Filing tax return is important, but it is not the final step

Filing tax return is important, but it is not the final step

Most of us would be completing the filing of Income Tax Return (‘ITR’) for FY 2012-13 by 31 July 2013. I am sure many questions often come to your mind on the upcoming challenges. Is everything done and dusted for FY 2012-13 or will you get a notice from tax office? If yes, does one need to do anything now to be ready for it? If you have claimed a tax refund, when and how will you get it? And so on.

While completing the task of filing of ITR is an important milestone, however, the same is surely not the final one. The Tax Office would like to verify your ITR and ensure if all transactions, tax payable thereon have been reported therein and such taxes have been duly paid. Accordingly, it is important to understand the process deployed by the Tax Department, likely outcomes and challenges, if any, which could arise there from and be prepared for it.

Challenges in credit of tax deducted at source
Most of the ITRs are processed and verified through a computerised process wherein arithmetically accuracy of numbers is checked and intimation is sent to tax payer thereafter. If you have filed your ITR electronically, you would get intimation from Central Processing Centre (CPC) of the Tax Department. In case you have not filed your ITR electronically, you would get intimation from your jurisdictional Tax Officer. In case you owe a tax refund from the Tax Department, it is recommended to file your ITR electronically, as usually, the CPC process ITRs much faster than the local Tax Office.

If everything ties up (that is, calculation of taxable income and tax liability thereon is correct, credit of Tax Deducted at Source (TDS) claimed in the ITR matches with Annual Tax Credit Statement in Form 26AS), intimation would reflect acceptance of ITR filed by you.

In case you have claimed a tax refund in the ITR, the same would be credited to your bank account directly, and in case you have opted for it in the ITR or otherwise refund cheque would be send to your correspondence address in due course.

However, in case the numbers do not tie up (for example, TDS claimed in ITR is not matching with Form 26AS), then, the intimation would show tax demand payable by you (or reduction in tax refund claimed).

In such a case, you will have to identify the reason for the same
and then take necessary action (which could be filing an application for rectification of the intimation or payment of tax demand).

For instance, one of reasons for mismatch of TDS claimed in ITR vis-à-vis as appearing in Form 26AS could be non-quoting of your PAN by the Tax Deductor in the eTDS statements filed by him. In such a case, you will have to get in touch with Tax Deductor and request him to rectify the said error by filing a correction eTDS statement for relevant quarters.

Challenges in detailed scrutiny by the Tax Office
Few ITRs are also picked up for detailed scrutiny randomly by the Tax Office using Computer Assisted Scrutiny System (CASS). Once your case is picked up for a detailed scrutiny, the Tax Officer would verify the ITR filed by you in detail, call for underlying details/ documents for verification, ask relevant questions to examine the ITR and then pass an assessment order reporting his findings therein.

Accordingly, it is recommended that one should prepare a file containing all the relevant supporting details/ documents of the ITR, at the time of its filing itself and keep it ready for verification by the Tax Officer, if the ITR is picked up for detailed scrutiny by the Tax Officer. Specifically, for reimbursement claims like medical, LTA, business expenses and for investments, Tax Officer would insist on verifying supporting documents.

High Value transactions executed during the year?
Certain high value transactions (for instance, purchase or sale of immovable property value for Rs 30 lakh or more, payments through credit card of Rs 2 lakh or more during the year) executed by you are reported by various authorised intermediaries (that is, property registrar or issuer) to the Tax Department through Annual Information Report (AIR) and these are co-related to the details filled in your individual tax return.

If you have entered into any high value transactions during FY 2012-13, it is likely that you might receive notice from the Tax Department’s special cell monitoring AIRs requesting for various details about the transaction(s). The purpose of issuing such notice is just to ensure that the tax payable, if any, is duly discharged by the respective tax payer. Accordingly, in case you happen to receive such a notice, you just need to submit the requisite details asked for. There is nothing to worry about, if you have reported all the income earned during the said year.

