All about “Sukanya Samriddhi Account Scheme”

Deposit during F.Y. 2014-15 in Sukanya Samriddhi Account by parent or legal guardian of a girl child aged below 10 years of age eligible for deduction u/s. 80C.

Salient Features:

1. Sukanya Samriddhi Account can be opening in nationalized banks and post office for maximum 2 girl child.

2. Minimum deposit of Rs. 1000/- every year otherwise penalty of Rs. 50 will be leviable.

3. Maximum deduction available u/s. 80C upto Rs. 150000/-.

4. Contribution to this account is to be made upto 14 years. However it will mature at the end of 21 years from the date of opening of account or if the girl gets married before completion of such 21 years.

5. Premature withdrawal upto 50% allowed when child attains age of 18 years for higher education and marriage only.

6. Current rate of interest is 9.10%. Interest will be tax free w.e.f. 01^st April, 2015. Every year Government will notify new rate of interest.

HIGHLIGHTS – BUDGET 2015

1. Wealth Tax REPLACED with additional surcharge of 2 % on super rich with a taxable income of over Rs. 1 crore annually.

2. NO CHANGE in personal income tax slab rates.

3. Transport allowance increased from Rs. 800 to Rs. 1600 pm (applicable for Salaried employees only).

4. Corporate tax to reduce from 30% to 25% over next four years.

5. Additional investment allowance @ 15% and additional depreciation @ 35% to new manufacturing units set up during 01.04.2015 to 31.03.2020 in backward areas of AP & Telangana.

6. Reduction in rate of tax on Income by way of Royalty and Fees for technical services in case of non-residents from 25% to 10% w.e.f. A.Y. 2016-17.

7. 100% deduction for donations made to Swachh Bharat Kosh and Clean Ganga Fund.

8. NON FILING OF RETURN / FILING OF RETURN WITH INADEQUATE DISCLOSURES TO HAVE A RIGORIOUS IMPRISONMENT UPTO 7 YEARS.

9.  Acceptance or repayment of an advance of Rs. 20000/- or more in cash for purchase of immovable property to be prohibited.

10. PAN being made mandatory for any purchase or sale exceeding Rs. 1 lakh.

11. The limit of deduction under Section 80D will be increased from Rs. 15,000 to Rs. 25,000. Further, the limit of deduction for senior citizens is also proposed to be increased from Rs. 20,000 to Rs. 30,000.

12. As a welfare measure towards senior citizens aged 80 years and above, a deduction under section 80D is proposed for any payment made on account of medical expenditure in respect of a senior citizen, subject to a limit Rs. 30,000.

13. The limit for deduction under section 80DDB is proposed to be increased to Rs. 80,000 in

respect of amount paid for medical treatment of senior citizen aged 80 years and above.

14. Section 80DD and section 80U is proposed to be amended to increase the limit from Rs. 50,000 to Rs. 75,000 and from Rs. 1 lakh to Rs. 1.25 lakh, as the case may be.

….to be continued….

Which Form Should I Use to File my Income Tax return for AY 2013-14 or FY 2012-13 at https://incometaxindiaefiling.gov.in/

For AY 2013-14 (ie FY 2012-13) if you are claiming any House Rent Allowance or Conveyance Allowance Exemption or LTA (Leave Travel) or have earned income from Public Provident Fund (PPF) or Maturity of LIC ie Life Insurance, then you will need to choose ITR 2 and declare the exempt income if this amount crosses Rs. 5000/- Therefore tell your Chartered Accountant or Tax Professional to use the correct form. Also always verify your Tax Credit Statement Form 26AS. This will help in avoiding Notice from the Income Tax Department and filing Rectification thereafter.

Contact us and we will help you to safely fill the correct form and smartly avoid any Notices for the IT department. We also help in Reply to Notice u/s 245, Intimations u/s 143(1), Rectification Applications u/s 154, Outstanding Tax Demands, Refund Status at www.incometaxindiaefiling.gov.in
The Due Date for AY 2013-14 (FY 2012-13) Income Tax Return is 31st July 2013.

Life that I should lead - Mahatma Gandhi

God, help me to tell the truth to the strong and to avoid telling lies to get the weak’s applause. If you give me fortune, do not take away my reason. If you give me success, do not take away my humility. If you give me humility, do not take away my dignity. God help me to see the other side of the medal. Don’t let me blame others of treason just because they don’t think like me. God, teach me to love people as I love myself and to judge me as I judge others. Please don’t let me be proud if I succeed or fall in despair if I fail. Remind me that failure is the experience that precedes triumph. Teach me that forgiving is the most important in the strong and that revenge is the the most primitive sign in the weak. If you take away my success, let me keep my strength to succeed from failure. If I fail People give me the courage to apologize and if people fail me, give me courage to forgive them. God, If I forget you, please do not forget me - (Mahatma Gandhi)




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THE GOVT. OF INDIA has appointed Tax Return Preparers for E-Filing INDIAN  INCOME TAX AND SERVICE TAX RETURNS. From Rs. 350, Our Experts will help assesses file  ITax Returns & other services(see above for our premium services). We offer DOORSTEP FACILITY* Call:022-28090939 9702121414 9819540939 Email: stbero@hotmail.com (Offices AT BORIVALI WEST & KANDIVALI EAST, MUMBAI) Though you are welcome to visit us at our offices, your return can be filed easily via email, so simply drop us a line today. Satisfied clients all over INDIA AND ABROAD.

