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 ITR filing: Common mistakes that could get you an income tax notice

New ITR Forms for FY2018-19, AY2019-20 notified by CBDT; Here is all you need to know
April, 09th 2019

Title:- Mismatch between ITR and service tax return comes under greater scrutiny

The revenue department has asked tax officials to scrutinise the mismatch in services turnover numbers provided by businesses in income tax returns and service tax returns for 2015-16 and 2016-17 fiscals.

Central Board of Indirect Taxes and Customs (CBIC) Chairman P K Das in a letter to field formation stated that there was a considerable gap of ?12 lakh crore between the turnover on account of services as per the ITR/TDS (tax deducted at source) data and the value of services declared in the corresponding service tax returns for fiscal 2015-16.

Mismatches were also noticed for the financial year 2016-17, for which data is being shared with the field offices.

"... the sheer magnitude of the mismatch is a pointer to the possibility of revenue leakage which cannot be ignored," Das said, asking the tax officers to quickly verify the data and report it to the CBIC.

The mismatch in ITR and service tax returns has come to notice in respect of permanent account numbers (PANs) that are either not at all registered under service tax or PANs which are registered but did not file the service tax returns.

In some cases, there is a value mismatch between the turnover declared in ITR or TDS and the service tax returns.

Service tax was subsumed into the goods and services tax (GST) with effect from July 1, 2017, and the period under scrutiny is the last two financial years before the new indirect tax regime was rolled out.

Net service tax collections during 2016-17 stood at ?2.54 lakh crore as compared with ?2.11 lakh crore in 2015-16.
Title:- Here are 6 common mistakes one should avoid Filing your income tax return?

The last day to file the income tax return for the financial year 2018-19 is July 31, 2019. Most of the people find the process of filing income tax return confusing. It involves a lot of documents due to which chances of mistakes are high. Some common mistakes can lead to notice from the Income Tax department or a hefty fine.

Six common mistakes one should avoid while filing ITR-

1. Not declaring all income sources- While filing income tax return, make sure to report all your income sources. This is the most common mistake committed by the taxpayers. The income from other sources includes interest earned on the bank savings account, fixed deposits (FDs), insurance and other schemes like public provident fund (PPF). On fixed deposits, 10 per cent tax deductible at source (TDS) applies.

However, income from all the sources must be reported including the tax-free ones as well. Income-Tax Department (I-T department) can send a show cause notice in case taxpayers fail to do do. In fact, all those employees who have recently changed their job are required to disclose income earned from the previous and current employer both.

2. Wrong personal details in the ITR form- Mentioning wrong personal details in income tax return filing should be avoided. Taxpayers often commit errors in the details like name, address, PAN, email ID, etc. This leads to the rejection of ITR form by the department. The name in the ITR form should be same as that on the PAN card. Moreover, address and email id should be mentioned correctly or else the taxpayer might end up missing important notifications.

3. Filling wrong ITR form- I-T department provides eight forms to file. Each form is for a different type of taxpayer. These forms are ITR-1, ITR-2, ITR-3, ITR-4, ITR-5, ITR-6, ITR-7 and ITR-V. For instance, ITR-1 or SAHAJ is filled by the resident individuals whose total income for the particular assessment year includes salary or pension, one house property or the income from the other sources.

4. Giving wrong bank details- One should provide correct bank details along with the Indian financial system code (IFSC) details. Incorrect bank account details might lead to problem in case of refunds and hamper the process.

5. Declaration of properties- If you own more than one house property then you have to pay tax on it. Either it is occupied by tenant or by the relatives, you are liable to pay tax on it.

6. Selection of wrong year to file ITR- Many taxpayers often get confused on the year of filing income tax returns. Always remember that the financial year of your income is the previous year. And the year in which your income is assessed and return has to be filed is called an assessment year.
Title:- GST dept probe on Mismatch in Sales Tax Return and E-Way Bill

Dircption :-
In a bid to curb tax evasion, the Goods and Services Tax ( GST ) officers have started investigating the mismatch in the details shown in the Sales Tax Returns and E-Way Bill by the Companies.

The E-way Bill was launched on 1st April last year as a measure to avoid tax evasion. Under the e-way bill system, the goods more than the value of Rs. 50000/- should have an e-way bill generated from the portal during the course of the consignment.

Following this, the tax officers suspecting that some transporters are doing multiple trips by generating only a single e-way bill or not reflecting e-way bill invoices while filing sales return. It has also come to the notice that certain businesses are not generating e-way bills even as supplies are being made. Goods and Services Tax Network (GSTN), has also started sharing details of e-way bills vis-a-vis taxes paid to help tax officers identify any discrepancy, sources added.

