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Income Tax Department Releases Updated Excel Utility and Schema of ITR-3 for AY 2024-25

editor — Sat, 11 May 2024 12:59:20 +0000

Introduction

The Income Tax Department has recently unveiled the updated Excel Utility and Schema for the ITR-3 form, applicable for the Assessment Year 2024-25. This move comes as part of the department’s ongoing efforts to streamline the tax filing process and enhance user experience for taxpayers.

Understanding ITR-3

What is ITR-3?

ITR-3 is an income tax return form primarily meant for individuals and Hindu Undivided Families (HUFs) who have income from profits and gains of business or profession. It is used to declare income earned from such sources and calculate the tax liability accordingly.

Who should file ITR-3?

Individuals and HUFs falling under the following criteria are required to file ITR-3:

Significance of Updated Excel Utility and Schema

The release of the updated Excel Utility and Schema holds significant importance for taxpayers, as it simplifies the process of filing returns and ensures compliance with the latest regulations set forth by the Income Tax Department.

Features of the Updated Excel Utility

The updated Excel Utility boasts several features aimed at enhancing user convenience and accuracy in filing tax returns:

Improved User Interface: The utility comes with a user-friendly interface, making it easier for taxpayers to input their financial data and navigate through various sections of the form.
Error Detection: It incorporates built-in error detection mechanisms to identify any discrepancies or missing information, thereby reducing the chances of filing incorrect returns.
Auto-Population of Data: Certain fields in the utility are auto-populated based on the information provided, minimizing manual data entry and saving time for taxpayers.

How to Use the Updated Excel Utility

Using the updated Excel Utility for filing ITR-3 is a straightforward process:

Download the Utility: Obtain the utility from the Income Tax Department's official website.
Enter Details: Fill in the required details accurately, ensuring all relevant information is provided.
Validate Data: Verify the data entered to ensure accuracy and completeness.
Save and Submit: Save the completed form and submit it electronically through the official portal.

Benefits of the Updated Schema

The updated Schema accompanying the Excel Utility offers the following benefits:

Important Dates to Remember

Taxpayers are advised to take note of the following important dates related to the updated Excel Utility and Schema:

Documents:

Utility Excel Based

Schema

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Taxpayers Get Choice in Valuing Startup Investments (Angel Tax)

editor — Mon, 15 Apr 2024 05:00:14 +0000

The Delhi High Court ruled in favor of taxpayers, allowing them to select the method for valuing investments received from angel investors. This comes after a disagreement between a company (Agra Portfolio) and the Income Tax Department (IT Department) regarding the valuation of shares issued to an angel investor.

What is Angel Tax?

Angel tax refers to the tax levied on the difference between the fair market value (FMV) of shares allotted to an angel investor and the amount the investor paid for them.

The Case:

Agra Portfolio used the Discounted Cash Flow (DCF) method to determine the FMV of the shares. DCF estimates an investment’s value by considering its projected future cash flows. The IT Department, however, rejected this valuation and used the Net Asset Value (NAV) method instead. NAV calculates the value per share by dividing the company’s net assets (assets minus liabilities) by the total number of shares.

Court’s Decision:

The Court clarified that while the IT Department can question a taxpayer’s valuation report, it cannot impose a different valuation method. The Court emphasized that the Income Tax Act and Rules grant taxpayers the sole authority to choose the valuation method.

The IT Department can still scrutinize the report and conduct its own valuation (using the taxpayer’s chosen method) to challenge the taxpayer’s assessment.

Outcome:

The Court ordered the IT Department to re-evaluate Agra Portfolio’s case using the DCF method as chosen by the company.

This decision offers greater flexibility to startups and investors when determining the FMV of shares for angel investments.

Source: https://www.thehindubusinessline.com/economy/angel-tax-valuation-method-solely-assessees-choice-says-delhi-hc/article68043342.ece

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Income Tax Department Cracks Down on Unfiled Returns: 1.52 Crore Individuals Targeted

editor — Mon, 15 Apr 2024 04:21:28 +0000

Large Discrepancy Between Taxpayers and Filed Returns

The Income Tax Department is launching a campaign to target individuals who haven’t filed their income tax returns (ITR) despite meeting filing requirements. According to a report in the Economic Times, the department has identified 1.52 crore such individuals.

