Interest u/s. 234B can't be charged on some Dis-allownaces by A.O.

Assessing Officer has not any right to charge interest u/s. 234B on non deduction of TDS u/s. 194C, 194A, 194H, 194I, 194J and 195.

The dis-allowance on account of non deduction of tax at source is now very common form of dis-allowance by the assessing officer. Such dis-allowance is done u/s 40(a)(i) and 40(a)(ia)  of the Income Tax Act. Very common dis-allowances for non deductions of tax at source  are as under :
  • Non deduction on contractual works (Section 194C )
  • Non deduction of tax on interest (194A)
  • Non deduction of tax on commission (194H)
  • Non deduction of tax on rent  (194 I)
  • Non deduction of tax on professional and technical fee (194J)
  • Non deduction of tax on payments to Non Residents.(195)
The Assessing Officer (A.O.) computes on increased total income and charges interest u/s 234B. Thus, interest u/s 234B is charged also on the tax on dis-allowance u/s 40(a)(i) which is included in total income.


Relief of "Sukanya Samriddhi Account" under section 80C w.e.f. 21.01.2015

The Hon'ble Prime Minister has been declared on 20-01-2015 that a new Investment Scheme i.e. "Sukanya Samriddhi Account" during Asstt. Year 2015-16 and the Interest Rate on Investment is 9.1%.  The scheme of "Sukanya Samriddhi Account" is specially for Girl Child which announcement by Finance Minister in his Budget Speech 2014-15.

Apart from this the Government has decided on 21.01.2015 that the "Sukanya Samriddhi Account" deductions relief to taxpayee under section 80C of the Income Tax Act in respect of Insurance Premium etc. shall come into force w.e.f. the date of this publication in official gazette.  Details of this notification is as under : 
NOTIFICATION NO. 9/2015 [F.NO.178/3/2015-ITA-1], DATED 21-1-2015
In exercise of the powers conferred by clause (viii) of sub-section (2) of section 80C of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby specifies the 'Sukanya Samriddhi Account' for the purposes of the said clause.
2. This notification shall come into force with effect from the date of its publication in the Official Gazette.

Exeptions to Professional or Notified Associations under Section 10(23A) for Asstt. Year 2013-14 to 2015-16.

Recently CBDT has issued a notification regarding exemptions to Professional or Notified Associations under section 10(23A) of the Income Tax Act, 1961 for Asstt. Year 2013-14 to 2015-16.  The details of the notification is as under :
NOTIFICATION NO.4/2015 [F.NO. 196/36/2013-ITA.I], DATED 20-1-2015
In exercise of the powers conferred by clause (23A) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby approves the "Indian National Group of the International Association for Bridge and Structural Engineering, IDA Building, Jamnagar House, Shahjahan Road, New Delhi-110011" for the purpose of the said clause for the Assessment Years 2013-14 to 2015-16 subject to the following conditions, namely:—
(i) the assessee shall apply its income, or accumulate the income for application, in accordance with the provisions of the said clause (23A), solely to the objects for which it is established;
(ii) the assessee shall not be eligible for exemption under the said clause (23A) in respect of income chargeable under the head "Income from House Property" or any income received for rendering any specified services or income by way of interest or dividends derived from its investment.

Limit and Qualifying Investment for Deductions under Section 80C for Asstt. Year 2015-16

Under this section, you can invest a maximum of Rs 1.50 lakh (1 Lakh upto AY 2014-15) and if you are in the highest tax bracket of 30%, you save a tax of Rs 45000. The various investment options under this section include:

Public Provident Fund (PPF):  Interest earned is fully exempt from tax without any limit. Annual contributions qualify for tax rebate under Section 80C of income tax. Contributions to PPF accounts of the spouse and children are also eligible for tax deduction. Balance in PPF account is not subject to attachment under any order or decree of court. But, Income Tax authorities can attach the account for recovering tax dues. The highest amount that can be deposited is 1,50,000. Tax bracket for PPF is EEE (i.e. Exempt,Exempt,Exempt). So contribution is exempted under 80C, Interest earned is tax exempted and withdrawal is also tax exempted.
One can withdraw the investment made in 1st year only in 7th year. However, loan against investment is available from 3rd financial year. If liquidity is not an issue, you should invest as much as you can in this scheme before looking for other fixed income investment options.

