Impact of Late Filing of Income Tax Return

Every Individual whose income exceeds maximum taxable limit is required to file Income tax Return on or before the due date.

Due date for Individuals getting salary and who are running their own business or profession or working as free lancer are required to file tax return on or before 31st July, every year.

In case of Individuals who are required to get their books audited and Companies, the last date for filing return is 30th September

Have you missed the tax filing deadline of 31st July, Don't worry, you can file returns till 31st March.

The last-minute rush of filing tax returns is over. Most people manage to file their Tax returns on time. Yet, there are some who, for one or the other reason, fail to do so. If you are among the latter, You can still file your returns and chances are you won't have to pay a penalty.

The return for income earned in the financial year ending on 31 March should ideally be filed by 31 July for non-business taxpayers. But if the taxpayer has missed the deadline in spite of having four months in hand, he can do so till 31 March.

In such a case, the penalty to be levied would depend on the status of the tax to be paid.

If Income tax is already paid either as advance tax or TDS

If you have paid your taxes as advance tax or TDS ( Tax Deducted at Source)has already been deducted then, you don't have worry to because you can file the tax returns before 31 March without paying a penalty.

But if you miss the new deadline and file the return only after 31 March, the assessing officer may impose a penalty of Rs 5,000 for late filing of return. This amount may depend however depend on the discretion of the assessing officer.

So it is advisable not to delay filing your Tax Return and file it before 31st March.

If tax has not been paid or short paid

If you have not cleared the taxes due or you have short paid your Income tax then, you will have to pay a penalty at the rate of 1% per month for the period after 31 July. If the tax due is more than Rs 10,000, you are supposed to pay an advance tax on your income in three tranches. In such a case, the 1% penalty per month will be applicable from the period you have not paid the tranche.

Is E filing of Income tax Return Compulsory.

E-filing of tax return is compulsory for all tax payers whose taxable Income Exceeds Rs 10,00,000/- (Ten lacs).

Contact us now to file your Income Tax Return

Section 80CCG – Rajiv Gandhi Equity Savings Scheme (RGESS)

Rajiv Gandhi Equity Saving scheme was introduced in the budget (2012-13) this year by the Finance Minister.

This scheme allows the retail investor to invest upto Rs.50, 000 directly into equity shares and avail tax benefit on 50% percent of investment made directly into equity shares.

Some of the conditions put under the scheme to avail tax benefits are:-

1) The benefit under the scheme will be given to the first time retail investors . This includes those who have opened the Demat Account but have not made any transaction in equity and /or in derivatives till the date of notification of this Scheme and all those account holders other than the first account holder who wish to open a fresh account.

2) The investor should have income of less than Rs. 10 lakhs in a year.

3) Investments will be subject to lock-in period of three years.

4) The maximum Investment permissible under the Scheme is Rs. 50,000 and the investor would get a 50% deduction of the amount invested from the taxable income for that year.

5) If the assessee has claimed and has been allowed a deduction under this section for any assessment year in respect of any amount, he shall not be allowed any deduction under this section for any subsequent assessment year.

6) Under the Scheme, following investment are eligible for income tax benefit

a) Stocks listed under the BSE 100 or CNX 100,

b) Stocks of public sector undertakings which are Navratnas, Maharatnas and Miniratnas would be eligible.

c) Follow-on Public Offers (FPOs) of the above companies would also be eligible under the Scheme.

d) IPOs of PSUs, which are getting listed in the relevant financial year and whose annual turnover is not less than Rs. 4000 Crore for each of the immediate past three years, would also be eligible.

e) Exchange Traded Funds (ETFs) and

f) Mutual Funds (MFs) that have RGESS eligible securities as their underlying and are listed and traded in the stock exchanges and settled through a depository mechanism have also been brought under RGESS.

7) The total lock-in period for investments under the Scheme is three years including an initial blanket lock-in period of one year, commencing from the date of last purchase of securities under RGESS.

8 ) After the first year, investors would be allowed to trade in the securities in furtherance of the goal of promoting an equity culture and as a provision to protect them from adverse market movements or stock specific risks as well as to give them avenues to realize profits.

