Budget boost to New Pension Scheme !

Tax concessions announced by Finance Minister Pranab Mukherjee have given a boost to the new pension system (NPS) with the number of subscribers rising to over 1,100 against 300 prior to the Budget.

"There has been a quantum jump in the number of subscribers after the Budget announcement. The number subscribers has increased to more than 1,100 from 200-300 prior to the Budget," a PFRDA official said.

The official also said that some public sector enterprises have shown interest in joining the NPS, which was opened to all citizens from May 1 this year.

"One or two public sector entities have approached us and they want their corpus to be managed by the NPS. However, discussions are at the preliminary stages and it would take a month or so for some clarity on the issue," the official added.

Earlier, the Indian Banks' Association has shown interest in the NPS for new bank recruits. Though no concrete decision has been taken so far.

In the Budget tabled in Parliament, the government said that self-employed persons subscribing to the NPS would be subjected to tax only at the time of withdrawal. Other subscribers are already under this kind of tax treatment.

The official added that the NPS has mopped up about Rs 1.2 crore till date.

The Budget also proposed to exempt the income of the pension trust from income tax and also the donor of dividend to the trust from dividend distribution tax.

It also said pension trusts will not have to pay Securities Transaction Tax (STT) if they invest in the securities market.

It also said the interim pension regulator will get Rs 8 crore to run an advertising campaign to familiarise people about the scheme.

Source : The Hindu/PTI

I-T department needs 9,000 more people in five years: CBDT report

The Central Board of Direct Taxes (CBDT) says it is badly short-staffed. Conservative estimates by a recent report of the special CBDT committee, sent to the government, has recommended that the income tax (I-T) department needs to recruit at least 8,965 officials within the next five years for smooth functioning. Their annual cost: Rs 150 crore.

The 8,965 officials include an estimate for an extra 760 sanctioned personnel in the Indian Revenue Service (IRS).

Apart from this, the department would have to create 42 posts of Principal Chief Commissioner of Income Tax (Principal CCITs), 74 CCITs, 116 Senior CCITs and Deputy CITs. “This would have to been done through simultaneous abolition of posts in other grades,” said the report.

However, these are just conservative estimates. The actual requirement of skilled manpower is much more, if the restructuring is done on the basis of three models presented by the report.

The department would require 61,000 additional officers and staff in the tax department if recruitment is done on the bases of ‘Revenue Collection Approach’, over 50,000 people under the ‘Expected Tax Payers Approach’ and nearly 15,000 people under the ‘Workload Management Approach’.

Additional staff would also be required for intelligence and investigation.

However, to limit the cost burden on the state exchequer, the report suggested a conservative way by giving additional responsibilities and suitably upgrading posts in the higher supervisory grades. This also aims to address the existing anomaly in the IRS cadre, where no posts exist in the upper two grades of Higher Administrative Grade and Apex Scale.

The CBDT, Department of Revenue, Ministry of Finance, is the cadre controlling authority for IRS (Income Tax) officers. Ideally, the cadre structure of each Group-A central service should be reviewed once in every five years, but there have been only four such reviews of IRS officials in the past three decades.

“It is an irony that despite being the highest source of revenue generation for government, lack of manpower and stagnation has plagued the tax department. The cost of tax collection, at 49 paise for every Rs 100 tax, is the lowest in the world. And it is only because the department is shockingly low on manpower,” said a senior CBDT official.

The official also added that adequate manpower could help reduce the tax burden on citizens by scaling-up revenue collection.

Quoting an earlier study by Indira Gandhi Institute of Development Research, the report stated that the potential tax loss in the country was over 50 percent of the tax actually collected during 2007-08, as Rs 8,58,264 crore are not accounted.

Consequently, there was a tax gap of approximately Rs 1,71,653 crore (assuming taxation at the median rate of 20 percent). ‘Black’ money amounted to over 18 percent in the economy and the department’s ability to curb tax evasion is correlated to manpower available for investigation, intelligence, assessment and other departmental work, goes the argument.

The report also said that Interpol had placed the size of hawala transactions in India at 40 percent of the country’s GDP.

Moreover, the pressure on the department had increased substantially with the rising challenge of tackling complex issues relating to taxation of e-commerce, mergers and acquisitions, special economic zones, international movement of capital, off-shore transactions and so on.

Many Assessing Officers (AOs) move their files without adequate diligence, as the workload is high. The report warned that if the number of Aos remained unchanged, the number of assessees per AO annually would increase to 11,490 and the scrutiny workload would increase to 230 by the end of 2013. An AO can handle a maximum of 150 scrutiny files in a year.

Assuming the historical growth rate between 2001-2002 and 2007-2008, the number of taxpayers is expected to grow 1.28 times to over 43 million in 2013-2014. Similarly, revenue, which had grown 4.55 times from Rs 69,198 crore in 2001-2002 to Rs 3,14,468 crore in 2007-2008, is expected rise to Rs 14,30,829 crore in 2013-2014.

At present there are over 33.6 crore registered tax payers in the country, roughly 3 percent of the population.

Source : Business Standard.

Income Tax dept. Exam in new syllabus this year. Union to agitate.

Directorate of Income-tax (IT) has issued notification dt. 10.07.09 for 2009 Departmental Examn. for ITOs/ITIs/MS alongwith new DE Rules and new Syllabus for all three cadres. The 2009 ITO/ITI Examn. would be held according to the new Rules and new Syllabus where MS Examn. would be held according to the 1998 Rules and corresponding syllabus. For MS Examn., the new rules would be effective from 2010 Examn. onwards.


