Latest Certicom Updates

Certicom Updates

1. Income Tax: Infosys recognizes the ongoing challenges faced by some users and has engaged with more than 1,200 taxpayers directly to better understand their concerns. The company is focused on rapidly resolving these challenges while working closely with the Chartered Accountant community.

2. ITAT Mumbai has held that minimizing tax liabilities through lawful means is not illegal. The Assessing Officer cannot disregard a transaction just because it results in a tax advantage to the assessee. In the matter of Michael E Desa. Minimizations of the tax liability, as long as it is through legitimate tax planning and without using colourable devices, is not illegal at all,

3. CBDT releases ITR 6 Schema Changes for AY 2021-22

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4. CBIC has asked field offices to draw up an action plan so that no case of GST evasion is pending investigation beyond one year. In instruction to field formations, the CBIC has also asked GST officers to speed up investigation and issue show-cause notices in evasion cases, so that enough time is left with adjudicating authority to pass orders.

5. FSSAI: Wef 1.10.21, mentioning of FSSAI Registration no. on bills, cash memos etc. is mandatory in the case of food businesses.

6. ICAI Members who are entitled to vote at a Polling Booth in India but have gone abroad before 31st August 2021 and are unable to return to India may now exercise their vote (to be held on 3rd & 4th December 2021) by applying for Postal Voting Facility.

One Person Company Annual Filing- Due Dates!

E-Form AOC-4: Within 180 Days of the close of Financial Year. [Reference: Section 137(1) of Companies Act, 2013]

  • Eg. F.Y. 2020-21: The due date for Form AOC-4 shall be 27th September 2021. If we count 180 days from 1st April 2021.

Are you a freelancer? Key points to know about GST payment

E-Form MGT-7: Within 60 days from the date of AGM. [Reference: Section 92(4) of Companies Act, 2013]

  • Eg.: F.Y. 2020-21, If AGM is on 30/09/2021 then the due date of Form MGT-7 would be 28th November 2021. As we know, OPC does not require to hold AGM, yet the due date for filing shall be 60 days from the completion of 6 months from the end of the Financial Year, which means the due date shall be 28th November 2021.

The deadline for filing tax returns extended to December 31.

The deadline for filing tax returns extended to December 31.

The government said on Thursday that the deadline for filing income tax returns has been extended to December 31, citing the coronavirus outbreak and ongoing technical issues with its website.

Normally due by the end of July, the deadline was extended in May owing to the coronavirus epidemic until September 30.

“In light of the difficulties reported by taxpayers and other stakeholders in filing Income Tax Returns and various reports of audit for the Assessment Year 2021-22 under the Income-tax Act, 1961(the “Act”), the Central Board of Direct Taxes (CBDT) has decided to further extend the due dates for filing Income Tax Returns and various reports of audit for the Assessment Year 2021-22,” according to the statement.

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Due to difficulties experienced by taxpayers in completing Income Tax Returns (ITRs) and Audit reports for the fiscal year 2021-22 under the ITAct, 1961, the CBDT has extended the deadlines for filing ITRs and Audit reports for the fiscal year 2021-22. Circular No.17/2021, dated September 9, 2021, was issued. 

9 September 2021 — Income Tax India

“The due period for filing Returns of Income for the Assessment Year 2021-22, which was 31st July 2021 under sub-section (1) of section 139 of the Act, as extended to 30th September 2021 by Circular No.9/2021 dated 20.05.2021, is thus further extended to 31st December 2021,”.

From November 30, 2021, the CBDT has extended the deadline for filing ITRs for businesses until February 15, 2022.

ITR filing increased to 3.2 lakh daily in September, 2021

The deadlines for filing the tax audit report and the transfer price certificate have been extended from October 31 to January 15, 2022, and January 31, 2022, respectively, from the previous deadlines of October 31 and November 30.

The deadline for filing a late or revised income tax return has been extended by two months, to March 31, 2022.

Concerning the tax portal’s difficulties, the finance ministry stated on Wednesday that it is working with Infosys to provide a smooth filing experience for taxpayers.

The CBDT released the paperwork for filing I-T returns for the 2020-21 fiscal year on April 1.

Under section 115BAC of the Internal Revenue Code, the government had given taxpayers the option of choosing a new tax regime for the fiscal year 2020-21.

SECTION 206AB- SPECIAL PROVISION FOR DEDUCTION OF TAX AT SOURCE FOR NON-FILERS OF INCOME-TAX RETURN

SECTION 206AB- SPECIAL PROVISION FOR DEDUCTION OF TAX AT SOURCE FOR NON-FILERS OF INCOME TAX RETURN
Effective date: 206AB is effective from 1st July 2021

206AB deals with the deduction of tax at a higher rate for specified persons.


