Month: June 2018

GST

E Way Bill Insight

E-way bill is an instrument which ensure that delivery of goods is being trailed via the system.It ensures non intrusive checks which were delaying the delivery of goods as for example each carrier which passes through any check post was checked and kept on hold for petty reasons in past but in new system since the details are on the system it has become almost impossible to undue harass the taxpayer.

E Way bill process is a 5 stage process

Registration in the portal – One time

Providing the details of consignment – Each time

Generating the bill — as and when required

Providing the same to the transporter

Dispatching the goods with E way bill

We will take each step one by one

Registration:

This is a one time process wherein each dealer /transporter registered under GST if he wishes to carry/deliver goods has to get himself/herself/itself registered with E-Way bill portal at E-Way Bill Portal .The process of registration is given under.

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Generating the E-Way bill:

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Providing the E-Way bill and Dispatching the goods: Since the E-Way bill is generated online and in almost all cases the transporter can update the vehicle details the bill is generally available with the transporter already.Only thing required is that the E-way bill be present in the system before the goods are moved

Extending Validity of E-Way Bill: The validity of the E-Way bill can be extended.The provision has been provided to the taxpayer to extend the validity of E-way bill, if he / she is not able to reach the destination before the expiry of the validity of e-way bill. The user can extend the e-way Bill few hours before or few hours after the existing validity time of EWB. The few hours available for extending is defined in the web-site. The present transporter of the e-way bill can only extend the validity.

Distance linked validity of E-way bill:Validity of the e-way bill depends upon the distance the goods have to be transported. In case of regular vehicle or transportation modes, for every 100 KMs or part of its movement, one day validity has been provided. And in case of Over Dimensional Cargo vehicles, for every 20 KMs or part of its movement, one day validity is provided. And this validity expires on the midnight of last day.

We have tried to provide a brief process of Registration of user,Generation of E-Way bill and related details in the E-Way Bill Process.We will cover more sections in later posts to come.

 

 

 

GST

Finalising accounts in GST Era -II

We had already discussed the modalities of finalisation of accounts in pre-GST period from 01/04/2017 to 30/06/2017 .Now since the remaining part of the Financial Year 2017-18 will deal with the remaining 9 months hence now we will discuss the details for that period.

a)Opening Balances: Since we had already prepared the balance sheet as on 30/06/2017 hence we will already be having the closing balances as on 30/06/2017 which will be the opening balance as on 01/07/2017

b)ITC as on 30/06/2017 will have to be maintained separately as it can only be claimed if the stock has been sold within 6 months ie upto 31/12/2017 .Any stock if remaining the relevant ITC will have to be reversed which will be termed as

Reversal of Unsold Stock pertaining to PRE GST era on which ITC has been claimed as per GST Trans 1

c)Reversal of ITC arising on account of purchases wherein the payment is still outstanding as on 31/03/2018:

Sec.16 of CGST Act (for a detailed analysis please refer to our post Unpaid Amount ITC

requires that any outstanding amount on account of purchases older than 6 months if remains to be paid then the relevant ITC will have to be reversed.

d)Reverse Charge:

Reverse charge was in vogue from 01/07/2017 to 15/10/2017 hence a detailed summary of expenditure incurred during this period on which no GST has been paid (Meaning if the bill issuer of service has not paid GST) in those cases for the aforesaid period GST liability was that of service receiver hence in all those cases if any liability exists then it has to be paid along with interest.

e)Stock: The beauty of GST is that if everything is in ideal condition then stock will be automatically accounted for.But as we know that GST is not fully implemented as of now hence the department has no perfect details of stock.But in the coming times the details will be definitely matched hence one should be very cautious in maintaining stock.To maintain stock the modus operandi should be as follows:

f)The purchases made should be vouched from purchase bills as well as from party statements

g)The inward stock as ascertained above should be adjusted for all credit notes issued as in GST returns the details of all credit notes issued will be automatically accounted for

h)The outward stock shall be ascertained from sales bill as crossed also from the party statements

i)The outward stock as ascertained above shall be adjusted for all the debit notes issued as in GST returns the debit notes shall be automatic accounted for .

