New amendment to calculate Interest u/s. 234A on Self Assessment Tax.

SECTION 234A OF THE INCOME-TAX ACT, 1961 - INTEREST FOR DEFAULTS IN FURNISHING RETURN OF INCOME - CHARGEABILITY OF INTEREST UNDER SECTION 264A ON SELF-ASSESSMENT TAX PAID BEFORE DUE DATE OF FILING OF RETURN OF INCOME


Interest under section 234A of the Income-tax Act, 1961 (hereinafter the Act) is charged in case of default in furnishing return of income by an assessee. The interest is charged at the specified rate on the amount of tax payable on the total income, as reduced by the amount of advance tax, TDS/TCS, any relief of tax allowed under section 90 and section 90A, any deduction allowed under section 91 and any tax credit allowed in accordance with the provisions of section 115JAA and section 115JD of the Act. Since self-assessment tax is not mentioned as a component of tax to be reduced from the amount on which interest under section 234A of the Act is chargeable, interest is being charged on the amount of self-assessment tax paid by the assessee even before the due date of filing of return.

2. It has been held by the Hon'ble Supreme Court in the case of CIT v. Prannoy Roy, 309 ITR 231 (2009) that the interest under section 234A of the Act on default in furnishing return of income shall be payable only on the amount of tax that has not been deposited before the due date of filing of the income-tax return for the relevant assessment year. Accordingly, the present practice of charging interest under section 234A of the Act on self-assessment tax paid before the due date of filing return was reviewed by CBDT.

3. The Board has decided that no interest under section 234A of the Act is chargeable on the amount of self-assessment tax paid by the assessee before the due date of filing of return of income.

4. This Circular may be brought to the notice of all officers for compliance.

Eight Types of Income on Which You Don't Have to Pay Taxes

There are certain incomes that are exempt from income tax. If you get your income from these sources, your tax liability will be zero.

1) Dividend from shares and equity mutual fund: If you have invested in the shares of an Indian company, any dividend that you receive is not liable to tax under Section 10 (34) of Income Tax Act. The reason being the company has already paid tax from its own profit. Similarly, dividend income from an equity mutual fund is also exempt from tax. However, if you being an Indian resident have received dividend from a foreign company, it will be taxable. In case the dividend is taxed both in the foreign country and in India, you can claim taxation relief either as per the provisions of Double Taxation Avoidance Agreement (if India has such agreement with that country) or can claim relief as per Section 91, if no such agreement exists.

2) Proceeds received on maturity of life insurance policies: Any sum received under a life insurance policy (including bonus if any) is exempt from tax provided the premium paid to actual capital sum assured does not exceed the prescribed thresholds provided by Income Tax Act.

"For policies issued till March 2012, the premium shouldn't be more than 20 per cent of the actual sum assured. For policies issued from April 1, 2012, the percentage was reduced to 10 per cent of actual sum assured," says Ms Neha of Nangia & Co. The tax exemption is applicable for endowment policies only, she adds.

However, if the above conditions are not met, the individual will be liable to pay a tax deducted at source (TDS) at the rate of 2 per cent, if the amount received during the financial year is more than Rs. 1 lakh.

3) Scholarship or grant received: If you have received any scholarship or grant as a student to meet your education cost, it is totally exempted from tax.

4) Interest received from government notified bonds: Interest income that you earn from certain bonds notified by government is exempt from tax. Recently, the government allowed certain public sector companies to issue such tax-free bonds to raise money for infrastructure projects. The interest that you will receive on these bonds will be tax-exempt but if you make any gains by selling these bonds on exchange before maturity, you will have to pay tax on the capital gains.

5) Agriculture income: As per Section 10 (1) of Income Tax Act, agriculture income in terms of rent or from any agriculture produce is exempt from tax. However, the agriculture income will have to be added to one's total income for the determination of the income-tax slab of the individual, says Neha Malhotra, executive director of taxation at Nangia & Co, a tax advisory firm.

