Finance Minister Nirmala Sitharaman on Saturday directed the Goods & Services Tax (GST) organization to hold a special filing demonstration session for new return framework. This activity is expected to get the input before the new documenting system becomes effective from April 1, 2020.
As per the law it is mandatory to file return either on monthly or quarterly basis, based on their turnover.
The Finance Minister met tax assesses in five group to discuss and find ways to further simplify GST forms and make the existing filling process (GSTR 1, GSTR 3B, GSTR 9, GSTR 9c etc) more user friendly. Five bodies demonstrated in real time before the Finance Minister and Senior GST and GSTN officials, the various issues encountered during filling GST forms.
However, there are issues related to certain entries where some amendments have been made, issue of credit note or debit note, matching of input tax credit (ITC) for buyer filing monthly return and seller filing quarterly return and demand to produce physical invoice by tax officials even details mentioned in GST Return Form 2A. There was also a suggestion to further ease co-relation of various forms.
The activities would assist organizations with getting ITC benefits with no problems.
70.22 per cent of the assessees, having an annual turnover of less than ?5 crore and engaged in B2C (business to consumer), B2B (business to business) as well as reverse charge mechanism-based supply activities can opt for quarterly filing of return. This form is called ‘SUGAM’ (RET-3). This is according to the turnover-wise distribution based on GSTR 3B (existing return form) filed during 2018-19.
About 28 per cent of the assessees, with an annual turnover of less than ?5 crore and are engaged in B2C as well as reverse charge-based supply activities. They can opt for ‘SAHAJ’ form (RET-2). All other assessees (engaged in foreign trade or SEZ-based activities) will have to file RET-1. They will be required to file the returns on a quarterly basis but payment of tax dues on monthly basis through a form called PMT-08.
Over 7 per cent assessees with annual turnover of more than ?5 crore. They will have to file the return on a monthly basis through RET-1. These assessees are a small in number, but in terms of overall tax payment they contribute nearly 85 per cent. Under the new system, these assessees will have to file their returns by the 20th of the next month, which means a majority of the collection will be with the Government by that date. For other assessees, the filing date is the 25th of next month.
Under the present framework, one can display two unique figures in GSTR 1 (showing liability) and GSTR 3 B (showing tax payment) as they are not linked automatically. Thus, one could show higher liability,claim higher input tax credit and pay less tax. In any case, this will be not be possible under new system.Through the RET-1/2/3, the taxpayer pays the auto-populated risk (from ANX-1) by using money and ITC (auto-populated through ANX-2) both. Additionally, only the creator of the form will be able to amend the details.
The role of the Company Secretaries as governance enablers in the Indian corporate scenario has been well acknowledged, both by the corporates and the Regulators. Company Secretaries, both in employment and in practice have distinct roles to play as far as the governance framework of the Indian corporate arena is concerned.
The ICSI has been upfront about bringing about good governance and strengthening the existing framework. In an attempt to imbibe and to reinstate our commitment towards our vision and mission and to bring about a culture of transparency and accountability amongst our members, the Institute has brought forth the ICSI UDIN and eCSIN Guidelines.
UDIN - Unique Document Identification Number (UDIN), as the name suggests, is an identification number that is generated for every document certified/attested by a Practicing Chartered Accountants.
eCSin - The Employee Company Secretary Identification Number as governed by the eCSin Guidelines shall enable the Institute to identify the appointments and cessations of Company Secretaries. eCSin is a system-generated unique number for identification of the Company Secretaries employed in a particular company which shall be generated by the Company Secretary at the time of employment as a Company Secretary (KMP or otherwise), as well as at the time of demitting office in any manner.
Queries regarding eCSin may be sent to firstname.lastname@example.org
Both the Guidelines have been made mandatory by the Council of ICSI w.e.f. 1st October, 2019 and we are confident that the same shall undeniably provide the benefit of verification of the authenticity of both documents and the professionals to the Regulatory Bodies and other stakeholders as well.