Points to be beared in mind whilst filing return this year ie whilst filing return for AY 12-13 (FY 11-12). These points are few issues which have brought to life by the budget of 2012. Though the budget primarily deals with compliances to be made for the following Assessment year - here are some issues which affect us with immediate effect.

1. As per existing rules, if a person has Gross Income which is below the basic taxable limit then he is not required to file his income tax returns. Now as per the amended rules, if such a person has any asset or any financial interest or any signing authority in any company/entity/bank account outside India, then such even though he has income below the basic exemption limit, will have to compulsorily file returns form AY 12-13 onwards. Due date as we all know is 31st July 2012.

2. All of us have been very pleased at the speed at which we all received our refunds without any verification or questions from the department. Well, the department now has now been empowered with effect from July 1st 2012, to hold back refunds in case there is an intention to verify the documents/proofs in relation to the amounts claimed in the IT return. Thus where there is an intention to issue a notice for scrutiny, the department though may process your refund but it will not be compulsorily for them to pay the refund to you until they have issued you a scrutiny notice and scrutinized your case as per section 143(3).

3. Though it may sound unjust it is as provided in the budget: that if the person from whom you receive your income is suppose to deduct TDS and if he does not do so, then it is your liability to pay the tax or advance tax as necessary and if not done so then it will the deductee's liability to pay the penal interest too on such non/short deduction of TDS.

4. If you are planning to sell your property DO THIS BEFORE 1st Oct 2012.Since if the value of the property is more than 50/20 Lacs then the purchaser will have to deduct 1% of the amount, pay this to the government and then pay the balance to you. For the 1% deducted and paid, the buyer will issue you a certificate. The Registration officer will not register this sale unless you produce this certificate from the buyer.

5. E-filing now mandatory for an individual/HUF if Total Income exceeds 10 lakhs.

INVESTMENT ADVICE THAT NOBODY WILL GIVE YOU - THE REASON? -

Invest in Government's National Pension Scheme (NPS) to get
1. SAFE AND EXCELLENT RETURNS.
2. Tax Deduction over and above the 100000 80 C Limit -

 The NPS Scheme is designed to take care of your pension needs after the age of sixty. Secondly You if your employer contributes 10% of your salary to NPS the entire amount as contributed by your employer will be allowed as a deduction from your taxable income.

Your insurance agent will not encourage you to invest here since there is no commission available to him under this scheme. To know about this scheme please contact us on our above phone numbers

My TDS has been deducted by my employer but not deposited/not showing or reflecting in my form 26AS. What should you do? - Read on to know the solution.

TDS is deducted by the employer/payer of the employee/payee.
The deductor/employer needs to deduct the TDS and deposit it into the treasury of the central government and then file a statement called 'TDS Returns'. Once TDS Returns are filed by the deductor of TDS then the TDS amount will appear as 'Tax Paid' in the 26AS form of the deductee. The employer/deductor also needs to furnish the TDS certificate in the way of form 16/form 16A to the employee/deductee.
It is not uncommon today to come across cases where employer/deductor has deducted the TDS but has failed to deposit it in the treasury of Central government or has filed incorrect TDS Returns. Also such unscruplous Deductors neglect issuing salary certificates to the employee/deductees. The Million Dollar question here is WHO IS RESPONSIBLE FOR THE UNPAID TDS/INCORRECT TDS?

An identical situation for The Mumbai High Court to decide, was the case was Yashpal Sahni vs. Assistant commissioner of income tax; Sahni received his salary after deduction of TDS of 660000. He filed his income tax return and claimed TDS refund of income tax in accordance with the income tax law. When the return was processed by the income tax department, the TDS refund was denied and a demand of income tax 12,73000 Rupees against Mr. Sahni was raised.

This was because Mr. Sahni deductor had not deposited the TDS amount with the government. Moreover, inspite of requesting no TDS certificate was issued. Mr. Sahni appealed for deleting the demand as he already paid the tax in the form of TDS. But the department denied his appeal, as no TDS was deposited and no TDS certificate was issued to him. The department conveniently raises a fresh demand of Rs.17,90,000 against his name.
Mr. Sahni with no option left moves the Mumbai High Court. Mr. Sahni's representative argued that TDS was paid by his client and if the employer/deductor failed to pay the amount, this should be recovered from the deductor and the employee/deductee must not be penalised for faults of the deductor/employer. He also presented proofs like salary paid receipts and bank statements.

