LATEST NEWS ON INCOME TAX

Are you not satisfied with your Income Tax assessment done by IT Department ?

CBDT rolls out now e-DRS Scheme, 2022

Dated 01.09.2024 : The Central Board of Direct Taxes (CBDT) had notified the e-Dispute Resolution Scheme, 2022 (e-DRS) with the aim to reduce litigation and provide relief to eligible taxpayers.

The e-DRS enables the taxpayer to file an application electronically for dispute resolution to the DRC designated for the region of Principal Chief Commissioner of Income-tax having jurisdiction over the taxpayer. To this end, DRCS have been constituted in all 18 jurisdictional CCIT regions across the country. For the list of such DRCS along with their e-mail addresses , CLICK HERE ( You can also go through the entire scheme )

statutory-form/popular-form/form-34-BC.

As per e-DRS, a taxpayer can opt for e-Dispute Resolution against the 'specified order' in which the aggregate sum of variations proposed or made does not exceed Rs.10 lakh and returned income for the relevant assessment year does not exceed Rs. 50 lakh.

According to e-DRS, a DRC may make modification to the variations in the specified order and decide to grant reduction/waiver of penalty and prosecution . The DRC is mandated to pass its order within six months from the end of month in which application for dispute resolution is admitted by it.

The application for e-DRS is to be filed in Form No. 34BC on the e-filing portal of the Income Tax Department, within one month from the date of receipt of specified order. In cases where appeal has already been filed and is pending before the Commissioner of Income-tax (Appeals), the application for e-DRS, is to be filed on or before 30.09.2024. In cases where the specified order has been passed on or before 31.08.2024 and the time for filing appeal against such order before CIT (Appeals) has not lapsed, the application for dispute resolution can be filed on or before 30.09.2024.

HOW TO ACCESS e-DRS ?

The Tax Payer can access e-DRS module by login on income tax portal . Login to your account using PAN/TAN as user ID ->Go to Dashboard ->e-File ->Income Tax Forms ->File Income Tax Forms -> under tab 'Persons not dependent on any source of Income (Source of Income not relevant)> Dispute Resolution Committee in Certain Cases (Form 34BC) -> Fill Form No. 34BC -> Review the details -> E-Verify the Form No. 34BC using Aadhar OTP, EVC or DSC.

This is another initiative by the Government towards minimizing litigation.

TAX CLEARANCE CERTIFICATE : Clarification

Dated 21.08.2024 ; On various news platforms including social media , it was reported that all Indians need Income Tax Clearance Certificate for leaving India , even for a short trip and the effective date is 01st , October 2024 . Various articles also appeared in the media about the procedure to be followed for obtaining such certificates .

Now the income tax department has come out with clarifications regarding the news that all Indian citizens must obtain ITCC before leaving the country. Department says that the report is factually incorrect.

Department clarifies " Vide Finance (No.2) Act, 2024, Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 ( the ‘Black Money Act’) has been added to the list of Acts u/s 230(1A) of the Income-tax Act, 1961, whereby any resident leaving the country is required to obtain a tax clearance certificate in certain circumstances. This insertion has been made only to cover the liabilities under the Black Money Act.

Section 230 (1A) of the Income-tax Act, 1961( the 'Act') relates to obtaining of a tax clearance certificate, in certain circumstances, by persons domiciled in India. The said provision, as it stands, came on the statute through the Finance Act, 2003 w.e.f. 1.6.2003. The Finance (No.2) Act, 2024 has made only an amendment in Section 230(1A) of the Act, vide which, reference of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (the 'Black Money Act') has been inserted in the said Section. This insertion has been made to also cover the liabilities under the Black Money Act in the same manner as the liabilities under the Income-tax Act, 1961 and other Acts dealing with direct taxes for the purpose of Section 230(1A) of the Income-tax Act, 1961.

There appears to be a mis-information about the said amendment emanating from incorrect interpretation of the amendment. It is being erroneously reported that all Indian citizens must obtain income-tax clearance certificate (ITCC) before leaving the country. This position is factually incorrect.

