Sunday, April 27, 2008
Filing of Income-tax Returns for A.Y.2008-09
CBDT has notified the Forms of the return of income for the assessment year 2008-09 vide notification S.O. 752(E) dated 28-3-2008. The returns can be e-filed by clicking here and for Forms click here.
Life Insurance premium paid on wife's Policy eligible for tax rebate?
By Going through analysis of Incoming traffic to this site and online search given on our blog site I found that more of the visitors are looking for basic tax concepts so I have decided to give important and widely used section details on blog,though I know most of the email readers of BLOG are professional in accounts and tax and does not like concepts in feeds ,yet it is necessary to give detail of basic concepts also.Today I will discuss life Insurance premium.Important Point in this regards are given below
Deduction u/s 80c of income tax is available to Individual and Huf Assessee.
Maximum total eligible amount under this head (LIFE insurance Premium) is Rs. 1.,00,000 /-
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.
If policy taken after 1.4.2003 then Premium paid up to 20% of sum Assured is Eligible for deduction.
Payment should not be necessarily from income chargeable to tax.
Minimum Period of holding of policy is Two years ,if policy terminated before two year then all benefit claim taken in earlier year will also be taxable in the year of termination.
Premium paid is eligible on "payment basis" means deduction is available in the year of payment no matter to which year premium relates to.
In my opinion late fees paid in addition to premium payable is also eligible for deduction as late payment fees is paid "to keep in force an Insurance".but it is advised not to claim as there are different opinion on this issue.Ques:Is Assessee eligible to claim benefit for policy taken on his/her children or spouse?Ans.In case of an individual policy can be taken on
His own life.
life of the spouse.(पती या पत्नी )
any childIn case of Huf,life of any member of family.One of friend Mr Rajesh Working as sales manager in Reliance Life Insurance asked me,Is this benefit available evan son (child) is married or not dependent on the assessee?The answer is yes he can claim.Assessee can claim tax rebate for payment of insurance premium paid for policy taken on child/spouse even the child is married and child/spouse is not dependent on assessee.suppose A(father) has taken a Insurance policy on life of his son C who is married with D(wife of C). C is not dependent on his parents (A=father,B =Mother) and paid a premium of first installment Rs 3000 as quarterly installment and second installment is paid by his mother (B) ,third Installment is paid by his wife D and forth installment is paid by his father A.who is eligible for rebate?In above example all the persons are eligible to claim deduction for rs 3000/- each.My basic aim to tell u that no matter who has taken the policy ,and who is nominee in the policy,if assessee has paid the premium for life insurance premium for policy taken on life of his/her own,life of spouse or any child (married or not,dependent on him/her or not) ,assessee will be eligible for deduction under section 80C.If in second year In above example let suppose A (father) has paid 2 installments and two installments paid by the son C. who is eligible for deduction?In this case also A (father) and son C both are eligible for 6000/- each.No matter in previous year rebate for the same policy has been divided in four as above..Means there is no such requirement that deduction are available only to that person who has paid the premium in proceeding year/years.The person who has paid in previous year is eligible and eligible person can be changed every year or in one year there can be more than one persons eligible for premium payment of one policy if they satisfy other condition as discussed above.lets discuss the above issue with specific section wording from Act."In computing the total income of an assessee, being an individual or a Hindu undivided family, there shall be deducted........any sums paid or deposited in the previous year by the assessee
(i) to effect or to keep in force an insurance on the life of persons specified in sub-section (4);
(ii) to effect or to keep in force a contract for a deferred annuity, not being an annuity plan referred to in clause (xii), on the life of persons specified in sub-section (4)"
and subsection (4)
(i) in the case of an individual, the individual, the wife or husband and any child of such individual, and
(ii) in the case of a Hindu undivided family, any member thereof;"
So above section says "to effect or to keep in force an insurance "means to keep running the policy taken on relative life and premium is paid by the assessee ,no matter who has proposer ,nominee ,dependent or not,married or not,assessee is eligible to claim deduction.
Deduction u/s 80c of income tax is available to Individual and Huf Assessee.
Maximum total eligible amount under this head (LIFE insurance Premium) is Rs. 1.,00,000 /-
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.
If policy taken after 1.4.2003 then Premium paid up to 20% of sum Assured is Eligible for deduction.
Payment should not be necessarily from income chargeable to tax.
Minimum Period of holding of policy is Two years ,if policy terminated before two year then all benefit claim taken in earlier year will also be taxable in the year of termination.
Premium paid is eligible on "payment basis" means deduction is available in the year of payment no matter to which year premium relates to.
In my opinion late fees paid in addition to premium payable is also eligible for deduction as late payment fees is paid "to keep in force an Insurance".but it is advised not to claim as there are different opinion on this issue.Ques:Is Assessee eligible to claim benefit for policy taken on his/her children or spouse?Ans.In case of an individual policy can be taken on
His own life.
life of the spouse.(पती या पत्नी )
any childIn case of Huf,life of any member of family.One of friend Mr Rajesh Working as sales manager in Reliance Life Insurance asked me,Is this benefit available evan son (child) is married or not dependent on the assessee?The answer is yes he can claim.Assessee can claim tax rebate for payment of insurance premium paid for policy taken on child/spouse even the child is married and child/spouse is not dependent on assessee.suppose A(father) has taken a Insurance policy on life of his son C who is married with D(wife of C). C is not dependent on his parents (A=father,B =Mother) and paid a premium of first installment Rs 3000 as quarterly installment and second installment is paid by his mother (B) ,third Installment is paid by his wife D and forth installment is paid by his father A.who is eligible for rebate?In above example all the persons are eligible to claim deduction for rs 3000/- each.My basic aim to tell u that no matter who has taken the policy ,and who is nominee in the policy,if assessee has paid the premium for life insurance premium for policy taken on life of his/her own,life of spouse or any child (married or not,dependent on him/her or not) ,assessee will be eligible for deduction under section 80C.If in second year In above example let suppose A (father) has paid 2 installments and two installments paid by the son C. who is eligible for deduction?In this case also A (father) and son C both are eligible for 6000/- each.No matter in previous year rebate for the same policy has been divided in four as above..Means there is no such requirement that deduction are available only to that person who has paid the premium in proceeding year/years.The person who has paid in previous year is eligible and eligible person can be changed every year or in one year there can be more than one persons eligible for premium payment of one policy if they satisfy other condition as discussed above.lets discuss the above issue with specific section wording from Act."In computing the total income of an assessee, being an individual or a Hindu undivided family, there shall be deducted........any sums paid or deposited in the previous year by the assessee
(i) to effect or to keep in force an insurance on the life of persons specified in sub-section (4);
(ii) to effect or to keep in force a contract for a deferred annuity, not being an annuity plan referred to in clause (xii), on the life of persons specified in sub-section (4)"
and subsection (4)
(i) in the case of an individual, the individual, the wife or husband and any child of such individual, and
(ii) in the case of a Hindu undivided family, any member thereof;"
So above section says "to effect or to keep in force an insurance "means to keep running the policy taken on relative life and premium is paid by the assessee ,no matter who has proposer ,nominee ,dependent or not,married or not,assessee is eligible to claim deduction.
TUITION FEES PAID FOR CHILDREN U/S 80C
Today we will discuss important points regarding deduction available for payment of tuition fees .we try to cover each and every aspect on the issue ,if any left ,or you have different opinion than of us ,please record in comments.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."on the basic of above following points are to be noted .
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.
The fees should be paid to university, college, school or other educational institution,so no rebate for private tuitions.
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.questions which are commonly asked regarding tuition fees eligibility u/s 80C given hereunder.Que:Can Mother claim the benefit of tuition fees paid for his son/daughter.Ans:Assessee means both mother and father both can take the benefit u/s 80 C for amount paid by them respectively.Ques:If a couple have four children,can they both claim fees for two children each?Ans:Yes ,husband and wife both have a separate limit of two children each ,so they can claim deduction for 2 children each.Ques:If a Couple has one child and paid a fees of 200000 rs can they both claim tuition fess 100000 each ?Ans. :yes ,they both can claim deduction for 100000 each subject to they have actually paid same amount .If husband has paid 1.50lac and wife has paid 50000 then husband can claim 100000 and wife can claim 50000.Ques:Ram has paid tuition fees for his child 2000/- in February 2008 relates to period march to june 2008 ,how much amount he can claim deduction in assessment year 2008-09?Ans: He can claim full 2000 rs in assessment year 2008-09 , as this deduction is available on the basis of payment and it may or may not be related to the period in which it has been paid.Ques: Is Late fees paid with tuition fees is eligible for deduction ?Ans:No,late fees is not eligible for deduction
(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."on the basic of above following points are to be noted .
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.
The fees should be paid to university, college, school or other educational institution,so no rebate for private tuitions.
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.questions which are commonly asked regarding tuition fees eligibility u/s 80C given hereunder.Que:Can Mother claim the benefit of tuition fees paid for his son/daughter.Ans:Assessee means both mother and father both can take the benefit u/s 80 C for amount paid by them respectively.Ques:If a couple have four children,can they both claim fees for two children each?Ans:Yes ,husband and wife both have a separate limit of two children each ,so they can claim deduction for 2 children each.Ques:If a Couple has one child and paid a fees of 200000 rs can they both claim tuition fess 100000 each ?Ans. :yes ,they both can claim deduction for 100000 each subject to they have actually paid same amount .If husband has paid 1.50lac and wife has paid 50000 then husband can claim 100000 and wife can claim 50000.Ques:Ram has paid tuition fees for his child 2000/- in February 2008 relates to period march to june 2008 ,how much amount he can claim deduction in assessment year 2008-09?Ans: He can claim full 2000 rs in assessment year 2008-09 , as this deduction is available on the basis of payment and it may or may not be related to the period in which it has been paid.Ques: Is Late fees paid with tuition fees is eligible for deduction ?Ans:No,late fees is not eligible for deduction
HOUSE LOAN BENEFIT AND SECTION 80C
All most 25 % queries online are regarding housing loan benefits under income tax act and second after Queries Relating to Pan Allotment. In this post we will discuss only points relating to benefit of house loan under section 80C.we have tried to cover all the important issues but if any left or you have different thoughts than ours please record in comments section.
Deduction for house loan /installment 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 payment of loan should be made towards cost of purchase/construction of new residential house property.
The house property income should be assessable in the hand of asseessee in simple term assessee should be the owner of the house property.
The payment should not be for addition or alteration to,or renovation or repair of house property done after completion of house.
Completion of house means
completion certificate in respect of the house property by the authority competent to issue such certificate or
house property or part has been occupied by the assessee or any other person on behalf of assessee or
has been let out;
Housing loan for more than one house can also be claimed.
All the benefit of tax u/s 80 c will reversed if house property is sold with 5 year from purchase of house property
The tax benefit under section 80C is available on residential house property only and not available on commercial house property.
Loan should be taken from Specified institutions/deptt only given below
Central or State Government
any Bank including co-operative bank
LIC or National Housing Bank
public company formed and registered in India or co-operative society with main object to provide long term finance for construction purchase of houses in India.
Assessee Employer if public company or public sector company or university established by law or a college affiliated to such university or local authority or co-operative society.
