Reckoning of Running Allowance as pay for the purpose of deduction of Income Tax

GOVERNMENT OF INDIA
MINISTRY OF RAILWAYS
(RAILWA BAORD)

No. F(X)I-91/23/3

New Delhi, Dated 28-12-2010

As per Standard List I, II, III

Sub: Reckoning of Running Allowance as pay for the purpose of deduction of Income Tax.

**************

In continuation of Board's letter of even number dated 13.07.2000, a copy of the Notification of Ministry of Finance (Central Board of Direct Taxes) No. S.O. 2820(E) dated 22nd November 2010 regarding substitution of the letters figures and words "Rs.6,000/- per month" with letters, figures and in sub rule (2) in the table against serial number 4 in column 4 is enclosed for information and guidance.

Receipt of this letter may please be acknowledged.

s/d
(V.Rama Manohar Rao),
Joint Director, Finance (Exp.)-I,
Railway Board

DA : As Above

More details please visit NFIR website...

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CBDT extended the due date of filing of return of income in the state of Jammu and Kashmir

F.No.225/72/2010/ITA.II
Government of India
Department of Revenue
Central Board of Direct Taxes

New Delhi, the 23^rd September,2010

Order under Section 119 of the Income Tax Act, 1961.

ON consideration of the reports of disturbance of general life caused due to the law and order problem in the State of Jammu and Kashmir, the Central Board of Direct Taxes, in exercise of powers conferred under section 119 of the Income Tax, 1961, hereby extends the due date of filing of returns of income for the Assessment Year 2010-11 for all category of cases in the State of Jammu & Kashmir to 30th November 2010. Accordingly the date for obtaining and furnishing Tax Audit report u/s 44AB of the Income Tax Act is also extended to 30th November 2010.

s/d
(Ajay Goyal)
Director (ITA.II)

www.incometaxindia.gov.in

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Income Tax Refund : Salaried Tax Payers use this facility upto 31st August

I-T Refund' fortnight from August 16 to 31

The Income Tax Department will observe the second fortnight of August 2010 as ‘I-T Refund' period to solve the long pending complaints of the salaried tax payers up to the assessment year 2008-2009, said Prema Malini Vasan, Chief Commissioner of Income Tax on Wednesday.

“I-T Refund fortnight will be observed throughout the State from August 16 to 31. Our officers will sit with the assessees and solve the issue across the table. Currently, we have around 2,200 complaints pending with the department with regard to non-receipt of refunds for a long time,” Ms. Vasan told The Hindu.

Department officials have requested the aggrieved salaried tax payers to bring along with them the original TDS certificate, Form 16, PAN card, TAN number, bank account details and current postal address. Additionally, tax payers can view their tax credit status by logging on to www.tin-nsdl.com, the officers said.

Inaugurating the four-day Special Return Receipt Counters at Aayakar Bhavan, Ms. Vasan said that she expected more than 2.5 lakh salaried assessees to make use of the facility. The salaried tax payers of Tambaram and Kancheepuram Income Tax office can also make use of the facility. Recently, the department opened special counters at eight different places in the city in which more than 40,000 assessees filed their returns.

At Aayakar Bhavan, 40 Special Return Receipt Counters and 20 help desks have been set up to help the tax payers that would be manned by 25 officers, 250 staff and some volunteers. Separate counters have been set up for senior citizens and differently-abled persons. The counters will operate from 9.45 a.m. to 5.30 p.m. on each day till Saturday. At Tambaram, 14 special counters are manned by 14 officers and 50 staff.

“So far, the department has collected 22 per cent of taxes for the financial year 2010-2011 amounting to Rs.5,500 crore. The target for this year is Rs.28,150 crore against Rs.25,000 crore for last year,” she said.

Last year, 2.51 lakh assessees made use of the special counters. In all, the department last year received more than 18.67 lakh paper returns and 4 lakh assessees e-returns.

Source: The Hindu

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Income Tax Department Celebrates 150 years

Income Tax Department Celebrates 150 years of Income tax in India Tomorrow: FM to Release Revised Citizen Charter of I-T Department on the Occasion

The Income Tax department is celebrating 150 years of income tax in India. The Governor General of India accorded to the bill levying the tax, introduced by James Wilson, the first Finance Member in Council, on 24th July 1860. The 150 years of income tax, spanning 3 centuries, have witnessed tremendous global changes. The Income Tax department has traveled this journey by mobilizing resources, from a meager Rs.1.33 crore in 1860-61 to about Rs.380 thousand crore in 2009-10. These revenues have constituted a vital component in the resources used by the Government of India to lift the people out of abject poverty, disease and misery and propel India into the frontiers of strong and self-reliant nations. In the 150th year, the Income Tax department rededicates itself to the people of India with the avowed objective of mobilizing optimum resources to build a modern, developed, vibrant and prosperous nation.

At the close of the first decade of this century, the role of the Income Tax department has radically altered and needs redefining. The department needs to address the rising expectations of taxpayers through innovative use of technology and modern management skills to ensure equity, transparency and efficiency in delivery systems. The Citizen’s Charter 2007 has, accordingly, been revised and will be released by the Hon’ble Finance Minister in a function on 24th July 2010 at 3:30 PM, FICCI Auditorium, New Delhi. The Charter reflects the best endeavour of the Department and is expected to meet the aspirations of the people of India.

A short documentary film on the journey of 150 years of income tax, anchored by actor Om Puri, will be shown and the third volume of the book “Let Us Share” will be released during the function.

The soul of the country speaks through its art. On this historic occasion, an artists’ workshop was recently organized in Kolkata to ponder and reflect on creativity in the field of resource mobilization. Several eminent artists, including Dhiraj Chowdhury, Ganesh Haloi, Prakash Karmakar, Jogen Choudhury, Wasim Kapoor and Sunil Das joined artists in the Department, Bratati Mukherjee and Prasanna Kumar Dash, in bringing forth 40 paintings of outstanding quality. An exhibition of these paintings, along with other expressions of creative outpouring by personnel of the department, will be organized at AIFACS, New Delhi from 25th to 30th July 2010. The exhibition will be inaugurated by Smt. Suvra Mukherjee in the company of several other renowned artists of different parts of the country on 24th July at 6:30 PM

PIB

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Investment in Bonds for Tax Exemption under Section 80CCF

Investment in Bonds of IFCI, IDFC, LIC and NBFCs (Classified as Infra Finance Company) Eligible for Tax Exemption under Section 80CCF

The Central Government have specified bonds to be issued by (i) Industrial Finance Corporation of India; (ii) Life Insurance Corporation of India; (iii) Infrastructure Development Finance Company Limited; and (iv) a Non-Banking Finance Company classified as an infrastructure finance company by the Reserve Bank of India; as “Long-term Infrastructure Bond” for the purpose of section 80CCF of the Income Tax Act, 1961.