Section 194N is applicable in case of cash withdrawals of more than Rs 1 crore during a financial year. This section will apply to all the sum of money or an aggregate of sums withdrawn from a particular payer in a financial year.
The section will apply to withdrawals made by any taxpayer including:
A Hindu Undivided Family (HUF)
A partnership firm or an LLP
A local authority
An Association of Person (AOPs) or Body of Individuals (BOIs)
The following payers are covered under this section:
Any bank (private or public sector)
A co-operative bank
A post office
The tax will be deducted by the payer while making payment to any individual in cash from a taxpayer’s bank account on the amount in excess of Rs 1 crore.
The limit of Rs 1 crore will be applicable to the cash payments/withdrawals made during the FY 2019-20. The provisions of Section 194N will be applied to the payments made on or after 1 September 2019.
The person (payer) making the cash payment will have to deduct TDS under Section 194N. Here is the list of such persons:
Any bank (private or public sector)
A co-operative bank
A post office
There are certain categories of person (payee) to whom the provision of this section will not apply. They are listed below:
Any government body
Any bank including co-operative banks
Any business correspondent of a banking company
Any white label ATM operator of any bank
TDS will be deducted by the payer while making the cash payment over and above Rs 1 crore in a financial year to the payee. If the payee withdraws a sum of money on regular intervals, the payer will have to deduct TDS from the amount, once the total sum withdrawn exceeds Rs 1 crore in a financial year. Further, the TDS will be done on the amount exceeding Rs 1 crore. For example, if a person withdraws Rs 99 lakh in the aggregate in the financial year and in the next withdrawal, an amount of Rs 1,50,000 is withdrawn, the TDS liability is only on the excess amount of Rs 50,000.
The payer will have to deduct TDS at the rate of 2% on the cash payments/withdrawals of more than Rs 1 crore in a financial year under Section 194N. Thus, in the above example, TDS would be on Rs 50,000 at 2% i.e. Rs 1,000.
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What is form 15G?
Form 15G or 15H has to be submitted by fixed deposit holders at the start of a financial year to the relevant financial entity like a bank. This is done to avoid on the interest income earned.
Who can submit form 15G?
Banks usually deduct TDS from the interest income on FDs if it crosses the threshold limit.
Form 15G is submitted by a resident individual whose age is below 60 years of age during the year as mentioned in the form.
Form 15H is submitted by a resident individual whose age is 60 years and above, that is, senior citizens and super senior citizens.
Conditions to fulfill before submitting Form 15G
One must fulfill the following eligibility criteria to submit Form 15G:
You are an individual or a person (other than a company or a firm).
You must be a resident Indian for the applicable FY
Your age should not be more than 60 years
Tax liability calculated on the total taxable income for the FY is zero
Your total interest income for the financial year is less than the basic exemption limit.
Instructions to fill out Form 15G
Form 15G has two sections. First part is for the individual who wants to claim no-deduction of TDS on certain incomes. The following are the key details you need to fill out in the first portion of Form 15G:
Name as mentioned on your PAN Card.
Permanent Account Number. Valid PAN card is mandatory to file Form 15G. If you fail to furnish valid PAN details, your declaration will be treated as invalid.
Declaration in Form 15G can be furnished by an individual but not by a firm or company.
The previous year has to be selected as the financial year for which you are claiming non-deduction of TDS.
Mention your residential status as a resident individual because NRI are not allowed to submit Form 15G.
Mention your communication address correctly along with PIN code.
Provide valid email ID and contact number for further communications.
Tick mark ‘’Yes’’, if you were assessed to tax under the provisions of Income Tax Act, 1961 for any of the previous assessment years.
Mention the latest assessment year for which your returns were assessed.
Estimated income for which you are making declaration needs to be mentioned
Total estimated income for the financial year (which includes all the income)
If you have already filed Form 15G anytime during the financial year, then the details of the previous declaration along with an aggregate amount of income need to be mentioned in the present declaration.
