Govt’s net tax collection rises 86% to Rs 5.57 lakh crore in Quarter1

Govt’s net tax collection rises 86% to Rs 5.57 lakh crore in Quarter1

Parliament was informed on Monday that the government’s total tax collection increased by almost 86 percent in the April-June quarter to more than Rs 5.57 lakh crore. Net direct tax collection totaled Rs 2.46 lakh crore, while indirect tax collection totaled Rs 3.11 lakh crore.

Minister of State for Finance Pankaj Chaudhary said, “The net direct tax collection in the first quarter of FY 2021-2022 is Rs 2,46,519.82 crore as against Rs 1,17,783.87 crore during the same period of previous FY 2020-21, representing a growth of 109.3 percent.”

In the first quarter of FY 2021-2022, net indirect tax collection was Rs 3,11,398 crore, up from Rs 1,82,862 crore in the same time the previous year, a 70.3 percent increase.

In response to another query, Chaudhary stated that the Income Tax Department takes appropriate action against tax evaders in accordance with applicable legislation.

Searches, surveys, inquiries, income assessments, tax levy, interest, penalties, and the filing of prosecution cases in criminal courts, if applicable, are examples of actions taken under direct tax laws.

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Furthermore, under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act of 2015, more than 107 criminal complaints have been submitted.
Assessment orders under the Act had been issued in 166 cases as of May 31, 2021, with a total demand of Rs 8,216 crore.

In the HSBC cases, concealed income of around Rs 8,465 crore was brought to tax, and a penalty of Rs 1,294 crore was imposed. In ICIJ (International Consortium of Investigative Journalists) cases, the undisclosed income of almost Rs 11,010 crore has been discovered.

Representation on 10 issues relating to GST

Undisclosed credits totaling Rs 20,078 crore and Rs 246 crore have been discovered in the Panama Papers and Paradise Papers disclosures, respectively.

 

When does EPF become taxable?

When does EPF become taxable?

As per current law, an employee’s own contribution to the EPF account is not taxable. However, effective from April 1, 2020, onwards, the employer’s contribution to the EPF account can become taxable if it exceeds Rs 7.5 lakh in a financial year.

Though the biggest USP of the Employees’ Provident Fund is its EEE tax status, however, there are certain instances when EPF can become taxable. Here is a look at instances when you are required to pay tax on EPF.

Full withdrawal from the EPF account is allowed if an employee has left his/her job and has not joined any other new job after two months.

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When does an EPF contribution become taxable?

According to a new regulation introduced in Budget 2020, if an employer’s total contribution to an employee’s NPS account, superannuation fund, and EPF account in a financial year exceeds Rs 7.5 lakh, the excess contribution becomes taxable in the hands of the employee.

 

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Case I: When your company contributes more than Rs 7.5 lakh to your NPS, superannuation fund, and EPF account in a financial year.
Assume an employer contributes Rs 1 lakh to the superannuation fund, Rs 5 lakh to the NPS, and Rs 2 lakh to the EPF account in a fiscal year. This is a total donation of Rs 8 lakh, which is Rs 50,000 more than the tax-free maximum of Rs 7.5 lakh. As a result, an employee must pay tax on the extra contribution.

Case II: When a financial year’s contribution to the EPF account exceeds Rs 7.5 lakh and no contributions to the NPS or superannuation fund are made.
Assume a worker does not have an NPS account or a superannuation fund. In a financial year, however, the employer contributes Rs 8.5 lakh to the EPF account. In this scenario, too, the extra amount will be taxable in the employee’s hands.

Form 16 has been postponed to July 15, although the deadline for self-assessment tax over Rs 1 lakh is still July 31.

Form 16 has been postponed to July 15, although the deadline for self-assessment tax over Rs 1 lakh is still July 31.

The government has delayed numerous income tax deadlines as a result of the second wave of the coronavirus, including those for filing income tax returns for FY 2020-21, issuing Form 16, and others. However, for those whose tax liability after deduction of TDS and advance tax exceeds Rs 1 lakh, the deadline for filing self-assessment tax for FY20-21 has not been extended. If a self-assessment tax of more than Rs 1 lakh is not paid by July 31, such individuals may face a penalty.

RSM India’s Founder, Dr Suresh Surana, adds, “Additionally, an extension has been granted to employees for the issuance of TDS certificates in Form 16 following the extension of the due date for filing TDS returns. The issuance of TDS certificates in non-salary instances does not currently have a corresponding extension. As a result, by June 15, 2021, banks must submit Form 16A (TDS certificate for tax deducted on interest).”

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According to a government press release issued on May 20, 2021, if an individual taxpayer’s tax dues for FY 2020-21 exceed Rs 1 lakh after deducting TDS and advance tax dues, the payment must be made on or before July 31, 2021. From August 1, 2021, until the date of filing of the ITR, criminal interest will be charged at a rate of 1% per month under section 234A of the Income-tax Act, 1961.

This is comparable to the government’s action last year, which only benefited small and medium-sized taxpayers.

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Even though the ITR filing date for people whose accounts are not required to be audited has been extended to September 30, 2021, if an individual’s tax liability for FY 2020-21 exceeds Rs1 lakh, they must pay the amount before July 31, 2021 to avoid paying penal interest.

“It has been clarified that interest under section 234A of the Act shall continue to be levied where the tax payable (after TDS/TCS, advance tax, relief under section 89, 90/ 90A/ 91, MAT credit) is more than Rs. 1 lakh,” says New Delhi-based practising chartered accountant Sachin Vasudeva.

ITR or Income Tax Return Filing Deadline for FY21 (AY 2021-22) Extended.

Deloitte India Partner Saraswathi Kasturirangan believes “The extension of the deadline for filing tax returns is a good thing. However, when the self-assessment tax owed on the return is more than Rs 1 lakh, this does not afford relief from the interest that is charged for filing the return after the initial due date.”

How to calculate self-assessment tax?

To figure out how much self-assessment tax you owe for FY 2020-21, follow these steps:

  • Step 1: Determine your entire income for the fiscal year 2020-21. This comprises wages, capital gains, rental income, interest income, dividend income, and other sources of income.

  • Step 2: To calculate your net taxable income, subtract your total income from your tax exemptions and deductions. House rent allowance, tax-saving investments under section 80C (ELSS, PPF, etc.), premium paid on your health insurance policy, and so on are examples of tax exemptions and deductions.

  • Step 3: Determine the amount of tax you owe on your net taxable income. You may determine your income tax liability using ET Wealth’s online calculator.

  • Step 4: Subtract the amount of taxes paid as TDS from your salary, interest income, and other sources from your total tax liability. Deduct the advance tax (if any) that you paid in the fiscal year 2020-21. These facts will be reflected on your Form 26AS. The deadline for filing TDS/TCS returns has been extended by the government to July 31.

When you reduce the TDS and advance tax from your overall tax liability, you’ll get the amount of self-assessment tax you’ll have to pay before filing your ITR.