Concluding Remarks:
Once you have filed your ITR with due care (for example, ensuring TDS is matching with Form 26AS, all income is offered to tax, when ITR has been filed electronically, Form ITR-V is sent to CPC within prescribed time limit, and so on) and all supporting documents are ready with you, it should be a safe and smooth journey thereafter, even if you receive tax notice enquiring about your tax affairs.

Be the first to comment - What do you think?  Posted by admin - June 9, 2013 at 2:28 pm

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E-Filing of IT Return mandatory for Individuals having Total Income of more than Rs.5 Lakhs

E-Filing of IT Return mandatory for Individuals having Total Income of more than Rs.5 Lakhs

The Central Board of Direct Taxes (CBDT) is Spreading e-tax net through Notification dated 34/2013 dated 01.05.213 (CBDT notification is provide at the end of this mail for your easy reference) E-filing of I-T returns is now mandatory for individuals, including salaried taxpayers, earning more than Rs 5 lakh taxable income during the financial year ended March 31, 2013. Earlier the same was mandatory for the Individuals having salaried Income more than 10 Lakhs.

CBDT’s earlier notification that salaried Individual having Income less than 5 Lakhs need not to file Income tax returns continues to be in force. Therefore salaried Individual earning less than Rs 5 lakh and whose saving bank interest income is less than Rs 10,000 in a year will need not to file Income Tax returns. However, if an employee has switched jobs during the financial year, then this leeway of tax filing exemption is not available. Since there is a condition to get the exemption that the employer has discharged the entire tax liability through deduction of tax at source and deposited it with the government & there is very chance that either of the employers will not discharge entire tax liability due to lower tax calculations at their end.

