Minimum Wages Rs. 26000 may be fixed in 7th Pay to Central Govt. Employee.

Incidentally, we may mention that the minimum wages at the level of an unskilled worker as per recent wage agreement in Coal India Ltd. Is Rs.29697/-. The per-capita Net National Product increase at factor cost between – (2004-05 – 2011-12) years as per the Economic Survey for 2012-13 presented to Parliament is 57.55..%. This, if applied to the present wage at the lowest level shall work out to Rs.22857/-. For the reasons stated in the preceding paragraphs and more specifically for the reason that the Government has presently the capacity to pay as detailed in this memorandum, we request the 7th CPC to recommend the minimum pay to be assigned to the lowest level of Group C functionary in Government of India service at Rs. 26,000/-.

Another important issue, we took with the Government was the inclusion of the Grameen Dak Sewaks of the Postal Department within the ambit of the consideration of the 7th CPC. The Government did not concede our demand. The Postal Department had been objecting to this demand consistently on the plea that the Grameen Dak Sewaks were not civil servants. They had, therefore, resorted to setting up separate committees to consider the service conditions and wage rise of the Extra Departmental Agents, or Grameen Dak Sewaks. It must be stated with some satisfaction that during the negotiation that took place with the organizations of the Postal employees on the eve of the commencement of the indefinite strike action, the Postal Department had to agree to recommend the acceptance of this demand to the Government, though belatedly.

Despite the said belated suggestion made by the Postal authorities, there had been no positive response from the Government of India till date with the result the GDS, a significant segment of the Postal Department will be denied the wage revision along with the other Central Government employees, if immediate steps are not taken by the Government to ask the Commission to consider their case within a stipulated time. We give hereunder the reasons we have advanced for inclusion of GDS within the purview of the 7th CPC.

Grameen Dak Sewaks constitutes the single largest chunk of the postal workforce. Without them perhaps the rural postal system in the country will break down. The dedicated service of the Grameen Dak Sewaks keeps the postal department operational throughout the year.The system of Extra Departmental Agency was introduced by the colonial British rulers to reduce the running expenses of the postal system in the country. The exploitative system continued even after independence. By excluding the Gramin Dak Sewaks from the purview of inquiry of the Pay Commission, the Government wanted the system to continue as a means to reduce the running expenses of the Postal Department. The exclusion is sought to be made on the specious plea that the GDS are not Civil Servants.

The Government’s contention on this score had been the subject matter of judicial scrutiny. The Honourable Supreme Court has held that the Extra Departmental Agents are holders of Civil post. The 4th Central Pay Commission also held the same view and asserted that their service conditions must be inquired into by the Pay Commission. However, when the 5th CPC is constituted, Government set up a Committee under Justice Talwar to look into their case. The Government did not implement many of the recommendations of the Talwar Committee. It is in this context we plead that the Gramin Dak Sewaks must be brought within the purview of the 7th Central Pay Commission and justice rendered to them.

Source: Internet

Latest Procedure for Verification and Scrutiny of Service Tax Returns.

The CBEC vide its circular no 185/4/2015 dated 30th June 2015 has revised the procedure for scrutiny of the service tax returns. This is a step towards ensuring whether the self­assessment carried out by the assessees is in line with the provisions of the prevailing service tax law. A two fold procedure has been prescribed which consists of an online scrutiny of all the service tax returns and a detailed manual scrutiny of the returns of select assessees. The new procedure shall be applicable with effect from 1st August 2015. A brief about the new procedure is as below.

Online Scrutiny

  • It shall be carried out for all the returns without exception.
  • Purpose / Coverage of Online Scrutiny
  • Arithmetic checks of the tax calculation.
  • Timely compliance in terms of payments made and filing of returns.
  • Ensuring completeness of the information furnished.
  • Identification of Non­filers and Stop­filers.
  • The online scrutiny is carried out by ACES and the returns containing any errors shall be marked for review and correction by the range officers.

Detailed Manual Scrutiny (“DMS”)

  • Applicable from F.Y. 2014 ­15 and onwards and will be carried out on a yearly basis.
  • Assessee Selection Criteria
  • Tax Paid (Cash + Cenvat) should be less than Rs. 50 Lacs. The Chief Commissioner may select assessee with tax paid more than 50 Lacs in certain cases.
  • Equal number of assessees shall be selected in each of the three bands based on the quantum of service tax payments viz. up to 10 Lacs, 10 ­ 25 Lacs and 25 – 50 Lacs.
  • Assessees selected for audit in the past three years shall not be selected for DMS.
  • An assessee cannot be subjected to both Audit and DMS.