Data Discrepancies Trigger Action

This initiative stems from a data analysis by the Central Board of Direct Taxes (CBDT) which revealed a significant gap between the total number of taxpayers (8.9 crore in financial year 2022-23) and the number of ITRs filed (7.4 crore, including revised returns). This suggests that potentially 1.97 crore individuals might not have filed their returns even though tax was deducted at source (TDS) from their income.

Focus on High-Value Transactions

The I-T Department is particularly interested in individuals with high bank transactions linked to their PAN cards. Officials will be contacting these individuals to explain the importance of filing ITRs. Additionally, the CBDT has identified nearly 9,000 potential taxpayers who might have made high-value purchases or cash deposits and will be sending them tax notices.

Consequences for Non-Compliance

Individuals who deliberately neglected to file returns will face penalties. However, those with genuine reasons for the sudden increase in income can submit an explanation or file a return to rectify the situation.

Data Analytics Boosts Tax Collection

The Income Tax Department’s access to a vast amount of data has proven instrumental in identifying non-filers and uncovering inconsistencies. This focus on data analysis is credited with contributing to a significant rise (19.88%) in net direct tax collection, exceeding ₹18.90 lakh crore as of March 17th.

Source: https://www.hindustantimes.com/business/it-department-to-tap-1-52-crore-individuals-for-income-tax-return-filing-heres-why-101713003056572.html

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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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GSTN Issues Important Advisory Regarding Reset and Re-filing of GSTR-3B for Certain Taxpayers

editor — Tue, 09 Apr 2024 12:06:19 +0000

The GSTN has released an important advisory, numbered 629 and dated April 9, 2024, regarding the reset and re-filing of GSTR-3B for specific taxpayers.

Referring to the option for re-filing GSTR-3B for certain taxpayers, it was observed that discrepancies existed between the saved data in the GST system and the data actually filed, particularly concerning ITC availment and tax liabilities. After thorough examination and discussion by the Grievance Redressal Committee of the GST Council, it was decided to reset these returns, providing affected taxpayers with an opportunity to rectify the discrepancies.

As a result, only the affected taxpayers have been notified via their registered email addresses, and the affected returns are accessible on their respective dashboards for re-filing with accurate data. Those who have received this communication are requested to visit their dashboard and re-submit their GSTR-3B within 15 days.

In case of any difficulty in re-filing, taxpayers are advised to contact their jurisdictional tax officer or raise a ticket on the GST grievance redressal portal.

We deeply regret any inconvenience caused to taxpayers.

The complete advisory can be found at: Link to Advisory

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CBDT Enables Filing of Commonly Used ITRs from April 01, 2024

editor — Fri, 05 Apr 2024 04:32:42 +0000

The Central Board of Direct Taxes (CBDT) has introduced the option for taxpayers to submit their Income Tax Returns (ITRs) for the Assessment Year 2024-25 (pertaining to the Financial Year 2023-24) starting from April 01, 2024. Essential ITR forms such as ITR-1, ITR-2, and ITR-4, commonly used by taxpayers, are now accessible on the e-filing portal for filing returns. Additionally, companies can utilize ITR-6 to file their returns starting April 1.

In preparation for this, CBDT had released notifications for various ITR forms in advance. ITR-1 and ITR-4 were notified on December 22, 2023, followed by ITR-6 on January 24, 2024, and ITR-2 on January 31, 2024.

To support e-Return Intermediaries (ERI), CBDT has provided the JSON Schema for ITR-1, ITR-2, ITR-4, and ITR-6, along with the Schema of Tax Audit Reports for A.Y. 2024-25, which are accessible in the downloads section of the e-filing portal.

Thus, taxpayers are now able to file ITR-1, ITR-2, ITR-4, and ITR-6 for A.Y. 2024-2025 on the e-filing portal from April 01, 2024. As of now, approximately 23,000 ITRs for A.Y. 2024-25 have already been submitted. The option to file ITRs 3, 5, and 7 will be provided soon.

This marks a significant milestone as taxpayers can now file their returns on the very first day of the new financial year, demonstrating the Income Tax department’s commitment to enhancing compliance and providing efficient taxpayer services.

For accessing the Income Tax Returns website landing page, visit: eportal.incometax.gov.in/iec/foservices/#/login

For more details, refer to the Press Release: www.pib.gov.in/PressReleasePage.aspx?PRID=2017196

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