Gsoftnet

House under construction? Check out your tax provisions.

Sanjay Matai, Author & Promoter, The Wealth Architects

You all must be aware that you get the following tax benefits on the EMIs that you pay for your home loan:

Deduction of the interest portion of the EMI up to a sum of Rs.1.50 lakhs (under section 24 of the I.T. Act) and Deduction of the principal portion of the EMI within the Rs.1 lakh limit of Sec 80C.

These deductions, however, are available ONLY AFTER the property is complete and ready for occupation.

Many properties are, however, bought during the construction period. Since the developer has to be paid as per the construction schedule, the loan disbursements happen during this period. Therefore, for many people the EMI payments start even while the property is under construction. In other words the property is still not complete and ready for occupation.

For such EMIs, paid during the under-construction phase, the following tax provisions will apply:

NO DEDUCTION for the principal portion u/s 80C. In other words, principal amount repaid during construction enjoys NO tax benefit.

No "immediate" deduction of the interest portion. Instead, all interest paid up to the year, prior to the year of completion, is accumulated and then 1/5th of this amount is allowed as deduction every year for 5 years from the year of completion.

If the construction is completed during the year, then the interest during the initial months when the construction is still on, is included with the interest during later months after completion...no bifurcation is necessary in the year of completion.

For example if you get the completion certificate in Dec 2013, then the interest paid from Apr to Dec 2013 will be included in post-completion interest (i.e. from Jan to Mar 14) and the usual tax provisions i.e. Rs.1.5 lakhs maximum deduction will apply. Total interest paid till Mar 2013, will be added-up and allowed as deduction in 5 equal annual instalments from 2013-14 to 2017-18.

Unfortunately, however, given the high property prices, the loan amounts are also quite high. Accordingly, in many instances the normal interest itself usually exceeds the limit of Rs.1.50 lakhs. Therefore, even if 1/5th of the under-construction interest can be deducted, there isn't sufficient limit available to do so.

Hence, in many cases, in addition to the Principal part, even the tax benefit on the Interest part during construction is possibly lost.

Fortunately, in smaller cities and towns the property prices and consequently the loan amounts are not very high. Secondly, recent budget gives additional Rs.1 lakh limit (only for the first-time home buyers) to loans up to Rs.25 lakhs for properties worth less than Rs.40 lakhs. Third, in recent months, the interest rates have softened. As such, this problem of not being able to utilize the tax benefit on interest paid during construction, may not arise in Tier II and Tier III locations.

Source: www.moneycontrol.com

Disclosure of Information u/s. 138 of Income Tax Act - Notification

SECTION 138 OF THE INCOME-TAX ACT, 1961 - DISCLOSURE OF INFORMATION RESPECTING ASSESSEES TO SPECIFIED OFFICER, AUTHORITY OR BODY PERFORMING FUNCTIONS UNDER ANY OTHER LAW - NOTIFIED AUTHORITY
NOTIFICATION NO. 32/2013 [F.NO.225/62/2013-ITAT.II], DATED 18-4-2013
Whereas the Central Government is of the opinion that it is necessary to do so in the public interest; and, therefore, in pursuance of sub-clause (ii) of clause (a) of sub-section(1) of section 138 of the Income-tax Act, 1961, the Central Government hereby specifies officers of the rank of Joint Director and above serving in Directorate of Enforcement, Department of Revenue, Ministry of Finance, Government of India, who are performing functions under the Foreign Exchange Management Act, 1999 and the Prevention of Money Laundering Act, 2002, for the purpose of the said clause.

Income Tax on Leave Salary/Leave Encashment.

The basic provision related to taxability of leave salary. Leave salary, also known as leave encashment, means that employee will receive the cash for leaves which are not taken by the employees. The leave encashment received during the service period is taxable for all the employees as per the income tax slab applicable to the employee. However, the tax treatment is different for the leave encashment received at the time of retirement/ superannuation. Further, the tax treatment is different for Government employee (Central or State) vis a vis  Non –Government employee as under: 

     In the case of Central/ State Government employee, any amount received as cash equivalent of leave salary in respect of period of earned leave at his credit at the time of retirement/ superannuation is fully exempt from tax u/s 10(10AA)(i). 

     In the case of Non-Government employee (i.e., the employee other than an employee of the Central Government or a State Government) leave salary is exempt from the tax u/s 10(10AA) (ii) to the extent of the least of the following:
  • Cash equivalent of the leave salary in respect of the period of earned leave to the credit of an employee only at the time of retirement whether on superannuation or otherwise (earned leave entitlement cannot exceed 30 days for every year of actual service rendered for the employer from whose service he has retired): or
  • 10 month “Average Salary” or
  • The amount not chargeable to tax as specified by the Government. (Presently, Rs. 3 Lacs has been specified).
  • Leave encashment actually received at the time of retirement.
Average salary, as mentioned above, is to be calculated on the basis of average salary during the period of 10 months immediately preceding the retirement/ superannuation.

