Gsoftnet

Importance of Month of January - 2015 for Income Tax and TDS

Today is last day of current calender year 2014 and day after today New Year 2015 starts.  The January-2015 is very important for Taxpayee and Deductor also.  The assessee can find their obligation toward income tax department through this income tax calendar which is as below:

Due Dates for January - 2015

7 January 2015

  • ​Due date for deposit of Tax deducted/collected for the month of December, 2014

7 January 2015

  • ​​Due date for deposit of TDS for the period October 2014 to December 2014 when Assessing Officer has permitted quarterly deposit of TDS under sections 192, 194A, 194D or 194H.

15 January 2015

  • Quarterly statement of TDS/TCS deposited for the quarter ending December 31, 2014 (applicable in all cases of TDS/TCS except when tax is deducted by an office of the Government)

22 January 2015

  • ​Due date for issue of TDS Certificate for tax deducted under Section 194-IA in the month of December, 2014

30 January 2015

  • Quarterly TDS certificate (in respect of tax deducted for payments other than salary by a person not being an office of the Government) or quarterly TCS certificate (in respect of tax collected by any person) for the quarter ending December 31, 2014.

31 January 2015

  • Quarterly statement of tax deducted by an office of the Government for the quarter ending December 31, 2014

31 January 2015​

  • Quarterly return of non-deduction at source by a banking company from interest on time deposit in respect of the quarter ending December 31, 2014

Effects and Key features of Proposed GST

As per the dual tax regime that has been announced for GST in India, there will be a Central stream for taxes and a State stream for the same taxes.In order to allow this model of taxation both the Centre and States will have to make policy changes. It is expected that the proposed concurrent dual GST system would p reserve and protect the fiscal powers and at the same time rationalize the indirect tax structure by subsuming a plethora of Central and Local Taxes into a consolidated levy.

Central GST may subsume the following indirect taxes/duties on supply of goods and services:

  • Central Excise Duties (CENVAT)
  • Additional Excise Duties including those levied under Additional Duties of Excise (Goods of SpecialImportance)Act, 1957
  • Additional Custom Duties in the nature of countervailing duties, i.e., CVD, SAD and other domestic taxes impose on imports to achieve a level playing field between domestic and imported goods although, under the GST regime all the imports will suffer a reverse charge. 
  • Cesses levied by the Union viz., Cess on rubber, tea, coffee etc.
  • Service Tax
  • Central Sales Tax – to be completely phased out
  • Surcharges levied by the Union viz., National Calamity Contingent Duty, Education Cess, Special Additional Duties of Excise on Motor‐Spirit and High Speed Diesel (HSD).

State GST may subsume the following State taxes

  • Value Added Tax
  • Purchase Tax
  • State Excise Duty (except on liqu or)
  • Entertainment Tax (unless it is levied by the local bodies)
  • Luxury Tax
  • Octroi
  • Entry tax in lieu of Octroi
  • Taxes on Lottery, Betting and Gambling

Taxes/Duties not to be subsumed in GST:‐
In Central GST

  • Basic Customs Duty
  • Excise Duty on Tobacco products
  • Export Duty
  • Specific Cess
  • Specific Central Cess like Education and Oil Cess.

In State GST

  • Taxes on Liquors
  • Toll Tax
  • Environment Tax
  • Road Tax
  • Property Tax
  • Tax on Consumption or Sale of Electricity – Not certain
  • Stamp Duty – Not certain

Certain components of petroleum, liquor are likely to be outside the GST structure.  Further, State Excise on liquor may also be kept outside the GST. In other words, in such circumstances, all taxes and duties on these goods will be outside the scope of GST.

Source: www.caclubindia.com

Action and Impact of PANs either "Not Available" or "Invalid" in TDS Quarter Return For Asstt. Year 2015-16.

Recently CPC (TDS) has found that while submitting TDS Return by TDS Deductor, Deductees reported in TDS Return PAN "Not Available" or "Invalid" even though  TDS Deductees reported with more than Rs. 50000/- TDS Amount in Quarter.  In this connection CPC (TDS) has issued a communication regarding the impact & action to be taken in this situation.  The details is as under :

Centralized Processing Cell (TDS) has observed from its records that though you have reported deductees with more than Rs. 50,000 of TDS in your Quarterly TDS statements, but the PANs are either "Not Available" or "Invalid". The "Invalid" PANs appear structurally valid, however, they are actually incorrect, as they are not available in the PAN Master records.

Please note the following details in reference to your TDS statements for Financial Year 2013-14 only for Form types 24Q & 26Q:


Immediate Attention:
Quarter wise details of PANs and transactions, where such errors have been identified are available in the Justification Reports that can be downloaded from TRACES. Therefore, you may take immediate steps to correct Invalid/ Incorrect PANs that have been reported in the statement. In case, the PAN was Not Available / Applied For at the time of reporting the transaction, the deductee may be contacted and respective PAN may be replaced.

What is the impact:
The impact of such errors is significant in nature, in view of following:

  • You would not have been able to generate TDS Certificates for deductees with such PANs. In case, you have issued TDS Certificates outside TRACES, they will not be valid.
  • In view of CBDT circulars 04/2013 dated 17.04.2013, No. 03/2011 dated 13.05.2011 and No. 01/2012 dated 09.04.2012, it may kindly be noted that the TDS Certificates downloaded only from TRACES Portal will be valid. Certificates issued in any other form or manner will not comply to the requirements referred in the Income-tax Act 1961 read with relevant Rules and Circulars issued in this behalf from time to time.
  • Correct TDS Credits in 26AS statements to the taxpayers will not be available and they will not be able to avail the same, while filing their Income Tax Returns.
  • As per section 206AA of the Income Tax Act, the tax is to be deducted at a higher rate, in case of "Not Available/ Invalid PANs". Therefore, Short Deduction, including Interest is charged, if the tax has not been deducted at higher rate or Section Rate, whichever is higher, as per the provisions of section 206AA.

What actions to be taken:

  • TRACES provides for a user friendly "Online Correction facility with Digital Signatures" for correction of PANs. To avail the facility, you are requested to Login to TRACES and 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.
  • You may also download the Conso Files and Justification Reports from TRACES to identify the above errors and submit C5 Correction Statement to correctly complete the details of the deductees.
  • PAN Verification facility on TRACES can be used for verifying the deductees. You are requested to Login to TRACES and navigate to "Dashboard" to locate "PAN Verification" in the Quick Links menu.
  • You can make use of the "Consolidated TAN - PAN File" that includes all the valid PANs attached with the respective TANs. To avail the facility, Login to TRACES and navigate to "Dashboard" to locate "Consolidated TAN - PAN File".

You can refer to our e-tutorial and FAQs on "TRACES" website for necessary help. For any further assistance, you can also write to ContactUs@tdscpc.gov.in or call our toll-free number 1800 103 0344.

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

CPC (TDS) TEAM

Source: TRACES

Significant change in processing of Quarterly TDS Statements - CPC (TDS)

Recently CPC (TDS) has issued a communication regarding significant change in processing of Quarterly TDS Statements to deductors.  The new process for Quarterly TDS Statement is identify the errors in Challan/ PANs and provde it the facility to correct before submitting in Quarterly TDS Statements.

The details of this communication is as below:

Dear Deductor,

Centralized Processing Cell (TDS), in its constant endeavor to improve services, is glad to update you with a significant change in processing of Quarterly TDS Statements. This change has been initiated in view of feedbacks received from deductors, to avoid defaults that may arise due to inadvertent data entry errors.

The central point in the new process is identifying errors in challan/ PANs and facilitating their corrections before CPC (TDS) computes defaults in TDS statements. Following are the salient features of the new process:

What is new ?

Step 1: CPC (TDS) will first process Original TDS Statements till the stage of 26AS generation for deductees reported.

Step 2: Short Payments and PAN Errors will be identified in the preliminary check of the Original statements.

Step 3: The statements will be placed "On Hold" for further processing and an opportunity will be provided to correct potential defaults of Short Payment and PAN Error.

