Income Tax

ITR return Filing 

Income Tax Return (ITR) is a form which a person is supposed to submit to the Income Tax Department of India. It contains information about the person’s income and the taxes to be paid on it during the year. Information filed in ITR should pertain to a particular financial year, i.e. starting on 1st April and ending on 31st March of the next year. Income can be of various forms such as :Income from salary, Profits and gains from business and profession, Income from house property, Income from capital gains, Income from other sources such as dividend, interest on deposits, royalty income, winning on lottery, etc.The Income Tax Department has prescribed 7 types of ITR forms - ITR-1, ITR-2, ITR-3, ITR-4, ITR-5, ITR-6, ITR-7 and applicability of the form will depend on the nature and amount of income and the type of taxpayer.

  TDS Return and TCS Return

Tax Deducted at Source or TDS is a type of advance tax which is deducted from the earnings of an individual or an organization before the money is actually credited into that entity’s account, according to the Indian Taxation Code. The government is able to generate revenues by implementing the provisions of TDS on the earnings of individuals as well as businesses. Rules and regulations regarding TDS are controlled and governed under the Income Tax Act, 1961 by the Central Board of Direct Taxes (CBDT).As the name suggests, “Tax Deducted at Source” implies that the payee or the employer deducts the tax before making a payment to the receiver. Tax Deducted at Source is applicable on income earned regularly and also on the income earned occasionally or irregularly. Thus, TDS is applicable on various incomes, including, but not limited to Salary, Commission, Rent, Professional Fees and Interest.

  PF registration

Employees Provident Fund is a scheme for the Indian Employees that is controlled by the Provident Funds and Miscellaneous Provisions Act,1952. The Employee Provident Fund is regulated under the umbrella of Employees Provident Fund Organization popularly known as EPFO. All establishments that have employed 20 or more than 20 employees can apply for PF registration in India. In some cases subject to the circumstances and the exemption establishments employing less than 20 are still eligible for PF registration. The Employee gets an amount that includes the self and employer’s contribution with interest on retirement or resignation.

  PF return

Provident fund return must be filed by all entities having PF registration every month. PF return is due on the 25th of each month. Further, a final PF return is due on the 25th of April for the year ended on 31st March.

  FORM 16 Issuance

Form 16/ 16A is the certificate of deduction of tax at source and issued on deduction of tax by the employer on behalf of the employees. These certificates provide details of TDS / TCS for various transactions between deductor and deductee. It is mandatory to issue these certificates to Tax Payers.

  ESI registration

ESI registration is mandatory once a company or any other entity employs 10 or more low-earning employees. According to the Act, any employee earning less than Rs. 15,000 per month needs to contribute 1.75% of his/her pay towards the ESI, while 4.75% will be contributed towards his/her ESI by the company. The ESI scheme provides tremendous benefits to the employees and has a large network of dispensaries, and hospitals throughout the country for facilitating fast and efficient medical care.

  Income tax Notice compliance

A) Intimation under Section 143(1)when the return is processed by the department then the intimation under sec. 143(1) is issued by CPC reflecting any of the three situations:If there is more tax liability to be paid, need to be paid within 30 days of receiving the demand.If any additional refund is determined.If the return filed matches with the assessment of AO and no action is required. Income is computed by the AO after making the following adjustments to the total income –Any arithmetical error.An incorrect claim.Dis-allowance of incorrectly loss or expenses.Any income not included.No intimation under this sub section shall be sent after the expiry of one year from the end of the financial year in which the return made.

B) Notice under Section 139(9)– Defective Return –Return can be considered as defective by the Assessing officer. The defect can be are as follows: –Wrong ITR filed.Missing Information.Incomplete Return.If the AO consider the return as defective return, then he will intimate the same and gave the opportunity to rectify the defect within 15 days from the date of such intimation.If the defect is not rectified within the given period, then the return will be considered as invalid return and it will be deemed that no return has been filed.

C) Notice under Section 142(1) – Inquiry before assessment –A notice under this section can be issued under these situations: –If the return has filed, but the Assessing officer requires additional information and documents for the purpose of making an assessment.If the return has not filed, but the Assessing officer wants the return to be filed.The basic purpose is to ask the details of the assessee before making the assessment. It is served to ask for the documents and details from the assessee and to take that case under assessment.AO may or may not start the assessment after compliance with this notice, depends upon the documents served by the assessee. If the AO is satisfied with the documents or return, he may not start the assessment process.To comply with this notice is mandatory even if the assessee thinks that the accounts or the documents required are irrelevant.

D) Notice under Section 143(2) – Scrutiny Notice –If the Assessing Officer is not satisfied with the produced documents or with the responses of the assessee against income tax notice u/s 142(1) then you will get the Notice u/s 143(2) which means that your return has been selected for the detailed scrutiny by AO. AO may ask the assessee to either attend his office himself or produce the relevant supporting, and evidences in support of his claim.

E) Notice under Section 148 – Income escaping assessment –If the AO has reason to believe that the assessee has not disclosed the income correctly or have paid the lower taxes or have not filed the return then in all cases it is termed as Income escaping assessment. Under these situations, AO assess or reassess the Income, as the case may be.To initiate the proceedings u/s 147, AO should serve a notice u/s 148.

F) Notice under Section 156 – Notice of Demand –Where any tax, interest, penalty, fine or any other sum is payable in respect of any order passed, then the AO serve the notice u/s 156 to the assesse specifying the sum so payable.Assessee can deposit the amount payable within 30 days from the date of Income tax notice.There is no time limit to serve this notice.

G) Notice under Section 245 – Set off Refunds against tax remaining payable –Notice u/s 245 is issued when the tax refund for an AY is adjusted against the tax demand dur from the assessee. There is no time limit to serve this notice.