Up to 5,000 MNCs Identified Late on Tax Payments

The Income Tax Department has identified 4,000-5,000 foreign companies based in this megapolis that are not paying taxes on time, including due to tax disputes, and expects to soon recover from them dues totalling nearly Rs 8,000 crore.

With the region accounting for about one-third of the government’s total tax revenue collection, the Department is “trying its best” to collect the dues from Mumbai-based foreign firms before end of this fiscal, that is March 31.

“We are trying to collect the tax due from foreign companies. In Mumbai alone, there are 4,000-5,000 foreign companies which are not paying taxes properly,” principal chief commissioner of income tax and head of the Mumbai region, DS Saksena told PTI here on Wednesday.

The Department has already collected Rs 23,000 crore from foreign companies so far this year and is hopeful of collecting the balance of around Rs 8,000 crore before March 31.

“We have already collected around Rs 23,000 crore from foreign companies and we are trying our best to collect the remaining Rs 8,000 crore by the fiscal-end,” Saksena said on the sidelines of an Assocham function here.

These tax dues have been caused due to disputes which include profit from international transactions and tax from permanent establishments, he added.www.taxxcel.com



I-T emphasis on creating awareness on TDS

Income tax department is emphasising on creating greater awareness on tax deducted at source (TDS) compliance.

“The department will create awareness for proper TDS compliance by all deductors,” Principal Commissioner of Income Tax D N Mishra said at a seminar on income tax TDS yesterday.www.taxxcel.com

Rakesh Goyal, CIT (TDS) explained the TDS provisions and assured necessary help to tax deductors as well as taxpayers in proper adherence to law.

The event was organised issued by Calcutta Citizens Initiative, All India Federation of Tax Practitioners and Rajasthan Bengal Maitri Parishad.

Speaking on the occasion tax advocate Narayan Jain said monetary limits of TDS should be revised upwards but rate should be scaled down in view of present exemption limit and lower rates of income tax.

He also said that multiplicity of provisions relating to Interest and Commission income need to be consolidated into for simplification.

Over 11 lakh file tax returns under special drive by IT department

Over 11 lakh taxpayers have filed their IT return for Assessment Year 2014-15 after the department tracked them under a special drive to identify those who have not filed their returns despite having an obligation to do so, according to official data.www.taxxcel.com

While the amount of revenue received by the tax department under this drive has not been quantified, the data said the Income Tax department identified a total of 58.95 lakh such taxpayers out of which 11.17 lakh filed their returns for the said time period.

Over 11 lakh file tax returns under special drive by IT department


The drive to identify these individuals and entities was conducted under a special initiative of the department called the ‘Non-filers Management System’ which uses technology Intelligence tools to track erring taxpayers who either forget or just skip filing their returns.

The data said the drive was conducted for the AY 2014-15 and over 11 lakh new taxpayers will act to bolster its another drive to bring more and more people with good income to the tax net by the end of this financial year in March end.

Officials involved in the drive said lakhs of emails and SMSes were sent to those taxpayers who were registered with the e-filing portal of the department while efforts are being made to reach others too.

“The cases of the 11.77 lakh taxpayers who filed returns for AY 2014-15 have been closed and their information has been sent to regional IT officials and Assessing Officers so that they can keep a track of their records in the future,” they said.

In an another attempt by the tax department to ease grievances of taxpayers on the IT refunds front, the Central Board of Direct Taxes (CBDT) has asked the department’s Bengaluru’s CPC to issue ex-parte refunds by making required adjustments, within 30 days, in case either the taxpayer or the Assessing Officer do not make the required initiative.

This means, an official said, if the AO fails to make appropriate changes as per the objection raised by taxpayer or the taxpayer does not respond to taxman’s communication on the refunds front, the Central Processing Centre (CPC) will be issuing refunds by making any possible adjustments, as allowed under the IT Act, in the refunds and generate them independently.

