Income Tax Officers are getting Laptop.

It may not be very good news for the tax payers as a portion of their tax paid on their hard earned money is being drained as incentive to the IT officers. The Central Board of Direct Taxes has decided to award Laptop to each and every Officers starting from ITO and above. They said this money will be spent to improve the infrastructure of the department.

 

As per CBDT instruction, Rs 196 Crores{Approx} has been awarded as excess collection over target fixed in the F.Y. 2006-07. This is only one percent of the money in excess of the target achieved by the department.

 

You may rightly think, “Are the officers only responsible for the huge collection?”

CBDT was kind enough to offer a very small portion to the greater chunk of the lower employees. They offered a reimbursement of mobile bill of Rs 500 per month for 3 years for Group C staff and a handset and free life time connection to the Group D employees. But the Service Associations bluntly refused the proposal without being able to suggest any better alternative. In the meanwhile, an order to allot 15 handset per Range has come but not implemented from pressure of the Unions as only a few portion of employee may be benefited.   Since then the matter of incentive relating to Group C and D employees is jeopardized.

 

There is a burning question. If a Chief Commissioner and an Income Tax Officer has equal contribution achieving the excess collection and share equal incentive, why the same analogy be drawn between an ITO and a Gr C or Gr D employee? As per our day to day experience we can see that the maximum of workload is being carried by the ground line staff. Is it not the responsibility of the authority to see that their morals are not down?

 

If anything is to be given as incentive to boost up the morals, the amount should be equal. Let us see the role of the Service Associations in this matter. But they should get the message that anger is mounting between the lower level employees. 

Relief U/S 89(1) for Arrears of Salary

RELIEF U/S 89(1)

In case of relief when salary has been received in arrears or in advance:

Method of calculating the relief:

1. Calculate the tax payable on the total income, including the additional salary of the relevant previous year in which the same is received. (receipt basis).
2. Calculate the tax payable on the total income, excluding the additional salary of the relevant previous year in which the same is received. (receipt basis).
3. Find out the difference in tax between (1) and (2) as calculated above.
4. Compute the tax on the total income after excluding the additional salary in the previous year to which such salary relates. (accrual basis).
5. Compute the tax on the total income after including the additional salary in the previous year to which such salary relates. (accrual basis).
6. Find out the difference in tax between (4) and (5) as calculated above.
7. The excess of tax computed at (3) over the tax computed at (6) is the amount of relief admissible u/s 89(1). No relief is however admissible if the tax computed at (3) is less than the tax computed at (6). In such a case the assessee – employee need not apply for relief.

Procedure for filing TDS returns with insufficient deductee PAN

As per instructions issued by the Central Board of Direct Taxes (CBDT), it is
mandatory for deductors to file TDS/TCS statements with a threshold limit of
Permanent Account Number (PAN) of deductees. To facilitate deductors who face
problem in filing TDS returns because of insufficiency of PAN of the deductees and
also to accommodate the deductees who have intimated their PAN, the Income Tax
Department (ITD) has specified the following procedure for filing TDS/TCS returns:
• Deductors can file a return containing deductee records which meets the
specified threshold limit of PAN quoting, i.e., a deductor can file a return
containing deductee details who have provided valid PAN. It can
subsequently file a correction return with details of remaining deductees.
E.g. as below:
o Suppose a challan payment of Rs.1,00,000/- has been made for nonsalary
TDS against 100 deductees each with TDS of Rs.1,000/-. Under
the existing procedure the deductor will have to quote at least 85 PAN
failing which his return will be rejected.
o If there are only 50 deductees whose PAN is available and the
deductor attempts to file a return with details of 100 deductees with
PAN of only 50 deductees, the return will automatically be rejected at
present.
o However, if he files a return with challan amount of Rs. 1,00,000/- and
with details of 50 deductees with PAN, with deductee total of
Rs.50,000/-, the return will be accepted. It means the deductor can
furnish the details relating to such deductees whose PANs are
available.
o The deductor can later file correction returns with other details of
remaining deductees with the same challan details, i.e., the challan
amount should be the amount deposited (in this case Rs. 1,00,000/-).
o The return will be accepted so long as the TDS total of incremental
deductees is less than or equal to the balance of Rs.50,000/-.
************

Forgot to file your return ?