When the statement is placed on Hold, CPC (TDS) will intimate you through following means :

  • e-mail at the Registered e-mail address at TRACES
  • SMS at Registered Mobile Number with TRACES
  • Message will be delivered to the Deductor's Inbox in TRACES

The above correction needs to be carried out by using Online Correction feature at TRACES within 7 days of above communication.

It is, therefore, advised that the deductors may ascertain status of the TDS statements within 7 days of filing with TIN Facilitation Centre.

What are the advantages:

  • You would have preliminary information of potential Short Payments and PAN Errors, before the Original Statement is completely processed for Defaults and Intimations are generated.
  • Correction of above defaults using Online Correction can be submitted before final processing of statements.
  • Above action will facilitate avoidance of multiple Correction Statement filing later, after the defaults are identified CPC (TDS) and Intimations have been sent.

What actions to be taken :

  • Please take note of the Intermediate communication from CPC (TDS) and submit Online Correction for potential defaults in TDS statement within the stipulated time frame.
  • Only "Online Correction" facility can be used for correction of above Short Payments and PANs

To avail the facility, you are requested to Login to TRACES and 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.

Please note that Digital Signature will be required to avail the benefit of complete correction features, including PAN Corrections. In view of Q3 filing due date approaching fast, you are requested to procure Digital Signature Certificate at the earliest.

  • PAN Verification facility on TRACES can be used for verifying the deductees. You are requested to navigate to Dashboard to locate PAN Verification in the Quick Links menu.
  • You can make use of the "Consolidated TAN - PAN File" that includes all the valid PANs attached with the respective TANs. To avail the facility, please navigate to Dashboard to locate Consolidated TAN - PAN File.
  • The action requires to be completed within 7 days of Intermediate communication from CPC (TDS).

It is hoped that the deductors will avail of the time window to correct errors, if any. CPC (TDS) is committed to provide best possible services to you.
CPC (TDS) is committed to provide best possible services to you.

CPC (TDS) TEAM

Source: TRACES

Income Tax Return mandatory for Senior Citizen, if Taxable Income is above Rs. 3.00 Lac.

Specially Senior Citizen Taxpayee Income source are as Pension, Interest, Rent, etc. and many more.  In case Taxpayee total income exceeds the aforesaid limit, Sr. Citizen Taxpayee would be required to file Income Tax Return and in case it does not, assessee would not be required to file the tax return.  It means total income exceeds Rs 3 lakh, being the maximum amount up to which tax is not payable by a senior citizen for assessment year 2015-16 (financial year 2014-15). 

Section 194A of the Income-tax Act 1961 (The Act) provides that tax deduction provisions shall not be applicable to such income credited or paid in respect of:-

  • deposits with a primary agricultural credit society or a primary credit society or a cooperative land mortgage bank or cooperative land development bank.
  • deposits (other than time deposits made on or after July 1, 1995) with a cooperative society, other than cooperative society or bank referred to in (a) above, engaged in carrying on the business of banking.

Taxpayee may, therefore, find out whether the cooperative societies in which fixed deposit etc; have been made are covered within the aforesaid exemption. In case such societies are not covered within the aforesaid exemption, deduction of tax will have to be made in respect of the interest income provided the same exceeds the limit prescribed under Section 194A of the Act.

According to the provisions of Section 80TTA of the Act, a deduction to the extent of Rs 10,000 is allowable in respect of the interest earned in a savings account with (a) bank, (b) cooperative society carrying on the business of banking and (c) post office. In that case Taxpayee can claimed a deduction of Rs 10,000 in respect of interest earned in savings account instead of more than exemption limit  up to March 31, 2016 and claim such deduction.

Source: www.tribuneindia.com

Get Tax Benefit on 'Reliance Retirement Fund' u/s. 80C - CBDT

Recently CBDT has issued notification dated 23rd Dec., 2014 for the purpose of Tax Benefite u/s. 80C Deductions to Taxpayee as "Reliance Retirement Fund".

Central Government hereby specified the Reliance Retirement Fund set up by the Reliance Mutual Fund Registered under the Securities and Exchange of Board of India (Mutual Fund Regulations, 1993) having registration No. MF/022/95/1, dated the 30th June, 1995 as a pension fund for the purposes of the said clause for the Assessment Year 2015-16 and subsequent assessment years.

This notification shall come into force from the date of its publication in the official Gazette.

Notified Pension Fund under Section 80C (2)(xiv)

Download Govt. Govt. notifies 'Reliance Retirement Fund' as pension fund for purpose of Sec. 80C deduction Click Here

CBDT issues new guidelines for compounding of offences under Direct Tax Laws, 2014

Recently, CBDT has issued new guidelines for or Compounding of Offences under Direct Tax Laws, 2014 on 23rd Dec., 2014 vide F.No. 285/35/2013 IT(Inv)/108.

In the light of various references received from the field formation from time to time, existing guidelines on compounding of offences under Income-tax Act, 1961 (the Act) have been reviewed and in supersession of the same, including the guidelines issued vide F.No. 285/90/2008-IT(Inv.)/12 dated 16 thMay 2008, the following guidelines are issued for compliance by all concerned. 

These guidelines shall come into effect from 01.01.2015 and shall be applicable to all applications for compounding received on or after the aforesaid date. The applications received before 01.01.2015 shall continue to be dealt with in accordance with the guidelines dated 16.05.2008. 

Compounding Provision:
Section 279(2) of the Act provides that any offence under chapter XXII of the Act may, either before or after the institution of proceedings, be compounded by the CCIT/DGIT. As per section 2(15A) and 2(21) of the Act, Chief Commissioner of Income Tax includes Principal CCIT and Director General of Income tax includes Principal DGIT. 

Compounding is not a matter of right:
Compounding of offences is not a matter of right. However, offences may be compounded by the competent authority on his satisfaction of the eligibility conditions prescribed in these guidelines keeping in view factors such as conduct of the person; nature and magnitude of the offence and facts and circumstances of each case.

Applicability of these guidelines to prosecutions under IPC:
Prosecution instituted under Indian Penal Code, if any, cannot be compounded as per these guidelines. However, section 321 of Criminal Procedure Code, 1973 provides for withdrawal of such prosecutions.

Classification of Offences:
The offences under Chapter-XXII of the Act are classified into two parts (Category 'A' and Category 13') for the limited purpose of compounding of the offences.

To Read detailed Notification Click Here

TRACES intimation about outstanding TDS Demand for Asstt. Year 2015-16

As per the records of the Centralized Processing Cell (TDS), there are number of unconsumed challans in your account in different years from 2007 onwards.These challan may have remained unconsumed mainly on account of :-
  • Mismatch in challan particulars as quoted in TDS statement with the challan particulars as per OLTAS, AND
  • Incomplete reporting of TDS transactions in TDS statements filed by you, OR
  • Non filing of TDS statements.
Table below shows year wise outstanding demand on account TDS defaults as on October 23rd 2014. Intimation u/s 154 read with section 200A of the Income Tax Act, 1961 intimating the outstanding demand for different address, as mentioned in the relevant TDS Statement to the relevant deductors (TANs).



You are requested to close the short payment default through "tagging" of correct challan using "online  correction" facility at TRACES portal (www.tdscpc.gov.in) In case of any clarification; you may contact your accessing officer and also send e-mail atinfo@tdscpc.gov.in.

It is to inform that while downloading TDS certificate (Form 16/16A), you would be prompted to first close the  'short payment' default on account of 'challan mismatch', if any. As the next due date for download of form 16A is 31st January, you are requested to close your defaults well in advance to avoid any issue in downloading of TDS certificates for third quarter of 2014-15.

In case, the unconsumed challans in your account are on account of incomplete reporting of TDS transactions in  the quarterly TDS statements, you are advised to file correction statements on immediate basis to close the issue.


For any assistance, you can write to info@tdscpc.gov.in. or call our toll-free number 1800 103 0344.

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

CPC (TDS) TEAM

Source: TRACES

For Central Government Employee latest Expected 7th CPC Pay Structure and Projected Calculator w.e.f. 01.01.2016

Recently, many federation of Central Government Employee had published most expected 7th CPC Pay Structure which will effect from 01st January, 2016.  The Central Government may applied the same Pay Structure to Central Government Employee as demanded by federations/unions.
Based on all the changes right from the 1st CPC, until the 6th CPC, we have predicted a pay structure. Even though we weren’t keen on it, we have been receiving requests by email and comments. At a point, it became unavoidable. We just had to give our own interpretation too. 

