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CBDT Urges Officers to Identify Top 30 Cases of TDS Shortfall by June 30, 2024

editor — Wed, 10 Apr 2024 05:13:23 +0000

The Central Board of Direct Taxes (CBDT) has instructed income tax officers to scrutinize the top 30 cases of insufficient tax deduction at source (TDS) and resolve at least 150 appeals by the Commissioner of Income Tax before June 30, 2024.

These directives are outlined in the interim action plan released by the CBDT for the fiscal year 2024-25, delineating the primary focus areas for field formations.

According to a recent communication from the CBDT to its officials, specific Key Result Areas have been identified for timely accomplishment, alongside attending to statutory limitation matters.

The CBDT routinely issues interim action plans to its officials at the onset of each financial year, refining them later in the year to form the final plan.

Additionally, the CBDT has called for seminars and awareness campaigns to be conducted on TDS. Over the years, TDS has emerged as a significant revenue source for the government, surging from Rs 2.13 lakh crore in FY13 to Rs 8.17 lakh crore in FY23.

As part of its interim plan for the current fiscal, the CBDT has also mandated the immediate approval of all pending refunds withheld under Section 241(A) once scrutiny assessments are completed and requisite orders are passed, either immediately or by April 30, 2024.

Furthermore, the CBDT has directed that all information requested by enforcement agencies such as the CBI, SEBI, and Enforcement Directorate before March 31, 2024, must be shared by the end of April. For requests received after April 1, information should be provided within 15 days.

Field officers are also tasked with identifying cases where seized assets are due for release as per Section 132B and facilitating their release by June 30, 2024.

Source: Business Today

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High Court Advocates Direct Communication, Urges Tax Department to Inform Taxpayers Prior to Action

editor — Wed, 10 Apr 2024 05:01:01 +0000

Introduction:

Certain demographics, including senior citizens, technologically hesitant individuals, Non-Resident Indians (NRIs), and those prone to forgetfulness, might be unaware of the Income Tax Department’s actions against them. The department initiates proceedings by uploading show-cause notices or summons to its online portal, without directly notifying these taxpayers via email or letter. Consequently, individuals who infrequently check the tax portal, as is common, may face unforeseen penalties and complications. This operational method by the tax authorities has raised concerns about its fairness.

High Court’s Critique:

Recently, the High Court criticized the tax authorities’ approach, highlighting the unreasonableness of expecting taxpayers to constantly monitor the e-portal for updates. In a case concerning the Munjal BCU Centre of Innovation and Entrepreneurship, the Punjab and Haryana High Court quashed a show-cause notice from November 2022. The court emphasized that legal provisions dictate the manner in which notices and orders must be served, rejecting the notion of notices being “presumed” received solely by placement on the e-portal.

Importance of Natural Justice:

An expert underscored the significance of natural justice in legal proceedings, emphasizing the principle of “audi alteram partem,” which requires both parties to be heard. Lack of communication regarding assessments, penalties, or other actions could result in hardships for taxpayers, missed deadlines, and ignorance of their right to respond, thereby increasing burdens for all parties involved.

Case Example: Munjal BCU:

Munjal BCU, dedicated to fostering innovation and startups in Ludhiana, received initial notices and reminders solely through the online tax portal. The court deemed this insufficient opportunity for the organization to present its case.

Historical Context:

Before 2009, the tax department primarily relied on physical mail for communication, transitioning to electronic means later. Placing communications solely on the income tax portal can pose tracking challenges, especially for certain demographics uncomfortable with technology. While portal accessibility is convenient, supplementary notifications via email and/or physical mail are necessary.

Expected Changes:

The court’s decision is expected to prompt the department to communicate through emails for various matters, including notices and summons.

Practitioners’ Concerns:

Tax practitioners have noted issues with recent proceedings, including notices not being visible on the portal and unreasonable response timeframes.

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Approval of outstanding refunds must be completed by April 30, Income Tax Department.

editor — Wed, 10 Apr 2024 04:45:35 +0000

The Income Tax Department has announced a positive development for individuals awaiting their income tax refunds. They have set a firm deadline of April 30 for the approval of all pending refunds.

Since the opening of the portal for the Assessment Year 2024-25 on April 1, there has been considerable activity, with over 46,000 income tax returns filed within the initial five days. Out of these, close to 3,000 returns have already undergone processing.

The Department has devised an interim action plan for the current fiscal year, outlining specific timelines for addressing various taxpayer-related matters. Immediate attention has been directed towards the approval of pending refunds, particularly those withheld under section 241A due to potential adverse effects on revenue, following the completion of scrutiny assessments and necessary orders. Despite the issuance of refunds exceeding ₹3.36 lakh crore in the fiscal year 2023-24, complaints persist regarding pending refunds from previous fiscal years.

