deposited

when we file ETDS/ETCS RETURN than department will reconsile the data relating to challan submiited by bank and data submiited by us through etds return.If Challan identification Number (CIN),amount ,TAN etc. not matched with details given by us through ETDS return & details submitted by bank than diff will be shown as per coloumn "I" TO 'L" in above excel picture.Deductee's PAN will also verified /reconsiled on the basic of PAN in the ITD database. If PAN not matched with itd database than 'PAN not matched' will be shown in coloumn' E' in excel picture shown above.In coloumn' f' PAN not submitted in original return will be shown .


WHAT TO DO NOW


Now we would like to know that which challan is not matched, and against which deductee wrong pan is given.In deptt letter only no's of challan not matched and no's f wrong pan given in the return is shown. so to get the detail we have to check qtrly return status from tin-nsdl web site
BY clicking on the link following screen will appear(right click on the link and select open in new window)

fill your TAN and provisional receipt no (PRN) and click view status
(please ensure that caps lock is on while entering Tan)
By clicking the view status follwing screen will be appear


in this screen a link on no of challan is given in blue colour by clicking this next scrren will appear as follows.


In this window staus of every challan for a particular PRN is shown date wise whether it is booked or not.if booked status is shown than every thing is ok as far as challan is concerned.do not worry about status" match pending" also, as process is going on .but if status shown as "not matched" than detailed process given in cin based view can be checked.In screen given above there are two links one is given in "count of deductees "and second "pan not in ITD database".if we click on coloumn under "count of deductee" than follwing screen will appear.



in this screen you can check deductees detail one by one through entering Pan And deducted amount.Or press back to challan status and click link in coloumn "pan not in itd data base".
then following screen will appear.




In this screen deductee sr no in filed return and wrong pan will be shown as above.No/invalid pan can be detected from original return .(This represent no's of deductees against which we have entereted "PANNOTAVBL",PANAPPLIED,PANINVALID')THIS detail is also genrated while creating FUV file in html format.

once we noted down the incorrect pan/pan not given deductees detail as well as challan not matched detail than we have to file a revise return.revise return software are available in the market ,in fact it may be part of your present etds software.if not it can be downloaded fron tin nsdl website under download section.

The above facilty can be also be availed by deuctees if they have not registered for pan login and if they have provisional receipt no's (PRN) (AS per new form 16,16a this detail should be given to deductee)



Preventive measures

please check do and Donts while tax deposite article given below. moreover following two point should be keep in mind.


1.before filling every qtrly return verify from tin wib site whether all the challans you have deposited has been correctly uploaded by the bank against your TAN .if not than please enqire from the bank branch.


Tan holder can check tax deposit status by two ways
1. CIN BASED VIEW
2. TAN BASED VIEW


CIN BASED VIEW
BY clicking on cin based view follwing screen will appear

In this window fill bsr code of collection branch,date of deposite,challan serial no given by the bank ,amount you will get the datail of tan and section under which amount has been deposited,this facility can be used after one week from depositing the challan.if "no recods found for the above query" message displayed then please re confirm the data you have entered even then no item displayed than contact the bank branch in which tax has been deposited to correct the data .

TAN BASED VIEW
If tan bsed view is selected than follwing scrren will appear

In this screen TAN and period of data required will be selected and after clicking submit, detail will appear .detail will be shown without amount .fill the respective amount of challan and matched cases will appear in next screen.
by both this methods you(tan Holder) can check status of tax deposit.
2. Collect PAN of deductee at the same time of tax deduction.Pan may also be verfied from the ITD website . DO not fill "PANINVALID,PANNOTAVBL,PANAPPLIED" against pan of the deductee in haste as it will only increase your work at later stage in shape of filing of correction return.

Provisions of Income-tax for F.Y.2007-08 vis-à-vis A.Y.2008-09.