6) Share of profit from partnership firm: If you are a partner in a partnership firm, you will not have to pay any tax on your share of profits. "The share of profit is exempt for the individual partner, if received from a partnership firm which has been subjected to tax on the profits at the partnership firm level," says Parizad Sirwalla National Head-Global Mobility Services-Tax, KPMG.

7) Interest on Non Resident External (NRE) account: "Any interest received by an individual is exempt from tax until such time the individual is a person resident outside India (PROI) as per Foreign Exchange Management Act, 1999 (FEMA)," says (USE Mr or Ms) Parizad of KPMG.

8) Leave Travel concession (LTA): If you receive LTA as part of your salary is exempted from income tax unlike house rent allowance (HRA) against which you can claim deduction. You can claim exemption on the cost of domestic travel incurred under Section 10 (5) of Income Tax Act provided you give the proofs. You can claim LTA twice in a block of four years.

Source: www.profit.ndtv.com

D.A.for All Maharashtra State Employee 119% w.e.f. 1 July, 2015.

Today Maharashtra State Government, Finance Department has issued a Government Resolution regarding Payment of Dearness Allowance to State Government employees - Revised Rates effective from 1 July, 2015.  The Dearness Allowance is increased by 6% from 1st July, 2015 i.e. from 113% to 119%.  This increased Dearness Allowance is effective for all State Government Employee and other than eligible State Employee. The State Government decided to give cash payment of Dearness Allowance from February-2016 and the balance arrears of Dearness Allowance from July, 2015 to January, 2016 will be paid soon by State Government.


Download Dearness Allowance Circular (Click Here)

TDS/TCS - Income Tax Returns and Due Date for Asstt. Year 2016-17

It is mandatory for every taxpayer to communicate the details of his income to the Income-tax Department. These details  are to be furnished in the prescribed form known as return of income. In this part, you can gain knowledge about the various provisions relating to return of income.

Person required to file the return of income
The provisions relating to filing of return of income depend upon the status of the taxpayer. The position in this regard is given below:

In the case of companies:
Every person, being a company, has to file its return of income compulsorily, irrespective of its income being profit or loss. In other words, it is mandatory for every company to file the return of income irrespective of its income or loss.

In the case of partnership firms:
Every person, being a partnership firm (including Limited Liability Partnership), has to file its return of income compulsorily, irrespective of its income being profit or loss. In other words, it is mandatory for every partnership firm to file the return of income irrespective of its income or loss.

In the case of an Individual / HUF / AOP / BOI / Artificial Juridical Person :
Every individual/HUF/AOP/BOI/artificial juridical person has to file the return of income if his total income (including income of any other person in respect of which he is assessable) without giving effect to the provisions of section 10A, 10B or 10BA or Chapter VIA (i.e., deduction under section 80C to 80U), exceeds the maximum amount which is not chargeable to tax i.e. exceeds the exemption limit.

In the case of charitable or religious trusts:
Every person in receipt of income derived from property held under charitable or religious trusts/legal obligations or in receipt of income being voluntary contributions referred to in section 2(24)(iia), has to file the return of income if its total income without giving effect to the provisions of sections 11 and 12 exceeds the maximum amount not chargeable to income-tax.

In the case of political parties:
The Chief Executive Officer of every political party has to file the return of income of the party if the total income of the party without giving effect to the provisions of section 13A exceeds the maximum amount not chargeable to income-tax.

In the case of certain associations :
Following entities are liable to file the return of income if their total income without giving effect to the provisions of section 10 exceeds the maximum amount not chargeable to tax:
  • Research association referred to in section 10(21)
  • News agency referred to in section 10(22B)
  • Association or institution referred to in section 10(23A)
  • Institution referred to in section 10(23B)
  • Fund/institution/trust/university/other educational institution/any hospital/medical institution referred to in sub-clause (iiiad), (iiiae), (iv), (v), (vi) or (via) of section 10(23C)
  • Mutual Fund referred to in clause (23D) of section 10
  • Securitisation trust referred to in clause (23DA) of section 10
  • Venture capital company or venture capital fund referred to in clause (23FB) of section 10;
  • Trade union/association referred to in sub-clause (a) or (b) of section 10(24)
  • Body/authority/Board/Trust/Commission referred to in section 10(46)
  • Infrastructure debt fund referred to in section 10(47)
In the case of certain university, college or other institution:
Every university, college or other institution referred to in clause (ii) and clause (iii) of section 35(1), which is not required to furnish return of income or loss under any other provision of the Act, shall furnish the return of income every year, irrespective of income (or) loss.

