Have you received Non-filing notice from Income-tax department? Here is what it means and what you should do?

Have you received Non-filing notice from Income-tax department? Here is what it means and what you should do? Have you received Non-filing notice from Income-tax department? Here is what it means and what you should do? The Income Tax Department has identified several potential non-filers who have carried-out high value transactions in Financial Year 2017-18 but have still not filed Income Tax Return for Assessment Year 2018-19 (relating to FY 2017-18). There might be several reasons for sending such notices. These are common notices, but you need to know what they mean and what you must do upon receiving them. Income Tax NoticeThe Non-filers Monitoring System (NMS) is an initiative by the Tax Department to prioritize action on non-filers with potential tax liabilities. The IT department carries out ‘data analysis’ to identify non-filers about whom specific information is available through various sources such as Annual Information Return (AIR), Centralized Information Branch (CIB), TDS/TCS Statements etc. The identified non-filers are informed by SMS, e-mails and physical letters. How to reply to non-filing of Income Tax Return Notice? You can respond to the notice through your income tax e-Filing Account. There is no need of personal presence in this matter. Below are the step by step guidelines on how to respond to the notice; Login to your e-Filing account at incometaxindiaefiling.gov.in with your user name and password. If you do not have a login id password, you may have to first register your PAN. Click on ‘Compliance Menu Tab’ and you will be re-directed to the Compliance portal. Here you can view information about your non-filing status Click on ‘View’ to submit your response to the non-filing compliance notice. Click on ‘Filing of Income Tax Return’ to update your ‘response’ & ‘reason’ for not filing your income tax return for a specific Assessment Year. Response can be either ‘you have filed ITR’ after receiving the notice (or) ‘ITR has not been filed’. Reason can be, i) Return under preparation, ii) Not liable to file return of income Also, remark is a mandatory field wherein you can mention the reason for non-filing. The second tab of Verification issue list will have details about the third-party information received by the tax department. Click on View and you will see the details. If the information pertains to you is correct, you need to click on I am aware of this information and submit. IT department wishes to know the source of investment for purchasing the asset which you need to provide them here particularly if it is in cash. For example: You might have booked Fixed Deposits with your banker and they would have deducted TDS on them. So, you need to mention whether this information relates to ‘self’ and the source of such income. Another example can be, you would have received ‘Gift’ in cash mode and invested in Mutual The detailed information reasons can be as below; Out of Earlier Income or Savings, Out of Receipts Exempt from Tax, Received from Identifiable Persons (with PAN), Received from Identifiable Persons (without PAN), Received from Un-identifiable Persons, Others After providing all the required details, you can click on ‘submit’ button and you will receive an acknowledgement. You can view the status of your response by clicking on ‘Compliance tab’ and then on ‘View my submission’. The response submitted online by you will be verified by the ITD (Income Tax Department) and if found satisfactory, the case will be closed. The chances of getting a notice for non-Filing of Income Tax Return from the compliance Management cell are high when if you have made a high-value Financial transaction in India. You may be a NAI (assuming that you have no taxable income in India) invested huge money in a property located in India and you may end up in getting a notice for non-filing of return if return is not filed. The IT department will only wish to know the source of funds through which the property was bought. You are only requested to furnish your response in the compliance module on the e-filing income tax portal. If you do not submit your response within the prescribed time-limit, your case might be transferred to the jurisdictional Assessing Officer. The office may consider to take up your case for scrutiny.

Old ITC may appear in GSTR-9 of next year! (understand how)

