Changes in income tax rates from 1 Apr 2017

Changes in income tax rates individuals need to look at from 1 April 2017

Beginning 1 April, 2017, here are the 10 important income-tax changes that tax payers need to take note of:

1) For employees in the yearly income group between Rs 2.5 and Rs 5 lakh, tax rate has been halved to 5 percent from the existing 10 percent, helping them save tax of up to Rs 12,500 a year. A tax saving of Rs 14,806 a year, including surcharge and cess, will be available for income above Rs 1 crore a year. And for people whose taxable income is between Rs 5 lakh and Rs 50 lakh, tax savings amount to Rs 12,900.
2) A simple one page form will be introduced for filing tax returns to tax payers with income up to Rs 5 lakh and excluding any business income. The I-T department will not scrutinize those who are filing their tax returns for the first time in this category.

3) For investment under Rajiv Gandhi Equity Saving Scheme, no deduction will be available from the assessment year 2018-19, The previous UPA government had introduced this tax-saving scheme in the Union Budget for financial year 2012-13 with an aim to encourage first-time investors in the securities market.

4) Long-term holding period for an immovable property has been reduced to two years from three earlier. Hence, the new law coming in place will ensure that an immovable property held over for two years will be taxed at a reduced rate of 20 percent, with various exemptions eligible on reinvestment.

5) Tax exemption on reinvestment of capital gains in notified redeemable bonds will be available for individuals in addition to investment in NHAI and REC bonds.

6) For rental payments in excess of Rs 50,000 a month, individuals will have to deduct a five percent TDS (tax deducted at source). According to tax experts, this move will enable the government to bring people with large rental income into the tax net. This will come into effect from 1 June, 2017.

7) Delay in filing tax return for 2017-18 will attract penalty of Rs 5,000, if filed by 31 December, 2018, and the penalty will be higher if filed beyond this date. However, for small tax payers with income up to Rs five lakh, the penalty has been restricted to Rs 1,000.

8) The government has also made Aadhaar compulsory while applying for PAN and filing income tax returns from 1 July. In fact, the Centre in a bid to curb black money from the system has limited cash transactions at Rs two lakh against the originally proposed cap at Rs three lakh.

9) Individuals will not have to pay any tax in case of partial withdrawals from National Pension System (NPS). The proposed changes allows NPS subscribers to withdraw 25 percent of their contribution to the corpus for emergencies before retirement. Remember that withdrawal of 40 percent of the corpus is tax-free on retirement.

Apart from these changes to income tax rates, individuals will also have to brace for higher insurance for cars, motorcycles and health insurance from 1 April, as the regulator IRDAI has given its nod for insurers to revise commission of the agents. The change in premium after modification will be limited to +/- 5 per cent of the existing rates.

The increase will be in addition to the enhanced third party motor insurance rates, which too will come into effect from April.

If you have Aadhaar card take these steps now and save your privacy

If you have Aadhaar card take these steps now and save your privacyManish Sain | @fat_grizzly
Last Updated: DEC 26, 2016
New Delhi
Email Author
http://indiatoday.intoday.in/technology/story/if-you-have-aadhaar-card-take-these-steps-now-and-save-your-privacy/1/843116.html



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When the UPA government launched the unique identification programme it said the Aadhaar number associated with each citizen of India will allow them to benefit by a better management and delivery of services, mostly government services and schemes. In simple words, Aadhaar card and number is something that gives you a unique identity to avail schemes and also works as the foremost identification document.

An Aadhaar account holds all the vital information of your being, which means it has your address, your date of birth, contact number, along with biometric information stored through 10 fingerprint scans and retina scans. If the technology were a little more advanced in India, they could even add your DNA signature. Long story short, Unique Identification Authority of India (UIDAI) has all your information. Everything. But since it's a government body there should be no harm to your privacy. To some extent.
What is the problem?

"Aadhaar number empowers residents of India with a unique identity and a digital platform to authenticate anytime, anywhere. Aadhaar number, in physical or electronic form subject to authentication and other conditions, is accepted as proof of identity of the Aadhaar number holder for any purpose." This is what the UIDAI website says. Fair enough, we must say.

