CU -BCOM-Sem VI -Tax assessment and procedure

["According to section 142A, the Assessing Officer may consult a Valuation Officer to determine the worth, including fair market value, of any asset, property, or investment for the purposes of assessment or reassessment. The definition of \\\"Valuation Officer\\\" under clause (r) of section 2 of the Wealth-tax Act, 1957 is the same. Whether or not the Assessing Officer is satisfied with the accuracy or comprehensiveness of the taxpayer's accounts, he may submit the matter to the Valuation Officer as stated above. [As modified by the 2022 Finance Act] Upon the Assessing Officer's referral, the Valuation Officer will have full authority under Section 38A of the Wealth-tax Act of 1957 to estimate the asset, property, or investment's worth. 11.5 SUMMARY \uf0b7 An audit is an examination of the financial statements of a company, such as the income statement, cash flow statement, and balance sheet. \uf0b7 Audits provide investors and regulators with confidence in the accuracy of a corporation\u2019s financial reporting. \uf0b7 Once completed, the auditor will provide an opinion on whether the financial statements accurately reflect the financial position of the corporation. 11.6 KEYWORDS \uf0b7 Auditing- Audit is the examination or inspection of various books of accounts by an auditor followed by physical checking of inventory to make sure that all departments are following documented system of recording transactions. It is done to ascertain the accuracy of financial statements provided by the organization. \uf0b7 External Audit - An external audit is an examination that is conducted by an independent accountant. This type of audit is most commonly intended to result in a certification of the financial statements of an entity. This certification is required by certain investors and lenders, and for all publicly-held businesses. 201 CU IDOL SELF LEARNING MATERIAL (SLM)","\uf0b7 Internal Controls - Internal controls are the mechanisms, rules, and procedures implemented by a company to ensure the integrity of financial and accounting information, promote accountability, and prevent fraud. \uf0b7 Internal Audit - Internal audits evaluate a company\u2019s internal controls, including its corporate governance and accounting processes. These audits ensure compliance with laws and regulations and help to maintain accurate and timely financial reporting and data collection. Internal audits also provide management with the tools necessary to attain operational efficiency by identifying problems and correcting lapses before they are discovered in an external audit. \uf0b7 Financial Audits- A financial audit, also referred to as a financial statement audit, is an objective evaluation of your company\u2019s financial statements. They are usually conducted on an annual basis. 11.7 LEARNING ACTIVITY 1. Define AUDIT ___________________________________________________________________________ ___________________________________________________________________________ 2. State the principles of audit ___________________________________________________________________________ ___________________________________________________________________________ 11.8 UNIT END QUESTIONS A. Descriptive Questions 202 Short Questions 1. What are the basic questions on auditing? 2. What are 3 types of audits? 3. What is audit short answer? 4. What are the 4 types of audits? 5. What is an audit? Long Questions CU IDOL SELF LEARNING MATERIAL (SLM)","1. Explain what is internal audit? 203 2. Mention what is the difference between internal and external audit? 3. Explain the steps before an audit processes? 4. Mention what is meant by decommission liability? 5. Explain what is required to perform an internal audit? B. Multiple Choice Questions 1. Auditing is compulsory for 2015 a. Small scale business enterprises b. All partnership firms c. All joint stock companies d. All proprietary concerns 2. Propriety audit refers to a. Verification of accounts b. Examination accounts of propriety concerns c. Enquiry against justification and necessity of expresses d. Audit of Govt. companies 3. Propriety is normally undertaken in case of a. Joint stock company b. Government company c. Statutory corporation d. Govt. departments 4. Interim audit refers to 2015, 2018 a. Examination of accounts continuously b. Examination of accounts intermittently c. Audit work to find out and check interim profits of a company d. Carrying on audit for bonus purposes at the end of the year CU IDOL SELF LEARNING MATERIAL (SLM)","5. Joint audit implies a. Audit of two concerns together b. Audit of joint stock companies c. Audit of joint sector companies d. Audit by two firms of C.A Answers 1-c, 2-c, 3-d, 4-c, 5-d 11.9 REFERENCES References book \uf0b7 Auditing for Dummies Paperback \u2013 2 July 2010 by Maire Loughran \uf0b7 The Internal Auditing Pocket Guide: Preparing, Performing, Reporting and Follow-up Spiral-bound \u2013 Import, 9 March 2007 by J. P. Russell \uf0b7 Fraud Examination Hardcover \u2013 1 January 2015 by Mark Zimbelman (Author), W. Albrecht (Author), Chad Albrecht (Author), Conan Albrecht (Author) \uf0b7 Forensic and Investigative Accounting Hardcover \u2013 Import, 29 July 2015 by D. Larry Crumbley (Author), Lester E. Heitger (Author), G. Stevenson Smith (Author) Textbook references \uf0b7 Auditing and Assurance Services Hardcover \u2013 23 May 2016 by Alvin Arens (Author), Randal Elder (Author), Mark Beasley (Author), Chris Hogan (Author) \uf0b7 Auditing Cases: An Interactive Learning Approach: United States Edition Paperback \u2013 7 August 2008 by Mark S. Beasley (Author), Frank A. Buckless (Author), Steven M. Glover (Author), Douglas F. Prawitt (Author)3.6 out of 5 stars 9 ratings 204 CU IDOL SELF LEARNING MATERIAL (SLM)","\uf0b7 MP Auditing & Assurance Services w\/ ACL Software CD-ROM Misc. Supplies \u2013 Import, 16 October 2013 by William Messier Jr (Author), Steven Glover (Author), Douglas Prawitt (Author) \uf0b7 Simplified Approach to Advanced Auditing and Professional Ethics (For CA Final) by CA. Vikas Oswal Website \uf0b7 https:\/\/en.wikipedia.org\/wiki\/Audit \uf0b7 https:\/\/economictimes.indiatimes.com\/definition\/audit \uf0b7 https:\/\/www.investopedia.com\/terms\/a\/audit.asp 205 CU IDOL SELF LEARNING MATERIAL (SLM)","UNIT - 12PROVISIONS STRUCTURE 12.0Learning Objectives 12.1Introduction 12.2Provisions relating to Payment of Advance tax 12.3TDS Provisions u\/s 192 to 195. 12.4Summary 12.5Keywords 12.6Learning Activity 12.7Unit End Questions 12.8 References 12.0LEARNING OBJECTIVES After studying this unit, you will be able to: \uf0b7 Cite the appropriate authority relating to a specific issue. \uf0b7 Understand how to apply \u201cthe authority\u201d to a specific issue and the relative weight of each authority. \uf0b7 Analyze \u201cthe authority\u201d and how it relates to a specific issue. \uf0b7 Identify the various research sources available in paper and electronic form. \uf0b7 Demonstrate the ability to synthesize research findings. \uf0b7 Evaluate the quality of the sources used. 12.1 INTRODUCTION A tax provision is what? A tax provision is, to put it simply, the predicted amount of income tax that a business is required by law to pay to the IRS for the current year. One form of provision that corporate finance departments put aside to offset a potential future charge is a 206 CU IDOL SELF LEARNING MATERIAL (SLM)","tax provision. Bad debts, depreciation, product warranties, pensions, and sales allowances are other categories of provisions that a corporation normally takes into consideration. For accounting purposes, tax provisions are seen as current tax obligations as they represent sums set aside for taxes to be paid this year. Although the fundamental concept seems straightforward, it is not always straightforward to plan for tax provision computation in a manner that is optimal for the company while still being quick, precise, and defendable. Corporate tax departments may spend a significant amount of time and energy estimating the tax provision for each year. How to calculate tax provision Current income tax expenditure and deferred income tax expense make up a company's tax provision. The majority of accounting departments employ Generally Accepted Accounting Principles (GAAP) to determine their financial status, which adds to the complexity. The manner in which GAAP methods and income tax accounting regulations vary is significant. The determination of current and deferred income tax costs is significantly influenced by these variations. Expense for current income taxes The amount of income tax that a corporation will incur for the current year is known as the current tax expenditure. It is estimated using current profits as well as the permanent and transient variances between income tax laws and GAAP for the current year. The procedure for calculating current income tax provision is outlined in the stages below: Start with the net income of your business. This is your income before taxes as determined by GAAP guidelines. Determine the permanent changes for the current year. These are revenue or cost items that are acceptable under GAAP but not for tax reasons. These costs or gains are seen as permanent since they are rejected or not recognized for tax reasons. Fines and penalties, entertainment costs, interest on municipal bonds, and income from life insurance are a few examples of permanent changes. 