Income Tax Notice- Top Reasons For Which You Can Receive an Income Tax Notice
Reasons For Which You Can Receive an Income Tax Notice: You have already paid your entire tax bill. You have faithfully filed your tax returns. Even so, what should you do if you receive an Income Tax Notice? Do not worry; we will discuss the same in this section.
Let’s see for which reasons you might receive an IT notice-
1) Inaccurate Information on Assets or Income in The Income Tax Return
The Income Tax Department has been taking a series of actions to obstruct as much black money as possible. You might receive a notice requiring you to disclose all your income and asset information inside and outside India.
Additionally, you should carefully complete your income tax return document by entering accurate information such as your name, address, and PAN. You will receive a notification if any of these details are incorrect.
2) Discrepancies in Disclosure of Actual Income & Declared Income
You will receive a notice for non-reportage if the income tax authorities suspect that not all your income from various sources has been reported.
You should gather all your financial documents and proof of all your income sources, such as paycheck stubs, bank statements, invoices, etc., to prevent instances of income non-disclosure when filing your income tax return.
3) Unexpected Alters in Investment Amounts, Elevated Transactions or Income
The tax department will be on a constant lookout in the event of a sudden substantial decrease in income or a steep increase in income levels.
The income tax division may become keen to know and send you a notice if you have acquired real estate, assets, or real estate of a very high value or if your bank account has a lot of high-value transactions. If you place excessive investments in your spouse’s or child’s name, your income will be your own. Therefore, it should be considered when determining your overall taxable income.
You might receive a notice if this income is not reported on your tax returns.
4) Unexpected TDS Inconsistencies When Your TDS Claim Is Incorrect
Your TDS, as of when you filed your ITR, should correspond to the TDS listed on Forms 26AS and 16 or 16A. A notice under Section 143 (1) will be issued if a discrepancy is discovered.
The employer, the bank that holds your fixed deposits, or a bond issuer from whom you have purchased bonds can all deposit TDS. Thus, you will likely receive a notice from the tax department if there are any errors in the TDS deducted and the income and interest you have earned.
5) For Review & Evaluation
You may be served with a notice under Section 143 (2) if the tax authorities have scrutinized the ITR you filedscrutiny can be triggered by discrepancies to incorrect reporting, among other things.
You should also be conscious that the Income Tax Department may penalize you, so respond to the notice as soon as possible.
You must submit your tax return by the deadline for each assessment year. You will get a nudge to file your returns if the ITR filing deadline is approaching and you have not yet.
Under Section 142(1)(i) of the Income Tax Act, which mandates that you furnish the return, notice may be issued. Tax filing and tax payment are two distinct processes. Before; therefore, the tax department may send you an ITR notice if you have only paid the tax and not filed any returns.
You must submit tax returns, even if your business experienced a loss for the fiscal year. Others merely submit their returns online. The process is not over at that point. After uploading the returns, you have 120 days to submit the ITR. A few people submit their tax returns after the deadline. Penalties may result from delays. You may receive a notice from the IT division in such circumstances.
7) Payment of Refunds Against Any Outstanding Debts & Taxes Owed by You
Unintentionally, you may have failed to include some interest income that you have accrued; however, since the interest is credited to your bank account or reinvested in your assets, the department can quickly identify you as the source of the overstatement. You may receive a notice for failure to pay taxes.
The assessing officer might send you a notice informing you that the dues will be subtracted from any refunds you have received for income taxes if you requested one.
8) For Prior Years of Tax Evasion
The Income Tax Act empowers the Internal Revenue Service to re-evaluate prior filed tax returns. The department may issue a notice to the taxpayer under section 147 of the Income Tax Act. Based on predefined criteria, an Assessing Officer can select tax returns for reassessment.
Only when the tax officer seems to have reason to suspect that income accountable to tax has escaped assessment is a notice for reassessment issued.
Income Tax portal ramped up; July 31 I-T returns deadline may stay
The July 31 deadline for filing Income Tax (I-T) returns is unlikely to be extended. The Central Board of Direct Taxes (CBDT) has intervened to fix recent glitches and downtimes reported on the I-T portal by ramping up its back-end capacity to cope with a higher workload experienced this year.
Kind Attention Taxpayers!
Do remember to file your ITR if you haven't filed yet. The due date to file ITR for AY 2024-25 is 31st July, 2024.#FileNowpic.twitter.com/cm3yxE3u8R
Acknowledging taxpayers’ concerns about delayed generation of TDS (Tax Deduction at Source) and Form 16 certificates, and the “slowness” of the I-T portal, CBDT chairperson Ravi Agarwal told The Hindu these issues have now been resolved, and as many as 28 lakh tax returns were filed on Wednesday with no downtime reported.
“Even per-hour filings are now at an all-time high. So therefore, I think we can say with confidence that over the next six days, we should be able to take care of it. Most of the problems have been addressed and sorted out, and yesterday, there was no apparent reporting of any of these problems like downtime, and even today, there is no issue so far,” he said late Thursday afternoon.
The I-T department has seen a substantial rise in number of transactions reported this year, Mr. Agarwal said, and some of the government officials in charge of issuing such deduction certificates were also occupied with election duty, delaying some issuances.
“Then there was a report of slowness on the website and people were finding it difficult. So now, some corrective measures have been taken in terms of ramping up the hardware, and also putting those solutions in place,” the CBDT chief assured.
“There has been a 15% growth in TDS transactions and about 30% growth in third-party transactions, and that has to get populated in the pre-filled I-T forms and the corresponding TDS certificates also have to be issued. Now, what happened was that because of elections, the deductors from the government side were engaged in the election duty… so all that got delayed, and then all of a sudden, we got that filing in bulk as far as TDS statements are concerned.”
“To process those statements and convert them into TDS certificates, was taking time, and involved a lot of data. But we have been able to resolve that, and we are up to date on the issue of TDS certificates not being downloaded or not being made available,” Mr. Agarwal said.
July 31 – the due date for filing income tax returns for the financial year 2023-24 (assessment year 2024-25) – is drawing closer.
If you are a salaried tax-payer and have not yet received your Form-16, you can still take the first steps towards filing returns by getting all your documents in order – primarily your Form 26AS, that is the tax credit statement, Annual Information Statement (AIS), capital gain and bank statements.
Why check Form 26AS and AIS
Both Form 26AS and the Annual Information Statement can be downloaded through the Income Tax portal (incometax.gov.in). If you haven’t registered already, you can do so now before commencing the process. Your Permanent Account Number (PAN) will be your user ID.
Through Form 26AS, you will be able to view details of property purchases and high-value financial transactions executed during the year besides tax deducted at source (TDS) and tax collected at source (TCS) deposited with the income tax department by deductors such as employers and banks.
AIS is an extension of Form 26AS, which provides a more extensive and comprehensive look at your taxes deducted and paid as well as other financial transactions. For instance, it will display details of tax refunds, savings account interest or dividend earned, rent received, purchase and sale transactions of securities, immovable properties, foreign remittances and so on.
Studying these two statements will ensure that you do not, inadvertently or otherwise, omit any financial transactions that are liable to tax. You will be able to identify the sources of income where tax has been deducted, which will allow you to claim credit against such deductions.
You need to be particularly alert while reconciling the details of high-value financial transactions (SFT) that you may have carried out during the year with the data in Form 26AS. For example, the statement will display cash deposits of over Rs 10 lakh in your savings accounts in a financial year or purchase of property worth over Rs 30 lakh. Any discrepancy on these counts that goes unrectified can lead to tax notices in future.
Flag mismatch, get discrepancies resolved
A comparison of your Form-16, income statements and bank interest certificates, among other things, can help you detect any mismatch between data on transactions and tax deducted in Form 26AS, AIS and your records. Do not ignore any discrepancies and these could trigger queries and even notices from the income-tax department.
A comparison of your Form-16, income statements and bank interest certificates, among other things, can help you detect any mismatch between data on transactions and tax deducted in Form 26AS, AIS and your records. Do not ignore any discrepancies and these could trigger queries and even notices from the income-tax department.
