Penalty on late filing of ITR and other tax changes effective from 1st April 2018

Taxpayers who do not file their income tax returns (ITRs) on time will have to shell out a penalty of up to Rs10,000, but from the 2018-19 Assessment Year (AY).

“In order to ensure that return is filed within due date, it is proposed to insert a new section 234F in the Act (I-T Act) to provide that a fee for delay in furnishing of return shall be levied for assessment year 2018-19 and onwards in a case where the return is not filed within the due dates specified for filing of return under sub-section (1) of section 139,” the memorandum for the Finance Bill 2017 said.

It specified two levels of penalty in this regard: “A fee of Rs5,000 shall be payable, if the return is furnished after the due date but on or before December 31 of the assessment year and a fee of Rs10,000 shall be payable in any other case.”
However, for small taxpayers or where the total income does not exceed Rs5 lakh, it is “proposed that the fee amount shall not exceed Rs1,000.” The memorandum said the decision was being taken “in view of the non-intrusive information-driven approach for improving tax compliance and effective utilisation of information in tax administration it is important that the returns are filed within the due dates.”

Further, it added that the “reduced time limits proposed for making of assessment” of I-T cases, as proposed in the latest Finance Bill, are also based on pre-requisite that returns are filed on time.”
“These amendments will take effect from April 1, 2018 and will accordingly apply in relation to assessment year 2018-19 and subsequent years,” it said

Finally due date for filing of income tax retunes(ITR) for Assessment year 2016-17 and 2017-18 is over. Now its time to get ready for AY 2018-19 ITR to avoid penalty of late filing of income tax return. Government has introduced new income tax forms for AY 2018-19. Rules are getting tough day by day or we can say that taxpayers must be active and punctual now to avoid any unnecessary penalties. So here in this article, our main objective is to save taxpayers from paying unnecessary penalties. Unnecessary means those penalties which we can avoid by proper follow up. A new section Sec 234F is inserted to levy penalty for late filing of ITR. Sec 234F is effective from Assessment Year 2018-19 (Financial Year 2017-18). If ITR for AY 2017-18 is filed after due date (31st July for individuals without audit, 30th Sept for other persons) but before 31st Dec of the Assessment year (31-12-2018) in case of Assessment year 2018-19) then Penalty of Rs.5000/- will be levied and If ITR is filed after 31st Dec then Res.10000 will be levied as penalty. Exception:- If the total Income of a person is below or equal to Rs. 5 Lakhs, then penalty will be restricted to Rs.1000 only.

Read more at: https://www.caclubindia.com/articles/penalty-for-delayed-filing-of-income-tax-return-for-ay-2018-19-32919.asp

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Know about Sahaj (ITR-1) – Income Tax Return filing

Recently, the Central Board of Direct Taxes (CBDT) notified the launch and use of new income tax return filing forms, named as Sahaj for the fiscal year of 2017-18. This is by far the easiest single page form to have ever been launched for IT return filing purposes. This form is aptly named as Sahaj (ITR 1), which has been introduced for individual assessees with an annual income for this financial year of about INR 50 Lakhs subject to certain conditions.

Who can file the ITR 1/ Sahaj?

The assessees allowed to file the ITR 1 are those who receive income from salaries or one residential property or some additional sources other than income from lottery or income from horse racing and such means.

Methods of filing ITR:

ITR 1 can be filled in one of following three ways:

1. One can do so electronically with a digital signature
2. Also electronically through a digital code
3. Or first doing so electronically and then submitting the ITR-V for verification of the Return Form

For the third option one must take two print outs of the Form ITR-V, one of which must be signed duly by the assessee; then mailed by post to the following address – Post Bag No. 1, Electronic City Office, Bengaluru 560 100, Karnataka.  The second copy may be retained by the assessee for their personal record keeping.

 How to file for returns in the physical form:

This is only allowed in a few special cases:

1. If the individual filing the return was above 80 years old in the previous year
2. If the income of the individual does not exceed INR 5 Lakh and no refund has been claimed.

