Thursday, July 31, 2014

What to do in case of TDS mismatch?


Even if the credit for TDS as claimed in the return matches with the balance as appearing in the Form 26AS, Assessing Officer may still raise a demand for payment of differential amount due to TDS mismatch. The reason for such differences could be as under: 
  • (1) TAN of deductor was wrongly mentioned 
  • (2) Name of deductor was not spelt correctly
  • (3) Tax deducted by one deductor wrongly included in the amount of tax deducted by another deductor 
In case of such TDS mismatch, an assessee can file a rectification request. 

Steps to file the rectification request: 
  1. (a) Login to your account in https://incometaxindiaefiling.gov.in
  2. (b) Go to My Account > Rectification request 
  3. (c) You need the following to fill in the required details: 
    1. (i) PAN 
    2. (ii) Assessment Year 
    3. (iii) Latest Communication Reference Number (it starts with CPC/Assessment Year/)
    4. (iv) Latest CPC Order date 
    5. (d) Click on Validate to go to next step
    6. (e) On the next screen, choose 'Taxpayer is correcting data for Tax Credit Mismatch Only' from the drop-down box of 'Rectification Request Type' 
    7. (f) Check from the following relevant boxes for which taxpayer is seeking rectification: 
      1. (i) TDS on salary details
      2. (ii) TDS on other than salary details 
    8. (g) Fill in all the relevant details including details of tax deducted and reported in the return of income filed earlier 
    9. (h) Click on the button of 'Submit' to submit the rectification request. 
The TDS mismatch may also be due to error in TDS return filed by deductor. In such a situation, you should intimate the deductor about such error and require him to rectify the TDS return. 

In a press note no. 402/92/2006 dated April 17, 2014 CBDT had noted that many taxpayers commit mistakes while furnishing details of tax credit in the return of income. Such mistakes include: 

  • (a) Invalid/incorrect TAN of deductor; 
  • (b) Furnishing same TAN for more than one deductor; 
  • (c) Filing information in wrong TDS Schedules in the Return Form; 
  • (d) Furnishing wrong challan particulars in respect of Advance tax, Self-assessment tax etc. 
Consequently, the tax credit could not be allowed to the taxpayers while processing returns despite the tax credit being available in 26AS statement. The CBDT, therefore, directs the taxpayers to verify if the demand raised on them is due to tax credit mismatch on account of such incorrect particulars and submit rectification requests with correct particulars of TDS/tax claims for correction of these demands. The rectification requests have to be submitted to the jurisdictional Assessing Officer in case the return was processed by such officer, or the taxpayer is informed by CPC, Bangalore that such rectification is to be carried out by Jurisdictional Assessing Officer. In all other cases of processing by CPC, Bangalore, an online rectification request can be made (as defined above). 

CA Amresh Vashisht

PROCEDURE OF APPOINTMENT OF MD FOR PRIVATE LIMITED COMPANY


Appointment of Managing Director, Whole- Time Director OR Manager (Section: 196):
This Section is applicable on Both Private as well as Public companies. Only this section of Chapter-XIII applicable on Private Companies. At the time of practical working on this section, some points create difficultiesm, because for appointment of Managerial Personnel company have to comply with provisions of Section- 196 and have to leave all other sections of this chapter.

MY OPINION: As per Law, there is no compulsion for private company to appoint MD, WTD and Manager. As per Act Private Company can be in continue working without MD, WTD and manager throughout the life of company. 

But problems arise when Private company appoint any Managerial Personnel willingly. Then company requires following Section: 196 of CA-2013.

SECTION- 196:

  1. A company can appoint either Managing Director or Manager not both {Sub – section (1)}. 
  2. MD, WTD and Manager can be appoint for maximum tenure of 5 years. But company may reappoint them for next term of 5 Years or lesser period, before expiry of existing term.
  3. But re-appointment cannot be done earlier than one year before expiry of the term. This means, company may re-appoint them for next term in last one year of current term.
  4. The minimum age for appointment for these positions is twenty – one years and normal retirement age is seventy years. (So the person who does not attain age of 21 year can’t appoint as Managerial Personnel).
  5. But a person who has attained age of 70 year can be appoint as Managerial Personnel, by passing of Special Resolution in General Meeting, Condition: Explanatory Statement justifying such appointment shall be annexed to the notice of General Meeting for motion of appointment.
  6. For appointment of a person who has attained age of 70 year following procedure:
    1. · Call a Board Meeting
    2. · Issue notice of General Meeting
    3. · Pass Special Resolution In General Meeting.
    4. · File MGT-14 with ROC within 30 days of passing of Resolution.
    5.  File form DIR-12 and MR-1 with ROC with in 30 days of passing of resolution of appointment.
  7. To appoint a person as Managerial personnel:
    1. · Appointee should not be an un-discharged insolvent nor has any time been adjudged as an insolvent.
    2. · Appointee has not any time suspended payment to his creditors or has made a composition with them. 
    3. · Appointee should not be a convict of an offence and sentenced for a period of more than six months. {Sub – section (3)

