Due date for filing of paper annual TCS returns for the F.Y. 2004-2005 and quarterly statements of TDS and TCS for the quarter ending 30 June, 2005 have not been extended.

However, due date for filing annual e-TCS returns for the F.Y. 2004-2005 has been extended from 30 June, 2005 to 31 July, 2005. Due date for filing of electronic quarterly statements of TDS and TCS for the quarter ending 30 June, 2005 has also been extended from 15 July, 2005 to 31 July, 2005. For details please see the notification by following this link.

The Central Board of Direct Taxes has authorized M/s. National Securities Depository Limited (NSDL) to act as “e-TCS Intermediary” for receiving TCS returns in electronic media to be furnished by corporate and government collectors of tax at source. Returns in Form 27E can now be filed with NSDL through its TIN Facilitation Centres. For details please see the notification by following this link.

Form ITS-3 for filing Return of Income has been amended, vide notification 159/2005 bearing S.O.No. 755(E). For details please see the notification by following this link.

Form ITS-1 for filing Return of Income has been amended, vide notification 160/2005 bearing S.O.No. 756(E). For details please see the notification by following this link.

Banking Cash Transaction Tax Rules, 2005 provides Rules relating to the particulars of taxable banking transactions to be maintained by banks, payment of banking transaction tax, furnishing of statements, returns etc.For details please see the document by following this link.

All electronic returns of tax collected at source (TCS) filed on or after 1/5/2005 must be in the format prescribed by the e-filing Administrator by notification No. SW/9/3/2002-DIT(S){Vol. II} dated 20.5.2005.

Income Tax Department, Delhi invites bids from reputed and experienced vendors for Annual Maintenance Contract of Computers and their Peripherals in the Income Tax Department, New Delhi.

Download Tender Notice

Download Tender Document

All electronic returns of tax deducted at source (TDS) filed on or after 1/5/2005 must be in the format prescribed by the efiling Administrator by notification no. SW/9/3/2002-DIT(S){Vol. II} dated 21.04.2005.

The Directorate of Income Tax (Systems), New Delhi has invited bids from established, reputed and reliable call center operators for establishment of Aaykar Sampark Kendra, a Taxpayer Information and Services Center of the Income Tax department. The tender document is now available online.

Download Tender

New forms for furnishing annual TDS/TCS returns and quarterly TDS returns in case of TDS on payments made to non-residents have been notified. Forms and rules for furnishing quarterly statements of TDS/TCS u/s200 (3) and proviso to section 206C (3) have also been notified. For more…

Returns under the scheme for e-filing of returns income can now be submitted on-line from 1 June, 2005. For the purpose of e-filling of returns any one of the seven e-intermediaries authorized by the Income Tax Department can be contacted. For details visit http://incometaxindiaefiling.gov.in and http://tin-nsdl.com

For the purposes of filing returns of tax collection at source on computer media under section 206C(5B), a scheme for electronic filing of returns has been notified.

E-Filing of TCS Returns

Notification for prescribing the incidental activities, manner of computation of deemed tonnage, computation of average of net tonnage for charter-in of tonnage and form of report of an accountant has been issued.

Notification for Tonnage Tax

The facility of TATKAL TAN is now available. Like Tatkal PAN, an application for TATKAL TAN can be made online with payment through a credit card. For such applications TAN will be allotted and communicated in five days by email. For more details and application visit the TIN website.

The status of a TAN application can now be ascertained from the TIN website.

Rates of depreciation for machinery and plant, furniture and fittings, motor cars, motor buses, motor lorries, motor taxies, moulds used in rubber and plastic goods factories, machinery and plant used in semi-conductor industry, gas cylinders, direct fire glass melting furnaces and ships are reduced from the existing rates and the reduced rates are applicable from Assessment Year 2006-07 onwards.

The rules for the valuation of perquisites have been amended in view of the proposed  Fringe Benefit Tax introduced through the Finance Bill, 2005. The notification shall be effective from the 1st April, 2005, i.e., for the Financial Year 2005-06 and subsequent years.