Purpose / Coverage of DMS

  • Taxability of Services, whether all taxable services covered, including taxability as per reverse charge mechanism.
  • Valuation of services as per valuation rules.
  • Appropriateness of Abatements, Exemptions and Tax Rates.
  • Appropriateness of Cenvat Credit.
  • Detailed reconciliation with the Income Tax Return (ITR) and Records.

Process and level of verification.

  • The scrutiny will be carried out at the Range office. No visits to the assessee premises.
  • 15 days intimation to be given to the assessee before initiating the DMS process.
  • The data as per the service tax returns and the income tax returns shall be compiled and analysed for the past three years viz. FY 2012 – 13 to FY 2014 ­15. This is to facilitate a better understanding of the details of the assessee by the assessing officer. This shall be done by referring to the service tax returns and income tax returns filed by the assessee.
  • Sample invoices, debit / credit notes, agreements and any other relevant documents shall be verified for determining the taxability and valuation of service.
  • Whether Service tax liability on reverse charge has been discharged appropriately.
  • The abatements and exemptions claimed, if any, are after fulfilling the prescribed conditions.
  • The eligibility and availment of cenvat credit, with specific reference to Rule 6 of the cenvat credit rules shall be verified. (Rule 6 applies in a case where the assessee is a provider of both taxable services as well as exempted service)
  • Appropriate applicability of the various rules, for eg. The place of provision rules to check the export of services.
  • Every possible aspect of the service tax return shall be reconciled with the information furnished in the income tax return. Some areas are indicated below:
  1. Total amount of output service provided with the total revenue as per ITR.
  2. Category wise classification of output service shall be broadly linked with the section under which TDS has been deducted as per the Form 26AS. An indicative list correlating the service categories with the TDS sections is given in annexure III to the above referred circular.
  3. Payments made in foreign currency as appearing in ITR along with service tax paid on import of services. (Eg. Legal and professional expenses incurred in foreign currency are required to be disclosed separately in the ITR)
  4. Certain expense heads in the ITR which prima facie appears to be of the nature of services covered under the reverse charge mechanism along with the service tax paid on reverse charge basis. (Eg. Freight expense may get covered under reverse charge provisions of transport of goods by road service)
  5. Reconciliation of tax amounts – both output tax collected and input credit claimed.
  6. Advances received from the customers as appearing as a liability in ITR and whether service tax has been paid on the same.
Time Limits

  • The intimation letters for FY 2014 – 15 shall be issued by the 15th July 2015 and the DMS process shall be initiated by 1st August 2015.
  • A time limit of one month to three months has been prescribed for completion of the DMS.

Source: - CA Yash Goyal

Updated ITR-3, ITR-4, ITR-5, ITR-6, ITR-7 and Acknowledgment for Asstt.Year 2015-16 - CBDT

Recently CBDT has issued a notification about Updated ITR-3, ITR-4, ITR-5, ITR-6 and ITR-7 Asstt.Year 2015-16 which is as under :





New Delhi, the 29th day of July, 2015

S.O. 2070 (E). In exercise of the powers conferred by section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:-
1. (1) These rules may be called the Income-tax (Tenth Amendment) Rules, 2015.
   (2) They shall be deemed to have come into force with effect from the 1st day of April, 2015.

2. In the Income-tax Rules, 1962, in Appendix-II, for FORM ITR-3, FORM ITR-4, FORM ITR-5, FORM ITR-6 and FORM ITR-7, the following FORMS shall respectively be substituted, namely:-

Form No.: ITR-3
[For Individuals/HUFs being partners in firms and not carrying out business or profession under any proprietorship (Please see rule 12 of the Income-tax Rules,1962

Form No.: ITR-4
Date of Birth/Formation (DD/MM/YYYY Yes No. If Yes, please provide Sex (in case of individual) (Tick Residential/Office Phone Number with STD code / Mobile No. 1

Form No.: ITR-5
[For persons other than,- (i) individual, (ii) HUF, (iii) company and (iv) person filing Form ITR-7 (Please see Rule 12 of the Income-tax Rules,1962 Is there any change in the name

Form No.: ITR-6
[For Companies other than companies claiming exemption (Please see rule 12 of the Income-tax Rules,1962 Is there any change in the company’s name If yes, please furnish the old name

Form No.: ITR-7
[For persons including companies required to furnish return under sections 139(4A) or 139(4B) or 139(4C) or 139(4D) or 139(4E (Please see rule 12 of the Income-tax Rules,1962

Form No.: Acknowledgement

[Notification No.61/2015, F.No.142/1/2015-TPL]
(Gaurav Kanaujia)
Director to the Government of India

Note.- The principal rules were published in the Gazette of India, Extraordinary, Part-II, Section 3, Sub-section (ii) vide notification number S.O.969(E), dated the 26th March, 1962 and last amended vide notification number S.O.1683 (E), dated 24.06.2015.