207 CU IDOL SELF LEARNING MATERIAL (SLM)","Determine the temporary differences for the current year. These are costs or sources of revenue that are acceptable for tax or GAAP reasons in a given year but not for the other until a subsequent year. By examining the balance sheet for the current year and locating discrepancies between your GAAP calculations and your income tax computations, you may ascertain your company's transitory variances. Depreciation and incurred but unpaid expenditures are examples of frequent transitory disparities. Net operational losses and credits should be applied (NOL). You arrive at your current year's taxable income after you have taken into account these discrepancies. Now you may use your NOLs and credits. Incorporate the current tax rate. Multiply your current federal tax rate by your taxable income for the current tax year. The outcome is the current year tax expenditure for the income tax provision for your business. cost for future income taxes The corporation has a liability for deferred income tax on its balance sheet, but that obligation is not yet payable. The more intricate portion of the income tax provision totals all transitory differences cumulatively and then applies the appropriate tax rate to that total. It focuses on how income, spending, NOLs, and tax credits may affect you in the future. Depending on whether you will eventually owe taxes or get a tax benefit, you will then account for your deferred tax expenditure on your company's GAAP balance sheet as an asset or a liability. calculating income tax provisions might be difficult It might be difficult and confusing to calculate tax provisions. The following frequent tax provision calculation problems are encountered by corporate tax teams. inaccurate income reporting. Starting with the correct net income amount is essential for accurate computation. The amount of the tax provision can only be guessed since most businesses only disclose their revenue yearly or periodically. 208 CU IDOL SELF LEARNING MATERIAL (SLM)","a challenge in collecting and combining the appropriate data. It is challenging to combine, integrate, and appropriately structure data from the finance and tax departments for your computation. dealing with a lot of info. A team of tax professionals may be needed to review documents including annual reports, financial statements, tax payments, and net income in order to do even the simplest computation. keeping up with developments in tax legislation. Your computation formulas are affected by changes in tax legislation. These new regulatory standards must be monitored by your tax department. reliance on calculations done by hand Spreadsheets and manual methods used to calculate the corporation tax provision might hinder your ability to get precise, legal data quickly. Four measures to enhance the accuracy of your tax provision calculation Your tax department may decrease your tax provision responsibilities, eliminate mistakes and hazards in tax provisioning, and produce better, quicker tax provisioning outcomes with the proper strategy. These are the actions to think about: Utilize and examine your data. Calculations of tax provisions are substantially more precise when the appropriate data is gathered and combined. consult checklists for tax provisions. Utilize instruments like the industry-leading Thomson Reuters Corporate Income Tax Provision Checklists to evaluate the risk management procedures, disclosure standards, and measurement procedures for income taxes. Look over your conformity. Verify that you are utilizing the correct criteria to compute tax provision by paying careful attention to your tax provision calculation procedure. Choose automation. A tax provisioning solution that provides quicker, more accurate data gathering, aggregation, and analysis may be used to enhance operations that are time- consuming or prone to mistake. 209 CU IDOL SELF LEARNING MATERIAL (SLM)","The benefits of tax provision software The use of automation and other technology in corporate tax provision software may, among other things, speed up your tax provisioning computation. By streamlining your tax calculation procedures and removing mistakes, the correct tax provision software makes it simple for you to fulfil your filing duties. The capabilities you need to adapt to regulatory changes in almost any country are provided by tax provision software. With certain tax provision software, tax departments claim up to 50% quicker processing times in addition to other enhanced outcomes. Your firm may combine compliance requirements with precise tax provisioning while guaranteeing a defendable process with the help of tax provision software like Thomson Reuters ONESOURCETM Tax Provision. 12.2 PROVISIONS RELATING TO PAYMENT OF ADVANCE TAX DISPOSITIONS FOR THE PAYMENT OF ADVANCE TAX Every individual whose projected tax due for the year is Rs. 10,000 or more is required to pay their tax in advance as \\\"advance tax.\\\" DISPOSITIONS FOR THE PAYMENT OF ADVANCE TAX OBLIGACY TO PAY AHEAD TAX Every individual whose projected tax due for the year is Rs. 10,000 or more is required to pay their tax in advance in the form of \\\"advance tax,\\\" under Section 208. NOT RESPONSIBLE FOR PAYING ADVANCE TAX Every individual whose projected tax burden for the year is Rs. 10,000 or more is required to pay advance tax, as was previously mentioned. However, even if they have a tax due of at least Rs. 10,000, the following individuals are not required to pay advance tax: 210 CU IDOL SELF LEARNING MATERIAL (SLM)","NOT RESPONSIBLE FOR PAYING ADVANCE TAX A taxpayer who chooses to use the presumptive taxation system of section 44AD is not required to pay advance tax in relation to the business for which they do so. A resident senior person who does not have any income from their company or profession and is at least 60 years old during the relevant financial year is not required to pay advance tax. DUE DATES FOR ADVANCE TAX PAYMENT Different instalments must be paid for the advance tax. The following are the due dates for paying various advance tax instalments: The payment deadline Payment amount prior until September 15th not less than 30% of the required advance tax prior until December 15th 60% or more of the required advance tax 100% of the owed advance tax must be paid by March 15th or earlier Advance tax payment: Companies The payment deadline Payment amount prior until June 15th 15% or more of the required advance tax prior until September 15th not less than 45% of the required advance tax 211 CU IDOL SELF LEARNING MATERIAL (SLM)","prior until December 15th not less than 75% of the required advance tax 100% of the owed advance tax must be paid by March 15th or earlier MODE OF ADVANCE TAX PAYMENT A corporate taxpayer (i.e., a firm) is required under Rule 125 of the Income-tax Rules of 1962 to pay taxes electronically utilizing the internet banking service of the designated banks. Taxpayers who are obligated to have their accounts audited but are not corporations must pay taxes electronically utilizing the authorized banks' online banking services. Any other taxpayer has the option of paying their taxes physically, by depositing their challan at the receiving bank, or electronically. TAX