Article Details

I-T department is very efficiently capturing & analyzing the data

TAX TALK-15.05.2017-THE HITAVADA

TAX TALK

CA. NARESH JAKHOTIA

Chartered Accountant

I-T department is very efficiently capturing & analyzing the data

Query 1]
During F.Y.2017-18, my expected tax liability is arriving at Rs. 2,600/-. My income of Rs. 5,20,000/- includes EPF Pension & interest from Fixed Deposits. Bank will deduct TDS of Rs. 49,000/- during F.Y.17-18 on Bank F.D. interest income of Rs. 4,90,000/-. I am senior citizen. Savings includes PPF Rs. 1,50,000/- , 80D Rs. 9,500/-, Saving bank interest Rs. 10,000/-. Please guide me whether am I eligible to submit Form no.15H? [Vijay Dabre- vijaydabre50@gmail.com]
Opinion:

I would like to electrocute everyone who uses the word "fair" in connection with income tax policies - William F. Buckley, Jr.

15G and Form 15H are the declaration forms on submission of which a person can get interest without deduction of tax at source (TDS). The conditions under which Form 15G and 15H may be filed are similar yet with a significant difference. Form 15H is for senior citizens and form 15G is for others. Each taxpayer needs to fully understand the specified conditions and ascertain whether he or she is eligible for filing the relevant form. Form No. 15G can be submitted only when (1) the final tax on estimated total income is expected be nil and (2) the aggregate of the interest received during the financial year should not exceed the basic exemption slab of Rs 2.5 lakhs. Form No. 15H can be submitted if the final tax liability of senior citizen is estimated to be nil.
There are various instances under the Income Tax Act-1961 where even small casual mistakes can cost you big. One such instance could be with regard to routine submission of Form No. 15G/15H.

One has to take utmost care while submitting these forms. Any person making a false statement in the declaration shall be liable to prosecution under section 277 of the Income-tax Act, 1961, and on conviction be punishable:
a] in case where tax sought to be evaded exceeds Rs. 1 Lacs, with rigorous imprisonment which shall not be less than 6 months but which may extend up to 7 years with fine;
b] in any other case, with rigorous imprisonment which shall not be less than 3 months but which may extend up to 3 years and with fine.

With e-filing made mandatory for 15G/15H, there are every chance that the taxpayer would be getting notices if they make false submission of Form No. 15G/15H. Now, one has to be all the more careful while submitting the declaration form.

Your deduction under chapter VIA shall consist of Rs. 1.50 Lakh u/s 80C towards PPF, U/s 80D of Rs. 9,500/- towards mediclaim insurance payment & u/s 80TTA towards Interest on SB A/c. As a result, your total income would be around Rs. 3,50,500/- (Rs. 5.20 Lakh less Rs. 1.50 Lakh less Rs. 9,500/- less Rs. 10,000/-). The basic exemption limit for the senior citizen for the FY 2017-18 is Rs. 3 Lakh whereas the same for very super senior citizen (80 years & above), it is Rs. 3.50 Lakh. Considering yourself as senior citizen, your tax including education cess would be Rs. 2,600/- (5% on Rs. 50,500/- plus 3% education cess thereon). Further, since your total income will be exceeding Rs. 3.50 Lakh, you would not be eligible for tax rebate of Rs. 2,500/- u/s 87A. As your ultimate tax liability is not nil, you cannot submit Form No. 15H. There is no other way to avoid TDS except getting lower deduction certificate from Assessing Officer after making an application in Form No. 13 to your Assessing Officer with income details incorporated therein. AO can issue lower deduction certificate authorizing bank to deduct tax at lower rate. However, the process of getting lower deduction certificate is little cumbersome and time consuming. You can claim the excess TDS by filing income tax return. The only alternate remedy would be to let the bank do TDS of Rs. 49,000/- (as against your actual income tax liability of Rs. 2,600/-) & claim the same as refund by filing income tax refund.
The best part, income tax refund is issued very speedily by the Income Tax Department.

Query 2]
We are receiving Civil Family Pension (Rs. 18,000/- Per month) and my mom has deposited some amount in fixed deposit and we received a letter from IT department with subject “Non-Filing of ITR, FY: 2014-15, Info. Code: CIB-403, Info. Description: Time deposit exceeding Rs. 2 Lakh”. Please instruct me how/what should be filled in Compliance link? [vasudev.praveen@gmail.com]
Opinion:
Income tax department is very efficiently & timely capturing the data from multiple sources & at the same time effectively analyzing & utilizing the database. As a result, it is able to smartly reach the taxpayer not filing income tax return. One such source of information is bank from where data is collected if anyone has invested more than Rs. 2 Lakh in FDR. It appears that your mom doesn’t have the taxable income and hence she is not filing her income tax return.

You can comply with the notice by logging at www.incometaxindiaefiling.gov.in wherein you can also be view the details of the transactions as mentioned in the notice. Response can be submitted in the “Compliance tab”. After clicking on ‘view & submit compliance’, tax payer has to provide details in the following two tabs named as (1) filing of income tax return & (2) Related Information Summary. It lists the assessment years for which return has not been filed. The tax payer needs to provide a response either as (a) ITR has been filed or as (b) ITR has not been filed. If option (a) is selected, information like mode of filing the ITR (paper or e-file), date of filing the ITR & acknowledgement number is required to be submitted. In case the ITR is e-filed, the status will be automatically updated. When option selected is (b) is selected, then the tax payer has to choose the options like Return under preparation or business has been closed or no taxable income or others. Further, if option chosen is ‘Others’ from above then it is mandatory for the tax payer to submit remarks. On the second tab of ‘Related Information Summary’, detail is to be provided about the source/s based on which compliance email has been sent. This is the information received from third parties such as banks, Credit card companies, TDS returns, Mutual fund investment, post offices etc. Against every financial year & against each information in the possession of the department, the description is given therein. Against such descriptions, response could be submitted from drop box menu which cover almost every possible options and if required, further details can also be given in the remarks column therein. Most of the options are self explanatory and are very user friendly. Once you have selected the right option, click on the green ‘submit’ button.

The author is a practicing Chartered Accountant from Nagpur. Readers may send their direct tax related queries at
SSRPN & Co
10, Laxmi Vyankatesh Apartment
C.A. Road, Telephone Exch. Square
Nagpur-440008
or email it at nareshjakhotia@ssrpn.com]