Life Insurance Premiums: Any amount that you pay towards life insurance premium for yourself, your spouse or your children can also be included in Section 80C deduction. Please note that life insurance premium paid by you for your parents (father / mother / both) or your in-laws is not eligible for deduction under section 80C. If you are paying premium for more than one insurance policy, all the premiums can be included. It is not necessary to have the insurance policy from Life Insurance Corporation (LIC) – even insurance bought from private players can be considered here.

Equity Linked Savings Scheme (ELSS): There are some mutual fund (MF) schemes specially created for offering you tax savings, and these are called Equity Linked Savings Scheme, or ELSS. The investments that you make in ELSS are eligible for deduction under Sec 80C. Equity Linked Saving Schemes (ELSS) of mutual funds are diversified equity funds that have a lock-in period of three years and provide tax benefit. Since a major portion of the corpus is invested in equities / equity stock markets , the earning potential is higher (though at a higher risk) as compared to other tax saving investments. Investors can invest up to 1,50,000 in an ELSS fund and deduct the investment from their taxable income u/s 80C of Income Tax Act, thereby effectively reducing their tax liability. Long-term capital gains and dividends received on these investments are tax-free in the hands of the investor as per the current tax laws.

Provident Fund (PF) & Voluntary Provident Fund (VPF) :
PF is automatically deducted from your salary. Both you and your employer contribute to it. While employer’s contribution is exempt from tax, your contribution (i.e., employee’s contribution) is counted towards section 80C investments. You also have the option to contribute additional amounts through voluntary contributions (VPF).

Home Loan Principal Repayment: The Equated Monthly Installment (EMI) that you pay every month to repay your home loan consists of two components – Principal and Interest.The principal component of the EMI qualifies for deduction under Sec 80C. Even the interest component can save you significant income tax – but that would be under Section 24 of the Income Tax Act. Please read “Income Tax (IT) Benefits of a Home Loan / Housing Loan / Mortgage”, which presents a full analysis of how you can save income tax through a home loan.

Stamp Duty and Registration Charges for a home: The amount you pay as stamp duty when you buy a house, and the amount you pay for the registration of the documents of the house can be claimed as deduction under section 80C in the year of purchase of the house.

National Savings Certificate (NSC): National Savings Certificates popularly known as NSC is a saving bond , primarily used for small saving and income tax saving investment in India, part of the Postal savings system of Indian Postal Service (India Post). These can be purchased from a post office by an adult in his own name or in the name of a minor, a minor, a trust, two adults jointly.These are issued for five and ten year maturity and can be pledged to banks for availing loans.  The interest accrued every year is liable to tax (i.e., to be included in your taxable income) but the interest is also deemed to be reinvested and thus eligible for section 80C deduction.

Infrastructure Bonds: These are also popularly called Infra Bonds. These are issued by infrastructure companies, and not the government. The amount that you invest in these bonds can also be included in Sec 80C deductions.

Pension Funds – Section 80CCC: This section – Sec 80CCC – stipulates that an investment in pension funds is eligible for deduction from your income. Section 80CCC investment limit is clubbed with the limit of Section 80C – it means that the total deduction available for 80CCC and 80C is Rs. 1.50 Lakh.This also means that your investment in pension funds upto Rs. 1.50 Lakh can be claimed as deduction u/s 80CCC. However, as mentioned earlier, the total deduction u/s 80C and 80CCC can not exceed Rs. 1.50 Lakh.

5-Yr bank fixed deposits (FDs): Tax-saving fixed deposits (FDs) of scheduled banks with tenure of 5 years are also entitled for section 80C deduction.