On the other hand UIDAI also says that you shouldn't share your Aadhaar number with anyone. Confused much? Well, you are not at fault here. UIDAI guidelines are confusing and contradictory.

While it says "Biometric information is never shared" companies like Reliance Jio is already collecting fingerprints of its customers. We don't doubt Reliance Jio's good intentions to simplify the eKYC process, but it is not short of a privacy nightmare.

Also read: Jio is buzzing but privacy and number protability issues may trip it

Companies like TrackID collects people's IDs and creates kind of a social network, where you can even rate people for their services. Another company named Eko which keeps track of financial transactions.

Now the government has launched an Aadhaar Payment app, as the name suggests this app is connected to your Aadhaar account. And your Aadhaar account is connected to your bank account. So each time you go shopping you can pay using your fingerprint to make a payment.

Above the surface it may appear to be a harmless practice, but if criminals mind can hack POS machines we don't have any reason to doubt they can't hack these biometric machines as well.

You can do rest of the math. If your biometric data is out there, nothing keeps them from reaching your personal details as address and phone number. And also your bank accounts.

Also read: 32 lakh ATM cards hacked: Is your debit card safee and should you change your PIN
Here's what you can do

Aadhaar card is a convenience, no doubt about that. It's a never-fail identification document that we need. But in a country like India, which has almost non-existential cyber security norms, you can never be too safe especially when you are giving out all your information through a thumb impression.

Also read: Digital payment providers at great hacking risk, neeed upgraded security: Experts

But all is not lost here, there are a few things you can do:

1) Lock your biometric data

Yes, you can do that. Nobody can access you biometric data once you have locked it. Your demographic details like address, age and gender will still be accessible when needed. To lock your biometric data, visit this page https://resident.uidai.net.in/biometric-lock

It will ask you to enter your 12 digit Aadhaar number, a captcha and a One Time Password (OTP) that you will receive on your registered number. On the next page, you can lock your biometric information.

If you wish to unlock the information, go to the same page, follow the same process and on the last page click on 'Unlock'.

2) Try to not to give a photocopy of the Aadhaar card to anyone, in physical or digital form. Avoid sharing your Aadhaar number with anyone. Remember, this number has all your information.

3) If there is no other option but to produce a photocopy of your Aadhaar card it is best to write the purpose and self-attest it.

8 questions that can tax you while e-filing your returns

8 questions that can tax you while e-filing your returns
Chandralekha Mukerji
By , ET Bureau | Jul 27, 2016, 10.45 AM IST

http://economictimes.indiatimes.com/wealth/tax/8-questions-that-can-tax-you-while-e-filing-your-returns/articleshow/53409832.cms

Here are answers to eight commonly­ asked queries that you were too embarrassed to ask.

Among reasons given by people who missed filing returns in the past is they did not know they were supposed to file tax returns.

1. Have not filed ITR for past two years. Can I file now?

Among reasons given by people who missed filing returns in the past is they did not know they were supposed to file tax returns. Others say they were on a sabbatical and not earning, and hence the gap in their ITRs. Or they were so busy that they simply forgot to file.

Some of these defaulters may have received a notice from the tax department. Others shy away from making amendments as they feel a correction will call for scrutiny and fetch a notice. However, the reverse is true. "It's a myth that those who start filing after a gap will receive notices. In fact, chances of getting a
notice are higher if you do not make corrections," says Archit Gupta, CEO, ClearTax.in.

The tax department does not want to harass a taxpayer who is willing to comply. Through a recent circular, the CBDT gave a chance to taxpayers to 
complete pending ITR V verifications for previous six assessment years. You don't have to worry even if you have never filed a tax return or have missed filing in the past couple of years. Make a fresh start this year.

2. What all should I include under interest income?

All taxable interest income needs to be declared in your ITR! Remember this one simple rule and you will never make a mistake. To know which all interest
income are taxable, refer to the table.

