No ITC If GST Return Not Filed: Telangana High Court Orders

The high court of Telangana recently ordered that no individual or taxpayer will be getting input tax credit until unless he had filed the GST returns.Also, the court has said that in case he had missed the return filing he is liable to pay the penalty on the tax amount. This would impact the majority of dealers who have been using the ITC on inputs for the reduction in cash payments.As per the judgement of Justices V Ramasubramanian and P Keshava Rao, it said, “…until a return is filed as self-assessed, no entitlement to credit and no actual entry in the electronic credit ledger takes place. As a consequence, no payment can be made from out of such a credit entry.”

The company on which the case was being decided argued that the interest has to be calculated on the net tax liability and not on the total tax amount however the court supported the otherwise and held the tax department correct.As per a tax lawyer, “The ruling has very wide implication as almost all taxpayers, who delayed filing returns and have paid interest only on cash payment of tax and not on the GST amount set off by them through ITC. The issue will open a floodgate of litigation and demands of interest by GST officials are imminent. Even CAs while auditing Annual GST Returns, which have to be filed by June 30, may be required to point out short payment of interest due to delayed set-off.”

GST Department Planning New Tricks on Tax Evaders

Tax sleuths have planned a fresh crackdown on traders practicing tax evasion of Goods and Services Tax (GST) by pursuing new registration for their businesses without dismissing a prior one.Right and duties coexist simultaneously & where it is right, there is a duty to be fulfilled by the citizens. The Goods and Services Tax (GST) law gives the right to an individual to have separate registration on the same Permanent Account Number (PAN) in the same state. But people are not using this facility in fair fashion instead they are using the same to evade taxes which were due under earlier registration.

The Central Board of Indirect Taxes and Customs (CBIC) has given strict orders to the tax officers to carefully check and analyze the information like details of proprietor, director/members of managing committee of associations/board of trustees etc, furnished by an applicant in the fresh registration form in the context of any cancelled registration having same details. Recently, a huge number of registrations has been aborted by tax officers due to non-compliance.

Key changes in ITR-1 and ITR-2 forms for FY 2018-19

Here are Nine changes in ITR forms 1 & 2 that you should know about while filing your return for FY19.

Key changes in ITR-1 and ITR-2 forms

If you are holding shares in an unlisted company then, you are required to disclose the details of your holdings in ITR-2.The income tax return (ITR) forms for FY 2018-19 notified by the government are different from those used to file the previous year’s returns. Some of the changes in the forms have been done in keeping with the changes in income tax laws made in Budget 2018 for FY 2018-19 and onwards. Apart from that, there are other changes as well in the ITR forms which you should be careful about while filing your return for FY 2018-19.

Here are nine changes in ITR forms 1 & 2 that you should know about:

1. Online filing of ITR mandatory

In a departure from previous year, all individuals (except for super senior citizens) will be required to file their ITRs electronically. The ITR-1 for FY 2018-19 cannot be filed in paper format by the taxpayers having income below Rs 5 lakh with no refund.Chartered Accountant, Naveen Wadhwa, DGM,  says, “In the previous year, CBDT allowed two types of individuals to file their ITR in paper format. These individuals were super senior citizens whose age is 80 years or above and individuals having income below Rs 5 lakh with no refund. However, for FY 2018-19, only super senior citizens can now file ITR-1 or ITR-4 in paper form and others will have to file their ITR electronically.”

2. Complete details of buyer to whom you have sold property

Property Details

If you have sold a property in FY 2018-19, then while filing ITR-2, you will be required to provide complete details of the buyer to whom you have sold the property. Wadhwa says, “The buyer details have to be provided irrespective whether the capital gains accrued are of short-term or long-term in nature. The details of buyer will have to be given if TDS is deducted by your buyer while making payment.”It is mandatory to deduct TDS if the sale value exceeds Rs 50 lakh. However, “If the sale value exceeds Rs 10 lakh but below Rs 50 lakh then deducting TDS is not mandatory but quoting of PAN of the buyer while filing ITR is mandatory for this year,” adds Wadhwa.

