Income Tax : - Which ITR should I File, Proper Selection of ITR Form

Saturday, August 2, 2014 | comments

You already know that you have to file taxes, but do you know which Tax Form you need? 

If the answer to that question is “no”, don’t worry because that’s the answer most people have. Even if you’ve been filing your taxes for many years, you may need to use a different form depending on your sources of income. And this may even change every year. Keeping track of this is difficult and often people make mistakes because of this.

ClearTax (http://cleartax.in) has created a very simple picture that helps you understand which ITR applies to you for filing your taxes.

A quick guide to the various ITRs

ITR forms

Income Tax : -Solution for Login Problem due to PIN number through email or mobile.

Thursday, July 31, 2014 | comments

Friends,   It is generally found that there is login problem due to PIN or low connectivity etc on 31.07.2014 as it is Last Date for submission of Income Tax Returns for Assessment Year 2014-15 for those assessee's who have salaried income and interest income.  A large numbers of assessee falls in this category.  But due to heavy load on last date there was some problem in submission online  income tax return.  

In case you are facing login problem due to PIN you may use the following trick for submit your income tax return. :-

Solution for Non Getting PIN on mobile or email

     Presently user can use off-line Excel Based or Java Based utility. In Java based utility he may Login Directly without any updation of Mobile No. and Email address. Initially, he may use Pre-fill link and then enter your income data and after that finally, he can use submit button for uploading of Income Tax Return. In this may taxpayer or user can upload his Income Tax return without updating Mobile No and Email address on income tax website.

Income Tax :- Online application procedure for PAN through NSDL

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Online application procedure for PAN

Application forms




Mode of Payment

      For dispatch of PAN card within India

  • Credit Card / Debit Card
  • Net-banking
  • Cheque / Demand draft drawn in favour of ‘NSDL-PAN’ payable at Mumbai.

     For dispatch of PAN card outside India

  • Credit Card / Debit Card
  • Demand draft drawn in favour of ‘NSDL-PAN’ payable at Mumbai.

Supporting documents

  • Proof of Identity (POI), Proof of Address (POA) and Proof of Date of Birth (PODB) as per Rule 114(4) of Income Tax Rules, 1962
  • Proof of AADHAAR (Copy of AADHAAR Card), if AADHAAR is mentioned.
  • Additional documents for PAN Change Request application
  • Proof of PAN – Copy of PAN card/allotment letter
  • Proof of Change Requested – Documents indicating change of name (i.e. Name/Father’s name) from old name to new name

Important Check Points while filling form

  • No initials/abbreviations to be used in name/father’s name (except for Middle name).
  • No prefixes such as DR, Col, Major, etc. should be mentioned in ‘Name’, father’s name and ‘Name to be printed on card’ fields.
  • Representative Assessee (RA) details mandatory for minor/lunatic/idiot/deceased cases.
  • POI, POA and PODB should indicate exactly the same name as mentioned in the application.

How to apply for PAN?

  • On successful submission of online application and payment (for online mode of payment), an acknowledgement receipt is generated.
  • Save and take a print out of the acknowledgement receipt.
  • The duly signed and photos affixed acknowledgement receipt alongwith prescribed supporting documents (for cheque/DD mode of payment) should be sent to NSDL at 5th Floor Mantri Sterling , Plot No. 341, Survey No. 997/8, Model Colony, Near Deep Bungalow Chowk, Pune-411 016.
  •  The 15 digit acknowledgement no. appearing on the acknowledgement receipt can be used for tracking status of application.