In the case of Business Trust
Every business trust, which is not required to furnish return of income or loss under any other provision of the Act, shall furnish the return of income every year, irrespective of income (or) loss.

In the case of persons holding assets located outside India:
Every person being a resident [other than not ordinarily resident in India], has to furnish his return of income even if he is not required to furnish a return of income as per the provisions discussed above, if during the year he has any asset (including any financial interest in any entity) located outside India or signing authority in any account located outside India.

Due date of filing of return of income

Short Notes on Tax Free Income - Section-wise for all Taxpayee - Free Download

As per the Finance (No.2) Act, 2014,  Income Tax Free Income level is very high.  Apart from this we all known that Income is payable on all types of Incomes earned by Taxpayee in India even-though, there are some exceptions to avoid this rule and some Incomes have been specially exemption from Income Tax.  Such Income is referred to as Income Tax Free Income.  The most popular Tax Free Income is namely :-

  • Agricultural Income (Section 10(1)).
  • Amount received by a member of the HUF from the income of the HUF, or in case of impartible estate out of income of family estate [Section 10(2)]
  • Share of profit received by a partner from the firm [Section 10(2A)]
  • Certain interest to non-residents [Section 10(4)]
  • Interest on notified savings certificates [Section 10(4B)]
  • Leave travel concession [Section 10(5)]
  • Remuneration received by specified diplomats and their staff [Section 10(6)(ii)]
  • Salary of a foreign employee and non-resident member of crew [Section 10(6)(vi),(viii)]
  • Remuneration of a foreign trainee [Section 10(6)(xi)]
  • Tax paid on behalf of foreign company deriving income by way of royalty or fees for technical services [Section 10(6A)]
  • Tax paid on behalf of foreign company or non-resident in respect of other income [Section 10(6B)]
  • Tax paid on behalf of foreign Government or foreign enterprise deriving income by way of lease of aircraft or aircraft engine [Section 10(6BB)]
  • Technical fees received by a notified foreign company [Section 10(6C)]
  • Allowance/perquisites to Government employee outside India [Section 10(7)]
  • Income of foreign Government employee under co-operative technical assistance programme [Section 10(8)]
  • Remuneration or fees received by a non-resident consultant/its foreign employees [Section 10(8A),(8B)]
  • Income of a family member of an employee serving under co-operative technical assistance programme [Section 10(9)]
  • Death-cum-retirement gratuity received by Government servants [Section 10(10)(i)]
  • Gratuity received by a non-Government employee covered by Payment of Gratuity Act, 1972 [Section 10(10)(ii)]
  • Gratuity received by a non-Government employee not covered by Payment of Gratuity Act, 1972 [Section 10(10)(iii)]
  • Pension [Section 10(10A)]
  • Leave salary [Section 10(10AA)]
  • Retrenchment compensation [Section 10(10B)]
  • Compensation for Bhopal Gas Leak Disaster [Section 10(10BB)]
  • Compensation on account of any disaster [Section 10(10BC)]
  • Payment at the time of voluntary retirement [Section 10(10C)]
  • Tax on perquisites paid by the employer [Section 10(10CC)]
  • Amount paid on life insurance policy [Section 10(10D)]
  • Exemption in respect of amount received from public provident fund/statutory provident fund/recognised provident fund/un-recognised provident fund [Section 10(11)/(12)]
  • Payment from approved superannuation fund in specified circumstances and subject to certain limits [Section 10(13)]
  • House rent allowance [Section 10(13A)] 
  • Prescribed allowances or benefits [Section 10(14)]
  • Interest on securities [Section 10(15)]
  • Lease rent of an aircraft [Section 10(15A)]
  • Educational scholarship [Section 10(16)]
  • Daily allowance to a Member of Parliament [Section 10(17)]
  • Awards [Section 10(17A)]
  • Pension to gallantry award winner [Section 10(18)]
  • Family pension received by the family members of armed forces [Section 10(19)]
  • Annual value of one palace [Section 10(19A)]
  • Income of local authority [Section 10(20)]
  • Income of research association [Section 10(21)]
  • Income of a news agency [Section 10(22B)]
  • Income of a professional association [Section 10(23A)]
