Deadline to file the Income tax return

Recently, the government notified the income tax return (ITR) forms for financial year (FY) 2018-19. The year following the financial year in which income earned by a person is assessed is referred as assessment year (AY). This is the year in which you file your ITR for the financial year gone by. For instance, for the financial year 2018-19, the AY is 2019-20.There are various different categories to file ITR of taxpayers.

For individuals, Hindu Undivided Families (HUF) and the taxpayers whose accounts are not required to be audited, the deadline to file the ITR for the FY 2018-19 is July 31, 2019. For other categories such as companies and working partners of a firm, the deadline of July 31, 2019 does not apply. Deadlines for various categories of taxpayers are as follows:

1. Due date of filing returns of all individuals / assesses whose accounts are not required to be audited (Individuals, HUFs, Association of Person, Body of Individuals ) is July 31 of the relevant assessment year
2. September 30, 2019 of the relevant assessment year is the deadline for below persons whose accounts are required to be audited:

• A company
• An individual or other entity whose accounts are required to be audited (like proprietorship, firm etc.)
• A working partner of a firm

1. An assesse whose is required to furnish report under section 92E should file return on November 30 of the relevant assessment year. (Report under section 92E is submitted when a taxpayer has undertaken international transactions during the relevant financial year).

Missing the deadline
On missing the ITR filing deadline of July 31, 2019, individuals can still file the return which is termed as belated ITR. The last date to file belated ITR for FY 2018-19 is March 31, 2020. On missing the deadline as well, the person will not be able to file ITR unless you receive a notice from tax department to do the same. Though there is an option to file belated ITR till March 31, it is required to avoid filing it late because late filing fees will be levied for if ITR is filed after July 31, 2019 and any time before March 31, 2019.

Late filing penalties
For filing the ITR post the deadline was announced in Budget 2017 and came into effect from the AY 2018-19, for the tax returns filed for FY 2017-18. Prior to this, it was the sole discretion of the assessing officer to levy penalty if the individual failed to file tax return before the end of the relevant assessment year. Section 234F introduced in the Income Tax Act made late filing mandatory.
The late filing fees structure is mentioned below:

Date of filing ITR
After July 31 but on or before December 31
5,000

Amount (INR)
Between January 1 and March 31
10,000

For small taxpayers whose total income does not exceed INR 5 lakh, the maximum late fee amount will not exceed INR 1,000 irrespective of when it is filed, i.e., before March 31. If an individual’s gross total income does not exceed the basic exemption limit, then he/she will not be liable to pay late filing fees if he/she files belated ITR. As per the current income tax laws, the basic exemption limit is as follows:

• 1. For below 60 years, basic exemption limit is INR 2,50,000
• 2. For 60 years or more but below 80 years (senior citizen), it is INR 3,00,000
• 3. For 80 years and above, INR 5,00,000 is the limit

However, if you have some unpaid tax liability, then penal interest on the same would be leviable, as applicable to your case, in case you have filed a belated return. But if no tax is payable, the taxpayer won’t be liable to pay this interest solely due to the belated filing of ITR for FY17-18. If the income tax department, upon assessing your return, raises demand for additional tax payment then you would have to pay penal interest on that tax as well as the additional tax. Therefore, it is recommended to file your return. If a resident individual has income from foreign assets and he files belated ITR, then late filing fee will be levied even if gross total income does not exceed the tax exemption limit.
The above are some of the deadline in ITR filing which leads to a tax notice. If you would like to know more about income tax updates and its impact assessment on your company, our team of experts can assist you. We can assist you in filing your ITRs, tax structuring, transfer pricing certification / documentation, international taxation and withholding tax treaty issues and representation for your tax assessments.