Track Status of PAN Application

Use 15-digit acknowledgement number for tracking the status of application, as under:

  • Check status at TIN website –please click here
  • SMS ‘NSDLPAN15 digit ack. no.’ to 57575.
  • E-mail us at tininfo@nsdl.co.in
  • Contact our Call Centre at (020) - 2721-8080
  • Fax us your queries at (020) - 2721-8081
  • Write to us at following address:
             NSDL e-Governance Infrastructure Limited,
             5th Floor Mantri Sterling , Plot No. 341, Survey
             No. 997/8, Model Colony, Near Deep
             Bungalow Chowk, Pune-411 016

Please read instructions and guidelines carefully before filling online application forms

Apply online PAN (Click Here)

Income Tax :- What can we do in the absence of New Form No. 3CA, Form No. 3CB, New Form No. 3CD

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                The existing Form No. 3CA, Form No. 3CB and Form No. 3CD have been substituted vide Notification No.33 dated 25/07/2014 with immediate effect. Taxpayers and CAs are advised to await the release of the new schema and utility to submit in the newly notified aforementioned Forms. Taxpayers and CAs are advised that any upload using the old Forms will not be valid even for previous AYs in view of the notification of CBDT. The new schema and updated utility for e-Filing of the same will be deployed shortly

View Notification No 33 dated 25/07/2014 and Download new Form No. 3CA, Form No. 3CB and Form No. 3CD in word format (Click Here)

Free Excel Based Income Tax Calculators and others (Click Here) for registered users.

Income Tax :- Why should you file your Income Tax Return in time

Wednesday, July 30, 2014 | comments

Under Income Tax Law if your total income exceeds the basic exemption limit: You have to file the Income Tax Return within the prescribed time, i.e. by the due date.


 The due dates of filing returns for Assessment Year 2014-15 are the following:
 
Category
Due Date


Most people fall in this category –
Salaried employees, pensioners and other
persons whose accounts are not required to be audited

31st July 2014

Companies and other persons whose
accounts are to be audited
30th September 2014  




What happens if a person does not file the Income Tax Return by the due date 

  • Revised return can not be submitted in case you have not submitted your return in time.
  • You have to Pay Interest on Income Tax Due if you don’t file on time  If you do not file the Income Tax Return by the due date:
  • You are liable to pay interest at the rate of one percent for every month after the due date till the date of filing the return.
  • If No Tax is due: Interest is calculated on the amount of tax payable after adjustment of pre-paid taxes like advance tax, TDS etc. So, if there is no tax payable on the basis of the Income declared in the Tax Return, there is no liability for the payment of interest.
  • You don’t get the benefit of Carry Forward of Losses if you don’t file on time Under income tax law, if you have sustained a Business loss or loss under the head “Capital Gains”, you can carry forward the loss ONLY if you file the Income Tax Return by the due date.
  • Therefore, if you have sustained a loss, you must file your Income Tax Return in time if you want to carry forward the loss for future adjustment with your Income.


Possibility of Penalty or Prosecution by the Income Tax Department 

  • Say you could not file the Income Tax Return by the due date: To avoid any penalty by the Income Tax Department, you must file your Income Tax Return before the end of the relevant assessment year that is 31st March 2015.
  • Possibility of Penalty and Prosecution: If you do not file your Income Tax Return by 31st March 2015, the Income Tax Department may impose a penalty of Rs. 5000, even though the tax payable by you may be Zero.
  • Further, if a person has failed to file the Income Tax Return by 31st March 2015 and the tax payable after adjustment of advance tax and TDS exceeds Rs. 3000, he may be prosecuted for imprisonment also. However, this law is used in practice very rarely.
  • Other reasons for filing the returns of income within time If a refund is due after adjustment of prepaid taxes, it is necessary to file the Income Tax Return to get the refund from the Income Tax Department.
  • Bank Loans: Further, the return is a declaration of your income and it will be extremely helpful when you are applying for a loan from bank. Before granting the loan, banks want to know your financial capacity and your income details as shown by you in income tax returns.
  • Visas of foreign countries: Many countries want to know if you are financially sound before they issue you a visa and for this purpose they will rely on your income tax returns.

Income Tax :- New / Latest Form 3CA, 3CB, 3CD notified by CBDT on 25.07.14

Tuesday, July 29, 2014 | comments

New Revised Form 3CA, 3CB, 3CD issued by CBDT are available in word format. 