Investment in these bonds up to rupees twenty thousand will be eligible for deduction from the total income of the assessee. The deduction will be in addition to the deduction of rupees one lakh allowed under sections 80C, 80CCC and 80CCD of the Act.

The tenure of the Bonds shall be a minimum of ten years with a lock-in period of five years for an investor. It will be mandatory for the subscriber to furnish permanent account number to the issuer for investment in the bonds.

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Due date for filling of return of Income Tax

F.No.225/72/2010-ITA-II
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes

New Delhi, the 31st May, 2010.

Order under Section 119(1) of the Income Tax Act, 1961

The due date for filling of return of income within the meaning of Explanation 2(c) to Section 139(1) of the Income Tax Act, 1961 is 31st July, 2010. The income tax authorities are hereby directed to make arrangements for accepting the returns of income on 31st July, 2010 (being Saturday). This direction is issued for administrative convenience by the Central Board of Direct Taxes in exercise of powers conferred under section 119 of the Income Tax Act, 1961.

Special arrangements may also be made by way of opening additional receipt counters, wherever required, from 28th July to 31st July, 2010 to facilitate the taxpayers to file their returns.

(Ajay Goyal)
Director (ITA-II)

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THE DIRECT TAXES CODE JUNE 2010 - REVISED DISCUSSION PAPER

REVISED DISCUSSION PAPER

ON

THE DIRECT TAXES CODEJUNE 2010
Central Board of Direct TaxesDepartment of RevenueMinistry of Finance

CHAPTER II

TAX TREATMENT OF SAVINGS – EXEMPT EXEMPT TAX (EET)VIS-A-VIS EXEMPT EXEMPT EXEMPT (EEE) BASIS

1. Chapter-XII of the Discussion Paper on the Direct Taxes Code (DTC) deals with tax incentives for savings. It proposes the "Exempt-Exempt-Taxation‟ (EET) method of taxation for savings. Under this method, the contributions towards certain savings are deductible from income (this represents the first 'E' under the EET method), the accumulation/accretions are exempt (free from any tax incidence) till such time as they remain invested (this represents the second "E‟ under the EET method) and all withdrawals at any time are subject to tax at the applicable marginal rate of tax (this represents the "T‟ under the EET method).

1.1 Based on the EET principle, the Code provides for deduction in respect of aggregate contributions upto a limit of three hundred thousand rupees (both by the employee and the employer) to any account maintained with any permitted savings intermediary, during the financial year. This account will have to be maintained with any permitted savings intermediary in accordance with the scheme framed and prescribed by the Central Government. The permitted savings intermediaries will be approved provident funds, approved superannuation funds, life insurer and New Pension System Trust. The accretions to the deposits will remain untaxed till such time as they are allowed to accumulate in the account. Any withdrawal made, or amount received, under whatever circumstances, from this account will be included in the income of the assessee under the head 'income from residuary sources', in the year of such withdrawal or receipt. It will accordingly be subject to tax at the applicable personal marginal rate of tax.

1.2 Taxation on EET basis is proposed to be prospective. The DTC provides that the withdrawal of any amount of accumulated balance as on the 31st day of March, 2011 in the account of the individual in a Government Provident Fund (GPF), Public Provident Fund (PPF), Recognised Provident Funds (RPFs) and the Employees Provident Fund (EPF) will not be subject to tax. Therefore, only new contributions as well as accretions on or after the commencement of the DTC, will be subject to the EET method of taxation.

1.3 The permitted savings intermediaries would be approved by the Pension Fund Regulatory and Development Authority (PFRDA). These intermediaries will, in turn, invest the amounts deposited with them in government securities, term deposits of banks, unit-linked insurance plans, annuity plans, bonds and securities of public sector companies, banks and financial institutions, bonds of other companies enjoying prescribed investment grade rating, equity linked schemes of mutual funds, debt oriented mutual funds, equity and debt instruments. The choice of instruments will, in some schemes, be with the investor and in some others with the trustees of the schemes. The pattern of investment by the latter will be as prescribed. The rollover of any amount received, or withdrawn, from one account with the permitted savings intermediary to any other account with the same or any other permitted savings intermediary will not be treated as withdrawal and, accordingly, will not be subject to tax.

2. A large number of representations have been made with regard to the proposed EET system. It has been stated that most countries that follow the EET method of taxation of savings also have a social security system in place for all their citizens. The EET savings accounts which operate for individuals in these countries are over and above the mandatory social service payments received by them. It has been represented that in India, in the absence of a universal social security system, the proposed EET method of taxation of permitted savings would be harsh. Tax payers require some flexibility in making withdrawals in lump sum without being subjected to tax. People may need lump sum funds on retirement for various family obligations. Requests have therefore been made for continuation of Exempt Exempt Exempt (EEE) method of tax treatment of investments. Alternatively, the application of EET should be restricted to new savings instruments after the date from which the DTC comes into effect, and it should not apply to existing saving instruments.

3. Universal social security benefits for tax payers may not be feasible in the near future. Also, switching over to a complete EET method of taxation for all savings instruments would entail many administrative, logistical and technological challenges. It would require a vast network of permitted savings intermediaries, a central record keeping authority and a central agency to service around more than three crore accounts and deduct tax at the time of withdrawals. The segregation of taxable and non-taxable amounts at the time of withdrawal and rollover from one account to another would introduce complexities and create practical difficulties.

3.1 Therefore, as of now, it is proposed to provide the EEE method of taxation for Government Provident Fund (GPF), Public Provident Fund (PPF) and Recognised Provident Funds (RPFs) and the pension scheme administered by Pension Fund Regulatory and Development Authority. Approved pure life insurance products and annuity schemes will also be subject to EEE method of tax treatment. In order to achieve the objective of long term savings, the rules for contribution as well as withdrawal will be harmonised and made uniform so that such savings are actually made and utilised by the taxpayer for the long term. Investments made, before the date of commencement of the DTC, in instruments which enjoy EEE method of taxation under the current law, would continue to be eligible for EEE method of tax treatment for the full duration of the financial instrument.

CHAPTER IV
TAXATION OF INCOME FROM HOUSE PROPERTY

1. Chapter VIII of the Discussion Paper on the draft Direct Taxes Code (DTC) deals with the computation of income from house property. “Income from house property” is one of the five heads under which accruals or receipts relating to ordinary sources of income are to be classified. The Discussion Paper states that income from house property, which is not occupied for the purpose of any business or profession by its owner, is to be taxed under this head. The Discussion Paper proposes a new scheme for computation of income from house property in the draft DTC, the salient features of which are:

(a) Income from house property shall be the gross rent less specified deductions.

