Mandatory Disclosure requirements to declare All Assets and Liabilities in the Return of Income

The new Incometax Returns prescribed by the Incometax Department this year, provides for the compulsory disclosure of all assets and liabilities as on 31-03-2013 at cost.

The importants points to be noted in this connection are as below.

1. The value at which the assets are to be disclosed is at cost.

2. All the immovable assets like land, buildings, houses, farm house, flats, plots, etc are to be disclosed.

 They should be disclosed at the cost for which they were bought and all the expenditure on improvements so for incurred. 

The value of immovable properties inherited from the parents etc, should be shown at nil cost. Similar are the assets gifted by the relatives etc are to be shown at NIL cost.

3. Balances with all banks like Savings Bank, Current Account, RD account, Fixed Deposits, as on 31-03-2013 is to be disclosed.

4. The cost of all the shares held , and other securities like mutual funds, chits etc should be shown at cost as on 31-03-2013.

5. The Insurance Policies held by the assessees, should shown at cost as on 31-03-2013. That is the total of all premium paid till 31-03.2013.

6. The total amount of loans and advances given as 31-03-2013 is to be disclosed.

7. Cash on hand as on 31-03-2013.

8. Jewellery and bullion at cost as on 31-03.2013.

9. Cars, Vehicles etc as on 31-03.2013 at cost.

10. Liabilities like loan etc in relation to above assets as on 31-03-2013.

All these details are compulsory for persons showing more than Rs.25 lakhs as Total Taxable income. Hence small assessees need not furnish the above details.

However I would prefer to furnish all these details in the return of income for all assessee. This will help, if any raid or survey takes place in their cases,  I will be able establish before the Incometax Department, that all assets owned by them are disclosed to the department and hence there is no undisclosed income.

May be ,this is a tedious work for the assessees and Chartered Accountants, to furnish all these details as they have collect the cost of all assets acquired over a period of time. But it will be easy from next year onwards. The reason is that we have to furnish the additional assets aquired during that year and additional liability incurred during that year only.

Persons with income more than Rs. 5 Lakhs to file Income tax return online

The latest notification of the Income tax department says that persons with more than Rs. Five lac income have to file their Income tax returns online. What are the implications?.

1. They have to register with the Income with the E Filing Website and get a Password. The user I'd is always the PAN number. It is a tedious job for which persons do not have previous experience in computer operations need the help of a Chartered Accountant. Of course you need to pay for it.
2. The assessee, need to get a digital signature for filing the returns. The Chartered Accountant will help you in getting a digital signature. He will also help and teach you how to sign with the digital signature.
3. Despite the promise of the Govt, that the income tax return filed online, will be processed faster and refunds granted earliest, in practice it does not happen. Many returns filed for the earlier year are still pending for disposal with the Central Processing Centre at Bangalore.
4. Let us hope that all the glitches at CPC will be sorted out and returns processed faster this year.

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Arrear Demands of the Incometax Department Resolving grevances

The Incometax Department had last year, uploaded the arrear demands of the assessees as per the books of accounts of the Incometax Officers.

Their books contained lot of mistakes. Several demands not pertaining to the assessees concerned were uploaded. In several cases huge demands, where the assessee filed returns showing below taxable income or loss were also shown as arrears with some tax effect. In many cases the intimation of the demand were not even despatched or served on the assessees. 

The CPC Bangalore started deducting these unverified demands with out giving proper notice to assessees. 

Representations to the Incometax Officers were met with the reply that it is not in their realm and the party had to approach CPC Bangalore. CPC Bangalore never replied.

It is in these circumstances, the High Court of Delhi, intervened on a letter from a Chartered Accountant, and issed directions that the refunds should not be adjusted for arrear demands, unless the assessees were issued  letters calling for objections. 

Based on the directions, the CBDT had earlier issued instructions to the Incometax Officers to settle these grivances at the earliest. However nothing much was done. Now the CBDT had again issued fresh instructions to the field formations to observe this month as grevance settlement month and settle all the grevances. I hope that better sense will prevail and the assessees grevances in this regard will be settled.