The benefit is available only to Individual assessee and to HUF assessee.
The above benefit is available even assessee already has another house property.
The benefit is available on payment basis ,no matter to which year payment is relates to or payment overdue or not.
From total amount of installment paid of house loan reduce amount availed under deduction section 24.(INTEREST)
The Benefit under this section is available whether residential house property is rented or self occupied,but it should be completed as define above by end of the previous year in which loan is repaid.
Pre EMI are also eligible for deduction if house property is completed by the end of previous year.
Stamp duty, registration fee and other expenses for the purpose of transfer of such house property to the assessee is also eligible for deduction under this section even assessee has not taken any loan .
There is no requirement that for loan ,house property should be mortgaged to the institution from which the loan has been taken ,but it should be used for the purpose of purchase /construction of house property
Deduction for house loan /installment 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 payment of loan should be made towards cost of purchase/construction of new residential house property.
The house property income should be assessable in the hand of asseessee in simple term assessee should be the owner of the house property.
The payment should not be for addition or alteration to,or renovation or repair of house property done after completion of house.
Completion of house means
completion certificate in respect of the house property by the authority competent to issue such certificate or
house property or part has been occupied by the assessee or any other person on behalf of assessee or
has been let out;
Housing loan for more than one house can also be claimed.
All the benefit of tax u/s 80 c will reversed if house property is sold with 5 year from purchase of house property
The tax benefit under section 80C is available on residential house property only and not available on commercial house property.
Loan should be taken from Specified institutions/deptt only given below
Central or State Government
any Bank including co-operative bank
LIC or National Housing Bank
public company formed and registered in India or co-operative society with main object to provide long term finance for construction purchase of houses in India.
Assessee Employer if public company or public sector company or university established by law or a college affiliated to such university or local authority or co-operative society.
The benefit is available only to Individual assessee and to HUF assessee.
The above benefit is available even assessee already has another house property.
The benefit is available on payment basis ,no matter to which year payment is relates to or payment overdue or not.
From total amount of installment paid of house loan reduce amount availed under deduction section 24.(INTEREST)
The Benefit under this section is available whether residential house property is rented or self occupied,but it should be completed as define above by end of the previous year in which loan is repaid.
Pre EMI are also eligible for deduction if house property is completed by the end of previous year.
Stamp duty, registration fee and other expenses for the purpose of transfer of such house property to the assessee is also eligible for deduction under this section even assessee has not taken any loan .
There is no requirement that for loan ,house property should be mortgaged to the institution from which the loan has been taken ,but it should be used for the purpose of purchase /construction of house property
Saving under 80c whose name can be done
In this post we will discuss only points relating to benefit of under section 80C.we have tried to cover all the important issues but if any left or you have different thoughts than ours please record in comments section.The list given below is not complete and we have covered schemes only that widely used by the persons.And we will try to cover each scheme in detail in our other post.80c saving
Scheme particulars
Available to
Can be for
amount cap
Holding period
Life Insurance premium
huf
Member of family
20% of Sum Assured
Two year
individual
spouse,own,children (major or minor,dependent or indepdent)
do
Non -Commutable defrreed annuity
individual
spouse,own,children (major or minor,dependent or indepdent)
Nil
Nil
Deferred Annuity deducted by Govt
individual
spouse,own,children (major or minor,dependent or indepdent)
20 % of salary
nil
Statutory provident and recognised Provident fund
individual
Individual only on his own name
nil
In case of Rpf 5years
Public Provident Fund
individual
spouse,own,children (major or minor,dependent or indepdent)
70000
6years
National Saving Certificate
individual /huf
own name
nil
nil
Ulip of utI and lic mutual fund(Dhanraksha)
huf
Member of family
nil
5 years
individual
spouse,own,children (major or minor,dependent or indepdent)
do
do
specified tax saving mutual fund
individual /huf
own name
nil
3 year
payment of house loan
individual /huf
own name
nil
5 year
tution fees
individual
any two children
nil
nil
specified fixed deposit with schduled bank
individual /huf
own name
nil
5 yearother points related to above
Deduction for above schemes in total 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.
PPF limit of 70000 is not as per income tax act but specified under ppf scheme more over the limit is combined for individual plus minor child.
Accrued interest on NSC is also available for rebate for first five year.(you can download NSC interest calculator from calculator section)
Holding period has been either defined under income tax or under scheme qualified in for deduction u/s 80C
Scheme particulars
Available to
Can be for
amount cap
Holding period
Life Insurance premium
huf
Member of family
20% of Sum Assured
Two year
individual
spouse,own,children (major or minor,dependent or indepdent)
do
Non -Commutable defrreed annuity
individual
spouse,own,children (major or minor,dependent or indepdent)
Nil
Nil
Deferred Annuity deducted by Govt
individual
spouse,own,children (major or minor,dependent or indepdent)
20 % of salary
nil
Statutory provident and recognised Provident fund
individual
Individual only on his own name
nil
In case of Rpf 5years
Public Provident Fund
individual
spouse,own,children (major or minor,dependent or indepdent)
70000
6years
National Saving Certificate
individual /huf
own name
nil
nil
Ulip of utI and lic mutual fund(Dhanraksha)
huf
Member of family
nil
5 years
individual
spouse,own,children (major or minor,dependent or indepdent)
do
do
specified tax saving mutual fund
individual /huf
own name
nil
3 year
payment of house loan
individual /huf
own name
nil
5 year
tution fees
individual
any two children
nil
nil
specified fixed deposit with schduled bank
individual /huf
own name
nil
5 yearother points related to above
Deduction for above schemes in total 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.
PPF limit of 70000 is not as per income tax act but specified under ppf scheme more over the limit is combined for individual plus minor child.
Accrued interest on NSC is also available for rebate for first five year.(you can download NSC interest calculator from calculator section)
Holding period has been either defined under income tax or under scheme qualified in for deduction u/s 80C
DUE DATE TO DEPOSIT SERVICE/EXCISE HAS BEEN CHANGED PLEASE READ THIS
-- In case of prop/partnership firms & individual to be paid Quarterly.-- In other cases monthly--Due date/Last date is 5th day of the month following the month/quarter for which service tax is paid.-- But in case of last month/qtr of Financial year due date is 31st march.--The service tax can be paid electronically.Mandatory e-payment of service tax E-payment of service tax has been made mandatory w.e.f . 1.10.2006, for all assessees who have paid (in cash plus through CENVAT Credit) a service tax amounting to Rs. 50 lakh or more in the preceding financial year or in the current financial year. The latter type of service taxpayers shall make any further payment of service tax in cash (i.e. other than through credit), only through e-payment.Issuance of invoices, bills, challans, consignment notes and other documents:-- every taxable service provider/input service distributor is required to issue a document (i.e. invoice, bill or challan) within 14 days from either the date of completion of provision of service or receipt of any service charges (whichever is earlier).--Such document should be serially numbered and should contain the name, address of the service provider and the service receiver, description, classification and value of service provided and service tax payable thereon.-- The amount of ‘education cess’ and ‘secondary and higher education cess’ should be shown separately on the invoice.--STC no./registration no. of the service provider should also be mentioned on the invoice for this purpose.-- For service providers providing ‘banking & other financial services’, certain relaxations are available. For such service providers, the invoice need not be serially numbered. They are also exempted from mentioning the address of the service receiver. Similar dispensation is available for input service distributors of such type of service providers.-- For providers of taxable service of transport of goods by road (i.e. goods transport agency) the invoice/bill/challan should, in addition to the general information required also contain the consignment note number, date and gross weight of the consignment. (other points for GTC see detail circular)Service tax return-Return is required to be filed on a half yearly basis, in (pdf)Form ST-3.(excel)---April to September -------------25th October---and October to March----------25th April-- A single service tax return should be filed (in Form ST-3) in respect of all taxable services provided by an assessee.- e-filing of return- The service tax return can be filed electronically after logging into the website www.servicetaxefiling.com.Delay in filing of return: The late fee presently is(a) Rs 500 for delay up to 15 days;(b) Rs 1000 for delay between 15 days and 30 days; and(c) Rs 1000 plus Rs 100 per day beyond 30 days, till the filing of return, not exceeding Rs 2000/-.Filing of revised return:--Assessee can submit a revised return within 60 days of filing of original return to rectify any mistake or omission.--It may be noted that in such cases where an assessee files a revised return, the limitation period for initiating any action for demanding the service tax not paid/ short paid/ not levied/short levied would be computed from the date of filing of revised return.Assessment--Normally, under self assessment scheme, the service taxpayer assesses his tax liability himself and pays the same.CENVAT CreditWef 10.9.2004, under CENVAT Credit Rules, 2004, CENVAT Credit across goods and services has been allowed.(a) ISSUE: Whether a manufacturer or taxable service provider having credit balance in his account can utilize that credit for payment of service tax on goods transport by road, as a consignor or as a consignee?COMMENTS:No(b) ISSUE: Whether a consignee can take credit of the amount paid as service tax either by himself (as consignee) or by the consignor or by the Goods Transport Agency?COMMENTS: yes(c) ISSUE: Up to what stage a manufacturer/consignor can take credit on the service tax paid on goods transport by road?COMMENTS: A manufacturer / consignor can take credit on the service tax paid on outward transport of goods up to the place of removal and not beyond that.“place of removal” means-(i) a factory or any other place or premises of production or manufacture of the excisable goods ;(ii) a warehouse or any other place or premises wherein the excisable goods have been permitted to be stored without payment of duty ;(iii) a depot, premises of a consignment agent or any other place or premises from where the excisable goods are to be sold after their clearance from the factory;from where such goods are removed.”Delay in payment of service taxInterestDelay in payment of service tax, including a part thereof, attracts simple interest at present, the rate of interest is 13% per annumPenalty--shall not be less than Rs 200 for every day during which such failure continues or at the rate of 2% of such tax per month, which ever is higher, starting with the first day after the due date till the date of actual payment of the outstanding amount of service tax. However, such penalty would not exceed the service tax payable.