  • Income received on behalf of Regimental Fund [Section 10(23AA)]
  • Income of a fund established for welfare of employees [Section 10(23AAA)]
  • Income of pension fund [Section 10(23AAB)]
  • Income from Khadi or village industry [Section 10(23B)]
  • Income of Khadi and Village Industries Boards [Section 10(23BB)] 
  • Incomes of statutory bodies for the administration of public charitable trust [Section 10(23BBA)] 
  • Income of European Economic Community [Section 10(23BBB)]
  • Income of SAARC fund [Section 10(23BBC)]
  • Income of Secretariat of Asian Organisation of Supreme Audit Institutions [Section 10(23BBD)]
  • Income of Insurance Regulatory and Development Authority [Section 10(23BBE)]
  • Income of North - Eastern Development Financial Corporation Limited [Section 10(23BBF)]
  • Income of Central Electricity Regulatory Commission [Section 10(23BBG)] 
  • Income of the Prasar Bharati [Section 10(23BBH)]
  • Income of certain national funds [Section 10(23C)(i)/(ii)/(iii)]
  • Income of National Foundation for Communal Harmony [Section 10(23C)(iiia)], Section 10(23C)(iiiad), Section 10(23C)(vi)
  • Income of Hospital [Section 10(23C)(iiiac)/(iiiae)/(via)]
  • Income of Charitable Institution or Fund [Section 10(23C)(iv)]
  • Income of religious/charitable trust [Section 10(23C)(v)]
  • Income of mutual fund [Section 10(23D)]
  • Income of a securitisation trust [Section 10(23DA)]
  • Income of notified investor protection fund [Section 10(23EA)]
  • Income of Credit Guarantee Fund Trust [Section 10(23EB)]
  • Income of the notified investor protection fund set - up by commodity exchange [Section 10(23EC)]
  • Income of Investor Protection Fund set by a depository [Section 10(23ED)]
  • Income of a venture capital fund or a venture capital company from investment in a venture capital undertaking [Section 10(23FB)]
  • Income of a of a Business Trust [Section 10(23FC)]
  • Distributed Income of a Unit Holder from the Business Trust [Section 10(23FD)]
  • Income of a registered trade union [Section 10(24)]
  • Income of provident fund [Section 10(25)]
  • Income of the Employees’ State Insurance Fund [Section 10(25A)]
  • Income of a member of a Scheduled Tribe [Section 10(26)]
  • Income of a “Sikkimese” individual [Section 10(26AAA)]
  • Income of an Agricultural Produce Marketing Committee/Board [Section 10(26AAB)]
  • Income of corporation or other body or institution or association established for promoting the interest of members of Scheduled Caste, etc. [Section 10(26B)]
  • Income of corporation established for promoting interest of minority caste [Section 10(26BB)]
  • Income of corporation established for ex-servicemen [Section 10(26BBB)]
  • Income of a co-operative society formed for promoting the interests of the members of Scheduled Castes or Scheduled Tribes [Section 10(27)]
  • Income of coffee board, rubber board, etc. [Section 10(29A)]
  • Subsidy from the Tea Board [Section 10(30)]
  • Income of minor [Section 10(32)]
  • Capital gains on transfer of US 64 [Section 10(33)]
  • Dividends and interest on units [Section 10(34)/(35)]
  • Income of a shareholder on account of buy back of shares by the company [Section 10(34A)]
  • Income of an investor received from a securitisation trust [Section 10(35A)]
  • Capital gains in case of compulsory acquisition of urban agricultural land [Section 10(37)]
  • Long - term capital gains on transfer of equity shares or units of an equity oriented mutual fund or a unit of a business trust covered by securities transaction tax [Section 10(38)]
  • Income from international sporting event [Section 10(39)]
  • Grants received by specified subsidiary company [Section 10(40)]
  • Income of certain non - profit body or authority [Section 10(42)]
  • Loan in the case of reverse mortgage [Section 10(43)]
  • Income of New Pension System Trust [Section 10(44)]
  • Any notified allowance or perquisite paid to the Chairman/retired Chairman or any other member/retired member of the UPSC [Section 10(45)]
  • Exemption of specified income of notified body/ authority/trust/board/commission [Section 10(46)]
  • Any income of a notified infrastructure debt fund set-up in accordance with prescribed guidelines [Section 10(47)]
  • Income received by certain foreign companies in Indian currency for import of crude oil etc. [Section 10(48)]
  • Tax exemption to National Financial Holdings Company Limited [Section 10(49)]