In one of the letters issued by Ghaziabad GST commissioner, a taxpayer has been asked to provide “clarification” within three days on the difference between taxes paid and the liability which the tax officer has ascertained after analyzing sales return GSTR-3B and e-way bill data for the period October 2018 and January 2019. Matching of invoices of e-way bills with the sales shown in sales returns helps taxmen in assessing whether the supplies have been accurately shown in the returns and GST paid on the same.

The matching of e-way bill data with that of tax payment is in addition to an analysis being done by GSTN by matching taxes paid in summary sales return GSTR-3B and final returns GSTR-1. Also, businesses whose GSTR-1 did not match with GSTR-2A, which is a purchase return auto-generated by the system from the seller’s return, have been flagged by GSTN systems.

Income Tax Return (ITR) Filing Forms for FY 2018-19: With the start of the new financial year, the income tax return filing season has begun and, keeping this in view, CBDT has notified the new Income Tax Return (ITR) forms for FY2018-19/ AY2019-20. The notified new forms are ITR 1 Sahaj, 2, 3, 4 Sugam, 5, 6, 7. CBDT has notified new ITR forms for FY2018-19, i.e. AY 2019-20, vide Notification No. 32/2019 Income Tax dated 1 April, 2019, in line with the amendments made by the Finance Act, 2018.

“ITR Forms for the Assessment Year 2019-20 have been notified by the CBDT. As per the new notified forms, ITR -1 and ITR-4 cannot be filed by the individual who is a Director in the Company or has invested in unlisted equity shares,” says CA Abhishek Soni, CEO,

ITR 1 Sahaj
For individuals being a resident other than not ordinarily resident having Income from Salaries, one house property, other sources (Interest etc.) and having total income up to Rs 50 lakh.

Simply put, ITR 1 Sahaj is a one page form for individuals having income up to Rs 50 lakh from the following sources:

1. Income from Salary or Pension
2. Income from One House Property
3. Income from Other Sources

For Individuals and HUFs not having income from profits and gains of business or profession.

For individuals and HUFs having income from profits and gains of business or profession

ITR 4 Sugam
For presumptive income from Business & Profession

For persons other than:-
(i) Individual,
(ii) HUF,
(iii) Company and
(iv) Person filing Form ITR-7

For Companies other than companies claiming exemption under section 11

For persons including companies required to furnish return under sections 139(4A) or 139(4B) or 139(4C) or 139(4D) or 139(4E) or 139(4F)

Here is the full text of the notification.

G.S.R. 279(E).— In exercise of the powers conferred by section 139 read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:-

1. Short title and commencement.-

(1) These rules may be called the Income-tax (Second Amendment) Rules, 2019.
(2) They shall come into force with effect from the 1st day of April, 2019.

2. In the Income-tax rules, 1962 (hereinafter referred to as the principal rules), in rule 12,?
(a) in sub-rule (1),-

(I) in the opening portion, for the figures “2018”, the figures “2019” shall be substituted;

(II) in clause (a), in the proviso, after item (IC), the following items shall be inserted, namely:
“(ID) has claimed deduction under section 57, other than deduction claimed under clause (iia) thereof;
(IE) is a director in any company;
(IF) has held any unlisted equity share at any time during the previous year;
(IG) is assessable for the whole or any part of the income on which tax has been deducted at source in the hands of a person other than the assesse;”;

(III) in clause (ca),-
(i) in the opening portion, for the words “a Hindu undivided family or a firm, other than a limited liability partnership firm,”, the words “a Hindu undivided family, who is a resident other than not ordinarily resident, or a firm, other than limited liability partnership firm, which is a resident” shall be substituted;
(ii) in the proviso, for item (I), the following items shall be substituted, namely:-
“(I) has assets (including financial interest in any entity) located outside India;
(IA) has signing authority in any account located outside India;
(IB) has income from any source outside India;
(IC) has income to be apportioned in accordance with provisions of section 5A;
(ID) is a director in any company;
(IE) has held any unlisted equity share at any time during the previous year;
(IF) has total income, exceeding fifty lakh rupees;
(IG) owns more than one house property, the income of which is chargeable under the head “Income from house property”;
(IH) has any brought forward loss or loss to be carried forward under any head of income;
(IJ) is assessable for the whole or any part of the income on which tax has been deducted at source in the hands of a person other than the assesse;”;

(IV) in clause (g), the words, brackets, figures and letters “or sub-section (4E) or sub-section (4F)” shall be omitted;
(b) in sub-rule (3), in the Table, in column (i), against the entries at serial number 1, in column (iii), for item (b), the following item shall be substituted, namely: (contd… please refer attachment for Forms ITR 1 Sahaj, 2, 3, 4 Sugam, 5, 6, 7)

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