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Conditions to Claim Deduction u/s. 80DD for Dependent under Handicapped.

2012-02-17T04:14:00.000+05:30

Deduction under section 80DD, in this regard the Income Tax Department put the following conditions to claim Deductions under section 80DD of Medical Treatment Handicapped dependent which are as under:

Eligible Taxpayers to whom deduction is Available :
This deduction can be claimed By Resident Individual/HUF. He may be ordinary resident Indian or Not ordinary resident Indian. He may be foreign citizen or Indian citizen. However Non resident can not claim this deduction.

Options :
Taxpayer may have done any (or both) of following options-
The taxpayer has incurs any expenditure for the medical treatment, training and rehabilitation of a disabled dependant; or
Deposits any amount in schemes like Life Insurance Corporation for the maintenance of a disabled dependant. An annuity or a lump sum amount is paid to the dependant or to a nominee for the benefit of the dependant in the event of the death of the individual depositing the money, from the said scheme,

Amount of deduction :
A deduction of Rs 50,000 is available. The amount of deduction is fixed irrespective of the amount deposited under option 2.1 or 2.2 as above. Where the depandant is with a severe disability, a deduction of Rs 1,00,000 is allowed. ( Rs 75000/- up to AY 2009-10)

Death of the defendant occurs before that of the assessee:
If the death of the dependant occurs before that of the assessee, the amount in the scheme is returned to the individual and is taxable in his hands in the year that it is received.

Certificate :
An individual should furnish a copy of the issued certificate by the medical board constituted either by the Central government or a state government in the prescribed form, along with the return of income of the year for which the deduction is claimed,However as per new rule 12 no document is to be attached with Income tax return .

Dependent Meaning :
The term 'dependent' here refers to -
For Individual: the spouse, children, parents and siblings(brother,Sister) of the assessee who are dependant on him for maintenance.
For HUF : menber of HUF who are dependent on him for maintenance

Depended claim of 80U :
Further Dependent themselves haven't claimed a deduction for the disability under section 80U in computing their total incomes.

Disability :
Normal disability not less than 40 % and severe disability means more than and equal to 80 %.

Conversion of STC into PAN based Registration.

2012-02-17T04:10:00.003+05:30

TRADE NOTICE NO.15/2011-ST, DATED 15-11-2011

Attention of the Trade, Industry and all concerned are hereby invited to the following :-

1. As per the provisions of Section 69 of Chapter V of the Finance Act, 1994 and Rule 4 of Service Tax Rules, 1994 every person liable for paying the Service Tax shall make an application to the concerned Jurisdictional Superintendent in form ST-1 for Registration and the same will be granted, after due verification, by the authorized officer, a certificate of registration in Form ST-2.

2. As per instruction issued vide C.B.E.C. Circular Nos. 493/59/99-CX, dated 12-11-1999, 35/3/2001-C.X. 4, dated 27-8-2001 and 97/8/2007-S.T., dated 23-8-2007. Registration Number also known as "Service Tax Code" (STC) will be alphanumeric fifteen digits PAN based number. The first part would be the 10 Character PAN issued by the Income Tax authorities. It is mandatory for all the concerned persons registered under the rules to obtain PAN whether or not they pay Income Tax.

3. To facilitate the trade, STC number/Registrations were issued to those assessees also who were not having PAN Numbers. To them registrations were given by creating TEMP (Temporary) Numbers by the department. This was done so that genuine tax payers will be able to pay their tax on time. These assessees were required to subsequently obtain PAN Number from Income Tax authorities and apply to the department to convert Temp based Registration Number into PAN based Registration Number.

4. There are approximately 167 nos. Service tax assessees who are having registrations based on the temporary number in Shillong Central Excise and Service Tax Commissionerate. It has been noticed that these assessees have not converted their Temp based Registration into PAN based registration.

5. It is directed that all those assessees who still have Registration based on TEMP number, should within one month from the issue of this notice, apply to the Jurisdictional Superintendent and obtain Registration number based on PAN. Xerox copy of PAN Number should also be submitted with application for necessary verification.

6. Those assessees who already have obtained PAN based registration number but still retained TEMP based registration number should immediately surrender their old registration based on Temp number.

7. After one month from the issue of this Trade Notice, all TEMP based Registration Numbers will made defunct in the ACES system.

8. All the Service tax Assessees and their Associations are requested to give wide publicity to the Trade Notice amongst their constituent members.

Unexplained Investment & section 69 of Income Tax Act.

2012-02-15T22:10:00.001+05:30

What happen when an assessee failed to show or did not mention in return, his investment made, but if the value of such investments is deemed to be his income provided, in such condition, what will do the assessee -

The assessee offers no explanations about the nature and source of investments.
The explanation offered by him is not found satisfactory by the assessing officer.

Financial year in which the investment is made may be taken as the previous year [Ram Swarup vs. CIT 192 ITR 537].

Where the assessee gives a credible explanation that is found to be satisfactory, no addition can be made to his income [CIT vs. Nitin 248 ITR 478]

Explanation should not be called for belatedly:
The length after which an assessee is called upon to explain a transaction is relevant factor while considering the sufficiency of the evidence. After the lapse of a decade an assessee should not be placed upon the rack and called upon to explain not nearly the origin and source of capital contribution but also the origin and source of that source as well.[S.Hastimal vs. CIT (1963) 49 ITR 273]; Upasana vs. CIT 229 ITR 220.

Discrepancies in stores may be treated as undisclosed income:
If there are differences between the value of stocks declared hypothecated to the bank and the value recorded in assessee’s books and the assessee failed to explain the differences, no exception could be taken to the addition made by the authorities[Century foam p ltd Vs. CIT (1994) 210 ITR 625].

Where books of accounts reveals sales but there is no corresponding material to show that the assessee could purchase the commodity for the purposes of offering for sales the situation is an invitation to assessee to explain as to how and from what source he held the amount of the commodity with regards to its purchase before it was offered for sale. In absence of anexplanation the deeming provision of section 69 is applicable [CIT vs. Anandarajan (1997) 228 ITR 664]

Secrete dealings are covered :
Where the sales were conducted by the assessee secretly and were not entered in his books of accounts and the relevant dealings involved assessments, additions could be made by invoking section 69[Himmatram Laxminarain Vs. CIT(1986) 161 ITR 7]

Advantages & Dis-advantages of New Pension Scheme under New Section 36(1)(iva) w.e.f. Assessment Year 2012-13.

2012-02-15T22:08:00.001+05:30

The union Government was introduced the new pension scheme in 2003 and according to the new pension scheme the employees appointed on or after January 1, 2004 & in State the appointment on or after 01.11.2005 both will contribute 10 per cent of their Revised Basic Pay + Grade Pay or A.G.P. and Dearness Allowance to the Pension Fund Regulatory and Development Authority under the Ministry of Finance. An equal amount will be contributed by the Centre. The scheme is mandatory for Government employees, but optional for other citizens of India. NPS merely declared that tax benefits would be applicable as per the Income Tax Act 1961 as amended from time to time.

THE NEW SECTION 36(1)(iva) :

The Finance Act, 2011 has inserted a new Section 36 (1)(iva) with effect from assessment year 2012-13 to provide that an assessee will get a deduction in respect of contribution towards a pension scheme referred in Section 80CCD of the Act on account of an employee up to 10 per cent of the salary of the employee in the previous year. For this purpose, ‘salary' includes DA, if the terms of ‘employment' so provide, but excludes all other allowances and perquisites.

Currently, contribution made by an employer towards a recognized provident fund, an approved superannuation fund or an approved gratuity fund is allowable as a deduction from business income under Section 36, subject to certain limits.

However contribution made by an employer to the NPS is not allowed as a deduction. The newly inserted clause provides that any sum paid by the assessee as an employer by way of contribution towards the pension scheme on account of an employee to the extent it does not exceed 10 per cent of the salary of the employee in the previous year, shall be allowed as deduction in computing the income under the head ‘Profits and gains of business or profession'.

No doubt, such deduction would have been available under Section 37. The matter, however, is placed beyond doubt by the new Section. It should, however, be noted that deduction would be available only upon actual payment. The term ‘employee' will include all employees including Director-employees. The limit of 10 per cent will apply to each employee individually. The Finance Act has also amended Section 40A (9) for this purpose.

LIMITS ON DEDUCTION :

Section 80CCE provides that the aggregate amount of deduction under Section 80CCC and 80CCD shall not exceed Rs 1 lakh. The Finance Act, 2011 provides that contribution made by the Central Government or any other employer to NPS shall be excluded while computing the limit of Rs 1,00,000. The contribution by the employee to the NPS will be subject to the limit of Rs 1,00,000.

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2012-02-15T22:05:00.001+05:30

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Salary on Hourly Basis, How to Calculate ?

2012-02-15T04:30:00.003+05:30

As you know, in the Company or any Private Firm or Small Scale Industries, where the numbers of employees are working. As the need to pay the salary, we can develop the Excel Base Hour Basis Salary Calculator, it solve there salary problem and which can calculate the salary of full month. Because calculating manual salary is full of waste of time as well as it requires a lot of energy. Therefore, I presenting a excel based salary calculator for Company, private firms or Small Scale Industries with no headache of calculating overtime or basic salary. One need to just enter the hours of work in a day and it will calculate the pay automatically.

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On the Basic of Duty Hours is 8, it will calculate salary along with all Incentives.
It provides Attendance Sheet.

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Conditions to claim Exemption of Medical Treatment u/s. 80DD of Handicapped Dependent.

2012-02-15T04:24:00.001+05:30

The deduction can claim of medical Treatment of Handicapped Dependent under secton 80DD as per the following conditions by Income Tax Act.

Eligible Taxpayers to whom deduction is Available :
This deduction can be claimed By Resident Individual/HUF. He may be ordinary resident Indian or Not ordinary resident Indian. He may be foreign citizen or Indian citizen. However Non resident can not claim this deduction.

Options :
Taxpayer may have done any (or both) of following options-

The taxpayer has incurs any expenditure for the medical treatment, training and rehabilitation of a disabled dependent; or

Deposits any amount in schemes like Life Insurance Corporation for the maintenance of a disabled dependant. An annuity or a lump sum amount is paid to the dependent or to a nominee for the benefit of the dependent in the event of the death of the individual depositing the money, from the said scheme,

Amount of deduction :
A deduction of Rs 50,000 is available. The amount of deduction is fixed irrespective of the amount deposited under option 2.1 or 2.2 as above. Where the depandant is with a severe disability, a deduction of Rs 1,00,000 is allowed. ( Rs 75000/- up to AY 2009-10)

Death of the dependant occurs before that of the assessee :
If the death of the dependant occurs before that of the assessee, the amount in the scheme is returned to the individual and is taxable in his hands in the year that it is received.

Certificate :
An individual should furnish a copy of the issued certificate by the medical board constituted either by the Central government or a state government in the prescribed form, along with the return of income of the year for which the deduction is claimed,However as per new rule 12 no document is to be attached with Income tax return .

Dependent Meaning :
The term 'dependent' here refers to -

Individual: the spouse, children, parents and siblings(brother,Sister) of the assessee who are dependant on him for maintenance.
For HUF : menber of HUF who are dependent on him for maintenance

Depended claim of 80U :
Further Dependent themselves haven't claimed a deduction for the disability under section 80U in computing their total incomes.

Disability :
Normal disability not less than 40 % and severe disability means more than and equal to 80 %

Salaried Employee may use Form 16 as Income Tax Return whose Salary is below 5 Lakhs.

2012-02-15T04:17:00.003+05:30

Finance Minister Mr. Pranab Mukarjee said on 24-05-2011 that no need to file income tax return for salaried person whose income is from salary and not from other sources, income 5 lakhs or below. But the question was that how the income tax return will be filed. Whether the employer file the return on there behalf or some other arrangement will take place.

Now the doubt is clear. Form 16 which is issued by the employer to the employee, a certificate of the deduction of TDS will do the work of income tax return of the salaried person.So it is a great news as the salaried person need not do anything but to submit Form 16 to the department and it's done.

How to Save Income Tax on Salary ?

2012-02-15T04:05:00.003+05:30

Dear Tax payee and salaried employee in this month of January 2012 more confuse that how and where the invest month for saving Tax and takes tax benefit under Chapter VIA during the assessment year 2012-13. The salaried Employee and Tax payee that what are the Tax free perquisites for Salaried Employee who deducted Tax as TDS from his monthly salary, so we suggest them all Tax Free Perquisites are as follows:

1. Medical Facility or Medical Reimbursement:

Medical Facility :- The value of any medical treatment provided to an employee or any member of his family in a hospital, dispensary or a nursing home maintained by the employee shall be a tax free perquisite.
Medical Reimbursement : Any sum paid by the employer in respect of any expenditure incurred by the employee on his medical treatment or treatment of any member of his family subject to maximum of Rs. 15,000 in the previous year.

