IT dept launches e-appeal filing system

In yet another step aimed at reducing human interface between taxman and the taxpayer, the Income Tax department today operationalised a facility for e-filing of the first appeal before a tax officer.

IT dept launches e-appeal filing system

The department said the facility of filing the appeal form, like filing Income Tax Returns (ITRs), can be done using a digital signature from now on, while the Electronic Verification (EVC) facility for the same using the Aadhaar, mobile number and email id will be activated soon on the official web portal of the tax department —http://incometaxindiaefiling.Gov.In/.

The existing two-page document used for this, called ‘Form No. 35’, has been re-formatted by the department recently so that it can be electronically uploaded on the e-filing portal of the department.

In the new e-form, an applicant or taxpayer seeking appeal against an Assessing Officer’s order has been given an avenue to append ‘Statement of Facts’ in 1,000 words as also furnish the grounds of appeal in another 100 words.

Documentary evidence can also be appended to the new form by an assessee using the electronic internet-based facility.

The IT department has four stages of appeal mechanism for the assessees to put forth their grievance beginning with the Commissioner of IT (Appeals), the Income Tax Appellate Tribunal (ITAT), the High Court and finally the Supreme Court.

The new form is applicable for the CIT (Appeal) fora and those taxpayers who file e-returns will be eligible to use this new facility.

In view of launch of this facility and activation of a select category of ITRs today, the taxman has asked filers to “update their profile and select higher security option to secure their e-filing account” created over the portal.www.taxxcel.com

The systems wing of the department will soon roll out detailed procedures for taxpayers to begin using this facility, a senior official said.

“Electronic filing of appeal along with the documents relied upon before CIT (Appeals) will remove human interface, reduce paperwork and decrease the transaction cost for the taxpayer. It would ensure consistent and error-free service as validations will be in-built, resulting in fewer deficient appeals. Online filing will also facilitate fixation of hearing of appeals electronically.

“The new format for filing of appeals is more structured, objective, systematic and aligned with the current provisions of the Income Tax Act,” the Central Board of Direct Taxes had earlier said.

With these changes, it had said, the “burden of compliance on the taxpayers in appellate proceedings will be significantly reduced.”

File your taxes safely: Income Tax Department tells you how

The Income Tax Department has from time to time issued advisories regarding the need to avoid phishing emails and to carefully protect the passwords, OTPs and not share them with others.

In order to ensure that taxpayers are able to secure their E-filing account against any fraudulent attempts, the Income Tax Department has introduced a new facility called the ‘E-filing Vault’. In order to use this facility, taxpayers can log in to their E-filing Account and under their profile page select E-filing Vault ‘higher security’.www.taxxcel.com

Taxpayers can then select to login with any one or multiple options of the higher security methods namely — Using Aadhaar linkage to generate OTP, login through Net-Banking or login using Digital Signature Certificate (DSC).

Once this has been done, any future attempt to login will require the additional check of OTP using Aadhaar or the taxpayers will have to login using net banking or login using DSC. By using this facility, taxpayers can prevent anyone from logging in even if in the past they shared the user id and password.

The dual factor authorization ensures higher degree of security compared to the simple user ID and password.

Similarly, taxpayers can also select how their password can be reset. Once the taxpayer has selected reset password using any one or multiple options of the higher security methods namely ? Using Aadhaar linkage to generate OTP, Login through Net-Banking or Login using Digital Signature Certificate (DSC), then no other person will be able to reset taxpayer?s password even if the secret answer or E-filing OTP etc is known.

Additional EVC options using ATM, Bank Account Validation or Demat Account Validations are shortly going to be introduced and these options will also be available for the higher level of security for login as well as resetting of password.

Income Tax Department strongly advises all taxpayers to use a strong password (combination of at least one uppercase, one special character and one numeral) and select the E-filing Vault option to add an additional layer of security to the their E-filing Account to login and resetting of password.

Taxpayers’ grievances: CBDT allots quota of complaints to monitor, track to top brass

The new initiative has come after Prime Minister Narendra Modi recently held a meeting on the subject on March 23.


 

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According to high priority to issues related to taxpayers’ grievances, CBDT has brought a new mechanism where top officers of the IT department have been allotted a specific quota of complaints to monitor and track, from their origin to successful resolution.

The new initiative has come after Prime Minister Narendra Modi recently held a meeting on the subject on March 23 under the Centralised Public Grievance Redress and Monitoring System portal where he expressed the view that “high-level monitoring of public grievances is necessary”.