Data Connectivity Tests for e-Return Intermediaries under 'Electronic Furnishing of Return of Income Scheme, 2004' will be commenced from from 10th Feb, 2005. Applicants who have applied to the Registrar, M/s National Securities Depository Ltd. (NSDL) for becoming e-Return intermediaries and who have been provided temporary passwords by the Registrar can conduct Data Connectivity Tests for all the 8 return forms as per schemas provided on the website of the department at http://incometaxindiaefiling.gov.in as well as on the website of the Registrar at www.tin-nsdl.com.

For the purpose of conducting Data Connectivity Tests, the applicants have to use temporary User ID and Password provided by the Registrar, for logging on the department server at http://incometaxindiaefiling.gov.in. The applicants will have to convert the schemas of the different return forms into xml format, and upload one return of each type successfully for passing the test. Every applicant will get 10 attempts to pass the tests.

Section 88E of the Income Tax Act provides for a deduction of securities transaction tax paid by assesses in respect of taxable securities transactions. CBDT has notified the evidence of payment of security transaction tax which is required to be furnished along with the return of income. For transactions entered into by the assessee in a recognized stock exchange it shall be in Form No. 10DB and in respect of transactions of sale of units of equity oriented funds to the mutual funds it shall be in Form No. 10DC.

 Notification Number 1 dated 6 January 2005

CBDT has notified the amendment of the format of notice of demand u/s 156 of the Income Tax Act (Form No. 7) to provide for, inter alia, compulsory quoting of PAN and reduction of the interest payable on default to 1% per month or part of the month from 1.5%.

 Notification Number 2 dated 7 January 2005

Employees making donations to the Prime Minister’s National Relief Fund, the Chief Minister’s Relief Fund or the Lieutenant Governor’s Relief Fund through their respective employers will be allowed deduction u/s 80G of the Income-tax Act, 1961 on the basis of the certificate issued by the Drawing and Disbursing Officer(DDO)/Employer in this behalf. The CBDT has clarified that in such cases respective Funds will not be required to give individual receipts to employees making contribution through the employer.

Facility for online application for TAN allotment and request for correction or change in TAN data is also now available.

Through Circular Number 01/2005 dated 06 January, 2005 the CBDT has clarified that “an undertaking set up in Domestic Tariff Area (DTA) and deriving profit from export of articles or things or computer software manufactured or produced by it, which is subsequently converted into a EOU, shall be eligible for deduction u/s 10B of the IT Act, on getting approval as 100% export oriented undertaking”.

By notification dated 30 September 2004, the Income Tax Department had launched the ‘Electronic Furnishing of Return of Income Scheme 2004’. Under this Scheme, ‘eligible’ taxpayers can file returns of income electronically through persons authorised to act as ‘e-Return Intermediary’. These e-intermediaries will digitise the data of returns and transmit under their ‘digital signatures’ to the e-filing Server of Income Tax Department.

From 16 December 2004 onwards, persons desirous of becoming ‘e-Return Intermediary’ under this Scheme will be able to make an on-line application to the ‘Registrar’ of the Scheme, that is M/s NSDL, at www.tin-nsdl.com. The on-line application will have to digitally signed by either a Class-II or Class-III ‘digital signature’ and paper documents of proof of fulfillment of eligibility criteria, a due Diligence Certificate and Application Processing Fee will have to be sent as prescribed.

1. Newspaper reports have appeared saying that due to non-quoting of PAN on challans or its incorrect capture by banks, tax payment transactions are going to suspense account. The apprehension that taxpayers whose entries do not have PAN may not get credit for such payment is not correct, as each challan is identifiable by a unique Challan Identification Number. Also it is important that all taxpayers quote their PAN on the challans. This has become all the more important with the introduction of a single copy challan under the Online Tax Accounting System(OLTAS).

2. With the introduction of the facilities for filing of PAN application through M/s UTI Investors Ltd. and M/s NSDL, the average time for allotment of PAN has come down to about 15 working days. Presently PAN has been allotted to more than 3.6 crore persons. Income Tax Department has also introduced ‘Tatkal’ Service for allotment of PAN, in which PAN applications can be filed on internet and service charges can be paid through credit card. Those taxpayers who still do not have PAN may avail the facility for ‘Tatkal’ allotment. Particulars in this regard are available on website of the Income Tax Department at incometaxindia.gov.in, and of Tax Information Network (TIN) at http://tin-nsdl.com.