RECENT UPDATES IN DIRECT & INDIRECT TAXES AND IN OTHER AREAS OF PROFESSIONAL INTEREST


INCOME TAX

CIT Vs Vikas International
Income Tax - Sections 28(iiib), 80HHC - export - gem stones - polished diamonds - Whether premium on the licences purchased by assessee from outside parties for sale or import, would be liable to be treated as cash assistance taxable u/s. 28(iiib) as against its export eligible to deduction us. 80HHC - Whether the said assistance would be taxable as income from other sources - Whether deduction u/s 80HHC could be claimed on export of cut and polished diamonds and gem stones. - Revenue's appeal dismissed : GUJARAT HIGH COURT

Tuesday, July 29, 2014

Major changes in new Form 3CD (Tax Audit report Format )


The CBDT has notified Income-tax (7th amendment) Rules, 2014 which substitutes the existing Form No. 3CD with a new form. The new Form 3CD prescribes certain new reporting clauses and substitutes some existing clauses with new ones. The new form requires tax auditor to furnish more and detailed information in the new form for tax audit report.

Unlike old form 3CD which required auditor to report only those inadmissible payments which were debited to Profit and loss account, the new Form 3CD requires reporting of all disallowable payments even if they are not debited to profit and loss account.


With the substitution of Form No. 3CD, reporting in the new form would be a time taking job for the Chartered Accountants. Here is the list of additional reporting requirements as prescribed in the new Form No. 3CD:

CBDT withdraw Form 3CD-3CB-3CA (audit report) Old Utility with Immediate effect


As Informed you earlier that CBDT has released New formats for Audit Report (Form No. 3CA, Form No. 3CB and Form No. 3CD) vide notification 33/2014 dated 25.07.2014.In response to this notification CBDT has withdrawn old efiling utility for Form No. 3CA, Form No. 3CB and Form No. 3CD from Income Tax India e filing site and released a notice (reproduce here under) on website. 

As per Notice shown on website ,CA has been advised not to upload Audit report based on old form.The restriction has been placed not only for current assessment year(2014-15) but also for previous assessment years. 

In our view if audit has been already been conducted on earlier date then it must be allowed to be uploaded on website in old format .ICAI should take up this matter with concerned authorities.Notice shown on the Income Tax website reproduced below.

The existing Form No. 3CA, Form No. 3CB and Form No. 3CD have been substituted vide notification no. 33/2014 dated 25.07.2014 with immediate effect. Taxpayers and CAs are advised to await the release of the new schema and utility to submit in the newly notified aforementioned Forms. Taxpayers and CAs are advised that any upload using the old Forms will not be valid even for previous AYs in view of the notification of CBDT. The new schema and updated utility for e-Filing of the same will be deployed shortly. CBDT has withdrawn old utility of form No. 3CD. CBDT is expected to release new utility soon.
Read Major Changes in Form 3CD  

PENALTY ON LATE FILING OF INCOME TAX RETURN AY 2014-15 FY 2013-14


Now A days all tax consultant ,business man,specially persons who have earned salary income ,are in rush to file their income tax return for financial year 2013-14 by due date i.e 31st July 2014.we are also one of them.

Due date of filing of income tax return for Assessment Year 2014-15 Financial year 2013-14 is as under(read link for more details)
  1. In case of person who are not liable to get their accounts audited is 31st July 2014 
  2. In case of person who's accounts are liable to be audited under any law  and partner of such firms and all companies is 30.09.2014
Person earning income from following heads is covered under due date 31st July 2014 .
  1. Salary ,Pension, 
  2. Income from other source like interest income ,
  3. Income from capital gain , 
  4. Income from house property and 
  5. Income from person owning small business and not liable to get their accounts audited are covered.
In brief all person other than those for which accounts are required to be audited is liable to file return on or before 31st July 2014 for Ay 2014-15

So in nutshell every body is trying to meet the deadline i.e.31st July 2014. we and you are also doing efforts in this direction ,but do you know

what is the penalty if some one failed to filed his return by due date.................i.e 31st July 2014?

any guesses..........

no guess ,we will tell you ,In fact there is no penalty as such for this fault ,absolutely no penalty ,do you believe ,we have said that there is no penalty on late filing of return as such.But this is the fact .

