Monday, 1 October 2012
Thursday, 13 September 2012
Relaxation from compulsory e-filing of return of income
Relaxation from
compulsory e-filing of return of income
subject: Relaxation from compulsory
e-filing of return of income for assessment year 2012- 13 - for representative
assesses of non-residents and in the case of private discretionary trusts -reg
Rule 12 of the
Income-tax Rules, 1962 mandates that an individual or Hindu undivided family,
if his or its total income or the total income in respect of which he is or it
is assessable under the Act, during the previous year, exceeds ten lakh rupees,
shall furnish the return electronically for the assessment year 2012-13 and
subsequent assessment years.
2. It has been brought
to the notice of the Board that the agents of non-residents, within the meaning
of section 160(1) (i) of the Income tax Act, are facing difficulties in
electronically furnishing the returns of non-residents. This is because there
may be more than one agent of the non-resident in India for different
transactions or a person in India may be an agent of more than one
non-resident. Such situations are not covered by the existing e-filing software
which functions on the principle of one assessee-one PAN-one return.
3. It has also been
brought to the notice of the Board that ‘private discretionary trusts’ having
total income exceeding ten lakh rupees are facing problems in filing their
return of income electronically in cases where they are filing their return in
the status of an individual. This is because status of a private discretionary
trust has been held in law as that of an ‘individual’. The existing e-filing
software does not accept the return of a private discretionary trust in the
status of an ‘individual’.
4. Accordingly it has
been decided by the Board that: (i) it will not be mandatory for agents of
non-residents, within the meaning of section 160(1) (i) of the Income tax Act,
if his or its total income exceeds ten lakh rupees, to electronically furnish
the return of income of non-residents for assessment year 2012-13; (ii) it will
not be mandatory for ‘private discretionary trusts’, if its total income
exceeds ten lakh rupees, to electronically furnish the return of income for
assessment year 2012-13.
Tuesday, 11 September 2012
Non reporting of income tax mistakes
Non Reporting of income Tax Filing Mistakes
Non reporting of any kind of income is quite a common tax filing
mistake. Here are the most
Commonly not reported types of income:
Not Reporting Exempt Income: Several incomes, such as dividends and long-term
capital gains
on listed securities, are exempt from tax. Even though
you do not need to pay any tax on these
incomes, you must report these in your tax return.
Since these incomes are reported to income tax department by companies and
brokerage firms, you must also make sure to provide these details in your tax
return. Otherwise, data reconciliation by income tax department may lead to
notice.
Tax and Penalty for Not Reporting Income from Previous
Employer: Every employer deducts tax on the basis of annual salary of the employee.
While computing the amount of tax to be deducted (TDS),employers provide the
benefit of basic exemption and deductions to the employee. If one has changed jobs
during the year, both the employers will give the tax benefit of basic
exemption and deductions to the employee and hence less TDS would be deducted
from salary. This leads to additional tax liability at the time of filing
return. In case you do not report previous employer income in your tax return,
you will get income tax notice when the TDS data is reconciled with your return
data.
Income Tax Notice for Not Reporting Bank Interest
Income: It is a common misconception
that either the interest income from savings or fixed
deposit accounts is not taxable, or that tax
has already been deducted on interest income by bank.
In fact, banks only deduct 10% TDS on
interest income, whereas you may be in the 30% tax
slab. Income Tax department has recently
started reconciliation of TDS data received from banks
and the interest income reported by individuals in their returns. Non-reporting
of interest income in the income tax return is a sure
shot reason to receive a notice from income tax department.
Sunday, 9 September 2012
Thursday, 6 September 2012
Wednesday, 5 September 2012
Tension free retirement by PF
Provident Fund
Regular income and a health cover are of priority
while you plan retirement. Indians are
known for saving more than 25% of their incomes but
they invest in low return assets
(deposits @ 3.5% to 8%). Post tax, the yield is not
enough to cover the loss of value due to
inflation over the years. There are various options
available depending upon the risk profile and required fund flow of individual.The
factors which generally impact the retirement corpus are - years to retirement,
risk profile, inflation and tax liability on income earned as well as
withdrawals. You can have complete tax free retirement life if planned with low
risk. There might be investment where funds are coming at their own pace instead
of the needs and you are paying tax thereon.
Employee provident fund (EPF): The employee share
gets deducted from the salary
and equivalent amount is added by the employer. The
amount is generally 12% of the basic salary plus DA. The returns are 8.5% p.a.
Fixed, safe and its 100% tax free. The best part of EPF is that it gets
invested before the salary reaches you. Hence, no more action is required, and
thus there are no delays. It starts from the very beginning of your career and
your employers are getting it doubled, without rating your performance. The
returns are guaranteed by Govt. of India. Post tax returns are better than
fixed deposits @ 12% in terms of safety too. The banks are offering up to 10%
however corporate deposits can get 12% .
Public Provident Fund: You can deposit from ` 500 to `
70000/- during the financial
year. The
returns are 100% safe and tax free. PPF account can be
opened in your spouse’s or child’s name also. The account is opened for a term
of 15 years and it can be further extended for 5 years. This is the best
investment for investors looking safe and steady returns. The investment of ` 70000/- p.a. for 15 years will help you to create a
corpus of `
20 lakh for your retirement.
Voluntary retirement or termination money isexempt up
to ` 5 lakh. Money received up to ` 5 lakh at voluntary retirement or termination is
exempt. You can take voluntary retirement benefit from multiple employers, but the
tax-free amount is limited to `
5 lakh. For claiming exemption
employee must have completed 10 years of service or
40 years of age. Tax-free amount paid
at voluntary retirement is limited to minimum of
1) 3 months of salary x number of completed year of service,
or
2) Balance months left before retirement age x monthly
emoluments at the time of retirement. Vacancy
caused by voluntary retirement should not be filled up by replacement. It
should be
a reduction in workforce.
You can have complete
tax free retir
Beware of Receive Money
Beware of Receive Money
Any gift received from or given to
non relatives above ` 50,000 is taxable. If you receive
more than ` 50,000 during a financial year
without any consideration,then, the entire sum is taxable. Below mentioned
points are some exceptions to the case:
• On the
occasion of marriage
• Under a
will or by way of inheritance
• Gift
from a relative
• In
contemplation of death
The limit
of ` 50,000 is for the entire financial
year (Apr 1, 2010 to Mar 31, 2011),irrespective of the number of people from whom
you have received the money. For example if you received Rs. 10,000 from six persons,
you will have to pay tax on the entire sum of ` 60,000.
Also a
gift received in kind, such as property, paintings, bonds, debentures and jewellery
without consideration is also taxable. If you are gifted a painting worth`
2 lakh, it will be included in your income and taxed as
per your slabs.However if a property is received on consideration which is less
than stamp duty value, then it will not be included in your income.
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