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) 

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

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)

Ministry of Finance

Direct Tax Collections for F.Y. 2018-19 up to December, 2018

Dated: 07 JAN 2019

The provisional figures of Direct Tax collections up to December, 2018 show that gross collections are at Rs. 8.74 lakh crore which is 14.1% higher than the gross collections for the corresponding period of last year.

Refunds amounting to Rs.1.30 lakh crore have been issued during April, 2018 to December, 2018, which is 17.0% higher than refunds issued during the same period in the preceding year. Net collections (after adjusting for refunds) have increased by 13.6% to Rs. 7.43 lakh crore during April - December, 2018. The net Direct Tax collections represent 64.7% of the total Budget Estimates of Direct Taxes for F.Y. 2018-19 (Rs. 11.50 lakh crore).

So far as the growth rate for Corporate Income Tax (CIT) and Personal Income Tax (PIT) is concerned, the growth rate of gross collections for CIT is 14.8% while that for PIT (including STT) is 17.2%. After adjustment of refunds, the net growth in CIT collections is 16.0% and that in PIT collections is 14.8%. It is pertinent to mention that collections of the corresponding period of F.Y. 2017-18 also included extraordinary collections under the Income Declaration Scheme (IDS), 2016 amounting to Rs.10,844 crore (Third and last instalment of IDS), which do not form part of the current year’s collections.

An amount of Rs. 3.64 lakh crore has been collected as Advance Tax, which is 14.5% higher than the Advance Tax collections during the corresponding period of last year. The growth rate of Corporate Advance Tax is 12.5% and that of PIT Advance Tax is 23.8%.

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DSM/RM/KA

(Release ID: 1558832)