Income Tax E-filing 2.0 New Portal - A bunch of problems & few solutions.

The old will have to go and the new will come - this is the simplest theory. Also we always expect some upgraded version after the departure of old. The old Income Tax efiling portal was too good. But Income Tax Department totally disappointed us till now after launching new Efiling 2.0 website.

It's been about a week, still multiple problems arising in the portal. Some issues and observations are highlighted regarding new portal, such as:

• Email id should be Registered with Bank: The Email id entered as Primary email in the Income Tax efiling portal, should be registered with bank, Otherwise taxpayer can not prevalidate his Bank a/c, can not enable Bank EVC and doesn't get Income Tax Refund. Earlier, only mobile no. need to be registered with bank to prevalidate bank a/c in Income Tax efiling portal. Generally, bank registers only mobile no. to communicate with their customers. Most of the people doesn't register their email with bank a/c. Now taxpayers will have to go Bank for email id link when already most of the banks are not giving proper services since 1 year due to pandemic situation. The problem is worse at some merged banks, like PNB, Indian Bank etc. However, taxpayers may register email id with bank through official app or website of the banks, if they have debit card.
  
  
  
• Bank prevalidated but still it showing 'not prevalidated' in Online Return Form: Bank A/c prevalidated and EVC enabled in profile tab but still it showing 'not prevalidated' in Return forms. Probably, this happens due to ongoing technical problems in the portal.
  
  
  
  
• Much Slower than Previous Website: The people who already visited the new website will better understand that how slow the new website is! So, log in to the new portal when you have enough time and patience.
  
  
  
• DSC need to be Re-register: The Earlier Digital Signature (DSC) registration can not be migrated due to security and technical reasons. Taxpayers need to re-register DSCin new efiling portal.
• Mismatch in PAN and Profile data: Mismatch in PAN and Profile data is shown when Name, D.O.B. are same, but communication addresses are different.
• E proceedings tab not working: It shows 'Coming Soon'.
  
  
  
• Filed I.T. Returns can't be downloaded: Filed I.T. Return forms and Acknowledgements of previous years can not be downloaded.
• No option to file 15CA/15CB: Due to several technical issues in the new portal, CBDT notifies that taxpayers can submit the aforesaid Forms in manual format to the authorized dealers till June 30th, 2021.
• Old Grievances registered are not reflecting: This happens because all data are still not migrated from old webportal.
  
• Old Outstanding Demands are not reflecting: This happens because all data are still not migrated from old webportal.
• Unable to raise Refund reissue request: This happens because all data are still not migrated from old webportal.
• Can't contact with CPC or efiling Helpline: Email at 'orm@cpc.incometax.gov.in' with the description of your issue and your mobile number. They will callback you within 72 hours.

The new portal efiling 2.0 launched to provide more user friendly service, quick processing of ITRs, quick refund and seamless experience to the taxpayers. But unfortunately the portal launched as a half cooked food. Hope the technical problems in the portal will be solved soon.

TDS deducted? Be careful if you are filing Income Tax Return only with Form 26AS

Nowadays, some taxpayers does not wait for form 16 or form 16A certificates. Some of the taxpayer submits Income Tax Return with the details of form 26AS. But there is chance of mistakes in TDS entry if any taxpayer files ITR only with form 26AS and doesn't tally form 26AS details with form 16 or form 16A.

What is TDS ?

TDS or Tax Deducted at Source is income tax deducted from the money paid at the time of making specified payments such as salary, professional fees, commission, interest etc. As per this concept, a person (deductor) who is liable to make payment of specified nature to any other person (deductee) shall deduct the tax at source and remit the same into the account of the Central Government.

What is form 16, 16A, 16B, 16C and 26AS ?

Form 16:

Form 16 is Salary TDS certificate. If your Annual Income from Salary is more than basic exemption limit of Rs. 250,000, your employer deduct TDS on your salary and deposit it with the government. It must be issued by 15th June of the year for which it is being issued. For example, for FY 2020-21, the due date for issue of Form 16 shall be 15th June 2021. However, sometimes this due date extends.

