Change in Service Tax Rate will effect on expesnes from 1st June, 2015.

Recently, Department of Revenue has been issued a notification about change in service Tax Rate i.e. 14% w.e.f. 1st June, 2015. This new rate of service tax i.e., 14% definately increases expenses from 1st June.  The detailsed Notification is as under:

[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)]
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
(DEPARTMENT OF REVENUE)

NOTIFICATION

New Delhi, the 19th May, 2015
No. 14/2015-Service Tax

G.S.R. ---(E).- In exercise of the powers conferred by clauses (a), (c) and (f) of section 107, section 108, sub-sections (2), (3) and (4) of section 109, section 153 and section 159 of the Finance Act, 2015 (No. 20 of 2015), the Central Government hereby appoints the 1st day of June, 2015 as the date on which the provisions of clauses (a), (c) and (f) of section 107, section 108, sub-sections (2), (3) and (4) of section 109, section 153 and section 159 of the said Act shall come into force.

[F.No. 334/5/2015 - TRU]

(Akshay Joshi)
Under Secretary to the Government of India

Important Information - TDS Return - Resons to reject the correction in Salary Details and Deductee Records by TDS (CPC).

Recently TDS (CPC) has clarify that reasons to reject the correction in salary detail records and Reasons to reject the correction in deductee records are as follows respectively:

Rejection reasons pertaining to salary details are as follows:

  • In case of salary detail PAN update or delete of salary detail record, last total gross income should match with corresponding value in regular / previous statement
  • Salary detail record on which correction is filed does not exist in the regular / previous return
  • In case of addition of salary detail record, the record number should be unique and in sequence with the existing records in regular / previous return.

Rejection reasons pertaining to deductee details are as follows:

  • In a correction statement that updates / deletes deductee rows, verification keys from deductee data that should match with corresponding fields in regular / previous return are – Last PAN, Last total amount deducted at source, Last total amount deposited
  • Updation / deletion on deductee record is submitted in a correction statement but this deductee record does not exist in previous/ regular return
  • Valid PAN to invalid PAN update is not allowed for a deductee row
  • Deductee detail record number should be unique in case of addition of deductees
  • If value of Reason for non-deduction / lower deduction / higher deduction / threshold field as per regular or last correction statement is ‘C’ , then update can be performed only on ‘PAN’, ‘Amount of Payment’ and ‘Date of Payment’
  • Deletion of deductee record having value C in Reason for non-deduction / lower deduction/ higher deduction / threshold field, is not allowed
  • Valid PAN to another valid PAN update can be done only once for a given deductee row.


Source: www.tdsman.com

Don't misuse Forms 15G, 15H to avoid TDS

Imprisonment and fines await those who wrongly file the two forms to avoid tax on interest income.

Getting a tax refund can be cumbersome as delays by the Income Tax Department are common. It makes sense to plan your taxes at the beginning of the year, to avoid overpayment and the refund process. Submitting investment declaration with your employer on time and filling form 15G15H will save you half the hassles. However, you cannot randomly submit forms 15G and 15H.

If your interest income exceeds `10,000 a year, the bank will deduct 10% tax at source.If you do not furnish PAN details, the TDS rate will be higher at 20%. However, you can submit a Form 15G and 15H to avoid TDS on interest income. While Form 15G is for Indian residents below 60 years of age, HUFs and trusts, Form 15H is for those above 60.

The repercussions of wrong filing is stiff.A false or wrong declaration in Form 15G attracts penalty under Section 277 of the Income Tax Act. "Prosecution includes imprisonment ranging from three months to two years, and a fine. The term can be extended to seven years and fine, where tax sought to be evaded exceeds `25 lakh," says Sudhir Kaushik, CA and CFO, Taxspanner.Keep in mind the following points.

Eligibility:

The basic conditions for filing 15G are--the final tax on estimated total income computed as per the Income Tax Act should be nil; and, the aggregate of the interest (excluding interest earned on securities) received during the financial year should not exceed the basic exemption slab of `2.5 lakh. If these criteria are met, you can submit Form 15G and the entire interest income would be credited without any tax cut.