Procedural issues in Service Tax (NEW)(ALL OLD CIRCULAR WITHDRAWN)
CBEC has issued a circular 97 dated 23/8/2007.in which all the old circular relating to procedure and administration of Service tax has been dealt with.As promised in Finance speech 2007 by FM new circular has been issued to simplifying the procedures and make better understanding and improve voluntarily compliance.Main reason to issue this Master circular explained in itself are1.Old circular issued are not rightly categorised & consolidation is required2.Some of them(circulars/clarification) are redundant and anachronistic.Important note:This circular supersedes all previous Circulars /clarifications /instructions issued on these subjectsRegistration:who is liable to be registered1.Every person providing a taxable service and liable to pay service tax is required to register with the Central Excise / Service Tax department. (subject to some exemptions)2.In a few cases liability to pay service tax has been shifted to the service receiver or other specified person.- Insurer in case of service provided by insurance agent;- Person making payment of freight in such cases where a goods transport agency provides taxable service to a specified consignor and consignee;- Asset management company or mutual fund, in case of service provided by a distributor to them;- Where the service is provided to a person in India by any person from a country other than India; and- body corporate or a firm located in India receiving sponsorship service.Turnover limit1. Aggregate value of taxable service for threshold based exemption is, currently, Rs. 8 lakh in a year.2. A person availing of this exemption is required to register with the department on achieving a turnover of Rs 7 lakh in a financial year in respect of all taxable services provided by him.3.value of All taxable services will be included ,whether they are taxable under different section Or provided in different premises by same service provided.4. Service provided by persons under a BRAND name can't take the benefit of exemption limit 2.Person who wants to take INPUT TAX CREDIT of services received while providing other service or adjustment in excise payable on goods manufactured is also liable to be registered.Please read changes in budget 2008 also APPLICATION FORM FOR REGISTRATION--FORM ST-1--Submit FORM ST-1 to jurisdictional superintendent of Central Excise/Service tax.-- If service is provided under different locations fall under different superintendents than registration will be done by jurisdictional Commissioner-- Within 30 days of levy of service tax on such service or, in case of an existing taxable service, within 30 days of the commencement of provision of such service.-- Submit one form for all the services.REGISTRATION CERTIFICATE--Will be issued in Form ST2 within 7 days if application is complete & filled properly.--In case registration certificate is not issued within seven days, the registration is deemed to have been granted.--Registration No., also known as ‘Service Tax Code (STC)’ is a fifteen digit PAN based number. ------First 10 digits of this number are the same as the PAN of such person.------Next two digits are ‘ST’.------Next three digits are serial numbers indicating the number of registrations taken by the service taxpayer against a common PAN.KNOW YOUR STC (SERVICE TAX CODE ) BY FILLING PAN NO Registration certificate can be amended by applying on form st-1 along with original certificate.----for new services--- for new premises--Deletion of services,premises can be applied on plain paper .
SERVICE TAX CHANGES IN BUDGET 2008
We try to cover major changes in service tax in Budget Presented on by Finance Minister on 29/2/2008.There is no change in service tax rate and it remains 12% plus education cess 2% and Higher Secondary Cess 1% .Important changes in service tax are given hereunder.
Service tax Good News
The annual threshold limit of service tax exemption for small service providers has been increased from the present level of Rs.8 lakh to Rs.10 lakh with effect from 01.04.2008, provided that the aggregate value of taxable services rendered by such provider of taxable service from one or more premises, does not exceed Rs.10 lakh in the preceding financial year.(Notification No.08/2008-Service Tax).The above limit for service provider wise not for each service.Suppose If a person provide 2 or more services then the limit will be total for all the services provided by the persons.
Consequent upon increase in threshold limit of exemption from Rs.8 lakh to Rs.10 lakh,with effect from 01.04.2008( notification No.26/2005-Service Tax dated 07.06.05 and notification No.27/2005-Service Tax dated 07.06.05 have been amended to raise the limit for obtaining service tax registration from Rs.7 lakh to Rs.9 lakh.)(Notification No.09/2008-Service Tax)(Notification No.10/2008-Service Tax) (Notification No.11/2008-Service Tax)
Exemption from service tax is being provided with effect from 01.03.02008 to the taxable service provided
by a person, located outside India,
in relation to booking of an accommodation for a customer, located outside India,
in a hotel located in India.(Notification No.14/2008-Service Tax).
Earlier the tax was applicable for booking for booking for Indian Hotels done by agent outside India.but Tax from outside India entity are difficult to collect and only leads to litigations and dispute.This is a welcome steps.
Exemption from service tax is being provided to the extent of 75% of the gross amount charged as freight for services provided by a goods transport agency (GTA) in relation to transport of goods by road in a goods carriage, unconditionally.(Notification No.13/2008-Service Tax)
Earlier the exemption was given conditionally with a condition that transport company has not taken cenvat credit ,moreover deptt has issued instructions to his staff to issue notice to service receiver who has taken the benefit of 75 % abatement on goods transport services while paying the service tax.As you aware of the clause that In case of Goods Transport services ,consignor ,consignee will pay service tax directly not goods transport agency ,if he falls in certain type of person category.
This abatement will apply from 01.03.2008
Goods Transport Agency Services excluded from the definition of “Output Services” to claim cenvat credit.means no output services credit will be available on goods transport agency now onwards.
OTHER CHANGES IN SERVICE TAX
New services Added :
information technology software service,
management of investment under Unit Linked Insurance Plan (ULIP)service,
stock exchange service,
recognised association or registered association commonly known as commodity exchange service,
processing and clearinghouse service,
supply of tangible goods for use service;
internet telecommunication service.Note :some of the services was included earlier in some other heads but now in depended heads have been given to them.scope of some services also extended
Service tax Good News
The annual threshold limit of service tax exemption for small service providers has been increased from the present level of Rs.8 lakh to Rs.10 lakh with effect from 01.04.2008, provided that the aggregate value of taxable services rendered by such provider of taxable service from one or more premises, does not exceed Rs.10 lakh in the preceding financial year.(Notification No.08/2008-Service Tax).The above limit for service provider wise not for each service.Suppose If a person provide 2 or more services then the limit will be total for all the services provided by the persons.
Consequent upon increase in threshold limit of exemption from Rs.8 lakh to Rs.10 lakh,with effect from 01.04.2008( notification No.26/2005-Service Tax dated 07.06.05 and notification No.27/2005-Service Tax dated 07.06.05 have been amended to raise the limit for obtaining service tax registration from Rs.7 lakh to Rs.9 lakh.)(Notification No.09/2008-Service Tax)(Notification No.10/2008-Service Tax) (Notification No.11/2008-Service Tax)
Exemption from service tax is being provided with effect from 01.03.02008 to the taxable service provided
by a person, located outside India,
in relation to booking of an accommodation for a customer, located outside India,
in a hotel located in India.(Notification No.14/2008-Service Tax).
Earlier the tax was applicable for booking for booking for Indian Hotels done by agent outside India.but Tax from outside India entity are difficult to collect and only leads to litigations and dispute.This is a welcome steps.
Exemption from service tax is being provided to the extent of 75% of the gross amount charged as freight for services provided by a goods transport agency (GTA) in relation to transport of goods by road in a goods carriage, unconditionally.(Notification No.13/2008-Service Tax)
Earlier the exemption was given conditionally with a condition that transport company has not taken cenvat credit ,moreover deptt has issued instructions to his staff to issue notice to service receiver who has taken the benefit of 75 % abatement on goods transport services while paying the service tax.As you aware of the clause that In case of Goods Transport services ,consignor ,consignee will pay service tax directly not goods transport agency ,if he falls in certain type of person category.
This abatement will apply from 01.03.2008
Goods Transport Agency Services excluded from the definition of “Output Services” to claim cenvat credit.means no output services credit will be available on goods transport agency now onwards.
OTHER CHANGES IN SERVICE TAX
New services Added :
information technology software service,
management of investment under Unit Linked Insurance Plan (ULIP)service,
stock exchange service,
recognised association or registered association commonly known as commodity exchange service,
processing and clearinghouse service,
supply of tangible goods for use service;
internet telecommunication service.Note :some of the services was included earlier in some other heads but now in depended heads have been given to them.scope of some services also extended
TAX CALCULATOR -WITH REVISED RATES IN BUDGET
In Budget 2008 personal income tax rates has been slashed by the Finance Minister and all Individual and Huf will gain from 4120 to 49852 (including surcharge)in relation to their income.We have Created a small calculator in which u calculate tax for individual as general,huf,Senior citizen,Women.In this calculator u will also know how much benefit u will get from budget.new Rates of Income tax for Previous Year 2008-09 is given hereunder.
For the AY 2008-09 (FY 2007-08) for an individual, HUF (other than woman or senior citizen)
Upto Rs. 110,000
Nil
Rs. 110,001 to Rs. 150,000
10% of income above Rs. 110,000
Rs. 150,001 to Rs. 250,000
Rs. 4,000 plus 20% of income above Rs. 150,000
Above Rs. 250,000
Rs. 25,000 plus 30% of income above Rs. 250,000
For women, the minimum limit of Rs. 110,000 is to be increased to Rs. 145,000 and for senior citizens to Rs. 195,000.
A surcharge of 10% of the total tax liability is applicable where the total income exceeds Rs. 10 lacs.
For persons, other than individuals and HUFs, the tax rates are as follows:
In case of a cooperative society:
Upto Rs. 10,000
10% of the total income
Rs. 10,001 to Rs. 20,000
Rs. 1,000 plus 20 % of the amount by which the total income exceeds Rs. 10,000
Above Rs. 20,000
Rs. 3,000 plus 30 % of the amount by which the total income exceeds Rs. 20,000
In case of every firm: - 30%*
In case of a domestic company:- 30%*
In case of a foreign company:- 40%**
*In case the income of a domestic company or a firm exceeds Rs. 1 Crore, surcharge @ 10% is applicable.
** In case the income of a foreign company exceeds Rs. 1 crore, surcharge @ 2.5% is applicable.
The tax and surcharge, as mentioned above, is to be increased by 3% education cess.There is no change in tax rates in other type of assessee except Individual or Huf.so u can use tax calculation of other persons from old Tax calculators .Features of calculator.
tax calculator for individual/Huf for previous year 2008-09
tax calculator for individual/Huf for previous year 2007-08
benefit from budget to individual .
Calculation fo woman,senior citizen ,general
Inbuilt calculator for Hra
excel Sheets Protected without any password means you can customised according to ur need
For the AY 2008-09 (FY 2007-08) for an individual, HUF (other than woman or senior citizen)
Upto Rs. 110,000
Nil
Rs. 110,001 to Rs. 150,000
10% of income above Rs. 110,000
Rs. 150,001 to Rs. 250,000
Rs. 4,000 plus 20% of income above Rs. 150,000
Above Rs. 250,000
Rs. 25,000 plus 30% of income above Rs. 250,000
For women, the minimum limit of Rs. 110,000 is to be increased to Rs. 145,000 and for senior citizens to Rs. 195,000.
A surcharge of 10% of the total tax liability is applicable where the total income exceeds Rs. 10 lacs.
For persons, other than individuals and HUFs, the tax rates are as follows:
In case of a cooperative society:
Upto Rs. 10,000
10% of the total income
Rs. 10,001 to Rs. 20,000
Rs. 1,000 plus 20 % of the amount by which the total income exceeds Rs. 10,000
Above Rs. 20,000
Rs. 3,000 plus 30 % of the amount by which the total income exceeds Rs. 20,000
In case of every firm: - 30%*
In case of a domestic company:- 30%*
In case of a foreign company:- 40%**
*In case the income of a domestic company or a firm exceeds Rs. 1 Crore, surcharge @ 10% is applicable.
** In case the income of a foreign company exceeds Rs. 1 crore, surcharge @ 2.5% is applicable.
The tax and surcharge, as mentioned above, is to be increased by 3% education cess.There is no change in tax rates in other type of assessee except Individual or Huf.so u can use tax calculation of other persons from old Tax calculators .Features of calculator.
tax calculator for individual/Huf for previous year 2008-09
tax calculator for individual/Huf for previous year 2007-08
benefit from budget to individual .
Calculation fo woman,senior citizen ,general
Inbuilt calculator for Hra
excel Sheets Protected without any password means you can customised according to ur need
DIRECT TAX CHANGES IN BUDGET AT A GLANCE
In this post we will cover some important clauses of direct tax that has been proposed to be changed by Finance Minister in Budget 08.We will try to explain the changes.
