Daily News

Tax-Saving Infrastructure Bonds: Know how much tax to be paid on maturity and how to avoid TDS

The long-term infrastructure bonds that were issued in the Financial Year 2011-12 to offer deductions of up to Rs 20,000 from taxable income under section 80CCF of the Income Tax Act are set to mature in the Financial Year 2021-22.

tax saving infrastructure bonds

Although the bonds provided tax benefits under section 80CCF at the time of purchase. The bonds’ interest is taxable in the hands of investors.

As a result, the tax-saving long-term infrastructure bonds were not really tax-free bonds.

The annual interest payout option and the cumulative interest option were both available to the investors.

While investors who chose annual interest distributions have already paid tax on the amount of interest received. Those who chose the cumulative option would pay more tax in the year of investment than they saved in the year of investment.

Because the interest on long-term infrastructure bonds is taxable. The interest earned by the investors will be added to their taxable income. Where interest calculations are on a per annum basis for those who chose the annual option. Whereas it is aggregate on maturity for those who chose the cumulative option.

As a result, tax payable will be lower for investors in lower tax brackets and higher for those in higher tax brackets.

TDS

For Resident taxpayers who choose the cumulative option in physical format. The interest payment will be subject to a 10% Tax Deducted at Source (TDS) if the interest payment upon redemption exceeds Rs 5,000.

TDS- tax deducted at source

The TDS rate will increase to 20% if the bondholder does not have a valid PAN. The investor will same TDS rate if the investor has not submitted his tax returns for the last two years; where the total TDS and TCS in each of those years is Rs 50,000 or higher.

No TDS will be applicable to investors who hold bonds in Demat form.

TDS of 31.2 percent would be applicable to interest payouts for non-resident taxpayers.

Daily News

Did not furnish PAN for FD? You can’t claim TDS credit now

If you are filing for TDS then there must be some questions running in your mind. In this article, we will see how PAN affects your TDS report.

Question: My mother is a senior citizen who has not provided her PAN to the bank. She has had income tax deducted from her FD for the previous three years. What is the procedure for obtaining Form 26 AS or Form 16 for income tax deductions on FDs?

TDS

Expert’s answer: On interest paid on fixed deposits, the bank is required to deduct tax at the source. Following that, the bank must file a TDS return; in which it must record the tax deducted against the deductee’s PAN. This information is present on the deductee’s Form 26AS. Hence, allowing them to claim credit for such tax against their final tax burden at the time of submitting their return of income.

Because you had not provided your PAN to the bank for the previous three years. The bank’s TDS returns would have said: “PAN not available”. As a result, the tax deducted will not appear on your Form 26AS. Hence, you will be unable to claim TDS credit.

PAN CARD

Even if you provide the PAN now and the bank revises its TDS return to reflect the tax deduction against your mother’s PAN. Still, you will be unable to claim credit because the TDS credit lapses if you do not claim it while filing the relevant assessment year’s return/ revised return; the time limit for which has passed in your case. Form 26AS can now be downloaded by going to the ‘e-file’ tab of the income tax e-filing portal and clicking on ‘view Form 26AS’. After successfully depositing TDS with the government, the bank has an obligation to provide the deductee with Form 16; which is a certificate of TDS.

Daily News

Glitches in new e-filing Income Tax Portal: Finance Ministry, Infosys meeting TODAY at 11 AM

Are you worried about how to access the new Income Tax E-filing portal? E-filing Income tax portal has launched newly on 7th June 2021 www.incometax.gov.in for various compliances and timelines to be met. Especially renewal of registrations under section 12A/ 12 AA 10(23c) and 80G.

Multiple technical glitches are coming in the way of using the income tax portal. Taxpayers, professionals, and other stakeholders are complaining about these glitches. From the very first day of the portal launch, there are multiple inconveniences for taxpayers like

  • Unable to login with their old passwords,
  • Difficult to find form 10a,
  • Problem in uploading a digital signature

Certain technical glitches associated with the portal specifically related to the renewal of registration to date. Many users posting tweets tagging finance minister to resolve the problem. We will further discuss these in detail.

Unable to login with old password

It generates an error while logging into the income tax portal. It seems that the password is not integrated with the PAN of the taxpayer.

Form 10a

In case the login successfully takes place, the user faces a problem in finding the form 10a from various income tax forms listed under the e-file tab.

Digital signal utility software

In this section instead of the java utility, the em sign utility is available on income tax portal. It implies that you will require a physical token of digital signature. Previously, the signature files could have been generated and attached even later.

Information saving

Complete information is not saved on the new income tax portal. Some of the organizations tried to fill up form 10a in the initial days of the new portal. They say that their information did not save on the new portal. Previously this facility was available on the old income tax portal.

Expiring of session

There is a number of complaints about session expiring the session while filling up the details. Even after multiple attempts, they were not able to completer the form and upload the documents.

In the press release on 15 June 2021, the ministry of finance has informed that the senior officers of the ministry will be holding an interactive meeting on 22nd June 2021 between 11 am to 1 pm with the Infosys team on the issues and glitches of income tax portal. They will clarify and resolve the queries related to such technicalities and receive inputs on the working of the new portal.

The other stakeholders including other members of the ICAI auditors, consultants, and the taxpayers will also join the interaction.

For more such updates, keep watching this space!

Advices Budgeting Daily News Finance Strategy

New Income Tax Portal!

Isn’t it exciting! Income Tax has launched a new portal for e-filing. It is named ‘e-filing2.0’. What are the new changes? Will it be easier to use than the previous one. Let’s discuss and learn more about it.

Income Tax Portal is in its initial stage, So there may be some issues sometimes like delay in opening the website, slow in filling the detail. So if you are facing these issues and worried about how to file your returns, you can choose the offline option for now. Infosys has said and regretted these glitches. The new URL for the website is www.incometax.gov.in.

About Portal

Despite all these glitches, the new portal is very much sorted in comparison to the previous one. Representation of the portal is very effective. Additionally, there are many videos for awareness about different income tax topics and processes. You will find some sections like:

  • Dashboard
  • e-file
  • Authorized Partners
  • Services
  • Pending Actions
  • Grievances
  • Help

For News and updates, you have to scroll down and access the folder. All the resources are mentioned for ITR related problems.

How to Log In?

As for the user id, you can use the PAN card number or the Aadhar number which is linked. Thereafter, you will receive an access message. After that entering your password you will be completely logged in.

You will need to update your profile step by step. You will find a dashboard and a Modified “You ask and we Answer” section in it. By clicking on this section you can ask all the queries related to income tax file returns and other services provided. you will not need any professional guide for the problems, only by visiting and learning the portal you will be able to do all of it by yourself.

Modes

This is the main attraction of the portal in comparison to the previous portal. It is very much user-friendly now. You will need to select a mode of filing to proceed. There are two modes mentioned in the portal

  • Offline (using HTML utility)
  • Online (recommended)

You will then need to choose your type of income tax form according to your income. If you do not know which type of form you should fill then help is there to help you out. Some beneficial services will be available only when the profile update is done 100%. The new portal also includes all-new mobile app services for tax-related issues. File your returns now in a more easy manner!

For more updates like these, keep watching this space!