Specific penalty for late filing of return is prescribed u/s 271F which is briefed here under

If a person who is required to furnish a return of his income, as required under sub-section (1) of section 139 or by the provisos to that sub-section, fails to furnish such return before the end of the relevant assessment year, the Assessing Officer may direct that such person shall pay, by way of penalty, a sum of five thousand rupees
so this section says end of relevant assessment year ,for previous year 2013-14, assessment year is 2014-15 and it will ends on 31.03.2015 ,means there is no penalty for late filing of income tax return up to 31.03.2015 and after that assessing officer(AO) can impose a penalty of 5000,and that is also his (AO) power which he may or may not exercise after giving due hearing to the assessee.

Now you would like to know why people are so much worried about the due date ,the reason is that as due date has been linked with various other section of the income tax act ,so it is significant in that manner .



so we have listed few impacts of late filing of the Income tax return and issues related to due date of income tax.

Impact of late filing of Income tax return and issue related to due date(The List is not exhaustive/complete)

  1. Interest u/s 234A:If there is tax due after deducting advance tax ,TDS and self assessment tax than interest will be applicable @1% per month and part thereof up to the date of filing of the return besides interest applicable u/s 234B or 234C. Means this interest is applicable only if there is any tax payable in your return .(INTEREST calculator 234BC online is available here)
  2. Loss of Interest on refund:You may loose interest on refund u/s 244A as delay in filing is attributable to assessee for the period by which you have filed late return.
  3. Audit Report:Person who are liable to get their accounts audited should get the audit report on or before the due date of filing return i.e 30.09.2014.E filing of audit report s mandatory from ay 2013-14
  4. Revised return :Late /belated return can not be revised .This is major draw back .if you failed to file return in time then you can not revise your income tax return. Though you may apply revision u/s 154 but it has few limitation and very lengthy process.
  5. Some of deduction under sub sections of Section 80 are not available for late return.
  6. Due date of income tax return is related to TDS deposit and dis allowance u/s 40a(ia).
  7. Due date of Income Tax return is related to tax saving u/s 54,54B,54F and some other issues in capital gain saving account deposit scheme.
  8. Not able to carry forward the losses under various heads:you are not able to carry forward following type of losses if file return after due date
    1. Speculation loss
    2. business loss excluding loss due to un absorbed depreciation and capital exp on scientific research
    3. short term capital loss
    4. long term capital loss
    5. loss due to owning and maint. of horse races
  9. However there is no impact on following type of losses even if return is furnished after the due date
    1. loss from house property
    2. business loss on account of un absorbed depreciation and capital expenditure on scientific research.
  10. Though delay can be condoned as per circular 8/2001 DT 16.5.2001 on fulfilling of certain condition)
so if you are falls under the ambit of the above points then you should furnish your return up to 31st July 2014 .

Person who can afford to file late return 

If you have
  • already deposited due tax or due taxes has been deducted by your employer and nothing is due or
  • you are not claiming a Major amount as refund or
  • you have no losses to be carried forward
then you can fill return up to the end of the assessment year i.e 31.03.2015 without any penalty.

Person who should file return on time.

If you have
  • balance tax to be deposited or short fall of tax or
  • huge amount of refund due to you or
  • you have losses to be carried forwarded as explained above
then rush to Income Tax department website to file Your Income Tax Return in Time.

NOTE: all things as explained above is to not encourage people to file voluntarily late return but only to inform taxpayers their liability so that they can take informed decision.

Monday, July 28, 2014

New 3CA 3CB 3CD (Audit Report format) Notified applicable wef 25.07.2014


CBDT has notified the new format for Tax audit report on form 3CA 3CB 3CD  under section 44AB of Income Tax Act 1961.The New format is applicable from 25.07.2014.The Notification 33 dated 25.07.2014 is given as under for your ready reference.