Form 16A:

Form 16A is a TDS certificate on Income Other than Salary. Generally, form 16A shall be issued, when a bank deducts TDS on your interest income from Fixed Deposits, for TDS deducted on insurance commission, for TDS deducted on Professional or Technical services. It must be issued by 15th June of the year for which it is being issued. For example, for FY 2020-21, the due date for issue of Form 16 shall be 15th June 2021. However, sometimes this due date extends.

 

Form 16B:

TDS Certificate for Sale of Property.

 

Form  16C:

TDS Certificate for Rent of Property.

 

Form 26AS:

Form 26AS is a statement which includes :

• Information on Tax Deducted on your income by deductors
• Details of Tax Collected by collectors
• Advance Tax and Self Assessment Tax paid by the Taxpayers.
• Regular Assessment Tax deposited by the Taxpayers.
• Details of Refund received by taxpayer during the financial year.
• Details of High value Transactions in respect of Shares, Mutual fund etc.

 

Due date of TDS Return :

Generally employer / deductor files TDS return quarterly and each quarter has respective due dates. But the Due date of last quarter ( Jan- Mar ) is 31st May. For example, for FY 2020-21, the due date to file TDS return is 30th June, 2021. However sometime due date extends ( For example: In FY 2019-20, due date extended up to 31st July 2021, due to Covid situation).

What happen if anyone Claim or Show TDS in their Income Tax Return and file it before 30th June, 2021 ?

First of all, if a Taxpayer fills TDS details in ITR with TDS certificate (Form 16 / 16A / 16B / 16C) issued by Employer / Deductor, then it is ok.

But if a Taxpayer fills TDS details in ITR only with Form 26AS details before 30th June, then there is a chance of mistakes. If you check form 26AS in 'HTML view' then you can't find all details. But if you export form 26AS in PDF format, then you will get detailed statement. Generally, last quarter (Jan-Mar) of TDS amount details updates in form 26AS after 31st May. So if you file Income Tax Return only with the TDS details of form 26AS before 30th June, generally you can't find all TDS deduction amount details. Therefore, you can't able to show all TDS deduction details in ITR and can't get full or actual amount refund (if refund arises).

Income Tax Return (ITR) Forms FY 2020-21 / AY 2021-22

CBDT notifies all ITR forms 1 to 7 FY 2020-21 / AY 2021-22 in Pdf version. I.T. Return preparation software in MS Excel & Java version will be available soon. Option to opt for New tax Regime U/s 115BAC is inserted. Otherwise no significant changes have been made in ITR forms FY 2020-21.

 

Sec 115BAC inserted in all ITRs

Click here to read eGazette notification regarding ITR forms FY 2020-21 

 

Click here to download ITR 1 FY 2020-21 (Pdf Version)
 

Click here to download ITR 2 FY 2020-21 (Pdf Version) 

 

Click here to download ITR 3 FY 2020-21 (Pdf Version) 

 

 Click here to download ITR 4 FY 2020-21 (Pdf Version)

 

Click here to download ITR 5 FY 2020-21 (Pdf Version) 

 

Click here to download ITR 6 FY 2020-21 (Pdf Version) 

 

Click here to download ITR 7 FY 2020-21 (Pdf Version) 

 

You May Also Read :

Income Tax Deductions FY 2020-21

Dividend is taxable from FY 2020-21 

 

 

 

 

 

Tax Audit (sec 44AB) limit for Business is 1 Cr / 2 Cr / 5 Cr in FY 2020-21 / AY 2021-22? Here is the answer

Click here to read: Tax Audit u/s 44AB limit increased upto 5 Cr. w.e.f. FY 2020-21 - Is it applicable to all businesses ?

 

eGazette notification regarding Sec 44AB on 1st April 2021

 

What is Audit ?

Audit means an inspection of books of accounts by some officials or some specified persons for the purpose of establishing the fact that the accounting records present a true and fair view.

Types of Audit

There are two types of audit, namely Statutory audit and Tax audit.

What is Statutory Audit ?

Statutory audit is a compulsory audit for a Company governed by Companies Act, a Trust governed by Trust Act, Bank by RBI Act etc. by an external auditor to examine full accounting records of the organization.

