Monthly Archives: May 2016

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.