The court decided in favour of Mr. Sahni. The Court said that it was the employer's duty to pay the deducted TDS amount. If the company fails to do so, the income tax department has the right to recover the amount with the interest and plenty.

The High Court also explained Section 205 of income tax act that if the tax is paid at source, the taxpayer can’t be called upon to pay further tax. The Court said that if the tax was deducted at source, the employee's liability to pay tax ends to the extent of TDS paid.

Section 205 defines that it does not matter whether the employer had issued him TDS certificate or not. If the employee had paid tax in the form of TDS, his liability ends and he has the right to TDS refund. It’s the duty of the employer to deposit the TDS amount in time and issue TDS certificate to the employee. Even in the absence of TDS certificate, the employee has the right to get TDS refund.
Following factors should be kept in mind for filing income tax return for saving time, harassment and a lot of energy.
- Keep your monthly pay slips intact, as long as you don’t get Form 16 of the year.
- You can file your income tax returns on the basis of monthly pay slips without getting Form 16 of the year from the employer.
- Employee can get TDS refund from the department even in the absence of Form 16.
- Getting Form 16 is not as important, and one needn’t to deposit taxes again for the sake of Form 16.

(Tags-form 16 importance,importance of form 16,can income tax is filed in absense of form 16,income tax filing without form 16,who is liable for TDS not deposited in banks,income tax return without form 16,income tax refund without form 16,income tax refund in absence of form 16)

New Income Tax Act (DTC) postponed by a year: to be applicable from 01.04.2012

The key objective of DTC is to benefit small taxpayers as a result of rationalization of tax rates, slabs and exemptions
Basic exemption limit is Rs 2 lakh for individuals; higher for women & Senior Citizens. Tax slabs yet to be finalized. Long term cap gains from sale of shares to remain exempt. PPF/PF remains tax free. Surcharge/edu cess may be dropped.

Overall, something to cheer about for small taxpayers.

Due Date Extended

If heavy rains, serpentine queues, or a non-functional income tax website was a reason for your inability to file your return,   - Rejoice - You can file your return now upto 4th August - as per the latest release on the Income tax Website. To add to this we too will be accepting returns upto the the 3rd of August - just Rs. 300 each.(appl to ITR 1 & 2)

Invest in Bonds of IFCI, IDFC, LIC & NBFC's & get deduction upto Rs.120000 U/S 80 C (Sec 80CCF)

Bonds to be issued by (i) Industrial Finance Corporation of India; (ii) Life Insurance Corporation of India; (iii) Infrastructure Development Finance Company Limited; and (iv) a Non-Banking Finance Company classified as an infrastructure finance company by the Reserve Bank of India; as “Long-term Infrastructure Bond” for the purpose of section 80CCF of the Income Tax Act, 1961.

Investment in these bonds up to Rs.20000 will be eligible for deduction from the total income of the assessee. The deduction will be in addition to the deduction of Rs.100000 allowed under sections 80C of the Act.

The tenure of the Bonds shall be a minimum of ten years with a lock-in period of five years for an investor.

Why you should not be worried about filing of returns by 31st July.

It is a common perception that if an income tax return is not filed within due date, the IT dept will impose some penalty. Therefore many people who can file even after 31st July due date, without any repercussion , rush to file return by 31st July. Every year there is is great rush to file return by 31st July.

So,when can you file return even after 31st July without any repercussion ?

You can file return after 31st July if

1.All taxes have been paid by you as advance tax or deducted at source.

2.You have not incurred any loss. In case you have incurred any loss, then it is in your benefit to file your return by 31st July , If you file returns by due date then, in future when you make some profits, the loss of the previous years can be set off against the profit - so you  pay lesser taxes. However if you do not file by due date then you cannot offset your losses against your profits.

One disadvantage is that - if you file after the due date, then in case you notice any errors in your return filed, you cannot correct/modify the return ie you cannot revise the return.

For example, if you are a salaried person and all tax has been deducted at source and no tax is outstanding as on 31st March 2010 for income (salary and other income ) earned during FY 2009-10 i.eAsst. Yr 2010-11 who are supposed to file return by 31/7/2010 , can file return upto 31/3/2011 without any interest or penalty.

And , if you take risk of paying penalty of Rs 5000 for late filing , you can file return upto 31/3/2012! In rare cases has this penalty been imposed. This penalty will not be imposed if you have sufficient/satisfactory reason due to which you could not file your return.

All government services to go online in various states

Citizens across the 28 states will be able to avail of all government services, including payment of utility bills and applying for a driving licence, through common Internet portals being developed. senior government officials told.