Old ITC may appear in GSTR-9 of next year! (understand how) The GST Council had earlier announced that ITC that could not be claimed until the filing of GSTR-3B of September 2018, will be allowed to be claimed by 31st March 2019. But a lot of our readers wrote back to us asking how this is really going to work. There may be 2 scenarios if you have unclaimed ITC of FY 2017-18 Your supplier reported in GSTR-1 of FY 2017-18 but you did not report it as purchase in your GSTR-3B and did not claim credit Your supplier did not report in any GSTR-1 of FY 2017-18 and hence you could not claim credit (but paid the invoice) In the first scenario, the situation is simple to resolve. You met all the conditions - the invoice was uploaded by the supplier, payment was made by you, but credit was not claimed. Such an ITC claim can be made by filing GSTR-3B of March 2019 (likely due on 20th April 2019). This ITC claim will appear in GSTR-9 of FY 2017-18. In the second scenario, the supplier needs to upload the invoice and report it in GSTR-1. Once it is part of GSTR-1, which will belong to the next financial year 2018-19, the claim will not belong to FY 2017-18 anymore. It will be part of GSTR-9 of FY 2018-19. Basically, old credit will be available but in the next financial year. As is the case with any new legislation, GST continues to be a mish-mash of changes and regulations! However, with ClearTax, you always stay on top of your GST compliance on both ends - pass ITC benefit smoothly to your customer and also claim credit when you’ve paid the invoice.

Non-Filers Monitoring System (NMS) – CBDT and Finance ministry is watching you

The Income Tax Department (ITD) has launched a pilot project namely “The Non-filers Monitoring System (NMS)”. NMS is a result of combined information network gathered through – Annual Information Return (AIR), Centralized Information Branch (CIB), TDS/TCS Statement etc. The Finance Ministry has recently sent various notices to income tax return non-filers based on information and analytics generated by NMS. Such notices have been sent through messages, emails and physical letters based on details registered on non-filers PAN database available with CBDT records. Recently, Finance ministry has given deadline of 21 days to respond to such notices. Such responses can be given online by log in to www.incometaxindiaefiling.gov.in In case no ITR filed or no response is provided, initiation of proceeding under Income tax, 1961 will be considered. Type of transactions which would have been identified in NMS Cash payments for purchase of bank drafts or pay orders or banker’s cheque, totalling Rs. 10 Lakh. Cash payments for pre-paid instruments issued by RbI, amounting to Rs. 10 Lakh Cash deposit/withdrawal totalling, Rs. 50 Lakh or more in single financial year. Cash deposits in one or more accounts (other than current account), amounting to Rs. 10 Lakh by an individual Deposits amounting to Rs. 10 Lakhs or more in single financial year. Payments made by any person-i. Up to Rs. 1 Lakh or more in cash;ii. Rs. 10 Lakhs or more by any other mode, against credit card bills of one more issued card in single financial year Receipt from any person of an amount aggregating to Rs. 10 Lakhs or more in a F.Y. for acquiring bonds or debentures (other than on renewal) issued by the company or individual. Payment of an amount for shares to a company, amounting to Rs. 10 Lakhs in a financial year. Buy Back of shares by any person, totalling Rs. 10 Lakh or more in a financial year. Receipt of money for acquiring units of one or more schemes of mutual funds acquired by any person adding upto to Rs. 10 Lakhs or more in a financial year. Receipt for sale of foreign currency involving credit of such currency into a foreign exchange card or expense in such currency through a debit card or credit card or through issue of traveller’s cheque or draft or any other instrument of an amount aggregating to Rs. 10 Lakhs or more during a financial year by any individual. Immovable property bought or sold by any person of an amount of Rs. 30 Lakhs or more or valued by stamp valuation authority at Rs. 30 Lakhs or more. Cash payment for sale of goods or services (other than mentioned in above 1-12) made by any person of Rs. 2 Lakhs Cash deposits made in the interval of 9th November to 30th December 2016 which sums up to-Rs. 12,50,000 or more, in one or more current account of a person; or Rs. 2,50,000 or more, in one or more accounts of a person (other than current account) Deposits between April 1st 2016 to November 9th, 2016 in respect of accounts that are reportable under S.I. No.14 because cash deposited in this account between November 9th 2016 to December 30th 2016 amounts to- Rs. 12,50,000 or more, in one or more current account of a person; OR Rs. 2,50,000 or more, in one or more accounts of a person; Form 26AS showing details of tax deducted by person To do for by Income tax return (ITR) non-filers Check your email ID, mobile phone and letters received at your registered address to check any income tax notices received from the department. Log in to incometaxindiaefiling.gov.in and respond to queries appearing in the section “Compliance” Do check the transactions through your bank statements, trading account or any other documents before filing any responses. Take help of your consultant before taking any further action / replying to queries raised by department.