Change in Income Tax rates(Covered in separate Post)TAX CALCULATOR -WITH REVISED RATES IN BUDGET
Senior Citizen Saving Scheme 2004 and the Post Office Time Deposit Account added to the basket of saving instruments under Section 80C of the Income Tax Act.This Benefit will be available from current year i.e investment made in f.y 2007-08 also eligible u/s 80c, and notification has already issued in this regard .
Additional deduction of Rs. 15,000 allowed under Section 80D to an individual paying medical insurance premium of his/her parent or parents.whether parents depended on individual or not.applicable from AY 2009-10
Income Tax Act to be amended to provide that reverse mortgage would not amount to “transfer”; and the stream of revenue received by the senior citizen would not be “income”.Reverse Mortgage scheme has been announced in last year budget but not so popular till date due to tax ambiguity which has been clarified now.applicable from AY 2008-09
Benefit of amortization of certain preliminary expenses under Section 35D allowed to assessees in the services sector.applicable from AY 2009-10
Corporate debt instruments issued in demat form and listed on recognized stock exchanges exempted from TDS.applicable from 01-06-2008
Creche facilities, sponsorship of an employee-sportsperson, organizing sports events for employees and guest houses excluded from the purview of FBT.applicable from AY 2009-10
Parent Company shall be allowed to set off the dividend received from its subsidiary company against dividend distributed by the parent company; provided that the dividend received has suffered DDT and the parent company is not a subsidiary of another company.applicable from AY 2008-09
Insert a new sub-section (11C) in Section 80-IB to grant a five year tax holiday to hospitals located in any place outside the urban agglomerations especially in tier-2 and tier-3 towns; this window will be open for the period April 1, 2008 to March 31, 2013.
Five Year holiday from the income tax being granted to two, three, or four star hotels established in specified districts having UNESCO-declared ‘World Heritage Sites’; the hotel should be constructed start functioning during the period April 1, 2008 to March 31, 2013.
Rate of Tax on short term capital gain under section 111A & Section 115AD increased to 15 percent.applicable from AY 2009-10
STT paid to be treated like any other deductible expenditure against business income; Earlier STT paid is treated as tax paid and rebate u/s 88E was available.Levy of STT, in the case of options to be only on premium, where the option is not exercised; liability to be on the seller; where the option is exercised, levy to be on the settlement price and the liability on the buyer; no change in the present rates.applicable from AY 2009-10
Commodities Transaction tax (CTT) to be introduced on the same lines as STT on options and futures.applicable from AY 2009-101. Sale of an option in goods or an option in commodity derivative @0.017 per cent on Seller on option premium.2. Sale of an option in goods or an option in commodity derivative, where option is exercised.On price of the option@0.125 per cent on the Purchaser.3. Sale of any other commodity derivative @0.017 per cent of the price at whichthe commodty derivative is sold on Seller.
Law being amended to exclude entities carrying on regular trade, commerce or business or providing services in relation to any trade, commerce or business and earning incomes from claiming that their purposes also fall under “charitable purpose”. Genuine charitable organizations not to be affected in any way.
Banking Cash Transaction Tax (BCTT) being withdrawn with effect from April 1, 2009.
Under clause (a), the due date to file the income tax return has been prescribed as 31st day of October of the assessment year for the following categories of assessees:-(i) a company;(ii) a person (other than a company) whose accounts are required to be audited under this Act or under any other law for the time being in force; or(iii) a working partner of a firm whose accounts are required to be audited under this Act or under any other law for the time being in force.It is proposed that the due date for filing of return of income for the above categories of assessees shall be 30th day of September of the assessment year.Applicable from AY 2008-09
Similarly FBT return date is also changed to 30 September for above two categories. Applicable from AY 2008-09
CST and a Roadmap towards GST
Central Sales Tax rate being reduced from 3 percent to 2 percent from April 1, 2008.
Roadmap for Goods and Service Tax being prepared for introduction of GST from April 1, 2010.
Change in Income Tax rates(Covered in separate Post)TAX CALCULATOR -WITH REVISED RATES IN BUDGET
Senior Citizen Saving Scheme 2004 and the Post Office Time Deposit Account added to the basket of saving instruments under Section 80C of the Income Tax Act.This Benefit will be available from current year i.e investment made in f.y 2007-08 also eligible u/s 80c, and notification has already issued in this regard .
Additional deduction of Rs. 15,000 allowed under Section 80D to an individual paying medical insurance premium of his/her parent or parents.whether parents depended on individual or not.applicable from AY 2009-10
Income Tax Act to be amended to provide that reverse mortgage would not amount to “transfer”; and the stream of revenue received by the senior citizen would not be “income”.Reverse Mortgage scheme has been announced in last year budget but not so popular till date due to tax ambiguity which has been clarified now.applicable from AY 2008-09
Benefit of amortization of certain preliminary expenses under Section 35D allowed to assessees in the services sector.applicable from AY 2009-10
Corporate debt instruments issued in demat form and listed on recognized stock exchanges exempted from TDS.applicable from 01-06-2008
Creche facilities, sponsorship of an employee-sportsperson, organizing sports events for employees and guest houses excluded from the purview of FBT.applicable from AY 2009-10
Parent Company shall be allowed to set off the dividend received from its subsidiary company against dividend distributed by the parent company; provided that the dividend received has suffered DDT and the parent company is not a subsidiary of another company.applicable from AY 2008-09
Insert a new sub-section (11C) in Section 80-IB to grant a five year tax holiday to hospitals located in any place outside the urban agglomerations especially in tier-2 and tier-3 towns; this window will be open for the period April 1, 2008 to March 31, 2013.
Five Year holiday from the income tax being granted to two, three, or four star hotels established in specified districts having UNESCO-declared ‘World Heritage Sites’; the hotel should be constructed start functioning during the period April 1, 2008 to March 31, 2013.
Rate of Tax on short term capital gain under section 111A & Section 115AD increased to 15 percent.applicable from AY 2009-10
STT paid to be treated like any other deductible expenditure against business income; Earlier STT paid is treated as tax paid and rebate u/s 88E was available.Levy of STT, in the case of options to be only on premium, where the option is not exercised; liability to be on the seller; where the option is exercised, levy to be on the settlement price and the liability on the buyer; no change in the present rates.applicable from AY 2009-10
Commodities Transaction tax (CTT) to be introduced on the same lines as STT on options and futures.applicable from AY 2009-101. Sale of an option in goods or an option in commodity derivative @0.017 per cent on Seller on option premium.2. Sale of an option in goods or an option in commodity derivative, where option is exercised.On price of the option@0.125 per cent on the Purchaser.3. Sale of any other commodity derivative @0.017 per cent of the price at whichthe commodty derivative is sold on Seller.
Law being amended to exclude entities carrying on regular trade, commerce or business or providing services in relation to any trade, commerce or business and earning incomes from claiming that their purposes also fall under “charitable purpose”. Genuine charitable organizations not to be affected in any way.
Banking Cash Transaction Tax (BCTT) being withdrawn with effect from April 1, 2009.
Under clause (a), the due date to file the income tax return has been prescribed as 31st day of October of the assessment year for the following categories of assessees:-(i) a company;(ii) a person (other than a company) whose accounts are required to be audited under this Act or under any other law for the time being in force; or(iii) a working partner of a firm whose accounts are required to be audited under this Act or under any other law for the time being in force.It is proposed that the due date for filing of return of income for the above categories of assessees shall be 30th day of September of the assessment year.Applicable from AY 2008-09
Similarly FBT return date is also changed to 30 September for above two categories. Applicable from AY 2008-09
CST and a Roadmap towards GST
Central Sales Tax rate being reduced from 3 percent to 2 percent from April 1, 2008.
Roadmap for Goods and Service Tax being prepared for introduction of GST from April 1, 2010.
Deduction for Higher Education Loan 80E on son's eduction.
In This post we will discuss issue relating to deduction u/s 80E for eduction loan for higher studies.We will try to cover all point relating to eduction loan ,but if any left or you have a different opinion than us ,you can record it in comment section given below.
relevant clause of section are reproduced hereunder for ready reference :
80E. (1) In computing the total income of an assessee, being an individual, there shall be deducted, in accordance with and subject to the provisions of this section, any amount paid by him in the previous year, out of his income chargeable to tax, by way of interest on loan taken by him from any financial institution or any approved charitable institution for the purpose of pursuing his higher education or for the purpose of higher education of his relative.
from above main points to avail the deduction are
Eduction loan should be taken by Assessee.
The repayment should be out of income chargeable to income tax means if repayment is made from income exempted from income tax than deduction will not available.
The amount eligible for deduction is repayment of eduction loan interest.
There is no limit for amount of repayment of interest
This deduction is available in respect of the initial assessment year and seven assessment years immediately succeeding the initial assessment year or until the interest is paid by the assessee in full, whichever is earlier.
Initial Assessment year means previous year in which assessee starts paying the interest amount.
The loan should be taken for the purpose of higher eduction,and higher eduction means
full-time studies for
any graduate or post-graduate course in
engineering,
medicine,
management or for
post-graduate course in applied sciences or pure sciences including mathematics and statistics;
The loan should be taken from any financial institution or any approved charitable institution.
The loan should be taken for higher study of himself or studies of relative
Relative under this section means the in relation to an individual, means the spouse and children of that individual.
Earlier to previous year 2006-07 the above deduction is available for loan taken and repaid by the assessee only but after finance act 2007 ,"the or for the purpose of higher education of his relative"
There is no deduction available for repayment of principal ,this deduction is available to only for interest.
This deduction is available for individual only and not for other type of assessee .
The loan should be for pursuing higher studies means its includes loan taken not only for tuition or college fees only but other incidental expenses for pursuing such studies like hostel charges,transport charges etc etc,
There is no condition that the course should be in India .
please read some hypothetical examples for clarification.
Qus: Ram has taken a Eduction loan for his higher studies on 20.06.2005 and started paying installments including interest from 20.06.2007.
Ans:In above example Ram will get tax benefit under section 8o E from p.y 2007-08 i.e initial year of payment and next seven year i.e upto previous year 2014-15 or upto full payment of loan which ever is earlier.
Ques:Ram has taken a loan for his higher studies on 20.06.2005 and paid 20000 interest in previous year and his father has paid 15000 interest payment in previous year 2007-08.who can claim benefit of deduction.
Ans:Only ram will be eligible for deduction of 20000 rs .His father is not eligible for deduction the reason behind this is that loan has been taken by the Ram and not by his father as mentioned in point one above ,though his father is satisfy the condition of relative and paid the interest also but he has not taken the loan
Ques:Can son /daughter can claim the benefit of deduction for loan taken for higher studies of his /her father/mother.
Ans: No,on the reverse parents can claim the benefit for payment of interest for higher studies .
Ques:Ram has taken a loan for his higher studies ,and has repaid the laon interest amount but unfortunately he has not succeeded in exams and could not complete his higher studies.