After the above said new notification comes into force income tax return filing is mandatory for three types of individuals having salaried income:
i) Individuals having salaried income over 5 lacs
ii) Individuals having salaried income over 5 lacs & switch over their job during the financial year.
iii) Individuals having salaried income less than 5 lacs & switch over their job during the financial year.
iv) Employees having income less than over 5 lacs but having other incomes and/or having interest income over 10000.
For the first two categories of employees e-return filing is mandatory. For the other category of individuals e filing is mandatory if their total income exceeds Rs. 5 lacs. Simultaneously e-filing of I-T returns also helps speed up the process of granting refunds to taxpayers – the processing is carried out at the CPC-Bangalore.
After making the income tax return mandatory for the individuals having total income over 10 lacs, IT department needs to extend the time limit for return filing of individuals from 31st July to 31st August (for 1 Month) due to non availability of access of website of the tax department which enables e-filing of returns. As per IT department there is about 18 lacs of individuals who file return between 5 lakhs to 10 lakhs which gather more traffic in the e-return filing website in this AY. It’s a good step by the IT department to gear up the Income tax return processing but a question that how the department’s website handles such huge traffic especially during the peak return filing season.
Through the same notification, the CBDT has also introduced e-filing of tax audit reports, transfer pricing (TP) reports and Minimum Alternate Tax (MAT) certificates. Earlier, while e-filing of I-T returns was mandatory for India Inc, these reports had to be physically filed at the local tax offices
Best Regards
Prakash Nair
INCOME-TAX (THIRD AMENDMENT) RULES, 2013 – AMENDMENT IN RULE 12 & SUBSTITUTION OF FORMS SAHAJ (ITR-1), ITR-2, ITR-3, SUGAM (ITR-4S), ITR-4 AND ITR-V
NOTIFICATION NO. 34/2013 [F.NO.142/5/2013-TPL]/SO 1111(E), DATED 1-5-2013
In exercise of the powers conferred by 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 the Income-tax Rules, 1962, namely:—
1. (1) These rules may be called the Income-tax (3rd Amendment) Rules, 2013.
(2) They shall be deemed to have come into force with effect from the 1st day of April, 2013.
2. In the Income-tax Rules, 1962 (hereinafter referred to as the said rules), in rule 12,—
(a) in sub-rule (1),-
(A) for the figures “2012″, the figures “2013″ shall be substituted;
(B) in item (a),—
(i) in sub-item (iii), after the words “income from race horses”, the words “and does not have any loss under the head” shall be inserted;
(ii) for the proviso, the following proviso shall be substituted, namely:—
“Provided that the provisions of this clause shall not apply to a person who,-
(I) is a resident, other than not ordinarily resident in India within the meaning of sub-section (6) of section 6 and has,—
(i) assets (including financial interest in any entity) located outside India; or
(ii) signing authority in any account located outside India;
(II) has claimed any relief of tax under sections 90 or 90A or deduction of tax under section 91; or
(III) has income not chargeable to tax, exceeding five thousand rupees.”;
(C) in clause (ca), for the proviso, the following proviso shall be substituted, namely:—
“Provided that the provisions of this clause shall not apply to a person who,-
(I) is a resident, other than not ordinarily resident in India within the meaning of sub-section (6) of section 6 and has,—
(i) assets (including financial interest in any entity) located outside India; or
(ii) signing authority in any account located outside India;
(II) has claimed any relief of tax under sections 90 or 90A or deduction of tax under section 91; or
(III) has income not chargeable to tax, exceeding five thousand rupees.”;
(b) in sub-rule(2), the following proviso shall be inserted, namely:-
“Provided that where an assessee is required to furnish a report of audit under sections 44AB, 92E or 115JB of the Act, he shall furnish the same electronically.”;
(c) in sub-rule (3), in the proviso,-
(A) in clause (a),—
(i) for the words “an individual or a hindu undivided family”, the words “a person, other than a company and a person required to furnish the return in Form ITR-7″ shall be substituted;
(ii) for the words “ten lakh rupees” the words “five lakh rupees” shall be substituted;
(iii) for the figures “2012-13″, the figures “2013-14″ shall be substituted;
(B) after clause (aaa), the following clause shall be inserted, namely:-
“(aab) a person claiming any relief of tax under section 90 or 90A or deduction of tax under section 91 of the Act, shall furnish the return for assessment year 2013-14 and subsequent assessment years in the manner specified in clause (ii) or clause (iii);”
(C) in clause (b), after the words, brackets and figure “in clause (i)”, the words, brackets and figures “or clause (ii) or clause (iii)” shall be inserted.
(d) in sub-rule 4, after the words, brackets and figures “of sub-rule (3)”, the words and figures “and the report of audit in the manner specified in proviso to sub-rule (2)” shall be inserted.
(e) in sub-rule (5), for the figures “2011″, the figures “2012″ shall be substituted.
3. In the said rules, in Appendix-II, for “Forms SAHAJ (ITR-1), ITR-2, ITR-3, SUGAM (ITR-4S), ITR-4 and ITR-V, the “Forms SAHAJ (ITR-1), ITR-2, ITR-3, SUGAM (ITR-4S), ITR-4 and ITR-V” shall be substituted.

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How to invest the retirement corpus for a steady income?

How to invest the retirement corpus for a steady income?

Venkatesh is a 55-year-old marketing professional who has decided to retire early. He has been computing his finances and knows that he has built a substantial corpus that will easily take care of the various financial obligations during his retired life.

Venkatesh likes to keep his finances simple and does not want to spend too much time on tracking his portfolio. How can Venkatesh arrange his affairs so that he and his wife have a comfortable retired life?

Venkatesh has to make provisions for his regular expenses after he retires, ensure that funds are available for immediate requirements and nurture the corpus through the retirement period. Given his preference for convenience and simplicity, he should primarily focus on two aspects-selection of products that are simple and meet his income requirements as well as setting a system that eases the operation of these investments.

The regular expenses can best be catered to by an annuity that will make regular payments during Venkatesh and his wife’s lifetimes. As these are low-return investment products, annuities will require a larger allocation from the corpus to generate the required income.
The advantage is that Venkatesh is assured of a regular income to take care of his daily expenses. While selecting an annuity, Venkatesh should consider the antecedents of the provider, the rates and the additional features, such as inflation adjusted payuts. He can pick short-term debt funds from a couple of stable fund houses to park the emergency funds.

