1 New e-filing procedures
About the topic Obligation to file Return of Income Due Dates for filing Return of Income Contents Recent Amendments relating to return filing. In ITA Forms used Changes in online filing of returns Introduction to the New Uploading Requirements Introduction CA Registration and Add CA Offline Preparation and Online Submission of forms Verification of Forms, View forms and View Clients Summary of Work flow
About the Topic We are in the month of August now, financial year 2012-13 has ended and due date to file the Return of Income ( ROI ) is already upon us. This presentation aims at creating awareness about the due date for filing the ROI, various forms used for filing of the return, recent amendments to the Finance Act impacting the filing of return and Introduction to the New Uploading requirements in relation to Tax Audit Report, Form 29B and Transfer Pricing Report.
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Obligation to file Return of Income Under section 139 of the Act, following persons are under an obligation to file their return of income: All Companies and Firms (including LLP) - irrespective of level of income Obligation to file Return of Income Person other than company / firm, if the total income exceeds maximum amount not chargeable to tax [section 139(1)(b)] Resident & Ordinary Resident having foreign asset or signing authority for foreign bank account [4 th proviso to section 139(1)] Person having business loss/capital loss seeking carry forward to file return of income [section 139(3)] Individual / HUF / AOP / BOI / Artificial Juridical Person having total income exceeding maximum amount not chargeable to tax before deduction under Chapter VIA / Section 10 / 10B / 10BA also liable 5th proviso to section 139(1) Political party with total income before section 13A exemption exceeding maximum amount not chargeable to tax liable section 139(4B)
Obligation to file Return of Income Person having income from property held in trust for charitable / religious purposes with total income before section 11/12 exemption exceeding maximum amount not chargeable to tax liable section 139(4A) Obligation to file Return of Income Research association, news agency, professional regulatory body, khadi / village industry development body, educational/medical institution, trade union, public regulatory body, infrastructure debt fund liable if total income before exemption exceeds max amt not chargeable to tax section 139(4C) University/college/institution [section 35(1)(iii)]
Due Dates TYPE OF ASSESSEE Every company, person requiring audit of accounts under ITA or any other law, working partner of firm subject to audit DUE DATE 30 th September Person required to furnish transfer pricing report under section 92E (includes person subject to domestic transfer pricing audit) 30 th November Other cases 31 st July
Recent Amendments in ITA
Recent Amendments in ITA/ITR W.e.f. AY 2012-13, any resident who is otherwise not required to furnish a ROI, will now be required to furnish a return if- has asset located outside India including any financial interest in any entity, or has signing authority in any account located outside India The Finance Act, 2013 has made an amendment to explanation to section 139(9) treatment of return as defective if self assessment tax and interest not paid before filing of return of income The amendment will be with effect from 1.6.2013 and is applicable to returns filed after that date Limits for tax audit increased to Rs. 1 crore/rs.25 lakhs for business and profession respectively with effect from AY 2013-14 Vide IT (Seventh Amendment) Rules, 2013, even trusts claiming exemption u/s. 10(23C)/12A will have to compulsorily file e-returns (some confusion here)
Form No. ITR-1 (Sahaj) Applicable To Individual having income only from Salaries, Family Pension, House Property (HP), Income from Other Sources (IOS) ITR Forms to be used Not Applicable To Individual having: i. More than one HP ii. B/f losses under HP iii. Loss under IFOS iv. Winnings from Lottery or Income from Race Horses v. R & OR having foreign assets/ signing authority in foreign bank account vi. Claim for foreign tax credit/ relief under section 90/90A/91 vii. Exempt income exceeding Rs.5,000 ITR-2 Individual/HUF Individual/HUF having business/professional income ITR-3 ITR-4 Individual/HUF who is partner in a firm Other Individual/HUF having business/ professional income Individual/HUF having any other business/ professional income -
Forms Used Form No. ITR-4S (Sugam) Applicable To Individual/HUF having presumptive business income computed under section 44AD/44AE Not Applicable To Individual/HUF : i. Being R & OR having foreign assets/ signing authority in foreign bank account ii. Claiming foreign tax credit/ relief under section 90/90A/ 91 iii. Having exempt income exceeding Rs.5,000 ITR-5 Person other than Individual/HUF/compa ny Persons required to file return u/s.139(4a),(4b),(4c) or (4D) ITR 7 ITR-6 Company Company required to file ITR 7 ITR-7 Person (including company) required to file return under section 139(4A),(4B), (4C) or (4D) -
Online filing of Returns