PAYMENT IN ADVANCE The taxpayer has two options for paying advance tax: on his own account or in compliance with an Assessing Officer order. It is the taxpayer's responsibility to estimate his current income and pay advance tax on his own account if they are obliged to do so. He is not obligated to provide any estimate or declaration of income to the tax authorities in this situation. If the tax obligation changes after the first or second advance tax instalment has been paid (as the case may be), the taxpayer may adjust the advance tax amount in the remaining instalment(s) and pay the tax according to the updated estimates. At the rates in effect for the financial year, tax may be calculated on the present income (as estimated by the taxpayer). Tax deducted or collected at source will be subtracted from the tax thus calculated, and the remaining tax due will be used to calculate the advance tax obligation. Additionally, any tax relief permitted by sections 90 or 90A, any deduction permitted by section 91, and any tax credit that may be offset by either section 115JAA or section 115JD must also be taken into account when calculating the advance tax due. 12.3 TDS PROVISIONS U\/S 192 TO 195. The Income Tax Act of 1961's Section 192 addresses tax withheld at source (TDS) on wages. TDS will be taken out of your salary by your employer. Your employer will be responsible for withholding TDS from your pay at the standard income tax rates that apply to you for the 212 CU IDOL SELF LEARNING MATERIAL (SLM)","relevant financial year. Your salary is classified as \\\"Income\\\" under the heading \\\"Salary.\\\" Form 16 is given to the employee by the employer and includes the TDS that was deducted in accordance with Section 192. Who is eligible to deduct TDS under Section 192? The employer might Companies (Private or Public) Individuals HUF Trusts Partnership companies cooperative organizations Each of these employers is obligated to collect TDS on a monthly basis and deposit it in the designated time frame. A link between an employer and an employee is required for the deduction of tax at source, as stated in section 192 of the Income Tax Act. For the purposes of the tax at source deduction under this provision, the employer's status, such as HUF, companies, or corporation, is immaterial. Furthermore, while calculating and deducting TDS, the employer's staff count is irrelevant. Under Section 192, when is TDS deducted? According to Section 192, TDS is taken off only when the wage is actually paid out, not while it is accruing. This implies that whether your company pays your wage in advance or in arrears, tax will be subtracted. If your predicted pay falls under the basic exemption threshold, there will be no tax due and no TDS will be taken out. 213 CU IDOL SELF LEARNING MATERIAL (SLM)","Even individuals without a PAN are subject to the aforementioned restriction. Click here to find out the income tax rates that apply to you. The fundamental exemption threshold according to the age at which TDS is not required is shown in the table below: Age Minimum Earnings Indian citizen under 60 years old: Rs. 2.5 lakh Seniors 60 years of age and older but under 80 years of age Rs. 3 lakh Super Senior Citizens beyond the age of 80 Rs. 50,000 How TDS Is Withheld From Salary Calculation of the Employee's Taxable Income The employer initially makes an educated guess as to the employee's pay for the relevant fiscal year. Included in this should be the base salary, overtime pay, perquisites provided by the employer, additional benefits provided by the company (such as HRA, LTA, lunch coupons, etc.), payments to the EPF, bonuses, commissions, gratuities, and, if applicable, remuneration from a former employer. The employer then determines exemptions in accordance with Section 10 of the Income Tax Act. Exemptions may be available for benefits like HRA, travel expenditures, uniform charges, and child-education benefits, among others. Reduce the standard deduction of Rs. 50,000 as well as the professional tax payment and entertainment allowance amounts. 214 CU IDOL SELF LEARNING MATERIAL (SLM)","The employer deducts such an exemption from the employee's monthly gross pay, and the remaining amount is considered taxable salary income. If the employee disclosed additional sources of income, such as interest from bank deposits or rental income from real estate, those sums should be added to the net taxable wage. Additionally, the interest paid on mortgage loans is subtracted from the revenue from real estate; nevertheless, if there is no income from real estate, there will be a negative amount under the heading \\\"income from real estate.\\\" The determined amount will be the employee's gross total income after the aforementioned sums have been added to or subtracted from. The employer now decreases the investments made by the workers for the year that are covered by Chapter VI-A of the Income Tax Act according to the investment declaration provided. The amount of investments such as PPF, employee's provident fund, ELSS mutual funds, NSC, and Sukanya Samithi account may be included in the declaration. Additionally, it may be used to pay for expenses like paying back a mortgage, life insurance premiums, NSC, Sukanya Samithi accounts, etc. The employer also permits deductions under a number of other sections, including Sections 80D and 80G. The employee may inform the company about exercising the choice each year if they choose to choose a different tax system. Additionally, the employer is permitted to deduct his or her income tax under the new tax system. Additionally, the Income Tax Act prohibits the use of 70 specific exclusions and deductions that were permitted under the previous tax system if the employee has claimed to compute income tax under the new system. As a result, the employer will determine the net taxable income using the employee's selected income tax system. TDS Deduction Rate The TDS rate is not mentioned in Section 192. TDS will be taken out in accordance with the tax bracket and rates that apply to the taxpayer for the particular financial year in which the remuneration is received. 215 CU IDOL SELF LEARNING MATERIAL (SLM)","The employer typically calculates the tax at the start of the fiscal year. The amount of TDS to be withheld is calculated by dividing the employee's projected tax due for the fiscal year by the number of months he worked for the specific company. However, TDS must be withheld at a rate of 20% + 4% cess if the employee's PAN is missing. The employer reduces or increases the number of future deductions made within the same fiscal year to make up for any surplus or deficit resulting from a prior deduction. If the employee paid any advance taxes, the payments may be modified when calculating TDS. The employee must inform the employer of this. Subsection 89 deductions You may deduct a variety of expenses from your gross income to lower your taxable income and consequently lower your tax bill. According to Section 89 of the Income Tax Act, if appropriate, the tax taken from salaries provided to workers of the government, businesses, cooperative societies, local governments, universities, associations or organizations, etc., shall be adjusted for marginal relief. When a salary or salary arrears are liable to a higher tax rate owing to a change in the slab rates, marginal relief is offered. You must submit Form 10E on the official income tax website in order to get this relief. You will not be granted relief under Section 89 without this form. TDS Declarations Your company must provide you a copy of Form 16 that contains information about your pay, including the amount received and taxes withheld. Form 12BA, which provides information on perquisites and earnings in lieu of compensation, may also be submitted in addition to this. 216 CU IDOL SELF LEARNING MATERIAL (SLM)","Section 192's deadline for tax deposits Any government employer that deducts TDS must deposit the money the same day. Whenever an employer other than a government agency withholds TDS: If the salary is credited and TDS is taken off in March, the payment must be made by April 30. b. Within seven days after the end of the month in which TDS was deducted if the pay is credited and TDS is deducted in any month other than March. Employer Filed TDS Return The employer is