Since the basic pay of an ordinary employee has evolved from 260-950-3050-7730, the next change is expected to increase the salary by 2.5 times. Our Projected Pay Scale is expecting an increase of no more than 3 times.

It could be 260-950-3050-7730-22500..!

More than the hike, everybody is hoping that the Grade Pay would be in proper series. 

And, everybody wants and hopes for a recommendation that prescribes a uniform Multiplication Factor (6th CPC 1.86) to all categories of employees. 

6TH CPC PAY STRUCTURE

EXPECTED 7TH CPC PAY STRUCTURE


DOWNLOAD 7TH CPC PROJECTED CALCULATOR


REGISTER FOR FREE 
TO DOWNLOAD 

 All Central or State Government Employee can send 
their comments, suggestions and Queries in below Comments Box

CBDT Notification reg. undisclosed Income during Search/Survey.

Recently on 18th December, 2014 CBDT has issued a notification regarding "Admission of Undisclosed Income under coercion/pressure during Search/Survey".  In this matter CBDT has already issued a notification on 09.01.2014 during this calender year vide Letter No. 286/98/2012-IT(Inv.II).  Read the notification which is as under :

Instances/complaints of undue influence/coercion have come to notice of the CBDT that some assessee were coerced to admit undisclosed income during Searches/Surveys conducted by the Department.  It is also seen that many such admissions are retracted in the subsequent proceedings since the same are not backed by credible evidence.  Such actions defeat the very purpose of Search/Survey operations as they fail to bring the undisclosed income to tax in a sustainable manner leave alone levy of penalty or lunching of prosecution.  Further, such actions show the Department as a whole and officers concerned in poor light.

I am further directed to invite your attention to the Instructions/Guidelines issued by CBDT from time to time, as referred above, through which the Board has emphasized upon the need to focus on gathering evidences during search/survey and to strictly avoid obtaining admission of undisclosed income under coercion/undue influence.

In view of the above, while reiterating the aforesaid guidelines of the Board, I am directed to convey that any instance of undue influence/coercion in the recording of the statement during Search/Survey/ other proceeding under the I.T. Act, 1961 and/or recording a disclosure of undisclosed income under undue pressure/coercion shall be viewed by the Board adversely.

These guidelines may be brought to the notice of all concerned in your Region for strict compliance.

I have been further directed to request you to closely observe/oversee the actions of the officers functioning under you in this regard.

This issues with approval of the Chairperson, CBDT.

To read more details Download Notification (Click Here

CPC (TDS) advisory for use of Digital Signatures on TRACES

The Centralized Processing Cell (TDS) has released a new feature on its web-portal TRACES, where a Digital Signature Certificate (DSC) can be used for availing various services offered by the portal.

You are advised to take note of the following key information in this regard:
  • Under Information Technology Act, 2000, a "Digital Signature" means authentication of any electronic record by a subscriber by means of an electronic method or procedure in accordance with the provisions of section 3.
  • The Digital Signature keeps record of the person who is availing the facility.
  • Please exercise caution in use of Digital Signature and should not be shared in any circumstances. If shared, the person using DSC shall also be liable to consequences.
  • In accordance with the Information Technology Act, 2000, every subscriber shall exercise reasonable care to retain control of the private key corresponding to the public key listed in his Digital Signature Certificate and take all steps to prevent its disclosure to a person not authorised to affix the digital signature of the subscriber.
  • TRACES has provided facility for Admin and Sub-users to facilitate authorised Sub-users to carry out activities on TRACES and submit to the Admin user. The Admin user has the rights to approve the activities using the DSC.
  • It is therefore, advised to refrain from using the Digital Signature of any person other than the Authorised Person appointed by the deductor, for carrying out any activity on TRACES.
Please note that the "Authorised Person" is referred to as "Person Responsible" in accordance with Section 204 read with Section 200 of the Income Tax Act, 1961 and other relevant provisions for deduction of tax.

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

CPC (TDS) TEAM

Source: TRACES

Download updated e-TDS/TCS Return FVU Ver 4.5 & 2.141 for Asstt. Year 2014-15

Recently, I had published a post regarding uptation of e-TDS/TCS Return FVU features.  The TIN-NSDL has relseased the updated e-TDS/TCS Return FVU utility ver. 4.5 and 2.141 with new features for Asstt. Year 2014-15 which is as under:

Key features of FVU version 4.5

Incorporation of section 194LBA:
  • Section 194LBA is applicable for Form no. 26Q and 27Q
  • Section 194LBA is applicable for statements pertaining to Q3 of FY 2014-15 onwards.
  • Section code to be quoted in the TDS statement for section 194LBA is 4BA
Incorporation of section 194DA:
  • Section 194DA is applicable for Form no. 26Q only
  • Section 194DA is applicable for statements pertaining to Q3 of FY 2014-15 onwards.
  • Section code to be quoted in the TDS statement for section 194DA is 4DA
Download FVU for quarterly e-TDS/TCS statement pertaining to FY 2010-11 onwards

    e-TDS/TCS FVU.exe (Version 2.141)

Download FVU for quarterly e-TDS/TCS statement up to FY 2009-10

    e-TDS/TCS FVU.exe (Version 4.5)

Extraction of e-TDS/TCS FVU
  • To extract these files, double-click on 'e-TDS FVU.exe'.
  • A 'WinZip Self-Extractor - e-TDS FVU.exe' will open.
  • By default, the path selected for extraction of the three files will be 'C:\e-TDS FVU'.
  • The files can also be extracted in any other location (other than C:\e-TDS FVU). In that case, the appropriate path has to be defined by clicking the 'Browse' button where the three files should be extracted.
  • Thereafter, click on 'Unzip' button.
  • On clicking the 'Unzip' button, the three files mentioned above will get extracted to the specified path (i.e. in folder 'C:\ e-TDS FVU' by default or at the specified path).
Installation of e-TDS/TCS FVU
The e-TDS/TCS FVU can be setup as per the procedure mentioned in the 'e-TDS FVU Readme.rtf' file (one of the three files extracted).

Running the FVU

The procedure to run FVU is given in the Readme button on the window opened by clicking e-TDS/TCS FVU icon.

Salaried Employee Download Updated Income Tax Calculator with all deductions as per recent circular for A.Y. 2015-16.

Recently, after Union Budger 2014-15 Income Tax Department has issued a circular (17/2014) for Salaried Employee to calculate Income for Asstt. Year 2015-16 thus the many websites provide Tax Calculation Utility on internet with all types of head of income i.e. Income under head of Salary, House Property Income, Other source of Income, Capital Gain Income From and others.  Apart from these Salaried Employee can't calculate actual  Income Tax because there is no provision of monthly salary Statement and salary deductions restated to income tax exemptions.  This difficulty solved this utility.   This utility calculates Annual Income Tax Liability including Monthwise Salary Statement and suggest to deduct as TDS from salary.

Tax Calculation Method for Salaried Employee:

What are the Income Tax Exemption Limit for Asstt. Year 2015-16, Click Here.

HRA exemption = Least of (40% (50% for metros) of Basic+DA or HRA or rent paid - 10% of Basic+DA)

Transport allowance is exempt up to Rs.800/- per month during the month. (Expenditure incurred for covering journey between office and residence.)  For people having permanent physical disability, the exemption is 1,600/- per month.

Reimbursement of Medical bills are exempt for self and dependent family, up to Rs.15,000/- per annum u/s(5) LTA is exempt to the tune of economy class Train/ Air /Recognised public Transport fare for the family to any destination in India, by the shortest route.

LTA can be claimed twice in a block of 4 calendar years. The current block is from 01.01.2010 to 31.12.2013. For claim, it is must to provide originals tickets etc.

U/s 24 There is an Exemption for interest on housing loan. (for Self occupied Residence). If the loan was taken before Apr 1, 1999 exemption is limited to Rs. 30,000/- per year. If the loan was taken after Apr 1, 1999 exemption is limited to Rs. 2,00,000/- per year if the house is self-occupied; There is no limit if the house is rented out.

