Asia Press Agency

Tag: income tax

  • Congress Faces Tax Scrutiny: Claims of “Tax Terrorism”

    Congress Faces Tax Scrutiny: Claims of “Tax Terrorism”

    The recent assertions made by the Congress regarding alleged “tax terrorism” stemming from new notices issued by the Income Tax department have been met with staunch rebuttals from government sources within the agency. These sources have underscored that the ongoing assessment proceedings were necessitated by the imminent expiration of the time limit on March 31 of this year, rather than any vindictive intent.

     

    According to these sources, the Congress was well aware of the assessment proceedings and had been afforded ample opportunity to respond, including during hearings in the Delhi High Court, where the party’s pleas for relief were dismissed. The Congress had previously asserted that its bank accounts were frozen following the imposition of a ₹200 crore penalty by Income Tax authorities. However, on Friday, the party disclosed receiving a fresh tax notice amounting to ₹1,800 crore.

     

    This latest notice pertains to the assessment years 2017-18 to 2020-21 (financial years 2016-17 to 2019-20) and encompasses penalties and interest. Officials have revealed that income tax searches conducted in April 2019 uncovered cash receipts by the Congress from entities like Megha Engineering, which has emerged as a significant donor in the electoral bonds scheme, among others. These findings allegedly surfaced during raids on associates of Congress leader and former Madhya Pradesh Chief Minister Kamal Nath.

     

    The total cash receipts between 2013-14 and April 2019 reportedly amounted to ₹626 crore and were linked to purported proceeds from an alleged corruption scandal. Officials maintain that these cash receipts have been substantiated through various means, including seized documents, WhatsApp communications, and recorded statements.

     

    Under Section 13A of the Income Tax Act, political parties are exempt from taxation on received funds if certain conditions are met, such as not accepting amounts exceeding ₹2,000. However, the Congress is purportedly in violation of these conditions, rendering its entire income subject to taxation, as per officials.

     

    A source emphasized that the Congress’ ability to secure a stay rested on the detailed and corroborated evidence presented by the Income Tax department in court. If the party believes in its innocence, the source suggested, it should release the complete assessment order to the public for clarity.

     

    The Delhi High Court recently dismissed four petitions filed by the Congress challenging the initiation of income tax reassessment proceedings for the 2017-18 to 2020-21 assessment years.

     

    In response, the Congress has decried what it perceives as targeted persecution and denounced the purported escalation of “tax terrorism” by the BJP-led Central government. Senior Congress leader Jairam Ramesh lamented the party’s receipt of additional notices, expressing uncertainty about the potential influx of further notices.

     

    Karnataka Deputy Chief Minister DK Shivakumar echoed these sentiments, alleging that the BJP’s issuance of notices signifies apprehension over the impending elections and serves as a tactic to instill fear. Shivakumar claimed to have received an Income Tax notice concerning a resolved matter, further fueling accusations of political intimidation.

     

    The unfolding developments underscore escalating tensions between the Congress and the ruling government, with accusations of partisan targeting and retaliatory measures clouding the discourse surrounding taxation and accountability. As both parties navigate this contentious terrain, the broader implications for governance, transparency, and democratic norms remain subjects of intense scrutiny and debate.

  • NCP and JMM Leaders Criticize Digital Platforms

    NCP and JMM Leaders Criticize Digital Platforms

    In a recent discussion on ‘The White Paper on Indian Economy’ in the Lok Sabha, leaders from various political parties such as NCP and JMM raised significant concerns about the state of digital platforms like Google Pay and PhonePe, alleging potential money laundering activities. NCP leader Supriya Sule particularly highlighted these concerns, describing these platforms as “ticking time bombs” and questioning the government’s efforts to prevent money laundering in the digital economy.

     

    Sule’s remarks were prompted by recent events, notably the controversy surrounding Paytm Payments Bank Ltd (PPBL), which she deemed “alarming” and akin to money laundering. She emphasized the widespread use of Google Pay and PhonePe compared to the lesser-known BHIM app, urging the government to take decisive steps to ensure the integrity of digital transactions in an increasingly cashless economy.

     

    Echoing Sule’s sentiments, JMM leader Vijay Kumar Hansdak accused the government of misusing central agencies such as the Enforcement Directorate (ED), Central Bureau of Investigation (CBI), and Income Tax department to target opposition MPs. Hansdak called for a white paper to be issued on the alleged misuse of these agencies, alleging that the government’s authority relies heavily on entities like the ED for political leverage.