Now, it is not possible to get your grievances around Form 26AS mismatches resolved through the I-T portal. You will have to approach your tax deductor (for instance, employer or bank) or collector to get the errors rectified. Since these tasks can be time-consuming, it is best to commence the return-filing process well in advance so that you have time to complete the reconciliation and rectification, if needed.
To raise a dispute on any figures mentioned in Part B of the statement (which contains income, TDS, SFT details, etc), you need to click ‘Bulk feedback’, select the specific transaction where you have spotted the error, and then click on ‘Continue’. Under the ‘Feedback type’ dropdown menu, select the appropriate grounds of complaint and hit ‘Submit’. If your argument is accepted, AIS will then reflect the value reported by the dedcutors as well as data modified after your feedback.
If details of your income and taxation as per Form-16, bank statements tally with your Form 26AS and AIS, your path to quick and error-free ITR filing will become clearer.
Filing taxes can be complex and full of potential pitfalls. Seeking experienced advice is crucial to navigate this world confidently. This article examines common tax filing mistakes and provides valuable advice from a seasoned Chartered Accountant to help people avoid these problems.
Selecting the incorrect form: One of the most common mistakes people make is choosing the incorrect form to file their taxes. Each form is tailored to a certain sort of income and taxpayer profile, and using the incorrect form might result in mistakes and processing delays. CA expert advises taxpayers to thoroughly analyse the qualifying conditions for each form and seek professional advice if confused.
Proper treatment of F&O transactions: Futures and options (F&O) transactions can be complicated, particularly in terms of tax treatment. CA urges clients to appropriately declare F&O transactions, including profits and losses, on their tax returns. Failure to do so may result in tax notifications and fines from the Income Tax Department.
Correct treatment of donations made: Section 80G of the Income Tax Act allows donations to charities to be tax-deductible. However, CA advises against claiming deductions for donations without adequate paperwork. Taxpayers should donate to qualifying organisations and acquire receipts to claim deductions.
Calculation for two or more job changes in a year: Taxpayers who change employment often throughout a fiscal year must precisely compute their earnings from each employer for tax purposes. To minimise errors in tax forms, CA encourages clients to keep thorough records of their income from each employment, including salaries, bonuses, and perquisites.
Taxation of cryptocurrencies and coins: Many authorities, including India, continue to be unsure how to tax cryptocurrency transactions. CA emphasises the necessity of seeking advice from tax specialists on how to approach Bitcoin earnings and losses. Taxpayers should keep accurate records of bitcoin transactions to comply with tax requirements.
Tax deducted from interest income: Many taxpayers fail to realise that tax deducted at source (TDS) on interest income, such as fixed deposits or savings accounts, is not required to be disclosed on their income tax return. CA recommends taxpayers reconcile TDS certificates with Form 26AS and report just net taxable interest income on their ITR.
Calculating capital gains from land purchase sale: The sale of land or property acquired on prolonged payment plans, such as those provided by municipal governments, necessitates careful consideration of capital gains tax consequences. CA suggests that you speak with a tax expert to appropriately assess capital gains, taking into consideration the prolonged payment term and any possible exemptions or deductions.
Strategies beyond common mistakes
In addition to avoiding frequent tax filing mistakes, taxpayers should remain up to date on new tax law developments and modifications. Changes in tax rules, exemptions, and filing methods can have a major influence on tax liabilities and refund claims.
Furthermore, taxpayers should use the income tax department’s online filing platforms and tools to ensure easy and correct filing. It is also critical to keep detailed records of financial transactions, investments, and deductions throughout the year to ensure a simple tax file.
By proactively educating themselves and being organised, taxpayers may ensure tax compliance and efficiently optimise their tax-saving methods. Consulting with a knowledgeable Chartered Accountant or tax expert can give vital insights suited to your specific financial position.
Why CA expertise is crucial?
Incorporating the knowledge of a seasoned Chartered Accountant into tax filing efforts is critical for a variety of reasons. For starters, a skilled CA has a thorough understanding of tax rules and regulations, assuring proper compliance and reducing the chance of errors or omissions. Second, a CA may give personalised advice based on an individual’s financial circumstances, maximising tax savings and refunds.
Furthermore, CA assistance provides peace of mind since taxpayers may rely on their experience to manage complicated tax issues efficiently. Finally, a competent CA acts as a trusted adviser, providing continuing assistance and direction throughout the tax filing process and beyond, resulting in a long-term partnership based on trust and dependability.
In conclusion, to avoid typical tax filing errors, you must exercise vigilance, be alert, and seek expert advice. Understanding the subtleties of tax legislation and receiving expert counsel when necessary allows taxpayers to confidently navigate the tax filing process and maintain regulatory compliance. Remember that when it comes to taxes, it’s better to be cautious than sorry.
The Central Board of Direct Taxes has issued Notification No. 105/2023-Income Tax, dated 22nd December, 2023, to amend the Income-tax Rules, 1962 for the Assessment Year 2024-25 / Financial Year 2023-24. The amendment includes changes to Form ITR-1 SAHAJ and Form ITR-4 SUGAM. These changes are effective from April 1st, 2024. The notification also emphasizes the importance of checking Form 26AS before filing income tax returns. The complete details can be found in the notification.
CBDT notifies ITR 1 and ITR 4 for Assessment Year (AY) 2024-25 / Financial Year (FY) 2023-24 vide Notification No. 105/2023-Income Tax Dated: 22nd December, 2023.
G.S.R. 908(E).— In exercise of the powers conferred by section 139 read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend Income-tax Rules, 1962, namely:-
Filing an income tax return (ITR) is an annual compliance obligation of the taxpayers. With the increase in the number of tax returns being filed, awareness regarding the steps to be followed by them to complete the ITR filing process is a must. To start with, you login to your e-filing account on the income tax portal, select the applicable tax return form and provide the required information. Post validating the online filled form, you will submit it and the ITR will be uploaded and an acknowledgement of filing – ITR V is generated. But is this the last step of the process? The answer is NO. An important stage of the e-filing process is verification of the uploaded ITR. Without verifying, your return will not be construed as ‘filed’ and hence, the post filing step is a prerequisite to ensure completeness of the filing process.
The verification can either be done electronically vis-à-vis net banking, Aadhaar registered mobile, Digital Signature Certificate, demat account etc. or manually by sending signed ITR V to the Central Processing Centre (CPC), Bangalore. The timeline of verifying is within 30 days. There is an option to file a condonation request if the said 30 days timeline is not met but the tax authorities have discretion to condone such delay or not.
Now, to further streamline the process, the tax authorities introduced a facility wherein the taxpayer can opt to ‘discard’ the ITR before verifying it. Let’s analyze the same in detail.
If you have filed your return, be it original, revised, or belated which is not yet verified, you can avail the facility to discard the same and subsequently file a fresh ITR after discarding the unverified one. This may happen where you identify any mistake/ error in your ITR post filing. Prior to this facility, the taxpayer would have to first verify the uploaded return, then file a revised return incorporating the details of the original return like acknowledgement number, date of filing etc. and then verify the revised return to complete the entire process. Now, with this facility, a fresh return can directly be filed without verifying the first ITR.
Timeline to discard IT return?
You can opt to discard ITRs filed for FY 2022-23 onwards. However, this option will be available only till the time limit specified for filing the ITR which is 9 months from the end of the relevant tax year i.e., December 31. For the tax year 2022-23, it is 31st December 2023.
Are there any caution points?
Yes, before you opt for this option, do take care of the below points:
1. Option available only for ‘unverified’ or ‘pending for verification’ ITRs. An online undertaking to this effect needs to be submitted before discarding the ITR.
2. You can discard the ITR multiple times. Once it is discarded, it cannot be reversed and is deemed to be not filed.
3. If you manually verify your ITR and have already sent out the signed ITR V to CPC, you should not discard the ITR given ITR V is in transit.
4. It is not a facility to relieve you from filing requirement. You are still required to file a subsequent fresh return after discard, as applicable to your case.