Any wastage should also be accounted for.

One will ask that all these adjustments were also in pre GST era then why so emphasis now.

True it is that these adjustments were in vogue in Pre GST era but then the department had no such readymade information at its disposal so the variance in stock went unnoticed .Now in GST era all the variance will be tracked by the system itself if not now then in coming years.Remember any case can be reopened within 4 years in normal scenario in GST

j)All the additions to assets used in business it should be decided whether one wants to claim depreciation or if wants to claim ITC then the same will be claimed in 60 instalments.This should be declared in the purchase returns in GST

k)All the services which have been availed in the course of business ITC on them should have been availed.

l)Any entries that are generally accounted for at the end of year in PRE GST era will now have to taken care as they arise.This type of transactions covers Incentives,Scheme Discount or any type of incentive given or received during course of business based upon quantum of turnover.

m)any advance paid should be separately checked as initially there was also liability to pay GST on all advance payments received.

n)Even if anything remains on account of ITC then the same can be corrected by filing the annual return under GST by filing GSTR 9 the due date being 31st December for Financial year 2017-18.

The crux is that now one will have to calculate profit and loss and trading account on an ongoing basis.Generally big corporate houses or to some extent the companies run by professionals still do these things but medium businesses and small ones do not do this on an ongoing basis rather they prepare the final accounts once in a year. These will have to adapt new practice or else they will be in a big trouble.

 

 

 

 

Income Tax

E-Verification under Income tax

E-verification is the process which confirms that the taxpayer has ob its own filed the return and further that he/she/it is fully aware of the facts disclosed in the return unless the return is filed by a TRP it is the assessee’s responsibility of the consequences of filing of return.This is similar to the fact that unless any document is signed by the declarant it has no evidentiary value.E-Verification also is the proof that the department has accepted the return for processing subject to any discrepancy noticed afterwards which may treat the return as defective.For defective return please refer to our earlier post on the subject.

Now Income tax has following methods of validation of returns:

  1. DSC ie Digital Signature Certificate: In this method nothing else is required after filing of return as the return itself is digitally verified.
  2. Aadhaar Verification: In this method as soon as the return is filed an OTP is sent to the registered mobile no of the assessee which has to be entered into the portal .As soon as the OTP is entered the return is validated.The time limit for expiry of OTP is 10m minutes after which fresh OTP has to be generated.So for the assessee who need to get the return verified by Aadhaar should get their valid mobile numbers in their AAdhaar. For linking the mobile no with AAdhaar see our relevant post.
  3. Demat Account verification:This is a lesser known and used form of verification as not every assessee might be having demat account.But if you have one you can everify your return by providing the demat account number wherein an OTP is sent  to the registered mobile no. which when entered into the portal the return is verified
  4. Bank Account verification:In this form of verification you can everify your return by providing the bank account number registered under your name wherein an OTP is sent  to the registered mobile no. which when entered into the portal the return is verified

In all the cases of everification the most important thing is that you must have a valid mobile no which should be linked to the device used for verification(Aadhaar, Demat account,Bank Account)

Why is E-Verification Important: The process of filing of return is incomplete without everification since any declaration filed or document submitted is incomplete unless signed by the declarant/filer.Now since the return is filed online hence it is important that an express consent is obtained from the declarant’s/filer’s end is obtained that the return has been filed and originated from it’s end .E-verification does the same.Moreover it is in the taxpayer’s interest that he/she/it must have knowledge that the return has been filed when and by whom(in those cases when the return is being filed by his tax consultant) so it is in their interest also.

Consequenses of Non-Everification:

Unless the return is everified the return will not be deemed to have been filed and after the expiry of 120 days which is generally the time period allowed ,the return will be deemed invalid and will be removed from the portal and hence will attract all consequences of non filing

Income Tax

Notices under Income tax

Any person may receive a notice that has originated from Income tax department.In this post we will discuss various notices under Income tax act and how to deal with them.