The confusion often arises because some of of the taxable interest income, like interest on NSC and interest earned on savings account in bank or post office are eligible for deduction. But you need to declare these incomes too and then claim the deduction under a separate section to reduce your tax liability. While investment in five­ year FDs are eligible for tax benefits, the interest earned on it
is fully taxable.

3. Do I need to report all my bank accounts?

Last year, the government made it mandatory to list all bank accounts in the ITR form. A common query is whether one needs to report every single account
including those that are no longer active. The answer to that question depends on how long the account has been inactive. "It is not compulsory to provide
details of accounts which are dormant. So, one can omit giving details of those accounts which have been inoperational for the past 36 months, since those are considered dormant," says Gupta.

RBI norms say an account becomes dormant if a customer does not initiate transactions such as withdrawal of cash at a branch or ATM, cheque payment, transfer of funds through Netbanking, phonebanking or ATMs.

An account is called inactive if it is not used for 12 months and has to be listed.

If you get dividends or the proceeds of your fixed deposit, the account is considered operational even if you haven't deposited or withdrawn cash. It will
be treated as inoperative only after two years from the date of the last credit entry provided there is no other customer­ induced transaction.

4. Is it necessary to provide Aadhaar card details?

While it is not mandatory to provide your Aadhaar details, it is good if you link the two. For one, your e­verification process for ITR V becomes easier.

However, before you link, make sure that your Aadhaar and PAN card details match. In case they don't, save the task for later. A mis­match in the two
documents can create unnecessary complications.

5. Which is the correct address to provide in ITR?

It is not uncommon to have three to four different addresses quoted at various places. Addresses in your voter's ID, bank account, Aadhaar card and PAN
records may not match and all be different.

Some of you may even have office addresses in your bank records. Which address should you provide in your ITR? Technically, you could provide any.

The income­tax department now corresponds over email and text messages and any communication from them would be delivered to you electronically.

However, some taxpayers still have been receiving communication over post too. So, to be on the safer, provide an address where you currently receive your
mails. "It is advisable to give address of the place where you currently reside," says Gupta.

6. Why is there a tax due even after TDS was deducted?

Your employer has been deducting tax every month. Even the bank has been crediting interest income after deducting taxes. And you do not have any other
source of income. Yet, the screen shows a tax due. In the case of salary income, this may be because you forgot to declare an additional source of income: say, from a previous employer.

Your employer deducts TDS based on the tax slab you fall, which is based on your annual income. However, if you haven't declared your investments or
your annual income. However, if you haven't declared your investments or income from a previous employer, the calculations go wrong. But at the end of the year, when you add up your income details in your ITR, the calculator shows an outstanding liability.

For those of you, who have a large interest income, the outstanding tax liability is because TDS is deducted at 10%. "Banks do not know your slab and they deduct TDS at 10% from deposit incomes, which may lead to a tax due in your return if you belong to the 20% or 30% tax slab," explains Gupta. Also, savings account interest is not subject to TDS. If you have income exceeding Rs 10,000 from your savings account, you are likely to see a tax due in your return.

7. What to do if I have filed an erroneous return?

One of the advantages of filing your return on time is that you are allowed to revise it any time you want. If you have not verified your ITR V yet, you can just
refile. "If you have discovered an error immediately after filing, it is advisable that you do not verify such a return as your tax processing starts only after ITR
V has been verified," says Gupta. Even if you have verified, you can file a revised return under Section 139(5) with correct particulars.

8. How do I know that ITR has been filed successfully?

If you are filing on the last day, there might be delays as servers are overloaded. So, make sure that you have received an acknowledgement number from the tax department. This acknowledgement is sent on your registered email. Look for an email from DONOTREPLY@incometaxindiaefiling.gov.in with
subject 'Confirmation on Submission of IT Return'. The ITR V is usually attached that states the acknowledgment number. If you do not get this email, it could be that your return was not submitted successfully and you may have to refile. 