Ans:As per section loan should be for "pursuing his higher education or for the purpose of higher education of his relative"and ram has pursued the higher course so he should be eligible for the deduction as he has fulfilled all the conditions and there is no condition that the course assessee has persuaded should b completed or assessee should be passed definitely in the course the main dedmand of the section is purpose of the loan should be higher eduction and it should be drawn and used for the purpose of higher studies for his or his relatives.
relevant clause of section are reproduced hereunder for ready reference :
80E. (1) In computing the total income of an assessee, being an individual, there shall be deducted, in accordance with and subject to the provisions of this section, any amount paid by him in the previous year, out of his income chargeable to tax, by way of interest on loan taken by him from any financial institution or any approved charitable institution for the purpose of pursuing his higher education or for the purpose of higher education of his relative.
from above main points to avail the deduction are
Eduction loan should be taken by Assessee.
The repayment should be out of income chargeable to income tax means if repayment is made from income exempted from income tax than deduction will not available.
The amount eligible for deduction is repayment of eduction loan interest.
There is no limit for amount of repayment of interest
This deduction is available in respect of the initial assessment year and seven assessment years immediately succeeding the initial assessment year or until the interest is paid by the assessee in full, whichever is earlier.
Initial Assessment year means previous year in which assessee starts paying the interest amount.
The loan should be taken for the purpose of higher eduction,and higher eduction means
full-time studies for
any graduate or post-graduate course in
engineering,
medicine,
management or for
post-graduate course in applied sciences or pure sciences including mathematics and statistics;
The loan should be taken from any financial institution or any approved charitable institution.
The loan should be taken for higher study of himself or studies of relative
Relative under this section means the in relation to an individual, means the spouse and children of that individual.
Earlier to previous year 2006-07 the above deduction is available for loan taken and repaid by the assessee only but after finance act 2007 ,"the or for the purpose of higher education of his relative"
There is no deduction available for repayment of principal ,this deduction is available to only for interest.
This deduction is available for individual only and not for other type of assessee .
The loan should be for pursuing higher studies means its includes loan taken not only for tuition or college fees only but other incidental expenses for pursuing such studies like hostel charges,transport charges etc etc,
There is no condition that the course should be in India .
please read some hypothetical examples for clarification.
Qus: Ram has taken a Eduction loan for his higher studies on 20.06.2005 and started paying installments including interest from 20.06.2007.
Ans:In above example Ram will get tax benefit under section 8o E from p.y 2007-08 i.e initial year of payment and next seven year i.e upto previous year 2014-15 or upto full payment of loan which ever is earlier.
Ques:Ram has taken a loan for his higher studies on 20.06.2005 and paid 20000 interest in previous year and his father has paid 15000 interest payment in previous year 2007-08.who can claim benefit of deduction.
Ans:Only ram will be eligible for deduction of 20000 rs .His father is not eligible for deduction the reason behind this is that loan has been taken by the Ram and not by his father as mentioned in point one above ,though his father is satisfy the condition of relative and paid the interest also but he has not taken the loan
Ques:Can son /daughter can claim the benefit of deduction for loan taken for higher studies of his /her father/mother.
Ans: No,on the reverse parents can claim the benefit for payment of interest for higher studies .
Ques:Ram has taken a loan for his higher studies ,and has repaid the laon interest amount but unfortunately he has not succeeded in exams and could not complete his higher studies.
Ans:As per section loan should be for "pursuing his higher education or for the purpose of higher education of his relative"and ram has pursued the higher course so he should be eligible for the deduction as he has fulfilled all the conditions and there is no condition that the course assessee has persuaded should b completed or assessee should be passed definitely in the course the main dedmand of the section is purpose of the loan should be higher eduction and it should be drawn and used for the purpose of higher studies for his or his relatives.
HRA AND HOUSE LOAN IN SAME CITY CAN BE CLAIMED ?.
I have taken a House Loan for a new house which is far away ( around 16KM ) from my office.( My new house and office are in same city ).I am staying for rent near to my office.As of now my parents are staying at new house which was bought on House Loan.and I stay with my wife at the rented house.CAN I CLAIM BOTH HRA AND HOUSE LOAN FOR TAX BENEFITS ?
Ans:
As per income tax act both benefits are independent of each other and there is no relation what to so ever in claiming HRA exemption and House loan interest ,if person fulfill conditions to avail benefit given in ACT than he can claim ,and condition is be checked separately for each section.If law has not given any condition or linking in both the sections than why DDO are linking it ,I don't know.lets discuss with provision of the act.
HRA EXEMPTION(HRA EXEMPTION HOW TO CALCULATE)
To claim HRA Exemption following point/condition to be satisfied.
Persons has a salary income and Getting House rent allowance
person has actually incurred expenditure on payment of rent (by whatever name called) in respect of the residential accommodation occupied by him.
The residential accommodation occupied by the assessee should not be owned by him.
In your case you full fill all the above condition ,means have a salary income ,getting hra ,paying rent and residing in Rented house.so you are eligible to claim HRA exemption irrespective of your house loan interest claim.
House loan Interest claim.
while calculating income from house property first annual value of house is to be determined.
House is let out (value will be according to Rent received)
House is self occupied by the owner for own residence. (annual value will be nil)
house cannot actually be occupied by the owner by reason of the fact that owing to his employment, business or profession carried on at any other place, he has to reside at that other place in a building not belonging to him(annual value will be nil)
in situation two and three value of house annual will not be nil if
the house or part of the house is actually let during the whole or any part of the previous year; or
any other benefit therefrom is derived by the owner.
more over if asssessee has more than one house which full fill condition two or three above than he can take this benefit of annual value as nil ,only on one house at his option.means Income tax act permits that a person can have more than one self occupied house but he can avail benefit only for one house and other houses will be deemed to be let out.
now in your case you are living in rented house so you are satisfying condition of Hra so you can claim hra exemption.
In case of your own house ,the house is self occupied by you ,it doesn't matter if you are going to house at weekend or monthly and your parents are living in your own house,it is covered under definition of self occupied under income tax act.As I have clarified above In income tax act self occupied definition is not the same as we generally taken and as per act person can have more than one house as self occupied ,and as per income tax self occupied means
house is not let out for whole or part the previous year
no any other benefit therefrom is derived by the owner
so you can claim house loan interest.
but i think you are covering yourself in condition three above i.e
"house cannot actually be occupied by the owner by reason of the fact that owing to his employment, business or profession carried on at any other place, he has to reside at that other place in a building not belonging to him"
and want to clarify whether this condition is applicable in same city or not.Though in my opinion your house is self occupied as I have clarified above yet for your clarification in above condition also there is no condition that your own house can not be in same city.At any other place does not mean any other city it can be in same city ,but there should be nexus between non occupation of your house and your employment,business or profession
Ans:
As per income tax act both benefits are independent of each other and there is no relation what to so ever in claiming HRA exemption and House loan interest ,if person fulfill conditions to avail benefit given in ACT than he can claim ,and condition is be checked separately for each section.If law has not given any condition or linking in both the sections than why DDO are linking it ,I don't know.lets discuss with provision of the act.
HRA EXEMPTION(HRA EXEMPTION HOW TO CALCULATE)
To claim HRA Exemption following point/condition to be satisfied.
Persons has a salary income and Getting House rent allowance
person has actually incurred expenditure on payment of rent (by whatever name called) in respect of the residential accommodation occupied by him.
The residential accommodation occupied by the assessee should not be owned by him.
In your case you full fill all the above condition ,means have a salary income ,getting hra ,paying rent and residing in Rented house.so you are eligible to claim HRA exemption irrespective of your house loan interest claim.
House loan Interest claim.
while calculating income from house property first annual value of house is to be determined.
House is let out (value will be according to Rent received)
House is self occupied by the owner for own residence. (annual value will be nil)
house cannot actually be occupied by the owner by reason of the fact that owing to his employment, business or profession carried on at any other place, he has to reside at that other place in a building not belonging to him(annual value will be nil)
in situation two and three value of house annual will not be nil if
the house or part of the house is actually let during the whole or any part of the previous year; or
any other benefit therefrom is derived by the owner.
more over if asssessee has more than one house which full fill condition two or three above than he can take this benefit of annual value as nil ,only on one house at his option.means Income tax act permits that a person can have more than one self occupied house but he can avail benefit only for one house and other houses will be deemed to be let out.
now in your case you are living in rented house so you are satisfying condition of Hra so you can claim hra exemption.
In case of your own house ,the house is self occupied by you ,it doesn't matter if you are going to house at weekend or monthly and your parents are living in your own house,it is covered under definition of self occupied under income tax act.As I have clarified above In income tax act self occupied definition is not the same as we generally taken and as per act person can have more than one house as self occupied ,and as per income tax self occupied means
house is not let out for whole or part the previous year
no any other benefit therefrom is derived by the owner
so you can claim house loan interest.
but i think you are covering yourself in condition three above i.e
"house cannot actually be occupied by the owner by reason of the fact that owing to his employment, business or profession carried on at any other place, he has to reside at that other place in a building not belonging to him"
and want to clarify whether this condition is applicable in same city or not.Though in my opinion your house is self occupied as I have clarified above yet for your clarification in above condition also there is no condition that your own house can not be in same city.At any other place does not mean any other city it can be in same city ,but there should be nexus between non occupation of your house and your employment,business or profession
PAY LESS SHORT TERM CAPITAL GAIN -HOW?
As you know in budget 2008 ,our Finance Minister has increased the short term capital gain on share transaction, on which securities transaction tax (STT) has been paid, from 10% to 15 % .This has been done under section 111A for Indian resident and under section 111d for FII from Assessment year 2009-10.
what was in section 111A
As per section 111A
if a person's total income includes Short term capital gain from transfer equity shares or unit of a equity oriented fund and
STT has paid on transfer
than rate of tax will 10% flat and on other income of the assessee tax will be calculated as if such balance amount is total income of the assessee
however in case of HUF and Individual if assessee balance income is less than the total exemption limit than such short-term capital gains shall be reduced by the amount by which the balance total income as so reduced falls short of the maximum amount which is not chargeable to income-tax and the tax on the balance of such short-term capital gains shall be computed at the rate of 10% per cent.
In this case deduction under chapter VI also available from balance income i.e income without short term capital gain as discussed above
What is current position after amendment
This section is yet beneficial to those who tax rate is more 15 % like companies ,AOP,BOI ,partnership companies and individual and huf who's income is more than 300000.But this the fact as most of the person who shows income from STCG has income less than 300000 as big fishes show income of sale purchase of shares as business Income.
What are the option available after Budget
First option:Treat income from shares as Business Income instead of short term capital gain, while we discuss under which head income from share to be taken ,as you all know there is a thin line between income from share as a business and short term capital gain . If your trading volume is large as compare to your net worth, you can go for it.
benefit:
as your income will be covered under business you can charge /book various expenses which has been incurred to earn share income which can not be done in short term capital gain .In some cases it will be beneficial for person who's income will be more than 300000 rs also.
You can set off loss from business of shares from any other head except salary.
You can also claim benefit of deduction under chapter VI also.
STT paid will be allowed as Expenditure.
dis advantages;
you have to prepare proper books of accounts if the income from shares is more than 120000 rs in a year or gross turnover is more than 1000000 in any of the proceeding proceeding three years.
if turnover is more than 4000000 than audit is required.