3. Property wise details of Rent arrears

“While filing ITR-1 or ITR-2 as applicable, if there are any rent arrears that are received by you in FY 2018-19 then you have to report them property wise as received,” says Wadhwa. Remember, if an individual has one house property which is let out during FY 2018-19, then the rent received is required to be reported in ITR-1.

For individuals with more than one house property, they are required to file their ITR using ITR-2. “ITR-1 & ITR-2 has introduced an additional row ‘Arrears/Unrealized Rent received during the year less 30%’. This row was not available in both the forms in the previous year,” adds Wadhwa.

4. Specifying the type of house property

While providing details of your one house property in ITR-1, you are required to specify whether the house is – ‘Self Occupied’, ‘Let-out’ or ‘Deemed Let-out.’ In the previous year’s ITR-1, there was no such option of ‘Deemed Let-out’ in ITR-1.

5. Investment details in unlisted companies

If you are holding shares in an unlisted company then, you are required to disclose the details of your holdings in ITR-2. The details required are extensive – name of the company, PAN of the company, number and cost of acquisition at the beginning of the year, number of shares, face value, issue price (or purchase price) and date of purchase of shares acquired during the year, number and sale consideration of shares transferred during the year, number and cost of acquisition of shares held at the end of the previous year.Wadhwa says, “Such information is being sought so as to get the footprints of transactions of purchase and sale of unlisted shares. It will also help the department to check whether income and net worth of a shareholder is in corroboration with the amount invested by him in an unlisted company. If it does not reconcile, the department can initiate the enquiry to verify if some unaccounted money is invested in an unlisted company.”

6. Reporting of salary details gets easier in ITR-1

This year providing details of your salary income will be easier as the details required are in sync with the information available in Form-16. In the last year, though taxpayers were required to provide the break-up of salary details, the information required was not in sync with information available in Form-16.

7. Full disclosure of interest income

Along with providing full break-up of salary income, taxpayers will be required to specify the full bifurcation details of the interest income or any other income received by them. Income from other sources head in ITR-1 has been updated to provide details of the source from where interest or any other income is received.

8. Residential status :

The new ITR-2 form asks individuals not only to specify the residential status as resident, resident but not ordinarily resident or non-resident, but also to provide additional information with respect to his residential status, such as, number of days of stay in India, jurisdiction of his residence and tax identification number in case he is a non-resident.”These details are being asked to check if a taxpayer has rightly determined his residential status in India which is entirely based on his number of days of stay in India. The Tax Identification Number will validate if a non-resident taxpayer is rightly claiming the DTAA benefit,” adds Wadhwa.

9. Mention of DIN number

If you are Director of a company, then you will be required to specify your DIN (Director Identification Number) in ITR-2 or 3 whichever is applicable. Along with this you will also be required to provide information – name of company, PAN, whether shares are listed or unlisted.

Wadhwa says, “The purpose of seeking DIN no. of directors might be to identify the inactive directors whose qualifications and taxable income does not justify him to remain on board. If a person has been a director of a company but his income over the period had been negligent, it can raise doubt on the purpose for which he was appointed as director in a company.”

GST Audit report form’s issued , last date June 30,2019

Forms for the GST audit report of the Financial Year 2017-18 have been issued. This form is for companies that do business more than 2 crore rupees annually.For the financial year 2017-18, companies with annual turnover of more than Rs 2 crore can start filling GST audit reports. For this, GST Network (GSTN) has made the form available on its portal. The last date for filing the audit report is June 30.The financial year 2017-18 was the first year of implementation of Goods and Services Tax (GST). The Ministry had notified the annual return form GSTR-9, GSTR-9A and GSTR-9C on December 31, 2018. The GST Council had extended the last date of filing of these forms from December 30 to 30 June.

GST Network has also made GSTR-9C offline available. It can fill the taxpayer and upload it to the portal. EY India’s tax partner Abhishek Jain said that the industry had been waiting for a long time to facilitate offline processing and filling of GSTR-9C online. He said, “Explanation of auditor’s digital signature, besides book-accounts, sending benefits / loss accounts etc, the companies should help in complying with its compliance.”

