How to Handle Doubtful Issues On Income Tax Return Filing: CBDT Issues Clarifications
Although the income tax (I-T) department had notified tax return forms for assessment year 2019-20 (FY2018-19), and released software utilities for filling (ITRs) online, taxpayers have been asking several queries. Finally, the Central Board of Direct Taxes (CBDT) has come out with a detailed clarification in question and answer format that tries to clear doubts raised by taxpayers. 
 
Here are the queries and clarification issued by CBDT for e-filing tax returns…
 
Question: I am a non-resident Indian (NRI). The taxpayer identification number (TIN) is not allotted in my jurisdiction of residence. How do I report the same in the column on “residential status”?
 
Answer: In case TIN has not been allotted in the jurisdiction of residence, the passport number should be mentioned instead of TIN. Name of the country in which the passport was issued should be mentioned in the column “jurisdiction of residence”.
 
Question: I am a director in a foreign company which does not have permanent account number (PAN). How do I report the same against the column “whether you were director in a company at any time during the previous year?” 
 
Answer: You should choose “foreign company” in the drop-down provided for “type of company”. In such case, PAN is not mandatory. However, PAN should be mentioned, if such foreign company has been allotted a PAN.
 
Question: Whether an individual who is a non-resident, or resident but not ordinary resident (RoNR) is also required to disclose details of his directorship in a foreign company which does not have any income accruing or arising in India?
 
Answer: Yes.
 
Question: I have held shares of a company during the previous year, which are listed in a recognized stock exchange outside India. Whether I am required to report the requisite details against the column “Whether you have held unlisted equity shares at any time during the previous year?” 
 
Answer: No.
 
Question: I have held equity shares of a company which were previously listed in a recognised stock exchange, but delisted subsequently, and became unlisted. How do I report PAN of company in the column “whether you have held unlisted equity shares at any time during the previous year”?
 
Answer: In such cases, PAN of the company may be furnished if it is available. In case PAN of delisted company cannot be obtained, you may enter a default value in place of PAN, as “NNNNN0000N”.
 
Question: In case unlisted equity shares are acquired or transferred by way of gift, will, amalgamation, merger, demerger, or bonus issue etc., how to report the “cost of acquisition” and “sale consideration” in the relevant column?
 
Answer: You may enter zero or the appropriate value against “cost of acquisition” or “sale consideration” in such cases. Please note that the details of unlisted equity shares held during the year are required only for the purpose of reporting. The quantitative details entered in this column are not relevant for the purpose of computation of total income or tax liability.
 
Question: I hold shares in an unlisted foreign company which has been duly reported in the Schedule FA. Whether I am required to report the same again in the column “Whether you have held unlisted equity shares at any time during the previous year?”
 
Answer: Yes.
 
Question: I have held unlisted equity shares as stock-in-trade of business during the previous year. Whether I have to report the same in the column “Whether you have held unlisted equity shares at any time during the previous year?”
 
Answer: Yes.
 
Question: Please clarify whether holding of equity shares of a co-operative bank or credit societies, which are unlisted, are required to be reported?
 
Answer: The details of equity shareholding in any entity which is registered under the Companies Act, and is not listed on any recognised stock exchange, is only required to be reported.
 
Question: I have sold land and building to a non-resident. Whether I need to report the PAN of buyer in the table A1/B1 in schedule capital gain (CG)?
 
Answer: As mentioned in ITR form, quoting of PAN of buyer is mandatory only if tax is deducted under section 194-IA or is mentioned in the documents.
 
Question: I am resident and have sold land and building situated outside India. Whether I need to report the details of property and identity of buyer in Schedule CG?
 
Answer: The details of property and name of buyer should invariably be mentioned. However, quoting of PAN of buyer is mandatory only if tax is deducted under section 194-IA or is mentioned in the documents.
 
Question: Whether it is mandatory to provide international securities identification number (ISIN) details and scrip-wise computation of long term capital gains (LTCG) arising on sale of shares/ mutual funds units on which securities transaction tax (STT) has been paid?
 
Answer: The tools for computation of LTCG under sections 112A and 115AD have been provided in the departmental utility for the convenience of taxpayers. These are optional tools designed for computation of the final figures of LTCG, which is then populated in the respective items in Schedule CG. Alternatively, the taxpayers can themselves compute the aggregate long term gain or loss manually, and input the same directly in the respective items in Schedule CG.
 
Question: An unlisted company is required to furnish details of assets and liabilities in the Schedule AL-1 of ITR-6? Please clarify whether details of assets held as stock-in-trade of business are also required to be reported therein.
 