Following the prime minister’s instructions, a senior official said, the Central Board of Direct Taxes has ordered that all members of the Board and officers in the ranks of Principal Chief Commissioner and Principal Directors General will “personally examine” 10 grievances each, every week.

Similarly, all Chief Commissioners, Principal Commissioners and Commissioners of Income Tax will individually monitor 20 and 30 grievances respectively, every week.

The overall assessment and resolution status of the grievances compiled for a month will be forwarded to the CBDT by the first week of the succeeding month which will be subsequently sent to the Prime Minister’s Office and

Department of Administrative Reforms and Public Grievances for review, they said.

The official said the measure will not only ensure accountability in effective grievance redressal but also give a clear and real-time picture of the subject.

CBDT has also recently created a new structure in the IT department to exclusively deal with taxpayers’ grievances and complaints related to delay in issue of refunds, problems in filing tax returns among others.

Aadhaar, net banking-based I-T e-filing appeal system activated

Income Tax department has activated the Aadhaar and net banking-based e-filing verification system for taxpayers to file the first appeal before a tax officer, on similar lines of online ITR filing.
Income Tax department has activated the Aadhaar and net banking-based e-filing verification system for taxpayers to file the first appeal before a tax officer, on similar lines of online ITR filing.
In order to reduce the interface between taxman and the taxpayer, the department has recently operationalised the maiden facility on its official e-filing portal.
www.taxxcel.com
“One EVC can be used to validate one form of the assesse irrespective of the assessment year. The EVC will be stored against the assesse PAN along with other verification details. The EVC will be valid for 72 hours or as otherwise specified,” a notification in this regard said.

The Electronic Verification Code (EVC) works by way of generating a personalised OTP by using the Aadhaar database or the net banking identity of a filer or entity. The OTP is subsequently sent to the personal email id or mobile phone of the filer for validation and subsequent process of filing.

The facility of filing the appeal form, like filing Income Tax Returns (ITRs), can also be done using a digital signature on the official web portal of the tax department — http://incometaxindiaefiling.gov.in/.

The existing two-page document used for this, called ‘Form No. 35’, has been re-formatted by the department recently so that it can be electronically uploaded on the said e-filing portal.

In the new e-form, an applicant or taxpayer seeking appeal against an Assessing Officer’s order has been given an avenue to append ‘Statement of Facts’ in 1,000 words as also furnish the grounds of appeal in another 100 words.

Documentary evidence can also be appended to the new form by an assess using the internet-based facility.

The IT department has four stages of appeal mechanism for the assessees to put forth their grievance beginning with the Commissioner of IT (Appeals), the Income Tax Appellate Tribunal (ITAT), the High Court and finally the Supreme Court.

The new form is applicable for the CIT (Appeal) fora and those taxpayers who file e-returns will be eligible to use this new facility.

In view of launch of this facility and activation of a select category of ITRs last week, the taxman had also asked filers to “update their profile and select higher security option to secure their e-filing account” created over the portal.

“Electronic filing of appeal along with the documents relied upon before CIT (Appeals) will remove human interface, reduce paperwork and decrease the transaction cost for the taxpayer. It would ensure consistent and error-free service as validations will be in-built, resulting in fewer deficient appeals. Online filing will also facilitate fixation of hearing of appeals electronically.

“The new format for filing of appeals is more structured, objective, systematic and aligned with the current provisions of the Income Tax Act,” the Central Board of Direct Taxes had earlier said.

With these changes, it had said, the “burden of compliance on the taxpayers in appellate proceedings will be significantly reduced.”

 

Tax sops for small I-T payers, hike in super-rich surcharge

It has hiked the surcharge by 3% on earnings above Rs 1 crore, levied a pollution cess on petrol, diesel cars and SUVs, among others.
The Union Budget for 2016-17 on Monday has offered sops for small and marginal income tax payers. www.taxxcel.com


It has hiked the surcharge by 3% on earnings above Rs 1 crore, levied a pollution cess on petrol, diesel cars and Sports Utility Vehicles (SUVs) and has offered a one-time compliance window for domestic black money holders slapping a tax and penalty of 45%.
Presenting his third Budget, Finance Minister Arun Jaitley has also proposed a ‘Krishi Kalyan’ cess of 0.5% on all taxable services to improve agriculture and reduction of duties on project imports for the cold room for cold chain, refrigerated containers and a number of other items.

Cigarette and tobacco products will become costlier with the hike in excise duty by 10 to 15%.

While the revenue loss on direct taxes will be Rs 1,060 crore, Jaitley’s indirect tax proposal will mobilise an additional Rs 20,670 crore. The net revenue gain will be Rs 19,610 crore.