Changes in Online Filing of Returns Persons All persons whose total income is up to 5 lacs (except Companies and person required to furnish return in ITR-7) Electronic Filing Physical Filing Digital Signature (Compulsory) Pre amendment position No change All persons whose total Earlier had the option to income exceeds 5 lacs but does not exceed 10 lacs (except Companies and person required to furnish return in ITR-7) file the Return physically All persons whose total income exceeds 10 lacs (except Companies and person required to furnish return in ITR-7) AOP, BOI, firms and Artificial Juridical person had the option to file return physically
Changes in Online Filing of Returns Persons Electronic Filing Physical Filing Digital Signature (Compulsory) Pre amendment position Person claiming benefit of Double Taxation Avoidance Agreement ( DTAA ) (u/s 90 or 90A) or unilateral relief (u/s 91) Had the option to file the Return physically subject to other conditions Person required to furnish return in ITR-7 Had no option to file return electronically Individual or HUF being resident and ordinarily resident having assets outside India or signing authority in any account located outside India No change
Changes in Online Filing of Returns Persons Firm or Individual or HUF to whom provisions of section 44AB i.e. tax audit is applicable Electronic Filing Physical Filing Digital Signature (Compulsory) Pre amendment position No change Company No change
Introduction to the New Uploading Requirements
Introduction to the New Uploading Requirements Following details are not required to be enclosed with the return of income [section 139(9) read with 139C and Rule 12]: Computation of tax payable Proof of tax payment/deduction There were cases where Assessee deliberately did not disclose some remarks of Tax Auditor or did not disallow some expenses, even if they were disallowed by tax auditor. Since the return did not contain tax audit report, it was not possible for the ITD to trace such instances. However, with effect from AY 2013-14, e-filing of Audit Reports under section 44AB (tax audit report TAR alongwith Financial Statements and other Audit reports, if any), section 92E (transfer pricing international & domestic), section 115JB (Form 29B for MAT), Form 10B (charitable trusts), Form 10BB (educational/medical institutions) and Form 10CCB (80- IA/80IB/80IC/80ID/80JJAA/80LA) have been made mandatory To be filed on or before the due date of filing the return To be filed before uploading the return Data to be entered in utility provided by income-tax department & converted into xml before uploading or to be entered in an online form for online submission Tax Payer and the CA who will be signing Form 29B, TAR and Transfer Pricing report will have to be registered with the Income Tax Department Website. CA is required to have a valid PAN and DSC for the registration.
New Uploading Requirements CA Registration For registration and uploading of forms, steps shown in the following slides will have to be followed. Every auditor/certifying CA will be a new user for A.Y. 2013-14 and will have to click on the Register Yourself button given on the e-filing website. Under Tax Professional, select Chartered Accountant and click on the CONTINUE button. The REGISTRATION FORM screen will appear (Screenshot shown below). Enter the details, upload the Digital Signature Certificate (DSC) and click CONTINUE button.
New Uploading Requirements CA Registration On successful validation, you will be directed to the next page of registration where you have to enter additional details like Password, Contact, Postal address and enter the Code displayed on the screen and click on the SUBMIT button.
New Uploading Requirements CA Registration On successful registration, a message will be displayed along with a transaction ID. An email with the user ID and activation link will be sent to your registered email ID. An alert will also be sent on the registered mobile number. Make sure you provide a valid mobile number and email ID as all the future communications will be sent to this mobile number and email ID.
New Uploading Requirements CA Registration After you login, the blue navigation bar on top will display additional menu options. Dashboard Option: Provides the current notifications and also the details of your previous e-filed reports. My Account option: Provides services such as View Forms and View Client List. e-file and Downloads options: Allows you to file your reports and download forms, respectively. Profile Settings option: Allows you to update your profile, details like DSC upload, secret question, contact details, change password, etc. Worklist option: Provides list of items, which may be pending for action at your end. Helpdesk option: Allow you to raise a query, if you face any issues while e-filing and check status, if raised.
New Uploading Requirements Add CA Assessee has to add CA to enable the CA to upload the Forms (other than ITR) on his/her behalf. Assessee should Login to e-filing portal Navigate to My Account -> Add CA Enter the Membership No. of the CA, select the Form and Assessment Year and enter captcha code. Click submit. Success message should be displayed on the screen.