(b) Gross rent will be higher of

(i) the amount of contractual rent for the financial year; and

(ii) the presumptive rent calculated at six per cent per annum of the ratable value fixed by the local authority. However, in a case where no ratable value has been fixed, six per cent shall be calculated with reference to the cost of construction or acquisition of the property. If the property is acquired during the financial year, the presumptive rent shall be calculated for the proportionate period of that financial year.

(c) The advance rent will be taxed only in the financial year to which it relates.

(d) The gross rent of one self-occupied property will be deemed to be nil, as at present. In addition, the gross rent of any one palace in the occupation of a ruler will also be deemed to be nil, as at present.

(e) The following deductions will be admissible against the gross rent:- (i) Amount of taxes levied by a local authority and tax on services, if actually paid. (ii) Twenty per cent of the gross rent towards repairs and maintenance as against thirty per cent at present. (iii) Amount of any interest payable on capital borrowed for the purposes of acquiring, constructing, repairing, renewing or re-constructing the property.

(f) In the case of a self-occupied property where the gross rent is deemed to be nil, no deduction for taxes or interest will be allowed.

(g) The income from property shall include income from the letting of any buildings along with any machinery, plant, furniture or any other facility if the letting of such building is inseparable from the letting of the machinery, plant, furniture or facility.

2. The most frequent feedback on computation of income from house property has been the determination of notional rent on presumptive basis (at the rate of 6%) with reference to the cost of construction/ acquisition. The input is that this is inequitable as it discriminates against recent owners as such cost is a function of inflation. The other major issue which has been raised is that, in order to incentivize investment in housing, the deduction for interest on capital borrowed for acquisition or construction of a self occupied house property, up to a ceiling of Rs. 1.5 lakhs, as available in the existing provisions of the Income-tax Act, 1961 should be retained.

3. The determination of notional rent for computing income from house property has been a cause for much litigation. Internationally also, in most jurisdictions, income from house property is taxed on the basis of rent from letting out of property.

3.1 Taking the above factors into account, the following modifications are proposed: (a) In case of let out house property, gross rent will be the amount of rent received or receivable for the financial year. (b) Gross rent will not be computed at a presumptive rate of six per cent of the rateable value or cost of construction/acquisition. (c) In case of house property which is not let out, the gross rent will be nil. As the gross rent will be taken as nil, no deduction for taxes or interest etc., will be allowed. However, in case of any one house property, which has not been let out, an individual or HUF will be eligible for deduction on account of interest on capital borrowed for acquisition or construction of such house property (subject to a ceiling of Rs. 1.5 lakh) from the gross total income. The overall limit of deduction for savings will be calibrated accordingly.
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Central Administrative Tribunal order checks bias in Income Tax department

CAT order checks bias in I-T dept

In a ruling aimed at checking bias in departmental promotions, the Central Administrative Tribunal has said if a Departmental Promotion Committee goes against the entries in an employee’s Annual Confidential Reports, the panel must give reasons for its decision.

A CAT bench said: “The DPC, as per DOP&T instructions may make its own assessment on the basis of entries in the ACRs and may not be guided merely by the overall grading. However, in cases where the assessment by DPCs are apparently not in line with the gradings in the ACRs, the DPC should appropriately substantiate its assessment...”

The ruling came on a petition filed by an income tax commissioner, who was ignored for promotion to the post of Chief Commissioner of I-T even as his juniors made it to the post.

This was despite the fact that D. K. Singh, Commissioner of Income Tax (appeal-IV), M.G. Road, Chennai had the prescribed benchmark (very good) in all the ACRs under consideration.

Singh, an Indian Revenue Service (Income Tax) Officer of 1977 batch, enjoyed excellent service record.

However, the DPC held on October 23, 2009 did not recommend Singh for promotion. Copies of his ACRs (2003-04 to 2007-08) revealed his reporting officer had given adverse remarks, which was corrected by the reviewing officer, who graded him as ‘very good’.

Singh, who had always been graded ‘very good’ in the ACRs preceding and succeeding the year 2005-06, submitted that “if one were to go by the remarks of the reporting officer, there is sudden sharp decline in the personal traits and skills of the applicant for the year 2005-06 ....Sharp fluctuations are not possible ... rather suggest bias and malice ....”

Singh alleged that the DPC went by assessment of the reporting officer and ignored the report made by the reviewing officer. As per the SC rulings adverse remarks in ACRs have to be communicated to employee concerned.

The CAT said: “Assuming that the reporting officer would have graded the applicant (Singh) only as ‘good’ because of some adverse remarks given by him, the same stood overruled by the reviewing officer. Though such was the position, the DPC could still take its own view and overrule the grading done by the reporting or the reviewing officer. For that, it was required to record reasons.”

The CAT pointed out that there was not a word mentioned as to why Singh had been found ‘unfit’. “There is not even a mention that ACR of the applicant ... would be considered only as good going by the adverse remarks given by the reporting officer, least the preference between the two gradings done by the reporting and the reviewing officer,” it noted.

“Present is not a case of the reporting officer giving over all grading of ‘good’ to the applicant for the year 2005-06... he has not graded the applicant at all,” the CAT pointed out.

Allowing Singh’s plea, the CAT directed the department of revenue, department of personnel and training and the UPSC to convene a review DPC for considering his case for promotion to the post of chief commissioner of I-T, as expeditiously as possible and definitely within a period of two months.

“In case the review DPC assesses the applicant fit for promotion, he would be promoted from the date persons junior to him were promoted, with all ...benefits,” the CAT ordered.

Source: Hindustan Times

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Income Tax exemption limit for gratuity enhanced to Rs.10 lakh - Central Board of Direct Taxes approved

Income Tax exemption limit for gratuity enhanced to Rs.10 lakh - Central Board of Direct Taxes approved

The government enhanced the income tax exemption limit for gratuity from Rs.3.5 lakh to Rs.10 lakh w.e.f. May 24, 2010.

The Central Board of Direct Taxes has approved notification of ten lakh rupees as the maximum amount of gratuity entitled to exemption under sub-clause (iii) of clause (10) of section 10 of the Income Tax Act 1961.

The notification will be applicable to employees who retire, or become incapacitated before retirement, or expire, or whose services are terminated, on or after the 24th May 2010.