What are the expectations of the Central Government employees from the 7th Pay Commission?

“It is impossible for the 7th Pay Commission to fulfill all the demands of the Central Government employees. The question is – will it at least address the concerns of majority of them?”

The media is full of unconfirmed reports on the submission of 7th Pay Commission report to Central Government. Recently in an interview with a leading English newspaper, Neelkanth Mishra, India equity strategist of Credit Suisse expressed his strong opinions about the 7th Pay Commission and the implementation of its recommendations.

The big question is – what are the expectations of the Central Government employees from the 7th Pay Commission?

In an exclusive interview to NDTV, Neelkanth Mishra said that there are possibilities of a 40% hike in the salaries of Central Government employees. He believed that the 7th Pay Commission will submit its report to the Government in the month of September and the recommendations will be implemented next year.

The employees are likely to get a hike of 30-40%. This time around, the implementation wouldn’t be like it was previously, during the 6th Pay Commission, due to the amount of arrears (it is worth mentioning that the arrears dues were paid in two installments during the 6th Pay Commission). He said that the economic status of Central Government employees would increase enough to afford a car.

His forecast has to be taken seriously. On August 15, 2008, the then Prime Minister Manmohan Singh had announced that the 6th Pay Commission will come into effect from September onwards. More than the salary hike, the employees were curious to know about the arrears and how they were going to get it, because the sum was huge.

The employees didn’t make such a huge fuss about the increment they had received. Instead of small hike that was added to the salary, they were more interested in the lump sum arrears. Since it was impossible to clear 30-months’ arrears in a single payment, the government was forced to release it in two installments.

Download 7th Pay Calculator (Projected)


Important Due Dates in the Month of August-2015

Only one day remain to end the month of July-2015 and thus Income Tax, TDS, COT, VAT, Professional Tax, Service Tax, Excise, EPF and ESI departments due dates comes in the month of August-2015, which is as under:

Due date extended for Individual, Business having Income Less than 1 Crore Due date extended from 31st July, 2015 to 31st August, 2015 vide order under section 119.

Payment of TDS deducted for the month of July, 2015 for Asstt. Year 2016-17 on or before 07.08.2015 else face the penalty as Interest @ 1.5% per month or part of month from the date of deduction till the date of payment.

Payment of COT (Monthly) filing of VAT 120 for July, 2015 due date is 15th August, 2015 else Interest charged @1.5% per month or part of the month and Penalty @10% on the Tax Payable.

Payment of VAT and filing of VAT 100 for July, 2015 deadline on 20th August, 2015 else Interest charged @1.5% per month or part of the month and Penalty @10% on the Tax Payable.

To e-Payment and filing of Form 5A for the month July, 2015 due date is 20.08.2015 and that Interest will be charged @1.5% per month or part of the month, Penalty Rs. 205/-.

Payments for Companies monthly upto 06.08.2015.

Extent of Delay
Simple Int P.A
Upto 6 Months
6 Months to 1 Year
More Than 1 Year
E-payment is mandatory for Excise Duty paid grader than 1000000 in Fin. Year 2014-15 as GAR-7 on or before 06.08.2015 and after that-
  • Monthly Return for production and removal of goods ER-1
  • Monthly Return of Excisable Goods Manufactured & Receipt of Inputs & Capital Goods By EOU, STP,HTP ER-2
  • Monthly Return of Information Relating to Principal Inputs by Manufacturer for Specified Duty paid>=Rs.One Crore in 2014-15 PLA/CENVAT/BOTH ER-6 on 10.08.2015.
The consolidate statements due and remittance under EPF and EDLI Form 12A and Monthly Returns of Employee joined/left 5/10 on or before 15.08.2015.

To deposit ESI due date is 21.08.2015. 

Tax implications of fixed deposits

If you are in the higher tax bracket, that is 20% or 30%, make sure that you pay the additional interest before filing your tax returns.

The biggest disadvantage of FDs is that the interest earned is subject to taxation. This eats into the returns.

Taxed as per income bracket
The interest earned on the FDs is added to the depositor's income and taxed as per income bracket. This reduces its attractiveness, especially for those in the highest tax bracket.

Pay tax even if bank cuts TDS
The bank will cut the tax at source (Tax Deducted at Source) before paying the interest, if the interest exceeds Rs 10,000 in a financial year.  But this is at the marginal rate of 10%. If you are in the higher tax bracket, that is 20% or 30%, make sure that you pay the additional interest before filing your tax returns. This is a common mistake most depositors do. It is a hassle if you receive a notice from the Income-Tax department for non payment of taxes. You will have to prove that not paying the tax was not deliberate and you may have to pay tax plus the penalty for the delay.

For ensuring that the bank has deducted TDS on your FD by checking Form 26AS. But sometimes if the bank deducts TDS but fails to submit the same to the I-T department, you may still get a notice.