Last part of section 1 talks about the investment details for which you are filing declaration. You need to furnish the investment account number (term deposit/ life insurance policy number/ employee code etc)
After filling the entire field, re-check all the details to ensure there is no error. The second part of Form 15G is to be filled out by the deductor i.e. the person who is going to deposit the tax deducted at source to the government on behalf of the tax assessee.
What if I forget to submit Form 15G?
In case you forget to submit Form 15G on time and TDS has already been deducted, here’s what you can do:
Option 1: Claim your TDS refund by filing income tax return.
Option 2: Immediately submit Form 15G to avoid further deductions for the current financial year.
Penalty for Submitting False Declaration using Form 15G
Providing a false declaration in Form 15G just to avoid TDS can lead to fine and even imprisonment under Section 277 of the Income Tax Act, 1961. The following are the details of punishments u/s 277 of the IT Act, 1961.
Imprisonment for a period of 6 months to 7 years if the wrong declaration was provided to evade tax of more than Rs. 1 lakh
For all other cases, imprisonment between 3 months to 3 years.
Seamless flow of input tax credit was the core purpose of the GST law after subsuming all the indirect taxes. Here, the admissibility of credit on motor vehicles has emerged as the burning issue and still in infant stage §ng there is diversity in the provision of the law and the decision being given by Authority for Advance Rulings.
The relevant provision related to the issue under consideration is as under
"Section 17 - Apportionment of credit and blocked credits.
(5) Notwithstanding anything contained in sub-section (1) of section 16 and sub-section (1) of section 18, input tax credit shall not be Unavailable in respect of the following, namely:
[(a) motor vehicles for transportation of persons having approved seating capacity of not more than thirteen persons (including the driver), except when they are used for making the following taxable supplies, namely
1. further supply of such motor vehicles; or
2. transportation of passengers; or
3. imparting training on driving such motor vehicles
(aa) vessels and aircraft, except when they are used -
1. for making the following taxable supplies, namely
further supply of such vessels or aircraft; or
transportation of passengers; or
imparting training on navigating such vessels; or
imparting training on flying such aircraft;
2. for transportation of goods;
(ab) services of general insurance, servicing, repair and maintenance in so far as they relate to motor vehicles, vessels or aircraft referred to in clause (a) or clause (aa):
Provided that the input tax credit in respect of such services shall be available --
(i) where the motor vehicles, vessels or aircraft referred to in clause (a) or clause (aa) are used for the purposes specified therein;
(ii) where received by a taxable person engaged —
in the manufacture of such motor vehicles, vessels or aircraft; or
in the supply of general insurance services in respect of such motor vehicles, vessels or aircraft insured by him;"
The assessee was engaged in supplying cabs on rental basis for the purpose of transportation of passengers. It was further submitted that as people take the car on rent for the transportation of
passengers, therefore, the services though claimed as "rent-a-cab" services but it is closely and essentially associated with transportation of passengers and hence, on reading of the provision as cited above the credit of tax paid on the purchase of motor vehicles is admissible to it
While discussing the matter, it was stated by the Authority for Advance Rulings that the GST Act has been amended with effect from 1-2- 2019 and before amendment the provisions of section 17(5)(b)(iii) of the Act did not allow credit of GST paid on inputs for supply of rent-a-cab service, except under certain specific conditions that are not applicable in the this case. It ruled out credit of input tax paid on the purchase of motor vehicles used for supply of rent-a-cab service if the transaction was effected before 1-2-2019
It further stated that the amended provisions of section 17(5)(b)(iii) of the GST Act do not contain reference to the rent-a-cab service. However, post-amendment, input tax credit shall not be available in respect of supply of the service of renting or hiring of motor vehicles in terms of section 17(5)(b)(i) of the GST Act, unless the inward and the outward supplies are of the same category, standalone or as an element of a taxable composite or mixed supply. Further, section 17(5)(a) of the Act provides that input tax credit shall not be available on inward supply of motor vehicles for transportation of persons having approved seating capacity of not more than thirteen persons (including the driver), except when they are used for making the following taxable supplies, namely -
1. a further supply of such motor vehicles; or
2. transportation of passengers: or
3. imparting training on driving such motor vehicles.