Income Tax Expectations From Arun Jaitley

Finance Minister Arun Jaitley will present the Budget for 2016-17 on February 29. The salaried class has a lot of expectations from the Budget. Increase in the personal income tax exemption limit and a higher deduction limit on home loan interest are among the common ones, say analysts.

Budget 2016: Income Tax Expectations From Arun Jaitley

“Considering the increase in cost of living, the current basic exemption limit of 2.5 lakh should be raised to Rs. 3 lakh. Also going forward increase in basic exemption limit could be linked to the rate of inflation and be raised every year automatically,” says Neha Malhotra, executive director of taxation at Nangia & Co, a tax advisory firm.

The salaried class also wants the deduction limit under Section 80C to be raised further, say experts.

“The Section 80C limit of Rs. 1.5 lakh hasn’t been revised since FY 2014-15. It may see an increase this year. Possibly, the government may look at adding some saving products and increasing the limit to Rs. 2 lakh,” says Preeti Khurana, chief editor of Cleartax.in.

Currently, Section 80C is too cluttered, say experts, with a large number of instruments qualifying for deduction under the section. Employee Provident Fund, which is a mandatory contribution for a salaried person, is also eligible for deduction under the section, consuming a major portion of the Rs. 1.5 lakh limit. Therefore, people especially in the higher income group are unable to claim deductions for other 80C-linked investments.

“80C deduction should be linked to the income level – higher income taxpayers should be given higher limit for deduction i.e. a slab for tax deductions based on the income” adds Neha Malhotra of Nangia & Co.

Experts also feel that the infrastructure bonds should be reintroduced, both to provide an extra deduction to the salaried class and help the government raise funds for infrastructure projects.

“To encourage savings for infrastructure development, the infrastructure bonds may be reintroduced with a sub-limit ofRs. 25,000,” says Anil Rego, CEO and founder of Right Horizons.

Also, given the high property prices, the deduction for the home loan interest part under Section 24B part should be raised further, experts say.

“The current limit of Rs. 2 lakh is low considering the costs involved in cities like Mumbai, where the houses are priced at a crore and above,” says Ms Malhotra of Nangia & Co.

The huge delays by the builders in giving possession are adding to the cost of buying a property further. Therefore, experts believe that the government should relax the rules related to home loan interest exemption.

As per the current income-tax rule under Section 24B, the buyer can claim the deduction on the entire interest paid during the construction period in five equal installments only after the completion of the construction of the property. It further says that if the construction of the property is not complete within three years, the borrower can claim only claim Rs. 30,000 per year of the pre-construction interest. The government should relax the norms, say experts.

Also, there are certain sections whose deduction limits have not been revised for a long time and are far below the actual cost that people incur. These needs to be increased, believes experts.

“Medical allowance of Rs. 15,000 per annum, education allowance of Rs. 100 per month per child and hostel allowance of Rs. 300 per month per child are too low considering the actual costs involved and have not been revised for a very long time, ” says Ms Malhotra.

Additional surcharge on Rs 1 crore income to increase tax outflow by almost Rs 1 lakh

The Finance Minister has increased the surcharge on income above Rs 1 crore, from 12% to 15%. This means that the super-rich would pay approximately 1% more income tax as their effective tax rate increases from 34.6% to 35.6%. This will result in an additional cash outflow of approximately Rs 1 lakh per annum(see box). 

FM has also announced tax on dividend income. Currently, dividend income is completely tax exempt in the hands of the shareholders as the company distributing the dividends has to pay a dividend distribution tax. FM has proposed to introduce Section 115BBDA to provide for 10% income tax on gross amount of dividends for taxpayers whose annual dividend income exceeds Rs 10 lakh.www.taxxcel.com

Budget 2016: Additional surcharge on Rs 1 crore income to increase tax outflow by almost Rs 1 lakh

FM has also proposed to impose a Krishi Kalyan Cess at 0.5% that will be levied on all taxable services. Meaning, the effective service tax has now gone up from 14.5% to 15%. 

A small relief of Rs 3,000 has been given to small taxpayers. The tax rebate of Rs 2,000 has been increased to Rs 5,000 per annum. “Around 2 crore taxpayers in India report annual taxable income of up to Rs. 5 lakh, who will benefit from the scheme,” said Finance Minister Arun Jaitley in his budget speech. This rebate will be extended under Section 87A. 

Also, self-employed individuals who do not receive HRA benefits and do not own a house can now claim a deduction of up to Rs 60,000 under section 80GG for rental payment. Currently, this deduction is restricted to Rs. 2,000 per month. FM has proposed that this be increased to Rs. 5,000 per month. 