CBDT Revises Form 3CA, 3CB and 3CD vide Notification No. 33/2014 dated 25-07-2014.

The Notification is attached herewith for ready reference which will be applicable from the date of its Publication in official gazette.

Notification is as follows :-
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
(DEPARTMENT OF REVENUE)
(CENTRAL BOARD OF DIRECT TAXES)
Notification No. 33/2014, Dated: July 25, 2014

S.O. 1902 (E).. In exercise of the powers conferred by section 295 read with section 44AB 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. (1) These rules may be called the Income Tax (7th Amendment) Rules, 2014. (2) They shall come into force on the date of their publication in the Official Gazette.

2. In the Income Tax Rules, 1962, in Appendix-II, for Form No. 3CA, Form No. 3CB and Form No. 3CD, the following forms shall be substituted, namely:-


[F.No.133/1/2014-TPL]
(J Saravanan)
Under Secretary (TPL)

Income Tax :- What is e-file, What is Process of e-file, How can i e-file.

Monday, July 28, 2014 | comments

How To e-File

What is e-Filing?

 The process of electronically filing Income tax returns through the internet is known as e-Filing.

 e-Filing of Returns/Forms is mandatory for :
            Any assessee having total income of ? 5 Lakhs and above for from AY 2013-14 and 
              subsequent Assessment Years.

            Individual/ HUF, being resident, having assets located outside India from AY 
               2012-13 and subsequent Assessment Years.

            An assessee required to furnish a report of audit specified under sections 10(23C)(iv), 
               10(23C)(v),10(23C)(vi) ,10(23C)(via) , 10A, 12A(1)(b), 44AB, 80-IA, 80-IB, 80-IC,
               80-ID, 80JJAA, 80LA, 92E or 115JB of the Act, shall furnish the said report of audit 
               and the return of Income electronically from AY 2013-14 and subsequent Assessment Years.

            An assessee required to give a notice under Section 11(2)(a) to the Assessing Officer 
                from AY 2014-15 and subsequent Assessment Years.

            All companies.

            Firm (to whom provisions of section 44AB is not applicable), AOP, BOI, Artificial 
               Juridical Person , Co-operative Society and Local Authority required to file ITR 5 from
               AY 2014-15 and subsequent Assessment Years.

            An assessee required to furnish return u/s 139 (4B) in ITR 7.

            A resident who has signing authority in any account located outside India.

            A person who claims relief under sections 90 or 90A or deduction under section 91.


Types of e-Filing

There are three ways to file Income Tax Returns electronically:

 Option 1: Use Digital Signature Certificate (DSC) to e-File. There is no further action needed, if filed with a DSC.

 Option 2: e-File without Digital Signature Certificate. In this case an ITR-V Form is generated. The Form should be printed, signed and submitted to CPC, Bangalore using Ordinary Post or Speed Post ONLY within 120 days from the date of e-Filing. There is no further action needed, if ITR-V Form is submitted.

 Option 3: e-File the Income Tax Return through an e-Return Intermediary (ERI) with or without Digital Signature Certificate (DSC).



e-Filing Process



Note:

 It is mandatory to file Income Tax Forms using Digital Signature Certificate (DSC) by a Chartered Accountant.

 The Digital Signature Certificate (DSC) used in e-Filing the Income Tax Return/Forms should be registered on e-Filing application.

How to e-File?

To upload Income Tax Return:

 Step 1: On homepage, GO TO 'Downloads' section and select applicable Income Tax Return Form of the relevant Assessment Year OR Login to e-Filing application and GO TO 'Downloads'-->'Income Tax Return Forms' and select applicable Income Tax Return Form of the relevant Assessment Year.

 Step 2: Download the excel utility of the Income Tax Return (ITR).

