Latest News – Certicom Update

Certicom Updates:

1. The Goods and Services Tax (GST) department has begun to identify instances of tax evasion and frauds identifying mismatches between E-way bills and the radio frequency tags used to cross toll plazas.

GST authorities are now comparing the data given at the time of generating e-way bills for goods movement with the actual movement of vehicles captured at toll plazas and identifying revenue leakages.

GST’s Applicability to the Reverse Charge Mechanism for Service Imports

2. CBDT has notified the new rules regarding computation of short-term capital gains and written down value where depreciation on goodwill has been obtained, potentially increasing tax liabilities on firms that have undergone mergers or acquisitions in recent years. Finance Act, 2021, had amended that ‘goodwill’ will no more be regarded as an “intangible asset” and depreciation would not be available with effect from April 2020.

3. Indirect Tax Department cannot freeze Bank account of assesses if Appeal has been filed with mandatory pre-deposit. As per CBEC Circular No 984/08/2014-CX.

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4. Reserve Bank of India announced the cut-off yield for the new 10-year bond at 6.10% per annum, higher than that of the current benchmark, signalling a slight tolerance for a higher yield after months of trying to keep it at 6% or less.

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.

Payment of Tax under QRMP Scheme, for the month of March 2021

1. All taxpayers having aggregate turnover up to Rs 5 crores, under QRMP Scheme (w.e.f. 01.01.2021 onwards), are required to furnish return on a quarterly basis, along with payment of tax on a monthly basis.

2. Persons availing QRMP Scheme are required to pay the tax due, in each of the three months of the quarter, by depositing the due amount as discussed below.

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3. Payment of Tax for first two months of a quarter (M1 & M2 ie for January and February month for Jan-March Quarter):

  • a. While generating the challan, taxpayers must select “Monthly payment for the quarterly taxpayer” as a reason for generating the challan.
  • b. They can choose either of the following two options to generate the Challan:

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–35% Challan (Fixed Sum Method):
For taxpayers opting for this method, the portal will generate a pre-filled challan in Form GST PMT-06, for an amount equal to 35% of the tax paid in cash, in the preceding quarter, if the return was furnished quarterly or equal to the tax paid in cash in the last month of the immediately preceding quarter if the return was furnished monthly.

–Challan on a self-assessment basis (Self-Assessment Method):

These taxpayers can pay the tax due by considering the tax liability on inward and outward supplies and the input tax credit as available, in FORM GST PMT-06.

RBI announces new initiatives for digital payments, including the ability to use your mobile wallet as a debit card.

Note: The aforesaid options are not available for payment of tax for the third month (M3) of the quarter to persons availing QRMP Scheme.

  • c. Payment of Tax for the third month of a quarter (M3 ie for March month for Jan-March Quarter): For the third month of the quarter (M3), taxpayers can click the button ‘Create Challan’ in Payment Table 6 of Form GSTR-3B and file GST-PMT-06 Challan, for depositing any amount towards their tax liability.