What is Tax Audit ?

A Tax Audit is an audit, made compulsory by the Income Tax Act, if the annual gross turnover/receipts of the assessee exceed the specified limit. Tax audit is conducted in Sec 44AB of the Income Tax Act by a Chartered Accountant. Simply Tax Audit means, an audit of matters related to tax.

Limits of Tax Audit (Sec44AB) under Income Tax Act

According to Section 44AB of the Income Tax Act 1961 (updated up to 2020) the Tax Audit limit for

Click here to go to the official website of Income Tax Department to read Sec 44AB in details

Business :

Rs. 1 Crore. It means an assessee need to be audited under Sec.44AB if his annual gross turnover/receipts in business exceeds Rs. 1 Crore. This provision is applicable from F.Y. 2016-17 (A.Y. 2017-18) & onwards. It means the limit of Tax Audit u/s 44AB is Rs. 1 Cr. for Business in FY 2020-21 / AY 2021-22

Profession :

Rs. 50 Lakh. It means an assessee need to be audited under Sec 44AB if his annual gross receipts in profession exceeds Rs. 50 Lakh. This provision is applicable from F.Y. 2016-17 (A.Y. 2017-18) & onwards. It means the limit of Tax Audit u/s 44AB is Rs. 50 Lakh for Profession in FY 2020-21 / AY 2021-22.


What is Presumptive Taxation Scheme (Sec 44AD) for Business ?

Sec 44AD provides special provision for computing profits and gains of Business on presumptive basis. You need not to maintain proper accounting. Your Net Income is estimated to be @ 8% of your gross receipt/turnover. From F.Y. 2016-17 onwards, net income is calculated as @ 6% of gross receipts are received through digital mode of payments and @ 8% of gross receipts are received in cash.

Businesses, whose annual gross turnover/receipt does not exceeds Rs. 2 Crore are eligible for this scheme.

Click here to go to the official website of Income Tax Department to read in details about Sec 44AD

You need to file ITR 4 (previously ITR4S up to F.Y. 2016-17) in F.Y. 2020-21 to avail these scheme.

 

What is Presumptive Taxation Scheme (Sec 44ADA) for Profession ?

 

Sec 44ADA provides special provision for computing profits and gains of Profession on presumptive basis. You need not to maintain proper accounting. Your Net Income is esteemed to be @ 50% of your gross receipt/turnover. 

Professionals, whose annual gross turnover/receipt does not exceeds Rs. 2 Crore are eligible for this scheme.

Click here to go to the official website of Income Tax Department to read about Sec 44ADA

 

You need to file ITR 4 (previously ITR4S up to F.Y. 2016-17) in F.Y. 2020-21 to avail these scheme.
 

Now a big controversy arises, 

My Income from business exceeds Rs. 1 Crore but below Rs. 2 Crore in F.Y. 2020-21 (A.Y. 2021-22). Do I need to audit under section 44AB ?

It depends on several things, such as

•  If you are a Commission agent, Company or L.L.P., then you need to audit u/s 44AB as you are not eligible for sec.44AD. So, you need to be audited u/s 44AB.
• If you are a resident in India and you are an Individual / HUF / Partnership firm, then if your annual gross turnover exceeds Rs. 1 Crore but below 2 Crore, you need to calculate your Net income u/s44AD and file ITR 4 in F.Y. 2020-21 (A.Y. 2021-22) to avoid tax audit. Remember your Net Income should not below @8%.
•  If your Net income is below @8% of your annual gross turnover/receipt, then you must be audited u/s 44AB even if your gross turnover is below 1 Crore.
• If you are eligible for sec. 44AD but want to declare income less than 8% or not want to claim benefit of sec 44AB then you should be audited u/s 44AB.

According to CBDT Press release regarding clarification on threshold limit of tax audit u/s 44AB and u/s 44AD, 


"Section 44AB of the Income-tax Act (‘the Act’) makes it obligatory for every person carrying on business to get his accounts of any previous year audited if his total sales, turnover or gross receipts exceed one crore rupees. However, if an eligible person opts for presumptive taxation scheme as per section 44AD(1) of the Act, he shall not be required to get his accounts audited if the total turnover or gross receipts of the relevant previous year does not exceed two crore rupees. The higher threshold for non-audit of accounts has been given only to assessees opting for presumptive taxation scheme under section 44AD."