In such cases, only one copy of the return form must be filed and if the return form is physically furnished, then the ITR-V or acknowledgement must also be duly filed for the same.

Mandatory information to be mentioned on the return:

1. Details of PAN
2. Email ID, mobile number
3. Residential address and status
4. Income and taxation details
5. Aadhaar number (if applied for Aadhaar but not yet received, then enrolment ID may be mentioned)

Note, effective from the 1^st of July, 2017 onwards Aadhar will be a mandatory field for Income Tax Return filing.

Important point to note about Sahaj:

It is important that you keep in mind that Sahaj is an annexure-less form, so do not attach any document with the form as it would be returned to the person filing the same.

You are not eligible to file ITR 1/ Sahaj if you have the following:

• Individuals whose total annual income exceeds INR 50 Lakhs
• Individuals with foreign assets
• Individuals with agricultural income of more than INR 5,000
• Those with taxable capital gains
• Individuals with income from business or profession
• Income from multiple residential (house) property

Main components of Sahaj:

• Part A: general information
• Part B: individual’s gross total income
• Part C: deductions and total taxable income
• Part D: computation of payable tax
• Part E: additional information
• Schedule IT: self assessed tax payments and details of advance taxes
• Scheduled TDS: necessary details of TDS/TCS

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Tax Deduction on LIC Premium u/s 80C of the I T Act.

Life Insurance Plans are very popular as a tool to get deduction u/s 80C of the I T Act. 1. The investment in life insurance can be deducted up to Rs 1,50,000. It a common perception that Premium Paid all Life Insurance Policies qualifies for deduction under section 80C of the Income Tax Act,1961 and full premium amount qualifies for deduction under section 80C .

Apart from several other items provided under section 80C, a taxpayer, being an individual or a Hindu Undivided Family (HUF), can claim deduction under section 80C in respect of premium on life insurance policy paid by him/it during the year.

Policy to be taken in whose name?

In case of an individual, deduction is available in respect of policy taken in the name of taxpayer or his/her spouse or his/her children. In case of a HUF, deduction is available in respect of policy taken in the name of any of the members of the HUF.

No deduction is available in respect of premium paid in respect of policy taken in the name of any person, other than given above.

Deduction Allowed

Overall deduction u/s 80C (along with deduction u/s 80CCC & 80CCD) allowed is up to Rs. 1,50,000

How much deduction available u/s 80C for investment in insurance policies???

Section 80C of the Income Tax Act provides deduction up to Rs 1,50,000 provided you invest according to condition given in section itself. One of the most popular way of saving tax by deduction u/s 80C is purchase of insurance policy. There is common perception that premium upto Rs 1,50,000 on any insurance product like life insurance or Unit Linked Insurance plan is fully allowed.However, this is not correct. The reason for such conclusion is section 80C (3) and 3(A) of the Income Tax Act which specifies which premium is eligible for deduction under section 80C of the Income Tax Act,1961.

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Union Budget - 2018

Budget 2018 : Key Highlights

Individuals and salaried class

• Personal income tax slab rates remains the same.
• Introduction of Standard deduction of Rs 40,000 for the salaried class (replacing the transport allowance and the miscellaneous medical Reimbursement).
• Education cess now to be called as Health and Education cess effective rate increased to 4% from 3%.
• Introduction of tax on long term capital gains above Rs 1 lakh on sale of equity shares @ 10% without giving the benefit of indexation. Capital gains tax for until 31 January 2018 will be grandfathered.

For senior citizens

• No TDS on interest from FD upto Rs 50,000.
• Exemption under Section 80D upto Rs 50,000 for medical insurance for senior citizens.
• Exemption limit for medical expenditure for certain critical illness from raised from Rs 60,000/- in case of senior citizens and from Rs 80,000 in case of very senior citizens, to Rs 1 lakh in respect of all senior citizens, under section 80DDB.