Second option
Sell the equity share out of market /off the market or render it to company if there is a buy back offer from the company ,as the stt is not paid,than section 111A will not apply
Benefit:
your short term capital gain will be treated as income and income tax will be calculated as it it required to calculated in on any other income. means STCG will be part of total income and normal slab rate will be applied.
You can also claim benefit of deduction under chapter VI also.
No STT is required to paid as transaction is to be done off market.
disadvantages:
generally off market transaction creates doubt in ITO mind ,but it is done on the same rate as were in stock exchange than it can be proved easily.
other expenses as compare to business income is not allowed under STGC.
off market buyer and seller are difficult to find but they are existed.
So in both the above conditions you will save considerable money ,at least five % of tax.
Example
lets take example of a Individual for Assessment year=2009-10
Income from salary= 200000
Income from shares as Short term capital gain (STT PAID 5000)=150000
saving U/s 80C =50000
case 1:tax liability if we take income as SHORT TERM CAPITAL GAIN
tax on STGC 150000@ 15 %=22500
other income
(200000-50000)=150000=nil tax
total tax payable=22500
Case 2:if we take as a Business Income (and lets suppose there are exp which can not be shown in STCG as 20000)
Income from salary=200000
Income from business=(150000-20000 other exp-5000stt)=125000
Gross income=325000
less :saving=50000
net taxable income=275000
tax payable=12500
Case 3= if we do the transaction off market out of stock exchange
short term capital gain=150000
salary= 200000
GT=350000
less :saving=50000
taxable income=300000
tax due=15000
and saving of stt =5000 rs so effective tax =10000
The increased rate of tax On STCG and generally reduced rates has create a situation where people are encouraged to do share sale purchase off market???????????
please comment
what was in section 111A
As per section 111A
if a person's total income includes Short term capital gain from transfer equity shares or unit of a equity oriented fund and
STT has paid on transfer
than rate of tax will 10% flat and on other income of the assessee tax will be calculated as if such balance amount is total income of the assessee
however in case of HUF and Individual if assessee balance income is less than the total exemption limit than such short-term capital gains shall be reduced by the amount by which the balance total income as so reduced falls short of the maximum amount which is not chargeable to income-tax and the tax on the balance of such short-term capital gains shall be computed at the rate of 10% per cent.
In this case deduction under chapter VI also available from balance income i.e income without short term capital gain as discussed above
What is current position after amendment
This section is yet beneficial to those who tax rate is more 15 % like companies ,AOP,BOI ,partnership companies and individual and huf who's income is more than 300000.But this the fact as most of the person who shows income from STCG has income less than 300000 as big fishes show income of sale purchase of shares as business Income.
What are the option available after Budget
First option:Treat income from shares as Business Income instead of short term capital gain, while we discuss under which head income from share to be taken ,as you all know there is a thin line between income from share as a business and short term capital gain . If your trading volume is large as compare to your net worth, you can go for it.
benefit:
as your income will be covered under business you can charge /book various expenses which has been incurred to earn share income which can not be done in short term capital gain .In some cases it will be beneficial for person who's income will be more than 300000 rs also.
You can set off loss from business of shares from any other head except salary.
You can also claim benefit of deduction under chapter VI also.
STT paid will be allowed as Expenditure.
dis advantages;
you have to prepare proper books of accounts if the income from shares is more than 120000 rs in a year or gross turnover is more than 1000000 in any of the proceeding proceeding three years.
if turnover is more than 4000000 than audit is required.
Second option
Sell the equity share out of market /off the market or render it to company if there is a buy back offer from the company ,as the stt is not paid,than section 111A will not apply
Benefit:
your short term capital gain will be treated as income and income tax will be calculated as it it required to calculated in on any other income. means STCG will be part of total income and normal slab rate will be applied.
You can also claim benefit of deduction under chapter VI also.
No STT is required to paid as transaction is to be done off market.
disadvantages:
generally off market transaction creates doubt in ITO mind ,but it is done on the same rate as were in stock exchange than it can be proved easily.
other expenses as compare to business income is not allowed under STGC.
off market buyer and seller are difficult to find but they are existed.
So in both the above conditions you will save considerable money ,at least five % of tax.
Example
lets take example of a Individual for Assessment year=2009-10
Income from salary= 200000
Income from shares as Short term capital gain (STT PAID 5000)=150000
saving U/s 80C =50000
case 1:tax liability if we take income as SHORT TERM CAPITAL GAIN
tax on STGC 150000@ 15 %=22500
other income
(200000-50000)=150000=nil tax
total tax payable=22500
Case 2:if we take as a Business Income (and lets suppose there are exp which can not be shown in STCG as 20000)
Income from salary=200000
Income from business=(150000-20000 other exp-5000stt)=125000
Gross income=325000
less :saving=50000
net taxable income=275000
tax payable=12500
Case 3= if we do the transaction off market out of stock exchange
short term capital gain=150000
salary= 200000
GT=350000
less :saving=50000
taxable income=300000
tax due=15000
and saving of stt =5000 rs so effective tax =10000
The increased rate of tax On STCG and generally reduced rates has create a situation where people are encouraged to do share sale purchase off market???????????
please comment
VALUATION RULE CHANGED FOR RENT FREE ACCOMODATION (Reduced)
CBDT has issued a NOTIFICATION NO. 271/2007, DATED 7-11-2007,vide which rules for valuation of Rent Free/Less rent Accommodation(RFA) has been changed from 1.4.06 means rules are applicable for assessment year 2006-07.These rules are Beneficial to assessee as the valuation rate has been reduced for some categories of employees.These rules are inconformity with amendment made in finance act 2007 and removed the ambiguity regarding valuation of RFA .
After this amendment valuation of perquisites in respect of Rfa will be as under
valuation in case of accommodation provided by Center or State Government to employees:License fee determined by the Central Government or any State Government in respect of accommodation in accordance with the rules framed by such Government as reduced by the rent actually paid by the employee.
Valuation in case of accommodation provided by other employer:
if house owned by employer :
(i) 15% of salary in cities having population exceeding 25 lakhs as per 2001 census;
(ii) 10% of salary in cities having population exceeding 10 lakhs but not exceeding 25 lakhs as per 2001 census;
(iii) 7.5% of salary in other areas,
if house owned by employer:Actual amount of lease rental paid or payable by the employer or 15% of salary whichever is lower as reduced by the rent, if any, actually paid by the employee.
In both above cases if any rent paid by employee to employer will be reduced from valuation arrived as above.
In both case if furniture etc is also provided without rent than valuation of perquisites will be added by 10% of the cost of furniture provided.
In both the above cases if accommodation provided is a hotel than valuation of RFA will be 24 % of salary except in case of transfer and period in aggregate is not more than fifteen days.
so after the above change in rule valuation of RFA is reduced by 50 % in case of many employees from assessment year 2006-07.But here main problem is that they had already submitted their return for assessment year 2006-07 as well as 2007-08.
Don't worry evan if you have already filled your return ,you can file your revised return for assessment year 2006-07 & assessment year 2007-08 and can claim a refund for difference in tax due to less valuation of perquisites in respect of rent free accommodation.
you can revise your return in case you have filed your return in time.As you may aware of that belated return can not be revised.
For assessment year 2006-07 you can either file on saral return form or through e-filing.
For assessment year 2007-08 you can use new itr(as Applicable) or through e-filing.
complete notification can be downloaded from here
vauation of rent free accommodation (rule-3) (word document)
Note:In this notifiaction valuation of other perquisites has also been changed.
After this amendment valuation of perquisites in respect of Rfa will be as under
valuation in case of accommodation provided by Center or State Government to employees:License fee determined by the Central Government or any State Government in respect of accommodation in accordance with the rules framed by such Government as reduced by the rent actually paid by the employee.
Valuation in case of accommodation provided by other employer:
if house owned by employer :
(i) 15% of salary in cities having population exceeding 25 lakhs as per 2001 census;
(ii) 10% of salary in cities having population exceeding 10 lakhs but not exceeding 25 lakhs as per 2001 census;
(iii) 7.5% of salary in other areas,
if house owned by employer:Actual amount of lease rental paid or payable by the employer or 15% of salary whichever is lower as reduced by the rent, if any, actually paid by the employee.
In both above cases if any rent paid by employee to employer will be reduced from valuation arrived as above.
In both case if furniture etc is also provided without rent than valuation of perquisites will be added by 10% of the cost of furniture provided.
In both the above cases if accommodation provided is a hotel than valuation of RFA will be 24 % of salary except in case of transfer and period in aggregate is not more than fifteen days.
so after the above change in rule valuation of RFA is reduced by 50 % in case of many employees from assessment year 2006-07.But here main problem is that they had already submitted their return for assessment year 2006-07 as well as 2007-08.
Don't worry evan if you have already filled your return ,you can file your revised return for assessment year 2006-07 & assessment year 2007-08 and can claim a refund for difference in tax due to less valuation of perquisites in respect of rent free accommodation.
you can revise your return in case you have filed your return in time.As you may aware of that belated return can not be revised.
For assessment year 2006-07 you can either file on saral return form or through e-filing.
For assessment year 2007-08 you can use new itr(as Applicable) or through e-filing.
complete notification can be downloaded from here
vauation of rent free accommodation (rule-3) (word document)
Note:In this notifiaction valuation of other perquisites has also been changed.
HRA EXEMPTION HOW TO CALCULATE
In most of the cases ,House Rent Allowance(HRA) is part of salary package .so exemption of Hra how to calculated is most of us is want to know infact most of person already know about HRA exemption,I am giving this to shares my understanding on the above issue which may be useful for many of this site visitors.if you have any different views or any point left in this post ,please record in the comment section.
calculation of HRA exemption.
least of following three will be exempted
Hra received
50% of salary in case of residential accommodation taken on rent is situated in Bombay ,Calcutta ,Delhi, or Madras (Chennai) and 40 % of salary in in any other case.
rent paid in excess of 10 % of salary
other points to be noted
Salary for this purpose mean
Basic salary
Dearness Allowance if terms of employment so provides.
commission based on a fixed percentage of trunover.
all other allowances and perquisites is to be excluded.
Salary related to period of rent should only be considered on due basic .
Salary received in period as advance or arrear not related to calculation period should not be included.
For calculating 40/50 % as per point 2 above place of residential accommodation is important ,not where the person is working.suppose Rajiv taken a house in Delhi on rent but has working in Rohtak than he is eligible as per point 2 upto 50 % as house is situated in Delhi.
The calculation should be done on separately(monthly) if salary or HRA has varies during the year.
No,Hra exemtion if Hra paid is less than 10 % of salary.
Again exemption is denied where an employee lives in his own house, or in a house for which he does not pay rent.
QUS:Is it necessary to submit House rent paid receipts to the employer,if yes,should the rent receipt include pan of the Land lord.
Ans:Employer are liable to deduct tds on salary and in present senario of annexure less income tax return ,there is more responsibility on DDO to check and verify each and every exception and deduction that employees claim .DDOs is empowered under income tax act to get and verify proof to saving and hra receipt from employees.However CBDT has exempted the employees who are receiving hra upto 3000 per month from submitting the proof to DDO(Employer) though Income tax assessing officer can demand Rent receipt from employee getting HRA upto 3000 pm.