Click here to read CBDT press release on 20.06.2016

Can anyone declare higher income i.e. income above 8% under Presumptive Income Scheme (44AD)?

Yes, you can declare higher income (>8%) under sec 44AD. But income should not below 8%.


So in simple words, If your annual gross turnover/receipts from business exceeds Rs. 1 Crore, you need to be audited u/s 44 AB. But you may avoid tax audit u/s 44AD if your annual gross turnover/receipt is below 2 Crore. 

You may also read 

  
Income Tax Department Survey, Search & Seizure (RAID) - When it happens & What to do ? Discussed in details  

Mutual Fund - Meaning, Types, Risks, Returns & Taxation  

How to improve CIBIL score for loan

Company Dividend is Taxable from FY 2020-21 but What about Mutual Fund Dividend ? - Here is the Answer

Hope you already know that Dividend received from company is taxable from financial year 2020-21. Hence exemption u/s 10(34) is not applicable from FY 2020-21 as Dividend Distribution Tax u/s 115O is abolished. But there are less clarifications regarding Mutual Fund Dividend Exemption under section 10(35). Is it till available or not? Let's read and understand with official links:

 

What is Dividend ?
Dividend means the distribution of rewards from a portion of the company's earning and is paid to its shareholders. Dividend is a part of the profit that a company shares with its shareholders. Dividends can be issued as cash payments or as shares of stock or any other kind, though cash dividends are most common.

According to Sec 10(22) of Income Tax Act, Dividend Includes:

• Distribution of accumulated profits to shareholders entailing release of the company's assets;
• Distribution of debentures or deposit certificates to shareholders out of the accumulated profits of the company and issue of bonus shares to preference shareholders out of accumulated profits;
• Distribution made to shareholders of the company on its liquidation out of accumulated profits;
• Distribution to shareholders out of accumulated profits on the reduction of capital by the company ; and
• Loan or advance made by a closely held company to its shareholder out of accumulated profits.
  

Taxation on Dividend received from Indian Companies  (Domestic Companies):

From Financial Year 2020-21, Dividend received from companies is taxable in the hand of receiver (shareholder). There is no exemption available u/s 10(34) of I.T. Act.

 

Click here to read Tax treatment of Dividend Received from Company

Taxation on Dividend received from Mutual Funds

From Financial Year 2020-21, Dividend received from Mutual Funds is also Taxable in the hand of receiver. There is no exemption available u/s 10(35) of I.T. Act.

Consequently, Sec 115BBDA which provides for Taxability of Dividend in excess of rs. 10 lakh has no relevance as the entire amount of dividend shall be taxable in the hand of shareholder.

Income Tax Deductions FY 2020-21 / AY 2021-22

 In FY 2020-21, there are two types of Tax Regime for Individual and HUF. A taxpayer can choose either Old Tax Regime or New Tax regime. Both these regime have some pros and cons. But if we talk about exemptions and deductions, then it can be said that most of the common exemptions and deductions are not available in New Tax Regime. Some uncommon deductions like deduction u/s 80CCD(2), 80JJAA etc. are available in New Tax regime. 

The list of deductions available in Old Tax regime are given below.