5. Assuming you filed your original ITR (say on 20th July 2023) and discarded it before verifying it. You filed a fresh ITR after the due date (say on 10th August 2023). In such a case, penal fee of Rs. 5,000/ Rs. 1,000 as applicable along with other consequences will come into play such as interest on late filing, restrictions on carry forward of losses (except house property loss), no option to opt for new personal tax regime etc. Where fresh ITR was filed (say on 30th July 2023), then no penal fee.
This facility aims towards streamlining the process of filing the returns and avoiding unnecessary revisions. Although it is a simple click facility and user-friendly, taxpayers should exercise caution and adhere to the points above.
Author: Chander Talreja is Partner at Vialto Partners. Manavi Gupta, Director, Vialto Partners
India may hold the distinction of being the world’s most populated country but only a small fraction of its population pay taxes. Data shows that currently India has 66.5 million individuals who pay personal income tax, which is 4.8% of total population and 6.3% of the adult population. Of this tax paying populace, 3.2 million individuals (0.3% of the adult population) account for 76% of total personal income tax receipts of the government.
There is no doubt that overall compliance has been rising steadily, but personal income tax payers are still a very small portion of the population. In FY12, 31 mn individuals paid income taxes, but now this figure has jumped to 71 mn in FY23. According to a recent analysis of personal income tax data over a ten year period conducted by Jefferies Research, a global investment bank, the number of income tax filers has experienced a compound annual growth rate (CAGR) of 8%, reaching a total of 68 million. In contrast, the number of corporate income tax payers has grown by 5% CAGR to 1026 from 581 in FY12. However, the percentage of individual tax filers who actually pay taxes has dropped to 33% due to higher rebate options.
One striking finding from the analysis is that the top 5% of income tax filers, which represents only 0.3% of adults, contribute a staggering 76% of the total personal tax collected. Additionally, the number of taxpayers with incomes exceeding Rs 0.5 million (Rs 5 lakh), Rs1.5 million (Rs 10.5 lakh), and Rs5 million (Rs 50 lakh) has all seen robust growth, with a CAGR of 17-20%. This indicates a rising compliance among individuals, as incomes of individual filers have risen from 15% of GDP in FY12 to 24% in the present day.
Interestingly, personal income tax filers have outpaced corporate tax filers in terms of growth. Over the period from FY12 to FY21, personal income tax filers experienced a CAGR of 8%, reaching 68 million. In contrast, corporate tax filers saw a slower growth rate of 5%, totaling 1 million in FY21. This divergence in growth rates, coupled with corporate tax cuts, has led to a significant increase in the share of individuals in total direct taxes, rising from 33% in FY12 to 50% currently. As a percentage of GDP, personal income taxes have also increased from 1.9% in FY12 to 3.0% in FY24E, says Jefferies.
Despite the positive growth in individual tax collections and filings, the analysis reveals that the number of IT return filers accounts for just 6.3% of the total adult population. Furthermore, only one-third of these filers, approximately 23 million individuals, are actually paying taxes. The concentration of tax liability remains significant, with the top 5% of income earners responsible for 76% of personal income tax payments, a figure that has remained relatively stable over the past nine years. The government has implemented various measures, such as demonetization, the rollout of the Goods and Services Tax (GST), and the usage of PAN cards for large transactions, to improve tax disclosures. The ongoing formalization of the economy and the shift of labor from agriculture to salaried jobs are expected to contribute to the expansion of the income tax base in the long run.
The analysis also highlights the composition of income sources for individuals. Salary income, accounting for 47% of total income, and business income, comprising 45%, are the predominant components. The study reveals that salary income has grown at a CAGR of 16% over the period from FY12 to FY21, reaching Rs25 trillion. The growth in salary income is primarily driven by an increase in the number of filers, which reached 31 million in FY21, contributing to 70% of the overall growth. The remaining 30% of the growth can be attributed to rising average salaries. On the other hand, business income, including proprietorships and consultants, has experienced relatively slower growth of 13%, amounting to Rs15 trillion. The analysis also indicates that the average income for individuals declaring business income is Rs0.5 million, coinciding with the non-taxable income limit. In contrast, salaried individuals have an average income of Rs0.79 million, which may be attributed to the easier traceability of salaries through the Tax Deducted at Source (TDS) mechanism compared to business income, which relies on self-declaration.
Another noteworthy finding is the significant increase in capital gains reported in FY21 returns. The contribution of capital gains, including both short-term and long-term gains, to total individual income more than doubled year-on-year, reaching 7.6%. Moreover, the number of filers reporting capital gains has also more than doubled over the past three years. This surge in capital gains can be partly attributed to the impact of rising disclosure and data tracking, with return forms now pre-filled with such information.
The analysis done by Jefferies also sheds light on the impact of corporate tax cuts. While the effective tax rate for individuals has remained stable at 11-12% of income over the past decade, corporate India has enjoyed a significant tax reduction following the government’s announcement in 2019. Effective corporate tax rates have declined by 7.6 percentage points to 23.5% in FY21.
In conclusion, Jefferies Research’s analysis of personal income tax data over the past ten years reveals several key trends. While the number of income tax filers has increased, the percentage of filers who actually pay taxes has decreased due to higher rebate options. The concentration of tax liability among the top 5% of income earners remains significant, with this group contributing the majority of personal tax collections.
The analysis also highlights the faster growth of personal income tax filers compared to corporate tax filers, resulting in a higher share of individuals in total direct taxes. The study emphasizes the need for continued efforts to improve tax compliance and expand the income tax base, particularly as the economy matures.
Several high-net worth individuals (HNIs) and salaried tax-payers, among others, are in a tizzy after having received notices from the income-tax (I-T) department recently.
Reportedly, the tax authorities have sent out 22,000 notices seeking explanations for discrepancies between Form-16, Form 26AS, Annual Information Statement (AIS) and their returns filed for the financial year 2022-23.
Deductions under section 80C, 80G in focus
Quite often, salaried tax-payers forget to – or are unable to – submit proof of investments made to claim deductions under section 80C, to their employers before the deadline. As a result, their employers deduct excess tax, but employees can claim a refund of this amount at the time of filing their income tax returns (ITR). Since the deductions do not reflect in Form-16, it is bound to differ from actual returns. This could be flagged off as a discrepancy by the I-T department’s scrutiny mechanisms.
“The issue at hand revolves around discrepancies in deductions claimed, such as those related to Section 80C, 80D and 80U, in comparison to what’s reported in their Form 16. These notices pertain to tax returns for the FY 2022-23 (assessment year 2023-24). In essence, taxpayers are being questioned if they’ve claimed higher deductions under Chapter VI-A than what’s reported by their employers in Forms-16,” says Vertika Kedia, Co-founder, Tax2Win, a tax consultancy portal.
Likewise, if the I-T department feels you have claimed deductions under section 80G on donations that seem suspicious, you would have received notices to furnish proof. “Those who have claimed exemptions/deductions on house rent allowance (HRA), and housing loan interest deductions, but have not mentioned it in their Forms-16, have also received notices,” adds Kedia.
Discrepancies in foreign asset declaration
If you maintain foreign bank accounts or own stocks or properties abroad, you need to declare the assets in schedule FA (foreign assets) while filing your returns. The catch here is that you are required to disclose assets held during the previous calendar year. That is, if you are filing income tax returns for the financial year 2022-23, you will have to furnish details of foreign assets held between January to December 2022.
“We have come across cases of several individuals who have received notices for non-disclosure of foreign investments made after December 2022 (that is, in calendar year 2023). The notices were issued after they claimed refund of tax collected at source (TCS) on these investments,” says Mayank Mohanka, Founder, TaxAaram.com. Until September 30, 2023, investments in foreign assets beyond Rs 7 lakh will attract a TCS of 5 percent. You can claim a refund of this amount at the time of filing returns.
“Such taxpayers claimed refund of tax collected at source (TCS) on investments made between January and March 2023, at the time of filing returns. They are not required to disclose these investments in the FY 2022-23 returns. Instead, they have to be reported in the returns to be filed for FY 2023-24, as per the income tax department’s rules. This is an error on the part of the department and will have to be appealed against,” explains Mohanka. Earlier, tax authorities had erroneously sent out notices to tax-payers for claiming deductions under section 80P.