23 Step 1 for Adding CA
24 Step 2 for Adding CA
25 Step 3 for Adding CA
26 Step 4 for Adding CA View List of CA
New Uploading Requirements Preparation and submission of forms There are two ways for preparing and submitting the form: 1. Offline Preparation and online submission (for Forms 3CA-3CD, Form 3CB-3CD, Form 3CEB, Form 29B, Form 6B, Form 10B, Form 10BB and ITR-7) 2. Online Preparation and submission (Other forms to be submitted)
New Uploading Requirements Offline Preparation On www.incometaxindiaefiling.gov.in, from the Downloads section on the right, either select Income Tax Return (ITR-7) or Forms (other than ITR) On selection of Forms (other than ITR) the following screen is displayed.
New Uploading Requirements Offline Preparation On clicking on the e icon, a zip file appears. On selecting the zip file, a JAVA based utility is displayed. Hence, the user is required to update JAVA (version 7 update 13) on the computer. File option under the utility provides option to select the Form which you want to fill.
New Uploading Requirements Offline Preparation User will fill in the details in the Form and save the same as draft in xml format in the desired folder. To reopen the draft for further editing the user needs to enter the utility on the income tax site, click on the Open Draft option given on the taskbar, browse the saved xml file and update as per requirement. Common details in the form get automatically updated once entered. (eg: data filled under Form No. 3CA is picked up automatically in the Form No. 3CD (Part A) and in Annexure to Form No. 3CD (Part A). Details like company name, address, previous year and assessment year)
New Uploading Requirements Offline Preparation Validate option, validates all the pages of the Form and throws up the errors in the form. Once the form is validated, Generate xml option creates a final xml which has to be uploaded with the department.
New Uploading Requirements Offline Preparation
New Uploading Requirements Online Submission of Offline Preparation 1. Go to 'e-file' menu, Login and select Upload Form 2. LOGIN to e-filing application and GO TO --> e-file --> Upload Form 3. Enter the Tax payer s PAN, CA s PAN; select the Form Name (other than ITR) and the Assessment Year. 4. Browse and Select the XML file 5. Upload Digital Signature Certificate. 6. Click 'SUBMIT'. 7. On successful upload, the Form (other than ITR) is sent to Tax Payer's workflow for acceptance. 8. The Tax Payer should LOGIN to e-filing application, GO TO Worklist and accept/reject the form. 9. A) On Approval, the Form is successfully submitted with e-filing application. No further action is required. B) If Rejected, the Tax Professional can file the Form (other than ITR) again and follow the same process as mentioned in 9, 10 & 11A.
New Uploading Requirements Online Submission of Offline Preparation 1. Alongwith the 3CD and 3CA/3CB, the tax auditor will also have to upload the scanned copies of the audited accounts. In addition, if the concerned assessee has to have a cost audit or an excise audit done or any other audit, then those reports also have to be scanned and uploaded. 2. There are certain restrictions on the size of the scanned files that can be uploaded (See next slide)
New Uploading Requirements Submission of Forms
New Uploading Requirements Direct Online Submission 1. Go to 'e-file' menu, Login and select "Submit Form Online" 2. Enter the Assessee PAN, CA s PAN, select the Form Name (other than ITR) and the Assessment Year. 3. Upload Digital Signature Certificate of the CA 4. Click 'SUBMIT'. 5. Enter the data and Submit. 6. On successful submission, the Form (other than ITR) is sent to Assessee's workflow for acceptance. 7. The Assessee should LOGIN to e-filing application, go to Worklist and accept/reject the Form (other than ITR). 8. a) On approval, the Form is successfully submitted with e-filing application. No further action is required. b) If rejected, the CA can file the Income Tax Form (other than ITR) again and follow the same process as mentioned above.
New Uploading Requirements Verification of Forms There are some statutory Forms like Form 62, Form 63, Form 63A and Form 64 which needs to be initiated by Assessee and reviewed by CA. On finding the Forms in order, CA will approve and an acknowledgment number is generated. Steps to verify submitted Forms (other than ITR) of Assessee 1. The CA should LOGIN to e-filing application, GO TO Worklist and verify the Income Tax Form (other than ITR) submitted by the Assessee. 2. Upload Digital Signature Certificate. 3. Click 'SUBMIT'. 4. The Form is successfully submitted with e-filing application. No further action is required.
