Submission of evidences of Claiming Deduction from Salary and Revised due dates of filing of TDS Returns

Income Tax (11^th Amendment Rules) 2016

Notification no 30/2016 dated 29^th April, 2016

Changes w.e.f 1^st June, 2016

Amendment 1: Submit Evidences of Tax Saving to Employer in from 12BB.

Before the Income Tax (11^th Amendment) Rules, 2016, employees are required to file self-declarations of tax savings/deductions to employer along with the evidences of such tax savings for every financial year and the employer was liable to deduct tax at sources on the estimated income of employees after considering such self-declarations of tax savings.

Now the CBDT has inserted the Rule 26C after rule 26B of the Income Tax Rules, 1962 and notified new form no. 12BB. Now Employees are required to submit evidences/particulars of tax savings to employer in Form no. 12BB.

Rule 26C of Income Tax Rules, 1962 - Furnishing of evidence of claims by employee for deduction of tax under section 192.-

(1) The assessee shall furnish to the person responsible for making payment under sub-section (1) of section 192, the evidence or the particulars of the claims referred to in sub-rule (2), in Form No.12BB for the purpose of estimating his income or computing the tax deduction at source.

(2) The assessee shall furnish the evidence or the particulars specified in column (3), of the Table below, of the claim specified in the corresponding entry in column(2) of the said Table:-

Table

Sl. No. (1)	Nature of Claims (2)	Evidence or Particulars (3)
1.	House Rent Allowance	Name, address and permanent account number of the landlord/landlords where the aggregate rent paid during the previous year exceeds rupees one lakh.
2.	Leave travel concession or assistance	Evidence of expenditure.
3.	Deduction of interest under the head “Income from house property”.	Name, address and permanent account number of the lender.
4.	Deduction under Chapter VI-A.	Evidence of investment or expenditure.

Amendment 2: Revised due dates for filing of quarterly TDS returns.

The CBDT has also notified revised due dates for filing of quarterly TDS returns by persons (other than government).

Table

Sl. No.	Due date of Ending of quarter of financial year	Old Due Date	Revised Due date
1.	30th June	15th July of the financial year	31st July of the financial year
2.	30th September	15th October of the financial year	31st October of the financial year
3.	31st December	15th January of the financial year	31st January of the financial year
4.	31st March	15th May of the financial year immediately following the financial year in which the deduction is made	31st May of the financial year immediately following the financial year in which the deduction is made

Amendment 3: Change in due date of payment of TDS deducted u/s 194IA.

Any sum deducted under section 194-IA shall be paid to the credit of the Central Government within a period of thirty days seven days from the end of the month in which the deduction is made and shall be accompanied by a challan-cum-statement in Form No. 26QB.

http://www.incometaxindia.gov.in/communications/notification/notification30_2016.pdf

FAQs on Annual Information Report (AIR) caused Sending of Notices by Income Tax Department

FAQ 1: How Income Tax Department get to know about our transactions?

Every one want to keep distance from Income Tax Department but due to the following expenses and investments, which at any point of time performed by you may invite undue attention of the Income tax Department.

S. No.	Expenses/Investments	Limits
1.	Cash Deposits in Saving Bank Account	Aggregating to Rs. 10 Lakhs P.a.
2.	Cash Deposits or withdrawals in one or more current account.	Aggregating to Rs. 50 Lakhs or more
3.	Receipt of Cash Payment for sale of any goods/ services	Exceeding Rs. 2 Lakhs
4.	Purchase / Sale of any Immovable Property	Exceeding Rs. 30 Lakhs
5.	Making Credit Card Payments	More than Rs.2 Lakhs p.a.
6.	Investment in Shares	More than Rs. 1 Lakh
7.	Investment in RBI Bonds	More than Rs. 5 Lakhs
8.	Investment in Mutual Fund Units	More than Rs. 2 Lakhs
9.	Investment in Debentures/ Bonds	More than Rs. 5 Lakhs
10.	Investment in Gold ETF	More than Rs. 1 Lakh

FAQ 2: How does the Income Tax Department get to know about all these activities?

The IT Department has developed a statement of financial transactions called Annual Information Report (AIR) through which they get to know about all the transactions entered by you and on the basis of this report, the Income Tax Department shortlists their targets and further sends them a notice.

FAQ 3: What do you mean by Annual Information Report?

Annual Information Return (now called as statement of financial transaction or reportable account) of ‘high value financial transactions’ is required to be furnished under section 285 BA of the Income-tax Act, 1961 by ‘specified persons’ in respect of ‘specified transactions’ registered or recorded by them during the financial year.