This exemption is available on accrual basis, which means if interest has accrued, you can claim exemption, irrespective of whether you've paid it or not..                            "

If you have rented out your house, enter the total income / loss from the house (after deducting property tax and standard maintenance expenses).

U/s 80CCE- Maximum Exemption up to  Rs. 150000/-  Investments up to Rs. 1.5 lac in PF, VPF, PPF, Employee contribution in NPS,Insurance Premium, Housing loan principal repayment, NSC, ELSS, long term bank Fixed Deposit, Post Office Term Deposit, etc. are deductible from the taxable income. There is no limit on individual items, (for example) all 1 lac can be invested in NSC or PPF etc.
U/s 80CCD -The Finance Act, 2011 provides that contribution made by the Central Government or any other employer to NPS (up to 10 per cent of the salary of the employee in the previous year)shall be excluded while computing the limit of Rs. 1,50,000.The contribution by the employee to the NPS will be subject to the limit of Rs. 1,00,000.

U/s 80CCG - Rajiv Gandhi Equity Savings Scheme is a new exemption available for investment in stock markets (direct equity). Avaialble only for those with gross income less than 12 lacs and only for first time investors in stock market. Exemption available at 50% of investment subject to maximum of Rs.50,000/- invested. Investments are locked-in for three years

U/s 80D Medical Insurance Premium (such as Mediclaim & Critical illness Cover)& Health Check up Upto Rs. 5000, premium is exempt up to Rs. 30,000/ per year (Rs.15,000/- for self,spouse and children ) (Rs. 15000/- for Parents. If the premium includes for a dependent who is (Senior Citizen) above 60 years of age, an extra Rs. 5,000//- can be claimed.

U/s 80DD Deduction in respect of medical treatment of handicapped dependents is limited to Rs. 50,000/- per year if the disability is less than 80% and Rs. 1,00,000/- per year if the disability is more than 80%

U/s 80DDB Deduction in respect of medical treatment for specified ailments or diseases for the assesse or dependent can be claimed up to Rs. 40,000/- per year. If the person being treated is a senior citizen, the exemption can go up to Rs. 60,000/-. but any amount received under Medical Insurance Policy will be reduced from the amount of deduction allowed. The Diseases and ailments specified under rule 11DD are.
  1. neurological diseases being demetia, dystonia musculorum deformans, motor neuron disease, ataxia, chorea, hemiballismus, aphasia and parkisons disease,
  2. cancer,
  3. AIDS,
  4. Chronic renal failure,
  5. hemophilia, and 
  6. thalassaemia.
U/s 80E Interest repayment on education loan (taken for higher education from a university of self & dependents) is completely tax exempt

U/s 80G Donations given for certain charities are tax exempt. Some(NGO,Trust etc.) are exempt to the tune of 50%, whereas Govt funds are 100%.

U/s 80GG If you are not getting  HRA, but living in rented house, an exemption is available. This will be calculated as minimum of (25% of total income or rent paid - 10% of total income or Rs. 24,000/- per year)

U/s 80U who suffers from not less than 40 per cent of any disability is eligible for deduction to the extent of Rs. 50,000/- and in case of severe disability to the extent of Rs. 100,000/-

U/s 80TTA introduced through Finance Act, 2012. Section 80TTA provides a deduction of up to Rs. 10,000 on your income from interest on saving bank accounts.

DEDUCTION u/s. 80C and chapter VIA
U/s. 80C of the Income Tax Act allows certain investments and expenditure to be deduct from total income. One must plan investments well and spread it out across the various instruments specified under this section to avail maximum tax benefit. There are no sub-limits and is irrespective of how much you earn and under which tax bracket you fall. Most of the Income Tax payee try to save tax by saving under Section 80C of the Income Tax Act.  However, it is important to know the Section in total. so that one can make best use of the options available for deduction under income tax Act. One important point to note that one can not only save tax by undertaking the specified investments, but some expenditure which you normally incur can also give you the tax exemptions.

Qualifying Investments u/s 80CCE
  • Provident Fund (PF) & Voluntary Provident Fund (VPF) PF is automatically deducted from your salary. your contribution [12% of Basic] (i.e., employee’s contribution) is counted towards section 80C investments. You also have the option to contribute additional amounts through voluntary contributions (VPF). Current rate of interest is 8.5% per annum (p.a.) and is tax-free.
  • Life Insurance Premiums: Any amount that you pay towards life insurance premium in Life Insurance Corporation (LIC) or any other Insurance CO.for yourself, your spouse or your children can also be included in Section 80C deduction. If you are paying premium for more than one insurance policy, all the premiums will be included. also premium paid for ULIP will also be treated as Premium paid for Life Insurance Policies.
  • Unit linked Insurance Plan : ULIP stands for Unit linked Saving Schemes. ULIPs cover Life insurance with benefits of equity investments.They have attracted the attention of investors and tax-savers not only because they help us save tax but they also perform well to give decent returns in the long-term.
IMP : Total Amount Received at Maturity, Survival Benefits, Withdrawal in Insurance Policies is Tax Free and fully exempted u/s 10(10D).
  • Public Provident Fund (PPF): Among all the assured returns small saving schemes, 
  • Public Provident Fund (PPF) is one of the best. Current rate of interest is 8% tax-free and the normal maturity period is 15 years. Minimum amount of contribution is Rs. 500 and maximum is Rs. 1,50,000.(New Change) from Budget 2014
  • National Savings Certificate (NSC): National Savings Certificate (NSC) is a 5-Yr small savings instrument eligible for section 80C tax benefit. Rate of interest is  8.58% compounded half-yearly, i.e. If you invest Rs.100, it becomes Rs.150.90 after five years. The interest accrued every year is liable to tax (i.e. to be included in your taxable income) but the interest is also deemed to be reinvested and thus eligible for section 80C deduction.
  • Home Loan Principal Repayment & Stamp Duty and Registration Charges for a home Loan The Equated Monthly Installment (EMI) that you pay every month to repay your home loan consists of two components – Principal and Interest.The principal component of the EMI qualifies for deduction under Sec 80C. Even the interest component can save you significant income tax – but that would be under Section 24 of the Income Tax Act. The amount you pay as stamp duty when you buy a house, and the amount you pay for the registration of the documents of the house can be claimed as deduction under section 80C in the year of purchase of the house.
  • Tuition  fees  for 2 children  Apart form the above major investments expenses for children’s education (Only Tution Fee (for which you need receipts)), can be claimed as deductions under Sec 80C.
  • Equity Linked Savings Scheme (ELSS): There are some mutual fund (MF) schemes specially created for offering you tax savings, and these are called Equity Linked Savings Scheme, or ELSS. The investments that you make in ELSS are eligible for deduction under Sec 80C.
  • 5-Yr bank fixed deposits (FDs): Tax-saving fixed deposits (FDs) of scheduled banks with tenure of 5 years are also entitled for section 80C deduction.
  • 5-Yr post office time deposit (POTD) scheme: POTDs are similar to bank fixed deposits. Although available for varying time duration like one year, two year, three year and five year, only 5-Yr post-office time deposit (POTD) – which currently offers 7.5 per cent rate of interest –qualifies for tax saving under section 80C. Effective rate works out to be 7.71% per annum (p.a.) as the rate of interest is compounded quarterly but paid annually. The Interest is entirely taxable.
  • Pension Funds or Pension Policies – Section 80CCC: This section – Sec 80CCC – stipulates that an investment in pension funds is eligible for deduction from your income. Section 80CCC investment limit is clubbed with the limit of Section 80C – it means that the total deduction available for 80CCC and 80C is Rs 1.5 Lakh.This also means that your investment in pension funds upto Rs.1.5 Lakh can be claimed as deduction u/s 80CCC. However, as mentioned earlier, the total deduction u/s 80C and 80CCC can not exceed  Rs.1.5 Lakh.
  • Infrastructure Bonds: These are also popularly called Infra Bonds. These are issued by infrastructure companies, and not the government. The amount that you invest in these bonds can also be included in Sec 80C deductions.
  • NABARD rural bonds: There are two types of Bonds issued by NABARD (National Bank for Agriculture and Rural Development): NABARD Rural Bonds and Bhavishya Nirman Bonds (BNB). Out of these two, only NABARD Rural Bonds qualify under section 80C.
  • Senior Citizen Savings Scheme 2004 (SCSS): A recent addition to section 80C list, Senior Citizen Savings Scheme (SCSS) is the most lucrative scheme among all the small savings schemes but is meant only for senior citizens. Current rate of interest is 9% per annum payable quarterly. Please note that the interest is payable quarterly instead of compounded quarterly. Thus, unclaimed interest on these deposits won’t earn any further interest. Interest income is chargeable to tax.
Know, How to calculate Income Tax for Asstt. Year 2015-16 with all exemption limits i.e. 80C, Deduction under Chapter -VIA and many more, Click Here.