Section	Deduction Limit	Investments / Expenses
80C	Up to Rs. 150,000/- In (80C, 80CCC & 80CCD(1) together)	Life Insurance Premium P.P.F. (Public Provident Fund) Investment E.P.F. (Employee’s Provident Fund)  N.S.C. (National Savings Certificate) Investment & Accrued Interest  ELSS Mutual Funds (Equity Linked Saving Schemes) Five years Bank or Post Office Tax Saving Deposits   S.C.S.S (Post Office Senior Citizen Savings Scheme)    Principle repayment of Home Loan Kid’s Tuition Fees  Sukanya Samriddhi Account Deposit scheme
80CCC		Contribution to annuity plan of L.I.C.  or any other Life Insurance Company for receiving pension from the fund is considered for tax benefit.
80CCD(1)		Allowed to an Individual who makes deposits to his/her Pension account (like NPS). Maximum deduction allowed is 10% of salary (in case of taxpayer being an employee) or 10% of gross total income (in case of tax payer being self-employed).
80CCD(1b)	Additional deduction Up to Rs. 50,000/-	Amount deposited by a taxpayer to their NPS account. Contributions to Atal Pension Yojana are also eligible.
80D	Up to Rs. 25,000/- & Rs. 50,000/- for Senior citizens	Mediclaim / Health Insurance Premium
80E	Not Applicable	Interest on Loan taken for Higher Education shall be deducted under this section. An Individual can claim this deduction   The loan should be taken from any Bank/Financial institutions or any approved Charitable institutions.  The loan should be taken to pursue Higher Study in India or outside India. Higher studies include all the fields of study pursued after passing the senior secondary examination or its equivalent. It includes both vocational as well as regular courses.  There is no maximum limit on deduction amount.   The deduction available from the year in which the assessee start repaying the loan. It is available only for 8 years starting from the year in which the assessee start repaying the loan until the interest is fully repaid whichever is earlier.
80EE	Up to     Rs. 50,000/-	Home Buyers can claim an additional Tax deduction of up to Rs 50,000 on home loan interest payments. The below criteria has to be met for claiming tax deduction under section 80EE. The home loan should have been sanctioned in FY 2016-17. Loan amount should be less than Rs 35 Lakh. The value of the house should not be more than Rs 50 Lakh & The home buyer should not have any other existing residential house in his name.
80EEB	Up to Rs. 150,000/-	Interest on loan taken for Purchase of Electric Vehicle shall be deducted under this section.  Only an Individual can claim this deduction.  The loan must be sanctioned during 1st April 2019 to 31st March 2023.
80G	100% (generally in case of government funds) or 50% (generally in case of non-governmental funds)	Contributions made to certain relief funds and charitable institutions. This deduction can only be claimed when the contribution has been made via cheque or draft or in cash. But deduction is not allowed for donations made in cash exceeding Rs 2,000. In-kind contributions such as food material, clothes, medicines etc do not qualify for deduction under section 80G.
80GG	Up to      Rs. 60,000/-	Self employed or Salaried assessee can claim deduction under this section if they have not received House Rent Allowance u/s 10(13A) at any time during the same financial year.
80GGC	Deduction Amount should not exceed the Taxable Value.	Any Individual can claim deduction under this section if he/she made any donation towards any Political Party or Electoral Trust.   Political Party should be registered with Election commission. Electoral Trust should be registered.  Donation should be from bank cheque, debit/credit card, demand draft, net banking etc. and should not made in cash.
80TTA	Up to     Rs. 10,000/-	Interest on deposits in SAVINGS A/c with BANK , CO-OPERATIVE SOCIETY OR POST OFFICE can be claimed under this section. Section 80TTA deduction is not available on interest income from fixed deposits.
80TTB	Up to     Rs. 50,000/-	Interest on deposits in SAVINGS BANK ACCOUNT, FIXED BANK ACCOUNT or POST OFFICE. Only Senior Citizens can enjoy this benefit, also Sec. 80TTA is not applicable for Senior Citizens.

 

 

Other Rebates:

24(b)

Up to Rs. 200,000/- in case of self occupied property or no maximum limit if the property is let out

Interest on housing loan is allowable as deduction on accrual basis not on paid basis (even if account books are kept on cash basis) if capital is borrowed for the purpose of purchase, construction, repair, renewal or reconstruction of the house property. Deduction can be claimed for two or more housing loans.

87A

Up to     Rs.12,500/-

This rebate is available on tax on total income to a resident individual if his total income does not exceed Rs. 500,000/-

Also Income Tax Exemptions are available under Sec.10 of Income Tax Act, 1961, such as,

PPF Interest or any payment from Statutory Providend Fund- Sec 10(11)
Gratuity - Sec 10(10) - Upto Rs. 20 lakh.
Maturity or Bonus amount received under a Life Insurance Policy - Sec 10(10D)
 

Click here to read all exemptions available under Sec 10 of Income Tax Act.