Some portion of the corpus will also have to be invested in growth assets, such as equity. A simple product that he can consider to provide appreciation is an exchange-traded fund that invests in an equity index.

Venkatesh should try and put most of his financial transactions on auto mode. Choosing automatic account transfers, having his wife as a joint holder for investments and accounts, giving clear instructions to the investment providers and taking care of the tax implications of the investment choices he has made will all reduce the follow-up and involvement required.

However, he will need to check his portfolio at least once a year to ensure that he is on the right track financially as well as take corrective action where required. If he chooses wisely the right products and has a systematic plan in place, he should be able to spend his retirement life as comfortably as he desires.

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Avoid Pyramid Marketing Schemes

Avoid Pyramid Marketing Schemes

Making big bucks is a dream of everyone. Many of us may have contemplated participating in pyramid marketing or a Multi- Layer Marketing (MLM) scheme. Despite numerous instances of frauds, people often fall for exaggerated claims of companies or the middlemen who drag several into such schemes. And unfortunately since regulations aren’t in place, company and their middlemen make hay. But now the Finance Ministry seems to have finally recognised the threat stemming from proliferation of such schemes and to crack the whip, is considering a ban.

The Department of Financial Services is pondering on the idea of banning pyramid marketing schemes by making amendments to “Prize, Chits and Money Circulation schemes (Banning) Act, 1978”. But it is yet unclear whether MLM would also bear the brunt of the proposed banned. Technically, pyramid marketing schemes compensate participants for getting other people registered with company. Compensation is being paid for adding to the list of members registered with the company and there is no real exchange of goods or services at any level. On the other hand, MLM is a structure where the person(s) influencing others into the schemes is not only compensated for sale of some real products, but is also incentivised for sales undertaken by people recruited by him. The picture looks slightly obscure as far as banning MLM is concerned for the want of some changes in definitions which might be unwarranted while making amendments to the Act.

The primary intent of imposing a ban on ponzi and money circulation schemes was the method and purpose of compensation. While MLM also comes in the ambit of the aforesaid ban remains to be seen; on-going developments at least hint at tighter regulations for MLMs. We believes that any scheme that promises you incredible success and portrays it to be the fortune changer, should be completely avoided. To earn attractive returns on investments one might consider time tested and well-regulated investment avenues. Personalised asset allocation and investment plan may help you achieve your long-term goals. While you may look like a turtle in the race of wealth creation, remember slow and steady wins the race.

1 comment - What do you think?  Posted by admin - at 2:11 pm

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IT Department introduced new facility for Filing Tax Return without filling any manual forms

IT Department introduced new facility for Filing Tax Return without filling any manual forms
Now you can directly file your tax returns online without any ones help.   Pre-filled tax returns forms (most of the static data fields like PAN, address, TDS details etc are already filled) available on income tax website.  The procedures to be followed are given under. Make use this facility for easy filing of your tax returns before the due date 31st July 2013.
                              
1. Log on to www.incometaxindiaefiling.gov.in
                              
2. Click on login option
                                                      
3. Once you click the login option, you will be asked to provide User ID, password and Date of Birth for login into your account.

                              
4. Once you login into your acount, you will find an option called “e-File” on the menu.

5. Under the “e-file” menu, select the option called “Prepare and Submit online ITR”

6. Once you select the above option, the following detailes will be displayed on the screen;
i. PAN No.
ii. ITR form Name: Here you need to select the ITR form applicable to you, as of now two ITR forms are available for efiling (ITR 1 and ITR 4S).
iii. Assessment year: Here you need to select the Assessment year for which you are filingthe return.
iv. Address: Here you need to select one of the option out of 3 options( 1. Address from PAN Database, 2. Address from previous year return and 3. New address).
v. Digital Signature: Select “YES” if you want to file your return with digital signature otherwise “NO”
vi. After filling the above details, then click on SUBMIT button.
vii. After clicking the SUBMIT button, the system will take you to ITR form.