 Step 3: Fill the excel utility and Validate. (You can pre-fill the Personal and Tax Information in your Income Tax Return. To pre-fill, Login to e-Filing application and GO TO --> Downloads --> Download Pre-filled XML to the desired path/destination in your desktop/system. Open the Excel utility (ITR) and click the "Pre-fill" button. This will require you to select the path/destination where you have saved the XML and click OK. The details will be uploaded into your utility. You may edit the tax details, if needed).

 Step 4: Generate an XML file and save in desired path/destination in your desktop/system.

 Step 5: LOGIN to e-Filing application and GO TO --> e-File --> Upload Return.

 Step 6: Select the Income Tax Return Form and the Assessment Year.

 Step 7: Browse and Select the XML file

 Step 8: Upload Digital Signature Certificate, if available and applicable.

 Step 9: Click 'SUBMIT'.

 Step 10: On successful upload, Acknowledgement details would be displayed. Click on the link to view or generate a printout of Acknowledgement/ITR-V Form.

Note:
You can upload the returns after you have registered in e-Filing.

 To e-File using Digital Signature Certificate (DSC), the DSC should be registered in the application. (To register DSC, you should LOGIN and GO TO --> Profile Settings --> Register Digital Signature Certificate)

 If the Income Tax Return is uploaded with DSC (digitally signed), on generation of "Acknowledgement", the Return Filing process is complete. The return will be further processed and the Assessee will be notified accordingly. Please check your emails on these notifications

If the return is not uploaded with a DSC (digitally signed), on successful upload of e-Return, an ITR-V Form will be generated. This is an Acknowledgement cum Verification form. A duly verified ITR-V form should be signed and submitted to CPC, Post Bag No. 1, Electronic City Post Office, Bangalore - 560100 by Ordinary Post or Speed Post (without Acknowledgment) ONLY, within 120 days from the date of e-Filing.

 On receipt of the ITR-V at CPC, the return will be further processed and the Assessee will be notified accordingly. Please check your emails on these notifications

Prepare and Submit ITR1/ITR 4S Online:

The taxpayer has the option of submitting ITR 1/ITR 4S by way of Uploading XML OR by Online submission

 Step 1: Login to e-Filing application

 Step 2: GO TO 'e-File' --> 'Prepare and Submit ITR Online'

 Step 3: Select the Income Tax Return Form ITR 1/ITR 4S and the Assessment Year.

 Step 4: Fill in the details and click the SUBMIT button

 Step 5: On successful submission, Acknowledgement detail is displayed. Click on the link to view or generate a printout of Acknowledgement/ITR-V Form.

Note:

 The Income Tax Return, ITR 1/ITR 4S Online, can be submitted using a Digital Signature Certificate.

 To e-File using DSC, it should be registered in the e-Filing application.

 If the Income Tax Return is digitally signed, on generation of "Acknowledgement" the Return Filing process is complete. The return will be further processed and the Assessee will be notified accordingly. Please check your emails on these notifications

 If the return is not e-Filed with a DSC (digitally signed), an ITR-V Form will be generated. This is an Acknowledgement cum Verification form. A duly verified ITR-V form should be signed and submitted to CPC, Post Bag No. 1, Electronic City Post Office, Bangalore - 560100 by Ordinary Post or Speed Post (without Acknowledgment) ONLY, within 120 days from the date of e-Filing.

 On receipt of the ITR-V at CPC, the return will be further processed and the Assessee will be notified accordingly. Please check your emails on these notifications

To upload Income Tax Form by Tax Professional:

 Step 1: GO TO 'Downloads' section and select applicable Income Tax Form of the relevant Assessment Year OR Login to e-Filing application and GO TO 'Downloads'-->'Download Forms' and select applicable Income Tax Form of the relevant Assessment Year.

 Step 2: Download the excel utility of the Income Tax Form.

 Step 3: Fill the excel utility and Validate.

 Step 4: Generate an XML file and save in desired path/destination in your desktop/system.

 Step 5: LOGIN to e-Filing application and GO TO --> e-File --> Upload Form.

