E-payment of property tax is not allowed at present

The taxpayer can pay their income tax in the respective offices or they can log in to the official website and pay their tax online. The tax calculator is official software that calculates the property tax when the taxpayer provides the required information. Resident from Jakkur, D S Sridhar used the tax calculator to calculate his property tax and found that the dues increased to ninety percent from last year.

Senior officials from the Bruhat Bengaluru Mahanagara Palike met the officials from the National Informatics Center regarding the issues on the property tax using the tax calculator. The officials said that they will update the tax calculator software and then they will allow the taxpayers to use it to pay their property tax. N Manjunath Prasad, the Commissioner of Bruhat Bengaluru Mahanagara Palike said in an interview with The Hindu that they will update calculator software and they will examine it before it is open to the taxpayers. There were certain things that must be included in the software like the refund for the servicemen, and they will adhere to these criteria as well.

The Commissioner also said that if any problems or issues arise during the updating process the officials will address to it and rectify the bugs before the release of the software to the public. And if no bugs arise during the updating process the tax calculator software will be available to the public within three days. The BBMP restricted the hike in the property tax to twenty five percent of the commercial properties and twenty percent of the residential properties, because of the serious opposition from the residents and political parties. And for the taxpayers who have already paid their property tax, they will adjust the difference in the dues for the next year.

An exclusive IT form to claim deductions on LTA, HRA

The Income tax department announced the taxpayers that they have to submit their evidences or proofs to claim tax benefits on HRA, home loan interest and LTALTC. The Central Board of Direct taxes (CBDT) introduced a new tax return form 12BB, to claim the tax benefits on house rent allowance (HRA), leave travel allowance (LTA). The taxpayer should furnish his personal information like name, address and PAN number in the tax form to claim the deductions.If an individual wishes to claim tax benefits on his leave travel allowance or concession, he has to provide proofs regarding the travel to his employer. And if the individual’s annual rent is more than one lakh, he has to provide the lender’s name, address and personal account number (PAN) to claim deduction on HRA (house rent allowance). The same way, to gain tax benefits on home loan interest the taxpayer should furnish the lender’s personal details.
According to the Income tax Act under the Section 80C the Chapter VI-A relates to the allowable deductions, and in the other sections like the Section 80CCC, 80CCD, 80E, 80G and 80TTA. And under the Chapter VI-A, the taxpayer has to submit the proof of expenditure or investments.

The CBDT increased the time limit to fifteen days to file the tax deducted at source returns in the Form 24Q, 26Q and 27Q. And they extended the time limit to settle the TDS on transfer of immovable properties to thirty days from seven days. The amendments will take action from June 1st, 2016. With reference to the Income tax Act under the Section 80C, the taxpayer can claim deduction of one lakh fifty thousand from the overall tax amount if the taxpayer invested it in Sukanya Samridhi account, children’s tuition fee, public provident fund, life insurance scheme or capital repayment of home loan.

Tax deduction is applicable on home rent when the taxpayer or the spouse or the minor child does not own residential accommodation in the work place or when the house rent allowance is not received. Under Section 80EE the first time house owner gets a deduction if the property is purchased within fifty lakh and the loan is within thirty five lakh. And for individuals who have loan amount more than two lakh gets a deduction of fifty thousand from the home loan interest.

Contribution of personal IT in India is lower than many countries

The government is imposing additional taxes like custom duty, excise duty, sales tax and value added tax, because they are not able to collect the direct tax from the majority of the population. The indirect tax is imposed on all the individuals irrespective of their status; even then the poor people spend a large sum of their income on paying the indirect tax.

The recent statistic data released by the Income tax department states that out of the overall population in the country, only one percent of the individuals paid their income tax. The former Financial Minister, P Chidambaram said that only 2.89% of people filed the income tax return form for the assessment year 2012-13. And by analyzing the data provided by the tax department shows that, not even half of the people paid their income tax.

On reviewing the report for the assessment year 2012-13, filed up to December 18th, 2014 shows that eighty percent of the income tax paid is by the individuals from the top eleven percent, which means that only fourteen lakh people paid the nation’s individual tax.

By comparing the income tax payment made by the individuals of India and other countries like South Africa, USA and UK; tax base of India is only 1-1.5% while South Africa’s tax contribution is ten percent and 45% of people from the USA pay their taxes. And ninety five percent of the population of UK paid forty percent of the tax, but the ninety five percent of the people from India have not paid their tax.