Ques:Am I eligible for HRA exception if I have Paid rent to my father.
Ans:If you have actually paid the rent to your father then you can claim the benefit .
Ques:Am I eligible for HRA exception if I have Paid rent to my wife/husband.
Ans:If you have actually paid the rent to your spouse you can claim the hra exemption benefit but the house should not be purchased by your spouse from funds transfered by you without adequate consideration ,in that case you will be the deemed owner of the house and clubbing provisions will attract
calculation of HRA exemption.
least of following three will be exempted
Hra received
50% of salary in case of residential accommodation taken on rent is situated in Bombay ,Calcutta ,Delhi, or Madras (Chennai) and 40 % of salary in in any other case.
rent paid in excess of 10 % of salary
other points to be noted
Salary for this purpose mean
Basic salary
Dearness Allowance if terms of employment so provides.
commission based on a fixed percentage of trunover.
all other allowances and perquisites is to be excluded.
Salary related to period of rent should only be considered on due basic .
Salary received in period as advance or arrear not related to calculation period should not be included.
For calculating 40/50 % as per point 2 above place of residential accommodation is important ,not where the person is working.suppose Rajiv taken a house in Delhi on rent but has working in Rohtak than he is eligible as per point 2 upto 50 % as house is situated in Delhi.
The calculation should be done on separately(monthly) if salary or HRA has varies during the year.
No,Hra exemtion if Hra paid is less than 10 % of salary.
Again exemption is denied where an employee lives in his own house, or in a house for which he does not pay rent.
QUS:Is it necessary to submit House rent paid receipts to the employer,if yes,should the rent receipt include pan of the Land lord.
Ans:Employer are liable to deduct tds on salary and in present senario of annexure less income tax return ,there is more responsibility on DDO to check and verify each and every exception and deduction that employees claim .DDOs is empowered under income tax act to get and verify proof to saving and hra receipt from employees.However CBDT has exempted the employees who are receiving hra upto 3000 per month from submitting the proof to DDO(Employer) though Income tax assessing officer can demand Rent receipt from employee getting HRA upto 3000 pm.
Ques:Am I eligible for HRA exception if I have Paid rent to my father.
Ans:If you have actually paid the rent to your father then you can claim the benefit .
Ques:Am I eligible for HRA exception if I have Paid rent to my wife/husband.
Ans:If you have actually paid the rent to your spouse you can claim the hra exemption benefit but the house should not be purchased by your spouse from funds transfered by you without adequate consideration ,in that case you will be the deemed owner of the house and clubbing provisions will attract
NEW ITR FORMS 2008-09 NOTIFIED
The CBDT has notified the new ITR forms for Assessment Year for 2008-09
however the software speceification for efiling of return has not notified yet and will be notified in due cource.
ITR-1 (in Regular Font)
ITR-1 Instructions For Individuals having Income from Salary & Interest
ITR-1 (in Large Font)
2
ITR-2 ITR-2 Instructions For Individuals & HUFs not having Income Business or Professionfrom
3
ITR-3 ITR-3 Instructions For Individuals/HUFs being partners in firms and not carrying out business or profession under any proprietorship
4
ITR-4 ITR-4 Instructions For Individuals & HUFs having income from a proprietory business or profession
5
ITR-5 ITR-5 Instructions For firms, AOPs and BOIs
6
ITR-6 ITR-6 Instructions For Companies other than companies claiming exemption under section 11
7
ITR-7 ITR-7 Instructions For persons including companies required to furnish return under section 139(4A) or section 139(4B) or section 13(4C) or section 139(4D). (Not available for e-Filing)
8
ITR-8 ITR-8 Instructions Return for Fringe Benefits
e-filing of Income tax return for Assessment Year 2008-09 has been been started.Initially it has been started for three forms .All the three Return preparation Utilities (RPU)software are excel based.you can use them as e filing software or you can also use them as manual return preparation and can print it for record .All the rpu use Macro in M S Excel so before using it set enable macro and set security setting accordingly to use the same.
so start using efiling now
you can download e-filing RPU(SOFTWARE) for ITR from below
ITR-1 EXCEL:For Individuals having Income from Salary/ Pension/ family pension & Interest RELEASED ON 15/04/08
ITR-2 EXEL:For Individuals and HUFs not having Income from Business or Profession RELEASED ON 21/04/2008
ITR-3 EXCEL :For Individuals/HUFs being partners in firms and not carrying out business or profession under any proprietorship RELEASED ON 21/04/2008
ITR-4 EXCEL:For Individuals & HUFs having income from a proprietory business or profession
ITR-5 EXCEL:For firms, AOPs and BOIs
UPDATE 21.04.2008,27.04.08>
CA Punkaj aggarwal has made a broad review of new forms and found the following changes in the forms for 2008-09 as compared to ITR forms of 2007-08
1. Assessment year has been changed from 2007-08 to 2008-09 in every form.
2. The column provided for ‘E-filing Acknowledgment Number has been removed from all the forms.
3. In schedule CG of Capital gains, the following changes has been made in all the schedules:
a. In A2e the sections 54,54EC,54F has been deleted and now the line reads as “ Exemption under section 54B/54D”.
b. In A3, sections 54 and 54F has been deleted and 54G and 54GA has been added. Now it reads as “Amount deemed to be short term capital gains under section 54B/54D/54EC/54ED/54G/54GA”.
c. In B2d, the word ‘deduction’ has been replaced with ‘Exemption’ and sections 54G and 54GA has been added.
d. In B3d, the word ‘deduction’ has been replaced with ‘Exemption’.
4. In Schedule CYLA, a new row of ‘Loss to be adjusted’ has been added and the sub-columns for losses has been merged.
5. In Schedule CFL, the year 1999-00 has been deleted and year 2007-08 has been added.
6. In Schedule SPI, it has been specifically mentioned that the income of minor child is to be included after Rs. 1500/- per child.
7. In ITR 3, the heading of Schedule BP has been changed to “ Details of Income from Firms of which partner”.
8. In ITR 4 and ITR 6
a. In Balance Sheet Part A BS, 2b ‘Trade Investments’ has been changed to ‘Short-term investments’.
b. In 2bi, ‘including share application money’ has been added after Equity Shares. (Only in ITR4)
c. In Schedule BP A 23 has been changed as under:
“Any other income (including salary, commission, bonus and interest from firms in which individual/HUF/Prop. Concern is a partner) not included in Profit and loss account.” /any other expenses not allowable.
(Added portion highlighted and deleted portion strike off.)
d. A37 is also changed as under:
Net Profit or loss from business or profession (same as above in 36 except in case of special business after applying rule 7A, 7B or 7C).
however the software speceification for efiling of return has not notified yet and will be notified in due cource.
ITR-1 (in Regular Font)
ITR-1 Instructions For Individuals having Income from Salary & Interest
ITR-1 (in Large Font)
2
ITR-2 ITR-2 Instructions For Individuals & HUFs not having Income Business or Professionfrom
3
ITR-3 ITR-3 Instructions For Individuals/HUFs being partners in firms and not carrying out business or profession under any proprietorship
4
ITR-4 ITR-4 Instructions For Individuals & HUFs having income from a proprietory business or profession
5
ITR-5 ITR-5 Instructions For firms, AOPs and BOIs
6
ITR-6 ITR-6 Instructions For Companies other than companies claiming exemption under section 11
7
ITR-7 ITR-7 Instructions For persons including companies required to furnish return under section 139(4A) or section 139(4B) or section 13(4C) or section 139(4D). (Not available for e-Filing)
8
ITR-8 ITR-8 Instructions Return for Fringe Benefits
e-filing of Income tax return for Assessment Year 2008-09 has been been started.Initially it has been started for three forms .All the three Return preparation Utilities (RPU)software are excel based.you can use them as e filing software or you can also use them as manual return preparation and can print it for record .All the rpu use Macro in M S Excel so before using it set enable macro and set security setting accordingly to use the same.
so start using efiling now
you can download e-filing RPU(SOFTWARE) for ITR from below
ITR-1 EXCEL:For Individuals having Income from Salary/ Pension/ family pension & Interest RELEASED ON 15/04/08
ITR-2 EXEL:For Individuals and HUFs not having Income from Business or Profession RELEASED ON 21/04/2008
ITR-3 EXCEL :For Individuals/HUFs being partners in firms and not carrying out business or profession under any proprietorship RELEASED ON 21/04/2008
ITR-4 EXCEL:For Individuals & HUFs having income from a proprietory business or profession
ITR-5 EXCEL:For firms, AOPs and BOIs
UPDATE 21.04.2008,27.04.08>
CA Punkaj aggarwal has made a broad review of new forms and found the following changes in the forms for 2008-09 as compared to ITR forms of 2007-08
1. Assessment year has been changed from 2007-08 to 2008-09 in every form.
2. The column provided for ‘E-filing Acknowledgment Number has been removed from all the forms.
3. In schedule CG of Capital gains, the following changes has been made in all the schedules:
a. In A2e the sections 54,54EC,54F has been deleted and now the line reads as “ Exemption under section 54B/54D”.
b. In A3, sections 54 and 54F has been deleted and 54G and 54GA has been added. Now it reads as “Amount deemed to be short term capital gains under section 54B/54D/54EC/54ED/54G/54GA”.
c. In B2d, the word ‘deduction’ has been replaced with ‘Exemption’ and sections 54G and 54GA has been added.
d. In B3d, the word ‘deduction’ has been replaced with ‘Exemption’.
4. In Schedule CYLA, a new row of ‘Loss to be adjusted’ has been added and the sub-columns for losses has been merged.
5. In Schedule CFL, the year 1999-00 has been deleted and year 2007-08 has been added.
6. In Schedule SPI, it has been specifically mentioned that the income of minor child is to be included after Rs. 1500/- per child.
7. In ITR 3, the heading of Schedule BP has been changed to “ Details of Income from Firms of which partner”.
8. In ITR 4 and ITR 6
a. In Balance Sheet Part A BS, 2b ‘Trade Investments’ has been changed to ‘Short-term investments’.
b. In 2bi, ‘including share application money’ has been added after Equity Shares. (Only in ITR4)
c. In Schedule BP A 23 has been changed as under:
“Any other income (including salary, commission, bonus and interest from firms in which individual/HUF/Prop. Concern is a partner) not included in Profit and loss account.” /any other expenses not allowable.
(Added portion highlighted and deleted portion strike off.)
d. A37 is also changed as under:
Net Profit or loss from business or profession (same as above in 36 except in case of special business after applying rule 7A, 7B or 7C).
HOW TO DEPOSIT ONLINE INCOME TAX
As I have earlier written that income tax payment online would be mandatory from January 1,2008BUT THE DATE HAS BEEN NOW 1/04/08PRESS RELEASE HAS BEEN ISSUED BY CBDT READ THIS.So one should also interested in how to make e payment of taxes through internet.in my view internet payment is easier than manual payment(deposit in bank branch).The basic advantages are given below.
In e payment of taxes ,there is no need to issue a cheque or deposit cash for taxes.
No need to download software or purchase income tax challan form.