9)  Investors would, however, be required to maintain their level of investment during these two years at the amount for which they have claimed income tax benefit or at the value of the portfolio before initiating a sale transaction, whichever is less, for at least 270 days in a year. The calculation of 270 days includes those days pursuant to the day on which the market value of the residual shares /units has automatically touched the stipulated value after the date of debit.

10)  The general principle under which trading is allowed is that whatever is the value of stocks / units sold by the investor from the RGESS portfolio, RGESS compliant securities of at least the same value are credited back into the account subsequently. However, the investor is allowed to take benefits of the appreciation of his RGESS portfolio, provided its value, as on the previous day of trading, remains above the investment for which they have claimed income tax benefit.

11) For the purpose of valuation of shares, the closing price as on the previous day of the date of trading will be considered so that new investors are certain about their debits and credits into the account.

12) In case the investor fails to meet the conditions stipulated, the tax benefit under section 80 CCG will be withdrawn.

TDS & Tax Rate on Interest Income of Non-Resident redued to 5% from 20%

TDS & Tax Rate on Interest Income of Non-Resident redued to 5% from 20%

Interest Income of a Non-Resident Investor to be taxed at the reduced rate of 5 per cent instead of the existing rate of 20 per cent and withhold Tax on such Income to be also at the Reduced Rate of 5 per cent

CBDT CLARIFICATION :DUE DATE EXTENDED FOR ALL ASSESSEE to 31.08.2012

PRESS RELEASE [No. 402/92/2006-MC (20 of 2012)], dated 1-8-2012

A section of Media has reported that the Central Board of Direct Taxes has extended ‘due date’ of filing of returns to 31st August, 2012 in respect of only those returns which were to be e-filed by 31st July, 2012. It is clarified that the notification issued by the Board on 31st July, 2012 has extended the ‘due date’ of filing of all returns for the Assessment Year 2012-13 which were due to be filed by 31st July, 2012 to 31st August, 2012.

Yesterday CBDT issued a Notification regarding extension of due date which creates confusion among General public....

.....On consideration of the reports of disturbance of general life caused due to failure of power and further in consideration of the fact that the e-filing of returns for a specified category of individuals and HUF has been made mandatory, the Central Board of Direct Taxes, in exercise of powers conferred under section 119 of the Income Tax Act, 1961, hereby extends the ‘due date’ of filing of returns of income for the Assessment Year 2012-13 to 31st August 2012 in respect of assessees who are liable to file such returns by 31st July 2012 as per provisions of section 139 of Income Tax Act, 1961.

http://taxgyan.in/cbdt-clarification-due-date-extended-for-all-assessee-to-31-08-2012/

TDS Claim without verification- new TDS Rule from may 12

Income tax department issued new rules about tax deduction at source. In these rules the main attraction is if the difference between TDS claim and matching tds in form 26AS is less than 5000 rupees, the TDS claim will be accepted without any verification. Income tax department issued instruction no. 4 dated 25-05-2012 about these new rules. Full instruction is as follows.


SECTION 143 OF THE INCOME-TAX ACT, 1961 - ASSESSMENT - GENERAL - PROCESSING OF RETURNS OF A.Y. 2011-12 - STEPS TO CLEAR BACKLOG - WITHDRAWAL OF INSTRUCTION NO. 1/2012, DATED 2-2-2012INSTRUCTION NO. 4/2012 [F. NO. 225/34/2011-ITA.II], DATED 25-5-2012

The Board has decided to withdraw Instruction no. 01/2012 issued on 2nd February, 2012 on the subject above with immediate effect. The following decisions have been taken in this regard:

 (i)  In all returns (ITR-1 to ITR-6), where the difference between the TDS claim and matching TDS amount reported in AS-26 data does not exceed Rs. Five thousands, the TDS claim may be accepted without verification.
(ii)  Where there is zero TDS matching, TDS credit shall be allowed only after due verification.
(iii)  Where there are TDS claims with invalid TAN, the TDS credit for such claims is not to be allowed.
(iv)  In all other cases TDS credit shall be allowed after due verification