The CBDT has recently asked IT department to expedite refunds of small families, specifically below Rs 5,000, and address this issue on priority as this area is one of the largest subject of grievance for taxpayers with even Prime Minister Narendra Modi ticking off the department sometime back to fasten the process of refunds.

बजट: महिलाओं के लिए हो स्‍पेशल प्रावधान, क्रेच पर मिले टैक्‍स छूट

देश के वर्कफोर्स में महिलाओं की भागीदारी बढ़ाने के लिए आने वाले बजट में महिलाओं के लिए स्‍पेशल प्रावधान होने चाहिए। इंडस्‍ट्री बॉडी एसोचैम ने वित्‍त मंत्री अरुण जेटली से बजट में क्रेच जैसी फैसेलिटी के लिए टैक्‍स छूट और बच्‍चों के एजुकेशन अलाउंस को 10 गुना करने का सुझाव दिया है। वित्‍त मंत्री अरुण जेटली 29 जनवरी को बजट पेश करेंगे।

एसोचैम के प्रेसिडेंट सुनील कनोरिया ने बजट पूर्व सुझाव में वित्‍त मंत्री जेटली से कहा है कि कंज्‍यूमर डिमांड को बढ़ाने बनाने पर जोर दिया जाना चाहिए। जिससे कि इन्‍वेस्‍टमेंट और रोजगार में वृद्धि हो सके। महिलाओं को आर्थिक रूप से सशक्त बनाने के लिए बजट में विशेष प्रस्ताव किए जाने की जरूरत है। www.taxxcel.com


एसोचैम ने दिए ये सुझाव-

– कमर्शियल क्रेच के लिए भी टैक्‍स छूट की व्यवस्था होनी चाहिए।

– हर बच्चे के लिए 2,500 रुपए प्रति माह (अधिकतम दो बच्‍चे तक) एजुकेशन अलाउंस मिले। – एजुकेशन अलाउंस छूट की सीमा मौजूदा 100 रुपए से बढ़ाकर 1,000 रुपए प्रति माह की जानी चाहिए।

– हास्‍टल खर्च अलाउंस पर छूट बढ़ाकर 3000 रुपए प्रति माह (अधिकतम दो बच्‍चों तक) की जानी चाहिए। अभी यह छूट 300 रुपए तक है।

– मेडिकल खर्च रिइम्‍बर्समेंट की सीमा मौजूदा 15 हजार से बढ़ाकर कम से कम 50 हजार रुपए प्रति माह किया जाना चाहिए।

– रिटायर्ड कर्मचारियों के लिए भी विशेष प्रावधान किए जाने की जरूरत है।

क्‍या कहा इंडस्‍ट्री बॉडी ने

एसोचैम ने आरबीआई की रिपोर्ट का हवाला देते हुए कहा कि सेंट्रल बैंक ने एजुकेशन और हेल्‍थ पर बढ़ते खर्च के कारण परिवारों की खराब होती स्थिति को कई बार उठाया है। खासकर नौकरीपेशा परिवारों की स्थिति इस मामले में अधिक खराब है। इसे ध्यान में रखते हुए बच्‍चों का एजुकेशन अलाउंस निश्चित तौर पर बढ़ाना चाहिए।

हेल्‍थ इंश्‍योरेंस के माध्यम से इसपर होने वाले खर्च को भी बेहतर बनाना चाहिए। इंडस्‍ट्री बॉडी का कहना है कि एजुकेशन अलाउंस फाइनेंशियल ईयर 1988-89 के आधार पर ही दिए जा रहे हैं, जो मौजूदा स्कूल फीस के मुकाबले बेहद कम है। हॉस्‍टल खर्च अलाउंस भी 1988-89 में ही तय किया गया था।

Experts Want More Income Tax Deduction on Insurance. Find Out Why

To deepen the penetration of insurance in the country, Finance Minister Arun Jaitley should give additional tax deduction for buying life insurance and remove service tax on term insurance, say industry experts.

