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With Rs 6.75 lakh cr arrears, I-T dept on mop-up drive

The income tax department has ordered a major revenue mobilisation drive focusing on recoverable tax arrears, enhancing the share of tax deducted at source (TDS) in total revenue receipts and casting its net wide to cover 22 Lakh more individuals who make high-value payments but do not file tax returns.

The Central Board of Direct Taxes (CBDT), the apex policy-making arm of the finance ministry for direct taxes, has informed all field officials that tax arrears demand has increased to an alarming Rs. 6.75 Lakh Crore as on April 1, 2014, from Rs. 5.8 lakh crore a year earlier.

Officials have been asked to recover a part of the arrears demand, which is not constrained by judicial restrictions on recovery. For the 2015 fiscal, officials have to recover about Rs. 42,000 crore of past dues, half of which ought to come from taxpayers assessed in Delhi and Mumbai, sources said.

Officials have also been instructed to check tax evasion, especially in the case of TDS defaults, and to raise the receipts from this stream in gross direct tax collection. TDS had accounted for Rs. 2.71 lakh crore in 2013-14, about 40 % of gross direct taxes revenue.

Individuals who have made high-value transactions but have not filed tax returns are also likely to get notices from officials seeking an explanation. Tax officials are expected to approach about 22 lakh non-filers this fiscal.

Intense scrutiny on the revenue recognition practices of real estate companies as well as on the weighted deductions claimed by companies on their research and development spending are also high on the priority list. Companies that get tax deductions for the amount given to research institutions on specific projects may be denied the benefit if the research body does not maintain proper records.

The tax administration also intends to approach nearly 89 countries with which India has double tax avoidance agreements and another 16 nations with which it has tax information exchange deals to verify the source of income and other details of entities that make payments to businesses in India if their transactions are suspected of attempted tax evasion.

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Procedures to e- file the Tax Audit Report for AY 2013-14 In simple words, the assessee who is required to furnish the tax audit report for AY 2013-14 shall submit the tax audit report electronically. The following steps should be followed for filing the ...

