V.K. SINHA & Associates

V.K. SINHA & Associates VARUN KUMAR & ASSOCIATES
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Just 4 Days Left....Avoid Last minutes rush and file your income tax returns for Assessment Years 2016-17 and 2017-18 we...
27/03/2018

Just 4 Days Left....

Avoid Last minutes rush and file your income tax returns for Assessment Years 2016-17 and 2017-18 well before 31st March 2018.

As It can not be filed after 31st of march 2018

16/03/2018

Income Tax department attaches benami properties worth Rs 39 billion

Show cause notices for provisional attachment of benami properties were issued in over 1,500 cases

Income tax department has provisionally attached benami properties of over Rs 39 billion in more than 1,200 cases, the Finance Ministry informed the Rajya Sabha today.

In a written reply, Minister of State for Finance Shiv Pratap Shukla also said the tax department has identified more than 1,600 benami transactions till end-February."Show cause notices for provisional attachment of benami properties were issued in over 1,500 cases and provisional attachment has been made in over 1,200 cases.

The value of properties under attachment is over Rs 39 billion," he said.In another reply, Shukla said till date, in three phases of 'operation clean money', the income tax department has identified around 22.69 lakh persons whose tax profile was found to be inconsistent with the case deposits made by them during the demonetisation period

"Total case to the tune of Rs 5.27 lakh crore has been found to be deposited in bank accounts in case of these 22.69 lakh taxpayers during demonetisation period," Shukla said.However, the unaccounted income in such transactions, if any, can be quantified only after completion of the verification/assessment process.

The Business Standard, New Delhi, 14th March 2018

16/03/2018

LS passes Finance Bill 2018; unlisted stocks to get indexation benefits

Finance Bill passed by Lok Sabha without debate; relief for start-ups, PPF holders

The Lok Sabha on Wednesday passed the Finance Bill 2018, allowing the benefit of inflation adjustments to stocks that were unlisted till January 31 while levying long-term capital gains (LTCG) tax.The move might provide tax benefits to shareholders of the National Stock Exchange (NSE), others who have invested in employee stock ownership plans (ESOPs), and in certain merger and acquisition cases.

The Bill retained the LTCG tax without removing the securities transaction tax (STT) and the indexation benefits provided to all shares.The amendments to the Bill also provided relief to start-ups and immunity to the holders of public provident funds (PPF) from any attachment of their funds by authorities.For the first time in years, the Bill was passed without any debate in the Lok Sabha and drew flak from the Opposition. Since it is a Money Bill, the Rajya Sabha’s approval is not required. The entire exercise, including the President’s assent, has to be completed by the end of this month so that the Budget provisions come into effect from April 1.

The Bill, tabled by Finance Minister Arun Jaitley in February, proposed to levy the LTCG tax at the rate of 10 per cent on listed securities for capital gains exceeding ~100,000. Indexation benefits are also not provided to these, but the proposal grandfathered all gains up to January 31.The amendments have provided indexation benefits to stocks that were unlisted as on January 31 but will be listed when sold from April 1 onwards.

08/03/2018

Fooling the IT returns system by using all zeros as Aadhaar number

Central Board of Direct Taxes had issued a circular, making it mandatory to provide Aadhaar or the enrolment number with IT returns for everyone

Even as the government is in overdrive to get people to link their Aadhaar number with the income tax (I-T) department while filing returns, some of those without the unique identification number have managed to find a loophole in the system.They say they have been able to file tax returns by putting in all 0s or 1s instead of the 12-digit Aadhaar.

The drive to link Aadhaar with I-T returns started in July last year. Central Board of Direct Taxes had issued a circular, making it mandatory to provide Aadhaar or the enrolment number with IT returns for everyone who was eligible for the unique identification number. The same condition applied for those applying for the permanent account number, too.

However, many still do not have an Aadhaar card and are holding out till the Supreme Court provides its judgement on the constitutionality of Aadhaar, in an ongoing case. Some of these people discovered they could just key in 0s or 1s and the tax returns were filed successfully.

"I don't have an Aadhaar number and I was unable to file returns because of that but then I discovered that keying in 1s works as well," said Shirsendu Karmakar, an engineer in Darjeeling who filed his return in September last year through the ClearTax platform.