A term insurance provides highest cover at minimal cost because it offers death-only benefit, with no survival benefits.


“To make insurance more popular in a country where there is no social security, there should be a separate window for deduction on life insurance premium,” says Girish Kulkarni, MD & CEO of Star Union Dai-Ichi Life Insurance. Currently, one can claim a deduction of up to Rs. 1.5 lakh on the life insurance premium paid under Section 80C.

When a person buys insurance he or she has to pay service tax of up to 14.5 per cent (increased last year from 12.36 per cent earlier) on the premium, which increases the cost of cover. Experts believe that if term insurance is exempted from 14.5 per cent service tax, then it will reduce the cost significantly, providing a good incentive for people to buy the cover.

“As far as life insurance is concerned, service tax imposed on term insurance should be withdrawn. Service tax is impacting growth of sale of term insurance,” says Suresh K. Sethi, vice president of Insurance Foundation of India, a non-profit organisation working towards creating awareness for insurance.

Also, insurance distributors need to be incentivised for selling term-insurance products, suggest experts.www.taxxcel.com

“Currently pure-term life insurance accounts for only 0.4 per cent of the total life insurance products sold in India. As per current regulation, the payouts to distributors are close to zero per cent which makes it less attractive for distributors to sell it. This needs to be changed,” says Yashish Dahiya, CEO of insurance comparison portal Policybazaar.com.

Also, certain changes are required in the Pradhan Mantri Jeevan Jyoti Bima Yojana, which was launched in budget last year, believe experts.

The Pradhan Mantri Jeevan Jyoti Bima Yojana offers a life cover of Rs. 2 lakh at an annual premium of Rs. 330. The scheme was launched to target the poor and those employed in the unorganised sectors which are not covered under any social security scheme. But experts feel that the life cover should be increased.

“The insurance cover of Rs. 2 lakh is very low. If the amount of cover is increased, it will find more takers,” says Naval Goel, CEO of insurance comparison portal PolicyX.com.

Mr. Kulkarni of Star Union Dai-Ichi Life Insurance adds: “Pradhan Mantri Jeevan Jyoti Bima Yojana was a great initiative by the government but to make it financially viable for the insurers, government should do away with the stamp duty of around 14 per cent or any other tax attached to the schemes.”

Guess How Many People Pay Income Tax? You Will be Surprised

It is that time of the year, when the salaried class starts praying for incremental tax concessions in the annual budget. Analysts, however, say that the government should focus on increasing the tax net instead of announcing new income tax concessions.

That’s because only 3 per cent of over 1 billion people in the country are estimated to pay income tax. Those who earn Rs.21,000 and more (per month) have to pay taxes, but many small businesses, professionals (such as doctors and lawyers) and rich farmers do not pay taxes.

Tax evasion is not limited to smaller tax payers, analysts say. The number of people who declare annual income of over Rs. 1 crore is abysmally low at just around 50,000 in the country, they added.

“The number of income tax payers in India is woefully small, and the prosperity the country has achieved post reforms, do not reflect in number of taxpayers… We have to devise systems so that we can be able to bring tax avoiding population within the tax net,” said Yashwant Sinha, former finance minister. (Watch)

According to Mr Sinha, the government has taken “baby steps” by announcing several measures on cash transactions, which could add 30-40 lakhs more tax payers per year.

The Goods and Services Tax (GST), however, could be a big step in bringing more people in the tax net, he added.

“If you had GST for instance, that will help… You will not have a separate sales tax, separate services tax, and a separate excise duty, etc. and you will have income tax. So, people in this country will be paying only two kinds of taxes… If a person is paying a certain amount of excise or service tax and he is not paying income tax, we can easily net him in income tax by finding this out,” Mr Sinha said.