2. Recreational Facilities : Any recreational facility provided to a group of employees (not being restricted to a select few employees) by the employer is not taxable.

3. Training of Employees: Any expenditure incurred by the employer, for providing training to the employees or by way of payment of fees of refresher courses attended by the employees.

4. Use of health club, sports and similar facilities provided uniformly to all employees by the employer.

5. Expenses on Telephone, including a mobile phone, actually incurred on behalf on the employee by the employer.

6. Employer’s Contribution: Employer’s contribution to superannuation fund of the employee or provided such contribution does not exceed Rs. 1,00,000 per employee per year.

7. The premium paid by the employer on an accident policy taken out by it in respect of the employee would not be a perquisite. [CIT v Lala Shri Dhar (1972) 84 ITR 192 (Del) and CIT v Vinay Bharat Ram (1981) 129 ITR 128 (Del)].

8. Motor car provided by the employer to the employee or expenses incurred by the employer in connection with motor car belonging to the employee (for purposes other than exclusively for personal purposes) shall be a tax free perquisite in the hands of the employee.

9. Amount given by the employer of assessee to assessee’s child as scholarship is exempt under section 10(16). [CIT v B.L. Garg (2006) 155 Taxman 189 (All)]

10. Food and Beverages provided to Employees: The following shall be a tax free perquisite in the hands of the employees-

free food and non-alcoholic beverages provided by the employer to his employees during working hours:

at office or business premises or
through paid vouchers which are not transferable and usable only at eating joints.

Provided the value of such meal is upto Rs. 50 per meal.

Any tea or snacks provided during working hours.
Free food and non-alcoholic beverages during working hours provided in a remote area or offshore installation.

11. Loans to Employees : - In the following cases the value of benefit to the assessee resulting from the provision of interest free or concessional loan shall be nil :

where the amount of loans are petty, no exceeding in the aggregate Rs. 20000;
Loans made available for medical treatment in respect of disceases specified in rule 3A of the Income-tax Rules. However, the exemption so provided shall not apply to so much of the loan as has been reimbursed to the employee under any medical insurance scheme.

12. Perquisites provided outside India : Perquisites provided by the Government to its employees, who are citizens of india for rendering services outside India, are not taxable. [Section 10(7)].

13. Rent Free House/Conveyance Facility: Rent free official residence and conveyance facilities provided to a Judge of the Supreme Court/High Court is not a taxable perquisite.

14. Specified Perquisite allowed to certain Persons:

Specified perquisites allowed to Judges of the Supreme Court, Chief Election Commissioner, Election Commissioner.
Chairman or retired Chairman, member or a retired member of U.P. S.C. are not taxable perquisites.

15. Residence to officials of Parliament etc. :- The Rent Free furnished residence (including maintenance thereof) provided to an officer of the Parliament a Union Minister or Leader of Opposition in Parliament, is not a taxable perquisite.

16. Accommodation in a Remote Area : - The accommodation provided by the employer shall be a tax free perquisite if the accommodation is provided to an employee working at mining site or an onshore oil exploration site or a project execution site, or a dam site or a power generation site or an offshore site which -

being of a temporary nature and having plinth area not exceeding 800 square feet, is located not less than eight kilometres away from the local limits of any municipality or a cantonment board; or
is located in a remote area.

17. Educational Facility for Children of the Employee: where the educational institution itself is maintained and owned by the employer and free educational facilities are provided to the children of the employee or where such free educational facilities are provided in any institution by reason of his being in employment of that employer, there shall be no perquisite value if the cost of such education or the value of such benefit per child does not exceed Rs. 1,000 p.m.

18. Use by the employee or any member of his household of laptops and computers belonging to the employer or hired by him.

19. Leave Travel Connection will be discussed in detail later.

20. Tax paid by the Employer on Non-Monetary Perquisites : Tax paid by the employer on non-monetary perquisites of the employee shall be exempt in the hands of the employee. [Section 10(10CC)]

Tax Calculation with DCPS & GPF Deduction Facility alongwith Monthwise Statement.

2012-02-14T09:06:00.003+05:30

A Salaried (Taxpayee) Employee are busy in Tax Calculation thus I develop easy , user friendly, excel base Tax calculation utility for Assessment year 2012-13. This utility contains projection of Tax and Salary Statement (monthwise). Employee of Maharashtra and Other State which they drawn salary as per State Government and Central Government Departments with All applicable allowances along with Dearness Allowance and as well as deductions withdrawal as per Salary Register.

This is Entry Form picture.

In this Entry Form entered information in only White Field/Cell, you will get all Gross Salary and Gross Deductions of Financial Year 2011-12 as per Maharashtra Government Salary Structure and Dearness Allowance.

If you want to Tax Calculation then click on Tax Calculation Button, you will see the following fig.

In the Tax Calculation form Enter Data in While cell/field to Calculate Proper Tax payable or Refund. After calculation of Tax press "Exit" Button to go to "Entry Form". If you want to print or preview your Mothiwise Salary Statement, then press on "Monthwise Salary Statement" Button. See the Following Pic.

After preview you may print, print this page in "Legal Size Paper" in Landscape format.

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What is Income Tax Slab for Assessment Year 2012-13 (Click Here)
Download TDS .FVU Utility (Click Here)
How to Create Form No. 16 (Click Here)

Tax on Employment (Profession Tax) [Section 16(iii)]

2012-02-13T06:59:00.003+05:30

Where an employee has paid tax on employment under the relevant State Law, the tax so paid or recovered from his salary is deductible from his gross salary income. The deduction is available in the year in which the tax is actually paid by the employee.

Perquisites - is gain or profit incidentally made from employment in addition to regular salary or wages. It is defined in section 17(2) of the Act. Perquisites can be broadly divided in following three categories:

Rent-free accommodation -section 17(2)(i)
Concession in rent –section 17(2)(ii)
Benefit or amenity given to a specified employee-section 17(2)(iii). The valuation of perquisites is provided in Rule 3 of the Income tax Rules. With effect from A.Y. 2006-07 the Fringe Benefits prescribed for the purpose of Section 17(2)
exclude the Fringe Benefits chargeable to tax under Chapter XII-H. The Fringe benefits prescribed u/s 17(2)
include -

interest free or concessional loan.
Use of movable asset
Transfer of movable asset.

Maximum amount under article 276(2): As per article 276(2) of the constitution ,State Govt , municipality or other authority which is authorized under article 276(2) can impose professional tax on employment from a person maximum up to 2500/year.

Basis of Computation of Income From House Property.

2012-02-13T06:59:00.001+05:30

Gross Annual Value (Section 23) :

Reasonable expected rent and is deemed to be the sum for which the property might reasonably be expected to be let out from year to year;
Rent actually received or receivable, if this sum is in excess of the sum referred to in clause (a), then the amount so received or receivable;
If due to vacancy during the whole or part of the year, the actual rent received or receivable is lower than the reasonable expected rent, then such rent is taken as the Gross annual value.

Unrealized rent (which the owner could not realize) shall be excluded from rent received or receivable in clauses (a)&(b), above.[Expln. To section 23(1)]

However, if the owner is in self occupation of the house property for his residential use, or cannot actually occupy it owing to his employment, business or profession carried on at any other place and he has to reside in a building not owned by him, then the annual value of such house shall be taken to be Nil.

Deduct municipal taxes :
From the Gross annual value, deduct municipal taxes (including service tax) levied by any local authority, only if these taxes are borne by the owner and actually paid by him during the previous year.

Deduction under section 24 :
The following two deductions are available u/s 24:

Standard deduction- 30% of the net annual value irrespective of any expenditure incurred by the taxpayer; and
Interest on borrowed capital is allowed as deduction on accrual basis, if capital is borrowed for the purpose of purchase, construction, repair, renewal or reconstruction of house property. For self-occupied house, deduction allowable is of Rs 30,000, if the capital is borrowed prior to 01.04.1999, the maximum ceiling of deduction is Rs1,50,000, if the capital is borrowed after 01.04.1999 for acquiring or constructing a house property, and the construction, acquisition is completed within 3 years from the end of the financial year in which the capital was borrowed and further that the person extending the loan certifies that such interest was advanced for acquisition or construction of the house property or refinance of the principal amount outstanding under an earlier loan.

Scheme of filing returns by salaried employees (getting Form No.16AA) through employer.

2012-02-13T06:59:00.000+05:30

The scheme is optional and provides an additional mode of furnishing returns of income by persons deriving income from salaries. An eligible employee (having gross salary upto Rs 1,80,000) may at his option furnish his return through he employer under the Scheme, as follows:

On receipt of TDS in Form 16AA from the employer, he shall verify the information given and furnish the same after signing and verifying to the employer before the due date.
On receipt of the duly signed and verified Form 16 AA, the employer shall furnish the return of i9ncome to the income tax department and receive an acknowledgment.
The employer shall ensure that the return is furnished before the due date and distribute the acknowledgment to the respective eligible employees and the date on which the employer furnished the return shall be treated as the date of filing of return by the eligible employee.”

What are the Reasons for mistakes in Credit for tax payments or TDS?

2012-02-12T06:59:00.003+05:30

A major reason for difference in refund amount during processing is that the details of tax payment or TDS do not match the data available with the Department. The critical checkpoints are as under:

Corresponding deduction of tax (TDS) on salary by all Employers should be correctly entered in Item 21- Tax Deducted at Source from Salary in ITR 1 or in Schedule TDS 1 for ITR 2.
The total of all TDS from all employers should be entered in Item 15b of ITR 1 or in Item 9b of Schedule Part B TTI- Computation of tax liability on total income of ITR 2.
Corresponding deduction of tax (TDS) on Interest by all Banks should be correctly entered in Item 22- Tax Deducted at Source on Interest in ITR 1 or in Schedule TDS 2 for ITR 2.
The total of all TDS from all Banks should be added to Item 15b of ITR 1 or to Item 9b of Schedule Part B TTI- Computation of tax liability on total income of ITR 2.
TDS on salary should be entered in Schedule TDS1 ONLY and TDS on other Income should be entered in Schedule TDS 2 ONLY.
Tax deduction Account Number (TAN) of the Employer or Bank is the unique identifier for matching TDS claims made against TDS reported by Employers or Banks. The TAN number is mentioned on the Form 16 given by the Employer or on the Form 16A given by the Bank. In case the TAN of the Employer or Bank is not correctly mentioned, no matching is possible and TDS credit will not be given. The correct structure of TAN is mentioned below:
If the TAN has been correctly entered but the Employer or Bank does not report the same TDS details to the Department, especially the taxpayer Permanent Account Number (PAN), then also the TDS cannot be matched. The taxpayer should confirm from the Employer or Bank that TDS details have been reported to the Department.
In case of Tax payments of Advance tax or Self Assessment tax, the PAN used to submit the tax challan to the bank should be the same as the PAN used to submit the return. Without a valid PAN the tax payment received from the bank would be in suspense and cannot be matched with tax payment claim as entered in the return.
While making the tax payment at the Bank, NO MISTAKE should be made in the challan while entering the PAN, Name, Type of tax payment (advance tax (code 100), self assessment tax (code 300)), tax applicable (Income tax other than companies).
Any tax payment made under code 400 corresponding to ‘Tax on regular Assessment’ cannot be used for matching and accordingly credit cannot be given against advance tax or self assessment tax claims.
The Challan Identification Number (CIN) is the combination of BSR code (any bank branch’s unique 7 digit identification number issued by RBI), date of deposit of challan (DD-MM-YY), and the running serial number of the challan, and is mentioned by the Bank while accepting tax payment on its seal. In case this is not clearly legible, the Bank can be requested to provide correct details. This must be entered correctly in the return while claiming credit.

How to rectify the mistake and to get the correct refund?

2012-02-12T06:59:00.001+05:30

Mistakes in the ITR due to any of the reasons may be corrected by submitting a rectification form. Some basic information is provided below:

The procedure for rectification and correction of mistakes will be available shortly. In case of any queries please call at 080-43456700.
In case of any difference in date of birth or gender in Department records or in case of any need to correct the address, the data may be corrected by submitting a revised PAN application form (quoting the existing PAN number) with correct details and providing relevant proof at any TIN facilitation center.
In case of any mistake in MICR or Bank Account number a cancelled cheque showing correct particulars would be required to be submitted to CPC for correction in bank account number or MICR code.
In case the charging of additional tax and interest is only because of non- matching of tax payment or TDS, upon correction of the details by taxpayer or employer / bank, the additional tax and interest will be automatically reduced or eliminated.