There can be following notices under Income tax act

Demand /Investigation Related/Defective return

Section under which the notice is issued Purpose When Issued
143(1) Summary Assessment This is an assessment based upon the return submitted .Basically this is only an intimation that your return has been processed
142(1),143(2) Notice for Regular Assessment and Initiation of Proceedings respectively. Department selects cases for detailed investigation based upon various criteria .This is called Scrutiny assessment in general parlance
147,148 Notice for assessing the Income which has escaped assessment In certain cases some income is left to be assessed either due to not being reported by the assessee or due to any other reason .This is called escaped from assessment.
131 Basically this is for third party verification During the course of assessment of an assessee there are instances when any transaction is found recorded that has its origin in third party hence to verify that transaction that third party is called for
245 Demand Adjustment Issued for old outstanding demand to be adjusted against any refund
144 Best Judgement Assessment Basically this is a letter of intent issued by the Assessing officer when the Assessee is not co-operating wherein the Notice says that the department now intends to assess the income on the basis of records available with it.This is called Ex-parte assessment in general parlance
200A Intimation of Demand/Refund in case of TDS This intimation is issued after processing of TDS returns
206CB Intimation of Demand/Refund in case of TCS This intimation is issued after processing of TCS returns
139(9) Intimation of Defective Return When there is any defect noticed after filing of return by any assessee the this intimation is issued and the assessee is given time to rectify the defect

Recourse on receipt of notice given above:

Generally the notices are classifiable under two catagories one is for an assessment to be made and another is post facto assessment.

Pre assessment cases:

  1. One should consider the notice in totality 
  2. The reason given for the notice is generally given in the notice itself except when an intended notice of assessment is there in which case also details are provided by the department if asked
  3. After the receipt of notice one should prepare the true affairs of its accounts, income declared etc and file the same with the department along with proper supporting backed by documents such as bank statements, confirmations ,sale and purchase details etc.
  4. Although in all cases of assessments the department sends a detailed questionaire which contains all details required by the department hence once should prepare the documents based upon it.
  5. It is advisable in cases of assessment to consult an expert as many legal issues are to be considered though an assesse can always present its case on its own
  6. In cases of investigation/third party confirmation the reply should be filed with complete details within due time with acknowledgement obtained.
  7. In cases of sec 147/148(Income escaping assessment) if the return has been filed earlier and the assessee feels that the income declared was correct then a statement of such intent should be filed.However if no return is filed then it should be now filed and copy of such return filed should be given with reply.
  8. In cases of sec 144 generally the notice contains a detailed computation which the Assessing officer calculates and intends to impose a tax .In this case the reply should strongly oppose the calculation and should contain your own computation backed with own Income .
  9. Cases of demand adjustment generally arises due to the tax paid by the assessee but not updated in portal.In these cases the proof of tax paid should be provided with the reply.

  Post Facto Assessment cases:

  1.  The notice generally contains the details which should be checked for the reason of demand
  2. if it is found that the demand is correct it should be paid and the reply filed with proof of deposit.Any delay in paying the demand attract interest from the date of demand due which is generally after 30 days of order by which the demand is created.
  3. If it is found that the demand is wrong as per assessee then proper reason should be filed with the department with an acknowledgment of the reply filed.
  4. In cases of defective return the defects should be removed by filing the revised return and filing a reply to the notice online

Penalty/Prosecution Notices

This aspect will be covered in a separate post

Income Tax

Defective Return under Income tax act

Defective return under Income tax act is covered under sec 139(9) which says that

If there is any discrepancy/proof not provided in reference to the income filed and contextual taxes credit claimed or if in those cases where books are said to be maintained but the details are not filled then the return shall be deemed as defective.

From last year this DEFECTIVE RETURN has attained significance as lots of returns have been considered defective on these accounts.Actually it so happened that before this time the department utility was not having inbuilt checks due to which many discrepancies went noticed which now are not ignored.

What happens when there is a defective return?

As soon as the defects are noticed the department sends a notice online/offline to the assessee and provides a reasonable time(generally 15 days) to rectify the defect.