As per section 230 of the Act, every person is not required to obtain a tax clearance certificate. Only certain persons, in respect of whom circumstances exist which make it necessary to obtain a tax clearance certificate, are required to obtain the said certificate. This position has been in the statute since 2003 and remains unchanged even with the amendments vide Finance (No. 2) Act, 2024.

In this context, the CBDT, vide its Instruction No. 1/2004, dated 05.02.2004, has specified that the tax clearance certificate under Section 230(1A) of the Act, may be required to be obtained by persons domiciled in India only in the following circumstances:

(i) where the person is involved in serious financial irregularities and his presence is necessary in investigation of cases under the Income-tax Act or the Wealth-tax Act and it is likely that a tax demand will be raised against him, or

(ii) where the person has direct tax arrears exceeding Rs. 10 lakh outstanding against him which have not been stayed by any authority.

Further, a person can be asked to obtain a tax clearance certificate only after recording the reasons for the same and after taking approval from the Principal Chief Commissioner of Income-tax or Chief Commissioner of Income-tax. In view thereof, it is reiterated that the ITCC under Section 230(1A) of the Act, is needed by residents domiciled in India, only in rare cases, such as (a) where a person is involved in serious financial irregularities or (b) where a tax demand of more than Rs. 10 lakh is pending which is not stayed by any authority.

To read Press release of CBDT in tis regard , CLICK HERE

RECORD NUMBER OF IT RETURNS FILED :

Dated 04.08.2024 :More than 7.28 crore ITRs for AY 2024-25 filed till 31st July, 2024, a 7.5% increase from the 6.77 crore ITRs for AY 2023-24 filed in the corresponding period in the preceding year. Around 72% of taxpayers opted for the New Tax Regime, with 5.27 crore ITRs filed under it, compared to 2.01 crore under the Old Tax Regime.

Over 69.92 lakh ITRs were filed on 31st July, 2024, with the highest hourly rate of 5.07 lakh filings between 7:00 pm to 8:00 pm. About 58.57 lakh ITRs were received from first-time filers, indicating a widening of tax base.

TNo read the Income Tax Department ' s Press Release in this regard , CLICK HERE

CBDT CLARIFIES ON HRA CLAIM CASES :

Dated 11.04.2024 : CBDT has reiterated that there is no special drive to re-open cases pertaining to media reports wherein it was alleged that IT department is reopening large number of cases pertaining to HRA claims .

CBDT Notification says "

Certain instances of mismatch of information as filed by the taxpayer and as available with the Income Tax Department have come to the notice of the Department as part of its routine exercise of verification of data. In such cases, the Department has alerted the taxpayers to enable them to take corrective action.
However, some posts on social media, as well as articles in the media, have highlighted enquiries initiated by the CBDT in cases where employees have made incorrect claims of HRA and rent paid. At the outset, it is stated that any apprehensions about retrospective taxation
on these matters and re-opening of cases on issues pertaining to HRA claims is completely baseless.

Data analysis was carried out in some high-value cases of mismatch between the rent paid by the employee and receipt of rent by the recipient for the FY 2020-21. This verification was done in a small number of cases without re-opening bulk of cases, especially since Updated Return for FY 2020-21(AY 2021-22) could have been filed by the taxpayers concerned only till 31.03.2024.
It is underlined that the objective of the e-verification was to alert cases of mismatches of information for FY 2020-21 only without affecting the others.
"

​To read CBDT NOTIFICATION DATED 08.04.2024 , CLICK HERE

RECORD NUMBER OF IT RETURNS FILED :

Dated 02.01.2024 : A record 8.18 crore Income Tax Returns, ITRs were filed in the current financial year till 31st , December 2023 . . This is nine per cent more than the total ITRs filed in the last year. According to Central Board of Direct Taxes, around 7.5 crore ITRs were filed last year during the same period.

It is also observed by the IT Department that a large number of taxpayers did their due diligence by comparing data of their financial transactions by viewing their Annual Information Statement (AIS) and Taxpayer Information Summary (TIS). A substantial portion of the data for all ITRs was prefilled with data pertaining to salary, interest, dividend, personal information, tax payment including TDS related information, brought forward losses, MAT credit, etc to further ease compliance by taxpayers. The facility was used extensively, resulting in smoother and faster filing of ITRs.