The government plans to develop portals for at least 10 states by October 2010, and the rest will follow. These state portals’ services will range from getting a birth or death registration certificate, to applications for pensions, to getting a domicile or residence certificate all online. The forms will be available electronically.

"It will reduce red-tapism and make delivery of services hasslefree ,” said a joint secretary-level official at the ministry of IT & communications.

Already, five IT companies — Accenture, Infosys, HP, Wipro, and 3i Infotech — have been empanelled as agencies for implementation of the project at the state level. KPMG, Ernst & Young, PwC, IL&FS and UTITSL have been empanelled as the consulting firms. The states may pick any of these agencies for implementation of the project.

When the portals go live, citizens would be able to query the status of his/her application at any point. Response will also be conveyed through SMSs or email or even displayed on portals.

Source: taxguru.in

Why should I E-file tax returns? Isn't it very risky?? Besides I think filing returns manually is safer and more reliable.

No. Actually its quite the opposite.

Here's what the latest income tax release says:

All electronically filed returns are processed on priority basis at the I-T Department's Centralized Processing Center (ITD-CPC) at Bangalore so that refunds can be issued earlier. E-filed returns for AY 2009-10 are already being processed at a fast pace and is expected to complete shortly. Thereafter, E-filed returns for the current year would be taken up for processing.

Read this if you want a faster refund

With all the automation features being introduced, the Congress Government I must say has taken a whole lot of steps to make life easier for taxpayers.

New facility added in “My Account” (see my 'Useful links' section down-right & click on 'Govt's efiling website') allows registered E-filers to View the Tax Credit Statement (Form 26AS) to verify if the tax payments made by you or TDS deducted from salary or interest etc are correctly reported to the Department. This is crucial to ensure that you receive complete and accurate tax credit for tax payments and TDS reported by you in the I-T return. Please immediately contact your bank or deductor in case of any discrepancy or missing entries.

Still confused? we'll help you through it. Please contact us.

Income tax department decides to clean up the mess of unpaid refunds to taxpayers

Admitting that many Income Tax refunds were still pending, the I-T Department decided to “clean up the mismatched TDS database” due to which the refunds were held up. An I-T Department release said, “The Income Tax Department has taken the initiative to clean up the mismatched TDS data base. Many refunds are pending with the IT Department due to the mismatch of tax paid by the assessee, but the same is not being reflected in the computer software of the department.”

The release said that the department is concerned about the same as the problem has risen either due to wrong PAN numbers mentioned by assesses while paying tax or wrong PAN number mentioned by the deductor while deducting the TDS of the deductee.

Source: Press trust of India

At Salem : Central Excise dept.'s deputy superintendent with a (heart) difference!

This is an interesting content shared with GConnect.in by Shri.J.Lakshminaryanan, DOS, Central Excise, Salem

I dreamt that I went to Heaven and an angel was showing me around. We walked side-by-side inside a large workroom filled with angels. My angel guide stopped in front of the first section and said, ‘ This is the Receiving Section. Here, all petitions to God said in prayer are received. ‘
I looked around in this area, and it was terribly busy with so many angels sorting out petitions written on voluminous paper sheets and scraps from people all over the world.

Then we moved on down a long corridor until we reached the second section.The angel then said to me, ‘ This is the Packaging and Delivery Section. Here, the graces and blessings the people asked for are processed and delivered to the living persons who asked for them. ‘ I noticed again how busy it was there. There were many angels working hard at that station, since so many blessings had been requested and were being packaged for delivery to Earth.

Finally at the farthest end of the long corridor we stopped at the door of a very small station. To my great surprise, only one angel was seated there, idly doing nothing. ‘ This is the Acknowledgment Section, ‘ my angel friend quietly admitted to me. He seemed embarrassed ‘ How is it that there is no work going on here? ‘ I asked.

‘So sad, ‘ the angel sighed. ‘ After people receive the blessings that they asked for, very few send back acknowledgments. ‘How does one acknowledge God ’s blessings? ‘ I asked.
‘Simple, ‘ the angel answered. Just say, ‘ Thank you, Lord. ‘
‘What blessings should they acknowledge? ‘ I asked.

‘If you have food in the refrigerator, clothes on your back, a roof overhead and a place to sleep you are richer than 75% of this world. If you have money in the bank, in your wallet, and spare change in a dish, you are among the top 8% of the world ’s wealthy. ‘

‘And if you get this on your own computer, you are part of the 1% in the world who has that opportunity. ‘

‘If you woke up this morning with more health than illness … You are more blessed than the many who will not even survive this day. ‘

‘If you have never experienced the fear in battle, the loneliness of imprisonment, the agony of torture, or the pangs of starvation … You are ahead of 700 million people in the world. ‘

‘If you can attend a church, temple or mosque without the fear of harassment, arrest, torture or death you are envied by, and more blessed than, three billion people in the world. ‘

‘If your parents are still alive and still married ..you are very rare.’