Officials emphasize the importance of approving all pending refunds related to e-returns filed on the Income Tax Business Application (ITBA) for all assessment years by April 30. Additionally, a deadline of June 30 has been set for resolving penalties in at least half of the cases that will become time-barred by March 31, 2025.

Furthermore, attention has been drawn to cases involving Tax Deducted at Source (TDS), with a one-month timeframe provided for disposing of all pending applications as of April 1, 2024, for NIL or lower TDS/TCS. Additionally, orders are expected to be issued by June 30 for cases where TDS surveys were conducted up to March 31, 2024.

Source: https://www.thehindubusinessline.com/economy/it-department-sets-april-30-as-deadline-for-approval-of-pending-refunds/article68042765.ece

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CBDT Issues Interim Action Plan for F.Y. 2024-25: Emphasizes Adherence

editor — Tue, 09 Apr 2024 04:36:03 +0000

The Central Board of Direct Taxes (CBDT) has released a Circular dated April 05, 2024, denoted as F.No. 380/01/2024, intended for internal departmental utilization. This circular delineates the Interim Action Plan tailored for the Financial Year 2024-25. It is imperative to disseminate this document among all officers within your jurisdiction for requisite action and to ensure unwavering compliance within the specified timeframes for each critical area of focus.

The comprehensive Interim Action Plan for the Financial Year 2024-25 is available for reference and download at the following link: https://www.nyca.in/wp-content/uploads/2024/04/CBDT_Releases_Interim_Action_Plan_for_F.Y._2024-25__for_departmental_use-_Urges_Strict_Compliance.pdf

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Income Tax Returns Now Invalid if Not Verified Within 30 Days or by Due Date, Whichever Is Later

editor — Sat, 06 Apr 2024 10:10:44 +0000

The CBDT issued Corrigendum dated April 04, 2024 to Notification No. 02 of 2024 dated March 31, 2024 regarding the Time limit for verification of return of income after uploading.

In the Notification no. 02 of 2024 issued by the DGIT(S), Bengaluru bearing the subject “Time limit for verification of return of income after uploading” dated March 31, 2024: –

Paragraph at s. no. 5 shall read as under:

It is further clarified that where the return of income is not verified within 30 days from the date of uploading or till the due date for furnishing the return of income as per the Income-tax Act, 1961 – whichever is later – such return shall be treated as invalid due to non-verification.

The Notification can be accessed at: https://incometaxindia.gov.in/communications/notification/corrigendum-notification-no-2-2024.pdf

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Income Tax Department enabled the Form 10IE for AY 2024-25 for filing on the income tax e-filing portal

editor — Sat, 06 Apr 2024 09:56:22 +0000

The Income Tax Department has enabled Form 10IE for AY 2024-25 for filing on the income tax e-filing portal.

Please note: This Form 10IE is applicable to those who opt for the old Tax regime for A.Y .2024-25 as the new Tax regime is the default Tax regime.

Source #Income Tax Portal

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CBDT notifies changes in ITR Form V and Acknowledgement for AY 2024-25

editor — Thu, 28 Mar 2024 10:28:31 +0000

The CBDT, through Notification No. 37/2024 dated March 27, 2024, has introduced revisions to the ITR form V and Acknowledgement for Assessment Year 2024-25. These changes align with amendments made in the Income Tax Act, 1961, and the Income Tax Rules, 1962, following the Finance Act, 2023.

For further details, the full notification can be viewed at: https://www.nyca.in/wp-content/uploads/2024/03/CBDT_37-2024-27.3.2024.pdf

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A Closer Look at the Significant Tax Adjustments Coming into Force on April 1, 2024

editor — Tue, 26 Mar 2024 07:04:10 +0000

April 1 signifies the start of a fresh fiscal year and holds great importance for personal finances, as many income tax adjustments from the Budget come into effect on this date. Additionally, various other alterations are also implemented, potentially influencing individual financial situations. These modifications were unveiled by Finance Minister Nirmala Sitharaman during her Budget speech this year. Let’s delve into some significant changes you need to know, such as the widened basic exemption thresholds, among others.

New Tax Regime Default Adoption

The default choice of the new tax regime is a significant alteration aimed at simplifying tax filing and encouraging more people to opt for the new regime.
The new regime offers reduced tax rates but fewer deductions and exemptions.
Taxpayers still have the option to continue with the old tax regime if it suits them better.

Elevated Basic Exemption Limit and Rebate

Effective from April 1, 2023, the basic exemption limit was raised to ₹ 3 lakh from ₹ 2.5 lakh under the new tax regime.
The rebate under Section 87A of the Income Tax Act, 1961, was increased to ₹ 7 lakh from ₹ 5 lakh.
Individuals with a taxable income up to ₹ 7 lakh under the new regime will receive a full tax rebate, exempting them from paying any income tax.