Interest Rates on Small Savings Schemes w.e.f. 01.04.2012

2012-02-12T06:59:00.000+05:30

Ministry of Finance has clarified that although the rate of interest on small savings schemes will be aligned every year with rates of Government securities of similar maturity, with suitable spread, the rates are fixed and not floating so far as individual investments except PPF are concerned. This is in response to news items appearing in certain sections of the Press that the interest rates on small saving schemes, revised by the Government w.e.f. 1.12.2011, are floating rates, which will undergo change according to fluctuations in the yield on the Government securities.

It has been clarified that the rate prevailing at the time of investments will remain fixed and unchanged till the maturity of the investment. Any revisions in interest rates in subsequent years will only be applicable to the investments made in the relevant period. For instance, investment made in an instrument other than PPF on 1.12.2011 will remain valid till the maturity of that instrument, irrespective of revision of interest rate with effect from 1.4.2012. As regards PPF, the interest rate fixed every year will be applicable to all PPF accounts.

When Employer deducted excess TDS from Salary of Salaried Employee, is refundable or adjustable?

2012-02-11T06:59:00.004+05:30

This is important task as well as question that when the employer deduct excess Income Tax as TDS from the Salary of Salaried Employee and in this situation the employee can be demand to refund or adjust the excess deducted TDS (Income Tax) if employer deduct excess TDS as income tax from salary of an employee.

Answer of this question is that No. The assessee from whose salary, excess tax has been deducted at source is to approach the assessing officer and submit his claim for refund of excess amount deducted. The employer is no required to make refund of the excess amount. The refund has to be made by the Assessing authority, with whom the amount has been deposited and not the employer.

Income Tax Department Change the verification process of TAN Account.

2012-02-11T06:59:00.002+05:30

The Income Tax Department Tin-Nsdl has changed the procedure of verifying the TAN Account. There was some confusions and doubt in the earlier method so the Tin has changed the procedure. For Details information about new procedure how to verify the TAN Account is as follows:

Steps to register the TAN account:

Register your TAN online at TIN website.
Submit the application online.
On successful registration of TAN, a 12 digit alpha numeric registration number will be generated.
Print the acknowledgment and preserve the same for future reference.
On successful registration, user will be required to verify the e-mail ID (s) quoted on re-re-registration of TAN for activating the TAN account.
For verifying the e-mail ID(s), an e-mail containing the link will be sent to the registered e-mail ID (s).
For verification of mobile no. (if provided on registration), an SMS containing six character verification code is sent.

New procedure to verify TAN accounts:

Click on the link received by e-mail, and provide:

TAN
TAN registration no. (12 digit alphanumeric no.)
Verification code (Six character received by SMS)
On successful validation of TAN, TAN registration and verification code, TAN account will be activated within 24 hours.
On activation of TAN account, an e-mail containing user ID (created on registration of TAN account) will be sent at the registered e-mail ID (s).

Change the Scheduled of Union Budget for Financial Year 2012-13

2012-02-11T06:59:00.001+05:30

The Union Budget 2012-13 is now scheduled on March 16, 2012. The Finance Minister, Mr. Pranab Mukherjee , will present the Union Budget. The re-scheduling of this date is due to Assembly Elections in five States. The Cabinet Committee on Parliamentary Affairs (CCPA), under Mr Mukherjee, met on Tuesday and recommended to the President that the Budget Session of Parliament be convened from March 12. The first part of the session will end on March 30. Both Houses will re-assemble on April 24, and the session will continue till May 22. The President's address will be on March 12, the Rail budget on March 14 and the Union Budget on March 16.

From 1.80 Lakhs to 3.00 Lakh Tax Relief Limit may be increased in Budget.

2012-02-10T13:05:00.004+05:30

The Standing Committee on Finance, headed by former Finance Minister and senior BJP leader Yashwant Sinha, will discuss the final draft of the report on the DTC Bill during its day-long meeting on Friday. And as per the Economical Finance survey some good news for Salaried Taxpayee that, the Finance Minister Pranab Mukharjee may announced in the Budget for Financial 2012-13 a New Tax Slab Exemption Limit for Assessment year 2013-14 by increasing the income tax exemption limit up to Rs. 300000.00 Now the existing Tax Exemption limit is Rs. 180000.

Sources indicated that the new tax slabs could be in line with the Direct Taxes Code Bill, which was introduced in Parliament in 2010. The bill has proposed that incomes between Rs. 3 to 5 lakh be taxed 10%, those between Rs. 5 to 10 lakh be taxed 20% and incomes above Rs. 10 lakh per annum be taxed 30%. At present, incomes between Rs. 1.8 lakh and Rs. 5 lakh are taxed 10%, those between Rs. 5 to 8 lakh taxed 20% while incomes above Rs. 8 lakh attract a tax rate of 30%. (Check ready reckoner for Financial year 2011-12)

A rejig in tax slabs along with a hike in exemption limits will enhance people's disposable incomes, which, in turn will boost consumption spending as well as savings.The government is negotiating through a maze of thorny issues ahead of this year's budget amid faltering demand and rising prices that have hit growth in the broader economy.

Interest Income Deduct TDS u/s. 194A as Fixed or Regular Deposit by Bank.

2012-02-10T08:14:00.000+05:30

In respect of Fixed or Regular Deposit the Bank deduct TDS u/s. 194A on Interest Income. All the (CBS) Core Banking System branches automatically deduct the TDS from the Payee (account holder) account. This difficulty solved by the Bank and TDS on interest on time deposits by banks following Core-Branch Banking Solutions (CBS) software.

In the case of banks using Core-Branch Banking Solutions (CBS) software, no constructive credit to the depositor's/payee's account takes place while calculating interest on time deposits on daily or monthly basis. Tax need not be deducted at source on such provisioning of interest by banks for the purposes of micro monitoring only. In such cases, tax shall be deducted at source on accrual of interest at the end of each financial year or at periodic intervals as per practice of the bank or as per the depositor's/payee's requirement or on maturity or on encashment of time deposits whichever event takes place earlier; whenever the aggregate of amounts of interest income credited or paid or likely to be credited or paid during the financial year by the banks exceeds the limits specified in section 194A. [Circular No. 3/2010, dated 2-3-2010]

Circular Regarding Work Contract Service

2012-02-10T08:12:00.000+05:30

Circular Regarding Work Contract Service

CIRCULAR NO. 150/1/2012-ST, DATED 8-2-2012

Reference has been received from a field formation seeking clarification as to whether 'gross amount', for the purpose of payment of service tax under the Works Contract Composition Scheme, included the value of free of cost supplies, for the period prior to 07/07/2009.

2. The issue has been examined. The meaning of the expression 'gross amount' appearing in Rule 3(1) of the Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007, is qualified by theExplanation inserted in the said Rule with effect from 07/07/2009. Since the Explanation inserted in Rule 3(1) with effect from 07/07/2009 is clarificatory and prospective in nature, inclusion of value of free-of-cost supplies of goods and services in or in relation to the execution of Works Contract [mentioned in the Explanation to Rule 3(1)(a)(i) and (ii)] in the 'gross amount' for the purpose of payment of service tax on works contract under the composition scheme, is a legal requirement, only with effect from 07/07/2009 when the Explanation became a part of Rule 3(1).

3. The Explanation appended to Rule 3(1) with effect from 07/07/2009, categorically says in the proviso that "…nothing contained in this Explanation shall apply to a works contract where the execution under the said contract has commenced or where any payment, except by way of credit or debit to any account, has been made in relation to the said contract on or before the 7th day of July, 2009." Where execution of works contract has commenced prior to 07/07/2009 or where any payment (except payment through credit or debit) has been made towards a works contract prior to 07/07/2009, then in those cases 'gross amount' for the purpose of payment of service tax does not include the value of free of cost supplies.

4. The above clarification may be communicated to the field formations and service tax assessees through Trade Notice/Public Notice.

What will happen when TDS/TCS Deductor deduct Excess or Twice TDS from Salary or Other?

2012-02-09T06:28:00.000+05:30

It is an important question that if employer deduct excess TDS as income tax from salary of an employee. Can he demand a refund/adjustment from employer.

Answer of this question is that No. The assessee from whose salary, excess tax has been deducted at source is to approach the assessing officer and submit his claim for refund of excess amount deducted. The employer is no required to make refund of the excess amount. The refund has to be made by the Assessing authority, with whom the amount has been deposited and not the employer.

Avoid Demand for non filing of Field while TDS/TCS Return by e-filers.

2012-02-09T06:07:00.002+05:30

All e-filers be aware one more important thing, while filing/submitting TDS/TCS return by NSDL FVU utility and Annexure of NSDL RPU as Paid by Book Entry or Otherwise. Almost persons are submitting TDS/TCS return without having knowledge of this column in NSDL RPU named "Paid by Book Entry or Otherwise" and income tax department is issuing demand for this reason.

See the Following Pic.

What is to be selected BOOK ENTRY or OTHERWISE.

If payment to the parties (on which TDS has been deducted) has been made actually i.e. by cash, cheque, demand draft or any other acceptable mode, then "Otherwise" has to be mentioned in the specified field. But if payment has not been actually made and merely a provision has been made on the last date of the accounting year, then the option "Paid by Book Entry" has to be selected.

Updated Income Tax Calculator For Salaried Employee of A. Y. 2012-13 with Form & Report Generation.

2012-02-08T11:40:00.001+05:30

Friends, Download most useful Income tax calculator available for free. This Income tax calculator for the Financial year 2011-12 . This calculator has many useful features and person who has used the same in past, wait for new release every time. Calculator has Following features.

Facility to add full salary details component wise. you can customize component yourself.

Utility - Excel Base, it is properly work in Office 2007 & above.
OS -Windows XP II and above supported.
Forms - Employee Data, Salary Data
Calculation Form - Tax Calculation
Use - Tax Calculation of Male, Female and Sr Citizen.
Report - Form 16, Salary Statement (Monthwise)

Download Income Tax Calculator for Financial year 2011-12
(Click Here)

Excel Base Hour Basis Salary Calculator for Company, Private Firm and Small Scale Industry.

2012-02-08T05:21:00.005+05:30

Features of this calculator :

It is Spreadsheet/Excel based.
It will work offline or Online as you required.
No need to enter duty and overtime separately.
Unlimited persons Calculate salary
On the Basic of Duty Hours is 8, it will calculate salary along with all Incentives.
It provides Attendance Sheet.

To Calculate Hours Basis Salary Click Here.
To see More Salary Calculator Click Here
To Calculate Online Salary Click Here

Is there any remedy to avoid TDS? or Receiving Income without TDS.

2012-02-08T04:47:00.001+05:30

When you can get the commission / Other income after Tax Deduction at Source (TDS) at a lower rate or even without TDS also. For this, you have to apply to your Assessing Officer in the prescribed Form No. 13 u/s. 197 of the Income Tax Act, 1961 read with rule 28 and 37G stating that you may either be exempt from TDS or TDS should be at a rate lower than the prescribed rate. To justify your demand, you have to attach documents of last three years to make your point. The CBDT has delegated the power to the Assessing Officer either to exempt the payment from TDS or to subject the payment at lower rate of TDS.

The dividend from co-operative society is taxable in the hands of recipient. As per section 10 (34), only that dividends, on which companies are paying pay tax u/s. 115-0 (Dividend Distribution Tax) are tax free in the hands of shareholders.

Helpful Tips for filing/e-filing of Income Tax Return to Taxpayee.

2012-02-08T04:39:00.003+05:30

Income-tax return is a legal document and it should be filed by the assessee with due care and caution. There should be no corrections or overwriting and it should be properly signed and verified by the person authorized to do so under the provisions of the Income-tax Act. The following important points may be taken care of while filling up the return forms:

Assessment year to which New Forms are applicable:
The new ITRs notified are applicable for the assessment years 2008-09 onwards only, for return of income relating to earlier assessment years return is to be furnished in the appropriate form as applicable in that assessment year. Each assessee has to identify the correct ITR Form applicable in its case before filing the return of Income.