For more details visit http://www.incometaxreturnindia.in/
Fike your income tax return with http://www.incometaxreturnindia.in/

NRE vs NRO Account

Key difference of NRE (Non Resident External Rupee acocunt) and NRO (Non Residents Ordinary Account )maintained with banks is:

	NRE Account		NRO Account
	Can be credited with foreign currency earnings from overseas.		Can be credited with foreign currency earnings from overseas and INR earnings in India.
	Account maintained in Indian Rupees.		Account maintained in Indian Rupees.
	Withdrawals in Indian Rupees and Foreign Currency.		Withdrawals in Indian Rupees only.
	4% p.a. Interest Rate.		4% p.a. Interest Rate.
	Exempt from tax in India.		30% tax deducted at source on interest earned.
	Principal: Freely repatriable. Interest earned: Freely repatriable.		Principal: Not repatriable. Interest earned: Repatriable after tax deduction. Repatriation of up to $ 1 million per financial year, as per RBI provisions.
	Joint A/C holder has to be an NRI.		Joint A/C holder may be a Resident Indian or an NRI.
	Family member resident in India can be authorized to operate the account. ATM Card for both NRI and Mandate holder.		Family member resident in India can be authorized to operate the account. ATM Card for both NRI and Mandate holder.
	Allows NRIs easy flexibility of transferring funds from overseas into India and then transferring them back from India to abroad with ease.		Allows an NRI to manage income earned in India. (Local income like Rent, Property Sale, Inheritance, etc.).

NRI's file your income tax return with http://www.incomtaxreturnindia.in/

Income Tax Rates

Assessment Year 2012-13 (Previous year 2011-12)

	Income Tax Rates/Slab for Assessment Year 2012-13 (F Y 2011-12) Rate(%age) Up to 1,80,000 Up to 1,90,000 (for women) Up to 2,50,000 (for resident individual of 65 years till 80 years) NIL 1,80,001 – 5,00,000 Up to 500,000 (for resident individual of 80 years and above, Tax is nil) 10 Nil 5,00,001 – 8,00,000 20 8,00,001 upwards 30

	Income Tax Rates/Slab for Assessment Year 2012-13 (F Y 2011-12) Rate(%age) Up to 1,80,000 Up to 1,90,000 (for women) Up to 2,50,000 (for resident individual of 65 years till 80 years) NIL 1,80,001 – 5,00,000 Up to 500,000 (for resident individual of 80 years and above, Tax is nil) 10 Nil 5,00,001 – 8,00,000 20 8,00,001 upwards 30

efiling is now compulsory for Individual if Income exceeds Rs 10 lakh

e-Filing has been made compulsory for the person

1) who is an Individual or
2) a Hindu Undivided Family,
3) if his or its total income, or the total income in respect of which he is or it is assessable under the Act during the previous year, exceeds ten lakh rupees
4) for AY 2012-13 onwards.

E-filing for such individuals was optional till 2010-11.

The department had received a record number of 1.64 crore e-returns in the 2011-12 financial year.
“We have done it to encourage people to go for e-filing of returns. This makes the entire process faster.

However, the digital signature is not mandatory for them,” a finance ministry official said.

Currently business houses with receipts of Rs. 60 lakh and professionals with income of Rs. 15 lakh are mandatorily required to e-file their return with digital signature.

As on March 31, 2012, there were 19,684,592 tax payers who had registered for e-filing.

RBI ask banks to allow customers intra-bank account portability

@Banks are advised that KYC once done by one branch of the bank should be valid for transfer of the account within the bank as long as full KYC has been done for the concerned account,” RBI said in anotification

What does it mean for bank customers:

1) The facility would enable the customers to shift their account to any of the desired branch any number of times, without any change in the account number.

2) KYC submitted earlier would be valid for another branch.

3) No need to re-submit KYC details again to new branch.

4) Currently these instructions are valid for same bank  ie if you are having bank account in Icici bank in delhi and is now transferred to  Banglore , Then previous banglore Icici bank was asking to open a new acccount with their Banlgore branch.

