Ministry of Finance

CBDT identifies non-filers through Non-filers Monitoring System (NMS) by using Data Analytics and request the Non-filers to assess their tax liability for AY 2018-19 and file the Income Tax Returns (ITR) or submit online response within 21 days

Dated: 22 JAN 2019

The Non-filers Monitoring System (NMS) aims to identify and monitor persons who enter into high value transactions and have potential tax liabilities but have still not filed their tax returns. Analysis was carried-out to identify non-filers about whom specific information was available in the database of the Income Tax Department. The sources of information include Statement of Financial Transactions (SFT), Tax Deduction at Source (TDS), Tax Collection at Source (TCS), information about foreign remittances, exports and imports data etc.

Data analysis has identified several potential non-filers who have carried-out high value transactions in Financial Year 2017-18 but have still not filed Income Tax Return for Assessment Year 2018-19 (relating to FY 2017-18).

The Department has enabled e-verification of these NMS cases to reduce the compliance cost for taxpayers by soliciting their response online. It is reiterated that there is no need to visit any Income Tax office for submitting response, as the entire process is to be completed online. Taxpayers can access information related to their case from the ‘Compliance portal’ which is accessible through the e-filing Portal of the Department at https://incometaxindiaefiling.gov.in. The PAN holder should submit the response electronically on the Compliance Portal and keep a printout of the submitted response for record purposes. User Guide and FAQs are provided under the “Resources” Menu on Compliance Portal.

Non-filers are requested to assess their tax liability for AY 2018-19 and file the Income Tax Returns (ITR) or submit online response within 21 days. If the explanation offered is found to be satisfactory, matters will be closed online. However, in cases where no return is filed or no response is received, initiation of proceedings under the Income-tax Act, 1961 will be considered.

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DSM/RM/KA

(Release ID: 1560976)

Click here to read and download ITAT order copy reported in [TS-5051-ITAT-2019(Pune)-O]

Ministry of Finance

Central Board of Direct Taxes (CBDT) clarifies regarding issue of Prosecution Notices

Dated: 21^st JAN 2019

The Central Board of Direct Taxes (CBDT) has stated that certain news items that appeared in a section of media regarding enmasse issue of prosecution notices to small companies for TDS default are completely misleading and full of factual inaccuracies. CBDT clarified that Mumbai Income Tax TDS office has issued prosecution Show Cause Notices only in   a limited number of big cases where more than Rs. 5 lakh of tax was collected as TDS from employees etc and yet the same was not deposited with the Income Tax Department in time.

CBDT said that some defaulter companies and vested interests are deliberately misleading the media to thwart action against themselves.  Having deducted tax from employees and other taxpayers and not depositing the same in time in the Government Treasury is an offence punishable under the law. It also affects the interest of the employees from whose salary the tax has been deducted by the unscrupulous employers who have not deposited the same in time in the Government Treasury. If the TDS is not deposited in time, the employee would be ineligible for claiming credit of the tax deducted when he files his own return.

CBDT stated that in last one month, only in 50 big cases prosecution notices have been issued by Mumbai IT TDS office. Out of these, in 80% of the cases the TDS tax default is above Rs. 10 lakh and in 10 % cases, TDS default is between Rs. 5 to Rs.10 lakh. In the remaining 10% cases, TDS default is of more than Rs. 1 crore as detected in the survey. Prosecutions have also recently been launched against 4 big business houses where more than Rs 50 Crore of tax was collected by them from the tax payers and yet not deposited with the Government in time. But such legal and rightful action is being unfortunately projected in the media by the vested interests as if the Department is going overboard to harass small employers. 

It would be pertinent to note that in a country of 130 Crore people where around 6 Crore returns are filed every year, only a total of 1400 prosecutions have been filed so far for various offences under the Income Tax Act during this financial year.  This, by any stretch of imagination, cannot be termed as mass harassment by the income tax department. Therefore, to say that prosecution notices enmasse have been sent to taxpayers for minor defaults is completely incorrect and misleading, the CBDT added.

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DSM/RM

(Release ID: 1560705) 

ITAT upholds addition u/s 68 on account of credits of sale of penny stock on the ground that assessee had generated bogus entries of long term capital gains on sale of penny stocks and claimed the same to be exempted u/s 10(38)

Click here to read and download ITAT order copy reported in [TS-5007-ITAT-2019(Delhi)-O]

Ministry of Finance

Withdrawal from New Pension Scheme

Dated: 08 JAN 2019

Government has allowed premature withdrawal from New Pension Scheme Fund. A subscriber is eligible for three partial withdrawals during the period of subscription under National Pension System (NPS), each withdrawal not exceeding twenty-five percent of the contributions made by the subscriber and excluding contributions made by the employer. There is, however, no restriction on withdrawals from the Tier-II account of the subscriber. Further, keeping in view the possibility of sudden financial needs of the subscribers, the requirement of minimum period under National Pension System (NPS) for availing the facility of partial withdrawal from the mandatory Tier-I account of the subscriber has been reduced from 10 years to 3 years from the date of joining w.e.f. 10th August, 2017. The minimum gap of 5 years between two partial withdrawals has also been removed w.e.f. 10th August, 2017.

On 06.12.2018, Government has approved the following proposals pertaining to choice of Pension Fund and investment pattern for Central Government subscribers under NPS:

• Choice of Pension Fund: Central Government subscribers will be allowed to choose any one of the pension funds including Private sector pension funds.  They could change their option once in a year. However, the current provision of combination of the Public-Sector Pension Funds will be available as the default option for both existing as well as new Government subscribers.
• Choice of Investment Pattern: The following options for investment choices will be offered to Central Government employees:

i) Government employees who prefer a fixed return with minimum amount of risk may be given an option to invest 100% of the funds in Government securities (Scheme G).

2) Government employees who prefer higher returns may be given the options of the following two Life Cycle based schemes.

• Conservative Life Cycle Fund with maximum exposure to equity capped at 25% at the age of 35 years and tapering off thereafter (LC-25).
• Moderate Life Cycle Fund with maximum exposure to equity capped at 50% at the age of 35 years and tapering off thereafter (LC-50).

In case an employee does not submit any choice, the existing allocation of funds shall continue as the default option.

This was stated by Shri Shiv Pratap Shukla, Minister of State for Finance in written reply to a question in Rajya Sabha today.

DSM/RM/KA

(Release ID: 1559129)