7. Once the ITR form got opened then you need to enter your details in the ITR form.

                              
8. Once all the details in the ITR form are filled then you need to click on “SUBMIT” option for filingthe return.

Note:
1. While filling the details in the ITR, please DON’T click on BACK button or BACKSPACE . If you click on BACK Space or BACK button, then you will be logged out.
                              
2. After entering the data in each screen of ITR form, please click on “Save’ button to save the data.

 

NRI Guide 2013 a 580 pages comprehensive e-guide for NRIs is now ready to download please click the following links to download the guide absolutely free of charges http://yourownadviser.com/downloads

Be the first to comment - What do you think?  Posted by admin - at 1:36 pm

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Cost Inflation Index for Financial Year 2013-2014

Cost Inflation Index for Financial Year 2013-2014
Income tax department has notified Cost inflation index(CII) for the financial year 2013-14. Income tax department has issued  notification No. 40 dated 6 June 2013 related to  the cost inflation index for the financial year2013-14 and CII is 939. Full notification as well as cost inflation index of 33 years starting from financial year 1981-82 is as follows.
New Delhi, the 6th day of June, 2013 S.O. 1464(E) – In exercise of the powers conferred by clause (v) of the Explanation to section 48 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby makes the following amendment in the notification of the Government of India in the Ministry of Finance (Department of Revenue), Central Board of Direct Taxes published in the Gazette of India, Extraordinary, vide number S.O. 709(E), dated the 20th August, 1998, namely:-

2. In the said notification, in the Table, after serial number 32 and the entries relating thereto, the following serial number and entries shall be inserted, namely:-
Sl. No.                             Financial Year                                 Cost Inflation Index
(1)                                            (2)                                                     (3)
“33                                     2013-14                                                 939”

[Notification No.40/2013/F.No.142/7/2013-TPL]
Financial Year
Cost  Index Inflation Index
1981-1982
100
1982-1983
109
1983-1984
116
1984-1985
125
1985-1986
133
1986-1987
140
1987-1988
150
1988-1989
161
1989-1990
172
1990-1991
182
1991-1992
199
1992-1993
223
1993-1994
244
1994-1995
259
1995-1996
281
1996-1997
305
1997-1998
331
1998-1999
351
1999-2000
389
2000-2001
406
2001-2002
426
2002-2003
447
2003-2004
463
2004-2005
480
2005-2006
497
2006-2007
519
2007-2008
551
2008-2009
582
2009-2010
632
2010-2011
711
2011-2012
785
2012-2013
852
2013-2014
939

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I want to buy a cellphone with a good music player, an e-book/PDF reader and supports all major apps (such as WhatsApp) within a price range of around R8000- 12000.

I want to buy a cellphone with a good music player, an e-book/PDF reader and supports all major apps (such as WhatsApp) within a price range of around R8000- 12000. I’m not particular about it running on Android or Windows OS, but was thinking of the Nokia Lumia 520. Your suggestion?

 

—The Nokia Lumia 520 is a Windows phone that is very attractive in terms of price and will perform every function you asked. There are many Android phones in this segment as well. For frequent reading on your phone (and within your budget), India-made or designed Phablet phones fit as well.

1 comment - What do you think?  Posted by admin - June 8, 2013 at 7:17 pm

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want to get WhatsApp running on simless tablet

I recently bought a tablet that does not have a SIM card slot. I use wi-fi at home to browse and on a friend’s suggestion, want to get WhatsApp running on it but am unable to do so. Please help.

WhatsApp messenger authenticates users only through a SIM Card with an SMS facility to create an account. Since your tablet doesn’t accommodate this feature, you can look at other alternatives suchy as Skype or Facebook Messenger.

Be the first to comment - What do you think?  Posted by admin - at 7:16 pm

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Click and Create Magazine online

Aim, click, publish!