Now, be thankful for all that you have been blessed with and thank God for everything.

Let’s see from here on how busy the acknowledgement department of heaven will be.

Begining of an end to the traditional, humble Ration Card ??

Ration Card not address proof anymore: TOI Mumbai dated 20th June 2010
The Mah State Govt in an official circular has asked all heads of govt. depts. not to consider under any circumstances the ration card as proof of residence or address.
This move is a bid to reduce or end the widespread misuse of ration cards, the circular said. The circular was sent to Passport office, transport commissoner, MTNL, RBI, CIDCO, Police, Oil firms, Collectors & MHADA.
The ration card is only issued for the purpose of distribution of essential commodities under the public distribution system, the circular informed.
So now we can certainly expect that ration cards will not be considered as address proof by the Income tax dept. for issuing PAN cards & also by banks for issuing loans.
This move by the govt. is logical considering that while issuing a ration card though the govt. enquires about the address of the person, it never asks whether the address is legal or not or whether it is a slum or pucca house. Also once the card is issued there is no mechanism to check if the person or family stays at that address.
The ration card may now gradually lose its importance, after finding itself in many our classic Bollywood movies too. Good subject for an autobiography of the ration card at school. HeHe.

Its 'Hide & Seek' if you want to know Tax Rates for FY 11 - 12

Finance Minister Pranab Mukherjee on Friday said the government will take a view on new tax slabs after receiving inputs from different stakeholders on the revised draft of the Direct Taxes Code (DTC).

“The government will take a final view (on tax slabs) after receiving all the inputs,” he said when asked whether the government was likely to retain the tax slabs suggested in the original DTC draft.

The first DTC draft, released in August, had proposed 10 per cent tax on the income of Rs 1.6 lakh-Rs 10 lakh, 20 per cent on Rs 10 lakh-Rs 25 lakh and 30 per cent beyond Rs 25 lakh in a year. At present, 10 per cent is levied on income between Rs 1.6 lakh-5 lakh, 20 per cent on Rs 5 lakh-8 lakh and 30 per cent over Rs 8 lakh.

The revised draft, on which the Finance Ministry has invited comments from the public till June 30, is silent on tax slabs. However, it did mention that tax slab and rates proposed in the first draft would be revised.

Now you can invest Rs.120000 U/s 80C instead of Rs.100000

Additional Deduction of Rs. 20,000 will be available from the Fin. Yr. 2010-11, for investing in long term infrastructure bonds notified by Central Government.(Sec. 80CCF)

This deduction will be over and above existing limit of Rs. 100,000 under section 80C, 80CCC and 80CCD.
Thus you can now invest Rs.1,20,000 and save more tax. Please also see below the beneficially revised tax slabs.

Rates for next year ie. FY 10-11

The basic exemption limits and the rates of income-tax will continue to be the same as those specified for assessment year 2010-11. However, the tax slabs are revised as under:—

INCOME TAX SLAB FOR MALE RESIDENT INDIVIDUAL AND HINDU UNDIVIDED FAMILY (HUF) BELOW THE AGE OF 65 YEARS


SLAB INCOME TAX RATE
Upto Rs. 1,60,000 Nil.
Rs. 1,60,001 to Rs. 5,00,000 - 10 per cent.
Rs. 5,00,001 to Rs. 8,00,000 - 20 per cent.
Above Rs. 8,00,000 - 30 per cent.

No Surcharge.However add Education Cess @3% on the tax amount


INCOME TAX SLAB FOR FEMALE RESIDENT INDIVIDUAL BELOW THE AGE OF 65 YEARS

In the case of every individual, being a woman resident in India, and below the age of sixty-five years at any time during the previous year,—

SLAB INCOME TAX RATE
Upto Rs. 1,90,000 Nil.
Rs. 1,90,001 to Rs. 5,00,000 - 10 per cent.
Rs. 5,00,001 to Rs. 8,00,000 - 20 per cent.
Above Rs. 8,00,000 - 30 per cent.

No Surcharge.However add Education Cess @3% on the tax amount

SENIOR CITIZEN

In the case of every individual, being a resident in India, who is of the age of sixty-five years or more at any time during the previous year,—

SLAB INCOME TAX RATE
Upto Rs. 2,40,000 Nil.
Rs. 2,40,001 to Rs. 5,00,000 - 10 per cent.
Rs. 5,00,001 to Rs. 8,00,000 - 20 per cent.
Above Rs. 8,00,000 - 30 per cent.