How to respond to notices
In many cases, the notices would have been sent based on artificial intelligence-based (AI) algorithms that the tax department uses. “Some are clearly erroneous. In some cases that we have come across, deductions are completely legitimate, yet tax-payers have received notices citing discrepancies. If you fall in this category, ensure that you send your response through the e-filing portal. Explain your position and make it clear that the discrepancies mentioned in the notices are factually misconceived and the ITR details, in fact, are accurate,” says Mohanka.
The key is to remain calm and frame a response justifying the deductions claimed if you believe the notice is unwarranted. “Visit the official I-T portal. Look for the specific notice that you received, as it should be available there. Within the notice, you should find an option to respond or submit your explanations along with any supporting documents,” says Kedia.
In case of any doubts, reach out to your chartered accountant to draft an appropriate response. “If your notice is related to a refund claim, and it has been flagged by the I-T department’s risk management process, you can choose the option that states, ‘The claim of refund is correct to the best of my knowledge and belief’,” says Kedia.
Mohanka believes that despite providing carefully framed responses and submitting the necessary proof to justify deductions and other claims, the I-T department often sticks to its stand. In such cases, the only option is to go in for an appeal, which is bound to be time-consuming.
“Automation and standardisation in scrutinising tax returns is welcome. However, in some cases, deeper scrutiny and manual intervention is required. AI needs to be more intelligent and machine learning tools need to learn for better results and fewer hassles to honest tax-payers,” he says.
Fraudulent claims bound to face the music
Finally, do not give in to the temptation to claim deductions that you are not eligible for under the mistaken assumption that you won’t face scrutiny. The tax department is employing AI and machine learning tools to flag discrepancies and you could land yourself in a soup in an attempt to make quick savings.
You could end up having to pay penalties if you have erred. “Taxpayers will have to revise their ITR and pay the tax on extra income reported in the ITR. If the tax department finds any problems or differences in the documents provided by these taxpayers in the future, they have the authority to impose a penalty. This penalty could be up to 200 percent of the amount of tax the person should have paid based on their actual income,” explains Kedia.
Government of India, in the Union Budget 2022, has introduced ITR U, an updated income tax return form that enables taxpayers to rectify and update their tax filings within 24 months from the end of the relevant assessment year.
Important Conditions to File an Updated Return
ITR U is available for all taxpayers who have previously filed an original return, a belated return, or a revised return. However, certain conditions must be fulfilled in order to file an updated return:
The updated return must be submitted within the specified time period which is 24 months from the end of the relevant assessment year.
If a taxpayer forgot to file returns for previous years, an updated return must be filed to fulfil the outstanding obligations.
If a taxpayer receives additional income or incurs additional expenses after filing the original return, an updated return enables the required changes.
In situations where errors were made in calculating the tax liability, an updated return allows for the correction of these miscalculations.
Choose the Right ITR Form: Visit the official website of the Income Tax Department of India and download the appropriate ITR form for the relevant assessment year. Ensure that you select the form according to your income source and the taxpayer category you fall in.
Compute Tax Liability: Determine your tax liability based on the updated information provided and ensure accurate calculations.
Gather Supporting Records: Collect all the necessary documents and supporting evidence for the revised information you are providing, including tax deductions, income statements and other relevant paperwork.
By introducing ITR U, the government aims to facilitate the rectification of any errors in taxpayers’ income tax filings, providing them with an opportunity to ensure accuracy and compliance with tax regulations.
Section 143(1)(b) of the Income Tax Act, 1961 is an important provision that empowers the Income Tax Department to process income tax returns filed by taxpayers. In this blog, we will take a closer look at this provision, what it entails, and how it can impact taxpayers.
The Basics of Section 143(1)(b)
Under Section 143(1)(b), the Income Tax Department has the power to process income tax returns filed by taxpayers. Processing essentially means that the department will verify the details provided in the return against the information it has in its records, such as TDS (Tax Deducted at Source) statements, Form 26AS, and other data.
During the processing, the department may do any of the following:
Accept the return as filed if no discrepancies or errors are found.
Reject the return if there are any errors, discrepancies or non-compliance with tax laws.
Issue a notice to the taxpayer under Section 143(1)(a) or Section 143(2) if any additional information or clarification is required.
Make adjustments to the tax liability if any discrepancies are found.
Grant refunds if any excess tax has been paid.
Why is Section 143(1)(b) Important?
Section 143(1)(b) is important for both the taxpayers and the Income Tax Department. For taxpayers, it ensures that their tax returns are processed promptly and efficiently, and any refunds due are issued without delay. It also helps them avoid any penalties or legal actions that may arise due to errors or discrepancies in their returns.
For the Income Tax Department, this provision ensures that taxpayers are complying with tax laws and paying the correct amount of tax. It helps in reducing the incidence of tax evasion, as the department has the power to scrutinize the returns and take corrective action if necessary.
What are the Implications of Section 143(1)(b)?
The implications of Section 143(1)(b) for taxpayers are twofold. Firstly, if the department finds any errors or discrepancies in the return, it can lead to additional tax liability, interest, and penalties. Secondly, if the department makes adjustments to the tax liability, it can impact the taxpayer’s finances and cash flow.
Therefore, it is important for taxpayers to ensure that their returns are accurate and comply with tax laws. They should also respond promptly to any notices or requests for information from the department.
Processing of Income Tax Returns
The processing of income tax returns under Section 143(1)(b) involves a comprehensive examination of the return filed by the taxpayer. The department checks the return against the information available with it, including Form 26AS, TDS certificates, and other data.
The department can accept the return as filed if no discrepancies or errors are found. If the return is rejected, the taxpayer will be notified, and the reasons for the rejection will be communicated. In case of any errors, discrepancies or non-compliance with tax laws, the taxpayer may be required to provide additional information or clarify the discrepancies. Failure to comply with such notices may result in penalties or legal action.
Adjustments to Tax Liability
If the department finds any discrepancies in the return, it has the power to make adjustments to the tax liability of the taxpayer. For example, if the taxpayer has claimed excessive deductions, the department can disallow them, resulting in an increase in the tax liability. Similarly, if the taxpayer has underreported income or claimed excessive exemptions, the department can adjust the tax liability accordingly.
Granting of Refunds
One of the significant benefits of the processing of income tax returns under Section 143(1)(b) is the granting of refunds. If the department finds that the taxpayer has paid excess tax, it can grant a refund. The refund can be processed in the same manner as the processing of the return, and the taxpayer will receive the refund amount through the mode of their choice.
Receiving an income tax notice can be an unnerving experience for anyone. However, proactively responding to it is crucial instead of panicking or ignoring it.
The first step is to carefully read and understand the notice, determining the reason behind its issuance. Look for any discrepancies in your income tax return that might have triggered the notice. Additionally, ensure that all the essential information in the notice, such as your name, PAN Card number, mobile number, and email address, is accurate and belongs to you. This verification step ensures that the notice is genuinely meant for you and not a case of mistaken identity.
Upon receiving an income tax notice, staying calm is the first and most crucial step. Avoid the temptation to ignore it or act impulsively. Take a moment to carefully read the notice, understanding the sections it refers to and the reason behind the notice. Notices can be about various issues, such as discrepancies in income, unreported transactions, or mismatched TDS entries. A clear understanding of the issue is vital for the subsequent steps.
Seek Professional Advice:
While some tax notices might be straightforward, others can be complex, requiring expert guidance. Consulting a qualified chartered accountant or tax professional is a smart move. They possess in-depth knowledge of tax laws and can provide valuable insights into your situation. A professional can also help you gather and prepare the necessary documents and responses, reducing the chances of errors and ensuring compliance with tax regulations.