Your Pan /Tan will be verified from income tax database .so less risk for wrong deposit of taxes
No Q,instant receipt of challan
chances of uploading wrong data by Bank Employees will reducedand there are other benefit also. Now lets know how to make e payment of tax.you can select one of the two gateways.
Start the process from NSDL/INCOME TAX web site
Start the Process From you bank website.presently only six banks are authorize to receive payment through internet for income tax .i.e
Axis Bank
State Bank of India
Punjab National Bank
Indian Overseas Bank
Canara Bank
Indian Bank
Bank of India
Corporation Bank
State Bank of Bikaner & Jaipur
State Bank of Travancore
State Bank of Indore
Vijaya Bank
HDFC Bank
Oriental Bank of Commerce
State Bank of Patiala
Bank of Baroda
IDBI Bank
State Bank of Mysore
Bank of Maharashtra
State Bank of Hyderabad
State Bank of Saurashtra
Union Bank of India
Allahabad Bank
Dena Bank
Syndicate Bank
ICICI Banklist is increasing day by day so check your bank alsolets learn Start the process from NSDL/INCOME TAX web site
click the above link & than select link given at bottom of your bank's name
select the appropriate challan form from 280,281,282,283
fill the the selected form and select the bank from which you want to transfer funds
click submit
a message will appear"
For the TAN/pan given by you above, the name as per Income Tax Department database is '...........................................................................................'. If the name is right, then click on "Submit to the bank"
if your name is matched with income tax data base than click the submit to bank button otherwise check your pan/tan or correct the name filled by you
you will lead to your net banking site ,login your self and confirm the payment .
a e receipt will be genrated ,save it for future use.
your e-payment process is complete nowyou can check frequently asked question about e payment from hereWhat is e-tax payment?Ans. This is a facility provided to the taxpayers to make income tax payments through internet using net-banking facilityCan I use this facility to pay income tax?Ans. You can, if;a) You have a bank account with net-banking facility, andb) Your bank is amongst the banks that provide the e-tax payment facility.in my opinion you can also use your friends account to make such payment after payment return money to friend by cheque.
How do I know whether my bank provides this facility?
Ans. The list of the banks providing this facility is available on NSDL-TIN website. Alternatively, you may get the information from your bank.
What is the procedure for entering the required data on the screen for paying tax online? Ans. Log on to the NSDL-TIN website. Click on the icon 'Pay tax online'. Choose the required challan.After choosing the required challan you will be directed to the screen for entering the following data:
PAN for non-TDS payments and TAN for TDS payments
Name and address of the taxpayer
Assessment Year
Major Head Code
Minor Head Code
Type of Payment In case of challan no. 280, 282 and 283, the Permanent Account Number (PAN) needs to be entered. In case of challan no. 281 Tax deduction Account Number (TAN) needs to be entered.Please ensure that you enter PAN/TAN correctly, as this is extremely important for further processing.The system will check the validity of PAN/TAN. In case PAN/TAN is not available in the database of the Income tax Department then you cannot proceed with the payment of tax.After entering the required data, select your bank through which the tax will be paid. Select your bank from the list of banks providing this facility.Once you have completed this, click on PROCEED button. TIN system will display the contents you have entered along with the "name" appearing in the ITD database with respect to PAN/TAN entered by you.What is the procedure after entering the required data?Ans. You can now verify the details entered by you. In case you have made a mistake in data entry, you can correct the same. If your name as per ITD database displayed on the screen is right and all other information is correct, click on the SUBMIT button to reach the net-banking site provided by your bank.What is the procedure after being directed to the net-banking site of my bank?Ans. TIN system will direct you to the net-banking facility of your bank. You will have to log on to the net banking site of your bank using the login ID and password/PIN provided by the bank. The particulars entered by you at the TIN website will be displayed again.You will now be required to enter the amount of tax you intend to pay and also select your bank account number from where you intend to pay the tax. After verifying the correctness, you can proceed with confirming the payment.What will happen after I confirm the payment of tax at my bank's site?Ans. Your bank will process the transaction online by debiting the bank account indicated by you and issue an acknowledgment indicating the Challan Identification Number (CIN). You can verify the status of the challan in the "Challan Status Inquiry" at NSDL-TIN website using CIN after a week after making the payment.How can I know that I have completed tax payment using this facility?Ans. Apart from the CIN given to you, you can check your online bank statement to verify the tax payment.Do I have to attach the acknowledgment counterfoil with my return?Ans. No, it will be considered sufficient proof if you quote your Challan Identification Number (CIN) as mentioned in your counterfoil in your return.What are the timings for making payment through internet?Ans. You will have to check the net-banking webpage of your bank's website for this information.in my view 24 x 7How secure is the transmission of data to the website for e-tax payment?Ans. All transmission through NSDL-TIN website is encrypted and is with Secure Socket Layer (SSL) authentication. With respect to the banks, it depends on the security measures provided by the bank for net-banking.How does this system of payment of taxes through internet benefit me as a taxpayer?Ans. This system is beneficial to you as you are not required to personally visit the bank to make the payments. Payment can be made electronically at your convenience from any place where an internet facility is available e.g. your office, residence, etc. Further, you get the Challan Identification Number (CIN) online, which is required by you when you file your return.Whether tds is also liable to be paid online?????-A view,check what RBI thinks about itdownload e payment procedure with pictures
In e payment of taxes ,there is no need to issue a cheque or deposit cash for taxes.
No need to download software or purchase income tax challan form.
Your Pan /Tan will be verified from income tax database .so less risk for wrong deposit of taxes
No Q,instant receipt of challan
chances of uploading wrong data by Bank Employees will reducedand there are other benefit also. Now lets know how to make e payment of tax.you can select one of the two gateways.
Start the process from NSDL/INCOME TAX web site
Start the Process From you bank website.presently only six banks are authorize to receive payment through internet for income tax .i.e
Axis Bank
State Bank of India
Punjab National Bank
Indian Overseas Bank
Canara Bank
Indian Bank
Bank of India
Corporation Bank
State Bank of Bikaner & Jaipur
State Bank of Travancore
State Bank of Indore
Vijaya Bank
HDFC Bank
Oriental Bank of Commerce
State Bank of Patiala
Bank of Baroda
IDBI Bank
State Bank of Mysore
Bank of Maharashtra
State Bank of Hyderabad
State Bank of Saurashtra
Union Bank of India
Allahabad Bank
Dena Bank
Syndicate Bank
ICICI Banklist is increasing day by day so check your bank alsolets learn Start the process from NSDL/INCOME TAX web site
click the above link & than select link given at bottom of your bank's name
select the appropriate challan form from 280,281,282,283
fill the the selected form and select the bank from which you want to transfer funds
click submit
a message will appear"
For the TAN/pan given by you above, the name as per Income Tax Department database is '...........................................................................................'. If the name is right, then click on "Submit to the bank"
if your name is matched with income tax data base than click the submit to bank button otherwise check your pan/tan or correct the name filled by you
you will lead to your net banking site ,login your self and confirm the payment .
a e receipt will be genrated ,save it for future use.
your e-payment process is complete nowyou can check frequently asked question about e payment from hereWhat is e-tax payment?Ans. This is a facility provided to the taxpayers to make income tax payments through internet using net-banking facilityCan I use this facility to pay income tax?Ans. You can, if;a) You have a bank account with net-banking facility, andb) Your bank is amongst the banks that provide the e-tax payment facility.in my opinion you can also use your friends account to make such payment after payment return money to friend by cheque.
How do I know whether my bank provides this facility?
Ans. The list of the banks providing this facility is available on NSDL-TIN website. Alternatively, you may get the information from your bank.
What is the procedure for entering the required data on the screen for paying tax online? Ans. Log on to the NSDL-TIN website. Click on the icon 'Pay tax online'. Choose the required challan.After choosing the required challan you will be directed to the screen for entering the following data:
PAN for non-TDS payments and TAN for TDS payments
Name and address of the taxpayer
Assessment Year
Major Head Code
Minor Head Code
Type of Payment In case of challan no. 280, 282 and 283, the Permanent Account Number (PAN) needs to be entered. In case of challan no. 281 Tax deduction Account Number (TAN) needs to be entered.Please ensure that you enter PAN/TAN correctly, as this is extremely important for further processing.The system will check the validity of PAN/TAN. In case PAN/TAN is not available in the database of the Income tax Department then you cannot proceed with the payment of tax.After entering the required data, select your bank through which the tax will be paid. Select your bank from the list of banks providing this facility.Once you have completed this, click on PROCEED button. TIN system will display the contents you have entered along with the "name" appearing in the ITD database with respect to PAN/TAN entered by you.What is the procedure after entering the required data?Ans. You can now verify the details entered by you. In case you have made a mistake in data entry, you can correct the same. If your name as per ITD database displayed on the screen is right and all other information is correct, click on the SUBMIT button to reach the net-banking site provided by your bank.What is the procedure after being directed to the net-banking site of my bank?Ans. TIN system will direct you to the net-banking facility of your bank. You will have to log on to the net banking site of your bank using the login ID and password/PIN provided by the bank. The particulars entered by you at the TIN website will be displayed again.You will now be required to enter the amount of tax you intend to pay and also select your bank account number from where you intend to pay the tax. After verifying the correctness, you can proceed with confirming the payment.What will happen after I confirm the payment of tax at my bank's site?Ans. Your bank will process the transaction online by debiting the bank account indicated by you and issue an acknowledgment indicating the Challan Identification Number (CIN). You can verify the status of the challan in the "Challan Status Inquiry" at NSDL-TIN website using CIN after a week after making the payment.How can I know that I have completed tax payment using this facility?Ans. Apart from the CIN given to you, you can check your online bank statement to verify the tax payment.Do I have to attach the acknowledgment counterfoil with my return?Ans. No, it will be considered sufficient proof if you quote your Challan Identification Number (CIN) as mentioned in your counterfoil in your return.What are the timings for making payment through internet?Ans. You will have to check the net-banking webpage of your bank's website for this information.in my view 24 x 7How secure is the transmission of data to the website for e-tax payment?Ans. All transmission through NSDL-TIN website is encrypted and is with Secure Socket Layer (SSL) authentication. With respect to the banks, it depends on the security measures provided by the bank for net-banking.How does this system of payment of taxes through internet benefit me as a taxpayer?Ans. This system is beneficial to you as you are not required to personally visit the bank to make the payments. Payment can be made electronically at your convenience from any place where an internet facility is available e.g. your office, residence, etc. Further, you get the Challan Identification Number (CIN) online, which is required by you when you file your return.Whether tds is also liable to be paid online?????-A view,check what RBI thinks about itdownload e payment procedure with pictures
Government Support to TRPs
The government will assist the TRPs through:
1. Arranging for their training by NIIT.
2. Post training, web-based advanced learning to upgrade their skills.
3. 24/7 Helpdesk to clarify TRPs' doubts pertaining to their work.
4. Monitoring and coordinating their activities and providing logistical support through a Resource Centre
1. Arranging for their training by NIIT.
2. Post training, web-based advanced learning to upgrade their skills.
3. 24/7 Helpdesk to clarify TRPs' doubts pertaining to their work.
4. Monitoring and coordinating their activities and providing logistical support through a Resource Centre
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