GOVERNMENT OF INDIA
MINISTRY OF FINANCE
(DEPARTMENT OF REVENUE)
(CENTRAL BOARD OF DIRECT TAXES)
New Delhi, the 25th July, 2014
NOTIFICATION  INCOME-TAX

S.O. 1902 (E) In exercise of the powers conferred by section 295 read with section 44AB 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 ( 7th Amendment) Rules, 2014.
(2) They shall come into force on the date of their publication in the Official Gazette.

2. In the Income-tax Rules, 1962, in Appendix-II, for Form No. 3CA, Form No. 3CB and Form No. 3CD, the following forms shall be substituted, namely:-



[F.No.133/1/2014-TPL] (J Saravanan) Under Secretary (TPL) Note: The principal rules were published in the Gazette of India vide number S.O. 969(E), dated the 26th March, 1962 and last amended by number S.O. 1418, dated the 30/05/2014. 

PROCEDURE TO OBTAINING DIN (Director Identification Number)


Section and Rule Number(s) 

E Form DIR-3 is required to be filed pursuant to Section 153 of the Companies Act, 2014 & Rule 9(1) of the Companies (Appointment and Qualification Of Directors) Rules, 2014 which are reproduced for your reference. 

Section 153: 

Every individual intending to be appointed as director of a company shall make an application for allotment of Director Identification Number to the Central Government in such form and manner and along with such fees as may be prescribed. 

Rule 9(1): 

Every individual, who is to be appointed as director of a company shall make an application electronically in Form No. DIR-3, to the Central Government for the allotment of a Director Identification Number (DIN) along with such fees as provided in the Companies (Registration Offices and Fees) Rules, 2014.

Purpose of the e-form 

Any person intending to become the director in a company is required to make an application to MCA for allotment of a unique identification, namely, Director Identification Number (DIN) through this e-Form.
  1. Any person intending to apply for DIN shall have to make an application in e-Form DIR-3 and should follow the following procedure:
    1. Download Form- DIR-3 from MCA Portal by given link. 
    2. http://www.mca.gov.in/MinistryV2/Download_eForm_choose.html
    3. Fill the given Particulars in e-form.
    4. Attach the photograph (JPEG).
    5. Attach scanned copy of supporting documents (Proof of Identity, Proof of Residence of Applicant and DIR-4): List Attached Below 
    6. Physical documents are not required to submit at DIN cell.
    7. The e-Form shall have to be digitally signed and shall be uploaded on MCA21 portal.
    8. Form DIR-3 is mandatorily to be signed by an Applicant and a practicing professional or secretary (who is a member of ICSI) in whole time employment or the Director of the existing company.
    9.  The applicant is required to get himself/herself registered on the MCA21 Portal to obtain login id, which is necessary for payment of the fees or the Professional is required to get himself/herself registered on the MCA21 Portal to obtain login id, which is necessary for payment of the fees 
    10. After obtaining the login-id, Login to the MCA21 portal and click on 'e-Form upload' link available under the 'e-Forms' tab for uploading the e-Form DIR-3.
    11. Upon upload, pay the fees for e-Form DIR-3.
    12. Only electronic payment of the fees shall be allowed (I.e. Net banking / Credit Card). No challan payment will be accepted under revised procedure of DIN allotment.
    13. e-Form DIR-3 will be processed only after the DIN application fee is paid.
    14. Approved DIN shall be generated in case the form is being signed by a practicing professional and details have not been identified as potential duplicate. Provisional DIN shall be generated in case form is signed by secretary in whole time employment or Director of existing company and details have been found as potential duplicate. A suitable informational message and an email shall be provided to the user that the DIN shall be approved after due verification by the DIN cell.

Processing of e Form DIR-3.

In case, DIR-3 gets certified by the professional (i.e. CA (in whole time practice)/ CS (in whole time practice)/ CWA (in whole time practice)/, the DIN will be approved by the system immediately online (in case it is not potential duplicate).

Post-approval changes in particulars of Form DIR-3.

If there is any change in the particulars submitted in e-form DIR-3, applicant can submit e-form DIR-6 online. For instance in the event of change of address of a director, he/ she is required to intimate this change by submitting e-form DIR-6 along with the required attested documents.