Burdened by Income Tax? Former Finance Minister Has a Plan

Only 3 per cent of over 1 billion people in India pay income tax, so it’s not surprising that the salaried class often complains about high taxes. Accountancy firm PricewaterhouseCoopers (PwC) found in 2014 that the take-home salary of a high earner in India is less than that of salary earners in many developed countries like UK, Canada and US. (Read)

Individuals earning as little as Rs. 21,000 per month have to pay taxes, according to current income tax rules. Unsurprisingly, there’s a consensus among tax experts that the government should increase exemption limits on several kinds of allowances to reduce the income tax burden on middle class.

Former Finance Minister Yashwant Sinha told  that he had recommended the exemption limit for personal income tax to be raised to Rs. 3 lakh per annum in 2012.

More importantly, Mr Sinha, as the head of the parliamentary standing committee on finance on the Direct Taxes Code Bill, had recommended that the exemption limit on income tax should be linked to the cost of living.

“Just as government employees get Dearness Allowance (DA) based on the cost of living index, similarly this threshold (exemption limit) should increase automatically based on cost of living every year. Then nobody will crib, nobody will say that prices have gone up and my income remains the same, and I am paying more taxes,” Mr Sinha said.

The DA is a cost of living adjustment allowance paid to government employees and is calculated as a percentage of basic salary to ease the impact of inflation on people.

Analysts say Mr Sinha’s suggestion to link the exemption limit to cost of living is an effective way to reduce the tax burden on salaries employees and should be considered by Finance Minister Arun Jaitley.

The Direct Taxes Code Bill sought to replace the 60-year-old income tax law. But it is unlikely to be implemented as Mr Jaitley last year said that most of the provisions of the proposed code have been integrated into existing tax law.


Income Tax department issues guidelines for e-communication to assessees

To ease communication with the Income-Tax department, the government has allowed tax payers to reply to notices using their registered email address.

The Income-Tax Department has issued detailed guidelines for using electronic communication, or emails, for paperless assessment proceedings.

As per the guidelines, the department will primarily issue notices or other communication through the email address provided by the assessee or the one available in the last income-tax return furnished.

In case of a company, its email address as available on the website of Ministry of Corporate Affairs or the one made available by the firm will be the primary address.

The assessee may furnish a letter to the Assessing Officer (AO) providing any other email address for the purpose of issuing email.

“Any email, in response to the notice issued by the AO, received from the primary email address of the assessee shall be considered as a valid response to the notice,” the guidelines said.

The guidelines will apply in respect of select non-corporate assessees as part of the pilot project on paperless assessment proceedings and can be extended to other assessees or proceedings as may be notified by the Board subsequently.

Commenting on the move, Vikas Vasal, Partner – Tax, KPMG said the government has clarified the procedural aspects of usage of electronic communication regarding paperless assessment proceedings.

“Gradually, the aim is to move most of the communication to the electronic format. Once done, it would save time and effort both of the tax payers and the tax department,” he said.

Also, such a move would bring in more transparency and consistency in tax positions.

“A number of tax simplification measures have been announced by the government recently and few more are expected to form part of the forthcoming Union Budget,” he added.

The email address to be used by the AO for communication shall be his official designation-based email address under the domain @incometax.gov.in.

“The AO shall issue all statutory notices/questionnaires including notice u/s 143(2) and notice u/s 142 (1) of the Income Tax Act 1961 from his designation email address to the assessee’s email address,” it said.

According to the guidelines issued by the income tax department, a scanned copy of the notice under section 143(2) or 142(1) bearing AO’s signature will have to be attached to the email sent to the assessee. 

In response to the notice, assessee shall, using his primary email address, submit the details called for, to the designation email address of the AO. 

“All supporting documents shall be submitted as attachment in Portable Document Format (PDF) to the email sent to the AO,” it said. 

In case of non-delivery of email on the primary address, the notices shall be sent to other email addresses available with the department.


Budget 2016 should eliminate multiple taxes on realty purchase

Real estate stakeholders in every Indian city are looking forward to the upcoming financial budget 2016 to see whether it will provide any relief to the sector. Developers have their own expectations, because positive announcements for real estate buyers made during the budget will help increase the market sentiment, and therefore sales. The general hope is that the budget will provide cheer to intending home buyers who have been deterred for various reasons.