required to submit a Form 24Q wage TDS return. Every three months, the abovementioned paperwork must be filed. Employee salary information, including TDS deductions, must be reported in 24Q. TDS returns may be readily filed by employers using the Clear Tax software, sometimes known as Cleats. Two annexures, Annexure I and Annexure II, make up Form 24Q. For the first three quarters of an FY, Annexure II is not needed to be provided, however Annexure I must be submitted for each of the four quarters of an FY. Annexure-II is to be filed only during the last quarter, from January to March. Additionally, the employer must explain why TDS was not deducted or was deducted at a lesser rate if he does not deduct TDS. For further information about Form 24Q 217 CU IDOL SELF LEARNING MATERIAL (SLM)","12.4 SUMMARY \uf0b7 A provision stands for liability of uncertain time and amount. \uf0b7 Provisions include warranties, income tax liabilities, future litigation fees, etc. \uf0b7 They appear on a company\u2019s balance sheet and are recognized according to certain criteria of the IFRS. \uf0b7 The recording of provisions occurs when a company files an expense in the income statement and, consequently, records a liability on the balance sheet. Typically, provisions are recorded as bad debt, sales allowances, or inventory obsolescence. They appear on the company\u2019s balance sheet under the current liabilities section of the liabilities account. \uf0b7 A loan loss provision is defined as an expense set aside by a company as an allowance for any unpaid debt meaning loan repayments that are due and are not paid for by a borrower. 12.5 KEYWORDS \uf0b7 ABATEMENT - A reduction in the assessment of tax, penalty or interest when it is determined the assessment is incorrect \uf0b7 ABUSE OF LAW - The doctrine which allows the tax authorities to disregard a civil law form used by the taxpayer which has no commercial basis \uf0b7 ACCELERATED DEPRECIATION - Method of depreciation under which taxpayers may allocate larger depreciation deductions to the first year or first few years of useful business assets, such as plant and machinery \uf0b7 ACCOUNTING BASIS - Method of calculating amounts subject to income tax and VAT. In respect of VAT, tax would be computed as a percentage levy on the excess of sales over purchases. This is a theoretical concept and no country uses it. \uf0b7 ACCOUNTING PERIOD - A period of time used by taxpayer for the determination of tax liability 12.6 LEARNING ACTIVITY 1. Definetaxprovisions 218 CU IDOL SELF LEARNING MATERIAL (SLM)","___________________________________________________________________________ ___________________________________________________________________________ 2. State the principles of TDS provisions u\/s 192 to 195 ___________________________________________________________________________ ___________________________________________________________________________ 12.7 UNIT END QUESTIONS A. Descriptive Questions Short Questions 1. What are the major provisions covered in FEMA, 1999? 2. What is current account transaction? 3. What is capital account transaction? 4. What is the objective of FEMA? 5. What are the other provisions under the income tax act which are applicable to a non- resident? Long Questions 1. When is a business connection said to be established\/ 2. What incomes are deemed to have accrue or arise in India? 3. Which incomes are charged to tax in India in the hands of a taxpayer? 4. How to determine the residential status of a company? 5. How to determine the residential status of a HUF for the purpose of income tax law? B. Multiple Choice Questions 1. \u2018Income\u2019 includes the following types. a. Legal b. Illegal c. Both d. None 2. \u2018Income\u2019 u\/s 2(24) includes. 219 CU IDOL SELF LEARNING MATERIAL (SLM)","(i) Profits of any business carried on by a person. 220 (ii) Any advance money forfeited in the course of negotiations for transfer of capital asset. Choose the correct option: a. Both (i) & (ii) b. Only (i) c. Only (ii) d. Neither (i) nor (ii). 3. Which of the following income is not included in the term \u2018income\u2019? a. Profit & gains b. Dividend c. Profitin lieu of salary d. Reimbursement of travelling expenses 4. Cash gift received from a non-relative is regarded as income. But Exempt amount is p.a. a. Rs. 25,000 b. Rs. 75,000 c. Rs. 50,000 d. Rs. 25,000 5. What is not included in taxable Income? a. Income from smuggling activity CU IDOL SELF LEARNING MATERIAL (SLM)","b. Casual income c. Capital Receipt, except gains on transfer of capital asset d. Income received in kind. Answers 1-c, 2-a, 3-d, 4-c, 5-c 12.8 REFERENCES Reference books \uf0b7 Chaturvedi and Pithisaria Income Tax Law Volume \uf0b7 Sampath Iyengar\u2019s law of Income Tax \uf0b7 The law and practice of Income Tax by Aravind P Datar \uf0b7 Direct taxes law practice by Vinod Singhania Textbooks \uf0b7 Commercial's Direct Taxes Law & Practice by Dr. Girish Ahuja &Dr. Ravi Gupta \u2013 13th edition \uf0b7 ESSENTIALS COMBO | Direct Tax Laws | Income Tax Act, Income Tax Rules & Direct Taxes Ready Reckoner | Set of 3 Books Taxmann,Vinod K. Singhania \uf0b7 Tax Audit Srinivasan Anand G. \uf0b7 Taxation of Start-ups & Investors Taxmann Website \uf0b7 https:\/\/www.upwork.com\/resources\/what-is-tax-provision \uf0b7 https:\/\/docs.oracle.com\/cd\/E57185_01\/TAXPU\/ch01s02.html \uf0b7 https:\/\/taxguru.in\/income-tax\/account-income-tax-provision-tds-advance-tax.html 221 CU IDOL SELF LEARNING MATERIAL (SLM)","UNIT - 13CALCULATION OF INTEREST STRUCTURE 13.0Learning Objectives 13.1Introduction 13.2Calculation of Interest u\/s 234A 13.3234B & 234C.Rates of tax & computation of tax liability in case of Individuals 13.4Summary 13.5Keywords 13.6Learning Activity 13.7Unit End Questions 13.8References 13.0LEARNING OBJECTIVES After studying this unit, you will be able to: \uf0b7 Understand the concept of simple and compound interests, \uf0b7 Understand the concept of time value of money, present value and future value, and \uf0b7 Apply the concept of time value of money and calculate present value and future value. \uf0b7 explain the concept of interest 13.1 INTRODUCTION Basic Interest Calculator The interest on fixed deposits, savings accounts, and loans is calculated using the simple interest formula. It is determined using the primary sum. Simple interest adds no interest rate to the amount of interest accrued on the original sum. Where Can I Find Examples of Simple Interest? In the following monetary circumstances, simple interest may be applied: 222 CU IDOL SELF LEARNING MATERIAL (SLM)","When you take out a loan, you will be responsible for paying interest on the amount you borrowed. Lending money: You will get the money in the form of interest on your principle for a savings account, fixed deposit, or recurring deposit. In India, however, simple interest is not used by banks, financial organizations, or specialized lenders. Instead, they use compound interest. Basic Interest Calculator Simple interest is calculated using the following formula: (P x r x t) \u00f7 100 Principal (P) r = Interest Rate t is the loan or deposit's term in years. This indicates that you are multiplying the principle amount with the rate of interest and the duration of the loan or deposit. Input the tenure in years, not months, please. The formula will be: if you are inputting the tenure in months. (P x r x t) \u00f7 (100 x 12) You may use the following formula to get the total amount, which is the maturity value of a deposit or the total amount due, including principle and interest: P x (1 + (r x t)) = FV Future Value is referred to here as FV. You may deduct the principle sum from the future value to get the interest due or payable. 