In a bid to seize illegal cash, the Income Tax Department has issued a 17-point checklist to tax commissioners across the country to track those who deposited unaccounted cash during demonetisation.
In a directive to the Principal Chief Commissioners of Income Tax and Principal Director Generals of Income Tax, the Central Board of Direct Taxes (CBDT) said that in continuation of the handling of cases related to demonetisation, a verification checklist of cash deposits has been prepared to assist the assessing officers so that deviant cases can be taken up for further study.
The CBDT move is aimed at spreading the department’s net wide and deep to catch those who deposited unaccounted cash during demonetisation.
In this latest directive to tax officers, a 17-point checklist has been created, which has to be updated on the department’s server for further action. All unaccounted cash deposits made between November 9, 2016, and December 31, 2016, will be examined as part of this plan.
The checklist also says that if a taxpayer disputes the amount, the correct amount has to be mentioned after checking with the bank.
The particulars in the checklist are — return filing compliance, the total income of the taxpayer in 2016-17, gross total income (including exempt income) of the taxpayer in FY 2016-17 and percentage of cash deposit to gross total income (including exempt income).
The assessing officers will have to check on the checklist with regard to the nature of deposit on assessment of the explanation provided by the taxpayer and the quantum of unaccounted deposits as determined by the assessing officers.
On the response side, they have to file if the explanation was acceptable, partially acceptable or not acceptable. The nature of the deposit option could be sale or advance for sale of land or any other capital asset, gift, repayment of loan and cash in hand.
Some other verification checkpoints are whether the quarterly VAT return is revised in the post-demonetisation period, if small part of the cash is deposited in or withdrawn from the bank despite having huge cash in hand, if there are large changes in the purchase and sales figures between the original and the revised VAT returns and if the changes are for genuine reasons.
The assessment procedures as per the checklist are — if the books of the accounts have been rejected, if additions have been made u/s 68 to 69D and if tax is calculated as per section 115BBE and if penalty u/s 271AAC has been levied.
The examination of monthly cash sales and cash deposits lists the period from April 2015 to November 8, 2016.
It has been three years since demonetisation which was implemented with the aim to curb and eradicate black money. But according to a report released on Wednesday, significant usage of unaccounted cash is still prevalent in the secondarily real estate market.
The report prepared by Anarock Property Consultants said that up to 30 per cent of the total transaction value in the secondary or resale residential maket in India can still be paid in cash.
However, the primary sales market in tier-I cities offer the least scope for unaccounted wealth in property deals, it said.
“Demonetization in November 2016 sent Indian residential real estate — till then a preferred laundromat for unaccounted wealth — into an almost terminal tailspin. Even three years after DeMo, the battle is only half-won,” said Anuj Puri, Chairman Aof Anarock Property Consultants.
“The secondary or resale residential real estate market still accommodates black money; at least 30 per cent of the total cost of resale property can still be paid in cash. While more and more buyers and sellers prefer official payment routes as a matter of principle, many still use the resale property market to launder untaxed cash,” he added.
As per the report, while the trend in the Mumbai Metropolitan Region (MMR) and the National Capital Region (NCR), which are historically notorious for black money in real estate, has tamed considerably in primary sales, their resale property markets still see cash components.
As much as 20-25 per cent of the total resale property cost can still be “adjusted” with black money, it said, adding that in Bengaluru, Pune and Hyderabad, the prevalence of transparent payment routes, even on the resale market, is much higher.
“Unlike the primary sales market, the resale market still lacks strict regulations, making it easier for buyers and sellers to use cash components.
Also, the primary sales market involves developers with a reputation to protect, while a resale property transaction involves two individuals. The pricing of resale properties also lacks transparency,” the report said.
In the case of direct sales by developers, there are readily-available pricing benchmarks, while in the secondary market, a seller can inflate the price of a property based on location, added features and so on without stating on the books. (IANS)
Income tax, two small words can bring tension for those who have to pay it. We think of saving tax every day whether we go for lunch or win a lottery. We pay so many taxes in different forms to the government for the nation’s development. Now, we cannot control how the government spends our money but, what we can control is how much tax to pay to the government. Income tax saving and tax planning is a smart idea as it is also legal while, tax avoidance or not paying the required amount of tax is illegal. There are some smart ways to save on your income tax legally. Let’s discuss those tips.
Income Tax Saving Under Section 80C
Section 80C is perhaps the most common term that is heard while it comes to saving tax There are various investment options that fall under section 80C of the Income Tax Act, 1961. Let’s discuss the most popular ones.
Purchasing a life insurance policy is perhaps the most secure and efficient income tax saving method that is a must purchase for everyone as life is simply unpredictable. All types of life insurance policies are eligible for tax deduction under section 80C. This tax deduction is eligible for policy premiums paid for the taxpayer himself, spouse, dependent children or any other member HUF (Hindu Undivided Family). Under this section, the maximum tax exemption rate is 20% of the sum of the annual premium if the policy was purchased on or prior to March 31, 2012. The tax exemption rate is 10% of the sum of the annual premium if the policy was purchased before April 1, 2012.