FAQ 4: Who furnished Annual Information Return to the Income tax Department?

Sr. No.	Class of Person	Nature and Value of Transaction
1.	A Banking Company	a)   A Cash deposit aggregating to Rs. 10 Lakh or more in a year in any saving account b)   Cash deposits or withdrawals aggregating to Rs 50 lakh or more in a financial year in one or more Current Account.
2.	Any Institution issuing Credit Card	Payment made by any person against bill raised in respect of credit card issued to that person, aggregating Rs. 2 Lakh or more in the year
3.	A Trustee of a Mutual Fund	Receipt of Rs. 2 Lakh or more for acquiring units of that fund.
4.	A Company or Institution issuing Bonds or Debenture	Receipt from any person of an amount of Rs. 5 lakh or more for acquiring bonds or debentures issued.
5.	A Company issuing shares through public or right issue	Receipt from any person of an amount of Rs. 1 lakh or more for acquiring shares issued by the company.
6.	Registrar or Sub- Registrar appointed under the Registration Act	Purchase and sale by any person of immovable property valued at Rs. 30 Lakh or More
7.	Any person being an officer of RBI	Receipt from any person of an amounts aggregating to Rs. 5 lakh or more in a year for bond issued by Reserve Bank of India
8.	Any other Person	a)   Receipt of Cash Payment exceeding Rs.2 Lacs for sale of any goods/ services. b)   Investment in Gold ETF worth more than Rs. 1 Lakh.

FAQ 5: How can I trace my High Value Transactions reported under AIR?

The assesse can trace his/ her high value transactions reported under AIR, in their 26AS Report under Part E - AIR Transactions. Any transaction of the assessee which has been categorized as a High Value Transaction, will be reflected therein.

FAQ 6: How to avoid receiving a notice from the IT department?

       

      1)      File your Income Tax returns on time and correctly.

      2)      Always re-check your Tax Credit with the 26AS statement.

      3)      Disclose all your Taxable as well as Exempt income under the right head in the income tax return.

Section 44AD Budget 2016

WOMEN CAN BE KARTA OF HUF

Question: Whether woman can be Karta of HUF HUKDFN???

There was no such reason for this question ever before why woman were deprived from being Karta of HUF. But as per recent judgment of Delhi High Court in case of Mrs. Sujata Sharma (Plantiff) vs Shri Manu Gupta (Defendant) dated 22.12.2015, woman can be a Karta of HUF.

Facts of the Case: The eldest daughter of the HUF family filed the suit against the cousin brother claiming her right to be Karta of HUF after the passing of her father and three uncles. The learned counsel of for the plaintiff further argued that when woman are equal in all respects in modern life as per 174^th report of the Law Commission of India so, why they should be deprived from such right and privilege of managing HUF as their Karta. On the other hand Section 6 of Hindu Succession Act does not curtails the right of woman to be Karta of HUF.

Decision: The court finds no restriction in the law preventing the eldest female co - parcener of an HUF, from being Karta of HUF.

Article by Ms. Karishma Sharma

TDS on Taxi Hire Charges

TDS under Section 194C - Payment to Contractors

I.           194C(1) - Any person responsible for paying any sum to any resident for carrying out Any Work shall, at the time of credit of such sum to the account of the contractor or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to—

(i) one per cent where the payment is being made or credit is being given to an individual or a Hindu undivided family;

(ii) two per cent where the payment is being made or credit is being given to a person other than an individual or a Hindu undivided family,

of such sum as income-tax on income comprised therein.

II.      As per Explanation (iv)(c) given under Section 194C defines “Work” to include “carriage of goods and passengers by any mode of transport other than railways”

Therefore, TDS shall be deducted on the Taxi Hire Charges as rate prescribed under section 194C of the Income Tax Act, 1961

No TDS on payment made to shipping agents on foreign shipping companies

a) Section 172 deals with shipping business of non-residents and as per section 172(1) the provisions of sections 194C and 195 relating to tax deduction at source are not applicable.

b) Section 194C applies to payments made to any "resident" and section 172 operates in the area of computation of profits from shipping business of “non-resi­dents”. Thus, there is no overlapping in the areas of operation of these sections.

However, no TDS shall be deducted in case of payments made to shipping agents of non-resident ship-owners or charterers for carriage of passengers etc., shipped at a port in India as the agents acts on behalf of the non-resident ship-owner or char­terer and they steps into the shoes of the principal.

Reference Circular no 723 dated 19-09-1995

http://www.incometaxindia.gov.in/Communications/Circular/910110000000000280.htm