In many cases I find that the officers were not trained enough on the technology side and the software,the assessing officers use and software used by the CPC Bangalore, are not compatible and this results in these problems. 

I do hope that the department take necessary steps to train the officers and software issues may be cleared at the earliest.

For more information the readers may go through the link as below:

http://www.itatonline.org/info/index.php/resolve-arrear-demand-grievances-in-transparent-manner-cbdt-directive/

New Income tax Forms for AY 2013-14 and transfers of Commissioners and Chief Commissioners

The Incometax Department is yet to publish the new forms for filing Incometax Returns. It wants all the Salaried employees to file their retun of Income before the end of June and all other returns before July 30th except tax audit cases.

In the last year the returns were prescribed very late and internet filing enabled also very late. Still many assessees are yet to receive their refunds. 

I dont know when the Incometax Department will act in time and announce new returns on 1st April of the new assessment year. May be the Apex Court has to issue an order in this regard?

Similarly the orders of the transfers of the Commissioners and Chief Commissioners are yet to be issued. Only thereafter the orders of transfer of Additional Commissioners and Joint Commissioners will be issued. If these transfers are not issued, all the activity in the department stops and everything is at standstill. I dont know who will bell the cat?

Huge and un necessary expansion of the Incometax Department

This is how the Incometax department is going to expand like anything and create all sorts of hurdle to business. Please curse or thank the FM for this as you wish.

Cadre Restructure proposal for Income Tax Department cleared by DOPT (as in Feb 2012 )

Cadre restructuring proposal- Changes in Gr.A as approved by the Department of Personnel & Training.

SL NO	GRADES	EXISTING	POSTS CLEARED BY DOE	POSTS APPROVED BY DOPT	ADDL. POSTS GIVEN
1.	APPEX (80000) PRINCIPLE CCIT	0	29#	27*	20#(-9)
2.	HAG+(75500-80000) ADDL.CCIT	0	88	50	50(-38)
3.	HAG (67000-79000) CCIT	116	333	150	34(-183)
4.	SAG PB-4(GP-10000) CIT	731	602	831	100(+229)
5.	NFSG PB-4(GP-8700) JAG PB-3(GP-7600) ADDL.CIT/JCIT	1253	1565	1565	312(0)
6.	STS PB-3 (GP-6600) DCIT	1358	1601	1396	36(-207)
7.	JTS PB-3 (5400) ACIT	734	1091	1091	357(0)
8.	RESERVES-PB-3 GP 5400-ACIT	0	760	570	570(-190)
	TOTAL	4192	6069	5678	1479(-398)

Figures in brackets denote number of posts altered by the DOPT vis-à-vis that approved by the DOPT.

*Included posts of Chairman, Members, CBDT which are to be excluded as per DOPT recommendations.

#Excluding the posts of Chairman and Members, CBDT.

Cadre-restructuring proposal Gr.B & C

S No.	Post/ Designation	Grade/Pay Scale	Existing	Proposed
9	ITO Gp-B	PB-2, GP Rs. 5400 & Rs. 4800	4448	6056
10	Sr. PPS PPS Sr. PS PS	PB-3, GP Rs.6600 PB-3, GP Rs.5400 PB-2, GP Rs.4800 PB-2, GP Rs.4600	0 0 117 706	0 0 450 602
		Sub. Total	823	1051
11	Pr. AO Sr. AO AO Gr. II AO Gr. III	PB-3, GP Rs.6600 PB-3, GP Rs.5400 PB-2, GP Rs.4800 PB-2, GP Rs.4600	5 0 35 774	29 0 421 1049
		Sub. Total	814	1499
12	ITI	PB-2, GP Rs.4600	9094	13521
13	Ex Asstt.(SrTA, OS/ Steno I & II/ DEO)	PB-2, GP Rs.4200	13867	19951
14	TA/ Steno III	PB-2, GP Rs.2400	11409	15123
15	Notice Server	PB-2, GP Rs.1900	2855	4088
16	Group C (Upgraded from GroupD)	PB-2, GP Rs.1800	7365	11138
17	Reserves (B & C)	PB-2, GP Rs.1800	nil	1125