Latest TDS amendments effected from 01.10.2014 & TDS Rate for Asstt. Year 2015-16.

 TDS / TAX CALCULATION UTILITY


Download Latest TDS / TAX Calculation Utility for
Asstt. Year 2015-16

What are the Penalties and prosecution, Click Here

Remember mandatory Quoting of PAN and TAN on TDS Certificate (Form-16) for Asstt. Year 2015-16.

Section 203A of the Act makes it obligatory for all persons responsible for deducting tax at source to obtain and quote the Tax deduction and collection Account No (TAN) in the challans, TDS-certificates, statements and other documents. Detailed instructions in this regard are available in this Department's Circular No.497 [F.No.275/118/ 87-IT(B) dated 9.10.1987]. If a person fails to comply with the provisions of section 203A, he will be liable to pay, by way of penalty, under section 272BB, a sum of ten thousand rupees. Similarly, as per Section 139A(5B), it is obligatory for persons deducting tax at source to quote PAN of the persons from whose income tax has been deducted in the statement furnished u/s 192(2C), certificates furnished u/s 203 and all statements prepared and delivered as per the provisions of section 200(3) of the Act.

All tax deductors are required to file the TDS statements in Form No.24Q (for tax deducted from salaries). As the requirement of filing TDS certificates alongwith the return of income has been done away with, the lack of PAN of deductees is creating difficulties in giving credit for the tax deducted. Tax deductors are, therefore, advised to procure and quote correct PAN details of all deductees in the TDS statements for salaries in Form 24Q. Taxpayers are also liable to furnish their correct PAN to their deductors. Non-furnishing of PAN by the deductee (employee) to the deductor (employer) will result in deduction of TDS at higher rates u/s 206AA of the Act mentioned in below.

Compulsory Requirement to furnish PAN by employee (Section 206AA):

Section 206AA in the Act makes furnishing of PAN by the employee compulsory in case of receipt of any sum or income or amount, on which tax is deductible. If employee (deductee) fails to furnish his/her PAN to the deductor , the deductor has been made responsible to make TDS at higher of the following rates:

  1. at the rate specified in the relevant provision of this Act; or
  2. at the rate or rates in force; or
  3. at the rate of twenty per cent.

The deductor has to determine the tax amount in all the three conditions and apply the higher rate of TDS. However, where the income of the employee computed for TDS u/s 192 is below taxable limit, no tax will be deducted. But where the income of the employee computed for TDS u/s 192 is above taxable limit, the deductor will calculate the average rate of income-tax based on rates in force as provided in sec 192. If the tax so calculated is below 20%, deduction of tax will be made at the rate of 20% and in case the average rate exceeds 20%, tax is to deducted at the average rate. Education cess @ 2% and Secondary and Higher Education Cess @ 1% is not to be deducted, in case the tax is deducted at 20% u/s 206AA of the Act.

Important Notifications for online Correct Mismatch Challan displayed on TRACES website

The original statement will be put on hold if Challan Mismatch/Challan Overbooked/PAN Errors has been identified in the preliminary check, please make online correction so that your statement is not processed for defaults.

A new version(2.1) of Excel Generation utility for Justification report has been rolled out. Please download and use latest utility version for Justification report requests.

Notices for Assessing Officer Functionality has been enabled on TRACES. Deductor can now check the status of Show Cause Notice/Penalty Order/201 Order issued by the Assessing Officer.

For queries where Conso-file is N/A due to Un-Matched Challan, please refer to our E-Tutorial under Quick-Links for "Online Challan Correction" .

Source: Traces

Features of e-TDS/TCS RPU and FVU validations of NSDL will changes after 20.12.2014

It is proposed to release new version of NSDL Return Preparation Utility (RPU) and File Validation Utility (FVU) incorporating the below features:

Features of NSDL RPU

Allow update in field in Form no. 27Q “Whether TDS rate of TDS is IT act (a) and DTAA (b)” where the tax has been deducted at higher rate.

Incorporation section code:
  • “194LBA” & “194DA” have been added for below forms which will be applicable for a statement pertaining to FY 2014-15 & Q3 onwards.
  • Section code 194LBA will be applicable for Form 26Q and 27Q.
  • Section code 194DA will be applicable only for Form 26Q.
  • For section code “194LBA”, select “4BA” from the dropdown of section code column in Annexure I sheet.
  • For section code “194DA”, select “4DA” from the dropdown of section code column in Annexure I sheet.
Latest FVU versions incorporating latest validations.

Features of FVU
  •  Incorporation section code“194LBA” & “194DA” for Form 26Q
  • The said section codes will be applicable for TDS statement pertaining to FY 2014-15 (Q3 onwards).
Utilities incorporating the above features will be available for download at TIN website (www.tin-nsdl.com) from download section on December 20, 2014.

For any further queries/ feedback, kindly send email to tin_returns@nsdl.co.in

For and on behalf of Tax Information Network

Thanks,

Deduction for Salaried Employee, who are elligible for Sec. 80D, 80DD, 80U, 80DDB etc. for Asstt. Year 2015-16 - Part-III

As per the recently issued a circular by Central Board of Direct Taxes for Salaried Employee regarding calculation of Exemption under Chapter VI-A to compute Income Tax for Asstt. Year 2015-16.  In this  circular many amendments has been made including Tax Exemption Limit increased for Asstt. Year 2015-16.  In the 2nd Part you will see all the deductions u/s. 80CCC, 80CCD, 80CCG etc.  This is the Third part to cover important Deductions under Chapter VI-A regarding Medical Reumbersment, Memdical Treatment, Physical Disability etc for Salaried Employee for Asstt. Year 2015-16 which is as under :

DEDUCTIONS UNDER CHAPTER VI-A OF THE ACT FOR THE ASSTT. YEAR 2015-16 FOR SALARIED EMPLOYEE

Deduction in respect of health insurance premia paid, etc. (Section 80D) : Section 80D provides for deduction available for health insurance premia paid, etc. which is calculated as under:


Here
  1. family - means the spouse and dependent children of the employee.
  2. Senior citizen - means an individual resident in India who is of the age of sixty years [For AY 2013-14 onwards] or more at any time during the relevant previous year.

The DDO must ensure that the medical insurance referred to above shall be in accordance with a scheme made in this behalf by-
  • the General Insurance Corporation of India formed under section 9 of the General Insurance Business (Nationalization) Act, 1972 and approved by the Central Government in this behalf; or
  • any other insurer and approved by the Insurance Regulatory and Development Authority established under sub-section (1) of section 3 of the Insurance Regulatory and Development Authority Act, 1999.

Deductions in respect of expenditure on persons or dependants with disability

Deductions in respect of maintenance including medical treatment of a dependent who is a person with disability (section 80DD):  Under section 80DD, where an employee, who is a resident in India, has, during the previous year -
  • incurred any expenditure for the medical treatment (including nursing), training and rehabilitation of a dependant, being a person with disability; or
  • paid or deposited any amount under a scheme framed in this behalf by the Life Insurance Corporation or any other insurer or the Administrator or the specified company subject to the conditions specified in this regard and approved by the Board in this behalf for the maintenance of a dependant, being a person with disability, the employee shall be allowed a deduction of a sum of fifty thousand rupees from his gross total income of that year.

However, where such dependant is a person with severe disability, an amount of one hundred thousand rupees shall be allowed as deduction subject to the specified conditions.