No enclosures to the return:
Rule 12(2) of the I.T Rules provides that the return of income and return of fringe benefits required to be furnished in Form No. ITR-1, ITR-2, ITR-3, ITR-4, ITR-5, ITR-6, or ITR-8 shall not be accompanied by a statement showing the computation of tax payable on the basis of return, or proof of tax, if any, claimed deducted or collected at source or the advance tax or tax on self assessment, if any, claimed to have been paid or any document or copy of any account or form or report of audit required to be attached with the return of income or return of fringe benefits under any provisions of the Act.

For timely delivery of refunds, ensure correct address and account number on your Return of Income:
From 1.10.07 onwards, all income tax refunds in Bangalore, Chennai, Delhi, Kolkata and Mumbai will be delivered by the Refund Banker directly at the communication address mentioned on the Return of Income. Taxpayers are requested to fill in the correct address (available during working hours for delivery) to ensure speedy delivery of refunds. In the case of taxpayers who opt for refunds through ECS, it will be credited directly to the bank account for which correct MICR code/ Bank Account Number has to be furnished on the Return.

Manner of filing the new Forms :
These Forms can be submitted in the following manner:

a paper form;
e-filing
a bar-coded paper return.

Returns can be e-filed through the internet. E-filing of return is mandatory for companies and firms requiring statutory audit u/s 44AB. E-filing can be done with or without digital signaturea):

If the returns are filed using digital signature, then no further action is required from the tax payers.
If the returns are filed without using digital signature, then the tax payers have to file ITR-V with the department within 15 days of e-filing.
The tax payers can e-file the returns through an e-intermediary who would e-file and assist him in filing of ITR-V within 15 days.

Where the form is furnished by using bar coded paper return then the tax payers need to print two copies of Form ITR-V. Both copies should be verified and submitted. The receiving official shall return one copy after affixing the stamp and seal.

Filling out acknowledgement:
Where the return is furnished in paper format, acknowledgement slip attached with the return should be duly filled in. The new forms are not required to be filed in duplicate.

Intimation of processing under section 143(1):
The acknowledgement of the return is deemed to be the intimation of processing under section 143(1). No separate intimation will be sent to the taxpayer unless there is a demand or refund.

Furnishing details of high value transactions:
In the return the details of high value transactions need to be compulsorily stated, which are ordinarily reported through the annual information return (AIR) and these details are cross checked and matched with the data in the AIR.

Filing your return through Tax Return Preparers (TRPs):
If you are an individual or an HUF assessee and you are not required to get your accounts audited (called ‘eligible person’) under the provisions of the Income Tax Act, then you can use the services of a Tax Return Preparer (TRP). However, if the ‘eligible person’ is not a resident in India during the previous year relevant to such assessment year, he can not avail of the services of a TRP.

If you are filing your returns through a TRP then you should ensure that:

You are eligible to file return of Income under this Scheme;
You give your consent to any Tax Return Preparer to prepare your return of income for any assessment year;
You verify that the facts mentioned in the return are true and correct before you sign the return;
You certify the amount which has been paid by you under this Scheme to the Tax Return Preparer for preparing and furnishing of the return of income; and
You take a receipt of the payment made to the Tax Return Preparer and produce the same before the Resource Centre or Assessing Officer, if required,

Incentive to Tax Return Preparers:
The Tax Return Preparer shall charge a fee of two hundred and fifty rupees for any assessment year from the eligible person for preparing and furnishing his return of income for that assessment year:

Provided that he will charge no fees for preparing and furnishing the return for any eligible assessment year if the amount disbursable to him as per the scheme notified by the government for that eligible assessment year exceeds two hundred and fifty rupees. If the amount disbursable is less than two hundred and fifty rupees, we can charge the difference between rupees two hundred fifty and the amount disbursable.

Verification:
The verification must be signed by the authorized person before furnishing the return and the name and designation of the person signing the return should also be written. Any person making false statement is liable to be prosecuted under section 277 of the Act.

What are the Common mistakes while filling of Income Tax Return (ITR) form and effected on reduction of refund ?

2012-02-07T21:00:00.001+05:30

The accurate and complete filling up of the relevant column or detail in the Income Tax Return (ITR) form is most crucial for correct calculation of income by the Income Tax Department. As a general principle during processing, in case of any inconsistency between the values as entered in the Schedules and the cross-referenced values in other Schedules or Totals / Summary in PART B-TI,

for Incomes, the higher value may be taken and
for Expenses, Losses or Deductions, the lower value may be taken

for final computation of Income. In case of e-returns using Department software these inconsistencies will not arise. However, if you are using other commercially available software for return preparation, please contact the software provider in case of such inconsistencies.

In case the computation of Income or refund is different than what had been entered or what is expected, please verify the accuracy of the data entered by you in the ITR. Except for limited number of complicated tax returns, for most taxpayers, the simple check points are the following:

Salary from all employers, irrespective of whether Form 16 has been issued or not, should be entered in Item 1 of ITR 1 or details in Schedule Salary in ITR 2.

Interest income from fixed deposits, savings bank account etc should be entered in Item 2b of ITR 1 or Item 1b of Schedule OS-Income from Other Sources in ITR 2. The total in Item 2c of ITR 1 and intermediate totals in Items 1e, 1g, and 3 of Schedule OS-Income from Other Sources in ITR 2 should be correctly entered.

House Property Income should be entered in Item 1a, Municipal taxes paid should be entered in Item 1c and the intermediate total should be entered in Item 1e of Schedule HP-Income from House Property in ITR 2.

Income from Short Term Capital Gains should be entered in Item A of Schedule CG-Capital Gains in ITR 2.

Income from Long Term Capital Gains should be entered in Item B of Schedule CG-Capital Gains in ITR 2.

Adjustment of current year and brought forward losses- Schedules CYLA, BFLA and CFL-
Most taxpayers have left these Schedules completely blank. These schedules are used for permissible adjustment of current year loss of one type of income against another type of income and is available only in ITR 2.

Income chargeable to Income tax at special rates- Schedule SI
Most mistakes have occurred in this Schedule since taxpayers have not correctly filled the codes, rates or values. The following points may be considered:

Deductions from Income under Chapter VIA
Most mistakes have occurred due to incomplete details or leaving blank of value of deduction claim in ITR 1 or in the Schedule VIA in ITR 2. In most cases only the total deduction value is mentioned.

Reasons for difference in calculation of Tax or Interest under 234A, B or C and Interest on Refund.

Reasons for mistakes in Credit for tax payments or TDS
A major reason for difference in refund amount during processing is that the details of tax payment or TDS do not match the data available with the Department.

Miscellaneous mistakes
Mistakes in address etc do not affect processing but cause mis-delivery or non-delivery of communication or in case of Bank Account error cause rejection of refund credit to taxpayer account.

How to rectify the mistake and to get the correct refund
Mistakes in the ITR due to any of the reasons may be corrected by submitting a rectification form.

For faster credit of Income Tax refunds, correct bank account number and MICR code in the return should be mentioned. In case of any mistake in MICR or Bank Account number, the refund will not be credited. and a cancelled cheque showing correct particulars would be required to be submitted to CPC for correction in bank account number or MICR code.

Calculate Online Salary of March-2012 as per Central/State Government Norms.

2012-02-07T13:00:00.002+05:30

Due to heavy work load in the month of March-2012, I make Online Salary Calculator to Calculate Salary for March-12 as per Central/State Government Norms. It is easy to operate and fully facility to export in excel.

What are Tax Liability on Retirement and Benefits ?

2012-02-07T08:26:00.002+05:30

On retirement, an employee normally receives certain retirement benefits. Such benefits are taxable under the head ‘Salaries’ as “profits in lieu of Salaries” as provided in section 17(3). However, in respect of some of them, exemption from taxation is granted u/s 10 of the Income Tax Act, either wholly or partly. These exemptions are described below:

GRATUITY (Sec. 10(10)):

Any death cum retirement gratuity received by Central and State Govt. employees, Defence employees and employees in Local authority shall be exempt.Any gratuity received by persons covered under the Payment of Gratuity Act, 1972 shall be exempt subject to following limits:-

For every completed year of service or part thereof, gratuity shall be exempt to the extent of fifteen days Salary based on the rate of Salary last drawn by the concerned employee.
The amount of gratuity as calculated above shall not exceed Rs.3,50,000(w.e.f.24.9.97).

In case of any other employee, gratuity received shall be exempt subject to the following limits:-

Exemption shall be limited to half month salary (based on last 10 months average) for each completed year of service
Rs.3.5 Lakhs whichever is less.

Where the gratuity was received in any one or more earlier previous years also and any exemption was allowed for the same, then the exemption to be allowed during the year gets reduced to the extent of exemption already allowed, the overall limit being Rs. 3.5 Lakhs. As per Board’s letter F.No. 194/6/73-IT(A-1) dated 19.6.73, exemption in respect of gratuity is permissible even in cases of termination of employment due to resignation. The taxable portion of gratuity will quality for relief u/s 89(1). Gratuity payment to a widow or other legal heirs of any employee who dies in active service shall be exempt from income tax (Circular No. 573 dated 21.8.90). Payment of Gratuity (Amendment) Bill, 2010 has proposed to increase the limit to Rs. 10,00,000.

COMMUTATION OF PENSION (SECTION 10(10A)):

In case of employees of Central & State Govt. Local Authority, Defence Services and Corporation established under Central or State Acts, the entire commuted value of pension is exempt.
In case of any other employee, if the employee receives gratuity, the commuted value of 1/3 of the pension is exempt, otherwise, the commuted value of ½ of the pension is exempt. Judges of S.C. & H.C. shall be entitled to exemption of commuted value upto ½ of the pension (Circular No. 623 dated 6.1.1992).

RETRENCHMENT COMPENSATION (Sec. 10(10B)):
Retrenchment compensation received by a workman under the Industrial Disputes Act, 1947 or any other Act or Rules is exempt subject to following limits:-

Compensation calculated @ fifteen days average pay for every completed year of continuous service or part thereof in excess of 6 months.
The above is further subject to an overall limit of Rs.5,00,000 for retrenchment on or after 1.1.1997 (Notification No. 10969 dated 25.6.99).

Know about Pension Fund and Contribution to Pension Scheme of Central Government Deductions in Respect of under sec. 80CCC & 80CCD Respectively.

2012-02-07T07:40:00.002+05:30

Deduction in Respect of Pension Fund under section 80CCC:
If the following conditions are fulfilled an assessee may claim deduction under this section-

The taxpayer is an individual
During the previous year, he has paid/deposited a sum under an annuity plan of the Life Insurance Corporation of India or any other insurer for receiving pension.
If deduction has not been claimed under section 80C.

Amount of deduction:
If the aforesaid conditions are satisfied, then

the amount deposited
or Rs. 10,000,

whichever is lower, is deductible.

Tax treatment of pension received
The pension amount received by the assessee or his nominee as pension will be taxable in the year of the receipt.

Deduction in respect of Contribution to Pension Scheme of Central Government under section 80CCD:
This section is for allowing deduction to new central Government employees, if the following conditions are satisfied:

The taxpayer is an individual
He is employed by the Central Government on or after January 1, 2004.
He has in the previous year paid or deposited any amount in his account under a pension scheme notified by the Central Government.

Amount of Deduction
The amount deductible is-

The total employee’s contribution and employer’s contribution to the notified pension scheme during the year.
Or 10% of salary of the employee.

Whichever is less

Check your Progress:

Salary means basic salary including dearness allowance if under the terms of employment.

Contribution towards Public Provident Fund qualifies for deduction under Section 80C.
The aggregate of investments made in schemes qualifying for deduction under Section 80C is known as Gross Total Income
The aggregate amount of deduction under section 80 C, 80 CCC & 80CCD cannot exceed Rs. 1,50,000.
The maximum deduction under section 80 CCD in respect of pension scheme of Central Government is 10% of salary.

The aggregate amount of deduction under sections 80C, 80CC and 80CCD cannot exceed Rs. 1,00,000.

What are the Deductions in respect of under sec. 80C ?

2012-02-06T20:59:00.002+05:30

Normally, taxpayee did not aware about deductions under section 80C properly. The section 80C comes from the assessment year 2006-07 onwards. Section 80C provides deduction in respect of certain expenditure/investments (which are specified in this section) paid or deposited by the assessee in the previous year.

Deduction under this section is available only to individual & Hindu Undivided Family.