38 Acceptance / Rejection of Report by Assessee Process: Step 1: Visit ITD Website. Assessee has to login through his Login Credentials Dashboard will appear on the screen Step 2: Go to Worklist List of Reports uploaded by CA Pending for Approval will appear. Step 3:Click on View Form to view the Form and Attachment. Assessee can download the Attachment and Report uploaded by CA. To submit, Assessee need to select Approve and affix his Dig. Sign. Step 4: On successful upload, Upload Screen will appear Step 5: Assessee can also reject the Return. However, reasons for rejections must be mentioned at the time of Rejection. Step 6: Acknowledgement can be generated from My Account -> My Returns / Forms. Click on the Return Ack. No. Step 7: Assessee can download Audit Report, Receipt and Attachments and also Acknowledgement
Acceptance / Rejection of Report by Assessee Step 1 - Login 39
Acceptance / Rejection of Report by Assessee Step 2 Go to Worklist 40
Acceptance / Rejection of Report by Assessee Step 3 Form View & Acceptance/Rejection 41
Acceptance / Rejection of Report by Assessee Step 4 Screen after Uploading of Report 42
Acceptance / Rejection of Report by Assessee Step 5(a) Rejection of Report 43
Acceptance / Rejection of Report by Assessee Step 5(b) Worklist after Rejection of Report 44
Acceptance / Rejection of Report by Assessee Step 6 Generation of Acknowledgement 45
Acceptance / Rejection of Report by Assessee Step 7 Acknowledgement Screen 46
Acceptance / Rejection of Report by Assessee Step 7 Format of Acknowledgement 47
New Uploading Requirements View Forms View Forms displays the list of Forms uploaded by CA for an assessee. The CA will type the PAN of the assessee and clicks SUBMIT button
New Uploading Requirements View Clients View Client list displays the list of clients of the CA
New Uploading Requirements Worklist The assessee will be able to view the form uploaded, the screenshot of which is as below 50
New Uploading Requirements Worklist After clicking the View form option on the screen, details of uploaded form will be shown as below. The form viewed by the assessee in pdf format. 51
Summary of Workflow Registration and Uploading Step 1 CA registers in e-filing portal Assessee registers in e-filing portal Step 2 Assessee adds CA for the desired Form (Other than ITR) and Assessment Year Step 3 CA logs in e-filing portal Step 4 CA Downloads the offline Form, fills the data, generates and uploads the XML Or CA opens the online Form, fills the data and submits the Form Step 5 CA gets the success message and the transaction ID Step 6 Assessee reviews and approves. An acknowledgment number is generated Step 7 CA can view/print the submitted Form using the functionality View Forms Assessee can view/print the submitted Form using the functionality e-filed Returns/Forms
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Hardships likely to be faced by assessees as per the representation: Attachment of the Financial Statements It is not clear as to whether the Financial Statements to be attached MUST BE A SCANNED COPY of manually signed statements or a PDF file digitally signed will be treated as sufficient compliance. Clause 14 Depreciation There is no column to give details of additional depreciation. Whether date wise details of all the minor items of additions to fixed assets are to be given? This data could run into a few thousands for many businesses, and would take substantial time to re-enter. Is there any limitation on the number of items one can enter? Clause 15 - Under sub clauses a) & b) is it necessary to select each section & put 0 in the amounts column if there is nothing to report under this clause? Or can we simply skip filling any information in this clause? Clause 17 & 17A Under sub clauses a) & b), h)b) of Clause 17 & Clause 17A, it is normal practice to give appropriate comments by the assessee / tax auditor. But for e filing form, the space provided is not sufficient. So in that case is it proper for the assessee/ tax auditor to keep the appropriate comments / remarks / explanation in the hard copy but in the online form we only fill NIL or 0? Clause 19 Under this clause whether we have to select each section and fill NIL 0 or we can skip filling this clause, if there is no information to be reported? 54
Clause 21 Under sub clause (i)(b)(b), normally the Tax Auditor fills the information till the date of signing of the Audit Report. If the payment is made after the date of Audit Report but before the due date of filing ITR u/s 139(1) of the Act the same is allowed u/s 43B of the Act. Now if the Tax Audit Report is signed on 20.6.2013 and the amounts unpaid are shown under the above sub clause and the Form 3CD is being uploaded on 16.8.2013, by which time the said amounts have already been paid, what information should be filled in this sub clause? Further suppose the payment is not yet made, and the Form 3CD is uploaded on 16.8.2013 and the assessee makes the payment after 16.8.2013 but before 30.9.2013, and while uploading the ITR does not disallow the amounts u/s 43B of the Act, will there be a problem of disallowance while processing the ITR by CPC, Bengaluru? Clause 24 Under sub clauses a) & b) if the loan