Senior Citizen Savings Scheme 2004 (SCSS): A recent addition to section 80C list, Senior Citizen Savings Scheme (SCSS) is the most lucrative scheme among all the small savings schemes but is meant only for senior citizens. An individual who has attained the age of 60 years or above on the date of opening of a/c or an individual who attained the age of 55 years or more and who has retired under VRS/SPL. VRS, can open an account individually or jointly with spouse. A retired personnel of Defence Services (excluding Civil Defence Employees) can subscribe to the scheme irrespective of the age limit subject to fulfilment of specificed conditions. Account can be closed after expiry of 5 years from the date of opening of account and account can be extended for next 3 years. Premature closure is permissible after one year subject to certain conditions. Deposits qualify for deduction u/s 80-C of Income Tax Act on the deposits made in new accounts opened on or after 8th December 2007.

Please note that the interest is payable quarterly instead of compounded quarterly. Thus, unclaimed interest on these deposits won’t earn any further interest. Interest income is chargeable to tax.

5-Yr post office time deposit (POTD) scheme: POTDs are similar to bank fixed deposits. Deposits in 5 year time deposit qualify for deduction under section 80-C of Income Tax Act on the deposits made in new accounts opened on or after 8th December 2007. The Interest is entirely taxable.

NABARD rural bonds:  The Finance Act, 2007 inserted clause (xxii) in sub-section (2) of section 80C of the Income-tax Act to provide that deposits made in  bonds issued by the National Bank for Agriculture and Rural Development, as the Central Government may, by notification in the Official Gazette, specify in this behalf, shall be eligible for deduction under the said section. There are two types of Bonds issued by NABARD (National Bank for Agriculture and Rural Development): NABARD Rural Bonds and Bhavishya Nirman Bonds (BNB). Out of these two, only NABARD Rural Bonds qualify under section 80C.

Unit linked Insurance Plan: ULIP stands for Unit linked Saving Schemes. ULIPs cover Life insurance with benefits of equity investments. They have attracted the attention of investors and tax-savers not only because they help us save tax but they also perform well to give decent returns in the long-term.
  • Contribution for participating in the unit-linked insurance plan (ULIP) of LIC Mutual Fund (i.e. Dhanraksha plan of LIC Mutual Fund)
  • Payment for notified annuity plan of LIC (i.e. Jeevan Dhara, Jeevan Akshay New Jeevan Dhara ,etc ) or any other insurer.
  • Contribution for participating in the Unit-Linked Insurance Plan (ULIP) of Unit Trust of India.
Tuition Fees : Any sum paid as tuition fees to any university/college/educational institution in India for full time education. Nowadays most of  income tax payee have to incur quite high payments towards the education fees of their children. The expenditure incurred on education fees is eligible for a deduction under Income Tax Act, So, if you are incurring expenditure towards education fee of your children, please check whether these are eligible for deduction under the IT Act.


Tax Collection Press Release from April-December for Asstt. Year 2015-16

Today, CBDT has issued a press release report on Tax Collection from April-December for Asstt. Year 2015-16 recently on 23rd, January, 2015.  This press release display the total collection of Income Tax including TDS, TCS, Advance Tax etc. from Taxpayee, Tax Deductors and Tax Collectors etc.  The details of this Press Release is as under :

Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes


New Delhi, 23rd January, 2015


Gross direct tax collection during April-December of the Financial Year 2014-15 is up by 12.93 percent at Rs. 5,46,661 crore as against Rs. 4,84,063 crore collected during the same period last year. Gross collection of Corporate tax has shown an increase of 12.79 percent and stood at Rs. 3,50,494 crore as against Rs. 3,10,754 crore collected during the same period last year. Gross collection of Personal income tax is up by 12.62 percent and stood at Rs.1,90,391 crore as against Rs.1,69,059 crore collected during the same period last year. Securities Transaction Tax(STT) stands at Rs. 4940 crore at a growth of 43.44%. Net direct tax collections are up by 7.41 percent and stand at Rs. 4,48,401 crore, as compared to Rs. 4,17,477 crore in the same period in the last fiscal.

2. Advance tax collection has shown a growth of 13.15% during April-December of the FY 2014-15 as against the growth of 8.76% shown at the same time previous year. Growth in TDS is 7.84% as against 16.73% in the same period last year.