You still have to verify your ITR V. You can verify either electronically or mail the signed ITR V to the processing centre within 120 days of filing the return.

Want to drop ex's name off passport? Prepare for a long haul in court corridors

Want to drop ex's name off passport? Prepare for a long haul in court corridorsBy Johanna Deeksha
Published: 22nd May 2016 04:32 AM
Last Updated: 22nd May 2016 05:10 AM


CHENNAI: Though the judiciary has provided relief to single parents on multiple occasions in the past, ground realities have not changed much for them. Single parents continue to run to courts for various legal procedures and passport officials are not making it any easier insisting on a court statement, if a single mother wishes that the father’s name not be mentioned in the passport.

Thirty-four year old Radhika V (name changed) was asked to get an annexure form (annexure G, affidavit for separated couples or those with no marriage certificate) signed by the magistrate in order that she not have her spouse’s name in her passport, after passport officials claimed that her divorce papers were not enough.

Radhika tracked down an advocate and managed to get a signature from the magistrate shelling out `12,000 as fees. Common sense would deem that this would have been enough for her daughter’s passport to exclude Radhika’s former spouse’s name.

“Since I already had that signed copy with me, I thought I would be asked to produce the same for my daughter as well,” she told Express.

However, to her annoyance, passport authorities demanded that she get another annexure form (annexure K, declaration of guardian of minor) duly signed by a magistrate.

“I had to shell out another `12,000 for my daughter’s passport,” said Radhika.

In several cases including one case as far back as 2011 and one case as recent as last Friday, Delhi courts have ruled in favour of single mothers deeming that the father’s name need not be included in the passport.

This begs the question why single parents are being forced to get a court statement each time?

“Even if it is an absolute must that we have to get the order, then at least the passport authorities should create another option for single parents, where we don’t end up shelling out such large amounts of money. If it is routine, why should it cost money?” asked Radhika.

Since online applications do not proceed unless all fields are filled in, applicants find it hard to even book an appointment with authorities which necessitates a personal visit to book an appointment when they are invariably asked to produce a magistrate’s signed annexure copies.

Advocate Kavitha Balakrishnan says that she has had many NRI clients approach her for the same matter despite the High Court’s order deeming it unnecessary for a father’s name to be included in such instances.

“Passport officials claim they do not have the software that accepts applications without the father’s name and they insist on the court order because most are unaware that the father’s name is not mandatory for single parents.”

It is clear that passport officials do not take responsibility to help applicants and explain options and procedures.

“There is a ‘why-should-I-care, it’s-not-my-responsibility’-attitude,” said Balakrishnan.

“ The judiciary has passed an order, now the executive should just get down to implementing the High Court order, even a circular to the passport offices would be a step for country-wide reform, but someone has to take the initiative,” according to Balakrishnan.

When passport officials were contacted, they said that it was simply impossible to issue a passport without the father’s name and are aware of the judgements passed in favour of single parents.

“The Ministry of External Affairs has to review those rules and see what can be done but till then we have to ask for the father’s name unless the court issues a statement saying otherwise. However,without a court order we cannot help the applicant unless we get directions from the ministry,” said a senior official from the Regional Passport Office.

http://www.newindianexpress.com/cities/chennai/Want-to-drop-exs-name-off-passport-Prepare-for-a-long-haul-in-court-corridors/2016/05/22/article3445215.ece

PAN requirement from 1 January 2016

PAN requirement: How your life will change from 1 January

A look at where the tax department’s new rules will apply



In an attempt to curb black money and encourage people to move towards cashless transactions, the income tax department has changed some rules related to the Permanent Account Number (PAN). The rules, which apply to financial transactions, will come into effect on 1 January. Listed here are some of the changes that will come into force.

Five Reasons Why You Can Get an Income Tax Notice

Receiving an income tax notice can be scary for most people. From not filing returns to hiding interest income, the reasons can vary for attracting a notice. Avoid these most common mistakes if you don't want to get an income tax notice.