What is Gross Qualifying Amount ?
The following payments/investments qualify for deduction under this section. The total amount of investments made during the Previous Year under these below mentioned schemes is known as Gross Qualifying Amount (GQA):

Life Insurance premium paid on a policy taken on his own life, life of the spouse or any child (child may be dependent/ independent ). In the case of a Hindu undivided family, policy may be taken on the life of any member of the family. The premium paid should be maximum of 20% of sum assured.
Any sum deducted from salary payable to a Government employee for the 168 purpose of securing him a deferred annuity (subject to a maximum of 20% of salary).
Contribution towards statutory provident fund and recognized provident fund.
Contribution towards 15 year public provident fund (maximum of Rs 70,000).
Contribution towards an approved superannuation fund.
Subscription to National Savings Certificates, VIII Issue .
Contribution for participating in the Unit-Linked Insurance Plan (ULIP) of Unit Trust of India.
Contribution for participating in the unit-linked insurance plan (ULIP) of LIC Mutual Fund (i.e. Dhanraksha plan of LIC Mutual Fund).
Payment for notified annuity plan of LIC (i.e. Jeevan Dhara, Jeevan Akshay New Jeevan Dhara ,etc ) or any other insurer.
Subscription towards notified units of Mutual Fund or UTI.
Contribution to notified pension fund set up by Mutual Fund or UTI.
Any sum paid (including accrued interest) as subscription to Home Loan Account Scheme of the National Housing Bank.
Any sum paid as tuition fees to any university/college/educational institution in India for full time education.

What is Amount of deduction ?
We add the amounts invested/spent in above mentioned schemes and this amount is known as Gross qualifying amount. The amount deductible is -

Gross qualifying amount; or
Rs 1,00,000

Whichever is less

Unique Centralized Processing of Return Scheme announced by IT

2012-02-06T07:55:00.001+05:30

Income Tax Department of India has been announced as per notification 2 and 3 of 2012 dated 04.01.2012 a Centralized Unique Processing of Return Scheme. For more details about Centralized Processing of Returns Scheme, 2011. Click here to download.

Latest D. A. Rates of in Maharashtra as on January - 2012

2012-02-06T07:54:00.001+05:30

The Dearness Allowance Rates in Maharashtra for 4th Pay, 5th Pay and 6th Pay Commission which are applicable to State Employee, Non-Govt. Employee, Aided Employee whose salary drawn by Maharashtra State Government. From Time to time, we updated all latest information for Employee and analyze the Resolutions, which passed by the Government.
The latest updated Dearness Allowance Rates are as follows:

DATE	D.A. RATES	PAY COMMISSION
01/01/1994	104.00%	D.A. RATES AS PER 4TH PAY COMMISSION
01/07/1994	114.00%
01/01/1995	125.00%
01/07/1995	136.00%
01/01/1996	148.00%
01/07/1996	159.00%
01/01/1997	170.00%
01/07/1997	182.00%
01/01/1998	190.00%
01/07/1998	203.00%
01/01/1999	213.00%
01/07/1999	218.00%
Note: The 5th Pay Commission was announced and implemented on 01 Jan. 1996.
01/01/1996	0.00%	D.A. RATES AS PER 5TH PAY COMMISSION
01/07/1996	4.00%
01/01/1997	8.00%
01/07/1997	13.00%
01/01/1998	16.00%
01/07/1998	22.00%
01/01/1999	32.00%
01/07/1999	37.00%
01/01/2001	38.00%
01/10/2001	41.50%
01/04/2002	44.50%
01/08/2003	55.00%
01/06/2004	61.00%
D. A. Merge 50% in Basic Pay as "D.P." from 01.08.2004
01/08/2004	50% + 11%
01/04/2005	50% + 14%
01/07/2005	50% + 21%
01/05/2006	50% + 24%
01/09/2009	50% + 29%
01/04/2007	50% + 35%
01/07/2007	50% + 41%
01/01/2008	50% + 47%
01/07/2008	50% + 54%
01/01/2009	50% + 64%
01/07/2009	50% + 73%
01/06/2010	50% + 87%
01/11/2010	50% + 103%
01/05/2011	50% + 115%
01/10/2011	50% + 127%
Note: The 6th Pay Commission was announced and impleted on 01 Jan. 2006.
01/01/2006	0.00%	D.A. RATES AS PER 6TH PAY COMMISSION
01/07/2006	2.00%
01/01/2007	6.00%
01/07/2007	9.00%
01/01/2008	12.00%
01/07/2008	16.00%
01/01/2009	22.00%
01/07/2009	27.00%
01/06/2010	35.00%
01/11/2010	45.00%
01/05/2011	51.00%
01/10/2011	58.00%

Tax payee can claim their TDS as a not tally with Statement 26AS for Assessment Year 2011-12

2012-02-05T06:59:00.001+05:30

This is a good news for Taxpayee/Tax Creditor that without tally Statement 26AS can claim TDS amount as per Instruction NO. 01/2012 [F.NO.225/34/2011-ITA.II], DATED 2-2-2012. For More more Details See the Instruction No. 01/2012 of Income Tax Department.

SECTION 143 OF THE INCOME-TAX ACT, 1961 - ASSESSMENT - GENERAL - PROCESSING OF RETURNS OF ASSESSMENT YEAR 2011-12 - STEPS TO CLEAR BACKLOG

INSTRUCTION NO. 01/2012 [F.NO.225/34/2011-ITA.II], DATED 2-2-2012

The issue of processing of returns for the Asst. Year 2011-12 and giving credit for TDS has been considered by the Board. In order to clear backlog of returns, the following decisions have been taken:

In all returns (ITR-1 to ITR-6), where the difference between the TDS claim and matching TDS amount reported in AS-26 data does not exceed Rs. One lac, the TDS claim may be accepted without verification.
Where there is zero TDS matching, TDS credit shall be allowed only after due verification. However, in case of returns of ITR-1 and ITR-2, credit may be allowed in full, even if there is zero matching, if the total TDS claimed is Rs. Five thousand or lower.
Where there are TDS claims with invalid TAN, TDS credit for such claims are not to be allowed.
In all other cases, TDS credit shall be allowed after due verification.

Exempted Income and Deductions for Expenditure u/s. 14 A of Income Tax

2012-02-04T06:46:00.001+05:30

Exempted Income u/s. 14 A of Income Tax and No deduction for an expenditure incurred in relation to exempted income under section 14A of income tax act: - no deduction allowed in respect of expenditure incurred by the assessee in relation to income which does not form part of the total income under income tax act.

The provision has been introduced by the finance act 2001 with retrospective effect from 1 April 1962. However the assessing officer is debarred either to re-assess under section 147 of income tax act or pass an order enhancing the assessment or reducing a fund already made or otherwise increasing the liability of the assessee under section 154 for any assessment year beginning on or before 1 April 2001.

From the assessment year 2007-08 and onwards, if the assessing officer, having regard of the accounts of the assessee, is not satisfied with the correctness of the claim of the assesse about the expenditure incurred in relation to exempted income, he is required to determine the quantum of such expenditure in accordance with such methods as may be prescribed under section 14A (2) of income tax act.

The assessing officer is also required to exercise this power in relation to a case where an assessee claims that no expenditure has been incurred by him in relation to income which does not form of the total income under this act under section 14A(3) of income tax act. Rule 8D (2) Provides that expenditure in respect of exempted income is the aggregate of the following amounts which are as under.

The amount of expenditure directly relating to exempted income.
Where the assessee has incurred expenditure by way of interest, which is not directly attributable to any particular income or receipt, an amount computed in accordance with the following formula.

Average value of total assets, appearing in the balance sheet of the assessee.

The amount equal to .5% of the average value of investment, generating exempted income, appearing in the balance sheet of the assessee.

The following points may be noted in contrast of section 14A of income tax act.

Average value of investment generating exempted income is computed by adding their values, appearing in the balance sheet on the first day of the previous year and divided such total by two.

Average value of total assets is computed by adding their values appearing in the balance sheet on the first day and the last day of the previous year and divided such total by two.

Exemption of Tax on Receipts by members from HUF u/s. 10(2) of Income Tax

2012-02-04T06:33:00.001+05:30

What are the exemption of Tax on Receipt by members from HUF u/s. 10(2) of Income Tax, for this, see the following:

Receipts by members from H.U.F: any sum received by an assessee in his capacity as a member of a H.U.F is exempt from tax to avoid double taxation as H.U.F is also assessable separately on its income in its own capacity. The sum should be received in the capacity as a member of an H.U.F. I the recipient is not a member of the H.U.F., he cannot claim the exemption. The sum should be received either out of the income of the H.U.F or out of the income of imputable estate owned by the H.U.F under section 10(2).

The ownership of impartible estate through belongs to the joint family but the income therefrom belongs solely and absolutely to the holder of the estate. The holder of the estate is assessable as an individual in respect of the estate income. The senior most male member succeeds to the impartible estate by law of primogeniture but the junior male members may have the right to maintenance out of the income from the impartible estate. Hence the exemption has been provided if any sum is received by the member of HUF out of the income from impartible estate.

Position of member in HUF: only those members of the HUF can claim exemption who can either claim a share of partition or who are entitled to maintenance under Hindu law and thus have an interest in the joint income of the HUF[Kadar narian singh vs. CIT(1938) 6 ITR 157.

Conversion of separate property into HUF property cannot be exempt: where a member of the HUF coverts his separate property into HUF property after 31 December 1969 without adequate consideration, the income of such property is included in the total income of such member under section 64(2) of income tax act. No exemption can be claimed for such income.

Latest e-Filing News by Income Tax Department to Taxpayees.

2012-02-03T13:00:00.001+05:30

Dear Taxpyees - Remember and be-aware, what the Inocme Tax Department says:

The Income Tax Department NEVER asks for your Income-Tax e-Return details, e.g. PAN, e-Filing-Ack-Number, PIN numbers, passwords or similar access information for credit cards, banks or other financial accounts through e-mail.

The Income Tax Department appeals to taxpayers NOT to respond to such e-mails and NOT to share information relating to their Income-Tax e-Return details, e.g. PAN, e-Filing-Ack-Number, credit card, bank and other financial accounts. .

Income Tax Department launches new service, i.e. Request Intimation/Refund re-issue. Log-in to avail this service under 'Services' menu.

Check your Credit Card Checklist.

2012-02-03T06:45:00.002+05:30

As the features offered by each credit card varies, it is essential for you to understand which features will benefit you a lot. If you are shopping regularly at a particular store, go for a credit card that offers your reward points or cash back or discount when you shop at that store.

As a result, it is very important for you to choose the right credit card so that you can get the best out of credit card. If you intend to carry outstanding balances each month, then it is advisable to choose a card offering a low interest rate. But if you can manage t pay off the balance in full at the end of each month, it is advisable to choose a card offering a low interest rate. But if you can manage to pay off the balance in full at the end of each month, it is advisable for you to go for a card with high interest rate but with low or nil joining and annual fees. If you are traveler, check out if the card has widespread acceptance.

Credit Limit.
Cash Limit.
Interest Rate.
Acceptability
Other Charges and penalties.
Quality of Service.

Take all the details before you select the final one. Before considering an ideal one for you, delve into the details of each one of them.

Benefited Scheme for Capital Gain Deposit Amount.

2012-02-03T06:45:00.000+05:30

There are lot of schemes benefited for Capital Gain Deposit Amount. One can invest the amount of Long Term Capital Gain in specified bonds issued by the Rural Electrification Corporation (REC) or National Highway Authority of India (NHAI) within a period of 6 months from the date of transfer of assets to get exemption under this section.

The Scheme of Deposits:

Although under section 54/54F, the assessee has given 2 years to purchase the house property or 3 years for construction of house property, but the capital gain on transfer of the original assets is taxable in the previous year in which the transfer took place. The return of income of that previous year is to be submitted by the specified date. Hence, the assessee will have to take a decision for the purchase/ construction of the house property before the date of furnishing of the return otherwise the capital gain would be taxable. To avoid the above situation, the Income Tax Act has specified an alternative in the form of a Deposit under the Capital Gain Deposit accounts Scheme-1988.

There are two type of accounts.

Deposit Account (This is a saving account.)
Deposit Account (This is a term Deposit Deposit account.)

Before filing of IT Return you must check your Tax Credit in 26AS Statement for faster processing and quick refunds.

2012-02-02T08:21:00.003+05:30

As per Income Tax Department, it is came to know that many taxpayers are advised to verify the tax credits available in 26AS statement before filing the Income Tax Return. It will facilitate faster processing and quick refunds. In order to avoid the TDS mismatch i.e if your claim of TDS is higher than the tax credits available in 26AS statement, please contact the Deductor for filing of the correction TDS statement.

Which is bad Planing and What are the Bad Investment to Save Income tax as well as for money growth?

2012-02-02T08:12:00.004+05:30

This is information about bad planing and bad investment to Save Income Tax and for money growth policy as per financial economy survey in India.