”Salary” here means basic salary & includes dearness allowances if term of employment so provided. It also includes commission based on a fixed percentage of turnover achieved by an employee as per term of contract of employment but excludes all other allowances & perquisites.

Now, with above basic brief up about taxability of leave salary, the opinions on the issue raised in your queries are as under:
  1. Leave salary received at the time of retirement is exempt only in the hands of State or Central Government employee. It will not be exempt in the hands of the employee of PSU or Local Authorities. The definition of “Government Employee” is not specifically given in the Income Tax Act-1961. However, the Act has specifically incorporated the PSU employees, Government undertaking employee, Local Authorities employees etc in various other Sections / clauses in the Income Tax Act-1961 where the benefit is meant to be conferred to them. The same is not there in Section 10(10AA).
  2. The Leave Salary is taxable under the head “Income from Salary”. The Salary Income is taxable in the year in which it has accrued or in the year in which it is received, whichever is earlier. Accordingly, the leave encashment is taxable as income of the FY 2012-13 and not FY 2013-14.
TAXABILITY OF LEAVE SALARY AT A GLANCE:

S.No.
 Particulars
 Tax Treatment
 A]
Encashment of leave during service
 It is charged to tax.
 B]
Encashment of leave at the time of retirement


1. If Central or State Government Employees
 Fully exempt from tax u/s 10(10AA)(i)

2. For any other employees
Lease of the following is exempt:
 1. Earned leave months x Average salary
 2. Avg. monthly salary x 10
 3. Maximum amount Rs. 3,00,000/-
 4. Actually received

Source: The Hitwada

Request for New PAN Card or/and Changes or Correction in PAN data.

Pan Card Hoder can get the PAN card changed with his/her Father’s name in it. For this, pan hoder have to make an application in “Request for New PAN Card or/and Changes or Correction in PAN data” and have to attach the documents in support of his/her submission. The form can be downloaded from the websites of UTI Technology Services Ltd (UTITSL), National Securities Depository Ltd (NSDL), or the I-T department [www.utitsl.co.in, www.tin-nsdl.com or www.incometaxindia.gov.in]. Pan Holder can tick in tick in the father’s name box on the left margin of the form. Pan Holder have to attach color stamp-sized photographs on the form.  The form can be submitted at PAN application centers of UTITSL and NSDL, the addresses of which are available at the above mentioned website.

Notification regarding Sec. 92C about variation of arm's Length Price.

[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY,
PART‐II, SECTION 3, SUB‐SECTION (ii)]
 
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
 
[DEPARTMENT OF REVENUE]
NOTIFICATION
New Delhi, 15 April 2013
 
[INCOME TAX]

In exercise of the powers conferred by the second proviso to sub‐section (2) of section 92C of the Income Tax Act, 1961 (43 of 1961), the Central Government hereby notifies that where the variation between the arm’s length price determined under section 92C and the price at which the international transaction or specified domestic transaction has actually been undertaken does not exceed one per cent of the latter for wholesale traders and three per cent of the latter in all other cases, the price at which the international transaction or specified domestic transaction has actually been undertaken shall be deemed to be the arm’s length price for assessment year 2013‐2014.

NOTIFICATION NO. 30/2013 (F.NO. 500/185/2011‐FTD I]
 
(Sanjay Kumar Mishra)
Joint Secretary to the Government of India

Consideration of 7th Pay denies by Government.

In a reply of question regarding 7th CPC, Minister of State for Finance Sri N.N. Mina has stated that as there is normally a gap of ten years between successive pay commissions, the Govt. is presently not considering setting up of seventh pay commission for central Govt. employees. This answer was given on 23.04.2013 on the upper house of parliament.

"The recommendations of the 6th Central Pay Commission were given effect to from 1.1.2006. Generally, there has been a gap of a minimum 10 years between two successive Pay Commissions. Therefore, no proposal to constitute the Seventh Central Pay Commission is at present under consideration."

But as per information from our sources that Govt. is actively considering it unofficially and may be not in near future, it may be announced in the later part of the current calender year.

Source: Pay Commission

6th Pay Commission Benefit to College and University Teachers of MP

The state cabinet has decided to accord six pay commission benefits to eligible University and College staff, abrogate a government service rule that restrained a person who married before the permissible age to join government service.

The meeting chaired by Chief Minister Shivraj Singh Chouhan gave its node to provide benefits of University Grant Commission's (UGC) six pay scale to eligible teachers and other staffers in the Universities and colleges with retrospective effect from January 1,2006.