RATE:
IF PAN IS SUBMITTED:
  1. At twice the rates specified in the relevant provisions of the act (or)
  2. At twice the rate or rates in force (or)
  3. At the rate of 5%

Whichever is higher

IF PAN IS NOT SUBMITTED:

The tax shall be deducted at higher of the two rates specified in this section and in section 206AA.

206AA:

  1. The rates specified in the relevant provisions of the act (or)
  2. The rate or rates in force (or)
  3. AT the rate of 20%

Whichever is higher

SPECIFIED PERSONS:

Meaning: Specified person means a person who is satisfying all the below-mentioned conditions.

Conditions:

  • A person who has not filed an income tax return for 2 previous years immediately preceding the previous year in which tax is to be deducted.
  • The time limit for filing such a return of income is expired under section 139(1).
  • The aggregate of TDS is 50000/- or more in each of these previous years.

Exception:
Non- Resident who doesn’t have a permanent establishment in India.

Example:
Mr Ajay doesn’t file his Income-tax return before the due date as per section 139 for the following two previous years even if the TDS amount deducted was :

FINANCIAL YEAR                                   TDS AMOUNT
2019-2020                                                      61000/-
2018-2019                                                      54000/-

Considered as a specified person.
Then deductor has to deduct TDS for Mr Ajay as per section 206AB

IF PAN SUBMITTED

1) At twice the rates specified in the relevant provisions of the act (or)
2) At twice the rate or rates in force (or)
3) At the rate of 5%
Whichever is higher

IF PAN NOT SUBMITTED

1) The rates specified in the relevant provisions of the act (or)
2) The rate or rates in force (or)
3) AT the rate of 20%, whichever is higher

Non- Applicability of the Section 206AB

1. If the specified person is a non-resident who does not have a permanent establishment in India.
2. The section has an overriding effect on all provisions of Chapter XVIIB of the Income Tax Act, 1961 except the below-mentioned sections

Table Representing Applicability of Section 206AB

TDS/TCS Provisions – Specified Assesses Identification – As per Circular No. 11/2021 dated 21/06/2021

Section 206AB and 206CCA requiring a higher rate of TDS & TCS are applicable from 1st July 2021 requiring deduction of TDS (other than salary, horse racing, etc) or TCS at twice the normal rates or 5% whichever is higher, in case, deductee or collected are specified persons ie not filed ITRs for 2 years, a total of TDS and TCS is Rs 50,000 or more.

Considering the fact that it is practically impossible for the deduction or collector to identify the specified persons, the new functionality has been issued by CBDT ‘Compliance check for 206AB and 206CCA’.

As per the functionality, Single or multiple searches of PAN can be made to identify the specified persons and bulk data can in fact be downloaded in pdf format.
A list of specified persons would be prepared at the start of the FY and no new specified person would be added during the FY.  If a specified person fulfils the conditions specified above, he would be removed from the list during the FY.

Digital payments up 30.2% in FY21: According to RBI data 

So as a rule, a new specified person list on the portal would be drawn at the start of the FY and no new person would be added during the year even if he becomes a specified person. So we just have to check at the start of the FY for specified persons. Only while adding a new vendor during the year, we might have to look if he is a specified person. Also, if the status of a specified person gets converted into a non-specified person, we might have to update our records.

Important Points

From the perusal of the above section, the following points are to be noted:

  • This punitive rate on the payee will be in addition to the interest, penalty, prosecution and other consequences of non-filing of ROI.
  • Credit will be available to the payees for the higher taxes paid while filing his return of income Interpretation of the threshold condition:
  • To compute a threshold of INR 50,000 or more, both TDS and TCS of respective FY needs to be aggregated. For example I Co is making an FTS payment to Mr A of Rs. 1 Lac on which TDS is required to be deducted u/s. 194J @10%. He had not filed ITR for the last 2 PY and due date u/s. 139(1) has also expired. For each of the last 2 PY, the tax deducted of Mr A was Rs. 20,000 and Rs. 35,000 respectively and TCS collected was Rs. 30,000 and Rs. 40,000 respectively.
  • Aggregate of TDS and TCS in year 1 – 20,000 + 30,000 = 50,000
  • Aggregate of TDS and TCS for year 2 – 35,000 + 40,000 = 75,000
  • The condition of having TDS & TCS of Rs. 50,000 or more in each of the 2 FY is satisfied in the given case.

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