Now the same account can be continued in banglore branch.

There is no need to open new bank account.

Visit http://www.incometaxreturnindia.in/ for more details

CC/DDs /Cheques validity being reduced from 6 to 3 months.

As per the new RBI guideline effective 1st April 2012,  CC/DDs /Cheques  validity being reduced from 6 to 3 months. Please note

- Cheques / Demand Drafts / Pay Orders dated April 01,2012 or after, if presented on or after April 01, 2012 will be valid only for three months from the date on the instrument.

- Cheques / Demand Drafts / Pay Orders issued and dated on or before March 31,2012 shall continue to be valid for six months from the date on the instrument.

 

LIC Jeevan Vriddhi new single premium plan

LIC Jeevan Vriddhi Insurance Plan is a single premium plan wherein the risk cover is a multiple of premium chosen by you. On maturity this plan offers a Guaranteed Maturity Sum Assured and Loyalty Addition, if any.
Jeevan Vriddhi combines a risk cover (five times the premium), tax benefits under Sec 80C, guaranteed maturity amount, one time payment, liquidity (loans available after 1 year) and also tax free maturity amount. And not to forget a possible return of 12% over the 10 year term
Key Features of LIC Vriddhi Insurance Plan:
1) This is Single Premium Plan. No need to worry about paying premium every year.
2) Benefit is enjoyed by policy holder for 10 years.
3) In case of death of the Life Insured within the policy tenure, Sum Assured is 5 times the premium paid.
4) On policy Maturity, Guaranteed Maturity sum is assured (approx double the premium paid).
5) Loan Upto 90% of premium paid is available
6) Higher Return of upto 12% over 10 year term


visit here for more details

Service tax rate raised from 10% to 12%

Indirect Taxes:


1. Standard rate of excise duty to be raised from 10% to 12%, merit rate from 5% to 6% and the lower merit rate from 1% to 2% with few exemptions.
2. Excise duty on large cars also proposed to be enhanced.
3. Service tax rate raised from 10% to 12%




http://incometaxreturnindia.in/Highlights-of-Budget-2012.htm

Rajiv Gandhi Equity Saving Scheme

New Investment upto Rs 50,000 in equity.


Rajiv Gandhi Equity Saving Scheme to allow for income tax deduction of 50% to new retail investors (whose annual Income is below Rs 10 lakh), who invest upto Rs 50,000 directly in equities. The scheme will have a lock-in period of 3 years


Other highlights of Income Tax (Direct Tax) visit here

Income Tax Rates 2012

http://incometaxreturnindia.in/Income_tax_rates_2013_2014.htm

Income Tax Rates/Slab for Assessment Year 2013-14 (Previous Year 2012-13)	Rate(%age)
Up to 2,00,000 Up to 2,00,000 (for women) Up to 2,500,000 (for resident individual of 60 years till 80 years)	NIL
200,001 – 5,00,000Up to 500,000 (for resident individual of 80 years and above, Tax is nil)	10Nil
5,00,001 – 10,00,000	20
10,00,001 upwards	30

Highlights of Budget 2012.htm

Here are some of the salient features and highlights of the Budget 2012: 1. Direct Taxes: A) Income Tax Rates/ Income Tax Slab -20121. Exemption limit for the general category of individual taxpayers proposed to be enhanced from Rs 1,80,000 to Rs 2,00,000. 2. Upper limit of 20% tax slab proposed to be raised from Rs 8 lakh to Rs 10 lakh. 3.Proposed to allow individual tax payers, a deduction of upto Rs 10,000 for interest from savings bank accounts. 4. Senior citizens not having income from business proposed to be exempted from payment  of advance tax.

http://incometaxreturnindia.in/Highlights-of-Budget-2012.htm

HRA Calculator

Download HRA calculator here

LIC Jeevan Vriddhi Queries

Should I opt for the policy?                                          
Reply:  Yes, because of
a) the high return this policy offer.
b) tax free return 
Scenario 1: If you are in 30% tax slab and you invest Rs 1,00,000/- in this plan:
You will save Rs 30,000/- as Income tax benefit. So your net investment becomes Rs 70,000/- and on which you are getting Rs 2,21,651 which is 100% Income tax free so the net yield in this plan is more than 12%.
Scenario 2: If you are in 30% tax slab and your Rs 1 lac limit of secton 80 C is  already used:
It is great investment for you, as you have already invested in banks where you have to pay the Income taxes on maturity @30% (Rs 121651 @ 30% = 36495 goes in taxes ) but here in LIC JEEVAN VRIDDHI you are not taxed at all so still it is a good investment. 
   