1) Not filing income tax returns

According to income tax law, if your gross income (without any deductions) is above the exempted limit of Rs 2.5 lakh in case of individuals, Rs 3 lakh for senior citizens (60-80 years of age) and Rs 5 lakh for super seniors (above 80 years), you are liable to file a tax return. Also, irrespective of the fact that your employer has deducted the tax at source (TDS) or not, you have to file an income tax return. Many people also believe that since they don't have a tax refund to claim, they don't need to file return. But that's a misconception.

According to Preeti Khurana, chief editor of Cleartax.in, "If you are a resident Indian and you own a foreign asset or are a signing authority in a foreign bank account, you have to file an income tax return irrespective of your income." If you fail to do so, you may get a notice from the income tax department, she added.

2) TDS errors

If there is mismatch between the TDS deposited by your employer and the income tax return filed by you, you may get an income tax notice. You should always check your tax credit statement (Form 26AS) online before filing the return. If a wrong TDS has been credited to your account or it has been credited to a wrong PAN, despite it being deducted from your salary, you can come under scrutiny.

3) Hiding interest income

Many people knowingly or unknowingly don't include the interest income from their saving account, fixed deposits and recurring deposits in their income tax returns. The interest from saving account up to Rs 10,000 is tax deductible under Section 80 TTA while interest on fixed deposits and recurring deposits is fully taxable. In case of fixed deposits and recurring deposit, a TDS will be deducted in case the interest income exceeds Rs 10,000 in a financial year. But whether the interest is taxable or not, you have to disclose all your interest income in your tax return. So reveal the interest income in your return and then avail the deduction if any. Not doing so can result in a tax notice.

4) Mismatch or concealment of income

If your actual income, expenditure or investments differ from the one declared in your income tax return, you can get an income tax notice under Section 143(3)/143(7). You would be asked to provide clarifications and documents for re-calculation of your income.

"Notice is issued when tax authorities are of the opinion that you have concealed a part of your income while filing your return of income. Penalty for concealment of income can be up to a maximum of 300 per cent of tax payable." says Neha Malhotra, executive director of taxation at Nangia & Co.

"The tax authorities can send notices pertaining to years gone by as well. So it is advisable to preserve the tax records for eight years, but where the assessee has any asset situated outside India, he should preserve the documents for past 18 years," she said.

5) Defective income tax return

You should be careful while filing your income tax return. If the income tax authorities find any error they can issue a notice to you under Section 139(9) and direct you to file a revised return on income after correcting the error.

Seven ways to earn tax-free income

Use these strategies to make the most of opportunities offered by tax laws and reduce your tax liability.

Use indexation to nullify tax

High inflation has been a curse for investors in the past few years, but for some, it has been a boon. Tax rules allow inves- tors to adjust the cost of an asset to infla- tion during the holding period.

Invest through a non-working spouse

If you gift money to your wife and it is invested, the taxman will club the earning with your income for the year. But if you invest in tax-free instruments like PPF or tax free bonds, there is no tax implication.

Avail of minor exemption

If you invest in a minor child's name, the income is clubbed with that of the parent who earns more. However, there is a small `1,500 exemption per child per year from such investments. You can avail of this for a maximum of two children.

Take help of an adult child

After a person turns 18, he is treated as a separate individ ual for tax purposes. His earnings are no longer clubbed with his parent's income. Save on tax by investing in the name of an adult offspring.

Parents can help too

Your parents can also help you avoid the tax net. If any or both of your parents do not have a high income, while you are in the highest 30% tax slab, you can invest in their name to earn tax-free income. Such income is not clubbed.

Revive your forgotten Ulip

Most of us have Ulips in our portfolios and many of us have stopped paying the premium. If you are part of this crowd, you can use your Ulip to earn tax-free income. Pay all the pending premiums at one go and earn tax free returns. 7 FORM AN HUF WITH INHERITED WEALTH Double your basic exemption and savings limit simply by establishing a Hindu Undivided Family (HUF). The tax authorities treat the HUF as a separate entity. It is entitled to the same tax benefits.