The deduction under (b) above shall be allowed only if the following conditions are fulfilled:-
  1. the scheme referred to in (b) above provides for payment of annuity or lump sum amount for the benefit of a dependant, being a person with disability, in the event of the death of the individual in whose name subscription to the scheme has been made;
  2. the employee nominates either the dependant, being a person with disability, or any other person or a trust to receive the payment on his behalf, for the benefit of the dependant, being a person with disability.

However, if the dependant, being a person with disability, predeceases the employee, an amount equal to the amount paid or deposited under sub-para(b) above shall be deemed to be the income of the employee of the previous year in which such amount is received by the employee and shall accordingly be chargeable to tax as the income of that previous year.

Deductions in respect of a person with disability (section 80U):  Under section 80U, in computing the total income of an individual, being a resident, who, at any time during the previous year, is certified by the medical authority to be a person with disability, there shall be allowed a deduction of a sum of fifty thousand rupees. However, where such individual is a person with severe disability, a higher deduction of one lakh rupees shall be allowable.

DDOs should note that 80DD deduction is in case of the dependent of the employee whereas 80U deduction is in case of the employee himself. However under both the Sections the employee shall furnish to the DDO following:
1. A copy of the certificate issued by the medical authority as defined in Rule 11A(1) in the prescribed form as per Rule 11A(2) of the Rules. The DDO has to allow deduction only after seeing that the Certificate furnished is from the Medical Authority defined in this Rule and the same is in the form as mentioned therein.
2. Further in cases where the condition of disability is temporary and requires reassessment of its extent after a period stipulated in the aforesaid certificate, no deduction under this section shall be allowed for any subsequent period unless a new certificate is obtained from the medical authority as in 1 above and furnished before the DDO.
3. For the purposes of section 80DD and 80 U some of the terms defined are as under:-
  (a) Administrator - means the Administrator as referred to in clause (a) of section 2 of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 200 ;
  (b) dependant - means -
      (i)  in the case of an individual, the spouse, children, parents, brothers and sisters of the individual or any of them;
      (ii) in the case of a Hindu undivided family, a member of the Hindu undivided family, dependant wholly or mainly on such individual or Hindu undivided family for his support and maintenance, and who has not claimed any deduction under section 80U in computing his total income for the assessment year relating to the previous year;
  (c) disability - shall have the meaning assigned to it in clause (i) of section 2 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 and includes ―autism, ―cerebral palsy and ―multiple disability referred to in clauses (a), (c) and (h) of section 2 of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999;
  (d) Life Insurance Corporation - shall have the same meaning as in clause (iii) of subsection (8) of section 88;
  (e) medical authority means the medical authority as referred to in clause (p) of section 2 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 or such other medical authority as may, by notification, be specified by the Central Government for certifying ―autism, ―cerebral palsy, ―multiple disabilities, ―person with disability and ―severe disability referred to in clauses (a), (c), (h), (j) and (o) of section 2 of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999;
  (f) person with disability - means a person as referred to in clause (t) of section 2 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 or clause (j) of section 2 of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999;
  (g) person with severe disability- means—
      (i) a person with eighty per cent or more of one or more disabilities, as referred to in sub-section (4) of section 56 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995; or
     (ii) a person with severe disability referred to in clause (o) of section 2 of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999;
  (h) specified company - means a company as referred to in clause (h) of section 2 of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002.

Deduction in respect of medical treatment, etc. (Section 80DDB): Section 80DDB allows a deduction in case of employee, who is resident in India, during the previous year, of any amount actually paid for the medical treatment of such disease or ailment as may be specified in the rules 11DD (1) for himself or a dependant. The deduction allowed is equal to the amount actually paid or Rs. 40,000 whichever is less. Further the amount paid should also be reduced by the amount received if any under insurance from an insurerer or reimbursed by an employer. In case of a senior citizen (an individual resident in India who is of the age of sixty years or more at any time during the relevant previous year) the amount of deduction allowed is Rs. 60,000/-.

DDO must ensure that the employee furnishes a certificate in Form 10-I from a neurologist, an oncologist, a urologist, nephrologist, a haematologist, an immunologist or such other specialist, as mentioned in Rule 11DD.

For the purpose of this section in the case of an employee "dependant" means individual, the spouse, children, parents, brothers and sisters of the employee or any of them, dependant wholly or mainly on the employee for his support and maintenance.

Click Here to Continue Reading

Updated Income Tax Calculator after circular No. 17/2014 for Salaried Employee for Asstt. Year 2015-16


Income Tax Department. CBDT has issued recently circular No. 17/2014 for Salaried Employee regarding Deduction from Salaries during the Financial Year 2014-15 under section 192 of the income Tax Act, 1961.



As per the recent circular of CBDT the Rates of Income Tax all deduction and exemption covered in the Tax Calculation utility. This Tax Calculation utility i.e. specially for Salaried Employee with monthly salary statement is here available.  Now, all Salaried Employee can download this Income Tax Calculation Utility for Asstt. Year 2015-16 to deduct TDS from monthly salary.


Download Updated Income Tax Calculator for
Asstt. Year 2015-16

Latest 13th Amendment for limit of 50% Govt. grant for deeming university/hospitals as substantially funded by Govt.

Recently, CBDT has made 13th Amendment in Income Tax by Insertion of Rule 2BBB for limit of 50% Government grant for deeming university/hospitals as substantially funded by Government on 12nd December, 2014.

In the Income-tax Rules, 1962, after rule 2BBA the following rule shall be inserted, namely:-
“ 2BBB.Percentage of Government Grant for considering university, hospital etc. as substantially financed by the Government for the purposes of clause (23C) of section 10.  For the purposes of sub-clauses (iiiab) and (iiiac) of clause (23C)of section 10, any university or other educational institution, hospital or other institution referred therein, shall be considered as being substantially financed by the Government for any previous year, if the Government grant to such university or other educational institution, hospital or other institution exceeds fifty percent. of the total receipts including any voluntary contributions, of such university or other educational institution, hospital or other institution, as the case may be, during the relevant previous year.”.


Details of deductions u/s. 80CCC, 80CCD, 80CCG for Salaried Employee for Asstt. Year 2015-16 - Part-II

Recently for current Financial Year and Assessment Year 2015-16, the current Government after Budget-2014 has issued a circular for Salaried Employee regarding computation of income.  In this  circular many amendments has been made including enhancement of  Tax Exemption Limit. Yesterday the First part has published on this blog. To read Part-I Deductions under Chapter VI-A for Salaried Employee for Asstt. Year 2015-16 Click Here. The Part-II is as under :

DEDUCTIONS UNDER CHAPTER VI-A OF THE ACT FOR THE ASSTT. YEAR 2015-16 FOR SALARIED EMPLOYEE

Deduction in respect of contribution to certain pension funds (Section 80CCC)

Section 80CCC allows an employee deduction of an amount paid or deposited out of his income chargeable to tax to effect or keep in force a contract for any annuity plan of Life Insurance Corporation of India or any other insurer for receiving pension from the Fund referred to in section 10(23AAB). However, the deduction shall exclude interest or bonus accrued or credited to the employee's account, if any and shall not exceed Rs. 1 lakh.

However, if any amount is standing to the credit of the employee in the fund referred to above and deduction has been allowed as stated above and the employee or his nominee receives this amount together with the interest or bonus accrued or credited to this account due to the reason of 
  1. Surrender of annuity plan whether in whole or part
  2. Pension received from the annuity plan

then the amount so received during the Financial Year shall be the income of the employee or his nominee for that Financial Year and accordingly will be charged to tax.  Where any amount paid or deposited by the employee has been taken into account for the purposes of this section, a deduction with reference to such amount shall not be allowed under section 80C.

Deduction in respect of contribution to pension scheme of Central Government (Section 80CCD):

Section 80CCD(1) allows an employee, being an individual employed by the Central Government or by any other employer on or after 01.01.2004, or any other assessee being an individual, a deduction of an amount paid or deposited out of his income chargeable to tax under a pension scheme as notified vide Notification F. N. 5/7/2003- ECB&PR dated 22.12.2003 (National Pension System –NPS) or as may be notifed by the Central Government. However, the deduction shall not exceed an amount equal to 10% of his salary (includes Dearness Allowance but excludes all other allowance and perquisites). The deduction under section 80CCD(1) shall not exceed Rs. 1,00,000/-.

