ITR filing increased to 3.2 lakh daily in September, 2021

ITR filing increased to 3.2 lakh daily in September, 2021

Updates to the Income Tax Department’s e-Filing portal

The Income Tax Department’s e-Filing site (www.incometax.gov.in) was introduced on June 7, 2021. Since then, taxpayers and professionals have experienced flaws and problems with the service. The Ministry of Finance has been keeping a close eye on how concerns with Infosys Ltd, the project’s Managed Services Provider, are being resolved.

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A number of technical issues are being addressed one by one, and the statistics for the various filings on the portal are showing a favourable trend. Since September 7, 2021, over 8.83 crore unique taxpayers have signed in, with a daily average of over 15.55 lakh in September 2021. In September 2021, the number of ITRs filed grew to 3.2 lakh per day, with 1.19 crore ITRs filed for the fiscal year 2021-22. Over 76.2 lakh taxpayers have used the portal’s online service to file their forms.

It’s good to see that over 94.88 lakh ITRs have been e-verified, which is required for the Centralized Processing Center to process them. 7.07 lakh ITRs have been processed so far.

Over 8.74 lakh Notices issued by the Department under the Faceless Assessment/Appeal/Penalty proceedings have been viewed by taxpayers, with over 2.61 lakh answers filed. On a daily basis in September 2021, an average of 8,285 Notices for e-proceedings were issued and 5,889 answers were filed.

Over 10.60 lakh statutory forms have been filed, including 7.86 lakh TDS statements, 1.03 lakh Form 10A for trusts/institutions registration, 0.87 lakh Form 10E for salary arrears, and 0.10 lakh Form 35 for appeals.

Applicability of Tax Audit under section 44AB or 44AD or 44ADA

66.44 lakh taxpayers have linked their Aadhaar numbers to their PAN numbers, and over 14.59 lakh e-PANs have been issued. In September 2021, around 0.50 lakh taxpayers were using these two services on a daily basis.

The Department is continuing to work with Infosys to ensure that taxpayers have a positive filing experience.

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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Representation for extending dates for furnishing belated/Revised Returns

Representation for extending dates for furnishing belated/Revised Returns

For filing a belated income tax return u/s 139(4) for the fiscal year 2019-20 (which was originally 31st March 2021 but was extended to 31st May 2021)

For the purpose of filing a Revised Return of Income Tax u/s 139(5) for the fiscal year 2019-20 (which was originally 31st March 2021 but was extended to 31st May 2021)

2. However, owing to the Corona pandemic, many taxpayers were unable to file their ITR for FY 2019-20 (First Year 2020-21) by May 31, 2021, despite their best efforts. The provision of such ITRs will aid in increased revenue collection, and taxpayers will be able to maintain regularity by ensuring that their returns are filed on a consistent basis.

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3. The CBDT has granted Corona patients the benefit of exemption for amounts received beginning in FY 2019-20 and ending on June 25, 2021, but the deadline for filing ITR/ Revised ITR has passed, and it is necessary to allow them to file their Return/ Revised ITR for AY 2020-21 so that they can benefit from the exemption.

Section 206AB introduces a higher levy of TDS on tax defaulters from 01st July 2021

4. Facility for filing ITR in response to Notice under Sec. 148: Please provide a facility on the new Income Tax Portal for filing Belated/ Revised ITRs as well as ITR in response to Notice under Sec. 148 for assessment years 2020-21 and earlier, as per amended provisions regarding the reopening of assessments with effect from April 1, 2021.