3. The Self-Assessment Tax shows a growth of 22.20% as against 11.86% in the same period last year. The growth in Regular Tax is 33.03% as against 15.60% in the same period last year.

(Rekha Shukla)
Commissioner of Income Tax
(Media & Technical Policy)
Official Spokesperson, CBDT

Basic Tax Exemption Limit for Salaried Employee for Asstt. Year 2015-16

Basic exemption limit to be increased from Rs. 2 lakhs to Rs. 2.5 lakhs for an individual below the age of 60 years and from Rs. 2.5 lakhs to Rs. 3 lakhs ,in case of an individual who is of age of 60 years or above, but below the age of 80 years.

The existing limit of deduction under section 80C to be increased from Rs. 1 lakh to Rs. 1.5 lakhs. The annual ceiling limit for investment in Public Provident Fund to be increased from Rs. 1 lakh to Rs. 1.5 lakh.

The deduction in respect of interest on housing loan borrowed for acquisition or construction of self occupied house property to be enhanced from Rs. 1.5 lakhs to Rs. 2 lakhs.

No change proposed in the income tax rate,surcharge and education cess.

Easy Income Tax Calculation Software for Salaried Employee for Asstt. Year 2015-16


With reference to circular No. 17/2014 dated 10.12.2014 regarding to calculate Income and Income Tax Deduction from Salaries during the Financial Year 2014-15 under section 192 of the Income Tax Act, 1961. Each and every salaried employee wants to calculate Income Tax liability before submitting Salary Bill of Feb-2015.  Look into this matter only 2 months in your hand to save Tax by little investments.  This is the updated Tax Calculation utility for every salaried employee and gives facility to generate Form-16 automatically, provide Month-wise Salary Statement, Tax Calculation Form for the Asstt. Year 2015-16.

Facility of this software:
It is easy wat to Calculate Income Tax including Month-wise Salary Statement and Form 16 (Annexure "A" and "B") in TRACE format. This utility helps to employee to calculate tax liability with all applicable deductions, exemptions etc.

This utility covered by Deduction of Chapter-VIA and other Deductions as per circular of Income Tax Department for Salaried Employee.

This Software is based on Income Tax circular issued by Income Tax Department for Salaried Employee for Assessment Year 2015-16.

Physical Requirements:
  • OS required Windows-2000, XP, Vista, Windows-7, Windows-8 etc.
  • MS Office-7 or Above Version is required.
  • Printing Facility Provides on Inkjet, Ledger Printer and other printers.
  • Required Standard A4 Size Paper Sheets.
Data Entry:
  • Only  "White" Cells are provide for input data.
  • Press Mouse Buttons for applications which you want to operate.
Key Features:
  • It maintain Each Employee Data.
  • It Calculate Gross Income as per current D.A. Rates automatically as per Government D.A. Rates.
  • It Provides Facility to Enter Data Manually along with all Arrears etc.
  • It Calculate Tax Liability.
  • It Display Month-wise Salary Statement for Asstt. Year 2013-14.
  • It Generate TDS Certificate (Form 16) Automatically with Annexure "B".

Penalty for late filing of the e-forms under Companies Act, 2013

Beware friends!! Don’t delay the filing of e-forms under companies act by more than 270 days from the last date of filing the form!!

Let’s start with discussing the charging section of penalties.

Section 403:

Brief: If a assessee delays filing of e-form by more than 270 days from the time period granted for filing of the respective e-form, then penalty as given in the concerned section will be imposed.

For eg: If the resolution to be attached in MGT-14 is passed on 21.01.2015, then normal time to file the form is 30 days. Penalty will be imposed if the person doesn’t file the form within 300 days from 21.01.2015 or if the form is not filed within 270 days from 20.02.2015.