Review Your Tax Return:
After understanding the reason for the notice and consulting a tax expert, review your tax return thoroughly. Cross-check the income, deductions, and exemptions you claimed with your submitted documents. Look for any discrepancies or errors that may have triggered the notice. Honest mistakes can happen, and identifying them at this stage will help you rectify the situation efficiently
Respond Promptly And Accurately:
Ignoring an income tax notice can lead to more significant problems in the future. Ensure you respond to the notice within the specified timeframe, usually 30 days. Craft your response carefully, addressing the specific issues raised in the notice. Be truthful and provide accurate information supported by relevant documents. If you require additional time to gather information or seek professional help, promptly request an extension from the tax department,” adds Dasari.
Maintain Proper Documentation:
While responding to the income tax notice, maintain a record of all communications and documentation exchanged with the tax authorities. This includes the notice itself, your response, any additional documents submitted, and acknowledgement receipts. A well-organized file will help you track the progress of your case and serve as evidence if needed.
Receiving an income tax notice might seem intimidating, but you can handle it efficiently with the right approach. Remember, staying proactive is the key to successfully navigating income tax notices and maintaining your financial peace of mind.
The Income Tax Department has issued the updated common offline utility for Form 3CA-3CD and 3CB-3CD for the Assessment Year 2023-24.
Common offline utility for Form 3CA-3CD and 3CB-3CD
Form 3CA-3CD: Audit report under section 44AB of the Income -tax Act, 1961, in a case where the accounts of the business or profession of a person have been audited under any other law and Statement of Particulars required to be furnished under Section 44AB of the Income-tax Act, 1961
Form 3CB-3CD: Audit report under section 44AB of the Income -tax Act 1961, in the case of a person referred to in clause (b) of sub – rule (1) of rule 6G and Statement of Particulars required to be furnished under Section 44AB of the Income-tax Act, 1961
Edge browser installation is required before installing the utility.
Note: Version 1.2.5 is deployed to extend the facility to allow 2 lakh rows in clause 18- currently 10,000 rows were allowed.
DocumentForm Utility(Version 1.2.5) (112 MB)Date of first release of Form Utility10-Sep-2021Date of Latest release of Form Utility15-Sep-2023
DocumentForm Schema(79 KB)Date of first release of Form Schema26-Oct-2021Date of latest release of Form Schema12-Jul-2023
An individual might get a notice under section 139(9) of the Income Tax Act, 1961 in case his/her income tax return (ITR) is declared as ‘defective’ by the Assessing Officer (AO). For instance, say you had filed your ITR but the spelling of your name in your PAN card does not match with the name in the ITR form. This will cause your ITR to be classified as defective. Once the ITR has been termed defective, the income tax department will send you notice for the same.
Although any notice from the income tax department might give one a shock, this notice can be easily rectified. Here is how you can fix the issue related to defective ITR.
What is a defective ITR?
Notice under section 139(9) may be issued to an individual in case his/her income tax return has been declared as defective by the assessing officer on account of incomplete or inconsistent information.
Here is a look at few reasons why an ITR filed could be termed as defective.
Wrong information in AIS: It may so happen that you mistakenly entered the wrong challan number while filing your ITR or you paid your advance tax for the wrong assessment year or maybe your employer filed a wrong TDS return and as a result your Form 26 AS, AIS, TIS auto populated the wrong information and, thus the error. Sometimes it could also happen that the bank deducted the TDS amount had put in a wrong entry in their TDS returns.
Like this, there could be numerous ways you could mistakenly input wrong tax information in your filed ITR. Hence, the best practice would be to always check the challans properly and reconcile your bank statements with the TDS information in your AIS (Annual Information Statement). If you still think that the information in one’s AIS is incorrect, then you may request the tax department to correct it. Otherwise, if the AIS is wrong and you said nothing, it will be assumed that every information in the AIS is correct.
Mismatch in income and TDS reported in return with details reflected in Form 26AS of the taxpayer is a common reason for treating a return as defective,” said Vijay Bharech from Deloitte Haskin & Sells LLP, a tax, audit and business consulting firm.
He added, “Do keep in mind that TDS being deducted from income but income not being declared would not be considered as concealment of income. Section 143 provides that the taxpayer should be intimated before an adjustment is made on account of income appearing in Form 26AS. However, in practice, following are few instances where tax authorities are treating a filed tax return as defective:
Name of taxpayer in ITR does not match with the “Name” as per the PAN data base.
For example, crypto exchanges in India deduct TDS on every sell transaction. But if for any reason someone neither declared this Virtual Digital Assets (VDA) crypto income nor did they file ‘schedule VDA’ while filing their ITR, then the ITR will be termed as defective.
Another example is in case of equity shares. Companies will deduct TDS on dividend payments if they exceed Rs 5,000 in a financial year provided form 15G/H is not submitted. Additionally, all dividends are taxable in the hands of shareholders. So however small the dividend amount may be, one must declare these incomes in their filed ITR.
Those who have a business income, must file their income tax audit report by September 30, 2023 for FY 2022-23 (AY 2023-24). “Despite having to do an audit by a qualified CA, if someone does not do it, then the ITR will be tagged as defective. Further, a penalty under Section 271B may be imposed if he fails to get his accounts audited or fails to furnish a report of audit under Section 44AB in Form 3CA and Form 3CB or Form 3CD, as the case may be, by the due date,” said Naveen Wadhwa, deputy general manager (DGM) of Taxmann, a Delhi based book publishing company..
The individual can either file the income tax return as a fresh or revised return in case the time provided for filing the ITR in a particular assessment year has not lapsed,” said Bharech.
If there is no change in gross total income or deduction claimed (such as section 80C, 80D etc) ITR filed (uploaded and verified) as a response to defective notice would be considered as a fresh ITR and would replace the defective return filed earlier. This would mean that original ITR has been replaced in response to defective notice. However, in case an individual wishes to change the gross total income or deduction claimed, one will be required to file a revised ITR. Here an individual will be required to quote the Original ITR number in the revised ITR form,” Bharech added.
The Assessing Officer may provide the individual with an opportunity to rectify the defect within 15 days from the date of receiving the notice. However, the Assessing Officer is empowered to extend the time limit if the individua; makes an application for an extension of time,” said Wadhwa.
Now if a taxpayer is unable to respond to the notice, the ITR will be treated as invalid. This would mean that an individual has not filed ITR for that assessment year.
Submitting an ITR in response to a defective ITR notice does not invite any penalties. However, if the individual fails to file a revised return rectifying the defects, the return will be deemed invalid. In such a scenario, penalties may be imposed on the individual for the non-filing of the ITR,” said Wadhwa.
Further, it must be noted that if any additional tax liability is coming due to the rectification of a mistake in the defective ITR, then interest may be levied on the outstanding amount.
The Income Tax Department recently launched a mobile app called “AIS for Taxpayer” for individuals to access their Annual Information Statement (AIS)/ Taxpayer Information Summary.
According to the IT department, AIS gives a comprehensive view of information for a taxpayer displayed in Form 26AS. The app is aimed at showcasing a complete perspective of AIS/TIS with data gathered from multiple sources.
The application is available for download from Google Play and the App Store for Android and iOS users, respectively. Individuals can examine information regarding GST data, foreign remittances, TDS/TCS, interest, dividends, share transactions, tax payments, and income tax refunds.
Average processing time of Income Tax Returns (ITR) has reduced to ten days in the Assessment Year 2023-24. Average processing time of ITR was 82 days in the Assessment Year 2019-20, and 16 days in Assessment Year 2022-23.
Income Tax Department said, it is committed to process the ITR in a speedy and efficient manner to the taxpayers. According to the Department, six crore 98 lakh ITRs for Assessment Year 2023-24 were filed, out of which 6 crore 84 lakh ITRs have been verified.
The Department informed that more than two crore 45 lakh refunds for Assessment Year 2023-24 have already been issued. Income Tax Department said, there are several cases in which the ITRs have been processed and refunds have also been determined, but the Department is unable to issue them. It said, taxpayers have not yet validated their bank account in which the refund is to be credited. The Department urged the taxpayers to validate their bank accounts through the e-filing portal to get the refunds.