223 CU IDOL SELF LEARNING MATERIAL (SLM)","To help you understand how much you will earn on your deposits or how much you will owe on your loan if your bank utilizes simple interest, here are a few examples. Simple Deposit Interest Calculation Example 1: If you deposit Rs. 50,000 at an interest rate of 8% for a year, the simple interest earned is as follows: (50,000 x 8 x 1) \u00f7 100 = Rs.4,000 At the conclusion of the one-year term, you will earn Rs. 4,000 in interest. Consequently, the FD's maturity amount will be Rs. 54,000. Example 2: If you deposit Rs. 8 lakh for a period of 5 years at a fixed deposit interest rate of 6.85%, the simple interest earned is as follows: (8,00,000 x 6.85 x 5) \u00f7 100 = Rs.2,74,000 At the conclusion of the five-year term, you will earn Rs. 2.74 lakh in interest. The FD's maturity amount will thus be Rs. 10.74 lakh. Simple Loan Interest Calculation Example 1: Let's say you took out a personal loan of Rs. 5 lakh at a simple interest rate from a lender. The duration is three years, and the interest rate is 18%. You will ultimately be required to pay the bank: (5,00,000 x 18 x 3) \u00f7 100 = Rs.2,70,000 You will pay Rs. 2.7 lakh in interest throughout the course of the three years. Your total repayment to the bank would thus be Rs. 7.7 lakh. This would amount to around Rs. 21,389 per month. 224 CU IDOL SELF LEARNING MATERIAL (SLM)","Suppose you get a vehicle loan with simple interest. The 5-year term, 7% interest rate, and Rs. 12 lakh principal are the details. Your last interest payment will be: (12,00,000 x 7 x 5) \u00f7 100 = Rs.4,20,000 You will pay Rs. 4.2 lakh in interest during the course of the five-year term. Therefore, you will pay back a total of Rs. 16.2 lakh. This would amount to around Rs. 40,000 each month. 13.2 CALCULATION OF INTEREST U\/S 234A Section 234A: Failure to file a tax return on time Taxes must be paid in full before the end of the fiscal year. If there is any unpaid tax, the balance must be paid and income tax returns must be submitted by July 31 of the assessment year in question (AY). If the tax returns are submitted after this deadline, the taxpayer will be assessed 1% simple interest on the unpaid tax balance each month. From the deadline for submitting taxes until the day the return is actually submitted, interest is computed. Credit rating Finding Interest Penalties Mr. Roy owes a total of Rs. 2,000 in unpaid taxes (including net of the advance tax paid and TDS, if any). Instead of July 31 of the assessment year, he submits his tax return on December 15 of that year. He is five months behind on his tax payments since he missed the deadline for filing a return. The fine is determined as follows: Mr. Roy would pay Rs. 10,000 more than the required tax amount. He will have to pay 1% simple interest until March 31\u2014the end of the assessment year\u2014if he doesn't submit his tax return. As seen in the example above, Mr. Roy's obligation would be Rs. 16,000, or 8% of Rs. 2,000,000. 225 CU IDOL SELF LEARNING MATERIAL (SLM)","13.3 234B & 234C.RATES OF TAX & COMPUTATION OF TAX LIABILITY IN CASE OF INDIVIDUALS section 234A, section 234B, and section 234C interest penalties For the avoidance of future misunderstandings, you should be aware of the procedure for computing the interest penalty under sections 234A, 234B, and 234C that you will have to pay if you fail to pay your income taxes on time for whatever reason. Taxes must be paid on time and in full. Depending on the amount owing, a delay or failure to pay tax might result in a punishment. The calculation for the interest penalty under Sections 234A, 234B, and 234C is as follows. Section 234A: Failure to file a tax return on time Taxes must be paid in full before the end of the fiscal year. If there is any unpaid tax, the balance must be paid and income tax returns must be submitted by July 31 of the assessment year in question (AY). If the tax returns are submitted after this deadline, the taxpayer will be assessed 1% simple interest on the unpaid tax balance each month. From the deadline for submitting taxes until the day the return is actually submitted, interest is computed. Credit rating Finding Interest Penalties Mr. Roy owes a total of Rs. 2,000 in unpaid taxes (including net of the advance tax paid and TDS, if any). Instead of July 31 of the assessment year, he submits his tax return on December 15 of that year. He is five months behind on his tax payments since he missed the deadline for filing a return. The fine is determined as follows: 226 CU IDOL SELF LEARNING MATERIAL (SLM)","Mr. Roy would pay Rs. 10,000 more than the required tax amount. He will have to pay 1% simple interest until March 31\u2014the end of the assessment year\u2014if he doesn't submit his tax return. As seen in the example above, Mr. Roy's obligation would be Rs. 16,000, or 8% of Rs. 2,000,000. Incomplete Tax Payment, Section 234B Advance tax is applied if a person must pay Rs 10,000 or more in taxes in a fiscal year. Advance taxes are defined as tax obligations that be paid at a certain time period in accordance with Income Tax Department regulations. Businesspeople, professionals who work for themselves, and salaried workers are all required to pay advance tax when the total amount due is more than Rs 10,000. When a taxpayer chooses to compute business income with an assumed turnover of 8% under Section 44AD, he is excused from paying advance tax. Seniors over 60 who have no income are likewise free from taxes under this clause. By the end of the financial year, the taxpayer should have paid the maximum amount (at least 90%) of the entire tax due. If the unpaid tax is more than 10% of the total obligation, Section 234B will impose a penalty of simple interest of 1%. Paying your taxes in advance refers to doing so according to the dates (often quarterly) that the income tax department provides. If you don't pay the advance tax, section 234B may hold you responsible for interest payments. Example of Interest Penalty Calculation In sum, Rahul must pay Rs 2,00000 in taxes for the current fiscal year. The income was reduced by Rs 1, 82, 650 in TDS (Tax Deducted at Source). Rahul made a payment of Rs 7,000 on March 25 and the remaining Rs 10,350 on July 20. The fine is determined as follows: It is important to determine whether the taxpayer is required to pay interest according to Section 234B before computing the interest penalty. 227 CU IDOL SELF LEARNING MATERIAL (SLM)","As of March 31, 90% of Rs 17,350, or Rs 15,615, should have been paid as tax. But Rohit only contributed Rs 7,000. As a result, Rohit will be required to pay interest on the tax that was charged. Calculated till July: Rs 15,600 (rounded value taken into account) x 1% x 4 months = Rs 624. So, in accordance with Section 234B, Rohit would be required to pay Rs 624 as a penalty on the interest of the assessed tax. Credit rating Delay in Periodic Tax Payment, Section 243C Every fiscal year, income tax should be paid on time to avoid interest and late payment penalties. On the dates listed, advance tax may be paid: 15% of the advance tax by June 15 if the taxpayer is a corporation. Taxpayers must pay a 45% tax advance and a 30% tax advance, respectively, on or before September 15. Non-corporate and corporate taxpayers should pay 60% and 75% of their tax advance by December 15 at the latest. Both business and noncorporate taxpayers must pay their full tax advance by March 15 or earlier. Finding Interest Penalties From the aforementioned dates until the actual payment date, an interest penalty of 1% of the tax amount owed applies. The amount due is determined after deductions for taxes under Sections 90, 91, and 115JD. According to Section 234C, interest penalty is computed as follows: 228 CU IDOL SELF LEARNING MATERIAL (SLM)","Individual Taxpayer: For advance tax that is less than 30% of the total on or before September 15, an interest rate of 1% per month for a period of three months is calculated. If the amount of advance tax paid by December 15 or earlier is less than 60% of the taxable amount, interest at 1% per month for three months is charged. Simple interest of 1% per month is calculated for any portion of the advance tax payment that is less than 100% and paid on or before March 15. Business Taxpayer: A 1% per month interest charge is applied for three months if 15% of the total is already deposited on or before June 12 and the advance tax is less than 12%. If 45% of the tax is paid on or before September 15 and the advance tax is less than 36%, a penalty of 1% of the interest per month is assessed for three months. When 75% of the tax is paid before December 15 and the amount owing is below 75%, 1% simple interest is calculated for a three-month period. A simple interest rate of 1% is applied when the amount of advance tax that must be paid is less than 100% of the tax that has already been paid. The following situations are exempt from interest penalties: Before the end of the fiscal year, the taxpayer made complete payment on the tax as well as advance tax on the income. 