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Income Tax Welfare Fund with a Corpus of Rs.100 Crore Operationalised after 12 Years

Finance Minister asks CBDT to Address the Issue of Unwanted Litigation with Taxpayers and Realise Locked up Revenue in Appeals

Finance Minister, Shri Pranab Mukherjee announced the operationalisation of the income tax welfare fund which was pending since 1998. The fund has a corpus of Rs.100crore and will be available for welfare activities of the employees of the income tax department. The finance Minister made this announcement while addressing the Annual Conference of Chief Commissioners and Director Generals of Income Tax, here today. The Finance Minister also announced that in order to upgrade the skills of the IRS officers, an advance mid-career training programme for them would be started during the current year. This will equip officers to face challenges dealing with complex international transactions and fight menace of tax avoidance schemes using tax havens and low tax jurisdiction. The Finance Minister also asked CBDT to ensure deployment of human resources in consonance with requirement of the tax laws. In this regard, he specifically asked for timely completion of exercise of cadre restructuring and hold regular departmental promotional committee (DPC) as per the DoPT calendar. The Finance Minister advocated the need to focus on preventive vigilance and adopt a strategy for zero tolerance for corruption. He asked CBDT to set up a Committee to examine the vigilance practices and procedures in few select countries. The experience of other countries can be used to streamline and strengthen the vigilance administration in Income Tax department. In order to provide the services to the taxpayers of desired quality, the Finance Minister stressed that the same become technology driven. For the current year, the Finance Minister asked senior officers of the income tax department to exceed the target of direct tax collection at Rs. 4,30,000 crore in the Budget estimates. He asked the department to adopt special strategy to monitor TDS compliance at the District level, State level and at Central level.

In the end, the Finance Minister expressed his concerns over the rising litigation with the taxpayers and the quantum of revenue locked in appeals. He stated that taxpayers should be encouraged to Mutual Agreement Procedure (MAP) which has emerged as a preferred alternate dispute resolution mechanism. He asked CBDT to come out with a comprehensive proposal to address the issue of unwanted litigation with taxpayers and also to realise locked up revenue in appeals.

Following is the complete text of the Finance Minister’s speech:-

“Direct Taxes, now the major resource provider to the Central Government, have grown at an average annual rate of 24 percent in the last five years and have nearly trebled from Rs.1,32,771 crore in financial year 2004-05 to about Rs.3,78,000 crore in financial year 2009-10, increasing its share from 4.1 percent to 6.1 percent of the Gross Domestic Product (GDP). This tremendous growth has been made possible not only due to rationalisation of tax structure and improvement in tax administration leading to better tax compliance, but also persistent and unrelenting efforts of employees of the Income Tax department.

To improve compliance further, tax laws need to be simple, stable and robust; tax rates should remain moderate; and multiplicity of tax exemptions and deductions should be gradually phased out in order to widen and deepen the tax base. Tax administration needs to be further toned up by appropriate use of technology on the one hand, and improving professional competence and responsiveness of the employees on the other.

A major tax reform initiative has already been announced in the proposed ‘Direct Taxes Code 2009’ to simplify, rationalize and consolidate the laws and procedure, relating to direct taxes. Its draft is under revision, taking into consideration the areas of concern expressed by various stakeholders, and the discussion paper will be shortly in the public domain before introduction in Parliament in the forthcoming monsoon session. It will indeed be legislation for the 21st century, which will witness the emergence of an economically strong and vibrant India. I anticipate that the new code will usher in major changes in procedures and practices of Direct Tax. The Department, therefore, needs to draw a roadmap for administratively meeting the challenges and the changes that will be introduced by the new Code. The Human Resource Directorate of the Department should draw up plans for training in cooperation with tax training institutes for capacity building for implementation of the Direct Tax Code. The transition from existing law to DTC would require completion of delegated legislation in a time bound manner. CBDT should ensure smooth transition by planning the activities schedule well in advance.

Growth in international trade and commerce driven by globalisation is throwing up new and complex challenges. Globalization offers a global market for product and services but at the same time it also poses challenges. The recent financial crisis has shown how an economic difficulty of one country can get exported to other countries. Similarly, the development of tax shelter products and use of tax havens is another challenge which emanates from globalization. In our response to global challenges we have set up two Income Tax Overseas Units (ITOUs) within Indian Missions in Singapore and Mauritius to facilitate exchange of information. Eight more such units in USA, UK, Netherlands, Japan, Cyprus, Germany, France and UAE are also being created on similar lines. I am hopeful that these measures would result in seamless flow of tax related information from foreign tax jurisdictions and would strengthen our fight against menace of tax evasion using cross border transactions .

The department needs to improve its infrastructure to match global standards of delivery of taxpayer services. The effective roll out of Sevottam and Aayakar Sewa Kendra (ASK) would require adequate infrastructure. It is necessary to make the infrastructure state-of-the art to improve the working environment and to make a visit to the tax office a pleasant experience. Processing of tax returns, now done on the National Computer Network, has to be made more efficient. Towards this, two more Centralized Processing Centres (CPCs) at Pune and Manesar should be set up expeditiously. Efforts should be made to further popularise and increase electronic filing of tax returns and electronic payment of taxes to reduce paper-work and make taxpayer services environmentally friendly. The scope of Large Taxpayer Units (LTUs), presently operational in four metropolitan cities, needs to be expanded for deepening of tax base as well as for centralized services to large taxpayers.

While taxpayer services have improved there are still large numbers of taxpayer grievances, including grievances relating to tax refunds and credit of TDS, which need to be attended on urgent basis. At the systemic level CBDT should ensure that Directorate of Systems take immediate steps to streamline the issue of credit of TDS. Apart from systemic changes, the grievance redressal mechanism including Ombudsman need to be integrated and streamlined. A holistic approach needs to be developed to cater to the rising expectations of taxpayers. The CBDT should immediately come up with a comprehensive and net-based grievance redressal mechanism in line with the best global practices.

A number of services offered by the department have become technology driven. It may not be possible to deliver the services of desired quality in the existing structure of tax administration. CBDT may come out with a new structure, which leads to faster adoption of technology and innovation. The CBDT may, therefore, consider hiving off its technology driven taxpayer services to a Special Purpose Vehicle (SPV), which can better deliver such services in the public-private-partnership mode. This will lead to innovation in delivery of services to taxpayers and also involvement of public in delivering the services.

For the current financial year, the direct tax collection target has been fixed in the Budget Estimates at Rs.4,30,000 crore at a growth of 13.7 percent over the actual collection last year. We have deliberately called this conference in the beginning of the financial year to deliberate strategies and draw action plan to achieve this target. Apart from concentrating on big cities and towns, Department should also look to smaller towns and cities for widening of tax base. The smaller towns and centres have emerged as centres of growth due to inclusive growth agenda of Government. Department may also develop special strategies to monitor TDS compliance at the District level, state level and at Central level.