Make home loans more affordable-

The Union Budget 2016 should make the rate of interest specific to home loans more reasonable. Currently, the banks are offering interest rates which are still too high. Paying so much interest has serious implications on the family budgets of most middle-class wage earners. It is not surprising that many of them currently shy away from home loans.

The budget should bring the interest rate on home loans down to between 7.5%-8.0%. The new government has clearly stated that it wants to make ‘Housing For All’ a reality by 2022. It is impossible to achieve this goal if home loans do not become affordable to all, as well.

Additionally, the home loan interest amount exemption under Income Tax benefit should be increased from the existing limit to Rs. 3 lakh. Further, this exemption should be made applicable for more than single property purchases. This is not an unreasonable expectation. In the current times and in many cases, a single home is not enough to accommodate all family members. The finance ministry should take due note of this fact and accordingly provide relief for both first home and second home buyers.

Eliminate Multiple Taxation On Property Purchase-

The budget should also do away with the multiple taxes involved in the purchase of residential property. As of now, home purchasers are required to pay service tax and value-added tax (VAT) on top of stamp duty and registration charges. Goods and Service Tax (GST) should be introduced in the place of these taxes.

Bring In The Real Estate Regulatory Bill-

The real estate industry expects the Budget to finally make the Real Estate Regulatory bill a reality this year, so that the industry has the benefit of an apex body via which all concerns can be addressed transparently and efficiently.

Reduce Cost Of Property Registration-

Another expectation from the Union Budget is a reduction in the cost of property registration. Stamp duty and registration costs are as high as 6% in most cases, and this needs to be reduced by a few basis points to aid consumers. Alternatively, a slab-based approach should be introduced. Stamp duty falls under state government purview, but the Center can nevertheless issue a directive to reduce stamp duty costs.

Finance Ministry alarmed at low I-T collections; asks taxmen to act quick


Alarm bells have rung in the Finance Ministry after net direct tax collections are showing a 35 per cent shortfall with only two months left for closing of the financial year.

Concerned over this, the CBDT, has written to the Income Tax department to pull up its socks and step up the drive for collection of revenue.

In an urgent missive to the top brass of the department in the country, the Board has asked them to give their “highest priority” to get as much as they can on the regular tax front as it is showing a negative growth rate of ‘-10.44 per cent’ as compared to the corresponding growth of 17.25 per cent last year.

While the target for direct taxes collection this fiscal is Rs 7.98 lakh crore, the department has made a net collection of about Rs 5.21 lakh crore by January 31, thereby falling short, at present, by over 35 per cent to reach the target.

In his first general communication to the department, newly appointed Central Board of Direct Taxes Chairman Atulesh Jindal asked the department to tighten their belts after a Revenue Secretary Hasmukh Adhia raised a similar concern in a meeting recently.

“The gross collection grew only by 8.13 per cent. Chairman CBDT needs to ask all Commissioners to achieve their target,” Jindal wrote to his Principal Chief Commissioners quoting Adhia.

“In the area of net direct tax collections, the present growth rate is not encouraging if compared with the preceding financial year. The net collections as on January 31, 2016 stand at Rs 5,21,853 crore indicating achievement of 65.40 per cent of budget estimates with a growth rate of 10.87 per cent. Looking at the overall minor head-wise growth rate, it is seen that except TDS all other minor heads are having a growth rate which is less than the growth rate of immediately preceding year at this time of the year,” he said.

The main cause of concern in this regard, the CBDT boss said, is the “decline in the regular tax collection which is showing a negative growth rate of (-) 10.44 per cent as compared to the corresponding growth of 17.25 per cent last year.

“This suggests that either regular demand has not been raised due to non-completion of scrutiny assessments or adequate efforts are not being made to collect the arrear demand. This is being seen as matter of concern by the government,” he said.www.taxxcel.com