 Step 6: Select the Income Tax Form and the Assessment Year.

 Step 7: Browse and Select the XML file

 Step 8: Upload Digital Signature Certificate.

 Step 9: Click 'SUBMIT'.

 Step 10: On successful upload, the Income Tax Form is sent to Assessee's workflow for acceptance.

 Step 11: The Assessee should LOGIN to e-Filing application, GO TO Worklist and accept/reject the Income Tax Form.

 Step 12: On Approval, the Form is successfully submitted with e-Filing application. No further action is required.

 Step 13: If Rejected, the Tax Professional can prepare and e-File the Income Tax Form again by following the above mentioned steps.

Note:
 You can upload the Forms after you have registered in e-Filing.

 Assessee can "Add CA", using My Account menu, after login.

 To e-File using Digital Signature Certificate (DSC), the DSC should be registered in the application. (To register DSC, you should LOGIN and GO TO --> Profile Settings --> Register Digital Signature Certificate)

 The Form will be further processed and the Assessee will be intimated accordingly. Please check your emails on these intimations.

To view the presentation on how to e-File, GO TO Help --> e-Filing --> Presentation

Income Tax : -Due Date for filing of Income Tax Return

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All Income Tax return filers  are requested to draw your attention on due date for submission of income tax return for assessment year 2014-15    or  Financial Year 2013-14 so that there may not any doubt in submission of income tax return.  

 Due-date: The due-date for filing of returns for non-audit & non-corporate assessee’s is 31st July of the assessment year and for assessee’ s under audit u/s. 44AB and corporate assessee’s, the same is 30th September of the assessment year. In case of an assessee, being a partner of a firm liable to audit u/s. 44AB, the applicable due-date shall be 30th September of the assessment year. The said limits are as per the provisions of section 139(1) of the Act. In the case of an assessee liable to submit a report u/s. 92E (Transfer Pricing Report) of the Act, the applicable due-date is 30th November of the assessment year.

Income Tax :- ITR-6 for companies JAVA based Return Submission Utility.

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Friends,  Income Tax department has released Java Based Return Utility named ITR-6 for Companies for assessment year 2014-15.   With the help of this utility Companies other than companies claiming exemption under section 11 can submit their income tax returns.  

Now, in general, question arises that what is section 11 for which companies can claim exemption.   Detail of Section 11 is given below :-