The GDP is poised to grow at 8.5 percent during 2010-11. Sectors of the economy performing well should be monitored for tax compliance and we should get our due taxes. The department should also make attempts to widen and deepen the tax-base further. It should improve utilization of information relating to high value transactions available through Annual Information Returns (AIR), Central Information Branches (CIB) and other sources. Using multisource data, Department should refine risk profiling of taxpayers and assessments and investigations should be carried out accordingly. Using this intelligence data department should develop credible deterrence for taxpayers, who are habitual tax evaders.

Skills of the personnel working in the department need constant up gradation in view of changing tax regulations, technology and global economic environment. Though I find that the CBDT has taken some steps in this direction through Knowledge Management by yearly publication of the book titled “Let us Share”, containing the best orders and practices, yet further steps need to be expeditiously taken in its training and skill up gradation programmes adopting the best global practices. I understand that CBDT is already providing exposure to probationers at NADT about international practices through international attachments. This has to be taken forward by suitably designing mid-career training programmes for officers at regular intervals. This will equip officers to face challenges of dealing with complex international transactions and menace of tax avoidance schemes using tax havens and low tax jurisdictions. This will also help us in getting our due share of taxes especially from cross border transactions.

I am happy to announce that Advanced Mid-Career Training Programme (AMCTP) for IRS officers would be started during the current year.

A satisfied work force is the backbone and strength of an organization. We have modified the transfer policy for the Indian Revenue Service (IRS) officers to improve satisfaction levels and minimise unwarranted service litigation with our own employees. The Standing Committee on Finance, in its report for 2009-10, has expressed concern about shortages of manpower in the Department. This needs to be addressed urgently, especially in the face of the exponentially increasing workload, and the challenges of maximising revenue generation along with efficient taxpayer service. I am told that cadre restructuring of CBDT is pending for quite some time, which has adversely affected the implementation of core areas of work in the Income Tax department. The tax laws can be implemented effectively by aligning the tax administration with the intent of tax policy. If there is a mismatch, then it may be difficult to implement a tax policy, however good it may be. CBDT should ensure that deployment of human resources is in consonance with requirement of the tax laws and this should be ensured by completing the timely exercise of cadre restructuring and by holding regular departmental promotional committee (DPC) as per the DoPT calendar. In the long term, we should aim for Human Resource policy which is, conducive for specialisation, promotes administrative innovation, provides equal opportunity and keeps employees in high state of motivation.

In the last year’s conference, I had emphasised the need for expediting vigilance matters. I find that though there is improvement, the progress is not at the desired levels. More focussed approach with proper adherence to prescribed time-lines is needed to expedite vigilance matters. I want to see that no charge sheets are filed against our own employees at the last day of retirement after more than 30 years of service to Government. We should ensure that guilty is punished but at the same time ensuring that those who have performed their duties and victims of frivolous complaints should be adequately protected. Department need to focus on preventive vigilance and adopt a strategy for zero tolerance for corruption. CBDT should set up a committee to examine the vigilance practices and procedures in few select countries. The experience of other countries can be used to streamline and strengthen the vigilance administration in Income Tax department.

The rising litigation with the taxpayers and the quantum of revenue locked in appeals is a matter of serious concern. The strengthening of Settlement Commission, setting up Dispute Resolution Panel (DRP) may address the litigation issues with the taxpayers to some extent. I am told that under mutual agreement procedure (MAP) negotiations under Indo-USA DTAA a tax demand of Rs.800 crore in 48 cases has been confirmed. This is a good development and tax-payers should be encouraged to invoke MAP, which has emerged as a preferred alternate dispute resolution mechanism. In spite of these efforts, we need to develop more strategies to reduce the litigation with the taxpayers. I would like CBDT to come out with a comprehensive proposal to address the issue of unwanted litigation with taxpayers and also to realise locked up revenue in appeals.

Before I close, I am happy to announce the operationalisation of the Income Tax Welfare Fund, which was pending since 1998. The Fund has a corpus of Rs.100 crore kept in interest-bearing deposit. The interest earned annually on this deposit, and other annual accruals to the Fund, will be available for welfare activities of employees of the Income Tax department. I am sure that CBDT will come out with innovative welfare measures, which will further motivate employees of the Department to excel in their area of work.

I wish this Annual Conference a great success. I would be looking forward to the outcomes of the deliberations.”

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Special arrangements for Tax Payers - CBDT

No.402/92/2006-MC (28 of 2010)
Government of India / Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
***

New Delhi the 3^rd June 2010

PRESS RELEASE

The Central Board of Direct Taxes (CBDT) have directed the Income Tax Department (ITD) to make arrangements for receiving income tax returns on 31^st July 2010, the due date for filing tax returns by most taxpayers, as that day happens to be a Saturday. ITD has also been asked to make special arrangements by setting up additional counters from 28^th July to 31^st July 2010, to facilitate taxpayers in filing their income tax returns.

In Delhi, special counters will be set up in Pragati Maidan, as in earlier years, to receive about 5 lakh income tax returns that are filed in the last few days. The Chief Commissioner of Income Tax, Delhi, will later announce the details of the special arrangements made for the taxpayers of Delhi. Counters will be opened to give additional and value-added services such as free return forms, photocopy, PAN application and information, e- filing, help desk, etc. Separate counters will also be opened for senior citizens and ladies, wherever required.

Similarly, special arrangements will be made in other major tax- collecting centers of the ITD such as Mumbai, Kolkata, Bangalore, Chennai, Chandigarh, Ahmedabad, Hyderabad, etc. The respective Chief Commissioners of Income Tax will announce details of arrangements made in these cities.

Taxpayers are advised to file their income tax returns early to avoid the last minute rush. Taxpayers are also requested to use the e-filing facility of the Income Tax department to get faster and error-free services. It is easy, secure and can be availed of from anywhere anytime. E-filing service is available on the website https://incometaxindiaefiling.gov.in/portal/index.jsp

The Income Tax Rules have been recently amended to include Receipt Number on the TDS certificates as a mandatory field. It is clarified that Receipt Number will not be required for the income tax returns to be filed this year (assessment year 2010-11), but only from next year. Tax deductors are, however, requested to quote Receipt Number of the TDS return for all tax deducted from this financial year.

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The Central Board of Direct Taxes (CBDT) Amends Rules Relating to TDS

CBDT Amends Rules Relating to TDS

The Central Board of Direct Taxes (CBDT) have amended the Rules relating to TDS provisions date and mode of payment of tax deducted at source (TDS), TDS certificate and filing of ‘statement of TDS’ (TDS return) vide Notification No.41/2010; SO No.1261(E) dated 31.05.2010. The amended rules will apply only in respect of tax deducted on or after 1st day of April 2010.