Others

• Reduction in corporate tax rate to 25% for companies having a turnover of Rs 250 crores and less.
• Equity Oriented Mutual funds to face a Dividend Distribution Tax @ 10%.
• Short term capital gains to continue to be taxed @ 15%.
• Cryptocurrencies continued to be considered as not “legal tender”. Government to consider exploring the Blockchain technology.
• Introduction of e-assessments to reduce interface between income tax department and taxpayers. 

Here's how much your income tax liability will be as per the proposed announcements in the budget: 

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How to calculate income tax?

Income tax calculation for the Salaried
Income from salary is the sum of Basic salary + HRA + Special Allowance + Transport Allowance + any other allowance. Some components of your salary are exempt from tax, such as medical reimbursements, telephone bills reimbursement. If you receive HRA and live on rent, you can claim exemption on HRA. Calculate exempt portion of HRA, by using this HRA Calculator.
Transport allowance is given to employees as part of their salary to meet travel expenses from residence to work & back. Starting financial year 2015-16, limit of exemption on transport allowance is 1,600 per month or Rs 19,200 per annum. For example - if you receive Rs 2,000 as transport allowance every month, Rs 1600 shall be exempt from tax and remaining Rs 400 per month or Rs 4,800 per annum shall be taxed as salary income.

For Calculate Your Income Tax: Click Here 

Let's understand income tax calculation by way of an example. Neha receives a Basic Salary of Rs 50,000 per month. HRA of Rs 25,000. Transport Allowance of Rs 8,000 per month. Special Allowance of Rs 5,000 per month. LTA of Rs 20,000 annually. Neha pays a rent of Rs 20,000 and lives in Delhi.

Nature	Amount	Exemption/Deduction	Taxable
Basic Salary	6,00,000	-	6,00,000
HRA	3,00,000	1,80,000	1,20,000
Transport Allowance	96,000	19,200	76,800
Special Allowance	60,000	-	60,000
LTA	20,000	12,000 (bills submitted)	8,000
Medical Bills	15,000	15,000(bills submitted)	-
Gross Total Income from Salary			8,64,800

To calculate income tax, include income from all sources.
Include:

• Income from Salary (salary paid by your employer)
• Income from house property (add any rental income, or include interest paid on home loan)
• Income from capital gains (income from sale purchase of shares or house)
• Income from business/profession (income from freelancing or a business or profession)
• Income from other sources (saving account interest income, fixed deposit interest income, interest income from bonds)

Neha has income from interest from savings account of Rs 8,400 and a fixed deposit interest income of Rs 10,000 during the year. Neha has made some investments to save income tax. PPF investment of Rs 50,000. ELSS purchase of Rs 20,000 during the year. LIC premium of Rs 8,000. Medical insurance paid of Rs 12,000. Here are the deductions Neha can claim.

Nature	Maximum Deduction	Eligible investments/expenses	Amount claimed by Neha
Section 80C	Rs.1,50,000	PPF deposit Rs 50,000, ELSS investment Rs 20,000, LIC premium Rs 8,000. EPF deducted by employer(Neha’s contribution) = Rs 50,000 *12% *12 = 72,000	Rs 1,50,000
Section 80D	Rs 25,000 for self Rs 30,000 for parents	Medical insurance premium Rs 12,000	Rs 12,000
Section 80TTA	10,000	Savings account interest 8,400	Rs. 8,400

Calculation of gross taxable income in India

Nature	Amount	Total
Income from Salary	8,64,800
Income from Other Sources	18,400
Gross Total Income		8,83,200
Deductions
80C	1,50,000
80D	12,000	-
80TTA	8,400	1,70,400
Gross Taxable Income		7,12,800

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PAN (PERMANENT ACCOUNT NUMBER)

Permanent Account Number (PAN) is a code that acts as identification for Indian nationals, especially those who pay Income Tax. It is a unique, 10-character alpha-numeric identifier, issued to all judicial entities identifiable under the Indian Income Tax Act, 1961. The PAN is mandatory for a majority of financial transactions such as opening a bank account, receiving taxable salary or professional fees, sale or purchase of assets above specified limits etc.; especially high-value transactions.

 NEED ASSISTANT

We are here to assist you in obtaining the PAN in 10-15 days, subject to the Government processing time.