77Income78 from property held for charitable or religious purposes.
7911. (1) Subject to the provisions of sections 60 to 63, the following income shall not be included in the total income of the previous year of the person in receipt of the income—
80[(a) income derived from property78 held under trust wholly78 for charitable or religious purposes, to the extent to which such income78 is applied78 to such purposes in India; and, where any such income78 is 78accumulated or set apart for application to such purposes in India, to the extent to which the income so accumulated or set apart81 is not in excess of 82[fifteen] per cent of the income from such property;
 (b) income derived from property held under trust in part81 only for such purposes, the trust having been created before the commencement of this Act, to the extent to which such income81 is applied to such purposes in India; and, where any such income is finally set apart for application to such purposes in India, to the extent to which the income so set apart is not in excess of 82[fifteen] per cent of the income from such property;
 (c) income 83[derived] from property held under trust—
   (i) created on or after the 1st day of April, 1952, for a charitable purpose which tends to promote international welfare in which India is interested, to the extent to which such income is applied to such purposes outside India, and
  (ii) for charitable or religious purposes, created before the 1st day of April, 1952, to the extent to which such income is applied to such purposes outside India:
Provided that the Board, by general or special order, has directed in either case that it shall not be included in the total income of the person in receipt of such income;
84[(d) income in the form of voluntary contributions made with a specific direction that they shall form part of the corpus84a of the trust or institution.]
85[Explanation.—For the purposes of clauses (a) and (b),—
 (1) in computing the 86[fifteen] per cent of the income which may be accumulated or set apart, any such voluntary contributions as are referred to in section 12 shall be deemed to be part of the income;
 (2) if, in the previous year, the income applied to charitable or religious purposes in India falls short of 87[eighty-five] per cent of the income derived during that year from property held under trust, or, as the case may be, held under trust in part, by any amount—
  (i) for the reason that the whole or any part of the income has not been received during that year, or
 (ii) for any other reason,
then—
  (a) in the case referred to in sub-clause (i), so much of the income applied to such purposes in India during the previous year in which the income is received or during the previous year immediately following as does not exceed the said amount, and
  (b) in the case referred to in sub-clause (ii), so much of the income applied to such purposes in India during the previous year immediately following the previous year in which the income was derived as does not exceed the said amount,
may, at the option of the person in receipt of the income (such option to be exercised in writing before the expiry of the time allowed under sub-section (1) 88[* * *] of section 139 89[* * *] for furnishing the return of income) be deemed to be income applied to such purposes during the previous year in which the income was derived; and the income so deemed to have been applied shall not be taken into account in calculating the amount of income applied to such purposes, in the case referred to in sub-clause (i), during the previous year in which the income is received or during the previous year immediately following, as the case may be, and, in the case referred to in sub-clause (ii), during the previous year immediately following the previous year in which the income was derived.]
90[(1A) For the purposes of sub-section (1),—
 (a) where a capital asset, being property held under trust wholly for charitable or religious purposes, is transferred and the whole or any part of the net consideration is utilised for acquiring another capital asset to be so held, then, the capital gain arising from the transfer shall be deemed to have been applied to charitable or religious purposes to the extent specified hereunder, namely:—
  (i) where the whole of the net consideration is utilised in acquiring the new capital asset, the whole of such capital gain;
 (ii) where only a part of the net consideration is utilised for acquiring the new capital asset, so much of such capital gain as is equal to the amount, if any, by which the amount so utilised exceeds the cost of the transferred asset;
 (b) where a capital asset, being property held under trust in part only for such purposes, is transferred and the whole or any part of the net consideration is utilised for acquiring another capital asset to be so held, then, the appropriate fraction of the capital gain arising from the transfer shall be deemed to have been applied to charitable or religious purposes to the extent specified hereunder, namely:—
  (i) where the whole of the net consideration is utilised in acquiring the new capital asset, the whole of the appropriate fraction of such capital gain;
 (ii) in any other case, so much of the appropriate fraction of the capital gain as is equal to the amount, if any, by which the appropriate fraction of the amount utilised for acquiring the new asset exceeds the appropriate fraction of the cost of the transferred asset.
Explanation.—In this sub-section,—
  (i) "appropriate fraction" means the fraction which represents the extent to which the income derived from the capital asset transferred was immediately before such transfer applicable to charitable or religious purposes;