Forms for TDS certificate have been revised to include the receipt number of the TDS return filed by the deductor. Now the Tax-deduction Account Number (TAN) of the deductor, Permanent Account Number (PAN) of the deductee, and Receipt number of TDS return filed by the deductor will form the unique identification for allowing tax credit claimed by the taxpayer in his income-tax return.

Government Authorities (Pay and Accounts Officer or Treasury Officer or Cheque Drawing and Disbursing Officer) responsible for crediting tax deducted at source to the credit of the Central Government by book-entry are now required to electronically file a monthly statement in a new Form No. 24G containing details of credit of TDS to the agency authorised by the Director General of Income-tax (Systems).

Due date for furnishing TDS return for the last quarter of the financial year has been modified to 15th May (from earlier 15th June). The revised due dates for furnishing TDS return are

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

Due date for furnishing TDS certificate to the employee or deductee or payee is revised as under

Sl. No.	Category	Periodicity of furnishing TDS certificate	Due date
1.	Salary (Form No.16)	AnnuaL	By 31st day of May of the financial year immediately following the financial year in which the income was paid and tax deducted
2.	Non-Salary (Form No.16A)	Quarterly	Within fifteen days from the due date for furnishing the ‘statement of TDS’

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Decoding the direct tax code

Decoding the direct tax code

The proposed Direct Tax Code is a combination of major tax relief and removal of most tax-exempted benefits. It is expected to usher in a new tax regime of transparency and greater compliance writes Dilip Maitra.

When archaic rules have to be replaced with new ones, the changes must be dramatic and path breaking. This is what Union Finance Minister Pranab Mukherjee conveyed to all taxpayers when he introduced the draft Direct Tax Code (Tax Code) last week. The Tax Code, now open to public debate, will be introduced as a Bill in Parliament’s winter session. If passed, it will become the new Income Tax Act, replacing the existing four decade old IT Act of 1961. The new IT Act will come into force from April 1, 2011.

In the foreward to the Tax Code Mukherjee explains that the aim is to eliminate distortions in the tax structure, introduce moderate levels of taxation, expand the tax base, improve tax compliance, simplify the language and lower tax litigations. Initial analysis shows that most of these objectives are achievable by tweaking of some provisions.

Talking to Deccan Herald, KPMG Executive Director Personal Taxation, IT & ESOP Vikas Vasal said “The new proposals are in the right direction. They will simplify regulations and reduce unnecessary litigations significantly.”

Agreed Bangalore Chamber of Industry & Commerce (BCIC) President K R Girish. “The Code is a completely new law and not an amendment of the existing Income Tax Act. This is a commendable change as one has always experienced tinkering of existing laws, ” observes Girish.

Major gains for individuals

What do the major changes proposed in the Tax Code look like? Personal income tax, almost all salaried persons will agree, in our country is one of the highest in the world. More open and honest an employer is in terms of disclosing remunerations, worse it is for the employees because taxable income goes up. The present system thus rewards dishonesty and non-disclosure of income by way of lower tax. The Tax Code will try to address these issues by significantly lowering income tax and by disallowing all tax-free perks. It proposed exemption of income tax on specified savings up to Rs 3 lakh a year as against the present deduction limit of Rs 1 lakh for all types of savings under 80C of the IT Act. The catch, however, is that a few long term investments like public provident fund, employer’s provident fund, insurance premium in pension (annuity) schemes, Post Office National Savings Scheme etc will be eligible for tax exemption.

But contributions to fixed deposits, interest and principal payment on housing loans, educational expenses of dependents, and a host of other forms of savings will not qualify as eligible for tax savings. The thrust, clearly, is to induce long term savings for future needs.

The Tax Code also raised income tax slabs significantly, lowering the tax burden on individuals. The draft proposed exempting the general tax payer from paying tax for income up to Rs 1.60 lakh a year.

According to the proposal, a tax payer will pay at the rate of 10 per cent for income above Rs 1.60 lakh and up to Rs 10 lakh, at 20 per cent on income between Rs 10 lakh and Rs 25 lakh and at 30 per cent for income beyond Rs 25 lakh.

At present, while the basic exemption limit remains at Rs 1.60 lakh a year, the limit for tax slabs are much lower — one pays 10 per cent tax on income ranging between Rs 1.60 lakh and Rs 3 lakh, 20 per cent between Rs 3 lakh and Rs 5 lakh and 30 per cent beyond Rs 5 lakh.

Thus, for an individual with taxable income of Rs 10 lakh a year tax payment will drop from Rs 1.68 lakh to Rs 51,000, a net annual saving of Rs 1.17 lakh. The exemption limit for women and senior citizens will continue to be Rs 1.90 lakh and Rs 2.40 lakh, respectively.

Not without pains

If the finance minister is for giving major relief to tax payers, he will also make sure that there aren’t many avenues to avoid taxes. So, as a rider, the Tax Code proposes to add all perquisites enjoyed by a tax payer to income for the purpose of tax calculations. In other words, allowances like leave travel, furnishings, entertainment expenses, conveyance, medical etc, will be added to income.

Similarly, the tax treatment for post-retirement benefits may prove to be a major dampener. Money saved in specified instruments like PPF and PF for getting tax exemption will become taxable when they are withdrawn later.

These investments, when accrued, were earlier exempted from tax. The Tax Code says that under the Exempt Exempt Tax (EET) system all withdrawals will attract tax because the amount withdrawn will be treated as part of the income for that year.

But in the Tax Code it is unclear if the employee’s contribution to PF and PPF will be taxed at the time of withdrawal. KPMG’s Vasal says that this is an anomaly that needs to be corrected. He believes that only the employer’s contribution and interest accrued to the account will be taxed.

Though taxing financial gains available after retirement will pinch the retired people, Vasal is of the view that the proposal is equitable as income is liable to be taxed at least once.

However, as a relief to senior citizens, tax exemption limits for them should be raised to Rs 5 lakh per annum instead of Rs 2.40 lakh at present. The Tax Code, however, specified that the tax exempt status currently available to withdrawals would continue to apply to amounts accumulated in post-retirement savings schemes like PPF, EPF, etc, up to March 31, 2011. Money that accrues from April 1, 2011 will be taxed on withdrawal.

Wealth tax benefits

The proposed Tax Code has sought to make major changes in wealth tax calculations and rates.

The threshold limit for wealth tax will be raised to Rs 50 crore from the present Rs 30 lakh and the tax rate was reduced from 1 per cent to 0.25 per cent.

