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2017
  • If you feel that Income Tax Return filing is a taxing task, you are not alone. For a layman, just the name is enough to induce shivers. The tax return filing season for F.Y. 2016-17 is on the horizon & the government has come up with a good news at the right time.
  • Do you remember that our Finance Minister had promised to introduce a simple one-page ITR form for tax filers? The form was expected to offer huge relief to taxpayers with income below Rs. 5 lakh. The recent news is even better than that. Now this one-page ITR form will make tax return filing simpler for a bigger chunk of taxpayers. Salaried individuals with income up to Rs. 50 lakh & having rental income from one house only will also be able to file their tax return easily with this one-page ITR.

Why has this step been taken?

  • There are several reasons why people find filing taxes daunting & boring. For most people, this is a once in a year activity. Income Tax rules also change every year. So, people tend to forget how they filed their taxes in the previous year. As a result, they have to learn everything all over again. This further leads to poor tax planning, unclaimed refunds & defective IT returns. A large number of people often skip this essential activity.

2017
As per the Finance Bill, 2017 a new section 269ST is introduced. The provisions of the section are as follows:

Provisions:

  • No Person shall receive an amount of three lakh rupees or more,
    1. in aggregate from a person in a day;
    2. in respect of a single transaction; or
    3. in respect of transactions relating to one event or occasion from a person, otherwise than by an account payee cheque or account payee bank draft or use of electronic clearing system through a bank account.

2017
  • The government made a very important announcement for people living in metropolitan cities. Now people staying in rented accommodation paying more than Rs. 50,000 per month as rent are required to deduct tax on behalf of their landlord. Government has taken this step to widen its tax net. However, this has put additional tax compliance burden on the rent payers.
  • It has proposed to introduce a new section, 194-IB in the Income Tax Act to provide that an individual or a HUF (other than those covered under 44AB of the Act), responsible for paying rent to a resident exceeding Rs. 50,000 for a month or part of month during the previous year, shall deduct an amount equal to 5% of such payment as income-tax thereon. The following amendment will take effect from the date budget gets the final approval from the President of India.
  • Further, a proposal has been made in the Act that tax shall be deducted on such payment at the time of credit of rent, for the last month of the previous year or the last month of tenancy if the property is vacated during the year, as the case may be, to the account of the payee or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier. It is also proposed to provide that tax so deducted shall be deposited only once in a financial year through a challan-cum-statement to be notified soon.

2017
  • The government made several tax proposals aimed at the housing and infrastructure sector. But apart from vowing pukka houses for the masses, an important announcement too was made, which has the potential to change the way taxes are levied on buying and selling houses.
  • If assets are held for long-term one can adjust the purchase price in accordance with inflation to reduce the tax applicable. This period of long-term differs from one asset to another. For debt-mutual funds it is 36 months and for unlisted shares it is 24 months, while for listed shares it is 12 months.
  • So, far immovable property should have been held for 36 months to be considered long-term. The Union Budget 2017-18 proposes to shrink this period to 24 months as well, in line with unlisted shares.

2017
  • The 50 days of demonetization are behind us and so is the deadline to deposit and convert the demonetized currencies of Rs. 500 and Rs 1000. If you have deposited cash up to Rs. 2.5 lakh in your account, there is no cause for worry as per the government directive. However, if your deposit amount exceeds Rs 2.5 lakh, you may get a notice from the Income Tax Department.
  • Most of the people get queasy when it comes to deal with income tax department. This article is an effort towards discussing how to handle the income tax notice after November 8.

Who may get an IT notice?

  • As per government’s directive, banks have been asked to furnish details of all individuals who have deposited more than Rs. 2.5 lakh in their savings account or opened fixed deposits. It has also asked banks for information on deposits of more than Rs. 12.5 lakh in current accounts. Banks send these details to tax authorities, which in turn may issue a notice if necessary.
  • At the same time, if you have bought big-ticket items such as gold or a car, you may get a notice from tax authorities. The government has asked all car dealers to furnish details of their transactions if there is a spike in the volume of business after the demonetization announcement. Similarly, jewellers have been asked to provide details of business transactions that transpired after November 8.

2017
  • The much anticipated Union Budget 2017 was finally announced today by our honourable Finance Minister. It was broadly focused on 10 issues — farming sector, rural population, youth, poor and health care for the underprivileged, infrastructure, financial sector for stronger institutions, speedy accountability, public services, prudent fiscal management and tax administration for the honest. Here is what it brought for personal Income Tax payers and corporate taxpayers.

Personal Income Tax:

  • Any person who files his tax return for the first time will not be scrutinised unless the tax department has specific information encouraging scrutiny.
  • The government will simplify tax filing by introducing a new ITR form for taxpayers with income up to Rs. 5 lakhs.
  • The government has proposed to levy a surcharge of 10% for persons having income between Rs. 50 lakhs and Rs. 1 crore.
  • The government has not changed Income Tax exemption limit but reduced tax rate to 5% for persons having income between Rs. 2.5 lakhs to Rs. 5 lakhs.
  • On the down side the budget 2017 has proposed to restrict the benefit of set-off loss from house property to a maximum Rs. 2 lakh per financial year and the balance loss can be carried forward to next 8 years

Financial Management