It was further discussed that "rent-a-cab" is not defined in the GST Act and therefore, the nature of services has to be identified from the invoices and the related facts. The assessee provides cab rental service to various institutions and in no case such services provided to institutions can fall under "passenger transportation services". From the facts, it was further’ inferred that the service receiver has to pay the assessee a certain amount per month as consideration, irrespective of what distance the cab travels in a particular month. Additional amount has to be paid if the cab is retained for extra hours or requisitioned on holidays. For the purpose of covering the cost of fuel, the distance travelled needs to be brought into play, but only if it crosses a certain threshold.
It is, therefore, clear from the above discussion that the nature of the service the assessee provides is classifiable under SAC 9966 as renting of a motor vehicle.
In view of-the facts and the legal provisions stated above, it was held by the Authority for Advance Rulings that the credit of GST paid on purchase of motor vehicles or other inputs for the supply of the "rent-a- cab" service is not admissible.
With due respect, the author of this article differs with the decision passed by the Authority for Advance Rulings in the above-mentioned case. The author wishes to throw light on the provision mentioned in section 17(5)(a)(A) of the CGST Act, 2017, wherein it was said that the credit of tax paid on motor vehicles is admissible where it is used for further supply of such motor vehicle. As the words highlight, it is very clear that the credit of tax paid on motor vehicle is admissible if the same is used in further supply. It is worthwhile to note that the term "supply" has its significance and from reading the meaning of supply as given to it in section 7 of the CGST Act, 2017, it is very widely interpreted to include all sorts of supply, service or sale including renting, leasing, etc.
Thus, where "rent-a-cab" is included in the meaning of the term "supply", and renting of motor vehicles is the further supply of such motor vehicles, hence, the conditions mentioned in section 17 are fulfilled in favour of admissibility of input tax credit to the assessee of tax paid on such motor vehicles. Hence, the above decision needs reconsideration in light of the provisions cited above.
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Income tax is applicable for people who make their ends meet through their pension. A pension is a regular payment made by the state to people of or above the official retirement age and to some widows and disabled people. Also, if a salaried individual is retired from employment, typically because of age or ill health, then a pension is paid to them.
The Government of India has notified four Income Tax returns forms which are applicable to Hindu Undivided Family (HUF) and individual.
Form No. ITR 1: Also popularly known as Sahaj (easy), this form can only be filed by an individual assesse. It is vital to take note that this form can only be used by an individual who has salary as his/ her source of income and not any business enterprise owned by him/her.
Form no. ITR 1 is a means by which pensioners can file their income tax returns. This form is also used by majority of salaried taxpayers who own a single house and have their income which is taxable (i.e. income from other sources) in addition to their pension.
Where the individual receives pension income from the fund to which contributions are made by employer, in case of ITR 2, under the salary schedule, the individual has to report the name, address and tax deduction and collection account number (TAN) (mandatory only if tax is withheld on pension) of the employer/LIC/any other fund. Also, the individual will have to select 'pensioners' as a category in the field for nature of employment in the salary schedule.
Commuted pension beyond the limits exempt under the Act and the entire uncommuted pension, should be reported as "Commuted pension" or "Annuity or pension" under 'salary under section 17(1)' of the Act as taxable. The commuted pension which is exempt from tax should be entered in the field "Commuted value of pension received under section 10(10AA)" selected from the dropdown available under "Allowances to the extent exempt under section 10". The reporting of commuted and uncommuted pension in ITR 1 remains the same as ITR 2 except, while reporting the pension income, there is no requirement for the individual to enter name, address of the employer, also this income is to be directly reported under section 17(1) without selecting "Commuted pension" or "Annuity or pension" as applicable under ITR 2.
Where the individual receives the pension from LIC/any other approved fund out of the contributions made by the individual from his own funds, he/she needs to report uncommuted pension under section "Any other income" of the schedule "income from other sources". Commuted pension, if any, will have to reported under the schedule "Exempt income" as "any other" in ITR 1 and as "any other" under the point "Other exempt income" in ITR 2.