 _______________________________________________________________________
How is it better than NSC and Fixed Deposit ?                Gaurav Chadha, Delhi
Reply :   If you had invested NSC, Fixed deposits,etc, Income tax is required to be paid.
Say if you invested Rs 1,00,000 in NSC or Fixed deposit, then you are required to  pay Income tax of Rs 30,000/-,
But In Jeevan Vriddhi, You don't have to pay any Income tax  
 _______________________________________________________________________
  
How is it better than Mutual Funds?                                                 Shriya, Delhi
Reply:  Mutual are subject to market risk, You dont know that Rs 100,000 you had invested will even give you back your Principal amount. Forget about interest part.
But Jeevan Vriddhi, is Guaranteed Plan. Total amount you can expect after 10 years would be double the amount you had invested ( inclusive of Guaranteed amount + loyality bonus)
   

Highlights of Jeevan Vriddhi New Single Premium Plan

LIC Jeevan Vriddhi Insurance Plan is a single premium plan wherein the risk cover is a multiple of premium chosen by you. On maturity this plan offers a Guaranteed Maturity Sum Assured and Loyalty Addition, if any.

Jeevan Vriddhi combines a risk cover (five times the premium ), tax benefits under Sec 80C, guaranteed maturity amount, one time payment, liquidity (loans available after 1 year) and also tax free maturity amount. And not to forget a possible return of 12% over the 10 year term

Key Features of LIC Vriddhi Insurance Plan:
1) This is Single Premium Plan. No need to worry about paying premium every year.
2) Benefit is enjoyed by policy holder for 10 years.
3) In case of death of the Life Insured within the policy tenure, Sum Assured is 5 times the premium paid.
4) On policy Maturity, Guaranteed Maturity sum is assured (approx double the premium paid).
5) Loan Upto 90% of premium paid is available
6) Higher Return of upto 12% over 10 year term

For More details visit here

Direct Tax Code (DTC) : The tax rates and slabs have been modified.

Direct Tax Code (DTC) : The tax rates and slabs have been modified. The proposed rates and slabs are as follows: 
Annual Income Tax Slab

... Up-to INR 200,000 (for senior citizens 250,000)                                                     Nil

Between INR 200,000 to 500,000                                                                              10%

Between INR 500,000 to 1,000,000                                                                          20%

Above INR 1,000,00                                                                                                    30%


http://incometaxreturnindia.in/New_Indian_Direct_Tax_Code_DTC_2010.htm

Exemption from filing of Income-tax return

Individual whose total income for the relevant assessment year does not exceed five lakh rupees and consists of only income chargeable to income-tax under the following head is exept from filing Income tax return.

NOTIFICATION NO

9/2012, Dated: February 17, 2012

In exercise of the power conferred by sub-section (IC) of section 139 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby exempts the following class of persons, subject to the conditions specified hereinafter, from the requirement of furnishing a return of income under sub-section (1) of section 139 for the assessment year 2012-13, namely:-

1. Class of persons.- An Individual whose total income for the relevant assessment year does not exceed five lakh rupees and consists of only income chargeable to income-tax under the following head,-

(A) “Salaries”;

(B) “Income from other sources”, by way of interest from a saving account in a bank, not exceeding ten thousand rupees.