Receiving an income tax notice can be an anxiety-inducing experience for many individuals. However, it is important to remember that such notices are a routine part of the income tax return filing process and should not necessarily be a cause for panic. With the right approach and knowledge, you can navigate through the process. In this article, we will outline five essential steps to help you handle income tax notices like a pro, ensuring you meet your tax obligations while minimising stress.
Upon receiving an income tax notice, the first and most crucial step is to carefully read the notice in its entirety and confirm whether it is an intimation or notice. If it is an intimation under section 143(1), then you don’t have to reply to it if the tax department is acknowledging the filed ITR as it is. In case of a tax demand, the individual has to file a response within 30 days if he doesn’t agree to it.
The tax notice will typically outline the reason for the communication, whether it is related to a discrepancy in reported income, a potential audit, or a request for additional information. By fully understanding the purpose of the tax notice, you will be better equipped to address the issue and respond appropriately.
Step 2: Gather relevant documents and information Once you have understood the nature of the tax notice, it is time to gather all relevant documents and information. This could include income tax returns, supporting documentation, receipts, and any other records that pertain to the issue raised in the notice. Organising your documents systematically will not only streamline the process but also demonstrate your commitment to resolving the matter promptly.
Step 3: Seek professional assistance, if needed
In some cases, the complexity of the issue or the income tax laws involved may require the expertise of a tax professional. Consulting a chartered accountant (CA), tax attorney, or tax advisor can provide you with valuable insights and guidance on how to best respond to the notice. A qualified professional can help you navigate the intricate details of tax regulations, ensuring that your response is accurate and well-informed.
Step 4: Respond promptly and clearly Timeliness is key when dealing with income tax notices. Once you have gathered the necessary information and consulted a professional, if necessary, form a clear and concise response to the income tax notice. Address the points raised in the notice and provide any requested documentation in an organised manner. Be sure to maintain a professional tone and avoid any emotional or confrontational language.
Step 5: Keep detailed records Throughout the process of responding to the income tax notice, it is crucial to maintain meticulous records of all communication and actions taken. Keep copies of your response to the , any documents you have submitted, and any correspondence with the tax authorities. These records can serve as evidence of your efforts to comply with the income tax notice’s requirements and can be immensely valuable, should any further issues arise.
Conclusion Handling income tax notices like a pro requires a combination of careful attention, organisation, and professionalism. By following the five essential steps outlined in this article, you can effectively navigate through the process and address the tax notice with confidence. Remember that income tax notices are a part of the tax system and, with the right approach, you can ensure that you meet your tax obligations while minimising stress and uncertainty. Whether you choose to tackle the notice on your own or seek professional assistance, staying informed and proactive will help you emerge from the experience with a sense of accomplishment and a clearer understanding of your tax responsibilities.
SUBJECT: REPRESENTATION REGARDING INCORRECT PROCESSING OF INCOME TAX RETURNS FILED FOR THE AY 2023-24 [DENIAL OF DEDUCTION EVEN IN CASES WHERE IT HAS NOT BEEN CLAIMED]
The Karnataka State Chartered Accountants Association (R) (in short ‘KSCAA’) is an association of Chartered Accountants, registered under the Karnataka Societies Registration Act, in the year 1957. KSCAA is primarily formed for the welfare of Chartered Accountants and represents before various regulatory authorities to resolve the professional problems faced by Chartered Accountants and the business community.
In the past, we have written to your good selves many times populating various issues, challenges and hardships being faced by taxpayers and Chartered Accountants and suggesting possible solutions on the same. Herein, we are presenting before your good selves, an issue regarding the Proposed Adjustments u/s 143(1) (a) of the Income-tax Act, 1961 (the Act) for deduction u/s 80P, which is causing hardship to the taxpayers….
Income tax return filed is processed by the CPC – Central Processing Unit. Presently, CPC in Bangalore is responsible for carrying out all primary assessments.
The CPC unit of Income tax department takes up the ITR for processing i,e cross checks the details reported in the ITR with the information in hand and sends a notice of intimation under section 143 (1) to the registered email address. The Income Tax Department processes the income tax return only after they are filed and successfully verified by the taxpayer. The taxpayers are advised to submit their return on time for the speedy processing of the returns.
Income tax return filing
The taxpayers should file their income tax returns by the due date to avoid any late fees and the penalty. The ITR processing starts only with the filing of the return; it can be on time or after the due date. However, it is also advisable to file the returns on time for quick processing.
ITR verification
The department starts the Income Tax Processing only when the return has been successfully verified.
The taxpayer has to verify the return by sending the ITR-V (Acknowledgement) after signing it with a blue ink within 120 days from the date of filing the return.
ITR-V will be physically sent to the Central Processing Center (CPC). Once they receive it, CPC will send an acknowledgement on the registered email ID of the taxpayer.
The taxpayer should correctly mention the email address in the return form as all the communications between him, and the department will take place through that email ID alone. Also, the taxpayer can e-verify the return after filing it instead of sending the acknowledgement physically to the department. It can be done through any one of the following means:
net banking
aadhaar OTP
EVC code through the department’s website
giving bank account details on the e-filing website
giving DEMAT account details on the income tax e-filing website.
ITR processing under section 143(1)
After the verification of the ITR, the department processes the income tax return and sends the intimation under Section 143(1) of the Income Tax Act, 1961 once the Income Tax Processing is done. The intimation will be sent via an email along with a message to the registered email ID and the mobile number respectively.
CPC processes each e-filed return and generates intimation u/s 143(1). The department compares the data provided in the return by the taxpayer in addition to the records available with the CPC and generates an intimation under section 143(1).
The intimation also carries the detailed calculation of the tax as computed by the taxpayers and the income tax department. The whole process generally takes 30- 45 days from the day of e-verification or the receipt of ITR-V by the CPC.
Status post the ITR processing
Taxpayers are required to decode the ITR intimation. Following are three possible scenarios that the taxpayer may need to understand :
Refund determined: If the return filed by the taxpayer is found to be accurate and has a refund claim, the refund is issued to the taxpayers. Generally, the credit of refund process takes about 20-45 days from the date of e-verification of the income tax return. However, if the acknowledgement has been sent physically to the CPC, it may take a longer time.
Demand determined: If any discrepancy is found in the taxes paid or the credit claimed, the department issues a demand intimation. The demand has to be paid within a stipulated time mentioned in the intimation under section 143(1).
No demand-No refund: The situation where the department accepts the information provided by the taxpayer and gives a green card then the status of the ITR processing turns to ‘No demand No refund’. It means there is no interest or tax payable or refundable by/to the assessee.
To, The Union Finance Minister, Union of India, North Block, New Delhi – 110 001
Respected Sir,
Sub: Appeal for [a] extension of due date for furnishing of Income-tax returns, Tax audit reports etc. & [b] Issues faced by us after launching of new website
REF.: Practical difficulties faced by tax payers & tax professionals in filing: [a] Income tax returns, tax audit forms [b] System glitches in new website launch
[01] About Our Association:
Our Association represents the Tax Consultants, Advocates, Chartered Accountants, Company Secretaries & Cost Accountants practicing in direct & indirect taxes from whole of the Maharashtra state. Presently, we have around 1700 plus active members from the state.
Our Association was earlier known as The Western Maharashtra Tax Practitioners’ Association. In the recent Special General Meeting of our members held on 6th June 2021, we have decided to expand our wings & made our area of operation as whole Maharashtra.
[02] Role of our Association:
Our Association always represents the concerns and problems faced by these members before the respective tax authorities. This initiative of our Association has proved beneficial for the tax administering authorities, our members and ultimately the tax payers at large.