How to remove the defects?

Now a days the notice contains a sheet with defect and their impact .It is only required by the assessee generally to accept of decline the adjustment advised .If the assessee agrees or disagrees then in both cases the response sheet is to be submitted which thereby results into removal of defect.

What happens if the defect is not rectified?

If the defect is not rectified within the given time the assessing officer shall treat the return as invalid return and then it shall be deemed that the return was never been filed Hence all consequences of non filing of return will be attracted

are you facing any such case? Feel free to write us about your problem we will assist you

mail us at info@a2zefilingsolutions.com

Income Tax

Revised Return under Income tax act

Revised return under Income tax act 1961 is covered under sec 139(5) of act .Whenever any assessee discovers any omission/discrepancy/inadvertent error after filing the return of Income he can at any time within one year from the end of assessment Year or before processing of return whichever is earlier  revise the same .Only condition was that the original return must have been filed within the due date or if it has been filed in response to a notice u/s 142(1)

The time of one year has been drastically reduced wef 2018-19 from one year to the end of assessment year but now a belated return can also be revised.

Now what is ommission/wrong statement as given above and other considerations while revising a return:

a) The ommission must be unintentional as if it is found that any shortfall was there in income reported earlier then it may tantamount to concealment of income

b)Any particulars that came to the knowledge after filing of income are a valid ground for revising income

c)If a return is revised consequence to a search , seizure or any other discovery by the department for eg if any income was not declared in original return but subsequently the same is found reported in 26AS and the assessee files a revised return then though the return is revised it will attract penalty

d)While filing a revised return income can increase or decrease as well

e)Any particular can be revised since there is no cap on any specific detail.

f)If income is increased then interest under sec 234B and 234C will be leviable however in case of decrease in income refund may happen as well as interest will be receivable

Summary

Revision Possible only uptill the end of Assessment Year or processing of return whichever is earlier

Only Unintentional ommissions /wrong statement can be revised other will attract penalty

Income can be increased or decreased in a revised return

Any particular can be revised

Any return revised on account of the discovery of short income will attract penalty

If income is increased interest is leviable on the increased amount.The same applies to decrease as well

Documents required for Revising Income tax return:

a)Acknowledgement of original return

b)A statement of computation of income having comparison of both income

Income Tax

Filing of Income tax return (Late Filing)

There is a last date for filing your Income tax return for each type of assessee. The dates are as follows for A.Y. 2018-19

Salary 31st July

Other assessee 30th September

Now what happens if you are unable to file the return by this date.well two types of consequences are there.

Filing beyond due date: Uptill A Y 2017-18 you would have the time till the end of Assessment Year to file the return without penalty and uptill the end of next A Y to file the return with Rs 5000.00 as penalty however if you failed to file the return uptill the end of next assessment year then you become a non filer and then the return can only be filed in response to a notice

However from this year there is a sea change in filing default

Filed after due date

Impact of Non Compliance

Return is filed on or before 31st December of Assessment Year but after due date and total Income exceeds Rs. 5 Lakh

 

5000
Return is filed on or before 31st December of Assessment Year but after due date and total Income do not  exceeds Rs. 5 Lakh

 

1000
In any other case 10000
   

Effectively it means that now you cannot file the return after the end of current assessment year .

Another change is for filing the revised return which as per old norms was any assessee if discovers any error can file the revised return within one year from the date of filing of original return or processing of return whichever is earlier.Now from this year a revised return can be filed upto the end of relevant assessment Year and no further.