 FAQ’s

1. Why to get e-form DIR-3 attested from Professional?
Answer:
  • · If eForm is digitally signed by a Chartered Accountant (CA) or Cost Accountant (CWA) or Company Secretary (CS) (in whole time practice) then the supporting documents attached shall be self-attested by the applicant. 
  • · If eForm is digitally signed by secretary (who is member of ICSI), in whole time employment or director of existing company then the supporting documents attached shall be either self-attested by the applicant or duly attested by either Public Notary or a Gazette Officer of a Government. {The attesting authority must indicate the following while attesting the documents:- (i) Signatures; (ii)Name in full in Capitals; (iii) Registration No.; and (iv) Seal/ Stamp. }
  • · In case, the director/ designated partner is residing outside India, then the attached supporting documents should be attested by the Consulate of the Indian Embassy, Foreign public notary. In case of director, supporting documents can also be attested by Company secretary in full time employment /CEO / Managing director of the Indian company in which he / she proposed to be a director. 

2. List of Mandatory Attached Documents: 
The following are the mandatory attachments to be filed in all cases:
A. Proof of Identity of Applicant
·         In case of Indian nationals, Income-tax PAN is a mandatory requirement for proof of identity.
·         In case of foreign nationals, passport is a mandatory requirement for proof of identity.
·         Proof of identify enclosed with e-Form DIR-3 should also contain the date of birth of the applicant and the same should match the date of birth filled in the application form. In case the proof of identify does not indicate the Date of Birth then additional proof of Date of Birth, duly certified/ attested, should be attached.

B. Proof of residence of applicant
·         Address proofs like: Passport, Election (Voter Identity) Card, and Ration Card, Driving License, Electricity Bill, Telephone Bill or Aadhar shall be attached and should be in the name of applicant only.
·         In case of Indian applicant, documents should not be older than 2 months from the date of filing of the e-Form.
·         In case of foreign applicant, address proof should not be older than 1 year from the date of filing of the e-Form

C. Copy of verification by the applicant as per e-Form No. DIR-4- DIR-4 shall contain the Name, Father’s name, date of birth and text of declaration and physical signature of the applicant)

In case of proofs which are in languages other than Hindi / English, the proofs should be translated in Hindi / English from professional translator carrying his details (name, signature, address) and seal. In the case of foreign nationals, translation done by the notary of home country is also acceptable.
Any other information can be provided as an optional attachment(s).


3. Ground of Rejections of e-form.

Rejection Code
Description
1
Proof of identity has not been attested by an authorized person.
2
Proof of residential address has not been attested by an authorized person.
3
The supporting document for identity proof is not valid as it has not been issued by any Government Authority
4
The enclosed evidence has handwritten entries.
5
Date of Birth is not matching with the date of birth mentioned in the proof attached.
6
Applicant’s Name is not matching with the name mentioned in the proof attached.
7
Address is not matching with the address details mentioned in the proof attached
8
Applicant’s Father’s Name is not matching with the father’s name mentioned in the proof attached.
9
The submitted application is duplicate DIN application i.e. an approved DIN already exists in this name.
10
Identification number entered in application does not match with the identity proof enclosed.
11
The gender is not entered correctly in DIN form.
12
ID proof not attached with the application
13
Address proof not attached with the application.
14
Non-submission of copy of passport (for foreign nationals)
15
Passport duly appostillised not enclosed (For foreign nationals)
16
Verification by applicant is not attached
17
Verification by applicant not in prescribed format
18
Verification by applicant is not signed
19
The prefixes/ suffixes like Mr. / Ms. / Kumari / Shri / Late or Ji etc. are used in your name or your father's name field in DIN form.
20
The supporting documents attached not valid or current or has expired.

Details obtained from the Instruction Kit of DIR-3 and MCA Website (CS Divesh Goyal, ACS is a Company Secretary in Practice from Delhi and can be contacted at csdiveshgoyal@gmail.com) 

CS Divesh Goyal Practicing Company Secretary
+91-8130757966 csdiveshgoyal@gmail.com

Sunday, July 27, 2014

HOW TO RESET PASSWORD AT INCOME TAX INDIA E FILING WEBSITE (5 Methods)


Many person are facing problems in filing income tax return due to forget password for Income Tax India E filing website.Further many person facing problem due to non dis-closer of password by their tax advisers. But now Income Tax department has given many ways to reset the password at income tax e filing site. In this post we have explained all the tricks to reset password at Income Tax return Filing website .

As you may aware of that user id at Income Tax India website is PAN number.

Please Note that Due date to file Income Tax return for Non audit cases (like salaried person, Business Income where audit is not required) for Financial Year 2013-14 (assessment year 2014-15) is 31.07.2014

To reset password at Income Tax India E filing Site
  1. first you should click Login Link and 
  2. Then Forget Password Link.