The beneficiaries will also be eligible for arrears from the same date until March 31, 2010 and which will be paid in three six monthly installments.

The state government, however, said it will pay the first installment and the next installments would be subject to release of fund by the Central government as 80 per cent of the money comes from the Centre.

Source : Daily Bhaskar

Leave Rules Prescribed by the UGC for Teachers of the Universities / Colleges.

The Commission vide its Notification dated 24 December, 1998 on revision of pay scales, minimum qualifications for the appointment of teachers in universities and colleges, and other measures for the maintenance of standards has laid down service conditions (including leave rules) for teachers. It may please be noted that while issuing this notification, it was expected that entire scheme of revision of pay scales, together with all the conditions attached to it, would be implemented as a composite scheme without any modifications.

It has now been brought to the notice of the UGC that some of the universities have not given effect to the Leave Rules prescribed by the UGC as an integral part of the revised pay scales. For implementation of the Leave Rules, it is necessary for the Universities to suitably amend the relevant statutes / ordinances / rules / regulations as may be required.  A copy of the Leave Rules is enclosed for your kind reference.

May I request you to kindly confirm if your university has implemented the prescribed leave rules. In case, your university is yet to implement the revised leave rules, you may please initiate action for its implementation forthwith. You may also advise the colleges affiliated to your university to follow the prescribed leave rules. I would appreciate if you could send me a status on the same. If you require any clarifications from us on this issue, please feel free to do so.

Download New Leave Rules

Payment of Dearness Allowance to Central Government employees of 8% w.e.f. 01.01.2013 - OM

Finally Finance Ministry has issued order to pay the Dearness Allowance to Central Government employees at revised rates effective from 1st January, 2013 on 25th April, 2013.

No. 1(2)/2013-E.II(B)
Government of India
Ministry of Finance
Department of Expenditure


North Block, New Delhi
Dated: 25th April, 2013.


OFFICE MEMORANDUM


Subject: Payment of Dearness Allowance to Central Government employees – Revised Rates effective from 1.1.2013.

The undersigned is directed to refer to this Ministry’s Office Memorandum No.1(8)/2012-E-II (B) dated 28th September, 2012 on the subject mentioned above and to say that the President is pleased to decide that the Dearness Allowance payable to Central Government employees shall be enhanced from the existing rate of 72% to 80%with effect from 1st January, 2013.

2. The provisions contained in paras 3, 4 and 5 of this Ministry’s O.M. No.1(3)/2008-E-ll(8) dated 29th August, 2008 shall continue to be applicable while regulating Dearness Allowance under these orders.

3. The additional Installment of Dearness Allowance payable under these orders shall be paid in cash to all Central Government employees.

4. These orders shall also apply to the civilian employees paid from the Defence Services Estimates and the expenditure will be chargeable to the relevant head of the Defence Services Estimates. In regard to Armed Forces personnel and Railway employees, separate orders will be issued by the Ministry of Defence and Ministry of Railways, respectively.

5. In so far as the persons serving in the Indian Audit and Accounts Department are concerned, these orders issue in consultation with the Comptroller and Auditor General of India.

6. The Hindi version of this O.M. is also attached,

sd/-
(K.R. Sharma)
Under Secretary to the Government of India

Download TDS/TCS FVU Ver. 3.7 which will be mandatory w.e.f May 26, 2013

Various post of this blog in connection with the Free FVU utility to make your TDS/TCS Statement/Return for Asstt. Year 2013-14 are read by you.  Now, NSDL-TIN has  provide to all TDS Deductor latest FVU Ver. 3.7 which will be mandatory w.e.f. 26th May, 2013 and before this date FVU Ver. 3.6 be applicable. There are some new features i.e. Sec. 80CCG, Sec. 80CCF, Relaxation of PAN validation etc.

Java Requirements:
The e-TDS/TCS FVU is a Java based utility. JRE (Java Run-time Environment) [versions: SUN JRE: 1.4.2_02 or 1.4.2_03 or 1.4.2_04 or IBM JRE: 1.4.1.0] should be installed on the computer where the e-TDS/TCS FVU is being installed. Java is freely downloadable from http://java.sun.com and http://www.ibm.com/developerworks/java/jdk or you can ask your vendor providing computer facilities (hardware) to install the same for you.