So essentially from this year

File your return within time

If you discover any mistake revise it within the Assessment Year itself

For filing the returns and precautions to take read our earlier posts

 

 

Income Tax

Allowances , Deductions and Perquisites

For the Financial year 2017-18 , this post shall highlight on the Allowances,Deductions  and Perquisites .We have already gone through the details required for filing Income tax return for salaried persons .For your reference you can visit to the posts from the related post section.For filing the salary return other than the Salary Details from the employer following details are also required to be filed

Allowances Exempt and taxable

Perquisites

Facilities in the nature of Perks and their valuation

Any amount received in the nature of salary

Retirement related amount and the deductions if any

Any arrears received and the taxable part if any

Now each of the 6 amounts mentioned requires a detailed understanding .In this post we will try to explain each and every part separately though they are required to be filed in a single form

Allowances :

These are amounts that are exempt to a certain extent as provided under sec 10 of Income tax act which are paid by the employer as a part of salary.Some of them are exempt in full and some are deductible from salary since they are provided by the employer on reimbursable basis.One should keep in mind that from this year all reimbursable amount or the tax exempt allowance can be verified so any receipts, proof ,bills etc that you submit to your employer should have credible supporting as they will be cross verified.Below is given a detailed table containing the allowances, extent of exemption and any other related conditions if any.

Additions to Salary:

There are amounts which are taxable under the head of salary with certain reliefs Examples are  Arrear salary, Salary received by foreign delegates while working in India,Compensation received by widow etc.These have certain threshold of exempt amount .Given under are the details of all such amount that a person may receive under the head salary

Perquisites:

There are certain facilities which are provided by an employer to an employee which if not so provided would have been met with by the employee from his/her own resources.Examples are Car,Furnished accomodation, Servant etc.In these cases Income tax provide that a fair amount of valuation be added to the salary of employee.Hence tax liability gets enhanced by this value .Given under are the details of these possible facilities

Last but not least remains are the deductions under chapter VI which are allowed for the investment made under various instruments .The total of these investments is deductible from the taxable income subject to various deductions and caveats which are given hereunder:

Deductions allowed under Sec 80C,80CCC,80CCD

Other Deductions

We hope we have provided all the details required for an Individual to file the salary return .In case of any query mail us at info@a2zefilingservices.com or you an drop your query at our query link or at www.a2zefilingservices.com

 

 

Income Tax

Filing Income tax returns (Precautions)-Part IV

Income tax Return form 5 

This post is in continuation of our earlier post on precautions while filing ITR for Asst Year 2018-19 . Please refer to them if you wish to read them for filing Income tax Forms ITR 1 ,ITR2, or ITR 3

Post Link
Filing Income Tax Returns (Precautions) -I  Filing Income Tax Returns (Precautions) -I
Filing Income tax returns (Precautions)- Part II Filing Income tax returns (Precautions)- Part II
 Filing Income tax returns (Precautions)- Part III  Filing Income tax returns (Precautions)-Part III

ITR 1 ,ITR 2 and ITR 3 and ITR 4 have already been explained in our earlier posts referred to above.In this post  we will take from ITR5  

For a ready reference ITR 5 is reproduced below

ITR 5 is applicable to following Assessee’s

Firm, LLP, AOP, BOI, artificial juridical person referred to in section 2(31)(vii), cooperative society and local authority but it cannot be filed by person who is required to file the return of income under section 139(4A) or 139(4B) or 139(4C) or 139(4D) or 139(4E) or 139(4F) (i.e., trusts, political parties, institutions, colleges, investment fund etc.).

A brief explantory guide is also given hereunder

 

How to get the maximum from this guide:

Please check which heads are applicable

Also note that following assessee can not file ITR 5

i)A person who is required to file the return of income under section 139(4A) or 139(4B) or 139(4C) or 139(4D) or 139(4E) or 139(4F)

ii)A person not being an individual or a Hindu undivided family or a company

It’s important that you get your Balance Sheet and Other schedules ready before filling the return

Keep the details of deductions under chapter VI proofs handy.

The guide presented here is freely downloadable .Do whatever you wish to do with this but please note that with the advent of technology everything has changed.Gone are the days when one earns income and forget to declare in the return either intentionally or unintentionally and the income was seldom discovered by the department.

Now it happens that the department gets information from almost all over the world and to add to it the data mining softwares are analysing the information and also applying all permutations and combinations so be aware and follow the guidelines given in the guide above and sleep a peaceful night and contribute in our nation’s progress.

In next post we will take remaining returns except ITR 6 which requires a separate post so happy reading