Income Tax Department Archives

Sent above a certain amount in outward foreign remittances?…

13 August 2024
by admin

The Central Board of Direct Taxes (CBDT) has initiated a thorough examination and verification process for outward foreign remittances exceeding Rs 6 lakh to identify any discrepancies in the data and potential tax evasion.
This action was taken after the discovery of cases where foreign remittances and expenditures were inconsistent with the income declared by individuals, as well as shortcomings in the collection of tax at source (TCS), sources familiar with the matter told ET.
The board has instructed its field formations to commence the verification process and scrutiny of Form 15CC, which is a quarterly disclosure statement of outward remittances submitted by authorized dealers to the income-tax department. The data from Form 15CC has been collected and segregated since 2016, and it will be available for analysis starting this year.
The board will create a list of high-risk cases based on the scrutiny of data from the 2020-21 financial year onwards. It has instructed the field formations to develop a detailed standard operating procedure (SOP) for detecting high-risk cases and to submit a list of such cases by September 30. The government has set a deadline of December 31 for sending initial notices to those identified as having undeclared income.

Risky remittance

“A comprehensive review was recommended last year… This will (soon) be made available to field formations for the first time,” a senior official told ET.
The initiative will enable the government to identify cases where remittances were sent but not reported by the taxpayer in their filings, the official added.
“The whole exercise will curb tax evasion and ensure that legitimate remittances are facilitated while preventing abuse of relaxations in foreign remittance reporting.”
An official has revealed irregularities in foreign remittances, citing a case where an individual with a declared annual income of Rs 5 lakh sent Rs 15 lakh abroad over the past three years, using multiple dealers to avoid mandatory Tax Collected at Source (TCS) and evade taxes.
Also Check | Latest FD rates: Which PSU banks are offering highest fixed deposit rates in August 2024? Check List
The government imposes a 20% TCS on foreign remittances exceeding Rs 7 lakh under the Liberalised Remittance Scheme (LRS), with certain exceptions for medical and education expenses. Form 15CC allows remitters to certify that their remittance is not taxable, exempting them from providing further details. This applies to payments by importers, companies to their subsidiaries, or loans to non-residents.
However, officials have identified potential misuse of this relaxation. “Monitoring these payments where exemption is claimed is crucial to prevent abuse of these relaxations,” said the official quoted above.
The CBDT has instructed banks to report total forex spends as a separate category, in addition to total credit card spends, even when not collecting TCS. This data is included in the annual income statement used for income tax assessment. The government increased TCS on foreign remittances under LRS from 5% to 20%, effective October 1, 2023.
The 2023 budget initially brought international credit card payments under the LRS and implemented TCS on such transactions. However, this decision was later reversed due to widespread criticism.

Science & Environment

ITR filing: Important to track your income tax return…

5 July 2024
by admin

Income Tax Return Filing FY 2023-24: The deadline for filing Income Tax Returns (ITR), July 31, 2024, for the financial year 2023-24 (assessment year 2024-25) is approaching. One important point to note is that even if the ITR is filed on time, ensuring that the Income Tax Department processes it is crucial. Without successful processing, any due income tax refund will not be credited to the taxpayer’s bank account.

ITR processing time

According to an ET report, typically, the processing of income tax returns takes an average of 15-45 days from the e-verification date of the ITR, as per tax professionals.If the offline verification method (ITR-V form) is used, the processing time may be longer. Once processed, the taxpayer will receive an Intimation under Section 143(1) of the Income Tax Act, 1961. This intimation cannot be issued more than 9 months after the end of the financial year for which the return was filed. Therefore, for ITRs filed for FY 2023-24, the intimation will be received by December 31, 2024.
If the return is not processed within this timeframe, the tax department is required to review the return further, meaning the return cannot remain unprocessed indefinitely.
Also Read | ITR filing FY 2023-24: Why is Form 16 important for salaried individuals when filing income tax return?

ITR not processed? Follow these steps

If a taxpayer’s ITR remains unprocessed for an extended period, they can lodge a complaint through the “Grievance tab” on the income tax portal. Alternatively, they can contact the Central Processing Centre (CPC) via helpline numbers.

Reasons for delayed ITR processing

Several factors can influence the processing time of an ITR, including:

The form selected for filing
Complexity of the ITR
Amount and nature of claims for deductions/exemptions
Whether Deductions/Exemptions covered in Form 16

Simpler forms like ITR-1, used by individuals with straightforward income sources, are typically processed faster than more complex forms like ITR-3, which are used by individuals and HUFs with business or professional income. Detailed financial information requires thorough verification by the income tax authorities, contributing to longer processing times.

Notifications after ITR processing

Once the ITR is successfully processed, the taxpayer will receive an intimation notice under Section 143(1), which can indicate:

Intimation for tax demand: If discrepancies are found between the tax return and the records held by the Income Tax Department, a notice indicating additional tax payable may be issued.
Intimation for tax refund: If no issues are found, the department will issue a refund. Any detected issues will be adjusted before issuing the refund.
No demand or refund case: This notification indicates that no additional taxes are due and no refund is payable.

Also Read | Form 26 AS: Filing Income Tax Return? Know why Form 26AS is important & how to download it

Income Tax Department’s statement on ITR processing time

In a press release dated September 5, 2023, the Income Tax Department stated that it has significantly reduced the average processing time of ITRs after verification. For returns filed for AY 2023-24, the average processing time was 10 days, compared to 82 days for AY 2019-20 and 16 days for AY 2022-23.

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