The e-TDS/TCS FVU setup file (e-TDS/TCS FVU.exe) comprises of three files namely:
  • TDS FVU Readme.rtf: This file contains instructions for setup of the e-TDS FVU.
  • e-TDS FVU Setup.exe: This is a setup program for installation of FVU.
  • These files are in an executable zip file. These files are required for installing the e-TDS/TCS FVU.
Key features of File Validation Utility (FVU) version 3.7.
  • Section 80CCG: Section 80CCG has been incorporated for Form no. 24Q  Q4. Section code 80CCG is applicable for FY 2012-13 onwards. 
  • Section 80CCF: Quoting deduction under section 80CCF has been restricted to FY 2010-11 and 2011-12. 
  • Relaxation of PAN validation: PAN compliance validation of 85% pertaining to deductees of section code 206CK (Form no. 27EQ) has been relaxed. 
  •  Applicability: FVU version 3.7 is applicable for quarterly TDS/TCS statements pertaining to FY 2010-11 onwards.

Download e-TDS/TCS FVU.exe (Version 3.7) 


FVU version 3.7 will be mandatory w.e.f May 26, 2013. Upto May 25, 2013 FVU version 3.6 and FVU version 3.7 will be applicable.


 

Non payment of Dearness Relief on Disability Element While on Re-Employment

Non payment of Dearness Relief on Disability Element While on Re-Employment

Principal Controller of Defence Accounts (Pensions) 
Draupadi Ghat, Allahabad - 211014

Circular No. 166
No. AT/Tech/263- XVI
O/o the Pr. C.D.A. (P), Allahahad
Date: 07.03.2013
Sub: - Non payment of Dearness Relief on Disability Element While on Re Employment.
The payment of dearness relief during re-employment / employment / permanently absorption of pensioners / family pensioners under the Central or State Government or in a Statutory Corporation / Company / Body / Bank under them in India or abroad is not being regulated correctly by various Pension Disbursing Authorities. Where some Pension Disbursing Authorities are disallowing dearness relief to re-employed pensioner of commissioned officer on disability element, others are allowing in few cases. Similar irregularities have been noticed in case of pensioners of PBOR. The instances of not allowing dearness relief to family pensioners during their employment are also drawing attention of this office/Ministry from time to time. The position on the subject is though clearly stipulated in Ministry of Personnel, Public Grievances & Pensions. Deptt of P&PW letter No. 45/73/97-P&PW(G) dt. 2nd July, 1999 and Ministry of Defence letter No. 79(1 )/95/D (Pen/Services) dated 2th August 2000 and Deptt of P&PW UO No. 41/42/2007-P&PW(G) dt. 3-4-2008. However, position is re-clarified as under for uniform implementation of above orders.

(a) In case of re-employed pensioners who hold Group 'A’ post or posts of the ranks of commissioned officers at the time of their re-employment will not he entitled to any dearness relief on pension on the fact that:
(i) A certain portion of pension is taken into account and is not entirely ignored.
(ii) The pay in the post of re-employment is not required to he fixed at the minimum of the scale in all cases, and
(iii) Dearness allowance at the rates applicable from time to time is also admissible on the pay fixed on re-employment.
(b)(i) The entire pension admissible is to be ignored in the case of civilian pensioner who held posts below Group 'A’ and those ex-servicemen who held posts below the ranks of commissioned officers, at the time of their retirement. Their pay on re-employment is to be fixed at the minimum of the pay scale of the post in which they are re-employed. Such civilian pensioners will consequently be entitled to dearness relief on their pension at the rates applicable from time to time.
(b)(ii) The ex-servicemen (PBOR) who retired before attaining the age of 55 years and re-employed thereafter and their pay fixed at a higher stage because of advance increments and no protection of the last pay drawn is being given, the pay should he treated as fixed at a minimum only for the purpose of ignoring the entire pension and allowing dearness relief on pension.
(c) The disability element is part of disability pension. therefore position explained at a & h above will also apply for regulating dearness relief on disability element during re-employment of pensioner drawing disability 
pension.
(d) The family pension received by the eligible central Govt. employees/Armed Forces pensioners is, in any case, not taken into account in determining their pay on employment therefore, dearness relief at the rates applicable from time to time shall he admissible on their family pension.
Incorrect payment of pension is not only infringement of Govt. orders but also cause of concern to pensioners. It is, therefore, requested o instruct Pension Paying Branches / CPPC / Offices / Treasuries under your jurisdictions to regulate the payment of dearness relief on pension /family pension on re-employment / employment / permanently absorption of pensioners/family pensioners as explained above.
sd/-
(P.N. CHOPRA)
Asst.CDA (P)

Withdraw or Transfer Employees Provident Fund Online.

          EPF Commissioner Mr. Anil told in the press conference that "We have decided to set up a central clearance house which will be operational on July 1. This will enable subscribers to apply online for settlement of the withdrawal and transfer of funds claims" because EPF account holders are more than 50 Million and thus this facility is the most important for EPF account holder to withdrawal and transfer online.