The main and complex work for any serviceman or businessman is to work on tax planning. Every person wants to save tax and do some investments from which one can save the tax liability. But this is the practice among peoples that they plan the tax planning in the financial year ending. In this time, they fast approach to different investments (tax saver) and many of them invest which one called bad investment.

Bad investments are those investments which may be duplicate or unwanted investment which fetch no return or minimal return to the investment. Tax planning should be done very carefully and doing it in rush may lead to bad investment which may damage more to the financial position than helping.

There are many ways in which people may do bad investment like medical insurance. Medical insurance is the insurance which also called medicliam. In which the insurance company foots the bills in case of hospitalization or any surgery. It’s good and every person should have the medicliam. But not for only tax planning.

People rush to mediclaim for tax planning, even they are covered by the company. Mediclaim comes under section 80D of income tax act where the tax saving exemption is
Rs. 15000 for self and family.

Another 15000 for parents which is 20000 in case of senior citizen.

But to the tax context, one needs to buy medical insurance policy of 10000-15000 annually just to save 4635 rupees of tax (highest tax bracket, which is reduced in case of lower tax bracket). Is it worth to have many insurance policies where the mediclaim company gives the floater option where one of the family members can use the entire insured amount in case of emergency?

Mediclaim policy is the must for now a days but one shouldn’t apply it for tax saving purposes.

The security that an insurance policy provides is simply a footnote that many forget to read. When the tax season looms and the employer has delivered an ultimatum to show proof of tax saving investments, the scramble begins. Then, the helpful insurance agent utters the magic word - a policy that will help them save tax - Invest in an insurance policy, get the proof, submit it to their office - and life is bliss! The problem: Most are unaware of the policy they have invested in, whether that policy is suitable to them, whether the tenure invested is appropriate, what returns it could offer and whether it is a traditional or a unit linked product and so on. In a nutshell, they have not evaluated the product for its merits and have just invested to save tax.

Another favorite among people is to buy a home to save tax. If it is the first home, the deduction available is just Rs. 1.5 lakh a year and tax savings would amount to Rs. ,350 in a year. For this reason, if one were to buy a home, it can put enormous pressure on one’s finances. Due to this, one’s lifestyle can become crimped. And it will continue to stay that way for years. It might have been much better just to have paid the taxes, invested the money after that, live life decently due to better cash flows ( in the absence of constricting loans ) and end up buying a property later, when it is actually required. This kind of investment is very common and quite harmful.

First, they invest a big sum of money in a product that they may not need -that too, a product that may require them to service for a long time.

Second, once someone points out pitfalls, they want to exit it in a hurry but many times the math forces them to hang around for years. For instance, if a policy has a lock-in for five years, there is little you can do. Yes, there would be some surrender value if you exit in the interim. But it will be most probably at a significant loss.

Third, even though they have been alerted, paying premiums at times becomes a habit. As a result, people forget to exit them at the right time.

Now, comes the most interesting part. Borrowing to save tax! Come December and the scramble to submit proof sets in. Those short of cash, resort to borrowing to save tax. People are known to take personal loans or credit card loans to invest in tax saving instruments. If one were to calculate the costs and efforts vis-a-vis how much money is being saved, it may not make much sense to do it in the first place.

Any investment made, even if it made for tax savings, should make sense in the overall scheme of things. It needs to be a good investment. We need to realize that if we actually calculate the total costs, it may be much costlier saving taxes than paying taxes, in many cases. Save taxes, where you can. Simply pay it, if it does not make sense. You would be much better-off.

The Due Date Extended upto 31.03.2012 for Submission of ITR-V for A.Y. 2011-12

2012-02-01T07:05:00.001+05:30

The Central board of direct taxes (CBDT) has been extended the last date of submission ITR-V for A.Y 2011-12 up to 31-03-2012 or 120 days from the date of upload whichever is later. CBDT has informed this extension in it's official website.

The process of request for re-sending of CPC-Intimation u/s 143(1)/154 and refund is now available in 'Services' option.

Digital Signature Certificate made mandatory w.e.f 1st July 2011 for Firms and Individuals whose accounts are required to be audited u/s 44 AB of the Income Tax Act' 1961.

The users belonging to above mentioned categories who have already registered their digital-signatures may continue to file this year's return also with same DSC. However, the users who are applying for new digital-signatures for registration and subsequent e-filing of returns are advised to apply for DSC-with-encrypted-PAN only.

Download Notification (Click Here)

Calculate Tax and Generate Salary Statement for Assessment Year 2012-13

2012-02-01T06:45:00.000+05:30

This is Entry Form picture.

Download Now
Tax Calculator
Download Now

What is Income Tax Slab for Assessment Year 2012-13 (Click Here)
Download TDS .FVU Utility (Click Here)
How to Create Form No. 16 (Click Here)

Important Government Resolutions for Teaching and Non-Teaching Staff regarding New Appointment and Others.

2012-02-01T05:41:00.002+05:30

Every Employee always find Old and New Government Resolutions for personal Information. In order to this we are searching most useful and important Government Resolutions regarding New Appointment for Teaching Staff, Pay Fixation, Ph.D. & M.Phil. Teachers appointment, Teachers Workload etc. And for Non-Teaching Staff - Workload, Staffing pattern, Cash Allowance, Promotions, Remuneration for workload of Non-Grantable Course along with maximum limit of Gratuity etc.

Download the following Government Resolutions for more information:

Important G.R. for Teaching Staff
1	Order of New Appointment for Teaching Staff	6 January 2000
2	Absorption of Teachers as surplus at the college level-(English G.R.)	11-Jun-76
3	Absorption of Teachers as surplus at the college level-(Marathi G.R.)	15 May 2000
4	Teachers Workload	19 May 2001
5	Revision PF pay scale of teachers and other	7 Sep. 2001
6	Fix pay Teachers Appointments (New)	06-Jul-07
7	Stay of Ph.D. & M.Phil. Teachers appointment New)	06-Jul-07
Important G.R. for Non-Teaching Staff
1	Staffing Pattern of Non-Teaching Staff	26Aug.1999
2	Non-Teaching Staff Workload	28-May-02
3	Non-Teaching Staff Working Hours	26Sep.1995
4	Cash Allowance G.R. (old)	17 Oct.1988
5	Cash Allowance G.R. (New).	23 Dec.1998
6	Non-Teaching Staff Promotion G.R.	18 Sep.2007
7	Remuneration for workload of Non-Grantable courses (U.G. & P.G.)	16 Aug.2007
8	Remuneration .for workload of Non-Grantable courses (U.G. & P.G.)	18 Sep.2007
9	National Education Policy 1986	1990 & 1992
Other Imp. G.R. for Teaching & Non-Teaching Staff
1	Raising the maximum limit of Gratuity	12-Jun-07
2	Increasment Leave G.R.	15 Jan.2001
3	Payment of Teaching & Non-Teaching Staff	19 Apr.1997
4	Medical Reimbursement G.R.(Old)	23-Jul-92
5	Medical Reimbrusement G.R.(New)	19-Mar-05
6	Medical Reimbrusement Advance G.R.(New)	10 Feb.2006
7	Medical Reimb.for Artho.& Brain Operations G.R.	27-Jul-06
8	Salary & Non-Salary Grant Assessment G.R.	27 Jan.1999
9	Govt.Athorised Catg.List G.R.	25-May-06
G.R. & Format of Pension Case for Teaching & Non-Teaching Staff
1	Retirement Pension Plan (1.1.73 to 30.9.82)	27-Nov-87
2	Retirement Pension Plan (1.1.73 to 30.9.82)( New)	10 Aug.1994
3	Pension & C.P.F. recovery G.R.	13-Jul-86
4	Document required for Reg.of date of Birth	27-Sep-94
5	Non-Grantable College Service allowed to Pension	23-Nov-93
6	Retirement Pension Plan (1.10.82)(New)	12-Aug-99
7	Cont.Prov.Fund Amt. send to Govt.	5 Jan.2002
8	New Defined Contribution Pension Scheme (Marathi)	12 Jan.2007
9	New Defined Contribution Pension Scheme (English)	12 Jan.2007
10	Format of Family Pension	Pension1
11	Format of Retirement Pension	Pension
12	History of P.F.	Format
13	Service Certificate	Format
14	Pension Letters	Format
15	Samaj Kalyaan Related G.R.	Format

May increase Tax Slab Exemption Limit for Assessment year 2013-14 in the Budget 2012-13

2012-01-31T07:41:00.000+05:30

As per the Economical Finance survey some good news for Salaried Taxpayee that, the Finance Minister Pranab Mukharjee may announced in the Budget 2012-13 New Tax Slab Exemption Limit for Assessment year 2013-14 by increasing the income tax exemption limit up to Rs. 200000.00 Now the existing Tax Exemption limit is Rs. 180000.

Sources indicated that the new tax slabs could be in line with the Direct Taxes Code Bill, which was introduced in Parliament in 2010. The bill has proposed that incomes between Rs. 2 to 5 lakh be taxed 10%, those between Rs. 5 to 10 lakh be taxed 20% and incomes above Rs. 10 lakh per annum be taxed 30%. At present, incomes between Rs. 1.8 lakh and Rs. 5 lakh are taxed 10%, those between Rs. 5 to 8 lakh taxed 20% while incomes above Rs. 8 lakh attract a tax rate of 30%. (Check ready reckoner for Financial year 2011-12)

A rejig in tax slabs along with a hike in exemption limits will enhance people's disposable incomes, which, in turn will boost consumption spending as well as savings.The government is negotiating through a maze of thorny issues ahead of this year's budget amid faltering demand and rising prices that have hit growth in the broader economy.

How to Claim Medical Treatment Deductions u/s. 80DDB?

2012-01-31T07:12:00.002+05:30

Most Taxpayee did not aware about claiming of Medical Treatment Deductions u/s. 80DDB, What are the conditions to claim deductions u/s. 80DDB and how much maximum amount to claim as well as diseases disability.

To claim deduction u/s 80DDB following condition should be satisfied.

Taxpayer should be resident in India in the previous year.
Deduction is available to Individual or HUF only.
Deduction is available on actual expenditure on medical treatment of specified Disease or ailment as prescribed.
Expenditure should be incurred for medical treatment of

assessee himself
wholly/mainly dependent Husband/wife(spouse)
wholly /mainly dependent children
wholly/mainly dependent parents
wholly/mainly dependent Brother
wholly/mainly dependent Sisters
in case of Huf ,wholly/mainly dependent member of the HUF

5. Assesee shall have to submit certificate in form no 10-I from prescribed specialist working in Government hospital
6. Government hospital includes a departmental dispensary whether full-time or part-time established and run by a Department of the Government for the medical attendance and treatment of a class or classes of Government servants and members of their families, a hospital maintained by a local authority and any other hospital with which arrangements have been made by the Government for the treatment of Government servants;

Amount of Deduction:

1. Deduction is available for Rs. 40000 or amount actually paid ,which ever is less.
2. If expenditure has been done in respect of dependent who is at least of 65 year of age in any time during the previous year then deduction shall be Rs. 60000 or amount paid which ever is less.
3. deduction Amount as arrived in above (1) or (2) will be reduced by amount reimbursed by employer or by insurer.

Specified diseases and ailments for the purpose of deduction under section 80DDB.

(i) Neurological Diseases where the disability level has been certified to be of 40% and above,
(a) Dementia ;
(b) Dystonia Musculorum Deformans ;
(c) Motor Neuron Disease ;
(d) Ataxia ;
(e) Chorea ;
(f) Hemiballismus ;
(g) Aphasia ;
(h) Parkinsons Disease ;
(ii) Malignant Cancers ;
(iii) Full Blown Acquired Immuno-Deficiency Syndrome (AIDS) ;
(iv) Chronic Renal failure ;
(v) Hematological disorders :
(i) Hemophilia ;
(ii) Thalassaemia.

On the Basic of facts given by you ,you are eligible to for deduction of Rs 40000 only.Enhanced Limit of 60000 is available if dependent /patient is senior citizen (attain age 65 in previous year ) not assesse who is is claiming the deduction.in your case your age is 66 ,However your wife's age is just 60 ,so you are eligible for only 40000 deduction or expenses incurred which ever is less.

Moreover the above said amount will be reduced by the amount reimbursed by employer/Insurance company .In your case this is nil.so you will get 40000 or expenses incurred ,which ever is less as deduction u/s 80DDB of the Income Tax Act.

