CBDT: New Income Tax Policy changes under new 26AS For More Transparency and Compliance
www.carajput.com; CBDT New Income Tax Policy
- Income Tax New declarations needed in the latest ITR forms 1to7 are as follows: Ownership of the house: Individual taxpayers who are joint owners of the house can not file ITR 1 or ITR4.
- If having the Passport: Than the Passport number must be recorded if it is owned by the taxpayer. It is to be furnished both in ITR 1-Sahaj and ITR 4-Sugam. Hopefully, this will be made mandatory in other ITR forms as and when they are notified.
- In the case of Cash deposit: In the case of ITR 4-Sugam filings, it has been made mandatory to report the money deposited as cash on the bank account if the balance exceeds Rs 1 crore during the financial year.
- International travel: If you expended more than Rs 2 lakh traveling abroad during the FY, you need to report the exact cost expended.
- Energy consumption: If your energy costs were more than Rs 1 lakh in total throughout the year, you need to report the actual amount.
- Investment details: details of the investment eligible for deduction under Chapter VIA with details of the capital invested during the period from 1 April 2020 to 30 June 2020.
- For each assessment year, the last date for filing tax returns is July 31, but this year the ITR filing deadline has been expanded to November 30, 2020, due to the Covid-19 pandemic.
- Income tax deductions and exemptions that can be sought under the current tax law for FY 2020-21 (AY 2021-22): the withdrawal of an employee from the Employees’ Provident Fund (EPF) is not taxed after 5 years of sustained service.
- Withdrawal from the National Pension Scheme (NPS) at maturity or discontinuance, up to 40% of the money raised on such withdrawal remains tax-free for all. In the event of a partial withdrawal from the NPS, up to 25% of the contributions made by individuals will be tax-free. Business owners’ contribution to NPS up to 10% of their basic salary and allowances persist tax-free.
- Pursuant to Section 10(10D) of the Income Tax Act, the balance of the insurance and bonus paid on maturity or surrender of the life insurance scheme is tax-free. Revenue on maturity continues to be excluded under Section 10(10D) even under the current system. The maturity number, including the interest charged to Sukanya Samriddhi Yojana, does not incur any tax.
- Conveyance reimbursement given to cover the cost of transport incurred in the execution of the duties of the office and any compensation provided to the employee to cover the cost of traveling on tour or move (including relocation) is tax-free.
- Interest received from the post office savings account balance to 3.500 per individual per year will remain tax-free.
- Any scholarship given to cover the cost of education is excluded from tax under Section 10(16) of the Income Tax Act. Compensation earned from the employer up to 20 lakh after five years of continuous service. Leave the encashment earned at the time of resignation or retirement up to 3 lakh.
- Form 26AS will now be the full profile of the taxpayer w.e.f. 01.06.2020, CBDT empty Notification dated 28 May 2020 as amended Form 26AS in Sec 285BB w.e.f. 01.06.2020.
The main take-feature in amended Form 26AS is: With the launch of The Transparent Taxation: Honoring the Honest on August 13, 2020, Honorable PM Narender Modi announced a landmark shift in income tax management to put things easy, pain-free and transparent.
www.carajput.com; CBDT new Form 26AS
- New form 26AS will also provide details on “Specified financial transactions” that include transactions for the purchase/sale of goods, properties, services, works contracts, investments, expenditures, receipt or approval of any loan or deposit of the value that may be approved but not less than Rs 50,000. The FM also suggested steps to ensure full compatibility by extending the scope of monitoring and reporting on subsequent transactions in New Form 26AS:
- Schooling fee/donation payment over Rs . 1 lakh per year
- Power consumption Recharge of more than Rs 1 lakh per year
- Domestic Air Travel or Foreign Travel
- Payment over Rs 20,000 to Hotel
- Jewelry purchase, white goods, sculptures, marbles, etc. above Rs 1 lakh
- Financial assets/credits over Rs 50 lakh in the current account
- Deposits or credits over Rs 25 lakh in the non-current account
- Property tax payments above Rs 20,000 per annum
- life insurance Primum over Rs 50,000
- Health Premium Cover over Rs 20,000
- Data on income tax claim, refund, delayed hearings, and completed proceedings which may include assessment, reassessment pursuant to section 148,153A 153C, revision, the appeal will also be shared in this form 26AS. New form 26AS will also provide the “selected monetary Transactions” information which includes:
- Buy / sale of goods or real estate transactions, delivering of services
- Transactions under contractual works,
- Transactions made by way of an expenditure or expense.
- Receiving or approving any loan or deposit of the amount specified but not less than Rs 50,000.
- Demand & Refund under the income tax act
- Pending and completed proceedings which may include assessment, re-evaluation under section 148,153A 153C, revision, appeal
- In this form, 26AS will also be posted details about income tax demand, refund, pending proceedings, and completed proceedings which may include assessment, reassessment under section 148,153A 153C, revision, and appeal.
- Details on this Form 26AS at year-end will not be a one-time affair. This will be a live 26AS, as this will be updated regularly within 3 months from the end of the month that such information is gathered in.
- For that specific year, Form 26AS will now be a full taxpayer profile as opposed to the previous form 26AS, which only provided taxpayer information via TDS / TCS or self-assessment. This form will also have e-mail, mobile no, and Aadhar no. of the taxpayer.
- An enabling provision has also been notified authorizing the CBDT to authorize DG Systems or any other officer to upload information received from any other officer, the authority under any law, in this form. Thus any negative action initiated or found or order carried under any other legislation such as custom, GST, Benami Law, etc. as well as data on turnover, import, export, etc. will also be placed in this form 26AS so that not only the taxpayer involved but also all the tax authorities will understand and have access to the data.
- This 26AS form will provide information obtained from any other nation by Tax Deptt under the agreement/exchange of taxpayers due to income data outside India.
- The implication of this new form 26AS will be that financial institutions, financial institutions or any other authority or customer, buyer, etc. will now ask for form 26AS while performing thorough research of the person/corporation worried so as to ensure that there are no significant problems about such people/corporations. And
- It will now make it impossible for any taxpayer to keep secrets from any bank / financial institution/authority about any proceedings against any statute or tax demand, tax disputes, etc.
- The govt has also suggested deducting TDS / collecting TCS at higher rates for those who do not file returns on income tax (ITR). There is also a proposal for the obligatory filing of ITR by those who have their bank transactions above Rs. 30 lakh, all professionals, companies with revenue above Rs. 50 lakh, and rent payment above Rs. 40,000.
Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. carajput.com is committed to helping entrepreneurs and small business owners to start, manage and grow their business with peace of mind. Our goal is to support the entrepreneur on legal and regulatory requirements and to be a partner throughout the entire business life cycle, offering support to the company at every stage to ensure that it is compliant and consistently growing. Hope the information will assist you in your Professional endeavors. For query or help, contact: firstname.lastname@example.org or call at 09811322785/4 9555 5555 480)