Topic 4: Now File Tax Returns On Time Or Pay A Fee
From the next financial year, 2017-18, it will get tougher for tax payers to avoid filing returns. But at the same time, unnecessary queries in case of a tax notice& endless waiting in case of appeals may soon come to an end. The Union Budget 2017-18 has provisions that seek to promote compliance while making things easier for those who comply.
Fee For Delay In Filing Returns: Currently, if a tax payer does not file returns on time there is a penalty. The penalty is discretionary & payable post facto, that is, after you have filed returns. It is also levied only if it is proved that the taxpayer has intentionally not filed returns. So technically it is possible to delay filing returns till the end of the next financial year. This means for FY17, returns have to be filed by July 31, 2017. It can be delayed till March 31, 2018, if there is no tax payable (if you have only salary income and the entire tax is cut by way of tax deducted at source). It is only after March 31, 2018 that there are chances of penalty. But, now the penalty has been changed to a fee. The fee is Rs. 5000 if the return is filed even a day after July, 31 2018 up to December 31, 2018, for the assessment year 2018-19. From January 1, 2019 on-wards the fee increases to Rs. 10000. Since it is a fee, it has to be paid while filing tax returns along with any tax on the interest income, etc. If any.
Scope For Unnecessary Queries Reduced: The Budget has proposed a scheme for centralized issuance of notices for processing of information or documents and making available the outcome of the processing to the AO. This will ensure that in case a refund is selected for scrutiny, the AO will have to stick to the particular points of that case. If properly implemented and supervised, this will reduce the scope for unnecessary scrutiny & assessment.
Summary Assessment A Must: Currently, in case of claims for refund, the income tax department is supposed to do a summary assessment. But, often the department puts off the summary assessment till the last minute & instead issues a notice for scrutiny detailed assessment. But, now the Budget has proposed that summary assessment must be done irrespective of whether the claim is to be taken up for detailed scrutiny assessment or not. This would reduce the delay in case of refunds.
Speedier Resolution In Scrutiny Notices: Earlier, if you received a scrutiny notice, the time to complete the assessment was 21 months. This has been reduced to 18 months for the assessment year 2017-18. It has been further reduced to 12 months for AY18-19. This will ensure speedier resolution of scrutiny cases & speed up the resolution process.
Tax Only On Completion Of Redevelopment: Those who are looking to develop their land jointly or redevelop their existing house societies with builders now have clarity on tax treatment of the asset. The Budget has clarified that the tax will apply only when the completion certificate is received. Now, the owner has to pay tax only when the asset, that is the house, is in his hand.
Source: Business Standard
Fee For Delay In Filing Returns: Currently, if a tax payer does not file returns on time there is a penalty. The penalty is discretionary & payable post facto, that is, after you have filed returns. It is also levied only if it is proved that the taxpayer has intentionally not filed returns. So technically it is possible to delay filing returns till the end of the next financial year. This means for FY17, returns have to be filed by July 31, 2017. It can be delayed till March 31, 2018, if there is no tax payable (if you have only salary income and the entire tax is cut by way of tax deducted at source). It is only after March 31, 2018 that there are chances of penalty. But, now the penalty has been changed to a fee. The fee is Rs. 5000 if the return is filed even a day after July, 31 2018 up to December 31, 2018, for the assessment year 2018-19. From January 1, 2019 on-wards the fee increases to Rs. 10000. Since it is a fee, it has to be paid while filing tax returns along with any tax on the interest income, etc. If any.
Scope For Unnecessary Queries Reduced: The Budget has proposed a scheme for centralized issuance of notices for processing of information or documents and making available the outcome of the processing to the AO. This will ensure that in case a refund is selected for scrutiny, the AO will have to stick to the particular points of that case. If properly implemented and supervised, this will reduce the scope for unnecessary scrutiny & assessment.
Summary Assessment A Must: Currently, in case of claims for refund, the income tax department is supposed to do a summary assessment. But, often the department puts off the summary assessment till the last minute & instead issues a notice for scrutiny detailed assessment. But, now the Budget has proposed that summary assessment must be done irrespective of whether the claim is to be taken up for detailed scrutiny assessment or not. This would reduce the delay in case of refunds.
Speedier Resolution In Scrutiny Notices: Earlier, if you received a scrutiny notice, the time to complete the assessment was 21 months. This has been reduced to 18 months for the assessment year 2017-18. It has been further reduced to 12 months for AY18-19. This will ensure speedier resolution of scrutiny cases & speed up the resolution process.
Tax Only On Completion Of Redevelopment: Those who are looking to develop their land jointly or redevelop their existing house societies with builders now have clarity on tax treatment of the asset. The Budget has clarified that the tax will apply only when the completion certificate is received. Now, the owner has to pay tax only when the asset, that is the house, is in his hand.
Source: Business Standard