Extend Limit of PPF Deposit by Rs. 30000.00 i.e. from Rs. 70000.00 to Rs. 100000.00

2012-01-31T06:32:00.001+05:30

Earlier every tax payee investors look in to the matter of saving of tax under section 80C, therefore as per newly amendment notification of Department of Economics affairs dated 25th November, 2011, New Delhi, the Tax Payee Depositor should have to deposit maxmium amount upto 100000 in their PPF Account in the Assessment year 2012-13. The detailed notification is as under:

RBI/2011-12/291
DGBA.CDD. No. H- 3572/15.02.001/2011-12
December 05, 2011

The Chairman and Managing Director/Managing Director
Government Accounts Department/Head Office
State Bank of India/State Bank of Patiala/
State Bank of Bikaner & Jaipur/State Bank of Travancore/
State Bank of Hyderabad/State Bank of Mysore/ Andhra Bank/
Allahabad Bank/Bank of Baroda/Bank of India/
Bank of Maharashtra/Canara Bank/Central Bank of India/
Corporation Bank/Dena Bank/Indian Bank/Indian Overseas Bank/
Punjab National Bank/Syndicate Bank/UCO Bank/
Union Bank of India/United Bank of India/Vijaya Bank/IDBI Bank/ICICI Bank Ltd.

Dear Sir/Madam,

Amendment to Public Provident Fund Scheme, 1968 (PPF, 1968)
We forward herewith a copy of Government of India Notifications G.S.R. (E) & S.O.(E) dated November 25, 2011, on the captioned subject, the contents of which are self-explicit.
2. In this regard, we advise that the contents of the Notifications may be brought to the notice of the branches of your bank operating the PPF, 1968 and may also be displayed on the notice boards of your branches for the information of the PPF, 1968 subscribers.

Yours faithfully
(Shrikant Hamine)
Manager

Encls: 2

----------------------------------------------------

[TO BE PUBLISHED IN THE GAZETTE OF INDIA: EXTRAORDINARY, PART II – SEC. 3 (II)]
New Delhi, the 25th November, 2011

MINISTRY OF FINANCE
(Department of Economic Affairs)
NOTIFICATION

G.S.R. (E). – In exercise of the powers conferred by sub-section (4) of section 3 of the Public Provident Fund Act, 1968 (23 of 1968), the Central Government hereby makes the following further amendment to the Public Provident Fund Scheme, 1968, namely : -
1. (1) This Scheme may be called the Public Provident Fund (Amendment) Scheme, 2011.
(2) It shall come into force on the 1st day of December 2011.
2. In the Public Provident Fund Scheme, 1968, -
(i) in paragraph 3, in sub-paragraph (1), for the letters and figures “Rs 70,000/-“, the letters and figures “Rs 1,00,000” shall be substituted;
(ii) in paragraph 11, in sub-paragraph (2), for the words “one per cent. per annum”, the words “two per cent. per annum”, shall be substituted;
(iii) in Form-A, in paragraph (iv), for the letters and figures “Rs70,000/-“, the letters and figures “Rs 1,00,000” shall be substituted.

[F.No. 1/9/2011-NS-II]
M.A. Khan, Under Secretary

Note :- The Scheme was notified vide notification G.S.R.1136(E), dated 15.06.1968 and amended vide G.S.R. 368 (E), dated 1.8.72, G.S.R. 217(E) dated 9.3.79, G.S.R. 271(E), dated 16.3.83, G.S.R. 54 (E), dated 7.2.84, G.S.R. 895(E), dated 23.6.86, G.S.R.1013 (E), dated 20.8.86, G.S.R.793 (E), dated 29.8.89, G.S.R. 477(E), dated 25.5.94, G.S.R. 489(E) dated 6.7.99, G.S.R. 908 (E) dated 6.12.2000, G.S.R. 679 (E), dated 4.10.2002, G.S.R.768(E), dated 15.11.2002, G.S.R. 585 (E), dated 25.7.2003, G.S.R.690 (E) dated 27.8.2003, G.S.R.755(E), dated 19.11.2004, G.S.R.291(E), dated 13.5.2005 and G.S.R.956(E), dated 7.12.2010.

-----------------------------------------------------

[TO BE PUBLISHED IN THE GAZETTE OF INDIA: EXTRAORDINARY, PART II – SEC. 3 (II)]
New Delhi, the 25th November, 2011

MINISTRY OF FINANCE
(Department of Economic Affairs)
NOTIFICATION

S.O. (E). – In pursuance of section 5 of the Public Provident Fund Act, 1968 (23 of 1968), the Central Government hereby notifies that the subscriptions made to the fund on or after the 1st day of December, 2011 and balances at the credit of the subscriber shall bear interest at the rate of 8.6 per cent. per annum.

[F.No. 1/9/2011-NS-II]
M.A. Khan, Under Secretary

Note :- The Principal notification was published in the Gazette of India vide number S.O.48(E) dated 15th January, 2000 and subsequently amended vide S.O.192 (E) dated 1st March 2011, S.O.271 (E) dated 1st March, 2002 and S.O. 250(E) dated 1st March, 2003.

How to claim Exemption of "Tuition Fees" u/s. 80C.

2012-01-30T07:38:00.002+05:30

Deduction of Exemptions under Chapter VIA, u/s. 80C Deductions starts and in u/s. 80C Tuition fees exempt. In case "Tuition Fees", the maximum limit of Exemption is Rs. 100000/- and whole amount exempt u/s. 80C is Rs. 100000/-.

Relevant part of the section 80c is reproduced here under.

"(xvii) as tuition fees (excluding any payment towards any development fees or donation or payment of similar nature), whether at the time of admission or thereafter,

(a) to any university, college, school or other educational institution situated within India;

(b) for the purpose of full-time education of any of the persons specified in sub-section (4) "

"(4) The persons referred to in sub-section (2) shall be the following, namely:
(a) ......................
b) .......................
c) for the purposes of clause (xvii) of that sub-section, in the case of an individual, any two children of such individual."

Note:

Deduction for tuition Fees is available up to Rs.100000 /-
The limit of one lac as above is total limit u/s 80C for all type of savings ,plus section 80CCC(pension policy) plus u/s 80CCD(Contributory Pension Plan). Means the aggregate amount of deduction under above referred sections can not exceed Rs. 1,00,000.
The deduction is available to Individual Assessee and not for HUF.
The Deduction is available for any two children.
This the only clause u/s 80 C where assessee can not claim tax benefit for expenditure done on himself.Means if assessee has paid tuition fess for his studies ,he will not be eligible.
Deduction is not available for tuition fees paid for studies of spouse.
The deduction is available for Full Time courses only, so no deduction for part time or distance learning courses.(This is my opinion but point is not very clear).
The fees should be paid to university, college, school or other educational institution,so no rebate for private tuition.
Tuition fees paid for coaching courses for admission in professional courses or any other type of courses are not covered as that fees is not paid for FULL time eduction.
The center mention above in point 8 must be situated in India, so location should be in India though it can be affiliated to any foreign institutes.
In This section tuition fees has a wide meaning than normal parlance ,means here tuition fees means total fees paid minus any payment towards any development fees or donation or payment of similar nature.so admission fees is also allowed.
In My Opinion Transport charges , hostel charges, Mess charges , library fees , scooter/cycle/car stand charges is not allowed.
Building fund or any donation etc not allowed.

On surrender Value during Survey of Income Tax there is no Penalty.

2012-01-30T07:35:00.001+05:30

Delhi High Court : Commissioner of Income Tax Vs SAS Pharmaceuticals : (2011) 199 Taxmann 255 (Magazine)

Income Tax Act Section 271(1) (c) says that if any person conceal his income than as per this section penalty can be imposed one time of the amount of Income Tax to three time of the amount of Income Tax. In this case, there was an survey on 06.01.2003 in the place of businessman. During survey it was found that there were defecencies in the Cash and Stock of the businessman. Due to this businessman surrender some income and while submitting his regular income, he includes separately income of surrendered amount and pays complete Income Tax. All this has been done by a businessman to avoid litigation and to by peace of mind

Assessing Officer impose penalty on businessman with the saying that if there was no survey, businessman conceal the surrendered amount and do not pay income tax on such amount. He has paid only Income Tax on surrendered amount only after survey. Businessman submit appeal against the penalty amount. In the end, Hon'ble High Court gives his decision that to impose penalty concealment will be watched on the basic of Point of View of Income Tax Return. An amount included in Income Tax Return can not be treated as concealed income. In normal case, Income Tax Departments decide that assessee has concealed any income or not on the basis of Tax Assessment Proceding. Because during Tax Assessment Procedure, there was no extra income in this case, therefore there penalty can not be imposed on assessee.

Updated RPU 2.7 with FVU 3.3 and FVU 2.131 w.e.f. 1st Feb. 12 for e-TDS/e-TCS Returns.

2012-01-30T06:56:00.004+05:30

Now a days NSDL RPU 2.6 was running, but why TIN-NSDL launch 2.7 ver with 3.3 and 2.131 ver. The latest 2.7 Version will create FVU file with 3.3 and 2.121 Ver. These files are validity utilities include more controls in the interest of users. After the validation from these utilities, less notice/demands will be raised by Income Tax Department.

have just tried to create a file with NSDL RPU 2.7 and found that there may be change of error in creation of file shown below :
FVU Version : 3.3 Input File Name : 26QRQ3.txt

In above statement error code is T-FV -4278 which has been raised due to wrong percentage mention in Annexure -1 (deductee sheet). I mean to say you have deducted 1% tds on bill amount, but wrongly shown in Rate at which Tax Deducted (427) 27 in 26Q (percentage column) 2%. On correction of this percentage, above error removes automatically.

Secondly now correction statement will only be created on adding consolidating file during file creation. Picture view of the same is given below :
Key features of File Validation Utility (FVU) version 3.3 :

FVU 3.3 will be applicable for quarterly TDS/TCS statements pertaining to FY 2010-11 onwards
Mandatory to quote Book Identification Number - BIN (in case of regular statement) for tax deposited by book entry (transfer voucher – applicable only in case of Govt. deductors). BIN to contain details as below:

Seven digit 24G receipt number (provided on successful acceptance of Form 24G statement at TIN central system)
Five digit DDO serial no. (provided for each DDO transaction in Form 24G statement)
Date of deposit of Tax

Correction file prepared to contain the “Hash value” as per the consolidated file, used for preparation of correction statement.
Mandatory to import consolidated file for validating correction statement.
For tax deducted at higher rate, if deductee PAN is valid, update allowed on all the fields of the deductee record except, higher deduction flag (flag “C”) mentioned against the corresponding deductee record.
FVU 3.3 will be mandatory with effect from February 01, 2012.
Files validated with FVU 3.2 and 3.3 will be allowed up to January 31, 2012.

Note :

BIN can be obtained by deductor (Drawing and Disbursing Officer) from the respective Pay and Account Office (PAO) / District Treasure Office (DTO).
BIN can also be downloaded by the DDO under the TAN account login.

Key features of File Validation Utility (FVU) version 2.131 :

FVU 2.131 will be applicable for quarterly TDS/TCS statements (regular and correction) pertaining up to FY 2009-10.
Correction file prepared to contain the “Hash value” as per the consolidated file used for preparation of correction statement.
Mandatory to import consolidated file for validating correction statement.
FVU 2.131 will be mandatory with effect from February 01, 2012.
Files validated with FVU 2.130 and 2.131 will be allowed up to January 31, 2012.

How to determine and undertaking Deductions u/s. 80IC of Income Tax Act.

2012-01-28T07:17:00.003+05:30

In respect to determine and undertaking Deductions u/s. 80 IC of Income Tax in certain special category states are as under:

Assessee eligible for deduction: - every assessee is eligible for this deduction irrespective of its residential status or corporate status. Deduction is operative from the assessment year 2004-05 and onwards.

Conditions to be satisfied: - the following conditions to be satisfied for the deductions under section 80 IC of income tax act.

Return of income to be furnished: - under section 80 AC of income tax act, the assessee should furnish return of income within the time limit specified under section 139(1) of income tax act.

Accounts of the enterprises or undertaking to be audited: - under section 80IA (7) of income tax act, the accounts of the assessee should be audited by a chartered accountant from the relevant year for which deduction is claimed. The report of such report should be furnished along with the return of income in the prescribed form duly signed and verified by chartered accountant.

Undertaking should be new and not formed by splitting up or reconstruction of an existing business: - under section 80IC (4) of income tax act, the object of these incentives is to promote new investment and not just relocation of existing ones. Therefore, it has been provided that the eligible undertaking should be new and not formed by splitting up and reconstruction of an existing business.