Family members who are earning pension will have to report the same under 'Any other income earned' in the other sources schedule in ITR 2.
For ITR 1, the individual will have to select 'Family pension' from the drop-down under Income from other sources.
Courtesy – economic times
1. Payment when liable to TDS under section 194C
Tax under section 194C is deducted where any sum is paid to any resident contractor for carrying out any work in pursuance of a contract between the contractor and the specified person
As per clause (iv) of the Explanation to section 194C, “work" shall include: -
2. broadcasting and telecasting including production of programs for such broadcasting or telecasting.
3. carriage of goods or passengers by any mode of transport other than by railways.
5. manufacturing or supplying a product according to the requirement or specification of a customer by using material purchased from such customer, but does not include manufacturing or supplying a product according to the requirement or specification of a customer by using material purchased from a person, other than such customer
2. Payment when liable to TDS under section 194J
Section 194J provides for deduction of tax at source from payments of fees for professional services, technical services, royalty or sums referred to in section 28 (va) like non-compete fee, etc.
3. Nature of payment made for maintenance services
As clarified via CBDT Circular No. 681, dt. 8-3-1994 Service contracts would be covered by the provisions of this section since service means doing any work as explained above. However fees for technical services is governed by section 194J.
As per Circular No. 715, dt. 8-8-1995 routine, normal maintenance contracts which include supply of spares will be covered under section 194C. However, where technical services are rendered, the provision of section 194-J will apply in regard to tax deduction at source
Therefore one has to differentiate between routine services and technical services while ascertaining the applicability of TDS provision.
4. Payment for maintenance of machinery where held to be covered by section 194C
In ITO v. Maharashtra Pollution Control Board 2016 TaxPub(DT) 4437 (Mum-Trib) It was observed that repairs and maintenance and quality monitoring services, etc., provided under an annual maintenance contract (AMC) in Relation to machinery, were not of technical nature and were not covered under section 194J. Being contractual work, assessee was liable to x under section 194C.
Merely because technical persons were involved in rendering the services relating to maintenance, of installed machines it could not be inferred that these services were technical or professional in nature liable to TDS under section 194J. Therefore, tax was liable to be deducted under section 194C, and not under section 194J.—Vide Facets Polishing Works (P) Ltd. V. ITO (2015) 69 SOT 361 (Ahd V'-Trib).
In ITO Mumbai Metropolitan Regional Development Authority (2015) 40 ITR (Trib) 60 (Mum ‘B'-Trib): (2015) 155 ITD 314 (Mum 'B'-Trib). It was held that annual maintenance contract services related to minor repairing, replacement of spare parts, oiling, greasing, etc., would not fall Category of technical services and therefore, the payment made by assessee towards them was not subjected to TDS under section 194J. Also see, Dy.CIT v. Asian Heart Institute & Research Centre (P) Ltd. (2015) 173 TTJ (MUM 'A'-Trib) 832.
An assessee entered into a contract with the government department for repairing and servicing typewriter and other machines in government offices at periodical intervals and certain specified rates. The above contract was held to be a work contract—Vide Eastern Typewriter Service v.State of Andhra Pradesh (1978) 42 STC18 (AP).
Annual maintenance charges paid towards services of repetitive nature not requiring very high technical qualification, were subject to TDS under section 194C and not under section 194J Vide SBI Life Insurance Co.Ltd. v.Dy. CIT2016 TaxPub (DT) 4958 (Mum-Trib).
5. Payment for rendered towards maintenance of medical equipments
In CIT v Saifee Hospital 2019 TaxPub (DT) 2050 (Bom-HC) the supplier of medical equipments to the assessee hospital had also rendered services of maintenance of these equipments. The assessee deducted tax under section 194C while making payment for maintenance services. However, the departmental authorities sought deduction of tax at source under section 194J.