          Now a days the EPF account holder has face the big problem that withdrawal and transfer fund if the Provident Fund Account holder will be change the job or transfer the job to other place in India.

           If the EPFO takes foot in this regard all EPF account holder get benefit of it. This facility will also give tracking the account as in what stage the account transfer is. It includes online tracking and getting the SMS time to time.

          EPFO has the dream plan to provide permanent account number to the entire employees provident fund account holder as one needn’t to transfer account one place to other. One account number will work all over country.

          But this dream project will take time around 8-10 months and only be possible in 2014 only. The department is setting the infrastructure for it. It needs speed clearance house and online office at every district.

          The new system will be very beneficial for the employees as this is department liability to verify the employees account by the employer for withdraw or transfer account. In current system the liability is of employees to get verified the account with the employer.

Extend Service Tax Return Oct-2012 to Mar-2013 from 25-04-13 to 31-08-13

CBEC has extended Service Tax Return due date of Oct-2013 to March-2013 from 25th April, 2013 to 31st August, 2013 vide order No. 03/2013-Service Tax dated 23rd April, 2013.  The CBEC is further introduce new Service Tax Return utility to prepare return.  This new utility will be available soon at ACES website.  In this order CBEC has informed to Service Tax holder that the extended due date is applicable in some special circumstance and nature to submit Service Tax Return in "Form ST-3" for the period from 1st October, 2012 to 31st March, 2013.  The following order are clarify the all the terms:

F.No.137/99/2011-Service Tax
Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs
***


New Delhi, dated the 23rd April, 2013
Order No: 03/2013-Service Tax

     In exercise of the powers conferred by sub-rule(4) of rule 7 of the Service Tax Rules, 1994, the Central Board of Excise & Customs hereby extends the date of submission of the  Form ST-3, for the period from 1st October 2012 to 31st March 2013, from 25th April, 2013 to  31st August, 2013.

     The circumstances of a special nature, which have given rise to this extension of time, are as follows: 

     “The Form ST-3, for the period from 1st October 2012 to 31st March 2013, is expected to be available on ACES around 31st of July, 2013”.

Himani Bhayana
Under Secretary (Service Tax)
Central Board of Excise and Customs

Updated TDS (Form-16) Software with Part-A and Part-B for Asstt. Year 2013-14

There is no-doubt internet market has various TAX software.  Though this we updated TDS Software as per new amendment rule and circular issued by the Income Tax Department on 17/4/2013. This software calculate Tax and generate Form 16, Monthwise salary statement and Computation of Income etc. This is latest updated Form-16 Software (TDS) Salaried Employee for the Asstt. Year 2013-14.

Calculate Your Income Tax, Generate Monthwise Salary Statement and Form 16.
This software calculates Income Tax, Create Monthwise Salary Statement and Form 16 with Annexure "A" and "B" is very easy. In this Software Taxpayee (Salaried Employee) Enter their personal Data i.e. under Chapter -VIA Deductions and other applicable Deduction like as House Loan Interest, HRA Exemption, Income from Other Source etc. After enter Deduction of Chapter-VIA and other applicable Deductions i.e. u/s. 80G, 80E, 80D as well as u/s. 89(i) it Calculate accurate Income Tax and surcharge there on.  It suggest to Salaried Employee (Taxpayee) whether he is Taxpayable or Refundable.

This Software is based on Income Tax circular dated 05.10.2012 & 19.02.2013 issued by Income Tax Department for  Assessment Year 2013-14.

Physical Requirements:
  • OS required Windows-2000, XP, Vista, Windows-7, Windows-8 etc.
  • Min. MS Office-7 or Above Version
  • Printing Facility Provides on Inkjet or Ledger Printer
  • Required Standard A4 Size Paper Sheets.
Data Entry:
  • Only  "Yellow" Cells are provide for input data.
  • Press Mouse Buttons for operation which you like
Key Features:
  • It maintain Each Employee Data.
  • It Calculate Gross Income as per current D.A. Rates automatically as per Government D.A. Rates.
  • It Provides Facility to Enter Data Manually along with all Arrears etc.
  • It Calculate Tax Liability.
  • It Display Monthwise Salary Statement for Asstt. Year 2013-14.
  • It Generate TDS Certificate (Form 16) Automatically with Annexure "B".
Download Updated Form-16 Software (Click Here)
Register Here for further free updates Click Here
How to Download Form-16 (Part-A) Click Here
Download TDS Amendment Rule Circular (Click Here)