1. Rates of tax for Individual, Resident of India (below age of 65 years), HUF, AOP/BOI,AJP

Where total income does not exceed Rs.1,10,000	NIL
Where total income exceeds Rs.1,10,000 but does not exceed Rs.1,50,000	10% of the amount by which the total income exceeds Rs.1,10,000;
Where total income exceeds Rs.1,50,000 but does not exceed Rs.2,50,000	Rs.4,000 + 20% of the amount by which the total income exceeds Rs.1,50,000;
Where the total income exceeds Rs.2,50,000	Rs.24,000 + 30% of the amount by which the total income exceeds Rs.2,50,000;

2. Rates of tax for Individual woman, Resident of India (below age of 65 years)

Where total income does not exceed Rs.1,45,000	NIL
Where total income exceeds Rs.1,45,000 but does not exceed Rs.1,50,000	10% of the amount by which the total income exceeds Rs.1,45,000;
Where total income exceeds Rs.1,50,000 but does not exceed Rs.2,50,000	Rs.500 + 20% of the amount by which the total income exceeds Rs.1,50,000;
Where the total income exceeds Rs.2,50,000	Rs.20,500 + 30% of the amount by which the total income exceeds Rs.2,50,000;

3. Rates of tax for Individual, Resident of India (who is of 65 years age)

Where total income does not exceed Rs.1,95,000	NIL
Where total income exceeds Rs.1,95,000 but does not exceed Rs.2,50,000	20% of the amount by which the total income exceeds Rs.1,95,000;
Where the total income exceeds Rs.2,50,000	Rs.11,000 + 30% of the amount by which the total income exceeds Rs.2,50,000;

Surcharge :

(i) for Individual, HUF, AOP&BOI : (if Total income exceeds Rs.10 lakh be reduced by amount of rebate of I.T.calculated under Chap.VIII-A,I.T.so reduced be increased by Surcharge)

On the amount of income-tax Provided that the total amount payable as I.T. and S.C. on such income shall not exceed the total amount payable as I.T. on a total income of Rs.10 lacs by more than the amount of income that exceeds Rs.10 lakh.

10%

(ii) for A.J.P : 10%

Double Bonanza for Income Tax Payers

The Finance Minister has proposed to increase the basic exemption limit as well as realign income tax slabs with different tax brackets. Income Tax payers are among the biggest beneficiaries of the budget with some standing to add over Rs 45000/- to their annual savings.

Following table will show what amount exactly you are saving in the next Financial Year.

Annual MEN Women People

Income (below 65) (below 65) (above 65)

1,50,000 4,120 515 Not taxable

1,80,000 7,210 6,695 Not taxable

2,25,000 11,845 11,330 6,180

3,00,000 24,710 24,205 19,055

5,00,000 45,320 44,805 39,655

7,00,000 45,320 44,805 39,655

10,00,000 45,320 44,805 39,655

11,00,000 29,780 26,265 21,115

(Above Rs 10 lacs, the saving will be less because of the ten percent surcharge.)

F.M. said,“In fact, this (changing the tax slabs) will bring me more revenue”.

Economic theory says that by cutting tax rates, revenues actually increase as more people are eager to come clean on undeclared income and pay tax.

As per the hint of my previous post the Tax Rate is very moderate now for the Individual taxpayers.

Just read it out what exactly the F.M announced in his Budget proposal

"I recall the Budget Speech of 1997. I believe that boldness pays. I also believe that trust will beget trust, moderation will beget revenues and fairness will beget compliance. Income tax payers have made out a persuasive case for some relief. Accordingly, I propose to make some changes in the slabs for personal income tax. I propose to increase the threshold limit of exemption:

• in the case of all assesses, from Rs.110,000 to Rs.150,000, thus giving every assessee a relief at a minimum of Rs.4,000. Consequently, the four slabs and rates will be as follows:

Up to Rs.150,000 NIL

Rs.150,001 to Rs.300,000 10 per cent

Rs.300,001 to Rs.500,000 20 per cent

Rs.500,001 and above 30 per cent

• in the case of a woman assessee, from Rs.145,000 to Rs.180,000;

• in the case of a senior citizen, from Rs.195,000 to Rs.225,000.

I do not propose to make any change in the corporate income tax rates.

No change is proposed in the rate of surcharge.

I propose to add the Senior Citizens Savings Scheme 2004 and the Post Office Time Deposit Account to the basket of saving instruments under Section 80C of the Income Tax Act.

I propose to allow an additional deduction of Rs.15,000 under Section 80D to an individual who pays medical insurance premium for his/her parent or parents."