3. The availability of PAN/TAN on challans, will expedite and ensure correct credit of taxes to the taxpayers. In order to obviate any difficulty in this regard, it has been decided to enforce implementation of the provisions for mandatory quoting of PAN and TAN on challans from 1st January, 2005. Accordingly, no payment of tax will be received in the banks unless the challan carries the PAN of the taxpayer or TAN of the deductor, as the case may be.

4. A facility to download the challan forms No.280 and 281 with pre-printed PAN/TAN and name of the taxpayer/deductor is available on the website of the Income Tax Department www.incometaxindia.gov.in and http://incometaxindiaefiling.gov.in.

Under the new Online Tax Accounting System (OLTAS) introduced from June 2004 proper credit for taxes paid hinges on correct quoting of PAN on the challans. In order to facilitate correct quoting of PAN while making payment of income tax, companies and firms are being sent challans (number 280) with PAN, name of taxpayer and some other particulars already printed by the department. Similarly, for payment of Tax Deducted at Source (TDS) similar blank challans (number 281) are being mailed to all TAN (Tax Deduction & Collection Account Number) holders.

The department is aware that some taxpayers have been allotted more than one PAN though it is against the law. If more than one set of challans with different PAN are received, the challans with PAN-in-use should be retained for use and intimation about other PANs should be given to the Income Tax Department through its website (www.incometaxindia.gov.in) or the Aaykar Sampark Kendra (0124-2438000) so that redundant PANs may be cancelled.

Any queries relating to use of the pre-printed challans may be sent to challans@incometaxindia.gov.in.

Income Tax Department proposes to use this website for delivery of information and customized services to taxpayers, tax professional and Income Tax personnel. This facility will be made available soon. Please register to avail of this facility.

The department would like to gather information specified below from each category of registrants.

• Taxpayers: PAN, Name, Phone Number, Fax Number, Mobile Number, email ID, Status under IT Act 1961, Primary Source of Income;
• Tax Professionals: PAN, Name, Phone Number, Fax Number, Mobile Number, email ID, Status under IT Act 1961;
• Income Tax Personnel: PAN, Name, Phone Number, Fax Number, Mobile Number, email ID, Designation, Place of Posting.

It is now possible to apply for PAN through Internet and pay Rs.60 + Service Tax, as applicable, through a nominated credit card. In such cases Tatkal, PAN will be communicated through e-Mail in 5 working days. The PAN card will, however, be printed and forwarded only after supporting documents and photograph are received by M/s NSDL. Failure to send supporting documents and photograph within stipulated time may result in cancellation of PAN so allotted. At present this facility is available through M/s NSDL (www.tin-nsdl.com) only, though very soon M/s UTIISL (www.utiisl.co.in) will also offer a similar facility.

In a major e-governance initiative for filing of returns of income, on 30 September 2004 the CBDT notified its decision to also authorize eligible categories of Chartered Accountants, Advocates, Employers responsible for deduction of tax from salaries and registered companies to function as e-Return Intermediaries. To begin with, in 60 specified cities, registered e Return Intermediaries will be authorized to received paper returns from taxpayers, digitize and electronically transmit the same to the Income Tax department through Internet under their digital signatures. Download Notification S.O. 1073(E) dated 30th September, 2004 for more details.

Electronic Furnishing of Return of Income Scheme, 2004 - Click here for more details

On 30 September 2004 the Central Board of Direct Taxes notified a new scheme for filing of returns of income through Internet. Under this scheme, for Assessment Year 2004-05 onwards in specified sixty cities individuals, who have been allotted PAN and have income from ‘Salaries’, but do not have income under the head ‘Profits and Gains of business or profession’, may file returns and enclosures electronically through Internet under their digital signatures. Download Notification S.O. 1074(E) for more details.