Answer: In case jewellery and motor vehicle is held as stock-in-trade of business, the drop-down value “stock-in-trade” should be selected against the field “purpose for which used”, while filling up details in the relevant table (table I or table H). In such cases, only the aggregate values are required to be filled up, and the particular details of each asset held as stock-in-trade is not required to be reported.
 
Question: I hold foreign assets during the previous year which have been duly reported in the Schedule FA. Whether I am required to report such foreign asset again in the Schedule AL (if applicable)?
 
Answer: Yes.
 
Question: An unlisted company is required to furnish details of shareholding as at the end of previous year in the Schedule SH-1 of ITR-6. Please clarify whether these details are required to be furnished in case of an unlisted foreign company.
 
Answer: Not required.
 
Question: An unlisted company is required to furnish details of assets and liabilities in the Schedule AL-1 of ITR-6. Please clarify whether these details are required to be furnished in case of an unlisted foreign company.
 
Answer: Not required.
 
Question: Please clarify whether a farmer producer company as defined in section 581A of Companies Act, 1956 is required to furnish details of shareholding in the Schedule SH-1 of ITR-6?
 
Answer: No. However, please ensure to tick the option 'Yes' against the item “whether the company is a producer company as defined in section 581A of Companies Act, 1956?” in Part-A General.
 
Question: A company is required to disclose break-up of all payments and receipts during the year, in foreign currency, as per Schedule FD of ITR-6 (if it is not required to get the accounts audited u/s 44AB). Please clarify whether only the receipts/payments related to business operations in India are required to be reported in Schedule FD?
 
Answer: Yes. In Schedule FD, the break-up of receipts and payments in foreign currency is required to be reported only in respect of business operations in India.
 
Question: In schedule tax deduction at source (TDS), one is required to enter the head under which corresponding receipt has been offered. In some cases, TDS is deducted by the payer in current year, but corresponding income is to be offered in future years. How to fill up Schedule TDS in such cases?
 
Answer: In such cases, no TDS credit should be claimed under the column “in own hands” for the current year. If this is done, the column “Corresponding receipt offered” is greyed-off and is not required to be filled up.
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    Leniency Allowed for Start-ups in Income-tax Scrutiny over Angel Tax
    In what is expected to boost investor sentiment, the income Tax (I-T) department has directed its officers to accept the declarations of companies which were tagged as start-ups in the middle of a scrutiny for angel tax.
     
    Angel tax refers to I-T payable on capital raised by unlisted firms by issuing shares where the share price is considered in excess of the fair market value.
     
    The excess realisation is treated as income and hence, taxable under Section 56 (2) (viib) of the Act. The government had earlier exempted companies tagged as start-ups by the department of promotion of industry and internal trade (DPIIT). 
     
    However, many companies, which were yet to be considered start-ups, were under I-T scrutiny. The present clarification makes the rules clear for these companies with regards to angel tax.
     
    The tax department issued the circular on Wednesday laying down procedures to be followed by assessing officers in case of start-ups which were recognised by DPIIT in the middle of an I-T scrutiny. Procedures have been also issued for unrecognised start-ups. 
     
    "The tax department has issued the procedures to be followed by tax officers. So, if a case is related to a company which was recognised as a start-up later on, the tax officer will not pursue the demand in respect of Section 56(2) (viib) which is Angel Tax," a tax consultant said. 
     
    As per the circular, a start-up which has not got DPIIT approval and the case is selected for scrutiny on grounds of applicability of Section 56 (2) (viib) or any other issue, inquiry or verification in such cases shall be carried out by the assessing officer as per due procedure and approval of the supervisory officer. 
     
    "Directions of the CBDT (Central Board of Direct Taxes) that the tax officer will have to summarily accept the contentions of the start-up on valuation of its shares shall provide the relief intended to be provided to the start-ups," said Rakesh Nangia, Managing Partner, Nangia Advisors. 
     
    "While the recognised start-ups stand relieved, the ones that are yet to receive a nod from the DPIIT may still have to face the inquiry from tax officers and the procedure to be followed by the tax officers in such cases would be crucial to note," he said.
     
    The tax department had earlier come out with a set of rules to provide relief to start-ups from tax demands under Section 56 (2) (viib) of the Income Tax Act.
     
    The tax department, in its circular on 7th August, said that there have been instances of notices being sent under Section 143(2) /147 by assessing officers to start-up companies before the DPIIT notification since February this year which are currently pending for disposal. 
     
    Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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    COMMENTS

    Jagdish Lalwani

    2 weeks ago

    All corrupt mus be afrd of god in skies if they wil go kaal maharaj wil audit all their balance sheets..showin only hevy liablity..n asset disapeared..there wil single windo wth kaall devta holdin all guilty from collar n punishin wth heavy penalty interest 24 pc p.a..and no return to earth..his family wil get notices from sky

    How to e-verify your Income Tax Return -ITR
    After uploading the income tax return (ITR) on the I-T e-filing portal, there is still one additional step remaining. The income tax e-filing process is considered as complete only upon verification by the assessee. The verification might be carried out physically i.e. by post or electronically by following methods:
     
    1. Physical Verification
     
    One needs to take a printout of the ITR-V (Income Tax verification form) that is generated subsequent to uploading the ITR on the Income tax website.
     
    After signing the document, the assessee needs to post the ITR-V to the Income Tax Centralised Processing Centre (CPC) at the following address: CPC, Post Box No – 1, Electronic City Post Office, Bangalore – 560100, Karnataka, India.
     
    It is mandatory that that signed ITR-V is sent to the CPC within 120 days of filing the IT return. Any delay would render the IT return as invalid. It must be remembered that one does not need to send any supporting documents. 
     
    2. E-verification of return via net-banking
     
     
    Another option is to e-verify the ITR by the net-banking route. After filing the returns, the assesse is provided the option to e-verify it through her bank’s net-banking facility. The following is the summary of steps involved:
     
    1. Login to e-filing portal through net banking
     
    2. Under the My Account menu, select generate electronic verification code (EVC)
     
    3. The EVC generated would be sent to the registered email ID and mobile number.
     
    4. One can e-verify the I-T return by using the EVC.
     
    Or
     
     
    2. On the left hand side, there are quick links. Click on e-Verify Return
     
     
    3. On the next page click on e-filing login through net-banking. This will give a list of banks. Select your bank.
     
    4. Login to your bank’s website account and check income tax e-filing tab
     
    5. Select the ‘View Returns/ Forms’ option to see e-filed tax returns
     
    6. Click to view your ITRs that are pending for e-verification
     
    7. Select e-verify
     
    8. Here you need to generate one time passcode (OTP) or EVC through net-banking
     
    9. Enter the OTP or EVC. Once successful, you will get confirmation message
     
    3. E-verification through Bank ATM
     
     
    The Income Tax Department also permits e-verification through Bank ATM. The following are the steps involved:
     
    Upon swiping the debit card at a bank ATM, the option to Generate PIN for e-Filing is available. 
     
    Upon selection, an EVC would be generated and sent to the registered mobile number.
     
    One needs to log in to the Income Tax Department e-filing website and opt for ‘e-verify using Bank ATM.’ 
     
    One would then need to enter the EVC to complete the e-verification
     
    4. E-verification using bank account number
     
     
    To avail this channel, one needs to validate one’s bank account in the profile section in the Income Tax e-filing website. Subsequently, upon selecting ‘verify with bank account number’ option, an OTP will be sent to the registered mobile number (registered with one’s bank). Upon entering the OTP on the e-filing portal, the e-verification is complete. One may opt for refund credit to the same pre-validated bank account.
     
    5. E-verification using demat account
     
     
    To use this route, one needs to validate one’s demat account in the profile section of the Income Tax e-filing website. Subsequently, one needs to click on ‘verify with demat account number’ option. An OTP would be sent to the verified mobile number (registered with one’s demat account), which may be used to e-verify the return.
     
    6. E-verification using Aadhaar OTP
     
     
    This is a very common method of e-verifying one’s Income Tax Return. To exercise this option, one’s Aadhar needs to be mandatorily linked to the PAN.
     
    One needs to opt for ‘e-Verify using Aadhaar OTP’ on the Income Tax online filing portal. The OTP sent to the registered mobile number (Mobile number linked with Aadhar) can be used for completion of the ITR e-verification by submitting the EVC.
     
    Post Verification steps: 
     
    Post verification, one can download the acknowledgement, which may be retained for record purposes. No further action is needed by the assessee.
     
    Assessee filing Paper Return: 
     
    Alternatively, in cases where one is permitted to file a paper return (i.e. not mandatory to file online return), one may sign the IT return as verification and submit the signed return at the jurisdictional IT office. 
     
    Conclusion:
     
    In conclusion, one can exercise any of the above six options to verify one’s Income Tax Return. Verification of the Income Tax return is a mandatory requirement.
     
    Further, the verification process may be completed at any time subsequent to filing the IT return. However, the verification must be completed before the due date of filing the I-T return i.e. 31 August 2019 for individuals.
     
    Additionally, in case of e-verification, there is no requirement to send ITR-V or any document by post. It is recommended to carry out e-verification as the IT return processing would be more prompt compared to other modes.
     
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    COMMENTS

    Prasad

    3 weeks ago

    Is aadhar mandatory for ITR filing? I thought one could use either PAN or Aadhar for ITR filing.

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