Karmakar added that it was after he tweeted publicly that he couldn't file his returns that representatives from ClearTax called to tell him about this workaround. "I didn't know it was possible and I am glad I was able to file without Aadhaar. I am waiting for the SC decision before applying for one, as I really don't want to get it if it's not really necessary," he said.

Karmakar is not the only one to have filed tax returns this way. Business Standard reviewed the returns of two other people who managed to file their taxes by putting in all 0s in the Aadhaar field on the I-T department's website"It works sometimes; at others, it does not. I got lucky and was able to do it by putting all 0s and checking the 'link Aadhaar later' box when prompted to link," said a professor at one of the national science universities, on condition of anonymity. He filed his return as recently as this Sunday.

Another person from Mumbai, who identifies himself as an activist, was able to file his return the same way in August last year. "I don't have an Aadhaar and I don't want to apply for it. Aadhaar is not required to pay taxes but is only required for the paperwork, which has nothing to do with the Consolidated Fund of India.

So, it's unconstitutional," he said. "I'd prefer to keep my data to myself -- the government is using Aadhaar for surveillance over people, by tracking their monetary activities and using the data to target individuals' right to privacy."Even as some people have decided to not link their Aadhaar just yet, the fact is March 31 is the final deadline to link it with services such as mobile phones and gas connections.

The SC judgement on the case is yet to arrive but people have strong arguments aagainst linking Aadhaar to their tax returns. Arguing from the petitioners' side on Wednesday, lawyer Arvind Datar stated claims of Aadhaar being foolproof do not hold and raised this very issue -- of people being able to file returns by putting in 0s instead of Aadhaar numbers.

Officials

Unique Identification Authority of India, which operates the Aadhaar project, declined to comment. An official from the Authority, however, said UIDAI had nothing to do with loopholes in I-T department systems.Another I-T official refused to be named but said the department had issued a waiver notification for those who were not eligible for an Aadhaar number. Even so, there is no clarity on how this loophole could be working for those eligible and having a number."We have put strong systems in place and the exemption was only supposed to be for those who don't have to legally get an Aadhaar number. But, if it's happening for other people, too, there is a problem that we will need to look into," the official said.

The Business Standard, New Delhi, 08th March 2018

06/03/2018

The Reserve Bank of India will inject Rs 1 lakh crore short term money into the banking system ahead of the financial year-end that normally sees cash crunch. The move is likely to keep short term rates under check benefiting borrowing companies.

“In order to address additional demand for liquidity and with a view to provide flexibility to the banking system in its liquidity management towards March-end, it is prepared to inject adequate additional liquidity….,” RBI said in a release. The central bank will use a combination of appropriate instruments for such fund infusion, while continuing with its normal liquidity adjustment facility (LAF) operations.

Beginning Tuesday RBI will conduct four variable repo operations of Rs 25,000 crore each. After reviewing the current and evolving liquidity conditions in the banking system it has been decided to conduct additional variable rate repo operations for longer tenors to provide additional liquidity support to the banks during March 2018, RBI said. This should bring short term rates including Treasury bills, call money.

"The proposed injection of additional liquidity aggregating to Rs 1 lakh crore by the RBI using longer term Repo that extends beyond March 31, 2018 should help cap the short-term rates,” rating company ICRA said. Also, it aids in lowering the rate volatilities for the rest of the month, it said.

06/03/2018

I-T Dept probes Rs 10-bn tax refund fraud by govt and PSU employees

I-T wing identifies over 18,000 revised returns, claiming false refunds in Mumbai, Bengaluru

With less than a month left for revising income-tax (I-T) returns for 2016-17, the I-T department has unearthed a giant fraud in multiple cities, where government employees allegedly claimed huge tax refunds forging documents, inflating expenses and not revealing complete information

In Mumbai alone, around 17,000 revised returns have been filed claiming refunds. Similarly, in Bengaluru, the I-T department has found over 1,000 returns filed with inflated claims on account of payments towards home loans.Since the I-T department is still investigating the matter, the loss to the department could not be ascertained, but it could go up to over Rs 10 billion, sources said.