Exception in case of re-establishment, reconstruction of revival of an undertaking: - however this condition does not apply where the undertaking is discontinued due to extensive damage or destruction of its building, machinery or plant and furniture or account of natural disasters, civil disturbance, accidental fire or explosion, enemy action etc. and such undertaking is re-established within 3 years from the end of such previous year.
New plant and machinery used by the undertaking: - under section 80 IC (4) of income tax act, use of old plant and machinery is prohibited except under the following cases.

For import and use of second hand plant or machinery in India is deemed to be a new plant and machinery. Second hand plant or machinery imported and put to use for the first time in India is not to be regarded as machinery or plant previously used provided the following conditions are satisfied.
(1) It was used outside India by a person other than the assessee.
(2) Such plant and machinery is used in India for the first time.
(3) No depreciation in respect of such plant and machinery has been allowed or is allowable under the act for a period prior to its installation by the assessee.

Transfer of old plant or machinery not exceeding 20% of the total value of plant or machinery of the new undertaking :- where the value of plant or machinery previously used by the assessee is transferred to the new undertaking, such value should not exceed 20% of the total value of plant or machinery used in the new undertaking.

Production schedule, nature of product and location: - the enterprise or undertaking must manufacture or produce the specified articles or things within the stated time period in special category states. An existing enterprise or undertaking manufacturing or producing eligible articles or things will be covered, provided it’s substantially expands its business.

How to calculate Stock, What is its method, When Case is in Scrutiny or Appeal - New Decision.

2012-01-28T07:12:00.001+05:30

As per the latest decision of High Court against Income Tax and Assessee for Stock Valuation in Books of Account, this method is not on the basis of Market Value.

Commissioner of Income Tax Vs C Jayanti Lal (2011) 199 Taxmann 34 (Magazine) : During scrutiny of this case, ITO has added income worth Rs. 17.71 Lakh due to difference in stock amount. ITO has calculated Stock on the basis of Market Value. Due to this an amount of Rs. 17.71 Lakh has been added by ITO. But this case goes in High Court and accepted that Stock Valuation has been calculated by businessman as per rules " Cost Price and Market Value " which ever is less. On the basis of this rule, addition of Rs. 17.71 Lakh has been deleted by High Court.

Note : If an assessee calculates his closing stock on a particular method in last few years, Assessing Authority (A.O. ) can not create any addition/demand on the basis of different Stock Valuation Method.

How to claim Mediclaim Exemption u/s. 80D of Income Tax Act?

2012-01-27T08:00:00.004+05:30

Now a days, Taxpayee (Assessee) are engaged to see how to save Income Tax from various criteria. The best option is that Mediclaim Exemption to save Income Tax u/s. 80D and secure the heath. The medicalim Policy is for Individual and HUF are available and get benefit of Tax u/s. 80D. The details regarding 80D and medicalim Insurance are as under:

1. Addition to section 80 C: Section 80D is available other than 100000 deduction available under 80C for life insurance, ppf, gpf, tuition fee, ULIP, House loan repayment etc.
2. Insurer covered: This deduction is available for medical claim policy which should be framed in this behalf by
* by GIC (General insurance Corporation) or by
* any other insurer but approved by IRDA (Insurance Regulatory Development authority)
3. Available to : Deduction is available to
* Individual (resident or non resident, Indian Citizen or foreign citizen)
* HUF(Hindu undivided Family may be resident or non resident)
4. Mode of payment: Insurance Premium should be paid by any mode other than by Cash . Means if insurance premium is paid by cash then no deduction is available.Before Assessment year 2008-09 ,only payment by cheque was allowed under this section but from Ay 2008-09 onwards the deduction is allowed by other mode also like online payment which is now a days is very popular or by credit card is also allowed.
5. Out of Income : The amount should be paid out of the income chargeable to tax.
6. Proposer of the policy is not must: The premium is to be paid to effect or keep inforce insurance policy ,there is no condition that assessee should be the proposer of the policy ,
7. Partly contribution: Assessee can partly contribute the premium amount but amount should be paid directly to insurance company and paid through mode other than by cash (see example)
8. Insurance cover on?: First deduction given below : Insurance Premium may be paid for medical claim insurance policy for assessee himself or spouse or dependent children or any combination of three.
9. Addition for parents: Second deduction given below:Insurance premium may be paid for medical claim insurance for assessee parents (father or mother or for both)
10. Deduction upto 40000: Theoretically ,maximum deduction can be claimed for Rs 40000.(detail as given below)

Amount Of deduction : Two type of Deductions are available to Individuals under this section from Assessment year 2009-10

1. Deduction on Medical insurance premium paid for himself,spouse,dependent children =Rs 15000 maximum.
2. Deduction on Medical insurance premium paid for parents ,whether dependent on assesee or not =Rs 15000 maximum

Deduction to HUF: Deduction to HUF is available on insurance premium paid for policy taken for of any member of the HUF.

Addition deduction for Resident Senior Citizen: In addition to two point above, additional deduction of Rs 5000 is available where assessee or his spouse (wife or husband) or dependent parents or any member of the family in case one and father or mother is a resident in India and a senior citizen in case two.And same in the case of HUF assessee if policy has been taken on member which is senior citizen than additional Rs 5000/- deduction is available also to HUF.

Senior citizen means who is at least of 65 year of age or more at any time during the previous year.

Wish you all Happy Republic Day 26th January.

2012-01-25T22:30:00.003+05:30

In India, When the Constitution of India came into force replacing by the Government of India Act, 1935 as the Governing document of India on 26th January 1950, call Republic Day therefore this Day celebrate on Honor as Republic Day.

WISH YOU ALL
HAPPY REPUBLIC DAY..

How to decide Selling of Own land after Plotting, is the Business Income or Capital Gain?

2012-01-23T05:47:00.003+05:30

Now a days business person making more income from plotting business, but non-taxpayee having ancestral property and decide to selling it as plotting business and get more income from them, then how to decide this income is capital gain or Business Income.

Whether selling of own land after plotting it out in order to secure better prices, in an advantage of trade or business?

Facts of the case: - the assessee received certain agricultural land by way of gift-deed. Therefore, the assessee got the said land diverted for non-agricultural purposes.

The land was converted into plots. The assessee tool development work of the colony such as leveling of the land, construction of the roads and drainage system etc. and thereafter sold the plots. The assessing officer proposes to assess the income from sale of plots as business income, being adventure in the nature of trade.

Held: - the earning from the sale of land is from capital gain and not from business. The selling of own land after plotting it out in order to secure better prices is not an adventure in the nature of trade. An isolated transaction or activity cannot be a part of the business.

To consider the question of business, there must be regular activities of purchase and sale. In this case, there was nothing on record to show that the land was purchased for the purpose of selling into plots. Basically, it was gifted land which was developed into plots to secure better prices. The isolated activities could not come within the preview of adventure in the nature of trade or business.

When delays to NEFT Credit Fund in time get 10.50% interest benefit.

2012-01-23T05:36:00.001+05:30

By RBI instructions to Banks that when NEFT (National Electronic Fund Transfer) transfer fund to another account, it takes a few hours but when it would be late transferred and is usually done with the same day then it could be a delay transfer fund and thus the benefit of interest of 10.5% takes place on this NEFT Credits.

Types of delay Sometimes there is a delay in crediting the beneficiary customer's account. When you transfer funds via NEFT to a friend's account and there is a delay in the funds being credited to his/her account. Then there is a delay in returning the un-credited amount to the remitter. At times, there is a delay from the bank's side in doing so.

The rule The Reserve Bank of India (RBI) had issued some guidelines for banks. According to these, banks are required to pay a penal interest at the current RBI's repo rate plus 2% for the delayed period, or until the date of refund, as per the case. The repo rate is currently 8.5%, so you should get 10.5% as penal interest on any delay.

What you can do If you find that your NEFTs are delayed, get in touch with the bank customer facilitation centres (CFCs). If for some reason, the CFC details displayed on the bank's website is outdated or you do not get a response, get in touch with RBI's banking ombudsman.

Updated Form 16/16A PDF Converter Utility Ver. 1.3 Free Download

2012-01-22T08:54:00.003+05:30

Now TDS Deductor Generate Form 16A in PDF Format and issue Form 16A to TDS Deductee. ForFree Form 16A PDF Converter Utility TDS Deductor must Registered TAN with NSDL-TIN. The Procedure for Download of Form 16A in PDF are as follows:

Form 16A PDF Converter Utility:

The Form 16A text file is to be passed through the PDF Converter Utility to convert to generate PAN wise Form 16A in PDF format.
The PDF Converter Utility is available to registered TANs at TIN.
It is available under the option ‘Form 16A’ post login to TAN account.

Procedure for Download of Form 16A PDF converter utility

Download “FORM_16A_PDF_CONVERTER” from TAN registration login under the option “Download PDF converter” in Form 16A menu. Form 16A PDF converter utility can be downloaded at the desired location.
JRE (Java Run-time Environment) [versions: SUN JRE: 1.6 and above] should be installed on the computer where the e-TDS/TCS FVU is being installed.
JRE is freely downloadable from http://java.sun.com or ht tp://www.ibm.com/developerworks/java/jdk or You may ask your computer vendor (hardware) to install the same for you.
For installing the Form 16A PDF converter, double click on the exe (FORM_16A_PDF_CONVERTER.exe) file downloaded from TAN registration login.
On double clicking, a window will be displayed for extracting the contents of the exe file. Default location for extracting the files will be C drive.
The files can also be extracted in any other location (other than C drive). In that case, define the appropriate path by clicking the ‘Browse’ button where the files are to be extracted.
For extracting the contents of the file click “Unzip” button. On clicking the “Unzip” button, two files will be extracted at the default path (C:\PDF Converter Utility) or the desired location as the case may be:
PDF Converter Utility.jar
Start_Form16A_Utility.bat
To open the PDF converter utility, double click on the file “PDF Converter Utility.bat” available in the folder where PDF converter utility has been installed. On double click of the file, window as below will open.

Procedure for Download of Form 16A PDF Converter (Click Here)

How to save Income Tax upto 6180.00, Get today Infrastructural Tax Saving Bond.

2012-01-20T08:33:00.003+05:30

Every Salaried Employee/Taxpayee viewing to save Income Tax, but how & which is reliable as well as secure safe. We suggest them L&T is the best Infrastructural Tax Saving Bond for those employee whose Taxable Income goes to above 800000.00. With the help of such type of bonds, income tax assessee can save extra benefit of saving of Rs. 20,000.00 under section 80CCF. Credit rating of L&T is CARE AA [ICRA] AA+.

Scheduled time:

Opening Date of issue is 10th January, 2012
Closing Date of issue is 11th, February, 2012

The following KYC Documents are required for submission of L&T Infra Bonds 2012A series.

1. Identification Proof for individuals:

Passport
Voter's ID
Driving Licence
Government ID Card
Defence ID Card
Photo PAN Card
Photo Ration Card

2. Address Proof (Residential) :

Passport
Voter's ID
Driving License
Ration Card
Society Outgoing Bill
Life Insurance Policy
Electricity Bill
Telephone (Land/Mobile) Bill.

3. Copy of the PAN card.

Download Form Click Here
Download KYC Documents Information Click Here

What persecution takes by the Deductor when TDS Deposit/Payment made late?

2012-01-20T08:09:00.000+05:30

When the TDS Deductor (Individual/HUF/Company), default to deposit/payment TDS within stipulated prescribed time at Central Government such Deductor (Individual/HUF/Company) it must takes below persecutions:

Facts of the case: - the assessee-company deducted an amount as TDS but deposited this amount with interest to the credit of the central government after the prescribed time limit. Thereafter, show-cause notice was issued to the company and its director, being the principal officer of the company, for the prosecution under section 276B and Section 278B of income tax act. The company contends that TDS has already been deposited, there was no default and no prosecution can be ordered.

Held: - once a statute requires to pay tax and stipulates period within which such payment is to be made, the payment must be made within that period. If the payment is not made within that period, there is default and an appropriate action can be taken under the act. Interpretation canvassed by the appellant would make the provision relating to prosecution nugatory. It is true that the act provides for imposition of penalty for non-payment of tax. That however, does not take away the power to prosecute accused person if an offense has been committed by them.

Company is liable to prosecution even though, it is not a natural person but legal or juristic person. Principal Officer of the company could be prosecuted if no reasonable cause was shown by him for late payment or non-payment. [Madhumilan Syntex Ltd. Vs. Union of India (2007) 160 taxman 71(SC)].