The Tribunal in respect of the same assessee in earlier year held that the services which are rendered for maintenance of equipment would not be in the nature of technical services. These services being of routine nature, would not be qualified to be called technical services which would require deduction under section 194J of the Act. Purpose of these services was only to ensure the proper maintenance of the machinery/equipment so as to ensure long life for the same. Thus impugned payment would be covered under section 194C for being made for work contract
Where the services rendered in respect of the machinery and equipment are only in nature of maintenance services provided to ensure they function properly and would be able to provide services for a long period of time. This does not involve any technical service. Hence payment for routine maintenance services would be liable for TDS under section 194C instead of section 194J.
Many of us would have received a refund from the income tax department in the past. A tax refund or tax rebate is a refund furnished to the taxpayer when the tax liability is less than the taxes paid.
Taxpayers can avail a tax refund on their income tax if the tax they owe is less than the sum of the total amount of the withholding taxes and estimated taxes that they paid, plus the refundable tax credits that they claim. Tax refunds are usually paid after the end of the tax year.
Refunds arise in those cases where the amount of tax paid by a person is greater than the amount which he/she is properly chargeable, as per the Income Tax and other Direct Tax laws. The same is noted under Sections 237 to 245 of the Income Tax Act, 1961.
Eligibility criteria for Income Tax Refund
1. If the tax that you have paid in advance, on the basis of self-assessment, is greater than the tax that you are liable to pay as per the regular assessment
2. If your tax deducted at source (TDS) from interest on securities or debentures, dividends, salary etc. is more than the tax payable based on regular assessment.
3. In case the same income is taxed in a foreign country (with which the government of India has an agreement to avoid double-taxation) and in India as well.
4. If the tax charged on the basis of regular assessments is reduced due to an error in the assessment process which was resolved.
5. If you find that that the tax payable is in the negative, after considering the taxes you’ve paid and the deductions you are allowed.
6. In case you have investments that offer tax benefits and deductions, which you are yet to declare.
But what is tax e-refund?
Electronic filing is the process of submitting tax returns over the Internet using tax preparation software that has been pre-approved by the relevant tax authority.
How do you claim tax e-refund.
1. The Income Tax Department issues refunds, if any, only as an e-refund to the assessee. The process of issuing refunds through cheques has been discontinued.
2. To be able to receive the refund amount, the bank account of the assessee should be linked to his permanent account number (PAN) and should have been pre-validated on the income tax e-filing portal.
3. The assessee is required to visit the e-filing portal of the Income Tax Department at https://www.incometaxindiaefiling.gov.in.
4. To access the portal, one needs to enter user name (PAN of the assessee) and password, along with Captcha code to log in.
5. After logging in, the assessee should check the ‘dashboard’ tab. Then, click on the ‘profile settings’ tab to see a drop-down menu of options. Choose the ‘prevalidate your bank account’ option and proceed.
6. The assesee will have to enter the bank account number, IFSC code, bank name, mobile number and e-mail ID. Note that the PAN, mobile number and e-mail ID should be the same as that registered with the bank account. After this, the assessee should click on ‘pre-validate’ button.
7. The pre-validation status is sent to the registered e-mail ID and mobile number of the assessee. Alternatively, view your status by logging in to the e-filing portal, and clicking on ‘profile settings’ and ‘pre-validate your bank account’ tabs.
What do I if the refund is not processed?
Income Tax Return form has to be verified by the relevant authority to process income tax returns. If you are yet to receive your refund even after 3 or 4 months after the deadline of 31st July of a particular assessment year, it perhaps implies that your refund has not been verified yet.
Interest payable on delay:
A number of cases have been reported where the taxpayers have stated that they haven’t received their refund in due time. If this has happened to you too, don’t panic. You will receive an interest of 0.5% on your expected refund amount, for every month or the part of a month for which the refund is delayed. This interest rate is calculated from the 1st of April of the assessment year. However, in case it is found that the reason for the delay can be attributed to you, you will not be liable to receive any interest for that duration.
Setting-off outstanding taxes against refunds:
There may also be a case where you have a certain amount of taxes is outstanding against your name. In this case, under Section 245, tax authorities have the power to set-off your refund amount against such outstanding taxes.