About the form

GSTR-9 is the annual return form for all the taxpayers registered under GST. GSTR-9A is for taxpayers who adopt a one-time tax plan. Whereas GST-9C is a maturity statement. Verification is done by chartered accountants or cost accountants. By the way taxpayers have to deposit it with an annual return whose business is more than Rs 2 crore in the financial year.

GST Revenue At Highest Level

Explain that revenue collection under GST has gone up from 15 percent to 1.06 lakh crore in March last year compared to the same period last year. According to the finance ministry, GST revenue collection was Rs 1,06,577 crore in March, which is the highest monthly collection level ever since GST was implemented. GST revenue collection in March last year was Rs 92,167 crore, compared to 15.6 per cent in the last month’s revenue collection.

Latest Changes In Income Tax Forms,Mean For You

Income tax assessees are set to come across certain changes in the income tax return (ITR) forms. The Income Tax Department has brought about certain changes in select ITR forms meant to be used for assessment year 2019-20. According to tax experts, some sections in the forms have been rationalised and reporting requirements increased. Individuals and businesses are required to file their income tax returns for the income earned in financial year 2018-19 using these forms: ITR-1, ITR-2, ITR-3, ITR-4, ITR-5, ITR-6 and ITR-7. These seven forms – also known as ITR forms – were notified by the Income Tax Department earlier this month. (Also read: Quoting Aadhaar in ITR compulsory “unless specifically exempted”, says Income Tax Department). July 31 is the due date for filing income tax returns (ITR) for assessees not required to get their accounts audited.

Here are some of the key changes in the income tax forms applicable to individual Assessees:

While there are no changes with respect to reporting of income eligible for benefit under Section 80C of the Income Tax Act, cash and non-cash donations eligible for deduction under Section 80G/80GGA need to be reported, say tax experts. “The forms seek bifurcation between donation in cash and other mode for Section 80G deduction purposes,” said Amit Maheshwari, partner, Ashok Maheshwary & Associates LLP.

Income tax forms – changes applicable to company director.

Individuals serving as a director in a company can no longer file the income tax return using Form ITR-1 or Form ITR-2. Such individuals will be required to furnish details such as the company’s Permanent Account Number (PAN) and Director Identification Number (DIN), and mention whether the shares are listed or unlisted. Additionally, details on investments and transactions undertaken in relation to such shares will also be required.

Changes with respect to agricultural income 

“In case of taxpayers earning agricultural income exceeding Rs. 5 lakh, additional details of the agricultural land need to be provided such as name of district, land area, whether land is owned or leased, whether the land is irrigated or rain-fed,” added Mr Kapadia.

Changes with respect to unlisted company shares.

Income tax assesses will be required to furnish details of the investments held, acquired or transferred in unlisted equity shares during the financial year.”An individual/HUF (Hindu Undivided Family) holding unlisted shares needs to disclose name of the company, opening number of shares, cost, details of shares acquired & sold during the year and closing number of shares and cost,” said Gopal Bohra, partner, NA Shah Associates LLP.

Changes applicable to NRI’s

Individual taxpayers are now required to select the applicable residential status rule based on the actual physical stay of the individual tax payer, say experts.Overseas Citizens of India (OCI) and Persons of Indian Origin (PIO) qualifying as non-resident are required to report the actual numbers of days of stay in the country in the relevant financial year as well as preceding four years, Mr Kapadia explains.

Also, individuals qualifying as NRI need to report the jurisdiction of residence and Taxpayer Identification Number, he adds.

Changes with respect to sale of capital assets (immovable property)

In case of sale of immovable property during financial year 2018-19, details such as name, PAN, percentage share, the value of sale and address of the buyer need to be furnished.

Restrictions on ITR-1 and ITR-4

Form ITR-1 – also known as “Sahaj” – cannot be used by an individual serving as director of a company, having investments in unlisted equity shares, or having income on which TDS (tax deducted at source) has been deducted in another person’s hands.

Form ITR-4 – or “Sugam” – cannot be used by individuals or HUFs non-resident, ordinarily resident, non-resident partnership firms, directors of companies or persons having investment in unlisted equity shares or having more than one house property.