is accepted or repaid by way of any journal / transfer entry or electronic funds transfer, the remark to that effect is given in Tax Auditor s report. However, in the e filing of the Form 3CD, the assessee/tax auditor has to only state whether the amount was accepted / repaid by otherwise than by account payee cheque or demand draft, and options available are only Yes or No. In this case, selection of option No without appropriate remarks may lead to penal proceedings under the Act. Clause 27 Under sub clause a), the tax auditor normally gives the appropriate remarks/comments/explanation in this regard. But in the online form 3CD, only Yes or No options are provided under this sub clause. So in that case is it proper that in tax auditor s hard copy he keeps the appropriate remarks / comments / explanation, but in the online form he only fills Yes or No? 55
Clause 27-Sub clause b)(ii) - Besides the normal short deduction, a Tax Auditor normally reports the cases wherein the tax is deducted under wrong section resulting in short deduction, e.g. if tax is deducted u/s 194C instead of u/s 194J. However, in the online form 3CD, short deduction only in the respective section can be reported. Under these circumstances, how does one report the fact of short deduction due to wrong section? Clause 27 Sub clause b)(iii) - In addition to the late deduction, the tax auditor normally gives the information about tax deducted but paid late i.e. after the due date of payment. However, there is no such option in the online form 3CD. In that case is it proper that the tax auditor gives this information in the hard copy but no reporting is done in the online form3cd? Clause 27 (b)(iv) Normally nowadays there is no such situation wherein tax is deducted but not paid to the Central Govt. as in such a situation the entire expense gets disallowed. However, it is possible that till conclusion of the Tax Audit Report, the TDS may not have been paid. So in a situation wherein the Tax Audit Report is finalized on 20.6.2013, and under this clause a default is reported. Till uploading of the online Form 3CD, say on 16.8.2013, the TDS is not paid. The assessee pays the TDS after 16.8.2013 but before 30.9.2013 and uploads the ITR without disallowing any amount U/S 40(a)(ia). What will be the consequences? Clause 28 This clause deals with quantitative details. In case of Trading / Manufacturing Unit normally the data is available. But if the same is not available, the tax auditor simply reports Information Not Available. 56
Certain voluminous data needs to be keyed in into the utility, such as asset wise addition to fixed assets, which would take a considerable amount of time for many assessees. Presently, no software is readily available which will automatically convert existing tax audit reports in word or excel format into xml files. Now the questions are 1) If the data is not available at all till uploading of the report, can a tax auditor skip this clause? 2) If the data is made available after signing of the Tax Audit Report but before uploading the Form 3CD, whether the same should be filled in? In that case, whether the signed Tax Audit Report needs to be revised? Clause 28(b)(A) - In case of manufacturing assessees, if yield is more than 100%, the utility does not accept it. Clause 32 In case of service industry or professionals, normally the tax auditors report states that The activity of the assessee is neither trading nor manufacturing - as such these ratios are not applicable. In the online filing there is no space for this comment. In this situation can a tax auditor simply skip this clause? In that case, is it proper that a tax auditor gives this statement in the hard copy but no reporting is done in the online form3cd? 57 In addition, many other clauses of Form 3CD need appropriate disclosures by way of Notes etc. No disclosure can be made unless space is provided in required fields, e.g. Disclosure of section 145A, Payments made by cheque or bank draft for section 40A(3), 269SS and 269T, etc.
The Annexure II is still part of the Form 3CD. However, from A.Y. 2010-11 the provisions of FBT are made ineffective. The online Form 3CD also does not provide this Annexure II. What is the exact position? Are tax auditors supposed to report NIL under this annexure? Normally, tax auditors report NIL and the fact that provisions of FBT are made ineffective from A.Y. 2010-11 is also reported. 58
Suggestions: In view of the above difficulties/issues, it is suggested that the requirement of furnishing report of audit electronically be made applicable from Assessment Year 2014-15 (i.e. next year) onwards, by which time appropriate software would be available for conversion. Alternatively, the due date for furnishing the report of audit be extended to 31st December 2013 instead of 30th September 2013 (i.e. extension of three months for furnishing the report), while the return can still be uploaded by the due date of 30th September/30th November, as the case may be. Clarification should be issued immediately in respect of various issues arising in respect of electronic filing of Form 3CA/3CB/3CD, as pointed out above. 59
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