As per Section 80CCD(2), where any contribution in the said pension scheme is made by the Central Government or any other employer then the employee shall be allowed a deduction from his total income of the whole amount contributed by the Central Government or any other employer subject to limit of 10% of his salary of the previous year.

If any amount is standing to the credit of the employee in the pension scheme referred above and deduction has been allowed as stated above, and the employee or his nominee receives this amount together with the amount accrued thereon, due to the reason of
  1. Closure or opting out of the pension scheme or
  2. Pension received from the annuity plan purchased and taken on such closure or opting out

then the amount so received during the FYs shall be the income of the employee or his nominee for that Financial Year and accordingly will be charged to tax. 

Where any amount paid or deposited by the employee has been taken into account for the purposes of this section, a deduction with reference to such amount shall not be allowed under section 80C.

Further it has been specified that w.e.f 01.04.09 that any amount received by the employee from the new pension scheme shall be deemed not to have received in the previous year if such amount is used for purchasing an annuity plan in the same previous year.

It is emphasized that as per the section 80CCE the aggregate amount of deduction under sections 80C, 80CCC and Section 80CCD(1) shall not exceed Rs.1,50,000/-. However, the deduction under Section 80CCD(1)shall not exceed Rs.1,00000 but contribution made by the Central Government or any other employer to a pension scheme u/s 80CCD(2) shall be excluded from the limit ofRs.1,00,000/- provided under this Section.

Deduction in respect of investment made under an equity savings scheme (Section 80 CCG):

Section 80CCG provides deduction w.e.f .assessment year 2013-14 in respect of investment made under notified equity saving scheme. Rajiv Gandhi Equity Savings Scheme 2012 has been notified vide SO No 2777 E dated 23.11.2012 as a scheme under this section. The scheme was modified in December 2013 vide notification SO No. 3693 dated 18.12.2013 as RGESS 2013.

The deduction under this section in accordance with RGESS 2013, is available if following conditions are satisfied:
  • The assessee is a resident individual
  • His gross total income does not exceed Rs. 12 lakhs;
  • He has acquired listed shares in accordance with a notified scheme or listed units of an equity oriented fund as defined in section 10(38);
  • The assessee is a new retail investor;
  • The investment is locked-in for a period of 3 years from the date of acquisition in accordance with the above scheme;
  • The assessee satisfies any other condition as may be prescribed.

Amount of deduction –The amount of deduction is at 50% of amount invested in equity shares/units. However, the amount of deduction under this provision cannot exceed Rs. 25,000. Withdrawal of deduction – If the assessee, after claiming the aforesaid deduction, fails to satisfy the above conditions, the deduction originally allowed shall be deemed to be the income of the assessee of the year in which default is committed.

This deduction is allowed for three consecutive assessment years beginning with the AY in which the listed equity shares or units were first acquired. If any deduction is claimed by a taxpayer under this section in any year, he shall not be entitled to any deduction under this section for any other year.

Click Here to Continue Reading

Now Taxpayee Login for e-filing Income Tax Return through Bank Account.

This new utility recently provided by www.incometaxindiaefiling.gov.in, by this facility taxpayee can login through Bank Account instead of Password in case when Taxpayee forgetten login password to sign. The forgotten option can be used to recover Passwod  at incometaxindiaefiling.gov.in using the net-banking facility of your bank.  Still this facility is not available in all Indian Banks, it is only available in some banks detailed below :

At this time the facility of direct e-Filing Login through Net banking is available through the following banks:
  • Corporation Bank-Retail Banking: https://www.corpretail.com/RetailBank
  • Corporation Bank-Corporate Banking: https://www.corpbank.biz/CorpBank/
  • Union Bank of India: https://www.unionbankonline.co.in/
  • Oriental Bank of Commerce: https://www.obconline.co.in/
  • City Union Bank Ltd: https://www.onlinecub.net/
  • Bank of India: http://www.bankofindia.co.in/english/home.aspx
  • Kotak Mahindra Bank: https://www.kotak.com/
  • Punjab National Bank: https://netbanking.netpnb.com/
The detailed steps are as follows -
  • Taxpayer should be a registered user of Income Tax e-Filing Portal.
  • Taxpayer should have already submitted the PAN details to the Bank. PAN is required to identify the taxpayer’s e-Filing account with the Income Tax Department.
  • Taxpayer have to first go to the Internet/ Net / Online Banking website of the Bank which has already registered for this facility with the Department.
  • Taxpayer after logging into his Net Banking account should select “Income Tax e-Filing Login” tab/menu item
  • Taxpayer should Select the account number and enter the PAN for verification and click Submit
  • Taxpayer should Accept the Rules and Regulations details
  • Taxpayer should confirm that he may be redirected to his Income Tax Department e-Filing account – home page.
  • Taxpayer can now reset the password and also avail of all services provided by the e-Filing Website of Income Tax Department, including, filing Income Tax Return.
Advantages of using this new facility
  • Taxpayer gets direct access to his e-Filing account even if he has forgotten his password.
  • Taxpayer gets a secure and safe way to login into his e-Filing account.
  • Taxpayer can safeguard his e-Filing account by selecting/opting for “Password Resetting” only by using Digital Signature Certificate or through this new facility of direct login from his net-banking account, thereby preventing others from unauthorized access to his account. (coming soon….)
  • Other benefits (coming soon…..)
Detailed steps using example of Corporation Bank Net banking
  • Go to https://www.corpretail.com/RetailBank/
  • Login in to your Corporation Bank Net banking account using your Bank provided User ID and password
  • Corporation Bank Net banking Homepage < Select Utility Payments < Select “Income Tax e-Filing Login”

Select Account Number (IFSC Code) from the drop down
  • Enter PAN
  • Accept the Terms & Conditions
  • Click on Submit

  • Click OK to get re-directed and automatically logged into Income tax Department e-Filing account (https://incometaxindiaefiling.gov.in)
  • You will get re-directed to Income Tax Department e-Filing website (https://incometaxindiaefiling.gov.in) and the home page showing the “Dashboard” after login will appear.
  • e-Filing Portal Taxpayer Dashboard
  • You may now reset your password using “Profile Settings” or avail of any service offered.
  • Remember: This facility is a safe and secure method for direct login to your Income Tax Department e-Filing account only and is available ONLY through your Bank website after you have logged in and not through any other organization or entity or website.
  • Note: Your net-banking User ID or password is NOT shared by the bank to the Department

Deduction for Salaried Employee under Chapter VI-A for Asstt. Year 2015-16 - Part-I

Recently, Current Government after Budget-2014 has issued a circular for Salaried Employee to compute Income Tax.  In this  circular many amendments has been made including increases Tax Exemption Limit for Asstt. Year 2015-16.  This is the First part to cover some important Deductions under Chapter VI-A for Salaried Employee for Asstt. Year 2015-16 which is as under :

DEDUCTIONS UNDER CHAPTER VI-A OF THE ACT FOR THE ASSTT. YEAR 2015-16 FOR SALARIED EMPLOYEE

In computing the taxable income of the employee, the following deductions under Chapter VI-A of the Act are to be allowed from his gross total income:

Deduction in respect of Life insurance premia, deferred annuity, contributions to provident fund, subscription to certain equity shares or debentures, etc. (section 80C)

A. Section 80C, entitles an employee to deductions for the whole of amounts paid or deposited in the current financial year in the following schemes, subject to a limit of Rs.1,50,000/-:

   (1) Payment of insurance premium to effect or to keep in force an insurance on the life of the individual, the spouse or any child of the individual.