Download Form-16 (Part-A) is mendatory from TRACES website w.e.f. 01.04.2012

Income tax department has changed the rules regarding issuing of Form 16 and 16A. For Asstt. Year 2013-14 the Income Tax Department has also changed the format of Form 16 and 16A. This amended rule for Form 16 (Part-A) is mendatory download from TRACE new website of Income Tax Department for only TDS.  Form 16 (Part A) has the unique TDS certificate number for every Tax Deductee and thus the TDS Deductor must be download from TRACES.  The detailed circular are as follows:

Issuance of certificate for tax deducted at source in Form No. 16 in accordance with the provisions of section 203 of the Income-tax Act, 1961 read with the Rule 31 of the Income-tax Rules 1962

1. Section 203 of the Income-tax Act 1961 (“the Act”) read with the Rule 31 of the Income-tax Rules 1962 (“the Rules”) stipulates furnishing of certificate of tax deduction at source (TDS) by the deductor to the deductee specifying therein the prescribed particulars such as amount of TDS, valid permanent account number (PAN) of the deductee, tax deduction and collection account number (TAN) of the deductor, etc. The relevant form for such TDS certificate is Form No. 16 in case of deduction under section 192 and Form No. 16A for deduction under any other provision of Chapter XVII-B of the Act. TDS certificate in Form No. 16 is to be issued annually whereas TDS certificate in Form No. 16A is to be issued quarterly. TDS Certificate in Form No 16 as notified vide Notification No. 11/2013 dated 19.02.2013 has two parts viz Part A and Part B (Annexure). Part A contains details of tax deduction and deposit and Part B (Annexure) contains details of income.

2. With a view to streamline the TDS procedures, including proper administration of the Act, the Board had issued Circular No. 03/2011 dated 13.05.2011 and Circular No. 01/2012 dated 09.04.2012 making it mandatory for all deductors to issue TDS certificate in Form No. 16A after generating and downloading the same from “TDS Reconciliation Analysis and Correction Enabling System” or (Error! Hyperlink reference not valid., previously called TIN web-site. In exercise of powers under section 119 of the Act, the Board has now decided as following:-

2.1 ISSUE OF PART A OF FORM NO. 16 FOR DEDUCTION OF TAX AT SOURCE MADE ON OR AFTER 01.04.2012:
All deductors (including Government deductors who deposit TDS in the Central Government Account through book entry) shall issue the Part A of Form No. 16, by generating and subsequently downloading through TRACES Portal, in respect of all sums deducted on or after the 1st day of April, 2012 under the provisions of section 192 of Chapter XVII-B. Part A of Form No 16 shall have a unique TDS certificate number.

2.2 AUTHENTICATION OF TDS CERTIFICATE IN FORM NO. 16:
The deductor, issuing the Part A of Form No. 16 by downloading it from the TRACES Portal, shall, before issuing to the deductee authenticate the correctness of contents mentioned therein and verify the same either by using manual signature or by using digital signature in accordance with sub-rule (6) of Rule 31.

2.3 In other words, Part A of Form No. 16 shall be issued by all the deductors, only by generating it through TRACES Portal and after duly authenticating and verifying it.
 
2.4 ‘Part B (Annexure)’ of Form No. 16 shall be prepared by the deductor manually and issued to the deductee after due authentication and verification along with the Part A of the Form No. 16 stated above.

2.5 Sub rule (3) of rule 31of the Rules sets the time limit for issuance of Form 16 by the deductor to the employee. Currently, Form 16 should be issued by 31st May of the financial Year immediately following the financial year in which income was paid and tax deducted.

3.1 The Director General of Income-tax (Systems) shall specify the procedure, formats and standards for the purpose of download of Part A of Form No. 16 from the TRACES Portal and shall be responsible for the day-to-day administration in relation to the procedure, formats and standards for download of Part A of Form No. 16 in electronic form.

3.2 It is further clarified that Part A of Form No. 16 issued by the deductors in accordance with this circular and as per the procedure, formats and standards specified by the Director General of Income-tax (Systems) and containing Unique Identification Number shall only be treated as avalid compliance to the issue of Part A of Form No. 16 for the purpose of section 203 of the Act read with rule 31 of the Rules.

How to download Form-16 (Part-A) from TRACES ?

Dear Friends, the Income Tax Department (New Portal i.e. TRACES) had made compulsory to download Form No. 16 (Part-A) (TDS Certificate for Salaried Employee) from TRACES (New Website of TDS) for Assessment Year 2013-14 by its new circular 4/2013 dated 17.04.2012 for TDS Deductor on or after 01.04.2012. Download request for Form No. 16 for a particular Fin. Year can be submitted only after Form 24Q statement for Q4 for the selected Fin. Year is filed by deductor and processed by TDS CPC.

So Now you can not download your Form 16 (Part-A) from TRACES portal.