Fraudster sends fake email to taxpayers

The taxpayers are busy at filling their information to the income tax department to avail the tax exemptions.
While the taxpayers were busy fill up their details, the taxpayers received a fake email with the official logo of the Income tax department. The email said the income tax would refund their income tax payment paid by them. And the refund amount is above twenty thousand rupees. The fake emails received by the taxpayers ask for their personal details like the credit card details, PIN number and their bank account details. It is hard for a common man to identify that it is a fake email.
Abhishek Aneja is a Chartered Accountant from Delhi; he received an email from the Income tax department saying that they would offer him a refund of twenty five thousand six hundred and forty six rupees. And it asked his mobile number for verification purpose. Since Abhishek deals with the IT department, he was able to identify that the email he received was a fake one.
He said that since the fraudster asked for the mobile number for verification, he can get the bank account details and passwords from the taxpayers. One can identify that the email he received is the original one from the domain, if it is from incometaxindiafilling.gov.in then it is from the Income tax department.
The officials from IT department said that, if a taxpayers come across fake emails they can report it to the department by forwarding the email to phishing@incometax.gov.in . The cyber branch of the department will block it and then identify the source of the email. And taxpayers should note that the IT department does not ask for the details about the personal information on bank accounts.

Significance of implementing Equalization levy

Committee on taxation and ecommerce report, released by the Central Board of Direct Taxes focuses on the equalization levy.
Senior officials and representatives from the Institute of Charted Account of India, Income tax department, independent representative officials and officials from the Finance Ministry formed a committee and insisted to limit the equalization rate at 6% and they also calculated previous year’s hike rate.
The Managing partner of Nangai & Co, Rakesh Nangai said that the experts had different opinions on the proposed Equalization levy, some of them considered it as a holding tax, while others expected that it is an imposition to foreign beneficial and others named it as an indirect tax.
Thus the Central Board of Direct taxes published a report on ‘Proposal on EQL on Specified transaction’ which explained in detail about the levy and resolved the speculations of the tax experts. The report consist of one hundred and twenty four pages covering the use and download of online software applications, goods and service sales, cloud computing, web designing and hosting, digital marketing, etc.
If a resident of India or a non-resident entity or a non-resident who has a permanent establishment whose payment exceeds one lakh are under the Equalization levy. And to limit its impact, the business to business transactions and the business to consumer transactions are almost kept.
Rakesh Jariwala said the Equalization levy is important, because only then the government would give a clear picture of the transactions covered under the levy. And to differentiate the income tax and the EQL, or else it would lead to the double taxation.
A recent report says the global economy is slower than the digital economy and the more it drives people to take part in it significant. According to the government report, the ecommerce market in India has grown up to 12.6 billion.

Tax exemption over specific services

The finance ministry has provided service tax exemption over certain services provided by the government or local authorities. The services are certain registration process where the amount to be paid does not exceed INR 5,000 if service is obtained on a regular basis the annual payment limit is 5,000. The budget made provisions to collect service tax from business entities with more than 10 lakh. The service tax charged is at 15 percent for the services offered by local or government authorities. Contact Uptra Consultancy Services for Company registration and Tax Consultancy Services.
The list of services exempt from tax are availing a passport, visa, drivers license and birth or death certificate, legal registrations( vehicle ), certifications for safety. Services related to approval change of status of land building approval. Fines or penalties will also be exempt from service tax. Service tax will not levied on individuals for obtaining these services from government or local authorities. Telecoms get a major relief as they are exempt from paying service tax over spectrum obtained before April 2016. For spectrum obtained after April 2016 tax will be paid under deferred payment scheme in installments. The telecom will pay service tax on the day of installment if opted for deferred payment for 10 years.
Business organizations can also claim input tax credit over service tax or excise, provided that the services are under non-exempt services list. Input tax credit can be availed over the life-time of the spectrum , that is 20 years. These provisions bring the much required clarity over service tax queries in spectrum usage.