Public Provident Fund (PPF)
PPF investors can claim for tax deduction under section 80C. The minimum deposit limit to a PPF account is 1,50,000 /year. So, all the deposits you make to your PPF account are eligible for exemption. But, it is a locked-in process. Hence, you cannot withdraw your money for 15 years from the time of investment. However, partial withdrawals are available only after the completion of 7 years.
Equity Linked Saving Scheme
As the name suggests, ELSS is an equity scheme. So, this is perfect for financial wealth building as well as income tax saving. Investing in ELSS is a wise idea as it is a tax saver under section 80C. However, they have a requirement of locking-in the money for 3 years from the date of investment. Invest for long term in this scheme for high returns.
Senior Citizens Savings Scheme
Senior citizens can invest in this scheme to save on income tax. An individual of at least 60 years of age can invest in this scheme for 5 years. Voluntary retirement scheme investors can choose this after the age of 55.
For all the home loan payers, here’s good news that the income tax department gives you a relief by providing you tax exemptions on the principal amount under Section 80C. The maximum limit is 1,50,000 for claiming tax exemption. Under Section 24, you can also save taxes on the interest amount. The maximum limit for exemption is 2,00,000 under section 24.
Income Tax Saving Under Section 80D
Tax exemption can be claimed on medical insurance premiums under section 80D. A person is eligible for a tax deduction of up to 25,000 for insurance of self, spouse, dependent children. If the individual purchases insurance for his/her parents then tax deduction amount will extend to 25,000 more for parents whose age is less than 60years and 50,000 for parents aged above 60 years.
Income Tax Saving Under Section 80E
Education is quite expensive nowadays. Education loan for higher education after 12th standard can save a lot of tax under 80E. The tenure of tax exemption on an education loan is the maximum of 8 years. But, if the repayment of the loan finishes in 5 years, then the tax exemption tenure will be 5 years only.
Income Tax Saving Under 10(13A) and Section 80GG
HRA or House Rent Allowance is given to an employee by an employer to meet the expenses if the employee is living in rented accommodation. People who get HRA as a component in their salary can claim for tax deduction under Section 10(13A).
An individual who is self-employed or an employee who does not have HRA as a component in their salary but they have expenses regarding accommodation can claim for tax deduction under Section 80GG. The maximum deduction permitted under this section is 60,000.
Income Tax Refund
An income tax refund can be issued when the taxpayer pays an excess amount of tax than the amount the taxpayer owes to the government. This miscalculation happens when n an advance tax, self-assessment tax paid or TDS deduction is higher than the taxpayer’s tax liability. In this case, income tax refund should be filed in the Assessment Year (AY) for the extra amount paid/deducted in the Financial Year (FY).
Save on your income tax every year by tax planning. Spending the money and investing the money in a certain way can prove to be beneficial. Use the ways of saving income tax provided by the government in a smart and legal way.
After the demonetisation of Rs 500 and Rs 1000 notes in 2016 pushed digital payments, Aadhaar-enabled electronic know your customer (eKYC) resulted in an exponential growth of such payments in the country, according to a new report by the Reserve Bank of India.
Transactions in which both the payer and the payee use digital modes to send and receive money are referred to as digital or electronic payments.
India recorded an accelerated growth rate of over 50 per cent in the volume of retail electronic payment transactions in the last four years, said the report titled “Benchmarking India’s Payment Systems”.
The growth in 2018-19 was largely due to the steep growth in Unified Payments Interface (UPI), it added.
“In India, the smartphone revolution has seen an explosion in digital payment options, from e-Money to the Unified Payments Interface (UPI) to a combination of the two. After demonetisation, the use of e-Money picked up on a very large scale,” the findings showed.
The digital landscape changed with higher usage of e-Money, UPI, Aadhaar Payments Bridge System (APBS), RuPay, and Bharat Bill Payment System (BBPS), among others.
With 3,459 million e-Money transactions, India was only behind Japan and the US (data on China not available) in 2017 with respect to volume of e-Money transactions, the report said.
The study revealed that over the years, the number of debit and credit cards also increased considerably in India.
India had 331.60 million and 19.55 million debit and credit cards respectively at the end of 2012. The numbers grew to 861.7 million and 37.49 million respectively at the end of 2017.
By March 31, 2019, the number of debit and credit cards issued were 925 million and 47 million, respectively.
However, the study showed that the cost of digital transactions was a factor inhibiting their growth.
Merchants have to cash out or transfer to their banks accounts at a cost and at times these costs are passed on to the consumer.
“A few countries have tried to regulate costs to ensure that the charges are not usurious, but the jury is still out on whether such a regulation promotes the growth of digital payments. With banks pushing and merchants pulling, it isn’t clear if such caps will discourage the use of cash,” the report added.