Deadline to file the Income tax return

Delineating assessments under GST

Goods and services Tax (GST) is a broad based, comprehensive tax to be levied on goods and services aiming at a simple and transparent tax structure to positively incentivize trade and industry. Under GST, the term “assessment” means determination of tax liability under this Act i.e. to figure out how much tax is to be paid actually, a GST assessment is organized. Various forms of assessments under GST include:

1. Self-assessment
2. Provisional assessment
3. Scrutiny assessment
4. Best judgement assessment
5. Assessment of unregistered persons
6. Summary assessment

Self-assessment (Sec 59)
A taxable person undergoes his self-assessment where all GST filings are based on his own assessment to furnish a return which concludes that GST promotes self-assessment like excise, VAT and service tax under current tax regime. It is the assessment done by the taxpayer himself whereas others are undertaken by tax authorities.

Provisional assessment (Sec 60)
In case of provisional assessment, a taxable person is unable to determine the tax liability due to value or rate of tax or understanding whether certain receipts should be added or not, he files an application in form GST ASMT- 01 along with the documents in support of paying taxes on provisional bases which follows a below procedure:

• A request for provisional assessment in writing is submitted by the taxable person to the concerned GST officer.
• After a provision by GST officer, an order is passed within a period not later than ninety days from the date of receipt of the request submission.
• The taxable person paying tax on provisional basis issues a bond with a security promising to pay the difference between provisionally assessed tax and final assessed tax.
• Now, a final assessment is passed with a period not extending six months from the date of communication of order of provisional payment. However, final assessment can be extended by commissioner for further 4 years as he seems fit.

Scrutiny of Returns (Sec 61)
To verify whether it is appropriate, a proper officer can scrutinize the return which is a non- compulsory pre –adjudication process. In short, it is not a legal and authorized judicial proceeding.

Best judgment assessment (Sec 62)
Failure to furnish the required returns by a taxable person, even after service of notice under section 46, an assessment is conducted by the GST officer which can be deemed to be withdrawn within a period of 30 days from the date of issuance of assessment order.

Assessment of unregistered persons
When a taxable person fails to obtain GST registration even if liable to do so, the GST officer can proceed to assess the tax liability of such taxable person to the best of his judgment for the relevant tax periods and issue an assessment order within a period of 5 years under section 44.

Summary assessment (Section 64)
A GST officer can on any evidence showing a tax liability of a person coming to its notice, proceed to assess the tax liability of such persons to protect the interest of revenue. A proper officer is required to obtain previous permission of additional commissioner or joint commissioner.
To conclude, taxpayers must furnish an application form, along with the necessary financial records to the tax official. The tax official may accept or reject the application communicating the decision to the registered taxpayer within 90 days from the date of receipt of the application. If the tax official finds the explanation satisfactory then the taxable person will be informed and no further action will be taken and if not, the officer may-

• Conduct audit of the tax payer u/s 65
• Start special audit procedure u/s 66
• Inspect and search the places of business of the tax payer
• Start demand and recovery provisions

If you are looking for assistance to represent your GST assessments or require professional advice for GST self-assessment, our team of experts can assist you in taking a proactive assessment approach for your business.
Our team can also assist you in setting up your business in India, accounting, bookkeeping, payroll, auditing, taxation, secretarial compliances, trademark registration, business structuring and advisory services. If you require any assistance, kindly click here 


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Tweaking the Goods and services tax – An ease or an agony

Goods and services tax (“GST”) is an indirect tax for the entire country levied on the supply of goods and services. GST is India’s single unified tax which reflects an overall shift from taxing goods and services at the point of supply to where they’re consumed. India is also looking to boost tax revenue by moving the existing sales taxes to a new harmonised GST system. GST was touted as biggest taxation reform since independence.