But, in a smart move, to expand the scope of taxation the Tax Code included financial assets like shares, corporate bonds, fixed deposits, etc in wealth tax. The valuation of these assets will be done at cost or at market price, whichever is lower. In case of capital gains tax too, the Tax Code proposed some sweeping changes. It has done away with the present system of short-term and long-term capital gain tax, and replaced it with a uniform structure and gains will be taxed at the marginal tax rate as applicable to the tax payer. The implications of these changes are clear: The period of holding has no bearing on the tax payable and bigger investors will be taxed at higher rates than the smaller ones.

A mixed bag

For the corporate world, the proposed reduction in the tax rate to 25 per cent from the existing 30 per cent is certainly good news and will help lowering the tax burden of India Inc in a big way. But at the same time the Tax Code proposes to do away with many exemptions that help lowering the tax. In a significant policy change, the Tax Code plans to discontinue all profit linked incentives for area-based investments like setting up plants in a backward area or in the north-east with investment-linked incentives in specific sectors like infrastructure, power, exploration and oil production etc.

Moreover, under the new proposal, tax holiday will not be for a specific period, as is the case now, but will be equal to all capital and revenue expenditure barring land, goodwill and debts.

Once a firm recovers the permitted investments and profits will be taxed. This change is aimed at incentivising capital formation in critical areas and remove incentives to shift profits from the taxable unit to the exempted unit.

On the mat

The Tax Code has also proposed changes in the calculation of minimum alternate tax (MAT) payable by corporates. MAT will now be levied at 2 per cent of the value of gross assets of a firm in case of all companies except for banks which will pay tax at 0.25 per cent. This shift in MAT from book profits to gross assets is aimed at encouraging optimal utilisation and increased efficiency of assets.

But Ernst & Young Partner- Tax & Regulatory Services, Sudhir Kapadia feels that this proposal seems to run counter to the objective of encouraging of capital investments for productive growth. Vasal of KPMG also of the view that changes in MAT rule will cause hardship to loss making companies as they will have to pay tax on assets.

Carrot and stick

If the Tax Code is generous in giving relief to tax payers, be sure, it will also make life miserable for those who evade tax through fraudulent means. As the Tax Code prescribes stiff penalties and prosecution for non-compliance with the tax laws, it proposes that every tax offense under the Code will be punishable by both imprisonment and fine.

Apart from defaulters, the Tax Code proposes to punish tax consultants who help in tax evasion. It gives sweeping powers and blanket protection to Income Tax officials for initiating court proceedings on matters relating to tax offences.

Direct Tax code : The Gains and the Pains

PERSONAL TAXATION
Manintains tax exemption at Rs.1.60 lakh income a year
10 per cent tax income Rs.1.6 to 10 lakh
20 per cent tax on income over Rs.10 lakh upto Rs.25 lakh
30 per cent tax on income beyond Rs.25 lakh
All perks and allowances will be added to income for taxation
Savings up to Rs.3 lakh will be exempted from income for taxation
Withdrawals from PF, PPF etc will be taxed
Wealth tax limit raised to Rs.50 Crore from Rs.30 lakh
Financial securities like shares brought under wealth tax.

Source: Deccan Herald

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Jeevan Akshay-VI approved for income-tax deduction

No.402/92/2006-MC (23 of 2010)
Government of India / Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
***

PRESS RELEASE

New Delhi dated 19th May 2010

Jeevan Akshay-VI approved for income-tax deduction

The Central Government have approved Jeevan Akshay-VI Plan of the Life Insurance Corporation of India as an annuity plan eligible for deduction under clause (xii) of sub-section (2) of section 80C of the Income Tax Act, 1961.

Persons who have invested in this plan during the financial year 2007-08 or subsequently (relevant assessment year being 2008-09 and subsequent assessment years) will be eligible for deduction of the amount invested from their total income chargeable to income tax. The benefit will, however, be limited to the overall ceiling of Rs.1,00,000 available for deductions under section 80C.

[Notification No.34/2010 dated 19th May 2010; F.No.178/46/2008-ITA-1]

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Participation by Central Government servants in sporting events and tournaments of National or International importance

No.6/2/2009-Pay-1
Government of India
Ministry of Personnel, Public Grievances and Pensions
(Department of Personnel and Training)

New Delhi , dated the 18^th May, 2010.

OFFICE MEMORANDUM

Subject: Participation by Central Government servants in sporting events and tournaments of National or International importance.

The undersigned is directed to refer to this Department's OM No.6/1/85-Pay-1 dated 16.7.85 in terms of which employees are entitled to grant of incentive increment on achieving excellence in sports events of national / international importance.

(i) There will be no further recruitment in Group ‘D’.

2.The question of defining the term 'Excellence' for grant of increment to a government servant has been examined in consultation with the D/Youth Affairs & Sports. It is clarified that sportspersons participating in sporting events (both individual and team events) of national and international importance will be treated as having achieved excellence for the purpose of grant of increment(s) if he/she achieves 1st, 2nd or 3rd position in the finals of sporting events if more than three individuals or teams have participated in the events. If only three or less individuals or teams have participated in the finals of a sporting event, the sportsperson/team achieving first position will be treated.as having achieved excellence.

(Rita Mathur)
Director(Pay)

Download the OM

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Government intends to introduce Direct Taxes Code in next Parliament Session

Government intends to introduce Direct Taxes Code in next Parliament Session:

Centralized Processing Centres for improving tax payer services in two more places.

Union Finance Minister Shri Pranab Mukherjee has said that the government intends to introduce the Direct Taxes Code in the forthcoming Monsoon Session of the Parliament. He was addressing the Central Direct Tax Advisory Committee.

The Finance Minister said that he had identified nine core areas of concern expressed by various stakeholders. He assured that all these concerns have been taken into consideration while redrafting the Code. He revealed that the code will soon be put in the public domain. The Finance Minister informed the Committee that two more Centralized Processing Centers (CPC) will be set up during the current year. The first one at Bengaluru has enabled faster processing of tax returns and better records management.

Shri Mukherjee further stated that the Refund Banker Scheme will be extended to more cities this year. The scheme enables speedier refunds directly to the bank accounts of the tax payers. The scheme had been introduced in nine more cities last year. It is now available in 15 cities.

The Finance Minister pointed out that several steps have been taken to improve exchange of tax related information and bilateral tax cooperation with several countries. He said that the government has written to 65 countries to make exchange of information more effective and to remove the secrecy clause.

Shri Mukherjee also informed that twenty low or no tax countries have been identified for negotiating and signing tax information exchange agreement.