You need to meet both criteria. Even if the interest income is less than the basic exemption allowed during that financial year, but your total tax liability is not nil, you will not be eligible for filing Form 15G. The reverse is also true. Say your income is `4 lakh, of which `3 lakh is earned as interest from the bank. You might invest `1.5 lakh in PPF and be out of the tax net, but you are not eligible for Form 15G as though your tax liability is zero, the interest income is high er than the basic exemption of `2 lakh. The refund route is your only recourse.

Form 15H can be only filed by individuals above 60. This form imposes only the first condition--the final tax on the investor's estimated total income should be nil. So, if you are above 60, your taxable income for the financial year can be up to `3 lakh for you to be eligible for 15H. For super senior citizens above 80 years, this limit is `5 lakh.

Important Information about TDS Statement by TRACES and Basic principles of TDS Compliance.

An important information regarding TDS statement has been displayed at TRACES website which states as follows:

Considering peak statement filing time, processing of statements might take 7 to 10 working days from date of filing. 97.5% of the statements filed till 29th Apr 2015 have been processed for 26AS. Please wait for 24 hours after receiving a communication to submit Online Corrections at TRACES. 

Basic principles of TDS compliance:

  • Deduction/ Collection of Tax at Correct Rates
  • Timely Deposit of Tax Deducted at Source
  • Accurate Reporting of data related to tax deductions/ collections made
  • Submission of TDS Statements within the due dates
  • Verification and Issuance of TDS Certificates within time
  • CPC (TDS) is now sending “Intermediate Default Communication” for PAN Errors and Short Payments, which can be corrected during the interim period of a week of filing TDS Statements, before CPC (TDS) proceeds with computing Defaults for the relevant statement.
  • User-friendly Online Correction facility can be used for Correction of Deductees, Tagging Unmatched Challans and Payment of Fees/ Interest. (Please navigate to Defaults tab to locate Request for Correction from the drop-down menu. For any assistance, please refer to the e-tutorial available on TRACES).
  • Aggregated TDS Compliance Report assists the PAN of the Deductor to administer TDS Defaults for associated TANs and to take appropriate action
  • The Deductor’s Dashboard provides you all necessary information to assist you in “Compliance Self-Assessment” and to take appropriate action.
  • Non-filing Self-declaration can be made by navigating to Statements / Payments menu and submit details under Declaration for Non-Filing of Statements.
  • PAN Verification and Consolidated TAN – PAN File facility on TRACES can be used for verifying the deductees.
  • The Conso Files and Justification Reports downloaded from TRACES help you to identify errors in submission of revised Quarterly TDS Statements.
Source: www.tdsman.com

How to file your Income Tax Return for Asstt. Year 2015-16 ? and Advantages & Disadvantages of Income Tax Return Filing.

Income Tax Return Filing is not mandatory whose income below Rs. 250000/-.  Apart from this if you have pan card must file income Tax Return before due date, evenif your Taxable Income is less than Rs. 250000/-.  

Heads of Income :

Salaries & Perquisites :  Salary and allowance (House Rental Allowance, Hardship allowance) and benefits (such as Rent free accommodation, car, stock options etc.) provided by employer either free or at a concessional rate.

Income from House Property : Rental income from House Property.

Profits & Gains of business or profession : Business Income
.
Capital Gains : Profit/loss on sale of shares, mutual funds, Property etc.

Income from other sources : Interest on fixed deposit, dividend, Gifts etc. 

Allowable Deductions :

  • Professional Tax levied State govt. from salary is deducted,
  • Transport allowance is deducted from salary upto Rs. 800/- per month,
  • Children education allowance is deducted from salary upto Rs.100/- per month per child,
  • Insurance Premium u/s 80C up to 1 lac,
  • Payment of medical insurance premium. Deduction is available upto Rs.15,000/ for self/ family and also up to Rs. 15,000/- for insurance in respect of parent/ parents of the assesse,
  • Donation to certain funds, charitable institutions u/s 80G,
  • Deduction of up to Rs.10,000/- for interest on savings bank account or post office savings account,
  • Rebate of Rs. 2000/- is available if Total income is less than Rs. 5 lacs

Deductions for Housing Loan:
For Principal Repayment:

  • Deduction of Rs. 1 lac u/s 80C is allowed on Payment Basis if construction of house property is completed.

For Interest on loan:

  • If Property is constructed/bought within 3 years then For self occupied Property : upto Rs. 2 lacs, For Let out Property: No limit,
  • If Property not constructed/bought within 3 years thenDeduction upto Rs. 30,000/- only.
  • Pre-construction interest is allowed after completion in 5 equal installments without any limit.