 (ii) "cost of the transferred asset" means the aggregate of the cost of acquisition (as ascertained for the purposes of sections 48 and 49) of the capital asset which is the subject of the transfer and the cost of any improvement thereto within the meaning assigned to that expression in sub-clause (b) of clause (1) ofsection 55;
(iii) "net consideration" means the full value of the consideration received or accruing as a result of the transfer of the capital asset as reduced by any expenditure incurred wholly and exclusively in connection with such transfer.]
91[(1B) Where any income in respect of which an option is exercised under clause (2) of the Explanation to sub-section (1) is not applied to charitable or religious purposes in India during the period referred to in sub-clause (a) or, as the case may be, sub-clause (b), of the said clause, then, such income shall be deemed to be the income of the person in receipt thereof—
 (a) in the case referred to in sub-clause (i) of the said clause, of the previous year immediately following the previous year in which the income was received; or
 (b) in the case referred to in sub-clause (ii) of the said clause, of the previous year immediately following the previous year in which the income was derived.]
92[(2) 93[Where 94[eighty-five] per cent of the income referred to in clause (a) or clause (b) of sub-section (1) read with the Explanation to that sub-section is not applied, or is not deemed to have been applied, to charitable or religious purposes in India during the previous year but is accumulated or set apart, either in whole or in part, for application to such purposes in India, such income so accumulated or set apart shall not be included in the total income of the previous year of the person in receipt of the income, provided the following conditions are complied with, namely:—]
 (a) such person specifies, by notice in writing given to the 95[Assessing] Officer in the prescribed96 manner97, the purpose for which the income is being accumulated or set apart and the period for which the income is to be accumulated or set apart, which shall in no case exceed ten years;
98[(b) the money so accumulated99 or set apart is invested or deposited in the forms or modes specified in sub-section (5)]:]
1[Provided that in computing the period of ten years referred to in clause (a), the period during which the income could not be applied for the purpose for which it is so accumulated or set apart, due to an order or injunction of any court, shall be excluded:]
2[Provided further that in respect of any income accumulated or set apart on or after the 1st day of April, 2001, the provisions of this sub-section shall have effect as if for the words "ten years" at both the places where they occur, the words "five years" had been substituted.]
3[Explanation.—Any amount credited or paid, out of income referred to in clause (a) or clause (b) of sub-section (1), read with the Explanation to that sub-section, which is not applied, but is accumulated or set apart, to any trust or institution registered under section 12AA or to any fund or institution or trust or any university or other educational institution or any hospital or other medical institution referred to in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10, shall not be treated as application of income for charitable or religious purposes, either during the period of accumulation or thereafter.]
4[(3) Any income referred to in sub-section (2) which—
 (a) is applied to purposes other than charitable or religious purposes as aforesaid or ceases to be accumulated or set apart for application thereto, or
5[(b) ceases to remain invested or deposited in any of the forms or modes specified in sub-section (5), or]
 (c) is not utilised6 for the purpose for which it is so accumulated or set apart during the period referred to in clause (a) of that sub-section or in the year immediately following the expiry thereof,
7[(d) is credited or paid to any trust or institution registered under section 12AA or to any fund or institution or trust or any university or other educational institution or any hospital or other medical institution referred to in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10,]
shall be deemed to be the income of such person of the previous year in which it is so applied or ceases to be so accumulated or set apart or ceases to remain so invested or deposited or 7[credited or paid or], as the case may be, of the previous year immediately following the expiry of the period aforesaid.]
8[(3A) Notwithstanding anything contained in sub-section (3), where due to circumstances beyond the control of the person in receipt of the income, any income invested or deposited in accordance with the provisions of clause (b) of sub-section (2) cannot be applied for the purpose for which it was accumulated or set apart, the 9[Assessing] Officer may, on an application made to him in this behalf, allow such person to apply such income for such other charitable or religious purpose in India as is specified in the application by such person and as is in conformity with the objects of the trust; and thereupon the provisions of sub-section (3) shall apply as if the purpose specified by such person in the application under this sub-section were a purpose specified in the notice given to the 9[Assessing] Officer under clause (a) of sub-section (2):]
10[Provided that the Assessing Officer shall not allow application of such income by way of payment or credit made for the purposes referred to in clause (d) of sub-section (3) of section 11:]
11[Provided further that in case the trust or institution, which has invested or deposited its income in accordance with the provisions of clause (b) of sub-section (2), is dissolved, the Assessing Officer may allow application of such income for the purposes referred to in clause (d) of sub-section (3) in the year in which such trust or institution was dissolved.]
