The government has decided to levy a tax on ULIP investments over Rs 2.50 lakh.

 The government has decided to levy a tax on ULIP investments over Rs 2.50 lakh

The Central Board of Direct Taxes (CBDT) has issued a notice that explains how to track ULIP charge exception status. It was planned in Budget 2021 to remove the expenditure exempt status on the pay of ULIPs if the annual premium exceeds Rs 2.5 lakh. Nonetheless, there were many questions about how the system would work, notably because of a few ULIPs, which included both pre-Budget recommendations and those secured afterward.

It’s worth noting that old ULIPs purchased before February 1, 2021 were considered entirely free of charge; nevertheless, this doesn’t mean you can’t buy new ULIPs with a premium of up to Rs 2.5 lakh and profit charge exemption. According to the most recent CBDT warning, both new and existing ULIPs’ absolute premiums would be assessed for exclusion, and if the sum is greater than Rs 2.5 lakh, this exemption will not be available for new ULIPs exceeding Rs 2.5 lakh.

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Calculation of the assessment for additional withdrawals

According to the letter, the policyholder’s incentives and withdrawals will be recognised as capital additions. In light of this, evaluation will be based on it. Because ULIPs are financial exchange-linked, withdrawals made before one year will result in a 15 percent transient capital increase tax. Withdrawal of speculation after one year will result in a ten percent increase in long-term capital accumulation.

Others took advantage of low-wage workers.

The government stated in its fiscal plan for 2021 that persons with major league incomes take use of the benefits available to small investors. The purpose of the charge exception on modest reserve funds is to assist small investors. In this vein, the government has decided to levy a penalty on ULIP interests over Rs 2.50 lakh in order to prevent major league paid workers from abusing the system.

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PF regulations have also been altered.

The government has also decided to levy a fee on excess interest in the Provident Fund (PF) and Employees Provident Fund (EPF) (EPF). There is no organisation commitment in this, and assessment should be paid on ventures of more than Rs 2.50 lakh yearly in PF and Rs 2.50 lakh in EPF. Individuals with greater wages were allegedly abusing tax-free higher premiums, according to the government.

Keep an eye on your profit.

The government is keeping an eye on all speculation-related investments, including ULIPs. Since the previous year, the Personal Tax Department has been issuing Annual Information Statements (AIS). It details the intricacies of each of your ventures, as well as the income and expenses that are relevant in the future.

What happened to my IT refund?

What happened to my IT refund?

In India, I am a self-employed individual with a salary. In addition, I work as a content writer for a Geneva-based nonprofit. It is not deductible for tax purposes. What should I do with this money?

It is presumed that you do not pay taxes on the same income in any other country.

Furthermore, if you are an ordinary resident of India, the income you receive from the Geneva organization for content writing will be taxable in your hands. The contractual agreements, periodicity of revenue, volume of transaction for which you receive income, and other factors will all influence how the income is classified. If it is determined that you and the Geneva organization have an employer-employee relationship, the income you receive will be subject to taxation as salary income. If, on the other hand, the contractual structure is based on professional fees,  the income received by you shall be taxed as income from business or profession.

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If the income is in the type of professional income, the applicability of tax rates (i.e. normal or presumptive), GST, the obligation of keeping books of accounts, tax audit, and so on should all be considered, based on the gross receipts / income level. You must pay tax on the aforesaid income using the prescribed advance tax instalments/self-assessment tax.

I filed my ITR exactly as per AS for AY 2021-22 and requested a refund, but the IT department took less TDS as mentioned in 26AS and provided less refund. How can I find out why my refund was reduced, and can I get the whole of my money back?

We’ve assumed that you’ve received notice under section 143(1) of the Income-tax Act, 1961 (the Act), and that the tax authorities (Centralized Processing Centre) have calculated a lesser income tax refund than you claimed in your tax return for AY 2021-22. In general, the explanatory table in the aforementioned intimation lists the details of TDS credit claimed vs. TDS credit examined by the tax authorities (i.e. information of matched vs. unmatched TDS claim). You can use the information in the table, as well as the computation provided in the notification, to figure out why the refund was reduced.

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Furthermore, if the mistake is clear from the record, you should make an online rectification application under section 154 of the Act against the abovementioned intimation in order to obtain the remaining refund. For the purpose of filing the stated online rectification application, you may refer to the online rectification user manual available on the income tax portal. The tax authorities will issue the remainder refund once the rectification application has been handled properly.

If the issue is not remedied through the above rectification request, other options such as appeals and grievances may be considered, subject to the time limits.

The govt has extended the deadline for filing corporate ITRs for FY21. 15th of March, tax audit report due by February 15th

  • 12 Jan 2022
  • Income Tax, ITR
  • Comments Off on The govt has extended the deadline for filing corporate ITRs for FY21. 15th of March, tax audit report due by February 15th

The govt has extended the deadline for filing corporate ITRs for FY21. 15th of March, tax audit report due by February 15th

The deadline for corporations to file Income Tax Returns (ITR) for the fiscal year ending March 2021 was extended by the government on Tuesday until March 15.

The deadline to submit a tax audit report and a transfer pricing audit report for the fiscal year 2020-21 has also been extended until February 15.

This is the third extension granted to corporations to file their income tax returns for the fiscal year 2020-21. The original deadlines for reporting ITRs for corporations and transfer pricing transactions were October 31 and November 30.

The Central Board of Direct Taxes (CBDT) said in a statement that it has decided to extend the due dates for filing Income Tax Returns and various reports of audit for the Assessment Year 2021-22 due to difficulties reported by taxpayers and other stakeholders due to Covid and in electronic filing of various reports of audit (2020-21 fiscal).

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The tax audit report is due February 15, 2022, and the extended date for filing ITR for corporations is now March 15.

Individual taxpayer have until December 31, 2021 to file their 2020-21 |TRS without penalty, and over 5.89 crore ITP were filed by the deadline.

According to Shailesh Kumar of Nangia &Co LLP, given the difficulty faced by taxpayers in light of the recent surge in Co cases in the country, as well as technical glitches in filing tax audit reports and other compliances related to filing ITR, the government’s extension of around one month for filing tax audit reports and extension of 15 days for cases covered by Transfer Pricing compliances is a welcome move that will provide relief to taxpayers.

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The finance ministry has finally granted the request to give taxpayers and audit experts more time to complete the tex filings, according to AMRO & Associates senior partner Rajat Mohan, and it considers the challenges identified by tax professionals owing to Covid.

“For all business taxpayers, this will be a significant relief. Individuals in the salaried class and MSME non-auditable non-corporate firms, on the other hand, have received no assistance “Mohan continued.

It should be noted, according to Taxmann DGM Rahul Singh, that if the tax amount exceeds Rs 1 lakh, no exemption from the interest applicable under section 234A has been provided. Thus, if the taxpayer’s self-assessment tax liability exceeds Rs 1 lakh, he will be required to pay interest under section 234A from the time the original due dates have passed.