2. Conditions,- The individual referred to in para 1,-

i) has reported to his employer his permanent Account Number (PAN);

ii) has reported to his employer, the incomes mentioned in sub-para (B) of para I and the employer has deducted the tax thereon;

iii) has received a certificate to of tax deduction in Form 16 from his employer which mentions the PAN, details of income and the tax deducted at source and deposited to the credit of the Central Government;

iv) has discharged his total tax liability for the assessment year through tax deduction at source and its deposit by the employer to the Central Government;

v) has no claim of refund of taxes due to him for the income of the assessment year, and

vi) has received salary from only one employer for the assessment year.

3. The exemption from the requirement of furnishing a return of income tax shall not be available where a notice under section 142 (1) or section 148 or section 153A or section 153C of the incometax Act has been issued for filing a return of income for the relevant assessment year.

4. This notification shall come into force from the date its publication in the Official Gazette.

F.No.225/283/2011-ITA (II)

(Ajay Goyal)
Director (ITA-II

Highlights of Direct Tax Code (DTC) : IncomeTaxReturnIndia. in

Income Tax Act will be replaced by Direct Tax Code: Highlights of The Direct Tax Code are given here


http://incometaxreturnindia.in/New_Indian_Direct_Tax_Code_DTC_2010.htm

LIC Jeevan Ankur Plan

LIC Jeevan Ankur Plan is a Traditional Plan with profits. This is a child benefit Endowment Plan where the parent is the Life Insured and the child is the nominee. This plan has been especially designed so that the benefits are payable for the child’s future even if the parent does not survive till the end of the policy tenure

Key Feature of LIC Jeevan Ankur
1) Here the Parent is Life Assured, compared to other Children plan the Child is life Assured
2) This is a endowment plan with Loyalty Additions
3) In case of death of the Life Insured within the policy tenure, Sum Assured is paid immediately and 10% of the Sum Assured is paid every year till the end of the Policy Tenure as Income benefit facility
4) When the policy matures, the Maturity Benefit is paid irrespective of whether the Life Insured is alive or not.
5) This policy offers Loyalty additions on the policy maturity irrespective of whether the Life Insured is alive or not.
6) You can take 3 Different Rider (Accident, Critical Illness, And Premium Wavier)
7) There is large Sum Assured rebate in this plan
8) The premium is little high compared for a traditional Life Plan. For a person aged 35 if he take policy for 25 years for sum insured for Rs 1,00,000/-, Premiumis is only Rs 358/-+ service tax

Benefits you get from LIC Jeevan Ankur Plan

Death Benefit – In case of death of the Life Insured, i.e. the Parent, immediate Death Benefit of the Sum Assured is paid to the nominee + 10% of Sum Assured is also paid on every policy anniversary till the end of the policy term as Income Benefit

Maturity Benefit – When the policy matures, the Maturity Benefit is paid irrespective of whether the Life Insured is alive or not.
Maturity Benefit = Basic Sum Assured + Loyalty Additions, if any.

Income Tax Benefit - Life Insurance premiums paid up to Rs. 1,00,000 are allowed as a deduction from the taxable income each year under section 80C. The maturity benefit is tax free under section 10(10)D provided all conditions have been fulfilled.



Should you opt for the policy?Yes, because of the high risk, rider options to avail and the death benefit for the Life assured it is a good plan.

What about komal Jeevan and Jeevan Chaya plans?Komal Jeevan is a Money Back policy for children, comparing to Jeevan Ankur, Jeevan Ankur is better to the High Risk and the parent being Life Insured.
For Jeevan Chayya and Jeevan Kishore, the risk is started little later. Even the death benefit is not good as compared to Jeevan Ankur. Also, the option for adding 3 riders, none of the plans have.
Jeevan Ankur policy will never terminate if 3 years of Premium has been paid. Only the Sum Assured will reduce so you basically do not lose your money and yet the cover exists.

For more details call us at 9810150489 or visit http://www.insuranceindiamart.com/

Deduction for HRA allowed upto 50% for metro cities

You can save upto 50% of your salary if you reside in Metro (40% of your salary if you reside in non-metro).

Cities Like, Delhi, Mumbai, Chennai and Kolkata constitutes Metro.

Cities like Bangalore, Gurgaon, Faridabad, Hyderabad, Pune, Ahmedabad etc would constitutes as Non metro and only 40% deduction will be allowed.