TDS threshold to be increased; Know what are the benefits

The high-level committee under a former Delhi High Court judge to suggest simplification of Income Tax laws has submitted its report on TDS (tax deduction at source) reforms as one of the core recommendations for Union Budget 2016.

The report, accessed by Times of India, says, “TDS rates for interest income and commission need to be rationalized, the committee suggested that these should be halved to 5 percent”.

-The committee has proposed to raise TDS limit on bank deposit interest from Rs 10,000 to Rs 15,000.

– It has proposed to raise TDS limit on interest on securities from Rs 2,500 to Rs 15,000.

-It has proposed to raise TDS limit on payment in respect of NSS from Rs 2,500 to Rs 15,000.

-The proposal will especially benefit senior citizens whose main area of invest include Bank FDs and other small saving securities and schemes.

-It will also benefit consultants, brokers, house owners, small depositors, freelancers who pay TDS on their income.

Tax payers can now e-verify income tax returns using bank, demat account details

“Currently an Income-Tax Return or ITR can be e-verified by using internet banking, email or an Aadhaar number- generated One Time Password (OTP).”

In a bid make e-verification of tax returns simpler, the Income-Tax Department has included bank account and demat account details among the modes that can be used to generate code to e-verify ITRs.

Currently an Income-Tax Return or ITR can be e-verified by using internet banking, email or an Aadhaar number- generated One Time Password (OTP).

To these, two more modes of bank account and share demat account have been added for generating an electronic verification code (EVC) that is used to submit annual ITRs.

The measures are intended towards ending the practice of sending paper acknowledgement of ITRs to CPC, Bengaluru.

The Central Board of Direct Taxes (CBDT) has added two additional modes for generation of electronic verification code (EVC) for e-verification of ITRs.

The efiling website of the I-T department would now provide a facility to pre-validate bank account details. The assessee will have to provide bank account number, IFSC code, email id, and mobile number and these details will be validated against the details of the tax payer registered with the bank.

“Generated EVC will be sent by e-filing portal to taxpayers’s email id and or mobile number verified from bank,” a CBDT notification said.

The list of banks which will participate in this facility would be provided on the efiling website.

As regards generation of EVC using Demat account details, the CBDT said the assess would have to provide demat account number, email id and mobile number. This details, along with Permanent Account Number (PAN), would be validated against the information with depository (CDSL/NSDL).

“Generated EVC will be sent by e-filing portal to email id and or mobile number verified from CDSL or NSDL,” CBDT said.

After the EVC is generated, it can be put in the ITR form for final submission.

“Despite of all the efforts of the government to go green and paperless, the mandate of providing Aadhaar Number at the time of filing the return of income prevented e-filing from becoming a completely paperless process for those who did not have an Aadhar Card,” Nangia & Co Executive Director Neha Malhotra said.

Last year the tax department launched its ambitious One Time Password (OTP) based e-filing verification system for taxpayers using the Aadhaar number.

According to experts, bank account detail based EVC generation is a more reasonable mode for e-verification. It would be now easier for small tax payers as mostly all of them have bank accounts, even if they do not have Aadhaar numbers.

“With Jan Dhan Yojna, even the small taxpayers have a bank account and thus can complete easily complete the return filing process,”