229 CU IDOL SELF LEARNING MATERIAL (SLM)","if the quantity of speculative income, such as lottery winnings or capital gains, is not estimated. These information related to the computation of interest penalties under Sections 234A, 234B, and 234C of the Income Tax Act. To avoid fines and penalties, pay any advance tax and obligations on time. 13.4 SUMMARY \uf0b7 Interest on interest is the interest earned when interest payments are reinvested, particularly in the context of bonds. \uf0b7 This is also known as compound interest, or compounding. \uf0b7 Compound interest grows at a faster rate than basic interest, and it will be fastest when compounding periods are most frequent. \uf0b7 Simple interest, in contrast, only credits the original amount of principal. \uf0b7 Coupon payments from bonds can be reinvested at some compound interest rate and held until the bond is sold or matures. Dividends can also be reinvested to compound stock returns. 13.5 KEYWORDS \uf0b7 Interest- interest refers to the cost of money borrowed from a lender. Usually, a percentage of the principal amount borrowed, interest can be either simple or compound. Invoicing and accounting software make it easy to track your expenses from anywhere. Try it now for 7 days free. \uf0b7 Computation- the act or process of calculating an answer or amount by using a machine: \uf0b7 Taxpayer- A taxpayer is an individual or business entity that is obligated to pay taxes to a federal, state, or municipal government body. 230 CU IDOL SELF LEARNING MATERIAL (SLM)","\uf0b7 Simple interest rate- Simple interest is a quick and easy method of calculating the interest charge on a loan. \uf0b7 Tax- A tax is a mandatory fee or financial charge levied by any government on an individual or an organization to collect revenue for public works providing the best facilities and infrastructure. 13.6 LEARNING ACTIVITY 1. What is calculation of interest ___________________________________________________________________________ ___________________________________________________________________________ 2. How to calculate interest ___________________________________________________________________________ ___________________________________________________________________________ 13.7 UNIT END QUESTIONS A. Descriptive Questions Short Questions 1. What are simple interest questions? 2. What is the formula to calculate interest? 3. What will be the simple interest on rupees 12000 at 10% per annum for 3 years? 4. How do you calculate interest problems? 5. What is Compound Interest? Long Questions 1. Find the compound interest (CI) on Rs. 12,600 for 2 years at 10% per annum compounded annually. 2. At what rate of compound interest per annum, a sum of Rs. 1200 becomes Rs. 1348.32 in 2 years? 231 CU IDOL SELF LEARNING MATERIAL (SLM)","3. A TV was bought for Rs. 21,000. The value of the TV was depreciated by 5% per annum. Find the value of the TV after 3 years. (Depreciation means the reduction of value due to use and age of the item) 4. what is the Simple Interest Formula? 5. What Types of Loans use Simple Interest? B. Multiple Choice Questions 1.Sam borrowed some money from his friend at simple interest of 6% per annum. He returned his friend Rs. 15600. After how much time did Sam return the money if he borrowed Rs. 12000? a. 8 years b. 2.5 years c. 5 years d. 3.5 years 2. Kabir paid Rs. 9600 as interest on a loan he took 5 years ago at 16% rate of simple interest. What was the amount he took as loan? a. Rs. 16400 b. Rs. 12000 c. Rs. 12500 d. Rs. 18000 3. Suresh for 2 years invested Rs. 500 in SBI. He also invested Rs. 300 in ICICI for 4 years. At the end he received Rs. 220 from both banks as simple interest. What must have been rate of interest? a. 10% b. 12% 232 CU IDOL SELF LEARNING MATERIAL (SLM)","c. 11% d. 5.5% 4. Raman paid Rs. 11400 as interest after 9 years. He had borrowed some money at rate of 6% for first two years, 9% for next three years and 14% for rest of the period. How much money did he borrow? a. Rs. 10000 b. Rs. 15000 c. Rs. 12000 d. Rs. 12500 5. Ram gets Rs. 2600 for Rs. 2000 in 5 years at some rate of simple interest. Had he invested in other places where rate of simple interest is 3% more than current rate, how much would have Ram got in same time? a. Rs. 2900 b. Rs. 3000 c. Rs. 3100 d. Rs. 2800 Answers 1-c, 2-b, 3-a, 4-c, 5-a 13.8 REFERENCES Reference books \uf0b7 Concept Building Approach to Income Tax Law & Practice (Assessment Year 2020-21) \u2013 By Dr. Naveen Mittal \u2013 Published by Cengage Learning India Pvt. Ltd. [B.Com.(H)] 2. \uf0b7 Principles of Income Tax Law & Practice (Assessment Year 2020-21) \u2013 By Dr. Naveen Mittal \u2013 Published by Cengage Learning India Pvt. Ltd. [B.Com.] Textbooks 233 CU IDOL SELF LEARNING MATERIAL (SLM)","\uf0b7 Julian's Interest Book, an Accurate Calculation of Simple and Compound Interest, at 5, 6, 7, 8, 9 and 10 Per Cent Hardcover \u2013 Import, 26 April 2016 \uf0b7 Julian's Interest Book: An Accurate Calculation of Simple and Compound Interest, at 5, 6, 7, 8, 9 and 10 Per Cent, Also Valuable Discount and Time Tables (Classic Reprint) Hardcover \u2013 Import, 18 October 2018 by Eran Julian (Author) Website \uf0b7 https:\/\/www.calculatorsoup.com\/calculators\/financial\/simple-interest-plus-principal- calculator.php \uf0b7 https:\/\/groww.in\/calculators\/simple-interest-calculator \uf0b7 https:\/\/www.myloancare.in\/fixed-deposit\/simple-interest-formula\/ 234 CU IDOL SELF LEARNING MATERIAL (SLM)","UNIT - 14ONLINE FILING STRUCTURE 14.0Learning Objectives 14.1Introduction 14.2Online filing of Return for Individuals 14.3Summary 14.4Keywords 14.5Learning Activity 14.6Unit End Questions 14.7References 14.0LEARNING OBJECTIVES After studying this unit, you will be able to: \uf0b7 Learn the conceptual understanding about filling of returns and e-filling \uf0b7 Acquire knowledge about Income Tax and filling of different tax Returns, TDS \uf0b7 Understand GST and its mechanism, different GST Returns and due dates of filing the returns \uf0b7 Understand how to fill online 14.1 INTRODUCTION ITR filing online The user has two options for submitting the Income Tax Return (ITR): 1. Online Save the created XML file and submit it after downloading the relevant ITR and filling out the form offline. The user must download one of the ITR utilities listed below in order to e-File the ITR utilizing the upload XML method: Excel Helper Utility for Java 235 CU IDOL SELF LEARNING MATERIAL (SLM)","Follow these procedures to produce and upload the XML after downloading the Java or Excel utility: Visit https:\/\/www.incometax.gov.in\/iec\/foportal\/ to access the Income Tax e-Filing portal. Under \\\"Downloads > IT Return Preparation Software,\\\" download the appropriate ITR tool. Open the Utility from the extracted folder after extracting the utility ZIP file that was downloaded. (See the \\\"Read me\\\" paper for further details and requirements.) System requirements are noted. Microsoft Office Excel 2007\/2010\/2013 with.Net Framework and macro support for Microsoft Windows 7\/8\/10 (3.5 & above) Java utilities: JRE (Java Runtime Environment) Version 8 with the most recent upgrades, running on Microsoft Windows 7\/8\/10, Linux, and Mac OS 10.x. Excel macros may be enabled. Log onto your computer and choose File > Options > Trust Center > Trust Center Settings > Macro Settings > Enable All Macro. To save these options, click the \\\"OK\\\" button two times. Fill out the ITR form's relevant and required fields. Note: After logging in to the e-Filing site, choose \\\"My Account > Download Pre-Filled XML\\\" to download the pre-filled XML, which may then be imported into the utility to prefill the personal and other relevant data. Check all of the ITR form's tabs for accuracy before calculating the tax. Make the XML and save it. 236 CU IDOL SELF LEARNING MATERIAL (SLM)","Enter your user ID (PAN), password, and captcha code to log into the e-Filing site, then click \\\"Login.\\\" The \\\"Income Tax Return\\\" link may be found by selecting the \\\"e-File\\\" option. On page of a tax return: PAN will automatically fill in. Choose \\\"Assessment Year\\\" Choose \\\"ITR form Number\\\" \\\"Filing Type\\\" should be set to \\\"Original\/Revised Return.