New Tax Slabs

Income between ₹ 3 lakh and ₹ 6 lakh will be taxed at 5%.
Income between ₹ 6 lakh and ₹ 9 lakh will be taxed at 10%.
Income between ₹ 9 lakh and ₹ 12 lakh will be taxed at 15%.
Income between ₹ 12 lakh and ₹ 15 lakh will attract a 20% tax.
Income above ₹ 15 lakh will be taxed at 30%.

Restoration of Basic Deduction

Reduced Surcharge

Life Insurance Taxation

Exemption of Enhanced Leave Encashment

Source: https://www.ndtv.com/india-news/new-tax-rules-to-come-into-effect-from-april-1-all-you-need-to-know-5283150

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Optimizing Tax Planning with Political Party Donations

editor — Fri, 22 Mar 2024 07:21:06 +0000

The difference between tax saving and tax evasion becomes apparent when individuals seek deductions under sections 80GGB/80GGC of the Income Tax Act 1961 for contributing funds to a political party or an electoral trust.

Eligibility for Deductions

Deduction Limits

Tax Savings Example

Gross Total Income	Donation Amount	Deduction Claimed	Tax Savings
Rs. 10,00,000/-	Rs. 2,00,000/-	Rs. 2,00,000/-	Substantial

Risks of Bogus Donations

Consequences of Failure to Prove Genuineness

Steps to Prove Genuineness

Obtain Registration Certificate: Confirm party registration under section 29A.
Verify on Official Website: Check legitimacy on eci.gov.in.
Request PAN Card: Obtain PAN of the political party.
Cross-Verify Bank Details: Use cancelled cheque.
Get Stamped Receipt: Ensure a physical receipt from the party.

Supporting Documentation

Conclusion

Donating to political parties can offer tax benefits but requires careful consideration, documentation, and compliance to avoid penalties. Proper evidence is crucial to substantiate the genuineness of the transaction.

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Guidelines Regarding Cash Limits in Home under Tax Regulations

editor — Fri, 22 Mar 2024 06:29:06 +0000

Under the provisions of the Income-Tax Act (ITA) of 1961, there exists no stipulation on the maximum amount of cash permissible to be kept within one’s residence. However, during an income tax inspection, individuals must provide verifiable sources for the cash in their possession.

This particularly applies to funds that must be accounted for in terms of income. If the documentation provided by an individual does not align with the amount of cash found at their residence, income tax authorities possess the authority to penalize them. In such instances, unaccounted cash can be seized, with penalties reaching as high as 137% of the total amount.

It is imperative to consider the subsequent regulations regarding cash, as mandated by the income-tax department:

Prohibition on accepting cash amounts of Rs 20,000 or more for loans or deposits: The income-tax department strictly prohibits individuals from accepting cash sums of Rs 20,000 or higher in relation to loans or deposits.
Compulsory presentation of Permanent Account Number (PAN) for transactions exceeding Rs 50,000: According to the directives of the Central Board of Direct Taxes (CBDT), individuals are required to furnish a PAN card for transactions involving deposits or withdrawals exceeding Rs 50,000 at a time.
Scrutiny by investigative agencies for cash-based asset transactions surpassing Rs 30 lakh: Indian citizens involved in cash transactions exceeding Rs 30 lakh concerning the purchase or sale of assets may come under scrutiny by investigative agencies.
Investigation into credit or debit card transactions surpassing Rs 1 lakh: Any single transaction exceeding Rs 1 lakh made through credit or debit cards is likely to attract the attention of investigative agencies.
Imposition of a 2% Tax Deducted at Source (TDS) on withdrawals surpassing Rs 1 crore: Individuals withdrawing over Rs 1 crore in cash from banks within a financial year are subject to a 2% TDS deduction.
Penalty for cash transactions surpassing Rs 20 lakh: Cash transactions exceeding Rs 20 lakh in a year may lead to penalties, while the purchase or sale of cash-based property worth more than Rs 30 lakh could prompt investigations by regulatory bodies.
Restrictions on cash payments: Limits include refraining from making cash purchases exceeding Rs 2 lakh without PAN and Aadhaar details, as well as restrictions on credit or debit card transactions exceeding Rs 1 lakh.
Regulations on familial transactions and loans: Accepting cash sums exceeding Rs 2 lakh from a relative in a single day or obtaining loans exceeding Rs 20,000 in cash from any individual are prohibited.

Adhering to these regulations is essential to avoid legal consequences and ensure full compliance with income tax laws and regulations.

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