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Scaling of Mount Everest by Income Tax Officer, Kolkata.

Scaling of Mount Everest by Income Tax Officer, Kolkata.

The Income Tax Department is extremely happy and proud to announce that Shri Debasish Biswas, an Income Tax Officer of West Bengal region has scaled the Mount Everest on 17th May, 2010 at 7:45 hours. Shri Biswas was accompanied by two other employees of the Income Tax Department, Kolkata region viz Shri Sourav Sinchan Mondal, Senior Tax Assistant and Shri Bivash Sarkar, Stenographer. Both of them were core members of successful team. This achievement is a matter of great honour for the Income Tax Department as a whole.

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CBDT Clarification on Security of e-filing portal

CBDT Clarification on Security of e-filing portal

A section of the media has reported that e-filing of income tax returns had turned risky as the security certification of the Income Tax department’s Internet portal had lapsed on 8th May 2010.

In this regard, it has been clarified by the Central Board of Direct Taxes (CBDT) that the process for renewal of the security certificate of the department’s e-filing portal was initiated well in time before it lapsed on 8th May 2010. Pending completion of certification procedure, the e-filing facility for AY 2010-11 has been temporarily suspended. This will not affect taxpayers in any way, as the earliest income tax return for AY 2010-11 falls due on 31st July 2010. The facility is expected to be renewed very shortly.

It is also clarified that the e-filing portal of the Income Tax department remains fully secure and lapse of the security certificate does not mean that its security features are slackened or compromised.

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Rebate only if capital for house is borrowed

Rebate only if capital for house is borrowed

I own a house in Ahmedabad that I occupy. I propose to buy a house in the same city. What is the tax impact on such a purchase? What deductions are available if I make such a purchase? – Dharmesh

The purchase as such will not lead to any tax implications. Note that only one property can be treated as self-occupied and the annual value taken as NIL. In respect of the other, the property will be treated as deemed to be let out and the annual value would be taken to be the sum for which the property can be leased.

The property that is to be treated as self occupied where more than one property is self occupied would be at the option of the assessee.

Deductions are available in respect of interest on capital borrowed and principal repayment of housing loan u/s 24 and u/s 80C respectively. A deduction in respect of purchase by itself will however not be available.

I had invested Rs 25,000 in a fixed deposit for one year at 8 per cent per annum. The fixed deposit will be maturing this month and I wish to renew it along with the interest.

Do I have to pay tax in respect of the interest now, as I fall within the tax bracket, or can I offer the entire interest to tax when I close the fixed deposit? – Sapna

At the time when the fixed deposit is renewed along with the interest accrued thereon, the interest will be deemed to have been paid and therefore such interest will have to be brought to tax if you are following the cash system of accounting in respect of such source of income being interest from fixed deposits.

It appears that you are not following the mercantile system of accounting as, if that had been so, the interest would have had to be offered on a year-to-year basis when it accrued.

This is in reference to the reply published in respect of the query on setting off of losses from trading in futures and options.

If I satisfy all the conditions that have been stated in the amended provisions of section 43(5) and if my loss is to be treated as non-speculative, can it be set off against income from bank interest and rental income received in the same financial year? – Sundar

If you satisfy all the conditions stated in section 43(5), the loss would be treated as a business loss and not as a speculation loss and can consequently be set off against any income of the year other than salary income.

If it cannot be so set off, it can be carried forward and set off against business income within eight assessment years immediately succeeding the assessment year in which the loss was first computed.

It may be noted that the conditions stipulated in section 43(5) are as follows: The transaction is carried out electronically on by screen-based systems; the transaction is carried out through a registered broker or sub-broker; the transaction is supported by a time stamped contract issued by such broker or sub-broker; the contract note indicates the unique client identity number and permanent account number.

I am a Central Government employee. As I was appointed in October 2005, I fall under the New Pension Scheme. My salary comprised of basic pay, grade pay, HRA, dearness allowance and transport allowance.

Deduction towards provident fund of Rs 3,499 and contribution towards CGEIS is being made from my salary income. Can I get any deduction u/s 80C by investing up to Rs 1,00,000? If yes, how? – Dr Jai Gopal Sharma

You can claim a deduction u/s 80C by making investments.

The maximum deduction available under this section is Rs 1,00,000 and the deduction is available in respect of certain payments and investments.

The payments and investments also include employees' contribution to a recognised provident fund and contributions to CGEIS (Central Government Employees' Group Insurance Scheme).

In your case as you are contributing to a provident fund (if the same is recognized) and to Central Government Employees' Group Insurance Scheme, the maximum investment other than contribution to provident fund and CGEIS that will qualify for deduction will be Rs 1,00,000 as reduced by the amount of contribution to such provident fund and CGEIS.

This deduction can be claimed by you by giving proof to your employer who can take it into account while computing the tax to be deducted at source from your salary or alternatively by filing a return of income and claiming a refund in respect of the excess tax deducted at source or by adjusting it against other tax payable.

Mail your queries to taxtalk@thehindu.co.in or by post to ‘Tax Talk', Business Line, Kasturi Buildings, 859, Anna Salai, Chennai-600002


Source: The Hindu Business Line

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Refund of income tax by April assured

Refund of income tax by April assured

Refund of income-tax to assesses for the period ending 2008-09 will be effected by April, said R. K. Kakkar, Commissioner of Income-Tax, Tiruchi.

Speaking at a meeting on ‘Analysis of Union Budget 2010’ organised by Confederation of Indian Industries, Tiruchi Zone, here on Wednesday, Mr. Kakkar said that the Income-Tax Department has made all arrangements for refund of income-tax due till 2008-09. Any assesses not getting the refund due by the end of April, could contact him or his office for immediate action, he said.

On the budget proposals for 2010-11, Mr. Kakkar said that the widening of the tax slab would benefit the salaried persons in a big way. It also encouraged savings through investment on long-term infrastructure bonds. Promotion of research and development would enhance competitiveness of our country’s economy in the global scenario, he added.

S. Jaikumar, an advocate, said that the introduction of service taxes would evoke a mixed result. While the tax plan on cultural or commercial events, involving huge sum of money for the organisers or sponsors, would bring adequate revenue, the proposed tax on domestic air travel would cripple the domestic air services which were already incurring losses.

G. Rajendran, Superintendent of Customs, said that the Tiruchi air-port should be developed into a full-fledged air-cargo complex with additional infrastructure.

P. Kalaiazhagan and V. Sathiyanarayanan, both Superintendents of Central Excise and Leo Ananth J., Chairman of Confederation of Indian Industries, Tiruchi Zone, spoke.
Source: The Hindu

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