Finance Ministry said, to encourage taxpayers to file their ITRs and forms early, over 103 crore outreaches were made through targeted e-mail, SMS and other creative campaigns. The e-filing Helpdesk team handled over 27 lakh queries from taxpayers to support the taxpayers proactively during the peak filing periods.

To read press release of CBDT , CLICK HERE

TCS ON FOREIGN TRAVEL & REMITTANCE
NEW NOTIFICATION EFFECTIVE FROM 1ST , OCTOBER 2023

Dated 26.09.203 : The revised scheme on collection of TCS ( Tax collected at source ) on Liberalized Remittance scheme ( LRS ) will become effective from 1st , October 2023 .

As per press release dated 28.06.2023 issued by Ministry of finance , TCS rates will be as follows from 1st , October 2023 :


1. TCS on LRS for Education purpose under a loan ( no change )
a. Up to Rs 7 lakhs : NIL %
b Above Rs 7 lakhs : 0.5 %

2. TCS on LRS for Medical Treatment : ( No change )
a. Up to Rs 7 lakhs : NIL %
b Above Rs 7 lakhs : 5.0 %


3. TCS on LRS for other purposes :
a. Up to Rs 7 lakhs : NIL % ( Earlier nil )
b Above Rs 7 lakhs : 20 % ( Earlier 5 %

4. Remittance on Overseas Tour package : 20 % ( earlier 5 % )

a. Up to Rs 7 lakhs : 5 % ( Earlier nil )
b Above Rs 7 lakhs : 20 % ( Earlier 5 %

To read the press release dated 28.06.2023 , CLICK HERE

TCS ON FOREIGN TRAVEL & REMITTANCE
FEMA Change and Clarifications ;

Dated 19.05.2023 : Finance Ministry issued a Gazette notification dated 16.05.2023 wherein rule 7 was omitted In the Foreign Exchange Management (Current Account Transactions) Rules, 2000 . The Rule 7 had given exemption to use of international Credit card from certain provisions of FEMA . Hence overseas credit card payments will come under the limits of Liberalized Remittance Scheme ( LRS ) . Under the LRS , residents can make INTERNATIONAL payment up to USD 2,50,000 PER YEAR .

Now Income tax department has given clarification dated 16.05.2023 on collection of TCS .

As per the clarification , TCS rate will be as follows from 01st , July 2023 :

1. TCS on Education purpose ( no change )
a. Up to Rs 7 lakhs : 0.5 %
b Above Rs 7 lakhs : 5.0 %

2. TCS on Medical Treatment : 5 .0 % ( no change )

3. Remittance on Overseas Tour package : 20 % ( earlier 5 % )

4. Remittance for any other purpose under LRS : 20 % ( earlier 5 % )

If a remittance does not come under LRS :

To avoid any procedural ambiguity, it has been decided by the IT department that any payments by an individual using their international Debit or Credit cards upto Rs 7 lakh per financial year will be excluded from the LRS limits and hence, will not attract any TCS. ( Ref : Press release dated 16.05.2023 )

INCOME TAX DEPARTMENT ISSUES CLARIFICATIONS :

Dated 25.05.2023 : The Central Board of Direct Taxes ( CBDT ) has issued various clarifications on various ,matters like Liberalized Remittance Scheme ( LRS ) , On-line Gambling and Charitable & religious trusts .

​For clarification on LRS , CLICK HERE

For clarification on ON-LINE GAMBLING , CLICK HERE

For clarification on CHARITABLE 7 RELIGIOUS TRUSTS , CLICK HERE

INCOME TAX PORTAL TO HAVE A NEW FEATURE : CO-BROWSING

Dated 26.11.2022 : Now income Tax Department's e-portal has a new feature called co-browsing . Using the feature , tax payers can avail the services of help desk agents while browsing the portal .

During a co-browsing session :

• Helpdesk agent gets an accurate visual representation of the Taxpayers browser screen.