DUE DATE OF FILING OR RETURN

The due date of filing of Income Tax return for the Financial Year 2007-08 (Assessment Year 2008-09) for assessees other than corporate and those whose books of accounts are not liable to be audited u/s 44AB was 31^st July 2008. So the due dates of filing of return for the salaried persons are gone on the last day of July.

DID YOU MISS THE BUS?

No Problem. The “Due Date” is most commonly mistaken as “Last Date”. Return can easily be filed after the due date. The return can be filed at any time {before the assessment is made} before the end of one year from the end of relevant Assessment Year.

For instance, you may easily file your return for the F.Y. 2007-08 within 31^st March 2010. But it should be filed before the Assessment is made.

Consequence of Late Submission

1] The assessee is liable for penal interest u/s 234A.

2] A penalty of Rs 5000/- may be imposed if belated return is submitted after the end of Assessment year {For the Financial Year 2007-08 the cut of date is 31/03/2009 for this purpose}.

3] Certain losses can not be carried forward to the next years if the return is not submitted within the due date.

4] Certain deductions under Chapter VIA {Applicable mostly for companies} will not be available.

For your case who has already paid the taxes {By TDS/Advance Tax}/saved taxes by virtue of investments but forgot to file the return…

Do not worry. File your Income Tax return within 31^st March 2009 and there will be no problem. No consequences of late submission will be applicable for you. Penal interest u/s 234A can not be charged as the interest is calculated on tax due [Tax Payable –{TDS + Advance Tax}]. In your case there is nothing due at your part and the taxmen can not charge anything. No Penalty can be leviable as it is chargable only if the return is submitted after 31/03/2009 in this case {discussed earlier}. Other two cases are not common for an individual taxpayer. If only you had a Capital Loss, you will not be able to carry it forward for set off next year.

The rush is over in the Income Tax Offices.

Prepare your return of income and submit it there. You may be fully aware that Income Tax returns are annexure less, nothing is to be attached [No Form 16, not even copy of last year’s acknowledgement]. You should retain your documents with you and submit only if the Assessing Officer wants them to verify in course of Assessment. Even if the counter clerk insists on it, bring it to the notice of higher officials.

You can easily file your return electronically also. If you are in a possession of a Digital Signature, there will be no need to visit the Income Tax offices for filing the return. Without Digital Signature, you can still file your return through the web, but it must be followed by a signed authentication from you.

{Details about efiling of return has been discussed in separate post in this blog}.

ePayment and efiling

ePayment has been made mandatory of companies and assessees whose accounts are liable to be audited u/s 44AB. All type of direct Tax payments including TDS has to to be paid through NetBanking w.e.f 01/04/2008.
However those assessees who do not have the facility of NetBanking may pay taxes electronically through the account of any other persons. CBDT has clarified the issue vide this circular.
For details please visit http://www.incometaxindia.gov.in/archive/CircularNo.5-21072008.pdf

STEPS FOR efiling

1. Visit the website www.incometaxindiaefiling.gov.in

2. Go to “Download” section.

3. Select the relevant utility (software) and download it.

4. “Excel” utilities are zipped. Unzip the file.

5. Set the security level of any excel file to ‘medium’ or ‘low’ to enable macros. (Tools-macro-Security and set medium or low)

6. Open the unzipped ‘excel’ file and click on ‘enable macro’ button.

7. Enter data in the Return Prep. Utility. (Green cells are meant for data entry. Red fields are mandatory. Do not use any cut/copy/paste option.)

8. After entering data validate each sheet and if found O.K., generate .xml file.( This file will be uploaded as e-return. )

9. Visit the site again and create user id and p/w if not created earlier.

10. Log in with user id and p/w, click on ‘Submit Return’.

11. Browse and select the .xml file, attach Digital Signature if any and click on ‘Upload’.

12. A message appears “The return has been successfully uploaded.” The ITR V will be dispatched by email to the registered mail address. It may also be obtained from My Account-My Return menu.

13. Print the ITR V ,and if it is uploaded without Digital Signature, get signed by the assessee and submit to the respective ward/circle within 15 days. If it is digitally signed, no need to submit anything to the Income Tax Dept.

It is mandatory for all corporate and firms(where audit u/s 44AB is required) to e-file their return of income for the A.Y. 2007-08 onwards.