See here for details.

"` Mass Dharna on 14^th July, 2009

On the issue of the Departmental Examination, the ITEF leadership met the DIT(E) and demanded that Examination-2009 should be held under the old Rules and the new Rules should be introduced only from next year and in consultation with the ITEF. As there was no positive response from the DIT(E) we met the Member (P) who assured us to discuss the issue with the DG(Admn.). However, we were later informed over the telephone about their intention to proceed with the New Examination Rules without taking our suggestions/objections into consideration, from 2009 itself.

In the light of the above development we are of the considered opinion that only a strong trade union action will force the authorities to come to the negotiating table for a fruitful discussion on the issue.

It has therefore been decided to include this as one of the items of our Charter of demands for the ensuing agitational programme. We call upon all our Circles to ensure massive participation in the Dharna programme as per the decision of the CWC, which is scheduled for 14^th July,2009 before all CCIT/CIT offices and make it a tremendous success.

DEMANDS

(I) Assigning grade pay of Rs. 4600 as per Government of India notification to Inspectors, Private Secretaries and Administrative officers and Rs. 1800 to all Group D employees;

(ii) All employees are provided with mobile phone facility out of the infrastructure fund;

(iii) No outsourcing of any departmental functions, especially the return processing, as per the recommendations of the BPR report;

(iv) The BPR should not be acted upon without reaching an agreement with the ITEF

(v) All Group C employees be provided with desktop computers to facilitate and speed up the functions entrusted to them immediately.

(vi) Hold Deptl. Examination-2009 under old Rules and implement the new Rules from next year in consultation with ITEF."

---------- from ITEF Circular Dated 1st July 2009.

"A telegram may also be sent to the Chairman CBDT on the same day in the following format :

"KINDLY INTERVENE TO HOLD THE EXAM-2009 UNDER THE OLD SYLLABUS AND TO FINALISE THE DRAFT NEW EXAM RULES IN CONSULTATION WITH ITEF."

SMS BASED SERVICE FOR CHALLAN STATUS QUERY INTODUCED

Tax Information Network (TIN) hosted by National Securities Depository Limited (NSDL) on behalf of Income Tax Department (ITD) gives you a facility to verify whether the banks have correctly uploaded the details of your tax deposit to ITD through SMS.



SMS based verification

The procedure for availing this facility is as under:

1. Send an SMS to 575758 with a message containing the word CSI followed by a space and CIN provided by the respective Bank at the time of making the Direct tax payment and the amount.

2. Challan Identification Number (CIN) consists of BSR Code of Collecting Branch (seven digit), Challan Tender Date (DDMMYYYY) and Challan Serial No (length less than or equal to 5 digit).

3. The amount is an optional field. If you provide the amount in the SMS you would get the confirmation whether the amount uploaded by bank matches with the amount paid by you.

4. Each of BSR code, Tender date, the challan serial number and amount should be separated by commas

For e.g., if the tax payer input CSI 0510001,11032009,5,5000 where in

0510001 is the BSR code of the collecting branch,

11032009 is the Challan tender date,

5 is the Challan serial number and

5000 is the amount paid by the taxpayer.

The tax payer will get the information against which TAN/PAN the payment has been accounted with the confirmation whether amount entered is matched or not.

(This is an illustrative CIN, actual CIN should be provided in the SMS).



There will be special charges for these SMS. These charges may vary from one mobile service-provider to another. The charge structure can be obtained from the concerned service-provider.



Online Challan Status Inquiry

You can also get the status of your CIN from www.tin-nsdl.com under the section Challan Status Inquiry.

Salient Features of Budget 2009-10 regarding Income Tax

I propose to raise by Rs 10,000 the exemption limit for women on income tax. For all others, Rs 10,000 up from Rs 1,50,000, says Mukherjee.
Personal income tax exemption limit for senior citizens raised by Rs 15,000.
No change in Corporate Tax.
Ten per cent surcharge on personal income tax removed.
FRINGE BENEFIT TAX ABOLISHED.
Direct Tax code to be released in 45 days along with discussion paper.
FBT ABOLISHED
IT returns to be made simpler, says Mukherjee.
Saral Form II to be reintroduced, says FM. In 4 years, filing tax returns online to be made easier.
Minimum Alternate Tax on book profits increased to 15 per cent from 10 per cent.

Tax Rate for the Financial Year 2009-10 as per budget proposal.

For Males

For Financial Year 2009-10

Taxable Annual Income Slab (In Rs.)

Tax Rate (In %)

Upto Rs. 1,60,000/-

Nil

Rs. 1,56,001/- to Rs. 3,00,000/-

10%

Rs. 3,00,001/- to Rs. 5,00,000

20%

Above Rs. 5,00,000/-

30%

For Females

For Financial YearYear 2009-10

Taxable Annual Income Slab (In Rs.)

Tax Rate (In %)

Upto Rs. 1,90,000/-

Nil

Rs. 1,90,001/- to Rs. 3,00,000/-

10%

Rs. 3,00,001/- to Rs. 5,00,000/-

20%

Above Rs. 5,00,000/-

30%

For Senior Citizen

For Financial YearYear 2009-10

Taxable Annual Income Slab (In Rs.)

Tax Rate (In %)

Upto Rs. 2,40,000/-

Nil

Rs. 2,40,001/- to Rs. 3,00,000/-

10%

Rs. 3,00,001/- to Rs. 5,00,000

20%

Above Rs. 5,00,000/-

30%

The Surcharge on Individual Income Tax has been abolished.