     

    In response to these accusations, BJP MP Sanjay Jaiswal countered by pointing out the perceived corruption during the tenure of the previous UPA government. He claimed that corruption levels were unprecedented during the 10 years of UPA rule, accusing individuals of obtaining loans without intending to repay them. Jaiswal’s remarks sought to deflect attention from the current allegations and redirect focus to past grievances under the UPA regime.

     

    AIMIM leader Asaduddin Owaisi contributed to the debate by questioning the effectiveness of the white paper on the Indian economy, labeling it as mere rhetoric rather than substantive analysis. Owaisi urged the government to explain the disparities in economic growth rates between the UPA and NDA governments. He highlighted statistics indicating higher average growth rates and lower fiscal deficits during the UPA era compared to the NDA’s tenure.

     

    Owaisi also called attention to the impact of demonetization on the country’s poor and marginalized communities, pressing the government to provide insights into how the policy adversely affected these vulnerable groups. He emphasized the need for transparency regarding the economic consequences of major policy decisions like demonetization, especially in light of contrasting economic indicators between different government administrations.

     

    IUML MP E T Mohammed Basheer criticized the white paper as biased towards the ruling BJP, dismissing it as a tool for political propaganda rather than objective analysis. Basheer highlighted the contributions of the Congress-led UPA government in enacting crucial legislations such as the Right to Information and Right to Education Acts, as well as implementing welfare programs like MNREGA for the benefit of disadvantaged populations.

     

    The discussion in the Lok Sabha between NCP, JMM and other leaders has left underscored deep-seated concerns about the integrity of digital payment platforms, allegations of misuse of central agencies for political purposes, and divergent perspectives on the economic policies of past and present governments. As the debate continues, it remains to be seen how the government will address these issues and uphold accountability in economic governance.

  • Penalties as 11.48 Crore PANs Yet to Link with Aadhaar

    Penalties as 11.48 Crore PANs Yet to Link with Aadhaar

    The Indian government has collected more than ₹600 crore in penalties from individuals who failed to link their Permanent Account Number (PAN) with Aadhaar within the stipulated deadline. As of January 29, 2024, approximately 11.48 crore PANs are yet to be linked with Aadhaar, as revealed by Minister of State for Finance Pankaj Chaudhary in a written reply in the Lok Sabha.

     

    The penalties collection is a consequence of the Income Tax Department’s order that PAN cards would become inoperative if taxpayers failed to link them with Aadhaar by the specified deadline of June 30, 2023. Additionally, no refunds would be issued against such PANs, and a higher rate of Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) deductions or collections would be applicable for non-compliance. Individuals facing inoperative PAN cards have the option to make them operational again by paying a penalty of ₹1,000.

     

    To re-activate an inoperative PAN card, individuals can follow these steps:

    1. Visit the Income Tax e-filing portal: https://incometaxindiaefiling.gov.in/
    2. Register on the portal if you are a new user.
    3. Click on the ‘e-Pay Tax’ option under ‘Quick Links’ to pay the penalty.
    4. Choose CHALLAN No./ITNS 280 for the submission of the Aadhaar-PAN linking request.
    5. Pay the penalty under Minor head 500 (Fee) and Major head 0021 [Income Tax (Other than Companies)] in a single challan.
    6. Select your preferred mode of payment.
    7. Enter PAN details, assessment year, and address.
    8. Type the Captcha code and proceed with the payment.
    9. After making the payment, log in to the Income Tax e-filing portal using PAN details, password, and date of birth.
    10. A pop-up window will appear to link PAN with Aadhaar. If not, go to ‘Profile Settings’ on the Menu bar and click on ‘Link Aadhaar.’
    11. Enter required details, such as date of birth, gender, etc., matching those on the PAN card.
    12. Verify details with those on Aadhaar, enter the Aadhaar number, and click “link now.”
    13. A pop-up message will confirm the successful linking of PAN with Aadhaar.

     

    The government’s proactive measures aim to ensure compliance with Aadhaar-PAN linkage for efficient tax administration and streamlined financial transactions.

  • IT Grants Extension for Companies to File Form 10-IC

    IT Grants Extension for Companies to File Form 10-IC

    The Income Tax Department of India announced on Monday that it will provide relief to companies that faced delays in filing a crucial form to claim the benefit of a lower corporate tax rate without incentives for the financial year 2020-21 (FY21). This move comes as a response to requests from businesses seeking relief from the department.