No Surcharge.However add Education Cess @3% on the tax amount

Limbo period for Income Tax Refund may reduce from the current 12 months taken

The Income-Tax Department must progressively reduce the time taken for refunds from the present period of more than four months to a maximum of 60 days, Mr S.S. Palanimanickam, Minister of State for Finance, has said.
There is also a need to review and revamp the existing Tax Deducted at Source (TDS) administration, he said in his valedictory address at the 26th Annual Conference of the Chief Commissioners of Income-Tax (CCIT) and Director General of Income Tax (DGIT) here on Thursday.

He highlighted that a major source of dissatisfaction of income-tax assessees is with respect to refund of taxes. “The time taken to grant refunds is very high when compared to international standards,” the Minister said, adding that the department should set up a task force to revamp the system of tax refunds.

The objective of the revamp should be to progressively bring down the time taken for refunds to a maximum of 60 days. He also pointed out that the taxpayers are facing difficulties in getting credit of the TDS paid by them.

Is TDS to be deducted on Service tax component of the bill too?

Here is an example that will clear the air:(as amended by Finance Act 2010):

A CA raises a bill on his client Rs. 24,000 as Prof Fee + Rs. 4,000 towards hotel bill [bill produced as proof for reimbursement] + Rs. 2,472 towards service Tax Totalling to: Rs. 30,472.00. Then TDS is deductible. But the hotel bill which is a reimbursement and service tax can under no stretch of imagination be treated as income. Hence the TDS is to be made on Rs. 24,000.00 only (even though this alone does not exceed the threshold limit) which is the “income component” of the total bill.

Tax benefits from under construction flat

If you avail of a home loan for buying an under-construction apartment, the law provides for a deferred (postponed) deduction on interest payable during the pre-construction period. This interest amount can be claimed as deduction in 5 equal installments - starting from the financial year in which the construction is completed.
Pre-construction phase is the period starting from the date of borrowing and ending on March 31 immediately preceding the year in which construction is completed. For eg, if you have taken a loan in June 2008 and the construction is completed in May 2010, the period from June 2008 to March 31, 2010 will be deemed to be the pre-construction period.

If your house is self-occupied, the deduction on interest payable would be restricted to Rs 1,50,000 per financial year. Also, it needs to be noted that deduction on repayment of principal amount can be claimed under section 80C only from the financial year in which construction is completed.

Also remember that the amount of Stamp duty & Registration paid on purchase of flat is also deductible u/s 80C

The New Income Tax Act (Direct Tax Code) may irritate you.

If you have invested in the Employee Provident Fund (EPF), Public Provident Fund (PPF) or any insurance plans you have a reason to worry. The Direct Tax Code (DTC), meant to replace the existing Income Tax Act, proposes to tax, all the long-term savings instruments such as EPF, PPF and superannuation funds on withdrawal or maturity – a stark difference as regards the situation today, where the amount is totally tax free.

It has also been proposed that all types of insurance policies will come under the purview of the new act, except the term policies. For an investor in these traditional instruments, if the regime is implemented, there could be a significant change for his/her final corpus because of the tax incidence.

If taxed at existing rates, it could hurt finances quite significantly.

Claim your undelivered Income Tax papers

Intimations of refunds and demands undelivered by the postal authorities, thanks to incomplete address, and those unclaimed for, were returned to the income tax department’s centralized processing centre. They can be obtained by producing identity proof on any working day between 2.30 pm and 6 pm. The list of such relevant PANs is available on www.incometaxbangalore.org.
In cases where refunds couldn’t be delivered by the refund banker due to incomplete /incorrect address or nonavailability of correct bank A/c No./MICR, taxpayers must send complete details to itdcpc@incometaxindia .gov.in or by ordinary/Speed Post to the Centralized Processing Centre , Post Bag No. 1, Bangalore-560100 . The list of such relevant PANs is available on www.incometaxbangalore.org.

Relief in respect of Salary received in advance or arrears of past years received

Any income due or received by an employee from his employer or former employer is taxable under the head `salaries’ as per the provisions of the Income Tax Act, 1961. It is pertinent to note that the salary earned in respect of a particular financial year is subject to tax as per the tax rates applicable for that financial year.
There are occasions when an employee may receive income in a particular financial year, which relates to earlier financial years, i.e., as arrears of salary or he may receive certain payments in advance for future financial years, i.e., as advance salary.

In such an event, it is possible that if the entire income is added to the salary income of that financial year, then the tax payer may have to pay tax at a higher rate depending on the slab rates under which his income is otherwise taxable.In such a case, there is a relief provided under the Act to ensure that the employee is not worse off. Email me in case of queries.

What do you mean by Arrears/Advance Salary?