• Agents can also annotate the taxpayers view of the screen, help to fill out ITR forms, other Statutory forms, change settings, complete transactions, find help and reference materials for tax payers and even upload documents

• Agents can help taxpayer to navigate, scroll, type text, and highlight areas of interest on the same browser tab in real-time.

• Co-browsing is simple to use. It can be easily combined with live chat, phone to resolve the customer issue faster.

However Co-browsing does not allow the agent to see any other data on the taxpayers desktop or computer. Also, the Taxpayer need to approve the request before the agents can start the co-browsing session. Taxpayer can also end the co-browsing session at any time if they wish to terminate the discussion.

How to get start Co-Browsing session from Helpdesk agent end?

• Agent will receive call & CRM pop up Infront of Agent.

• Agent will talk to taxpayer and guide taxpayer where to locate co-browse button on income tax portal.

• Taxpayer to generate PIN and share with Agent.

• Agent to click on CB button on CRM which will take him to co browse URL.

• Agent to enter PIN shared by taxpayer in screen displayed to Agent and click on start session button.

• Once Agent clicks on Start Session button co-browse session will start & Agent can guide taxpayer.

• After the Taxpayer gets the answers, he/she can click the STOP button anytime. Once the session has ended, the Agent will no longer see the Taxpayer's browser

How Co-browsing Works ?

When the taxpayer starts a session, the browser sends a request to the Co-Browser proxy.

• The request is then modified in a way that it looks as if the original request came from corbrowse.incometax.gov.in.

• This request is then sent to the original site that the leader wants to co-browse.

• The website sends back the response to the Co-Browser proxy.

• The Co-Browser proxy then modifies the data so that it can be loaded into an iframe that rests on top the original page.

• Both the leader and the follower now interact with the website as it is loaded within the iframe. From this point, there’s only communication between the user’s browsers and the proxy, and the requests don’t continuously have to be sent to the original website anymore.

To know further details of the feature , visit Income Tax e-filing website , by CLICKING HERE

INCOME TAX DEPARTMENT MAKES ELECTRONIC SUBMISSION OF CERTAIN FORMS MANDATORY :

Dated 17.07.2022 : Income Tax department has prescribed that the following Forms, returns, statements, reports, orders, by whatever name called, have to furnished electronically and have to be verified in the manner prescribed electronically :

FORM NO Description

1. 3CEF Annual Compliance Report on Advance Pricing Agreement

2. 10F Information to be provided under sub-section (5) of section 90 or sub-section (5) of
section 90A of the Income-tax Act, 1961
3. 101A Certificate of the medical authority for certifying 'person with disability, 'severe disability, 'autism', 'cerebral palsy' and 'multiple disability' for purposes of section 80DD and section 80U
4. 3BB Monthly statement to be furnished by a Stock Exchange in respect of transactions in
which client codes have been modified after registering in the system for the month of -

5. 3BC Monthly statement to be furnished by a Recognized Association in respect of transactions in which client codes have been modified after registering in the system for the month of

6 . 10BC Audit report under (sub-rule (1) of rule 17CA) of Income-tax Rules, 1962, in the case of an electoral trust

7 10FC Authorization for claiming deduction in respect of any payment made to any financial institution located in a Notified jurisdictional area.
8. 28A Intimation to the Assessing Officer under section 210(5) regarding the Notice of demand under section 156 of the Income -tax Act, 1961 for payment of advance tax under section 210(3)/210(4) of the Act
9. 27C Declaration under sub-section (1A) of section 206C of the Income-tax Act, 1961 to be made by a buyer for obtaining goods without collection of tax

10. 58D Report to be submitted by a public sector company, local authority or an approved association or institution under section 35AC of the Income-tax Act, 1961 to the National Committee on a notified eligible project or scheme
11. 58C Report to be submitted under clause (i) of sub-section (4) of section 35AC of the Income- tax Act, 1961 to the National committee by an approved association or institution
12. 68 Form of application U/s 270AA(2) of the Income Tax Act, 1961

To go through the notification dated 16.07.2022 , CLICK HERE