Procedure to Download Form No. 16 :

Select from Menu:
  • Go to webside https://www.tdscpc.gov.in/
  • Login to TRACES as a deductor by entering User Id and Password and clicking on ‘Go’.
  • Landing page will be displayed.
  • Under ‘Downloads’, click on ‘Form 16’ to place download request.
  • Form 16 can be downloaded from FY 2007-08 onwards
  • For a given FY, TAN and PAN, there will be only one Form 16. In case of more than one employer, a PAN holder can have those many Form 16s
Enter Search Criteria
  • For individual PANs, select Financial Year for which Form 16 is required and enter PAN and click on ‘Add’
  • Valid PANs will be added to the list. Select a PAN and click on ‘Remove’ to remove it from the list.
  • Click on ‘Go’ to proceed with download request
  • For downloading Form 16 for all PANs , select Financial Year for which Form 16 is required and click on ‘Go’
Token Number Details (Contd.)
  • Enter Authentication Code if the validation is done earlier and you have the Authentication Code
  • Enter Token Number of only Regular (Original) Statement corresponding to the Financial Year, Quarter and Form Type displayed above
  • Tick in Check Box for NIL Challan or Book Adjustment (Government Deductor)
  • Government deductors not having BIN details tick here and need not need provide BSR and Challan Serial Number below
  • Click on Guide to select suitable Challan option
  • Enter CIN details for a challan used in the statement
  • Tick here if you do not any Valid PAN corresponding to above Challan details
  • Click on Guide to select suitable PAN amount Combinations
  • PANs entered must be those for which payment has been done using the CIN / BIN entered on this screen
Details to be printed on Form 16
  • This information will be printed on Form 16 for each PAN. Details will be populated from your profile information in TRACES
  • Click on ‘Submit’ to submit download request for Form 16
  • Click on ‘Cancel’ and go to ‘Profile’ section to update details
Download File
  • Click on ‘Requested Downloads’ under ‘Downloads’ menu to download Form 16 text file
Search File to Download
  • Enter Request Number (Search Option 1) or Request Date (Search Option 2) to search for the download request submitted for Form 16
  • Click on ‘View All’ to view all download requests
  • Click here if you are facing difficulty in PDF Generation Utility
Search Results
  • Click on a row to select it
  • Click on the buttons to download file
Convert .ZIP File into PDF or Click Here
  • ZIP file downloaded from TRACES will contain Form 16 details for all requested PANs
  • Download ‘TRACES PDF Generation Utility’ from the website and install it on your desktop
  • Pass the ZIP file through the utility to convert it into individual PDF files for each PAN
  • User can opt to digitally sign the Form 16s during conversion
  • Deductor can also opt to manually sign the PDF files after printing
e-Tutorial to Download Form No. 16 (Salaried Employee) Click Here

Tax Benefit of Housing Loan can take re-employed or ex-servicemen Employee.

Both, the Salary Income as well as pension income, received by you is taxable under the head “Income from Salary”. Its only the amount of disability pension receivable from Ministry of Defence is totally exempt by virtue of Instruction No 136 dated 14th January, 1970 [F.No.34/3/68-IT(A.I) & Instructions No. 2 dated 2nd July, 2002 [F. No. 200/51/99-IT(A.I)] issued by Central Board of Direct Taxes.

Considering the overall scheme of deduction u/s 24(b) towards Interest on Housing Loan and u/s 80C towards the principal repayment of the housing loan, as per Tax Law Taxpayee/Assessee who are re-employed or ex-serviceman employee cannot claim the deduction [U/s 24(b) & U/s 80C] against the Demand Overdraft Loan availed by such type of Employee.

Tax Free Mutual Funds, Lock-in Period, Interest Rates & Benefits.

One must understand that Equity mutual funds means stock market by proxy. When you buy a unit of mutual fund, you are buying a small basket consisting of very small portion of different shares that the particular fund has purchased. So a mutual fund investor is in reality an investor in the stock market. In the long run, theoretically speaking, mutual fund should give a return more or less equal to the market return. In the short run, the divergence between stock market return and the mutual fund return is because of selection of different shares in their basket as compared to the shares in the market basket.

Historically over a long period of time stock market has given much higher return than the fixed income instruments. However this may hold true only in the long run, in the short run market idiosyncrasies and noise determines the price. The risk reward ratio in the stock market is high which means that while you take a high risk, the reward potential is also high (high risk means that if the spiral works against you, it may wipe off your capital too).

In comparison, fixed income securities are fairly stable, and their return predictable with mathematical accuracy. But, they do not offer the kind of appreciation that stock market may offer.

Having explained that, it is for an individual to decide which would be a better investment for him. A judicious mix of the two is suggested, so that you can take advantage of capital appreciation from your mutual fund investment, and continue to get a fixed return on your fixed income securities. What is the right mix for you will depend upon your risk appetite, and investment time-frame.