Where a tax payer receives a sum in the nature of salary being paid in arrears or in advance or receives in any financial year salary for more than twelve months or receives profits in lieu of salary or family pension paid in arrears due to which his total income is taxable at a rate more than the rate at which it would otherwise had been taxable then he may claim relief in respect of tax rates. Besides, certain other receipts like gratuity received for past services, compensation received from the employer or former employer on termination of the employment, payment received in commutation of pension, etc are also eligible for the purposes of said relief, subject to certain conditions.
The said relief is to be claimed in the financial year in which the extra payment by way of arrears, advance is taxed. Broadly, the relief under these provisions is arithmetic in nature, as it involves finding out two rates of taxes. The first is the rate of tax applicable to the total income including the extra amount in the year of receipt. Second is finding out the rate by adding the arrears to the total income of the year to which they relate.

Exceptions to tax relief - You cannot claim relief ...

No such relief can be availed in respect of the amount received by the tax payer on his voluntary retirement or termination of service if an exemption in respect of the same has been claimed otherwise by the tax payer under some other provision.

Procedure to be followed for claiming relief

The tax payer is required to furnish the particulars in Form 10E supplied by Income Tax dept. which has annexures for arrears in salary,gratuity etc. fill it up, compute the tax relief going back to your respective financial years return data and tax slab rates and submit to employer fo him to make tax calculations.

HRA could be your tax saving device

HOUSE rent allowance, or HRA, is a major component of your salary. This is given by an employer to an employee to meet the cost of renting a home. As a salaried employee you can claim a tax exemption on such an amount. But there are certain conditions that we need to understand to claim such exemptions.

When can you claim exemption on HRA?

You can claim exemption on rent given to parents. For example, you live with your parents and pay them rent. This would technically make your parents the landlords. In such an case, one of your parents should declare the rent paid by you in his/her personal income tax return to prevent litigation in future. However, you cannot claim exemption on rent paid to your spouse. Tax experts say that the relationship between a husband and wife is not commercial in nature and they are supposed to stay together. You should provide your employer with accurate rent information so that the company can credit you with the eligible amount of relief before deducting tax at source. You can also claim such exemption when you file the tax return and seek a refund.
If you receive HRA for the period during which you were not occupying a rental accommodation, then you can’t claim any tax exemption. In all cases it is advisable for you to maintain rent receipts as they are the only proof for rent payments.

When can you enjoy the twin benefits of home loan and HRA?

If you have taken a home loan to buy a house, say, in Mumbai, but you reside in another city, you can get tax benefits on your housing loan & HRA.
If you have bought a house but stay in a rental accommodation in the same city because your house is not ready for possession, you are entitled to tax benefits on HRA. You can claim tax benefits on the home loan only if your home is ready to live in during that financial year. Once the construction on your home is complete for possession, the HRA benefit stops
However, if you have bought a house by taking a home loan and stay in a rented accommodation after giving you house on rent, you will be entitled to all the tax benefits mentioned above.

How is the exemption on HRA calculated?

The tax exemption on HRA is computed as the minimum of following three conditions: i) Actual HRA as per you pay slip; ii) 40%/ 50% of your basic salary; iii) The rent amount minus 10% of the salary. If you stay in a metro —Mumbai, Kolkata, Delhi or Chennai — your HRA would be 50% of your salary. In other cities/towns, it would be 40% of salary. For example, if your salary is Rs 40,000 and you live in Mumbai, HRA would be Rs 20,000 (50% of the salary). Let’s assume that you a pay a rent of Rs 15,000 p.a. The amount of rent paid minus 10% of the salary is Rs 6,000. The least of these is Rs 6,000, which would be taken as the HRA exemption. Hence the balance (i.e. rent minus HRA exemption) Rs 9,000 will be taxed.

Latest circular on PAN Applications

Circular No: – NSDL/TIN/2010-339, May 22, 2010
Subject: – Acceptance of PAN applications – initials in the middle name.

Attention of all TIN-Facilitation Centers (TIN-FCs) is hereby invited to the procedure prescribed for accepting PAN applications. As you are aware, PAN applicants (individuals) are required to provide names (first name, middle name & last name) in expanded form in PAN applications submitted. Also, the supporting documents submitted as proof of identity and address should contain the applicant’s name in expanded form and as mentioned in the PAN application.
Income Tax Department (ITD) has now informed that PAN applications received from Individuals having initials (one single character) in the middle name (Applicant’s name, Applicant’s other name, Father’s Name, Representative Assessee’s name), may be accepted. Accordingly, the instructions for acceptance of PAN applications have been revised as below:

Initial (single character)

If the middle name of the abovementioned name fields contain one initial, then the application may be accepted provided they match exactly with the documents (proof of identity and proof of address) submitted by the applicant.
If the last name and/or first name part of the abovementioned name fields contain initial, then the application should be rejected.
It may be noted that the guidelines issued for acceptance of PAN applications having two character names, remain unchanged.