(4) For the purposes of this section "property held under trust" includes a business undertaking so held, and where a claim is made that the income of any such undertaking shall not be included in the total income of the persons in receipt thereof, the 12[Assessing] Officer shall have power to determine the income of such undertaking in accordance with the provisions of this Act relating to assessment; and where any income so determined is in excess of the income as shown in the accounts of the undertaking, such excess shall be deemed to be applied to purposes other than charitable or religious purposes 13[* * *].
14[(4A) Sub-section (1) or sub-section (2) or sub-section (3) or sub-section (3A) shall not apply in relation to any income of a trust or an institution, being profits and gains of business, unless the business is incidental to the attainment of the objectives of the trust or, as the case may be, institution, and separate books of account are maintained by such trust or institution in respect of such business.]
15[16(5) The forms and modes of investing or depositing the money referred to in clause (b) of sub-section (2) shall be the following, namely :—
  (i) investment in savings certificates as defined in clause (c) of section 217 of the Government Savings Certificates Act, 1959 (46 of 1959), and any other securities or certificates issued by the Central Government under the Small Savings Schemes of that Government;
 (ii) deposit in any account with the Post Office Savings Bank;
(iii) deposit in any account with a scheduled bank or a co-operative society engaged in carrying on the business of banking (including a co-operative land mortgage bank or a co-operative land development bank).
Explanation.—In this clause, "scheduled bank" means the State Bank of India constituted under the State Bank of India Act, 1955 (23 of 1955), a subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959), a corresponding new bank constituted under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970), or under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980), or any other bank being a bank included in the Second Schedule to the Reserve Bank of India Act, 1934 (2 of 1934);
(iv) investment in units of the Unit Trust of India established under the Unit Trust of India Act, 1963 (52 of 1963);
 (v) investment in any security for money created and issued by the Central Government or a State Government;
(vi) investment in debentures issued by, or on behalf of, any company or corporation both the principal whereof and the interest whereon are fully and unconditionally guaranteed by the Central Government or by a State Government;
(vii) investment or deposit18 in any 19[public sector company]:
20[Provided that where an investment or deposit in any public sector company has been made and such public sector company ceases to be a public sector company,—
 (A) such investment made in the shares of such company shall be deemed to be an investment made under this clause for a period of three years from the date on which such public sector company ceases to be a public sector company;
 (B) such other investment or deposit shall be deemed to be an investment or deposit made under this clause for the period up to the date on which such investment or deposit becomes repayable by such company;]
(viii) deposits with or investment in any bonds issued by a financial corporation which is engaged in providing long-term finance for industrial development in India and 21[which is eligible for deduction under clause (viii) of sub-section (1) of section 36];
(ix) deposits with or investment in any bonds issued by a public company formed and registered in India with the main object of carrying on the business of providing long-term finance for construction or purchase of houses in India for residential purposes and 21[which is eligible for deduction under clause (viii) of sub-section (1) of section 36];
22[(ixa) deposits with or investment in any bonds issued by a public company formed and registered in India with the main object of carrying on the business of providing long-term finance for urban infrastructure in India.
Explanation.—For the purposes of this clause,—
  (a) "long-term finance" means any loan18 or advance where the terms under which moneys are loaned or advanced provide for repayment along with interest thereof during a period of not less than five years;
  (b) "public company"23 shall have the meaning assigned to it in section 3 of the Companies Act, 1956 (1 of 1956);
  (c) "urban infrastructure" means a project for providing potable water supply, sanitation and sewerage, drainage, solid waste management, roads, bridges and flyovers or urban transport;]
 (x) investment in immovable property.
Explanation.—"Immovable property" does not include any machi-nery or plant (other than machinery or plant installed in a building for the convenient occupation of the building) even though attached to, or permanently fastened to, anything attached to the earth;]
24[(xi) deposits with the Industrial Development Bank of India established under the Industrial Development Bank of India Act, 1964 (18 of 1964);]
25[(xii) any other form or mode of investment or deposit as may be prescribed.26]


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Income Tax Rebate u/s 89(1) Calculator updated on 25/07/2014

Friday, July 25, 2014 | comments

Friends  It has been noticed that there was an error in calculation for those employees who have total income exactly Rs. 5,00,000.00 in the financial year 2013-14 or in financial year 2014-15.   This calculator was not allowing rebate of Rs 2000/- under section 87A for those who are getting exactly total income Rs. 5 Lakh, but allowing rebate Rs. 2000/- who are getting total income less than 5 Lakh.  Now the same has been updated. 

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