Clubbing of Income
Concept of joint filing of tax return does not exist.

There exists clubbing provisions for income of minor children and spouse in certain circumstances.

Salary earned by spouse :  Spouse salary from a concern where individual has a substantial interest ( > 20% stake)- Salary due to technical/professional expertise excluded).
Transfer of asset to spouse : Transfer of asset to spouse for inadequate consideration or otherwise than in connection with an agreement to live apart.
All Income of minor child : Exclusion available for manual work and Activities involving application of skills

Modes of tax payment
Withholding Tax

  • Tax to be withheld from the remuneration paid by the employer even after departure if income exceeds maximum threshold limit not chargeable to tax .
  • Annual certificate to be issued by the employer for salary and benefits.
  • Withholding at prescribed rates on personal income.

Advance Tax

  • Advance tax payable on
  • other income, where it is liable to tax in India. (Tax Limit INR 10,000)
  • Advance tax payable on personal income in three installments
  • 30 per cent by 15 September
  • 60 per cent by 15 December
  • 100 per cent by 15 March

Income Tax slab for individuals (Click Here)

Advantages and Disadvantages of filing Return.

  • Return filing is mandatory for getting any loan,
  • Return filing is mandatory for getting VISA,
  • For getting Credit Card,
  • Standard proof of income,
  • For quick registration of immovable properties,

Disadvantages of filing Return. If Return is not filed

  • Penalty of Rs. 5000/- will be levied & also interest u/s 234A is required to be paid,
  • Losses can not be carried forward to next year,
  • No Revise Return can be filed,
  • Interest upto 1% per month will be levied.

Don't wait for the Last moment to submit TDS Statement for Q4 for Fin. Year 2014-15.

Recently, CPC (TDS) has issued an advisory communication to all deductors stating that they should not wait for the last moment to submit their TDS statements for 4th quarter of Financial Year 2014-15. The issued communication has been given below:

Dear Deductor,

As you may be aware, the due date (May 15, 2015) for filing of TDS statements for Q4, Financial Year 2014-15 is approaching fast and therefore, CPC (TDS) is reaching out to you to ensure that best practices are followed in exercise of the above activity.

Key information to note:

  • CPC (TDS) emphasizes timely, correct and complete reporting for taxes deducted at source, to ensure that the deductees have correct TDS Credits to claim.
  • CPC (TDS) informs you of possible PAN Errors and Short Payment Defaults through an Intermediate Communication on filing of Original TDS Statements. The above can be corrected by using Online Correction facility at TRACES after waiting for 24 hours on receipt of above communication. You are, therefore, requested to file your TDS Statements well in advance to correct above errors, ensure timely processing and avoid defaults.
  • Short Payment Defaults ought to be closed at the time of submitting requests to download TDS Certificates from the web portal TRACES.

Timely Reporting:

  • The due dates to file TDS statements for Q4, FY 2014-15 and to distribute TDS Certificates are May 15 and 30, 2015 respectively.
  • Please submit the statement well before the due date to facilitate processing of TDS Statements and availability of TDS Certificate, in advance of the applicable due dates.
  • Please do not wait for the last moment to avoid any delays and levy of Late filing fee, which, being statutory in nature, cannot be waived.

Correct Reporting:

  • Please use your correct contact details, including Contact Number and email IDs in TDS Statements.
  • It is very important to report correct and valid particulars in respect to deductor and deductees. Please report the TAN of the deductor, Category (Government / Non-Government) of the deductor, PAN of the deductees, AIN details in case of Government deductors and other particulars of deduction of tax correctly in the quarterly TDS statement.
  • For claiming lower rate of tax under DTAA, please mention correct Country Code and Nature of Remittance in form 27Q of TDS Statements.
  • Please use TAN-PAN Master from TRACES to Validate PAN and name of deductees before quoting it in TDS statement. Please note that there are restrictions for correction of PAN.
  • Quote correct and valid lower rate TDS certificate in TDS statement wherever the TDS has been deducted at Lower/Nil rate on the basis of certificate issued by the Assessing Officer. Please raise Flag “A”/ “B”, as appropriate, and quote valid and correct Certificate Numbers.
  • Correct details with respect to Challans/ BINs must be reported to avoid mismatches resulting into Short Payment defaults in TDS Statements.