Furnishing of return of income on Internet Scheme, 2004 - Click here for more details

As another step in its ongoing process of deploying technology in service of taxpayers, the Income Tax department has set up an 'Aaykar Sampark Kendra' (ASK), a dedicated phone-in-service, to provide information and services to taxpayers. For instance, by just dialing 0124-2438000 it should be possible to ASK for information on PAN, obtain application form for PAN or ascertain status of PAN application made to UTIISL or NSDL. The 'Aaykar Sampark Kendra' (ASK) will also receive and process grievances arising out of PAN applications made to UTIISL or NSDL. Taxpayers could now simply request for commonly required forms, say return form 2C, 2D or 2E, application form for PAN or form for requesting for changes in PAN data. Similarly at the time of making payment of taxes, taxpayers could just ASK for challans. Forms and challans so asked for will be sent through fax or email. In due course more information and services will become available through ASK.

Payment of income tax through Internet has now become possible with the inauguration of the facility by M/s IDBI Bank Ltd. on 16.10.2004. Account holders of IDBI Bank Ltd., who are registered for net banking with the bank, can avail of this facility and pay Income Tax 24 X 7 X 365.

IDBI account holders desirous to pay taxes over Internet would have to log on to this site (www.incometaxindia.gov.in) or http://tin.tin.nsdl.com and follow the instructions. After payment, account holders would be able to generate the taxpayers’ counterfoil containing the Challan Identification Number (CIN). Other banks are also likely to provide similar facilities in near future.

The CBDT has clarified that the non-resident entity or the foreign company will be liable to tax in India only if the IT enabled BPO unit in India constitutes its Permanent Establishment. The profits attributable to an IT enabled BPO unit constituting a Permanent Establishment will be determined on the basis of “arm’s length principle”.

The Income Tax Department has introduced Electronic Clearance Scheme (ECS) for refunds upto Rs. 25,000/- in cases of salaried taxpayers filing returns in Form 2E (Naya Saral). This Scheme is available to taxpayers in 12 cities, namely, New Delhi, Mumbai, Chennai, Ahmedabad, Bhubaneshwar, Nagpur, Kanpur, Bangalore, Hyderabad, Patna, Kolkata and Thiruvanthapuram. Once the return is processed the refund (if any) will be credited directly to the bank account indicated in the return of income. Taxpayers wishing to avail of this Scheme should indicate required bank details on the return of income. To this end, the Central Board of Direct Taxes has recently notified modified form 2E for salary returns that contains columns for providing details of bank accounts. Modified Form 2E may be downloaded from the website or obtained on fax or email from Aaykar Sampark Kendra (ASK) by dialing 0124-2438000.

Visit 'Tenders' for details on Expression of Interest (EOI) for Hardware requirements at NCC

In connection with taxation of IT enabled Business Process Outsourcing Units in India, the CBDT proposes to withdraw its circular number 1/2004 dated 2 January 2004 and replace it with another circular, the draft of which is posted on this site for elicting public opinion.  Views may be sent to Shri A J Majumdar, Joint Secretary (FT & TR)-I, Department of Revenue, Ministry of Finance, North Block, New Delhi - 110 001 or at jsfttr1@hub.nic.in

Income Tax Department has introduced one more convenience for taxpayers: PAN applications can now be submitted online. Required details are available at http://tin.nsdl.com. After data is entered and submitted online, an Acknowledgment Form will be displayed on the screen that would contain a unique acknowledgement number. This Acknowledgment Form should be printed and all applicants should affix 'signature' within the box provided on this Acknowledgment Form. In cases of applications by other than 'Individuals' the authorized signatory shall sign the Acknowledgment Form and affix appropriate seal or stamp. Only 'Individual' applicants would be required to paste (and not staple or clip) a recent colour photograph (size 3.5 cm x 2.5 cm) in space provided on the Acknowledgment Form. Clarity of image on PAN card will depend on quality and clarity of the photograph so pasted on the form.

Along with Acknowledgment Form, processing fee of Rs.60 plus 8% service tax, i.e., Rs.65, will have to be sent through demand draft or by cheque in favour of 'NSDL - PAN'. Demand drafts should be made payable at Mumbai whereas payments through cheque can be made through a local cheque, drawn on any bank, with any HDFC Bank branch across the country (except Dahej). Deposit slip for cheque should mention 'NSDL - PAN' as the 'account name' and '5422320001523' as the 'account number' of NSDL to which such payment will be credited. The fact that the draft or cheque is towards a PAN application could also be indicated by writing 'PAN Application' on reverse of the demand draft or cheque as the case may be and 'Acknowledgement Number' should also be mentioned.