Bare law:

Sec 403. (1) Any document, required to be submitted, filed, registered or recorded, or any fact or information required or authorized to be registered under this Act, shall be submitted, filed, registered or recorded within the time specified in the relevant provision on payment of such fee as may be prescribed:
             Provided that any document, fact or information may be submitted, filed, registered or recorded, after the time specified in relevant provision for such submission, filing, registering or recording, within a period of two hundred and seventy days from the date by which it should have been submitted, filed, registered or recorded, as the case may be, on payment of such additional fee as may be prescribed:
             Provided further that any such document, fact or information may, without prejudice to any other legal action or liability under the Act, be also submitted, filed, registered or recorded, after the first time specified in first proviso on payment of fee and additional fee specified under this section.
         (2) Where a company fails or commits any default to submit, file, register or record any document, fact or information under sub-section (1) before the expiry of the period specified in the first proviso to that sub-section with additional fee, the company and the officers of the company who are in default, shall, without prejudice to the liability for payment of fee and additional fee, be liable for the penalty or punishment provided under this Act for such failure or default.

Now, let’s discuss the penalty.

Commencement of Business
Section 11(2)
Company – upto Rs. 5,000/-
Officer – upto Rs. 1,000/- per day
Return of Allotment
Section 39(5)
Company & officer in default: Rs. 1000/- per day or 1 lakh, whichever is less.
Intimate alteration of Capital
Section 64(2)
Company & officer in default: Rs. 1000/- per day or 5 lakh, whichever is less.
Section 66(11)
Officer will be liable u/s 447 and company will have to pay from Rs. 5 lakh to 25 lakh.
Section 86
Company: Rs. 1 lakh to 10 lakh
Officer: Imprisonment upto 6 months and/or fine of Rs. 25000/- to 1 lakh
Annual Return
Section 92 (5)
Company: Rs. 50,000/- to 5,00,000/-
Officer: Rs.  50,000/- to 5,00,000/- and/or imprisonment of 6 months
Filing of resolutions
Section 117 (2)
Company: Rs. 5 Lakh to 25 Lakh.
Officer: Rs. 1 Lakh to 5 Lakh.
Retirement of Auditor
Section 140(3)
Auditor: Rs. 50,000/- to Rs. 5 Lakh
Intimation of DIN
Section 157 (2)
Company: Rs. 25,000/- to Rs. 1 lakh
Officer: Rs.  25,000/- to Rs. 1 lakh
Disclosure of Interest
Section 184 (4)
Director: Rs. 50,000/- to Rs. 1 lakh and/or imprisonment upto 1 year.

 This isn’t the complete list, but for sure to make us aware of the stringent provisions of Companies Act, 2013.


Budget 2015-16 - 3-year Bank FDs may get Tax Exemption

MUMBAI: The government may consider the demand of banks to make fixed deposits for three years and more tax-free instead of the five-year lock-in period at present, providing these lenders a level-playing field with mutual funds and tax-free bonds that have been weaning away a large chunk of investors.

Indicating this possibility, officials said bank executives and heads of financial institutions also requested finance minister Arun Jaitley in a pre-budget meeting to consider separate tax slabs for corporate entities on the lines of different tax slabs for individuals.

"The view from the pre-budget meeting is that FDs of lower maturity should be considered for tax benefits," said a person present in the meeting.

Bankers say this will discourage people from opting for other instruments like mutual funds, which have a lock-in period of three years. The terms of schemes eligible for tax rebate under Section 80 C are not uniform; while public provident fund has a lock-in period of 15 years, it is six years in the case of national savings certificate and three years in equitylinked savings schemes (ELSS).

"Largely, it will bring flexibility to people in terms of lock-in and lower lock-in will make it (the sum invested) available after three years," said Suresh Sadagopan, founder of Ladder 7 Financial Advisories. "This will bring bank FD in direct competition with ELSS."

Financial saving as a percentage of gross domestic saving fell to 7.1% in 2012-13 from 7.2% in the previous year. Gross domestic saving fell to 30.1% from 31.3% during this period.

At present, investment up to Rs 1.5 lakh in certain instruments including various post office schemes, public provident fund, bank deposit, life insurance and principal paid on housing loan is eligible for a tax rebate.



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