ANNUAL INFORMATION STATEMENT

ANNUAL INFORMATION STATEMENT

The Income-Tax Department has rolled out a new Annual Information Statement (AIS), which includes additional categories of information.

The facility can be accessed by visiting the online portal link of the Annual Information Statement (AIS) under the Services tab on the tax e-filing portal.

At present, Form 26AS is detailed by the Tax Department, which is a consolidated annual tax statement that includes information on TDS/ TCS, advance tax, and self-assessment. It is available on the Income-Tax website against a taxpayer’s PAN.

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The revised AIS includes additional categories of information – on interest, dividend, securities transactions, mutual fund transactions, and remittances from abroad, along with information on many other transactions that are at present available with the IT Department.

“There may be other transactions relating to the taxpayer which are not presently displayed in the AIS,” the I-T Department has said.

With the help of AIS, Taxpayers can view the information, report, and accurate data in the Income Tax Return.

Taxpayers just need to carefully check all transactions reflected in the AIS, so that correct information is then reflected in their returns.
With the revised AIS, most transactions are now under the purview of the I-T Department.

Tax-Saving Infrastructure Bonds: Find out how much tax you’ll have to pay at maturity and how to avoid TDS.

The Department has said it also has access to information beyond what is being shown in the AIS, which will help tax authorities to assess a taxpayer’s profile comprehensively and reduce the scope of evasion.

The department has offered the convenience of feedback, which will ensure correction of any anomaly before a taxpayer files their returns. The ability to submit online feedback will help remove any duplicate and incorrect transactions.

15G Exempts TDS on Taxable Income below a threshold limit!

15G Exempts TDS on Taxable Income below a threshold limit!

Form 15G can be filed with the prescribed financial institution if the individual’s total income is less than the basic exemption amount.

Where interest income from time deposits with prescribed financial institutions for a financial year (FY) exceeds the required maximum (currently 40,000), TDS at the applicable rate is deducted, according to the rules of the Income Tax Act.

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When an individual’s total income is less than the basic exemption limit, he or she can file Form 15G with a prescribed financial institution (such as a bank) to request that no taxes be withheld from the interest income made on the deposits.

Furthermore, if the tax rate at which the total income is subject to tax is NIL or lower than the rate at which the TDS is deducted (regardless of any advance tax paid by the recipient of income), the recipient of income may apply to the jurisdictional tax officer in the prescribed form for a lower or NIL deduction certificate (LDC). Following an examination of the appropriate papers, the tax officer may issue an LDC indicating a lower rate of TDS deduction at his or her discretion. TDS will be deducted at the rate provided in the LDC in this circumstance.

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Separately, take notice of the following from the perspective of the timing of taxation of such income. The interest income you receive from recurring deposits is taxed under the heading “income from other sources” (IFOS) according to the accounting system you use on a regular basis (i.e. mercantile/cash basis).

As a result, if you have previously offered interest income or revenue from other sources on an accrual/receipt basis, you might use the same approach for income from these RDs. The interest income will be taxed at the slab rates that apply to you for the fiscal year in which it is received. Any TDS already deducted by the bank on these deposits during the relevant FY will be credited against the income tax you owe for that year. If the amount of taxes deducted at source is less than the appropriate tax rate, you must pay the difference in advance tax in the specified instalments.

Tax-Saving Infrastructure Bonds: Find out how much tax you’ll have to pay at maturity and how to avoid TDS.

Tax-Saving Infrastructure Bonds: Find out how much tax you’ll have to pay at maturity and how to avoid TDS.

The long-term infrastructure bonds that were issued in FY 2011-12 to allow tax deductions of up to Rs 20,000 from taxable income are set to mature in FY 2021-22.

The long-term infrastructure bonds that were issued in the Financial Year 2011-12 to offer deductions of up to Rs 20,000 from taxable income under section 80CCF of the Income Tax Act are set to mature in the Financial Year 2021-22.

Although the bonds provided tax benefits under section 80CCF at the time of purchase, the bonds’ interest is taxable in the hands of investors.

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As a result, the tax-advantaged long-term infrastructure bonds were not really tax-free bonds.

The annual interest payout option and the cumulative interest option were both available to the investors.

While investors who chose annual interest distributions have already paid tax on the amount of interest received, those who chose the cumulative option would pay more tax in the year of investment than they saved in the year of investment.

Taxation

Because the interest on long-term infrastructure bonds is taxable, the interest earned by the investors – annually for those who chose the annual option and aggregate on maturity for those who chose the cumulative option – will be added to their taxable income.

As a result, tax payable will be lower for investors in lower tax bands and higher for those in higher tax brackets.

TDS

For Resident taxpayers who choose the cumulative option in physical format, the interest payment will be subject to a 10% Tax Deducted at Source (TDS) if the interest payment upon redemption exceeds Rs 5,000.

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The TDS rate will increase to 20% if the bondholder does not have a valid PAN or if the investor has not submitted his tax returns for the last two years and the total TDS and TCS in each of those years is Rs 50,000 or higher.

TDS will not be applied to investors who hold bonds in demat form.

TDS of 31.2 percent would be applied to interest payouts for non-resident taxpayers.

How can TDS be saved?


Resident bondholders must submit Form 15G / 15H, as appropriate, to avoid TDS. Those who did not disclose their PAN data at the time of investment must update their PANs with the various RTAs within the time frames set by the bond issuers.

Non-Resident bondholders must submit a tax officer’s order under Section 197 / 195 setting NIL / lower TDS rates to the appropriate RTAs before the deadline to guarantee that TDS is collected at the rates provided in the order.