Other important exemptions 
Apart from above discussed exemption of section 10 following is the list of other important exemptions:

  • Section 10A provides for exemption in respect of income of newly established undertakings in free trade zone or electronic hardware technology park or electronic software technology park.
  • Section 10AA provides for exemption in respect of income of newly established units in Special Economic Zones. 
  • Section 11 and 12 provide exemption in respect of income of a public charitable or religious trust.
  • Section 13A provides exemption in respect of income of a political party.
  • Section 13B provides exemption in respect of income of an electoral trust. 
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Deductor to get Interest on TDS Refund only from date of return filing.

Deductor to get interest on TDS refund from date of filing claim and not from date of deposit of TDS

Where TDS u/s 195 becomes refundable to resident deductor on account on non-resident payee waiving the payment and the resident deductor delays filing the refund application to the Department(files it 18 months after the date of waiver by non-resident), he will be entitled to interest on refund u/s 244-A only from the date of filing the refund claim only and not from date of deposit of TDS as law favours the vigilant only and not those who slumber and Department cannot be made liable for interest for any period prior to the date on which facts giving rise to refund are brought to the Department's notice

source: www.taxmann.com

Detailed procedure to file and Correction of e-TDS Return online at TIN website.

Procedure of furnishing of e-TDS statement/return online at TIN website:

Deductor/DDO is required to procure Digital Signature Certificate (DSC) for online upload of e-TDS statement/return. After registration on TIN website, an authorization letter by the Deductor/DDO should be provided on the letter head of the organisation to NSDL. Once application is approved by NSDL, user ID is created and intimated to Deductor/DDO on their registered email ID provided at the time of registration. Preparation and validation of e-TDS statement is in line with regular e-TDS statement/return (submitted at TIN-FC).Deductor/DDO can login with its user ID and DSSC and upload the validated e-TDS file (.fvu file) generated by the FVU to the TIN website. On successful acceptance of e-TDS statement/return at TIN, an acknowledgement containing a unique 15 digit token no. and 8 digit receipt number is generated and displayed. There is no need to submit physical form 27A in online upload. Deductor/DDO can view the status of e-TDS statement/return on TIN website.

No charges are applicable for online upload of e-TDS statement/return.

Correction of e-TDS statement/return online at TIN website:


Deductor/DDO can file a correction e-TDS statement/return for any modification in e-TDS statement/return accepted at TIN central system. Correction statement/return can be prepared by using the TDS consolidated file only, available at the CPC-TDS portal www.tdscpc.gov.in through TAN registration. Preparation and validation of e-TDS statement is in line with regular e-TDS statement/return (submitted at TIN-FC) Deductor/DDO can login with its user ID and DSC and upload the validated e-TDS file (.fvu file) generated by the FVU to the TIN website. On successful acceptance of correction e-TDS statement/return at TIN, an acknowledgement containing a unique 15 digit token number is generated and displayed. There is no need to submit copy of provisional receipt of regular e-TDS statement/return, physical Form 27A and SSR in online upload. Deductor/DDO can view the status of e-TDS statement/return on TIN website.