     

    The specific form in question is Form 10-IC. Under the provisions of the Income Tax Act, Indian companies are eligible to pay taxes at a concessional rate of 22%, along with applicable surcharges and cess, provided they refrain from availing specified deductions and incentives. This option allows companies to avail of the lower tax rate starting from FY20 if they file Form 10-IC within the stipulated time frame.

     

    The Central Board of Direct Taxes (CBDT) outlined several conditions for condoning the delay in filing Form 10-IC. One of the key requirements is that the income tax return for the relevant assessment year must have been filed on or before the due date.

     

    Experts believe that this decision will offer much-needed relief to companies that opted for the 22% tax rate while filing tax returns for the assessment year 2021-22. Due to their failure to file Form 10-IC with their tax return, these companies did not receive the concessional tax rate.

     

    Ved Jain, a tax expert and former president of the Institute of Chartered Accountants of India (ICAI), explained that these companies must now e-file Form 10-IC for the assessment year 2021-22 before January 31, 2024. By adhering to this deadline, these companies can qualify for the lower tax rate of 22%.

     

    This measure by the Income Tax Department seeks to ensure that eligible companies benefit from the lower corporate tax rate without incentives while allowing for reasonable accommodations in the filing process. It simplifies the process for these companies to access the concessional tax rate, providing them with financial benefits.

  • 70% of Income Taxpayers Expected to Shift to New Tax Regime

    70% of Income Taxpayers Expected to Shift to New Tax Regime

    The Central Board of Direct Taxes (CBDT) chairman, Nitin Gupta, has revealed that about 70% of personal income taxpayers are anticipated to make the transition to the new tax regime, which has been made more appealing in the FY24 union budget. He also noted that approximately 60% of corporate income is already operating under the low tax rate regime. Tax collections have seen significant growth, with ₹9.57 trillion collected after refunds in the current financial year, as of October 9.

     

    Prior to refunds, the tax authority amassed ₹11.07 trillion so far this year, marking an increase of nearly 18% compared to the collections at the same time the previous year. This surge in tax collection can be attributed to various factors, including the utilization of technology and the exchange of information concerning taxpayers’ transactions provided by various entities in the annual information statement. Notably, around 5.3 million new taxpayers have filed their tax returns by July this year.

     

    Gupta also disclosed that India has collected ₹600 crore this year as tax deducted at source (TDS) from the net winnings issued by online gaming platforms to players. The scope of TDS on net winnings from online games was expanded in the union budget this year. TDS has become an increasingly significant mode of tax collection as the tax authority widens its oversight of economic activities.

     

    Regarding individual taxpayers, Gupta mentioned that an estimated 60-70% of them are likely to shift to the new personal income tax regime, which offers several benefits. Even if an individual’s tax is deducted based on the new regime by their employer, they can choose between the old and new regimes when filing their returns.

     

    Furthermore, Gupta highlighted that corporations have been taking advantage of the new tax regime introduced for them in 2019, which offers lower tax rates without tax exemptions. He noted that around 60% of corporate profits had already shifted to the new regime in FY23, a reflection of the increased corporate tax collections.

     

    Gupta also mentioned that India is collaborating with G20 nations to establish automatic data exchange regarding undisclosed overseas real estate assets held by residents of these countries. Currently, data sharing arrangements primarily focus on financial information. Investigations into numerous cases of undisclosed overseas assets are ongoing, including those uncovered in leaks such as the Panama Papers and Paradise Papers.

     

    As of October 9, central government net direct tax collections reached ₹9.57 trillion after refunds, showing a 21.8% increase over the net collections during the same period in the previous year. These collections encompass both corporate and personal income taxes, which account for more than half of the total budget estimates of ₹18.2 trillion for this fiscal year.

     

    In the current assessment year ending in March, 72.7 million income tax returns have already been filed, with the majority verified. More than 95% of the verified returns have been processed, according to information from the tax authority.

     

    The CBDT provided additional details, stating that gross corporate tax receipts have grown by 7.3% so far this fiscal year, while personal income tax collections (excluding securities transaction tax or STT receipts) have grown by 29.5%. After factoring in refunds, corporate tax collections have seen a 12.39% increase, while personal income tax receipts (excluding STT) have surged by 32.5%. To date, the department has issued ₹1.50 trillion in tax refunds for this year.