Online Rectification :
Rectification application maybe filed u/s 154 of the Income Tax Act by the taxpayer in case of any mistake apparent from the record.
An Income Tax authority may:
a) amend any order passed by it under the provision of this Act
b) amend any intimation or deemed intimation under sub-section (1) of Section 143.
Subject to the other provisions of this section, the authority concerned,
a) may make an amendment under sub-section (1) of its own motion,
b) shall make such amendment for rectifying any such mistake which has been brought to its notice by the assessee.
Pre-Requisites to file a Rectification-
1. The Income Tax Return for the Assessment Year should have been processed in CPC, Bangalore.
2. An Intimation under Section 143(1) OR an order under Section 154 passed by CPC, Bangalore for the e-Filed Income Tax return should be available with the taxpayer.
3.For Electronic returns filed and processed at CPC, only online rectifications will be considered.
4.If the refund arising out of return processed at CPC is adjusted against the demand of other Assessment Years and then the assessee is challenging the demand itself, in that case
i) Rectification application has to be filed for the demand year, if the demand was raised by CPC then online application has to be filed
ii)for the demand raised by the Field Assessing Officer, the application has to be filed before him.
5.No rectification has to be filed for giving credit to taxes paid after raising the demand.To file your Rectification, you should be a registered user in e-Filing application.
Below listed are the steps to file Rectification:
Step 1 – LOGIN to e-Filing application and GO TO –> My Account –> Rectification request.
Step 2 – Select the Assessment Year for which Rectification is to be e-Filed, enter Latest Communication Reference Number (as mentioned in the CPC Order), and Latest CPC Order Date (as mentioned in the CPC Order).
Step 3 – Click ‘Submit’.
Step 4 – Select the ‘Rectification Request type’–> ‘Taxpayer Correcting Data for Tax Credit mismatch only’ − On selecting this option, three check boxes, TCS, TDS, IT, are displayed. You may select the check-box for which data needs to be corrected. You can add a maximum of 10 entries for each of the selections. No upload of an Income Tax Return is required.
–> ‘Taxpayer is correcting the Data in Rectification’ − select the reason for seeking rectification, Schedules being changed, Donation and Capital gain details (if applicable), upload XML and Digital Signature Certificate (DSC), if available and applicable. You can select a maximum of 4 reasons
–> ‘No further Data Correction required. Reprocess the case’ − On selecting this option, three check-boxes, Tax Credit mismatch, Gender mismatch, Tax/ Interest mismatch are displayed. You may select the check-box for which re-processing is required. No upload of an Income Tax Return is required.
Step 5 – Click the ‘Submit’ button.
Step 6 – On successful submission, an Acknowledgment number is generated and sent for processing to CPC, Bangalore.
Post processing, either the rectification order under Section 154 will be issued
——-
Important Notes before e-Filing Rectification-
1. You must file using the latest CPC Order for the selected Assessment Year. For eg: If an order has been passed by CPC on 27th September, 2011 and another order has been passed on 15th December, 2011, the assessee can e-File ONLY using the latest i.e. 15th December, 2011 order.
2. You can file another Rectification for the same Assessment Year ONLY if the previous Rectification request is processed.
3. The CPC order details can be used ONLY once to file a Rectification. Any subsequent Rectification should be filed using new/latest CPC order details. However, the same CPC Order details can be re-used if the e-Filed Rectification has been withdrawn by the assessee ( Note: Time for withdrawal is 7 days from date of e-Filing the Rectification)
4. The rectification request can be withdrawn within 7 days if submitted by mistake or the request needs to be amended. LOGIN and GO TO ‘My Account’ –> ‘Rectification status’ to withdraw the Rectification.
Common mistakes while filing Rectification
It is noticed that Communication Reference Number mentioned in the CPC Order (u/s 143(1) or 154) is entered wrongly. It must be mentioned exactly as it appears on the CPC order.
Communication Reference Number should be entered in the below format:
1st time Rectification – Example for AY 2011-12, ITR 3, the Communication number is CPC/1112/I3/1000003276 I3 in the above reference number should be inferred as English alphabet (I) and 3 indicated the ITR Form type.
Re-rectification – Example for AY 2011-12, ITR 3, the Communication number is CPC/1112/T3/1000008998 T3 in the above reference number should be infered as English alphabet (T) and 3 indicated the ITR Form type.
Right Assessment Year should be selected.
The complete Income Tax Return should be e-Filed and NOT just the schedules/ fields that need change/correction.
In case of change in ‘Income’, a rectificatin should NOT be filed. A revised Income Tax Return should be filed in this case, of course, subject to the time limit as per the Income Tax Act, 1961.
In case of change in ‘Bank Account details’ OR ‘Address Details’, a Rectification should NOT be filed. You can LOGIN and GO TO My Account –> Refund Re-issue request and raise a request for change in the Bank Account/Address details (in case of refund failure).
Note: The Bank Account details and Address details as in the original Income Tax Return (processed) will be considered for any refund/demand notice, and not the bank account/address details mentioned in the Rectified Income Tax Return.
Tips to the user on filling the Income Tax Return-
For cases where the XML for the IncomeTax Return needs to be uploaded, it is suggested that –> you start with the saved IT Return (Processed) data that was prepared by the return preparation utility/software (Department provided excel software or other software), if available.
–> you import the details of the previous version into the new version of the utility using the “Import Previous Version” facility. Click on the “Import Previous Version” button and select the path where the previous version is available and click OK. The data is uploaded successfully.
The complete Income Tax Return should be e-Filed and NOT just the schedules/ fields that need change/correction. However, there should NOT be any revision in Income or new claims of deduction/ exemption made in the Rectification request, as this would lead to rejection or delay in processing by CPC. Please note that this facility is only provided by Income Tax Department for correcting mistakes. In case you wish to make changes in Income or make new claims, a Revised Income Tax Return should be filed as per the Income Tax Act, 1961.

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