Features :

• The PAN card carries your photograph, name and address. Hence it serves as a nationally accepted proof of identity.
• Without a PAN card, you will be taxed at the highest rate possible. If you pay TDS (tax deducted at source), that cannot be counted without a PAN card and you may end up paying tax twice.
• The PAN number is unique to every PAN card holder. Your name and address may change; your card may get lost or stolen; but the PAN will remain unchanged. So, the possibility of misuse is rare.
• A minor account can be opened and operated easily with the PAN card of the guardian.
• If you are NRI, you can easily buy property or engage in business in India with the help of your PAN card without filing tax returns.

Process :

The steps for getting the PAN are:-

• Download Form :
  New PAN 49A (for Indian Citizen) - Download
•  Fill the Form.
• Send It to our address with Self-Attested documents as required.
• Open the Link for list of required Document: Document List
• Make the Payment online
  

Tracking :

Once your application for PAN is filed to the department then you can track the status on the link given by using the Application No.  provided by us.
http://www.trackpan.utiitsl.com/PANONLINE/#forward

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GST (Goods & Service Tax)

What Is GST ? 

The Government of India is committed to replace almost all the indirect taxes levied on goods and services by the Centre and States and implement GST during any time before 2017. With GST, it is anticipated that the tax base will be comprehensive, as virtually all goods and services will be taxable, with minimum exemptions. GST will be a game changing reform for the Indian economy by creating a common Indian market and reducing the cascading effect of tax on the cost of goods and services.
GST is a tax that we need to pay on supply of goods & services. Any person, who is providing or supplying goods and services is liable to charge GST.

GST Concept:

GST is a consumption based tax/levy. It is based on the “Destination principle.” GST is applied on goods and services at the place where final/actual consumption happens.
GST is collected on value-added goods and services at each stage of sale or purchase in the supply chain. GST paid on the procurement of goods and services can be set off against that payable on the supply of goods or services.The manufacturer or wholesaler or retailer will pay the applicable GST rate but will claim back through tax credit mechanism.
But being the last person in the supply chain, the end consumer has to bear this tax and so, in many respects, GST is like a last-point retail tax. GST is going to be collected at point of Sale.
Indian Government is opting for Dual System GST. This system will have two components which will be known as

• Central Goods and Service Tax (CGST) and
• State Goods and Service Tax (SGST).

The current taxes like Excise duties, service tax, custom duty etc will be merged under CGST.
The taxes like sales tax, entertainment tax, VAT and other state taxes will be included in SGST.
So, how is GST Levied? GST will be levied on the place of consumption of Goods and services. It can be levied on :

• Intra-state supply and consumption of goods & services
• Inter-state movement of goods
• Import of Goods & Services

GST Advantage:

• The tax structure will be made lean and simple
• The entire Indian market will be a unified market which may translate into lower business costs. It can facilitate seamless movement of goods across states and reduce the transaction costs of businesses.
• It is good for export oriented businesses. Because it is not applied for goods/services which are exported out of India.
• In the long run, the lower tax burden could translate into lower prices on goods for consumers.
• The Suppliers, manufacturers, wholesalers and retailers are able to recover GST incurred on input costs as tax credits. This reduces the cost of doing business, thus enabling fairer prices for consumers.
• It can bring more transparency and better compliance.
• Number of departments (tax departments) will reduce which in turn may lead to less corruption
• More business entities will come under the tax system thus widening the tax base. This may lead to better and more tax revenue collections.
• Companies which are under unorganized sector will come under tax regime.

Way forward:

• All the existing Sales Tax/ VAT, Excise, Service tax assessee need to migrate to GST Network to ensure better preparedness for GST.
• All the existing need to prepare smooth transition to GST to ensure full credit to be availed as credit not claimed in the current system shall be gone forever.
• All existing as well as new assesses should need to understand the point of differences in the GST system as compared to the existing system to ensure better planning and gain optimum benefit from the GST system.
• Last but not the least, the way of doing business will be changing in GST system, we should gear up to adopt it to get set go.

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