   (2) Any payment made to effect or to keep in force a contract for a deferred annuity, not being an annuity plan as is referred to in item (7) herein below on the life of the individual, the spouse or any child of the individual, provided that such contract does not contain a provision for the exercise by the insured of an option to receive a cash payment in lieu of the payment of the annuity;

   (3) Any sum deducted from the salary payable by, or, on behalf of the Government to any individual, being a sum deducted in accordance with the conditions of his service for the purpose of securing to him a deferred annuity or making provision for his spouse or children, in so far as the sum deducted does not exceed 1/5th of the salary;

   (4) Any contribution made :
       (a) by an individual to any Provident Fund to which the Provident Fund Act, 1925 applies;
       (b) to any provident fund set up by the Central Government, and notified by it in this behalf in the Official Gazette, where such contribution is to an account standing in the name of an individual, or spouse or children; 
           [The Central Government has since notified Public Provident Fund vide Notification S.O. No. 1559(E) dated 3.11.05]
       (c) by an employee to a Recognized Provident Fund;
       (d) by an employee to an approved superannuation fund; 
           It may be noted that "contribution" to any Fund shall not include any sums in repayment of loan or advance;

   (5) Any subscription :-
       (a) to any such security of the Central Government or any such deposit scheme as the Central Government may, by notification in the Official Gazette, specify in this behalf;
       (b) to any such saving certificates as defined under section 2(c) of the Government Saving Certificate Act, 1959 as the Government may, by notification in the Official Gazette, specify in this behalf.
           [The Central Government has since notified National Saving Certificate (VIIIth Issue) vide Notification S.O. No. 1560(E) dated 3.11.05and National Saving Certificate (IXth Issue) vide Notification . G.S.R. 848 (E), dated the 29th November, 2011, publishing the National Savings Certificates (IX-Issue) Rules, 2011 G.S.R. 868 (E), dated the 7th December, 2011, specifying the National Savings Certificates IX Issue as the class of Savings Certificates F No1-13/2011-NS-II r/w amendment Notification No.GSR 319(E), dated 25-4-2012 ]

   (6) Any sum paid as contribution in the case of an individual, for himself, spouse or any child,
       a. for participation in the Unit Linked Insurance Plan, 1971 of the Unit Trust of India;
       b. for participation in any unit-linked insurance plan of the LIC Mutual Fund referred to section 10 (23D) and as notified by the Central Government.
          [The Central Government has since notified Unit Linked Insurance Plan (formerly known as Dhanraksha, 1989) of LIC Mutual Fund vide Notification S.O. No. 1561(E) dated 3.11.05.]

   (7) Any subscription made to effect or keep in force a contract for such annuity plan of the Life Insurance Corporation or any other insurer as the Central Government may, by notification in the Official Gazette, specify;
       [The Central Government has since notified New Jeevan Dhara, New Jeevan Dhara-I, New Jeevan Akshay, New Jeevan Akshay-I and New Jeevan Akshay-II vide Notification S.O. No. 1562(E) dated 3.11.05 and Jeevan Akshay-III vide Notification S.O. No. 847(E) dated 1.6.2006 ]

   (8) Any subscription made to any units of any Mutual Fund, of section 10(23D), or from the Administrator or the specified company referred to in Unit Trust of India (Transfer of Undertaking & Repeal) Act, 2002 under any plan formulated in accordance with any scheme as the Central Government, may, by notification in the Official Gazette, specify in this behalf;
       [The Central Government has since notified the Equity Linked Saving Scheme, 2005 for this purpose vide Notification S.O. No. 1563(E) dated 3.11.2005]
       The investments made after 1.4.2006 in plans formulated in accordance with Equity Linked Saving Scheme, 1992 or Equity Linked Saving Scheme, 1998 shall also qualify for deduction under section 80C.

   (9) Any contribution made by an individual to any pension fund set up by any Mutual Fund referred to in section 10(23D), or, by the Administrator or the specified company defined in Unit Trust of India (Transfer of Undertaking & Repeal) Act, 2002, as the Central Government may, by notification in the Official Gazette, specify in this behalf; 
       [The Central Government has since notified the Equity Linked Saving Scheme, 2005 for this purpose vide Notification S.O. No. 1563(E) dated 3.11.2005]

  (10) Any subscription made to any such deposit scheme of, or, any contribution made to any such pension fund set up by, the National Housing Bank, as the Central Government may, by notification in the Official Gazette, specify in this behalf;

  (11) Any subscription made to any such deposit scheme, as the Central Government may, by notification in the Official Gazette, specify for the purpose of being floated by (a) public sector companies engaged in providing long-term finance for construction or purchase of houses in India for residential purposes, or, (b) any authority constituted in India by, or, under any law, enacted either for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages, or for both.
       [The Central Government has since notified the Public Deposit Scheme of HUDCO vide Notification S.O. No.37(E), dated 11.01.2007, for the purposes of Section 80C(2)(xvi)(a)].

  (12) Any sums paid by an assessee for the purpose of purchase or construction of a residential house property, the income from which is chargeable to tax under the head "Income from house property" (or which would, if it has not been used for assessee's own residence, have been chargeable to tax under that head) where such payments are made towards or by way of any instalment or part payment of the amount due under any self-financing or other scheme of any Development Authority, Housing Board etc.
       The deduction will also be allowable in respect of re-payment of loans borrowed by an assessee from the Government, or any bank or Life Insurance Corporation, or National Housing Bank, or certain other categories of institutions engaged in the business of providing long term finance for construction or purchase of houses in India. Any repayment of loan borrowed from the employer will also be covered, if the employer happens to be a public company, or a public sector company, or a university established by law, or a college affiliated to such university, or a local authority, or a cooperative society, or an authority, or a board, or a corporation, or any other body established under a Central or State Act.
       The stamp duty, registration fee and other expenses incurred for the purpose of transfer shall also be covered. Payment towards the cost of house property, however, will not include, admission fee or cost of share or initial deposit or the cost of any addition or alteration to, or, renovation or repair of the house property which is carried out after the issue of the completion certificate by competent authority, or after the occupation of the house by the assessee or after it has been let out. Payments towards any expenditure in respect of which the deduction is allowable under the provisions of section 24 of the Act will also not be included in payments towards the cost of purchase or construction of a house property.
       Where the house property in respect of which deduction has been allowed under these provisions is transferred by the tax-payer at any time before the expiry of five years from the end of the financial year in which possession of such property is obtained by him or he receives back, by way of refund or otherwise, any sum specified in section 80C(2)(xviii), no deduction under these provisions shall be allowed in respect of such sums paid in such previous year in which the transfer is made and the aggregate amount of deductions of income so allowed in the earlier years shall be added to the total income of the assessee of such previous year and shall be liable to tax accordingly.

  (13) Tuition fees, whether at the time of admission or thereafter, paid to any university, college, school or other educational institution situated in India, for the purpose of full-time education of any two children of the employee.
       Full-time education includes any educational course offered by any university, college, school or other educational institution to a student who is enrolled full-time for the said course. It is also clarified that full-time education includes play-school activities, pre-nursery and nursery classes.
       It is clarified that the amount allowable as tuition fees shall include any payment of fee to any university, college, school or other educational institution in India except the amount representing payment in the nature of development fees or donation or capitation fees or payment of similar nature.

  (14) Subscription to equity shares or debentures forming part of any eligible issue of capital made by a public company, which is approved by the Board or by any public finance institution.

  (15) Subscription to any units of any mutual fund referred to in clause (23D) of Section 10 and approved by the Board, if the amount of subscription to such units is subscribed only in eligible issue of capital of any company.

  (16) Investment as a term deposit for a fixed period of not less than five years with a scheduled bank, which is in accordance with a scheme framed and notified by the Central Government, in the Official Gazette for these purposes.
       [The Central Government has since notified the Bank Term Deposit Scheme, 2006 for this purpose vide Notification S.O. No. 1220(E) dated 28.7.2006]

  (17) Subscription to such bonds issued by the National Bank for Agriculture and Rural Development, as the Central Government may, by such notification in the Official Gazette, specify in this behalf.

  (18) Any investment in an account under the Senior Citizens Savings Scheme Rules, 2004. 

  (19) Any investment as five year time deposit in an account under the Post Office Time Deposit Rules, 1981.

B. Section 80C(3) & 80C(3A) states that in case of Insurance Policy other than contract for a deferred annuity the amount of any premium or other payment made is restricted to:

*Introduced by Finance Act 2013
Actual capital sum assured in relation to a life insurance policy means the minimum amount assured under the policy on happening of the insured event at any time during the term of the policy, not taking into account –
 i. the value of any premium agreed to be returned, or
ii. any benefit by way of bonus or otherwise over and above the sum actually assured which may be received under the policy by any person