IMF chief presses for tax transparency in multinational companies

Panama papers are the harsh reality of tax evasion and tax heavens used by the multinational companies and corporate world. The problem is not constrained any single country it’s a global issue. The panama papers have names of influential personalities and corporate companies covering half the globe. Still the papers have not been fully revealed, surface scratch of the papers has took the world by storm.
Speaking amid this crisis, the International Monetary Fund chief Christine Lagarde pressed for international financial transparency in tax avoidance among multinational companies. Developing countries are the worst hit due to tax evasion.
Even major countries like Britain lose trillions of pounds due to tax heavens. A study Oxfam showed that even giants like Apple and General electric stash trillions in off-shore accounts.
This deprives the countries of the much needed revenue from corporate world. Lagrade spoke about these issues in the spring meetings of international monetary fund and World Bank.
IMF has decided to propose changes to battle tax evasion along with other international financial organizations.
The G20 summit has signed for automatic information exchange among its member nations with respect to tax evasion. The European Union has also decided to draft a list of tax heavens and issued that big corporate will have to reveal their earnings and tax details.
However tax evasion may seem less of an offence but the complete revelation of “panama papers” is expected to show the kind of activities the money is used for.

G20 nations to fight against tax evasion

G20 leaders sign deal to curb tax evasion and money laundering. The countries have agreed upon exchange of information regarding financial data of foreign accounts.
In the back drop of panama papers leak the communiqué attended by the G20 finance ministers and central bank governors urged the need for strong measures against tax heavens.
The leadership stressed for the need of transparency in financial institutions to prevent money from being used for illegal activities such as funding terror organizations, trafficking and drug deals.
India is also a part of the G7 summit initiative, financial action task force, against money laundering. The task force is operational since 1989.
The G20 also expects all countries to be a part of the automatic information exchange program. Organization of economic cooperation and development (OECD) is working with G20 to indentify jurisdictions which do not cooperate with tax transparency.
IMF also stressed that major multinationals should become transparent with taxes and income. Oxfam organization released data that shows even giants like Apple and General electric stash trillions in off-shore accounts by evading taxes.
India has formed a probe team over the names listed on “panama papers”. There are 500 Indians listed on the list. India does not have an official estimate over the total amount of black money held by Indians but unofficial estimate is around $1.4 trillion.
India is also in agreement with USA over mutual sharing of information in regard with possible tax evasion by its citizens.

Government hits on tax evasion by sellers on e-commerce

The Maharashtra state government is trying to reduce its fiscal deficit by plugging gaps in tax evasion. The government burdened with drought relief in several districts is watching out new sources of revenue like e-commerce websites.
The 2016-17 financial budget by the government is blocking loopholes for avoiding tax and has made registration easier. The service tax system is computerized to have a keen check on payments. Service tax is the major revenue for government (30.08 percent). The state finance minister has provide with an amnesty to pay due taxes. The amnesty period is expected to bring in 500 crore revenue. The defaulter should pay 25 percent of disputed interest and they will be exempted from penalties.
The government will obtain sales-purchase transactions from e-commerce portals; on failing to provide the information the portals will be penalized.
This will get hold of the sellers who evade taxes by showing lesser income. The sellers who have more than 10 lakh turn over are registered with the government. This will give insight whether these sellers pay the dues properly. The move will also get hold of merchants who file lower incomes to evade taxes. The government is adopting to latest techniques to plug-in the gap in revenue deficit

Additional Tax on car purchase

Indian Automakers association expects lower sales for the year 2016 starting from april. This is the second time the projections have been lowered for the year. Last year the car sales stood at 7.24 percent the highest in the past few years. This comes after the government introduces additional taxes on car purchase in the 2016-17 budget. Cars above INR 10 lakh will have an additional 1 percent luxury tax, SUVs and heavy vehicles will be charged 4 percent excess. Even small cars have not been spared by the finance minister; the budget imposes 1 percent infrastructure cess on small cars. Diesel cars have 2.5 percent additional tax.
The decision by the government comes after the increased pollution levels in the country. Finance Minister stated that the increase in taxes was not from a revenue point of view; rather it was raised over environmental concerns.
There was a severe media outcry over increasing pollution levels in major Indian cities. A study on pollution level patterns point to the fact that individual vehicles cause 40 percent pollution in Indian cities. In World Health Organization (WHO) polluted cities of the world list Indian cities have secured 14 places in the top 20.
The Supreme Court banned Diesel cars in Delhi after the city was listed as the most polluted city of the world in the WHO list. Diesel cars account for 40 percent of car sales in India.
Maruti the biggest automaker in India said that the government’ decision in singling out car industry over the pollution issue was unfair.