The recent 32nd GST council meet announced new registration criteria for businesses, doubling the sales threshold for GST registration to INR 40 Lakh, allowance to certain states of northeast to keep threshold at INR 10 lakhs as against INR 20 lakhs for other states.One of the key decisions taken at this council meeting was to increase the existing turnover limit of composition scheme to INR 1.5 crore. Special category states have been given the option to decide about the composition limit in their respective states. Further, it declared that the new GST rates will be applicable from April 1, 2019 on under construction properties.
On the roadmap ahead, industry leaders opine that GST council should take charge for aligning tax rules, however, the question remains if it has managed to achieve its intended purposes? Not wholly, it seems.

Below are some highlighted core issues being faced under present system of GST:

1. Different states, different rules
   Government’s one time exception to certain states highlights increased exemption limit which is applicable to only those who have businesses within a state and inter-state businesses trade.
   
2. Operational challenges
   From applying the tax rules to individual products through filing and payment, the operational demands of GST are much greater than any standard tax.
   
3. Evaders bonanza
   Increased pool of registered taxpayers impacted less on revenue generation as only 70% of taxpayers file returns regularly. There is an estimated mismatch of INR 34,000 crore tax liabilities reported in GSTR-1 and GSTR-3B. The present GST structure has no mechanism for checking discrepancies found between GST returns for July till December and final returns filed by the taxpayers. On an average of 84% taxpayers were unable to correctly report revenue statements. The discrepancies demand that the GST Council now needs to take rigorous measures to tackle the menace of tax evasion through under-invoicing.
   
4. Fiscal features
   Deficit in GST revenue promises large dents in the centre and states’ fiscal applecart. A layman will find himself on the receiving end if such gap in the revenue continues.
   
5. Technical issues
6. i. Credit reversal – The credit claimed on the purchases in which the payment has not been given to the suppliers within 180 days must be reversed. To keep notice of these things might lead to an extra burden on the organization.
7. ii. Pertinent issues for small traders – Additional operation costs are involved in small trader businesses. Sellers even if exempted from GST need to submit bill to buyers. Without the certificate of GST exemption, small shop owners find themselves marooned and immobile.
8. iii. E-commerce companies – The capital blockage will hamper day to day operational cost due to tax collected at source (TCS) provisions. GST council has fixed 1% TCS over the deduction made while payment to the sellers.
9. AAR (Authority for advance Ruling)
   Recent changes in AAR has confused the Industry with divergent rulings given on a single issues. Different states following different rulings have emerged as a major issue add to the pan-India complexities for businesses.
10. ITC (Input tax credit)
    Presently, GST is levied at an effective rate of 12% on normal housing and 8% on affordable housing payments, where completion certificate has not been issued at the time of sales. Withdrawal for ITC policy can block credit chain and hike in cost of construction. Real estate developers may pass on this burden to the ultimate buyers in the form of higher sale price. Lower slab with restriction on input tax credit is likely to lead to cost-benefit analysis of lower rate vis-à-vis loss of credit.
11. Tax filing
    In the present GST, each registered business person is required to fill in a host of forms. Some temporary changes introduced in the GST calculated that a business operating in 31 states of India would have had to file 37 forms per annum per state making it a total of 1,147 forms annually. In accordance with proposed system, only one form per month and one annual return per state would be needed to be filed. So, the forms to be filled would be around one-third of the present system and the paperwork would be far less. The required monitoring would also get greatly simplified.

In addition to this, industry believes that the discretion to states for allowing different specifications and different thresholds for different states from a registration perspective under GST may debase the ‘One Nation, One Tax’ code of GST and might eventually result in complicating the entire tax framework. Thus, a uniform threshold across India is the best way forward as the same is in line with the founding principles of GST.

You can’t plough a field simply by turning it over in your mind, so we have a specialised team of experienced professionals who can assist you in best methodologies for GST implementations, innovation and a clear manageable roadmap to your business. It will help you to drive key business decisions on operating business model changes required to optimize tax outcome.

Our team can also assist you in setting up your business in India, accounting, bookkeeping, payroll, auditing, taxation, secretarial compliances, trademark registration, business structuring and advisory services. If you require any assistance, kindly click here
 
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