Effect of the increase in surcharge on various categories with income of Rs 1 crore.

Budget 2016: Four-month window for domestic black money holders to come clean

Government on Monday came out with one time four-month compliance window for domestic black money holders to come clean by paying tax and penalty of 45% per cent.

“I want to give an opportunity to earlier non-complaint to move to the category of complaint. I propose a limited period compliance window for domestic tax payers to declare undisclosed income represented in any form of assets and clear up past transgression by paying tax at 30%, a surcharge at 7.5%, a penalty at 7.5% which is total of 45% of undisclosed income,” Finance Minister Arun Jaitley said.www.taxxcel.com

Unveiling the Budget for 2016-17, Jaitley said those declaring their assets will get immunity from prosecution.

“There will be no scrutiny or inquiry regarding tax in these declaration under Income Tax Act or Wealth Tax act and declarations will have immunity from prosecution. Immunity from Beneami transaction has been proposed subject to certain conditions,” he said.

The government plans to open the compliance window under the Income Tax Disclosure Scheme from June 1 to September 30 2016 with option to pay amount due within 2 months of declaration.

In the last Budget, the government had come out with similar compliance window for people holding undisclosed assets abroad.

He, however said that tax evasion will be “countered strongly”.

Capability of the tax department to detect tax evasion has improved because of enhanced access to information and availability of technology, the minister said.

Jaitley further said the surcharge levied on undisclosed income called ‘Krishi Kalyan Surcharge’ will be used for agriculture and rural economy.

“We plan to open window under the income tax disclosure scheme from June 1 to September 30, 2016, with option to pay amount due within two months of declaration.

“Our government is fully committed to removing black money from economy… We would like to focus all our resources to bringing back black money to the books,” Jaitley said.

Budget 2016: Tax sops for small I-T payers, hike in super-rich surcharge


 

It has hiked the surcharge by 3% on earnings above Rs 1 crore, levied a pollution cess on petrol, diesel cars and SUVs, among others.


 

The Union Budget for 2016-17 on Monday has offered sops for small and marginal income tax payers.www.taxxcel.com

It has hiked the surcharge by 3% on earnings above Rs 1 crore, levied a pollution cess on petrol, diesel cars and Sports Utility Vehicles (SUVs) and has offered a one-time compliance window for domestic black money holders slapping a tax and penalty of 45%.

Presenting his third Budget, Finance Minister Arun Jaitley has also proposed a ‘Krishi Kalyan’ cess of 0.5% on all taxable services to improve agriculture and reduction of duties on project imports for the cold room for cold chain, refrigerated containers and a number of other items.

Cigarette and tobacco products will become costlier with the hike in excise duty by 10 to 15%.

While the revenue loss on direct taxes will be Rs 1,060 crore, Jaitley’s indirect tax proposal will mobilise an additional Rs 20,670 crore. The net revenue gain will be Rs 19,610 crore.www.taxxcel.com

MFs See Rise In Basic Income Tax Exemption Limit

India’s mutual fund industry is expecting an increase of Rs. 50,000 in basic income tax exemption limit to Rs.3 lakh in the budget to be presented on Monday.

MFs See Rise in Basic Income Tax Exemption Limit

If done so, this can leave an additional liquidity of Rs. 50,000 crore in the hands of taxpayers, a part of which can go into investments.

The mutual funds industry also wants that money coming under capital gains be invested in infrastructure mutual fund products.

“We do hope that the finance minister will increase the basic I-T exemption limit to Rs. 3 lakh. If it happens, more fund is likely flow into the mutual fund industry which will help further increase the assets under management which stands around Rs. 13.4 trillion (Rs. 13.4 lakh crore),” LIC Nomura Mutual Fund chief investment officer Saravana Kumar told PTI.www.taxxcel.com

Expressing similar views, Taurus Mutual Fund chief executive Waqar Naqvi said, “I expect the budget to increase the basic income tax exemption limit to Rs. 3 lakh. This can leave an additional Rs. 50,000 crore into the hands of the taxpayers, a part of which can come into the mutual fund industry.”

Mr Naqvi also said that government must allow money coming under capital gains to be invested in the infrastructure funds of the fund houses.

“I also hope capital gains to be invested in the infrastructure mutual fund products. As of now, when one gets capital gains, one is liable to pay capital gains tax. However, if the government allows this money to be invested in infrastructure MF products, then one will be able to avoid paying capital gains tax.”

“Moreover, the amount will be deployed by the MF industry for infrastructure projects which will further help nation-building,” he added.