\\\" Choose \\\"Upload XML\\\" for \\\"Submission Mode\\\" To check the income tax return, choose one of the following options: Certificate for Digital Signature (DSC). OTP for Aadhaar. Using Prevalidated Bank Account Information for EVC. Using PrevalidatedDemat Account Information for EVC. EVC that has already been earned using the Bank ATM or My Account's Generate EVC option. Such EVCs are valid for 72 hours after they are generated. Later, I'd want to e-Verify. Remind me, please. I would want to submit a signed ITR-V to the \\\"Centralized Processing 237 CU IDOL SELF LEARNING MATERIAL (SLM)","Center, Income Tax Department, Bengaluru - 560500\\\" however I do not want to e-verify this income tax return. Attach the ITR XML file by clicking \\\"Continue.\\\" On selecting, DSC as a method of verification, Include the signature file that the DSC management tool produced. Aadhaar OTP is a method of verification, Enter the Aadhaar OTP that was sent to the UIDAI-registered cellphone number. Enter the EVC obtained on the mobile number associated with the Bank or Demat Account as appropriate. EVC via Bank account, Demat account, or Bank ATM. The ITR will be filed regardless of the other two verification choices, but the filing procedure is not complete until the ITR is validated. Either the signed ITR-V should be forwarded to CPC, Bengaluru, or the filed ITR should be e-Verified later by utilising the \\\"My Account >e-Verify Return\\\" option. Send the ITR in. To see the uploaded ITRs 2. Online: At an e-filing site, simply enter the pertinent data and submit it. ITRs 1 and 4 may be filed online by taxpayers. Go to https:\/\/www.incometax.gov.in\/iec\/foportal\/ to access the Income Tax e-Filing portal. Enter your user ID (PAN), password, and captcha code to log into the e-Filing site, then click \\\"Login.\\\" The \\\"Income Tax Return\\\" link may be found by selecting the \\\"e-File\\\" option. On page of a tax return: PAN will automatically fill in. Choose \\\"Assessment Year\\\" Choose \\\"ITR Form Number\\\" 238 CU IDOL SELF LEARNING MATERIAL (SLM)","\\\"Filing Type\\\" should be set to \\\"Original\/Revised Return.\\\" Prepare and submit online under \\\"Submission Mode\\\" Select \\\"Continue\\\" Read the instructions attentively and complete all the necessary areas on the online ITR form that apply to you. Note: To store the input ITR information as a draught and prevent data loss or redo caused by session time out, click the \\\"Save Draft\\\" button frequently. The stored draught will be accessible for 30 days after it was saved, until the date the return was filed, or until the notified ITR's XML schema did not change (Whichever is earlier). In the \\\"Taxes Paid and Verification\\\" tab, choose the appropriate Verification option. To check the income tax return, choose one of the following options: I want to use e-Verify. Within 120 days after the filing date, I want to e-Verify. I choose to submit my signed ITR-V to the \\\"Centralized Processing Center, Income Tax Department, Bengaluru - 560 500\\\" within 120 days of the filing date instead of using e- Verification. Verify all of the information submitted in the ITR, then click the \\\"Preview and Submit\\\" button. submit the ITR 239 CU IDOL SELF LEARNING MATERIAL (SLM)","When selecting the \\\"I would want to e-Verify\\\" option, you may e-Verify using any of the following procedures by providing the EVC\/OTP when prompted. Aadhaar OTPPrevalidated Bank AccountPrevalidatedDemat AccountNote: EVC acquired from a bank ATM or the Generate EVC option under My Account The ITR will be filed if one of the other two choices for verification is selected, but the filing of the ITRs is not complete until it is validated. Either the signed ITR-V should be forwarded to CPC, Bengaluru, or the filed ITR should be e-Verified later by utilising the \\\"My Account >e-Verify Return\\\" option. In the event that the EVC\/OTP is not input within 60 seconds, the Income Tax Return (ITR) will be filed automatically. The filed ITR has to be confirmed later by emailing a signed ITR-V to CPC or utilising the \\\"My Account >e-Verify Return\\\" option. To see the uploaded ITRs 14.2 ONLINE FILING OF RETURN FOR INDIVIDUALS The process of filing taxes doesn't have to be difficult. If you are concerned that hauling hundreds of documents and organizing everything as students do before exams will be required to file taxes, let us assure you that this is not the case at all in the modern world. Electronic filing (e-filing) makes it feasible to submit income tax returns (ITRs) in a couple of clicks as India embraces the digital world and all of its benefits. The greatest thing is that you may e-file your taxes from the convenience of your home or business computer. There are no protracted lines where time is lost or contacts with people who make things more difficult. Simply create an account on the income tax filing website. E-filing: What is it? The abbreviation for electronically submitting taxes is \\\"e-filing.\\\" You electronically submit your income tax returns online for a certain year when you use the term \\\"e-filing.\\\" As a result, you are no longer need to physically submit your returns at the office of the Income Tax Department that is the closest to you. Instead, you access the internet and do the task there. E-filing: 3 methods 240 CU IDOL SELF LEARNING MATERIAL (SLM)","Electronic filing of income tax returns may be done in one of three methods. The first choice is to e-file using a Digital Signature Certificate (DSC). As the digital counterpart of physical or paper certificates, a DSC is a handy tool for electronically signing documents. Option two: E-filing without a DSC is an option. In this instance, a one-page document known as the \\\"Income Tax Return-Verification\\\" form, or ITR-V, is generated. If the Aadhar data on the income tax website have not been changed, the form must be printed, signed, and sent to Central Processing Centre (CPC), Bangalore, within 120 days after the e-filing date. The third option is to electronically submit your income tax return without a DSC and have it verified by your Aadhar number or a bank. ITR-V need not be reported to CPC in this instance. Why do you need to submit a tax return? Along with the advantages of timely submitting income tax returns, doing so is also cost- effective. Penalties for submitting your tax return late may be avoided. If you submit your ITR after the deadline for the year, you may be subject to a $10,000 maximum fine. advantages of submitting tax returns For certain activities, filing income tax returns is quite beneficial. Those who submit income tax returns find it simple at every stage of the process, whether they are seeking for a loan, travelling abroad, or coping with financial problems. Let's go through how. Tax Deducted at Source is a deduction made from a taxpayer's income, whether they are employed or self-employed (TDS). However, your real tax obligations, as determined by your income tax bracket, may be significantly lower than what has already been paid if you have made investments that are deductible from taxable income. If you submit your taxes, you may claim and get a refund for the extra tax you paid. 241 CU IDOL SELF LEARNING MATERIAL (SLM)","Visa - Most nations need a visa for travel abroad. You must submit your tax returns from the previous several years if you are an Indian in order to complete your visa. These returns must be presented to the embassy or consulate representatives of the country of destination. Loans - Regardless of the kind of loan, banks will want you to provide tax returns from the previous several years as part of the paperwork. We'll analyze the results to determine your financial status. Your application can be turned down if you don't have returns. Credit card - Credit card companies want to know whether a potential customer will be able to repay the credit. A document that details an individual's income is their income tax return. You could not be eligible for a higher credit limit without income tax returns. Loss adjustment - In accordance with current income tax regulations, a person may carry losses forward to offset against future taxable income. It is possible to do this for up to eight years straight. You may use your income tax returns to support your claim and carry over or reduce your losses against