Complete Reporting:

  • Please ensure completeness of your TDS statement by including all your deductees. Please note that the obligation to report each transaction correctly in the relevant quarter is on the deductor.
  • Completeness of statement will ensure that a C4, C5, C3 or C9 correction can be avoided. It may be noted that CPC (TDS) does not encourage C9 corrections by addition of a new challan and underlying deductees.
  • Please ensure to complete Annexure II for all deductees employed (Form 24Q) for any period of time during the current financial year, including Annexure I for TDS details. Incomplete reporting in Annexure II results into Short Deduction Defaults and unavailability of TDS Certificates for missing deductee rows.

CPC (TDS) is committed to provide best possible services to you.

CPC (TDS) TEAM

Source: TRACES

Be careful while submitting TDS/TCS Returns - Common Errors

This is the important part to avoid common mistakes, while TDS Return (Statement).  If the TDS Statements are filed with following common mistakes you may cause the penalty or interest or default notices by Income Tax Department, therefore must read carefully the following common Errors in TDS Returns:

Incorrect reporting of 197 Certificates:

Please refer to the following guidelines for correct reporting of 197 Certificates:

The Certificate Number should be of 10 digits with Alpha-numeric structure. Please refer to the following examples:
  • Correct Format 1111AA111A;
  • Incorrect Format: 1111AA111A/194C
Certificate Number should be valid during the period for which it is quoted.

The Certificate Number should be for the same PAN, Section Code and Section Rate for which it has been mentioned in the statement

Threshold limit Amount of the Certificate should not be exceeded.

Please ensure that the Certificate is not expired. Please refer to the following illustration:

Lower deduction Certificate under section 197, issued in April 2013 (e.g. Certificate Number – 1) stands cancelled by Assessing Officer on 10/11/2013.

A fresh certificate Under Section 197 (e.g. Certificate Number – 2) is issued with effect from 11/11/2013.

Deductor quotes Certificate Number – 2 against the transactions recorded during the period from 01/11/2013 to 10/11/2013 in Q3 TDS statement.

Deductor should have quoted Certificate Number – 1 for the transactions conducted till 10/11/2013.

Common errors resulting into Short Payment Defaults:
  • Typographical errors committed by deductor, in reporting the date ’20032014′    in the “Tax Deducted” column.
  • Total of “Amount Paid / Credited” reported in the “Tax Deducted” column of the statement. This results into short payment and Deductors need to ensure that the TDS/TCS Deducted/Collected amount should be equal to TDS/TCS Deposited Amount.
The above mistakes are illustrated below:

Amount Paid/ Credited
TDS Deducted
TDS Deposited
Remarks
1,55,000.00
1,55,000.00
15,500.00
Wrong TDS Deducted Amount
220420.00
20032014.00
22042.00
Date mentioned in the TDS Deducted Column

Actions to be taken:
  • CIN Particulars (BSR Code, Date of Deposit and Challan Serial Number) mentioned in the TDS statement should exactly match with the CIN Particulars as available on ‘Challan Status’ at www.tdscpc.gov. in or ‘Challan Status Enquiry’ at www.tin-nsdl.com
  • For BIN (Book Identification Number), the particulars (24G receipt number, Date of transfer voucher and DDO Serial Number) mentioned in the TDS statement by the Govt. Deductors should exactly match with the BIN Particulars as available on ‘Challan Status’ at www.tdscpc.gov. in or ‘BIN View’ at www.tin-nsdl.com
  • Amount of Tax deposited pertaining to different BIN’s/ CIN’s should not be clubbed together while reporting in the TDS statements.
Few other common mistakes in reporting dates are as follows:

Actual Date of Deposit (As per Challan)
Date of Deposit mentioned in TDS Statement
Observations
07/01/2014
(07th Jan, 2014)
07/01/2013
(07th Jan, 2013)
Wrong Year
(2013 instead of 2014)
07/01/2014
(07th Jan, 2014)
01/07/2014
(01st July, 2014)
Wrong Date Format
(MM/DD/YYYY)

Pradhan Mantri Suraksha Bima Yojana, Pradhan Mantri Jeevan Jyoti Bima Yojana and Atal Pension Yojana Details.