Source: The Hitwada

Additional Dearness Allowance 8% to Central Govt. Employees due from 01.01.2013 - PIB

PIB Press Release on Dearness Allowance : Release of additional installment of DA to CG Staff and DR to CG Pensioners, due from 1.1.2013


Press Information Bureau 
Government of India
Ministry of Finance 

18-April-2013 20:45 IST

Release of additional installment of Dearness Allowance to central government employees and Dearness Relief to pensioners, due from 1.1.2013 
The Union Cabinet today gave its approval to release an additional instalment of Dearness Allowance (DA) to central government employees and Dearness Relief (DR) to pensioners with effect from 01.01.2013 at the rate of 8 percent over the existing rate of 72 percent. 


Thus, the combined impact on the exchequer on account of both DA and DR would be of the order of Rs.8629.20 crore per annum and Rs. 10067.36 crore in the financial year 2013-14 (that is for a period of 14 months from January, 2013 to February, 2014).

Tax Liability, If The Stamp Duty Valuation is Higher than Actual Sale Consideration.

“BUILDER ALSO LIABLE TO PAY TAX ON THE DIFFERENCE IF THE STAMP DUTY VALUATION IS HIGHER THAN THE ACTUAL SALE CONSIDERATION”

So far, section 50C (which provides for taxability of property on the basis of higher of Stamp duty valuation or the actual sale consideration) is applicable only when the capital asset is sold. It don’t have any application if the assets sold is not a capital assets i.e., it is not applicable when the stock in trade is sold by the tax payer. In short, Section 50C is not applicable to the builder since in most of the cases the assets/property is the part of stock in trade and resultantly the profit on sale of assets was taxable on the basis of actual sale consideration and not taxable on the basis of Stamp Duty Valuation of the property.
 
To bring land or building or both held as business assets within the scope of stamp duty value based taxation, the Finance Bill-2013 has proposes to incorporate a new section 43AC in the Income Tax Act-1961.  As a result of proposed insertion of Section 43AC, even the immoveable property forming the part of stock in trade would be taxable on the basis of Stamp Duty Valuation or Actual sale price, whichever is higher.
 
Exception:
  • It is provided that where the tax payer claims before any assessing Officer that the value adopted or assessed or assessable by the authority under section 43CA(1) exceeds the fair market value of the property as on the date of transfer and the value so adopted etc by the authority under section 43CA(1) has not been disputed in any appeal or revision or no reference has been made before any other authority, the assessing officer may refer the valuation of the assets to the valuation officer. Where the value ascertained on reference to valuation officer exceeds the value assessed by the stamp valuation authority, the value so assessed shall be taken as the full value consideration.
  • It is also proposed that where the date of an agreement fixing the value of consideration for the transfer of the assets and the date of registration of the transfer of the assets are not same, the stamp duty valuation may be taken as on the DATE OF THE AGREEMENT for transfer and not as on the date of registration for such transfer. However, this exception is applicable only where amount of consideration or part thereof for the transfer has been received by any mode other than cash on or before the date of agreement.
It’s true that the definition of Agricultural land is proposed to be amended by the Finance Bill-2013. Presently, Rural Agricultural Land is defined to mean land not situated in any area within the jurisdiction of a municipality or cantonment board having population of not less than ten thousand or in any area within such distance not exceeding eight kilometers from the local limits of any municipality or cantonment board as notified. For that purpose, the Central Government had issued Notification No SO – 9447 dated 06.01.1994. In that notification, more than 400 cities have been listed and corresponding relevant distances have been mentioned. Any transfer of agricultural land falling within the relevant distance of the cities mentioned in the notification would be subject to capital gains tax. It is to be noted that presently only notified areas were covered under the scope of agricultural land. Now, the definition is proposed to cover all areas whether notified or not. Moreover, various limits are proposed for land to qualify as a Rural Agricultural Land. A land will be considered as an “Rural Agricultural Land” if it is not situated in any area within the distance, measured aerially of not being more than:
  • 2 kilometers, from the local limits of any municipality or cantonment board and which has a population of more than 10,000 but not exceeding 1,00,000; or
  • 6 kilometers, from the local limits of any municipality or cantonment board and which has a population of more than 1,00,000 but not exceeding 10,00,000; or
  • 8 kilometers, from the local limits of any municipality or cantonment board and which has a population of more than 10,00,000.
 It is now further clarified that the distance has to be measured aerially. The amendments are proposed to take effect from 1st April, 2014 & will accordingly, apply in relation to assessment year 2014-15 and subsequent assessment years.
 
Source: The Hitwada.