PUSH-BUTTON MAGAZINES The Flipboard app for iPhones, iPads and Android devices helps you collect, curate and share stuff from the Web in neat formats

The Internet is exploding, with articles, blogs and even e-books. The pictures are getting sharper and brighter. And videos are mushrooming. There is a whole new culture in getting them from diverse sources and sharing them with people over e-mail and social media sites such as Facebook or Twitter, which also provide you with interesting links from friends. In short, everyone can be a publisher of sorts now – or at least a smart curator.

You can do this smarter with the arrival of Flipboard, an application that helps you do all this and more. All you need is an iPad or an iPhone, an Android Tablet or an Android phone. At this point, this is not working for Windows or BlackBerry tablets.

The Flipboard app is free and so is an account that helps you use it. The app has been around for sometime, but finally offered an Android variation late last year. And more features have been added to make it cool.

So let’s say you are headed for a holiday, and are up for planning one. This typically means combing the Internet, going through magazine sites or other web sites to look for the stuff you want. What Flipboard does is to help you collect the items that you surf and pick, and turn them into a format that is nice, attractive – and shareable.

When you start using Flipboard for the first time, it will ask you for your areas of interest, and after you create an account, it will ask you if you want to integrate it with your Facebook and/ or Twitter feeds so you can get all your content here.

Once this is set up, your can build your own magazine-like display.

Since we are considering travel as an example, let us say you are travelling to London. If you search for “London Travel” you will have a few suggestions pop up on Flipboard when you type this on a search bar on the app. This leads you to a collection of articles or magazines published by others. You can now surf or flip through them as if they were a catalogue. If you like something, you can press the “Like” button and/or share it on your social media network. Or you can email it to yourself.

But the best part is the button at the bottom of the app that leads you to “Click Create Magazine” – that turns you into a publisher. You can choose up a name for a magazine, with a description and a category and decide whether or not to share it with others.

You can also use the app now to collect and publish stuff that you come across while browsing the Net. This is made easier by a “bookmarklet” for your browser that takes you to the sharing link ( https://share.flipboard. com ). You can press the share button on your browser when you are on a page and the stuff comes on to your Flipboard magazine.

You can also edit and share your magazine items from your PC. Head on to http://editor.flipboard.com , log in with the account you set up for Flipboard. You can see all the “magazines” you created here, add more content or rearrange items or share your magazine with a friend, family or group members so they can read it on their tablets.

If you like photographs on sites like Pinterest, Google Images, Facebook and on Flickr, you can send them all to a Photo Journal on Flipboard, and enjoy them at your convenience.

And yes, you can share videos as well. You can go to YouTube and curate your own collection of stuff like funniest animal videos and use the “bookmarklet” to take them to your Flipboard magazine.

Sky is the limit, and you are limited only by your creativity. If all you want is to read, Flipboard is good for stuff that has been already curated .

You can even go for special niches. For instance, there is Yanko Design, which showcases the latest in product and industrial design; iPhoneography, which compiles great pictures taken and modified on the iPhone; and Cycle Exif, which takes a look at both vintage and modern cycles.

With such variety on offer, whether you are a collector, consumer or publisher, Flipboard can help you go far.

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A NEW DROPBOX FOR ATTACHMENTS

A NEW DROPBOX FOR ATTACHMENTS

Remember when mail attachments weren’t sent because uploads were slow and mails bounced back due to full inboxes? Along came faster Internet, more storage and the smartphone. With a 3G connection that charges you by data downloads, how do you handle such large attachments on it? Here’s how:

  • Share this ID with your contacts. Files and attachments will now directly land in your Dropbox account, which can also be synchronised with your PC. It has an easy-to-manage file system, which helps avoid your inbox bloat. For free.

Caution: To prevent spamming and quick filling up of your Dropbox storage don’t share this email ID widely. Upgrading to Pro service from sendtodropbox.com at $3 per month (about R150) gives these benefits: a better email ID ([email protected]), multiple email addresses and a list of who can and who cannot send you files.

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