Friends,  Indian Government has started good general / life policies in the interest of Indian.  Name of the schemes are given below :-

  • Pradhan Mantri Suraksha Bima Yojana 
  • Pradhan Mantri Jeevan Jyoti Bima Yojana 
  • Atal Pension Yojana 

Sometime we feel that different  policy providers force us to take policy by hook or crook and  and we feel  frustration to view the different thoughts of the policy providers.   Everyone present their policies with new idea which creates great confusion for a general person.   Their main aim is to collect maximum money from Individual  and get maximum commision from insurance company. Nobody wants to insure anyone. 

But now Indian Government has started above policy in the interest of  Individuals.   When we check its benefit it is totally surprise.   Payment is less than Rs. 1.00 per day and sum assured is 4 Lakh.  

State Bank of India has also provided online facility to apply the above policy to those who are using internet banking facility.   There is no need to go anywhere, amount of premium will be deducted automatically from Saving Account as auto-debit facility. 

Name of main website of above scheme is  http://www.pmjdy.gov.in/

Suraksha Bima

  • For all Bank account holders whose age is between 18 to 70 years.
  • Insurance amount can also be availed if in a handicapped state.
  • Accident insurance worth Rs. 2 lacs at just Rs. 12 per annum.

Period of Insurance 

  • Annual : 1st June - 31st May
  • The premium will be deducted from the account holder's saving bank account through 'auto debit' facility.
  • The person would be eligible to join the scheme through one saving bank account only.

Jeevan Jyoti Bima

  • For all Bank account holders whose age is between 18 to 50 years.
  • Life Insurance amount for your family, in your absence.
  • Life insurance worth Rs. 2 lacs at just Rs. 330 per annum.

Period of Insurance 

  • Annual : 1st June - 31st May
  • The premium will be deducted from the account holder's saving bank account through 'auto debit' facility.
  • The person would be eligible to join the scheme through one saving bank account only.

Pension Scheme

  • For all Bank account holders whose age is between 18 to 40 years.

Period of Insurance

  • Annual : 1st June - 31st May
  • The premium will be deducted from the account holder's saving bank account through 'auto debit' facility.
  • The person would be eligible to join the scheme through one saving bank account only.


Source: TDSTAXINDIA.com

Guidelines to avoids all types of TDS Defaults.

One can avoid defaults in the TDS statements, by way of adherence to the following basic principles: 

  • Timely Payment of total taxes deducted/ collected
  • Correct Reporting with regard to PANs, Tax Rate and Challans
  • Complete Reporting for all Deductees
  • Timely filing of TDS Statements

Following are some important facts to be adhered to, while submitting TDS statements, to avoid each type of Default:  

 Late Payment Defaults:


Short Payment Defaults:

  • All the taxes deducted must be deposited with challan 281 quoting correct TAN, Assessment Year, Minor Head etc.
  • Challan details/BIN details quoted in the statement should be correct. Challans can be validated by using Challan Status Inquiry(CSI) file. Correct details can also be verified at TRACES in “Challan Status” menu under “Statement Status” after login.
  • There should not be any difference in the amounts quoted in “Deducted” and “Deposited” columns of the deductee rows.
  • Challans quoted in the statement must have balance available for consumption against specified deductee rows. Available balance can be verified at TRACES in “View Consumption Details” under “Statements/ Payments” menu after login.
  • Government Deductors need to report Book entry flag as “Y” in challan details.  

Short Deduction Defaults:

  • Taxes must be deducted at correct rates specified in the Act. The Rate table can be accessed at TRACES for correct tax rates.
  • Correct flags (A, B, C, T and Y) must be raised for no deduction/ lower deduction/ higher deduction, as appropriate.
  • The PAN for deductees must be valid and correct. TAN-PAN Master can be downloaded from TRACES and be used to file statement to avoid quoting of incorrect and invalid PANs. 
  • Correct and valid 197 Certificates must be specified. E-tutorial can be referred to for the purpose of validation. 
  • For 24Q statements, correct flags should be raised for Woman/ Man/ Senior Citizen/ Super Senior Citizen deductees, as may be appropriate. 
  • DTAA flag “B” must be raised under section 195 of the Act, at the time of filing 27Q  statements. 

Late Deduction Defaults:

  • Taxes must be deducted at the time of Payment or Credit, whichever is earlier.  

Late Filing Defaults:   

Source: www.tdsman.com