[03] About this representation:
This representation contains various issues faced by Tax Professionals in filing of returns, tax audit forms etc. & issues of the new website
C) Practical difficulties faced by tax payers & tax professionals in filing Income tax returns, tax audit forms:
REGISTERED
UNDER BOMBAY PUBLIC TRUST ACT Regi. No. F-1861 n PAN : AAATT1337P
80-G Get. No. PN/CIT-IV/TECH/80G-89/2007-08/2054 dt.2-11-2007 w.e.f.1-4-2007 to 31-3-2010, CIT-IV Pune
UNDER SOCIETIES ACT Regi. N0./MAH/642/POONA 81 n UNDER SECTION 12A OF THE [TACT No. CH/PN/3292/80-81
1) Extension of due date for filing ITR’s: As you are aware that the Income-tax website is changed & there are hundreds of issues in the new website. However, some of the issues have been resolved, but many issues as enumerated below are still persisting. It took huge time to get these issues resolved. Still the following issues persists:
A) Filing of tax Audit forms: The utilities for filing tax audit reports have been made available very recently & hence the work of filing tax audit reports is held The data required in the changed forms is to be extracted from the accounts for which the staff I tax professionals offices & taxpayers offices is taking time.
B) Overlapping due dates: The due date for filing GSTR-9 & GSTR-9C for f y 2020-21 is 31st December, 2021. Whereas, the due date for filing tax audit reports under Income-tax Act, 1961 is 15th January 2022. The due dates are overlapping & hence professionals find it difficult to prepare both the audit
C) CA examination: The basic data, checking of accounts, finalisation work for tax audit reports is mainly prepared in the offices of Chartered Accountants by the articled clerks under CA course. The examination of CA final, IPCC will be concluded on 20th December 2021. The articled assistants appearing for the examination have taken leave for the same. Therefore, the work in the offices of Chartered Accountants has been hampered to a considerable extent.
D) ITR Form-5 & Form-6: Utilities for ITR form-5 applicable for partnership firms, AOP & Co–operative Societies, ITR form-6 for Companies are still having many issues while filing theses ITR’s. Tax professionals facing these issues & hence are unable to file these returns.
E) Recent changes in Tax audit forms: CBDT has recently made various changes in tax audit form seeking additional information therein. Tax professionals have to get acquainted to it. The information sought is required to be collected from the client & / or his accountant. Both of them require time & study of the relevant information.
F) ITR due dates for audit & non audit assesses: The due date for filing ITR for audit assessee is 31st December 2021. For non audit assessee due date for filing Tax audit report is 15th January 2022, the gap of 15 days is insufficient. Whereas, the gap in these two due dates is 2 months in normal circumstances. Therefore, there must be a gap of two months in these two due dates. Therefore, tax professionals neither concentrate on work of audit assessee nor concentrate on work of non audit assessee.
G) Due date of Scrutiny Assessments: The due date of scrutiny assessments for A Y 2018 – 19 & other scrutiny assessments under other sections is 31st December 2021. Tax professionals find it almost impossible whether to file ITR’s, Tax audit reports, GSTR-9, GSTR-9C audit or to comply with the scrutiny assessments in the given time.
H) Introduction of AIS / TIS: In case of Individual & HUF assessee Annual Information Statement (AIS), Tax Information Statement (TIS) have been introduced in Oct / Nov 2021. Coordinating with the data on these statements is almost an impossible task as the statements have been introduced after many assessees have finalised their accounts. These statements are faulty in it, as it contains half the information. In many cases the banks have not supplied the full / part of the information. If there are bulk transactions of shares or other transactions then it does not get downloaded or takes too much time to get downloaded. In case of discrepancies in data available it becomes difficult to how to correlate the data with actual figures. It will lead to issues in scrutiny assessments in future. Therefore, it is urged that the basis of AIS, TIS data be started from next assessment year. Those who have already filed ITR before the introduction of A.I.S. are now advised to file a revised return. If CBDT has introduced A.I.S. late on the portal why assessee should file a revised ITR?
I) Filing Form 10-1D for Company assessee: For Company assessee opting for option to file return u/s 115BAB of The Income – Tax Act, 1961 the form is not getting uploaded on the website. If the complaint is raised, after some days portal gives a reply that “issue is resolved, file Form 10-1D’. Factually, still the issue Thus company assessee will have to pay income tax at a higher rate without any fault at their end.
J) Due date for filing revised returns: The due date for filing revised returns is 31st December for all assessee. However, due to the reasons of new website the due date of filing original returns has been extended. Therefore, the due date for filing revised returns be extended at 3 months from filing the extended due date of filing the original return.
K) Departmental messages containing XXXX: The tax payment challans, messages on mail, mobile contains xxxx in name, PAN of the assessee. It is time consuming and unwanted. What the CBDT is achieving by sending xxxx in every message? The same must be removed & all details as to full name, full PAN etc be reflected in each communication from the department.
L) Form 10-1E could not be filed by representative assessee: In case of deceased / lunatic assessee the return for the unfilled period be fled by the legal heir of the deceased / lunatic. However, if the legal heir chooses to opt for taxation u/s 115-BAC of the deceased / lunatic he cannot do so as the applicable form 10-1 E could not be uploaded by the legal heir.
M) Old Penalty Notices still live on new portal: Penalty notices of the period before the new site was launched in which answers were filed upto 31.05.2021 (period of old website) were not processed & the cases are still seen as not Appropriate actions in such cases are required to be given. It may so happen that the assessee under sincere belief of responding the notice may be penalised due to this for no fault.
N) Filing of returns with DSC: If any assessee chooses to file his ITR by signing it by digital signature then even individual returns without audit cannot be filed with DSC. The issue must be resolved on priority.
0) Suggestion for Point no I & L above: Atleast for some period the signed copy of the relevant form be directed / allowed to be accepted in the respective ward offices till the website get smoothened.
It is therefore urged that extension for filing of various returns & compliances be granted as follows:
Sr. No.
Particulars
Date
i)
ITR filing for non audit assessee
31st January 2022
ii)
Filing of tax audit reports
28th February 2022
iii)
Filing of ITR for audit cases & working partners of compulsory audit assessee
31st March 2022
iv)
Completion of scrutiny assessments
31st March 2022
B) System Glitches:
1 Wrong tax audit limit shown by new website: The new website shows tax audit limit of Rs. 60 Lakhs for f y 2015-16 corresponding to A Y 2016-17. In fact, for A Y 2016-17 the tax audit limit was Rs. 1 crore. We are attaching herewith the relevant extract of section 44–AB of the Income – Tax Act, 1961 applicable for A Y 2016-17.
Audit of accounts of certain persons carrying on business or profession Section 44-AB: Every person
(a) Carrying on business shall, if his total sales, turnover or gross receipts, as the case may be, in business exceed or exceeds (one crore rupees) in any previous year or
(b) Carrying on profession shall, if his gross receipts in profession exceed (twenty – five) lakh rupees) in any (previous year; or
(c) Carrying on the business shall, if the profits and gains from the business are deemed to be the profits and gains of such person under (Sec 44AE) (or Sec 44BB or Sec 44BBB), as the case may be, and he has claimed his income to be lower than the profits or gains so deemed to be the profits and gains of his business, as the case may be, in any (previous year; or)
(d) Carrying on the business shall, if the profits and gains from the business are deemed to be the profits and gains of such person under (Sec 44AD) and he has claimed such income to be lower than the profit gains so deemed to be the profits and gains of his business and his income exceeds the maximum amount which is not chargeable to income – tax in any previous year.
It may be questioned that the relevant years ITR filing due date has already been over & no ITR now could be filed. However, in case of notice u/s 153–C r w s 153–A & in case of notice u/s 148 to file returns it may be required for further period of 4 more years. It is therefore urged that the same may be rectified immediately.
2 Vivad se Vishwas Form-4 filing glitches: The limit for making payment under Vivad se Vishwas scheme was 30th September 2021. On making full payment Form-4 under the scheme is required to be filed. In Form-4 all payments made after assessment such as part payment on stay application etc. were required to be considered towards discharging the liability payable as per DTVSV scheme. However, the present website though allows details of tax payment made after issue of Form-3 under the scheme however, it does not allow to enter any payment made before issue of Form-3. This glitch in the system is required to be overcome on priority.
We assure you our best possible co-operation in re-building our most beloved motherland.