They added most of these refunds were being claimed by employees working for the government or in public sector undertakings (PSUs).“These assessees’ original returns were already processed by the centralised processing centre of the I-T department. But they filed revised returns, claiming refunds with supporting documents,” said an I-T official.

A red flag was raised when the tax department noticed a pattern over three years. “The rate of revised tax returns filing has seen a significant rise in the last three years. We have identified these assessees from our data mining system. We were able to find how people claimed refunds by furnishing forged documents,” said a senior I-T official privy to the development.

“Assessees can file revised or deferred returns for the previous two financial years. For instance, a taxpayer can revise returns for 2015-16 and 2016-17 till March 31, 2018,” explained a tax assessment officer.Explaining the modus operandi, an I-T official said some of these assessees showed no income in their original tax returns under the head ‘income from house property’, but claimed losses in revised returns.

Under Section 24 of the I-T Act, home loan interest is allowed as a deduction.In the absence of income from house property, it becomes a loss from house property, leading to a refund. I-T officers claim the tax evasion takes place by inflating expenses, not revealing complete information and forging documents.

Since most of these revised returns were being filed by government and PSU employees, the tax department had shared the information with the Central Bureau of Investigation to examine whether the people under scrutiny had unaccounted wealth and also to probe potential connivance of some of the tax sleuths and chartered accountants.

Tax officials said that in case of revised returns, the system automatically generates a message that draws the attention of the person processing the refunds and also assessing officers who approve the refunds. The I-T department had till February 10 issued refunds to the tune of Rs 1.42 trillion. Over 41.9 million I-T returns were processed and refunds were issued to 16.2 million taxpayers till February 10.

Typically, the I-T department gives priority to small taxpayers who claim refunds below Rs 50,000. Official data suggest of all the refunds issued so far in this fiscal year, 90 per cent were to small taxpayers and the salaried class.

05/03/2018

RBI gets tough on MNC banks on priority sector lending

The RBI move, directed at foreign banks with over 20 branches will impact the likes of Standard Chartered, Citi and HSBC and will come into force from the next financial yearThe Reserve Bank of India (RBI) has further tightened the priority sector lending (PSL) norms for foreign banks by directing them to mandatorily create sub-targets so that they lend a portion of their loans to small and marginal farmers as well as micro enterprises from April.

The move, directed at foreign banks with over 20 branches will impact the likes of Standard Chartered, Citi and HSBC, which much higher branch presence, and will come into force from the next financial year.

The PSL norms mandate foreign banks to eventually lend 40% of their total loan book to the priority sector, such as agriculture, rural infra, and medium, small and micro enterprises (MSMEs) among others from April 2020.In a notification over the weekend, RBI has said a sub-target of 8% of net bank credit, or credit equivalent amount of off-balance sheet exposure, whichever is higher, “shall become applicable for foreign banks with 20 branches and above, for lending to MSMEs from FY19.”

Another sub-target of 7.50%, using the same criterion, will be applicable to these banks from FY19 for lending to micro enterprises. But in a partial relief, the apex bank removed the prior condition that only loans of up to Rs5 crore and Rs10 crore given to MSMEs would be PSL-compliant.The notification further said “all bank loans to MSMEs will now qualify under PSL without any credit cap.” According to RBI priority sector include medium enterprises, social infrastructure and renewable energy, apart from agriculture and other existing categories.

It can be noted that PSL has been a bone of contention for foreign banks all these while, and the latest move will only further anger them as not meeting the new targets will further prevent them from expanding their branches.Foreign banks have been citing their lack of knowledge of the rural markets to lend all these years, while RBI has been linking rural expansion as a pre-condition for more urban presence. And to meet their PSL targets, they often buy loans from microfinance and other non banking financial institutions (NBFCs).

However, it can be noted that most large MNC banks have been winding down their brand presence in the country and have been focusing more on branchless banking. According to a November 2017 report by the RBI, foreign banks are slowly reducing their presence in the country. The number of MNC bank branches came down from 317 in FY16 to 286 in FY17.-

The Mint , New Delhi, 05th March 2018

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