Acknowledgment Form duly signed, affixed with photograph (only in case of 'Individuals') along with demand draft or cheque as the case may be, and required proof of 'identity' and 'address' should be sent to NSDL at 'National Securities Depository Limited, 4th Floor, Trade World, 'A' Wing, Kamala Mills Compound, Senapati Bapat Marg, Lower Parel, Mumbai - 400 013'. Envelope should be super-scribed with 'APPLICATION FOR PAN - Acknowledgment Number' (e.g. 'APPLICATION FOR PAN - 881010100000097). Application will be processed only on receipt of the Acknowledgement Form, relevant proofs and realization of demand draft or cheque as the case may be.

Sampark 2004, is a return preparation software, which helps the assessee in preparation of Returns of Income for the assessment year 2004-05. Those assessee who do not have any business income can use this software for preparing their Returns of Income. The software through a series of user friendly screens gathers information regarding the income of the assessee and generates his return of income. The computation of income, and interest etc is done by the software and no knowledge about tax laws is required on part of the assessee. The software also generates the challan for payment of taxes, if necessary and so required by the assessee. Free Download of SAMPARK 2004, can be made from the website of Incometax Department.
Click here to Download

Individuals having income from salaries not exceeding Rs. 1,50,000 but not having income from 'business or profession' or 'capital gains' or 'agriculture' and who are not in receipt of any other income from which TDS has been deducted, now have the option of filling return in Form 16AA.
This form 16AA is essentially a two in one: a TDS certificate that will be issued by the deductor - employer that will become a return of income when signed by deductee - employee and deposited in original with concerned Assessing Officer. In such cases, neither the TDS certificate in form 16A nor return of income in any form will be required.

As present there are seven different types of challans for depositing direct taxes into the government account. These will be replaced by three types of challans : (i) A common single copy challan No. ITNS 280 for payment of Income tax, Corporation tax and Wealth tax ;(ii) A common single copy challan No. ITNS 281 for depositing Tax Deducted at Source from corporates or non-corporates; (iii) A common single copy challan No. ITNS 282 for payment of Gift-tax, Estate Duty, Expenditure Tax and Other direct taxes.

The collecting bank branch will put a rubber stamp on the challan and its counterfoil indicating a unique Challan Identification Number (CIN) comprising of seven digit BSR Code allotted by RBI to that bank branch, the date of deposit (dd/ mm/ yy i.e. six digits), and the challan serial number in 5 digits. CIN will, therefore, be unique for each challan through out the country and will be used for identifying the challan in the OLTAS.

The new single copy challans will have a main portion at the top and a 'taxpayer counterfoil' at the bottom. The bank will retain the main portion of the challan and return the 'taxpayer counterfoil' duly receipted to the taxpayer.

Because there will be only one copy of challan it becomes extremely important that the challan is correctly filled and PAN of the taxpayer and PAN/ TAN of the deductor as the case may be, is correctly indicated in the challan, and that the right columns are ticked/ filled in the challan, and that the taxpayer collects a proper stamped acknowledgement from the banks indicating the Challan Identification Number (CIN) as indicated above.

The collecting bank will capture the entire data of the challan and transmit it electronically to the Income-tax Department. . The bank will send the paper copy of the challans alongwith printed scrolls to the Zonal Accounts Officers. The information received from banks will be used by the Department to give credit for the tax paid based on CIN.

Since the taxpayer will have only a counterfoil, the requirement to enclose proof of payment of pre-paid taxes with the return of income as contained in 'Explanation' to Section 139 (9) shall stand fulfilled if CIN of the challans for payment of self-assessment tax and Advance Tax is indicated in the return of income.
As the new scheme comes into force only from 1.6.2004, the challans for Advance Tax payments made upto 31.3.2004 and Self Assessment Tax paid upto 31.05.04 will not have CIN. Therefore, in respect of Advance Tax or Self Assessment Tax paid before 1.6.2004, the Assessing Officer's copy of the challan will have to be enclosed with the return. This will be necessary only in the current year, which is a switch over year.