future taxable income if you have them. How to file electronically in India FIG- 14.1 242 CU IDOL SELF LEARNING MATERIAL (SLM)","Documents needed for electronic filing For the following reasons, it is advised to have certain papers on hand when completing the ITR form online: the broad strokes PAN Aadhaar (Linked to PAN) Account information calculating earnings from a salary 243 CU IDOL SELF LEARNING MATERIAL (SLM)","wage slips rental receipts needed to obtain a house rent subsidy (HRA) Form 16 Making deduction claims Certificates of Interest for Savings and Deposits Information about insurance and mortgages information on assets that may be deducted Additional evidence of income (For e.g. Income from house property, income from capital gains ) Note: Consult a Chartered Accountant to confirm that your tax obligation includes all allowable deductions and exemptions. What should you do after electronically filing your income tax returns? You will get an ITR-V acknowledgment whenever you submit the return (or upload it using the return software). The return may be verified in two different methods. One, you may self-verify your returns if your PAN and Aadhaar card are connected. This is accomplished by providing an Electronic Verification Code (EVC) issued by the Income Tax Department's e-filing site. The EVC is sent to the tax filer's registered cellphone number. Such taxpayers are no longer required to provide the Income Tax Department in Bangalore the ITR-V, a one-page verification document. Two, to complete the verification procedure, taxpayers have 120 days from the date of e-filing to mail the ITR-V to the Income Tax 244 CU IDOL SELF LEARNING MATERIAL (SLM)","Department in Bangalore. You will shortly have your tax refund transferred immediately to your bank account if you are entitled for one. You will get information on refunds from the Income Tax department. Tax planning strategies like life insurance plans are quite effective. Keep in mind that under the Income Tax Act, holders of life insurance policies are entitled for two types of tax advantages (1961). According to Section 80C, you may deduct the cost of life insurance premiums for yourself, your spouse, or your children from your taxable income. You may deduct up to '1.5 lakhs from your income, which lowers your taxable income and lowers your tax burden. Your life insurance plans' returns are tax-free under Section 10(10D), provided that the clause's criteria are met. Therefore, the whole corpus, or maturity amount, in your possession will be 100% tax-free. 14.3 SUMMARY \uf0b7 Electronic filing, or e-filing, refers to the process of filing one\u2019s taxes electronically, using online software approved by the relevant tax authority of the respective country. \uf0b7 Whether individuals, small businesses, and other professionals are allowed to e-file depends from country to country, and sometimes even within a country, province by province, depending on the tax regulations and government rules. \uf0b7 E-filing is becoming increasingly popular because of the wide array of benefits it offers. 14.4 KEYWORDS \uf0b7 e-FILING- the process of electronically filing income tax return through the internet is known as e- filing \uf0b7 OTP- A one-time password (OTP) is an automatically generated numeric or alphanumeric string of characters that authenticates a user for a single transaction or login session. \uf0b7 ITR- 245 CU IDOL SELF LEARNING MATERIAL (SLM)","Income Tax Return (ITR) is a form which a person is supposed to submit to the Income Tax Department of India. It contains information about the person's income and the taxes to be paid on it during the year. \uf0b7 Income tax- Income tax is a direct tax that a government levies on the income of its citizens \uf0b7 PAN- A permanent account number (PAN) is a ten-character alphanumeric identifier, issued in the form of a laminated \\\"PAN card\\\", by the Indian Income Tax Department, to any \\\"person\\\" who applies for it or to whom the department allots the number without an application. It can also be obtained in the form of a PDF file 14.5 LEARNING ACTIVITY 1.Define e-filing ___________________________________________________________________________ ___________________________________________________________________________ 2.State the principles of ITR ___________________________________________________________________________ ___________________________________________________________________________ 14.6 UNIT END QUESTIONS A. Descriptive Questions Short Questions 1. Which ITR Form to Fill? 2. Where to Invest in Order to Save Tax? 3. How to E-Verify Income Tax Return? 4. Who is Required to Fill Schedule FA (Foreign Assets)? 5. Is There any Compulsion to Disclose all Bank Accounts other than Dormant Account? 246 CU IDOL SELF LEARNING MATERIAL (SLM)","Long Questions 1. How to Claim Relief u\/s 89(1)? 2. How can One Revise Income Tax Return? 3. What Should One Report in Schedule ICDS? 4. Is Aadhar Number Necessary to Link While Filling Income Tax Return? 5. How to Upload Defective Return u\/s 139(9)? B. Multiple Choice Questions 1. In e-filling of income-tax returns, a duly verified ITR-V form should be signed and submitted to CPC within ............. days from the date of e-filling. a. 60 b. 90 c. 30 d. 120 2. Mr.Arnab has incurred as short-term capital loss of Rs.50,435, the said loss shall be adjusted against which of the following income\/s ? 1) Long term capital Gain 2) Short term capital Gain 3) Other source Incomes 4) Speculative Gain a. 2, 4 b. 2, 3 c. 1, 2, 3 d. 1, 2 3. Having or using ......... PAN is ........... 247 CU IDOL SELF LEARNING MATERIAL (SLM)","a. One, Legal b. More than one, illegal c. Both A & B d. only A 4. Information of PAN the forth alphabet \u2018J\u2019 stands for ? a. Jurisdiction b. Company c. Trust d. Artificial Juridicial Person 5. Full form of ITR is .... a. Income Tax Refund b. Income Tax Return c. Income Tax Remuneration d. Indian Tax Return Answers 1-c, 2-d, 3-c, 4-d, 5-b 14.7 REFERENCES Reference books \uf0b7 Procedure of E-Filing Paperback \u2013 1 January 2017 by Dr Kamal Pant (Author) \uf0b7 Introduction to E-Filing of Returns (with Practical Workshops using Java and Excel Utilities) Paperback \u2013 1 January 2021 by Varun Panwar (Author), Jyoti Mahajan (Author) \uf0b7 War Department correspondence file (abridged ed.) for the use of the United States Army in the field \/ (Washington: G.P.O., 1917), by United States. War Dept, H. M. McLarin, Walter Keeton, and David A. Watt (page images at HathiTrust) \uf0b7 [X-Info] A.I.A. standard filing system and alphabetical index; for filing information on the materials, appliances and equipment employed in construction and related activities. ([Washington, 1951]), by American Institute of Architects (page images at HathiTrust) 248 CU IDOL SELF LEARNING MATERIAL (SLM)","\uf0b7 [X-Info] Supplementary code of fair competition for the filing supply industry (a division of the business furniture, storage equipment and filing supply industry) as approved on July 30, 1934. (Washington, D.C.: United States Government Printing Office, 1934), by United States National Recovery Administration (page images at HathiTrust) Textbooks \uf0b7 [X-Info] Subject filing. ([Washington, D.C.?] : General Services Administration, National Archives and Records Service, Office of Federal Records Centers ; [Supt. of Docs., U.S. G.P.O., distributor], 1981), by United States. National Archives and Records Service. Office of Federal Records Centers (page images at HathiTrust) \uf0b7 [X-Info] Suggestions for handling office training for stenographers. Teacher's key. (New York,[etc.] : Gregg Pub. Co., [c1912]), by Rupert Pitt So Relle (page images at HathiTrust) \uf0b7 [X-Info] How to build an occupational information library, ([Chicago] Science research associates, [1944]), by John R. Yale and Chicago Science Research Associates (page images at HathiTrust) \uf0b7 [X-Info] Subject filing. ([Washington : for sale by the Supt. of Doc., U.S. Govt. Print. Office], 1966), by United States. National Archives and Records Service. Office of Records Management (page images at HathiTrust) Website \uf0b7 https:\/\/tax2win.in\/efile-income-tax-return\/sources-of-income \uf0b7 https:\/\/cleartax.in\/ \uf0b7 https:\/\/www.mca.gov.in\/MinistryV2\/efiling.html 249 CU IDOL SELF LEARNING MATERIAL (SLM)"]