If your PAN card details are not updated with the bank, the TDS will be deducted at 20%. And if you are in the 10% tax bracket, this will mean having to file for refund while filing tax returns, which can be a hassle. These are some of the things to keep in mind.

Form 15G and 15H
If your income is below the taxable limit and you have no then submit Form 15G to avoid TDS. For senior citizens whose income is below the taxable limit the form is 15H.

Reduce your TDS
You can also reduce your TDS by spreading your deposits across several banks so that the interest earned in a financial year remains less than Rs 10,000. But this will only reduce the TDS. You will still have to pay income tax as per your tax bracket.

7th Pay Commission to Hike Salaries By 40%: Credit Suisse

The 7th Pay Commission is likely to raise the salaries of government employees by up to 40 per cent, said Neelkanth Mishra, India equity strategist of Credit Suisse. The Pay Commission will submit its recommendations in October and it will be implemented by next year.

"As the Pay Commission numbers come through there could be a 30-40 per cent increase for each  individual. It won't be as big as last time because it was driven by a lot of arrears but definitely a large number of government employees will come into the pay bracket which can afford to have, for example,  four-wheelers," he said in an interview with NDTV.

Credit Suisse says about one-third of India's middle class is employed by the government and as the 7th Pay Commission comes through, there will be an improvement in discretionary spending.

"In Tier 3, Tier 4 towns where government employees are 50-60 per cent of the middle class, it is very likely that real estate markets will take off again," Mr Mishra said.

Once the Pay Commission submits its recommendations in October, it will take 3-6 months for the Centre and the states to announce its implementation, Credit Suisse said.

Gujarat and Madhya Pradesh have already indicated that they are going to implement the 7th Pay Commission recommendations from January 1, 2016, he said.

As clarity emerges on the 7th Pay Commission, consumption will see an uptick and that could act as a stimulus to the economy, the brokerage said.

However, Mr Mishra struck a note of caution. "Clearly if you see a third or 35 per cent of your middle class getting a 40 per cent or 30 per cent jump in compensation in one shot, the fears of inflation will rise." Expectations of rate cuts can get pushed out and some possible fiscal pressures can emerge, he warned.


Download Standard Handbook on Income Computation and Disclosure

This Income Computation and Disclosure Standard is applicable for computation of income chargeable under the head "Profits and gains of business or profession" or "Income from other sources" and not for the purpose of maintenance of books of accounts.

In the case of conflict between the provisions of the Income]tax Act, 1961 "the Act" and this Income Computation and Disclosure Standard, the provisions of the Act shall prevail to that extent.

Download Standard Handbook (Click Here)

Last Date of TDS Return for Government Deductor for Q-1 is 31st July, 2015 for Fin. Year 2015-16.

For Government deductors, Last date of TDS return filing for Q-1, Fin. Year 2015-16 is 31st July, 2015.


Before understanding the penalty provisions for failure to furnish the statement of Tax Deducted at Source or statement of Tax Collected as Source (i.e. commonly known as TDS/TCS return) we shall first have a look at the few basic duties of a person liable to deduct/collect tax at source and due dates for filing of TDS/TCS return.

Duties of the person liable to deduct/collect tax at source

  • He shall obtain Tax Deduction Account Number or Tax Collection Account Number (as the case may be) and quote the same in all the documents pertaining to TDS/TCS.
  • He shall deduct/collect the tax at source at the applicable rate.
  • He shall pay the tax deducted/collected by him to the credit of the Government.
  • He shall file the periodic TDS/TCS statements, i.e., TDS/TCS return.
  • He shall issue the TDS/TCS certificate in respect of tax deducted/collected by him.

Due Dates for filing of TDS/TCS return
The due dates for filing of statement of TDS i.e. TDS return for different quarters are as follows:
Now we will understand the provisions relating to penalty for not furnishing the TDS/TCS statement i.e. TDS/TCS return.

Basic provisions
A person who fails to file the TDS/TCS return or does not file the TDS/TCS return by the due dates prescribed in this regard has to pay late filing fees as provided under section 234E and apart from late filing fees he shall be liable to pay penalty under section 271H. In this part you can gain knowledge about the provisions of section 234E and section 271H.

Late filing fees under section 234E
As per section 234E, where a person fails to file the TDS/TCS return on or before the due date prescribed in this regard, then he shall be liable to pay, by way of fee, a sum of Rs. 200 for every day during which the failure continues. The amount of late fees shall not exceed the amount of TDS.

TDS/TCS return cannot be filed without payment of late filing fees as discussed above.  In other words, the late filing fees shall be deposited before filing the TDS return. It should be noted that Rs. 200 per day is not penalty but it is a late filing fee.