Thanking you, Yours faithfully, For Maharashtra Tax Practitioners’ Association
(Manoj S Chitalikar) President 9822194015
(Santosh S Sharma) Past President & Chairman Income tax representation Committee 9850053341
(Narendra K Sonawane) Past President & convener 9822601617
SS / MTPA / IT representation 21-22 / 1221
Dated: 11th December 2021
To,
The Prime Minister of India, South Block, Raisina Hill, New Delhi – 110 011
Respected Sir,
Sub: Appeal for fal extension of due date for furnishing of Income-tax returns, Tax audit reports etc. & fbl Issues faced by us after launching of new website REF.: Practical difficulties faced by tax payers & tax professionals in filing: [a]
Income tax returns, tax audit forms [b] System glitches in new website launch
[01] About Our Association:
Our Association represents the Tax Consultants, Advocates, Chartered Accountants, Company Secretaries & Cost Accountants practicing in direct & indirect taxes from whole of the Maharashtra state. Presently, we have around 1700 plus active members from the state.
Our Association was earlier known as The Western Maharashtra Tax Practitioners’ Association. In the recent Special General Meeting of our members held on 6th June 2021, we have decided to expand our wings & made our area of operation as whole Maharashtra.
[01] Role of our Association:
Our Association always represents the concerns and problems faced by these members before the respective tax authorities. This initiative of our Association has proved beneficial for the tax administering authorities, our members and ultimately the tax payers at large.
[03] About this representation:
This representation contains various issues faced by Tax Professionals in filing of returns, tax audit forms etc. & issues of the new website
A) Practical difficulties faced by tax payers & tax professionals in filing Income tax returns, tax audit forms:
SS / MTPA / IT representation 21-22 / 1221
Dated: 11th December 2021
To,
Minister of State for Finance, Union of India, North Block, New Delhi – 110 001
Respected Sir,
Sub: Appeal for ral extension of due date for furnishing of Income-tax returns, Tax audit reports etc. & rbl Issues faced by us after launching of new website
REF.: Practical difficulties faced by tax payers & tax professionals in filing: [a] Income tax returns, tax audit forms [b] System glitches in new website launch
[01] About Our Association:
Our Association represents the Tax Consultants, Advocates, Chartered Accountants, Company Secretaries & Cost Accountants practicing in direct & indirect taxes from whole of the Maharashtra state. Presently, we have around 1700 plus active members from the state.
Our Association was earlier known as The Western Maharashtra Tax Practitioners’ Association. In the recent Special General Meeting of our members held on 6th June 2021, we have decided to expand our wings & made our area of operation as whole Maharashtra.
[02] Role of our Association:
Our Association always represents the concerns and problems faced by these members before the respective tax authorities. This initiative of our Association has proved beneficial for the tax administering authorities, our members and ultimately the tax payers at large.
[03] About this representation:
This representation contains various issues faced by Tax Professionals in filing of returns, tax audit forms etc. & issues of the new website
A) Practical difficulties faced by tax payers & tax professionals in filing Income tax returns, tax audit forms:
SS / MTPA / IT representation 21-22 / 1221
Dated: 1 1 th December 2021
To,
The Chairman, Central Board of Direct Taxes, North Block, New Delhi – 110 001
Respected Sir,
Sub: Appeal for [a] extension of due date for furnishing of Income-tax returns, Tax audit reports etc. & [b] Issues faced by us after launching of new website
REF.: Practical difficulties faced by tax payers & tax professionals in filing: [a] Income tax returns, tax audit forms [b] System glitches in new website launch
[01] About Our Association:
Our Association represents the Tax Consultants, Advocates, Chartered Accountants, Company Secretaries & Cost Accountants practicing in direct & indirect taxes from whole of the Maharashtra state. Presently, we have around 1700 plus active members from the state.
Our Association was earlier known as The Western Maharashtra Tax Practitioners’ Association. In the recent Special General Meeting of our members held on 6th June 2021, we have decided to expand our wings & made our area of operation as whole Maharashtra.
[02] Role of our Association:
Our Association always represents the concerns and problems faced by these members before the respective tax authorities. This initiative of our Association has proved beneficial for the tax administering authorities, our members and ultimately the tax payers at large.
[03] About this representation:
This representation contains various issues faced by Tax Professionals in filing of returns, tax audit forms etc. & issues of the new website
A) Practical difficulties faced by tax payers & tax professionals in filing Income tax returns, tax audit forms:
Compliance Calendar for the month of September 2021
It is crucial for every business, Irrespective of the business structure to adhere to the statutory compliance and complete all the necessary filings before the due dates. It is important to stay compliant with enormous compliance falling in the year for businesses and entrepreneurs. The Government and concerned Government Departments such as Ministry of Corporate Affairs, Central Bureau of Direct Taxes, Income Tax Department, Ministry of Finance etc have announced extensions in various due dates from time to time to facilitate the stakeholders and taxpayers at large. Nevertheless, statutory compliance and tax compliance is concerned, every month is significant. There are various tax and statutory compliance due dates relating to ROC filing, GST return filings and Income tax filing falls in the month of September, 2021.
Compliance Calendar for the Month of September 2021
Important due dates for the GST Returns in the Month of September 2021
Due date
Form to be filed
Period
Who should file?
10.09.2021
GSTR 7
August 2021
GSTR 7 is a return to be filed by the persons who is required to deduct TDS (Tax deducted at source) under GST
10.09.2021
GSTR 8
August 2021
GSTR-8 is a return to be filed by the e-commerce operators who are required to deduct TCS (Tax collected at source) under GST
Taxpayers having an aggregate turnover of more than Rs. 1.50 Crores or opted to file Monthly Return
13.09.2021
GSTR 1 IFF (QRMP)
August 2021
GST return for the taxpayers who opted for QRMP scheme (Optional)
13.09.2021
GSTR 6
August 2021
Input Service Distributors
20.09.2021
GSTR 5 & 5A
August 2021
Non-Resident Taxpayers and ODIAR services provider
20.09.2021
GSTR 3B
August 2021
The due date for GSTR-3B having an Annual Turnover of more than 5 Crores
25.09.2021
GST Challan Payment
August 2021
GST Challan Payment if no sufficient ITC for Aug (for all Quarterly Filers)
Important due dates for the Income Tax Compliance / PF / ESI in the Month of September 2021
07.09.2021
Challan No. ITNS-281
August 2021
Payment of TDS/TCS deducted /collected in August 2021.
14.09.2021
TDS Certificate
July 2021
Due date for issue of TDS Certificate for tax deducted under Section 194IA in the month of July, 2021
14.09.2021
TDS Certificate
July 2021
Due date for issue of TDS Certificate for tax deducted under Section 194IB in the month of July, 2021
14.09.2021
TDS Certificate
July 2021
Due date for issue of TDS Certificate for tax deducted under Section 194M in the month of July, 2021
15.09.2021
Form 24G by Government officer
August 2021
Due date for furnishing of Form 24G by an office of the Government where TDS/TCS for the month of August, 2021 has been paid without the production of a challan
Second installment of advance tax for July to September for the assessment year 2022-23
15.09.2021
Form No. 3BB
August 2021
Due date for furnishing statement in Form no. 3BB by a stock exchange in respect of transactions in which client codes been modified after registering in the system for the month of August, 2021
15.09.2021
Electronic Challan cum Return (ECR) (PF)
August 2021
E-payment of Provident Fund
15.09.2021
ESI Challan
August 2021
ESI payment
30.09.2021
TDS Challan-cum-statement
August 2021
Due date for furnishing of challan-cum-statement in respect of tax deducted under section 194-IA, 194 IB, 194M
30.09.2021
Income Tax Return
AY 2021-22
ITR filing for non audit cases and who have not entered into any international or specified domestic transactions
Earlier Due date was 31st July, 2021 which is extended to 30th September, 2021
30.09.202
(As extended from 30.06.2021)
Linking of Aadhaar
–
Due date for linking of Aadhaar number with PAN 2021)
Important due dates for the Company Annual Filing and LLP Annual Filing in the Month of September 2021
The month of September 2021 is crucial for the due dates for various compliances under Goods and Service Act, Income Tax Act, Companies Act and LLP Act. Filing the above mentioned forms on or before the due dates will save the Taxpayers from hefty penalties.