You may face jail if compensation not paid for bounced cheque

If a person convicted for issuing a cheque without balance in his bank account is ordered to pay compensation to the payee, he can be sentenced to imprisonment under Section 357(3) of the Criminal Procedure Code, the Supreme Court has held in the case, K A Abbas vs Sabu Joseph. In this case, the court asked the drawer to pay Rs 5 lakh as compensation for issuing a cheque which bounced. The drawee did not pay. So he was sentenced to two months more for the default. The Kerala high court reduced it to imprisonment till the rising of the court. Both parties appealed to the Supreme Court, the payee arguing that the sentence was minimal. The court ruled that sentence of imprisonment can be imposed in such cases.

E-filing suspended temporarily by IT Department

The Finance Ministry has suspended the facility of e-filing of income tax returns, as security certification for the Income Tax Department’s website is not yet in place. In an official statement here on Monday, the Central Board of Direct Taxes (CBDT) said: “Pending completion of the certification procedure, the e-filing facility for AY [assessment year] 2010-11 has been suspended…The facility is expected to be renewed very shortly.”
The I-T department has initiated the process of renewing the security certificate of its e-filing portal, which expired on May 8, 2010, the statement added.

“The suspension of e-filing of returns,” the CBDT said, “will not affect taxpayers as the earliest date for submitting tax returns for AY 2010-11 is July 31, 2010. The e-filing portal of the Income Tax Department remains fully secure and the lapse of the security certificate does not mean its security features are slackened or compromised.”

The security certification provided by specialised agencies indicates that adequate safeguards have been taken to protect data from unauthorised access.

Technical

Old form with New name & Still easier

It has to be noted that: ITR-1 has been renamed Saral – II E-filing will be also available along the lines of last year ITR-1 New addition to the format of ITR-1 is that an assessee can show ‘Income from House Property’ . The house property income can be from one property only.If more, use ITR-2 .

An assessee can show loss from house property (interest paid) as a negative figure here. This should be deducted to obtain ‘total income’ . The distinct features of Saral-II are that it is to be used by individual taxpayers having salary or pension income, income from one house (excluding brought forward loss from previous years) as well as income from other sources (excluding winnings from lottery).

Centralised System means you can file your return from anywhere

As the process has been centralised, filing of IT returns can be done anywhere in the country, at IT offices and even post offices. If a person has relocated, just the change of address needs to be intimated and the filing can be done at the new location.
You can also file returns electronically. Individuals can file returns through authorised intermediaries who digitise the data and send it to the IT Department.
It is, however, mandatory, for all those filing income tax returns, to apply and get a PAN.The last date for filing returns is July 31.

Track status of Application for New PAN or Corrections in PAN

Click on the following link and fill your details:

https://tin.tin.nsdl.com/tan/StatusTrack.html

Cheques with alteration/corrections will not be honoured from 1st July 2010

RBI has issued RBI Circular dated 22nd February 2010 by virtue of which Banks are supposed to prohibit alterations / corrections on the cheque leaf.
Prohibiting alterations / corrections on cheques : No changes / corrections should be carried out on the cheques (other than for date validation purposes, if required). For any change in the payee’s name, courtesy amount (amount in figures) or legal amount (amount in words), etc., fresh cheque forms should be used by customers. This would help banks to identify and control fraudulent alterations.
The only alteration which is allowed is the alteration in the date.

New Clarification announced by the RBI on 24 June 2010.

Track your Refunds

You can now check whether your assessing officer has proccessed your refunds or not. Please click on the link TRACK YOUR REFUNDS in the left hand side bar and then - enter your PAN Number after selecting your Assessment Year.

Free Doorstep facility for 2 or more returns

Yes, you read it right. If you and your friend or relative wants to file their returns, we will come right to your doorstep for no extra charge.

PAN CARD Services

Charges for preparing and submitting your application for PAN Rs. 300
Required Documents:
Identity Proof
Date of Birth Proof
Address Proof
We provide doorstep facility on request.
The 'Name' 'date of birth' and 'address' in the above documents must match EXACTLY with the name you want in the application for PAN Card.

Have you not filed returns last year?

Do not worry. We are authorised to file last 2 years returns for you.

Need "Blank Income Tax Forms" or a "Blank Challan for paying Taxes (ITNS 280)" or any other document?

Email us or simply leave a comment alongwith your email address and we will send the blank forms in your email in a convinient Word Document form.

Want to know rates applicable for you?

Please Read answer to First Question in the "FAQs" Page.

Are you a working person? Meaning to say are drawing salary every month?

Just follow the steps given in the Second Question in the "FAQs" Page.
We can assure you that filing your returns will be a cakewalk.

Are you having a Business?

Fortunately for you whether you are an LIC Agent or a civil contractor, or professional like a doctor or a lawyer or running a small shop or having any other business, do contact us, because we are one of the few qualified TRPs, who will help you file your returns, right from writing your accounts in detail, to handing over your Income Tax Return Acknowledgemnt in your hands, all at a reasonable cost and that too with our TRP certification.
This package starts from Rs. 500 & Rs.750 onwards.