Articles by Bankingontips The Bankingontips Blog

Latest Updates

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Alert! PAN card holders may have to pay Rs 10,000 penalty after June 30! Do this now

Tue Jun 16 2020 / By: Rashmi

The month of June is about to end and there is something very important all PAN Card holders must do. Otherwise, they will have to pay Rs. 10,000. Many people know that June 30, 2020 is the last date to link PAN cards with Aadhaar cards. But, not many know that if they fail to do this, they will have to pay this massive amount as per Section 272B of the Income Tax Act.


Earlier, the deadline for linking PAN with Aadhaar card was March 31, 2020. However, due to the nationwide lockdown, the government shifted the last date to June 30.


What Will Happen?


As per reports, if PAN Card holders fail to link their PAN and Aadhaar, then their PAN cards will be declared as ‘inoperative’. This will mean that they will not be able to hold any financial transactions linked with PAN.

Now, the Income Tax (IT) Department has released a new notification. According to this notification, PAN card holders will face strict consequences like paying penalty of Rs.10,000 if they miss the deadline.

Therefore, if you are among those whose Aadhaar is not linked, make sure you complete the step before it is too late.

How To Link You PAN card with Aadhaar Card?


To help you save both your money and PAN card, we have listed below a step-by-step guide about how you can link both of your cards. Read carefully.

There are two methods for the linking process:


1.  Through e-Filling Website


  1. First, visit the official website of the Income Tax Department at https://www.incometaxindiaefiling.gov.in/home and choose “Link Aadhaar” option from the left side panel.
  2. Now, enter your details like PAN card number, Aadhaar number and Name as mentioned on the cards.
  3. Tick the square box if you have mentioned your birth year on Aadhaar Card.
  4. Now, enter the computer-generated Captcha code. For visually-impaired, the site has an option of sending OTP on the registered mobile number.
  5. Click on the “Link Aadhaar” option and you are done.


2.  Through SMS


  1. Send an SMS UIDPAN<SPACE><12 Digit Aadhaar Number><SPACE><10 Digit PAN> to 567678 or 56161 from registered number.
  2. An example would be – UIDPAN 987654321000 ABDBE3445E. There is no charge for sending this SMS by NDSL or UTI. But, you may have to pay the SMS charge to the mobile operator.


To ensure that you do not face any complications or pay hefty amount of Rs. 10,000, link your PAN and Aadhaar today.


For more details and updates, keep reading BankingOnTips.

Latest Updates

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CBIC Puts End to Controversy Over GST On Company Directors’ Salary

Sun Jun 14 2020 / By: Rashmi

Earlier this financial year, a lot of controversies stirred around company directors’ salary, whether a GST should be collected or not. Putting an end to that, the Finance Ministry has released a circular saying that Goods and Services Tax (GST) will not be levied on the salaries of the directors who are employees of the company.


The issue was examined for two categories. The first one referred to the independent directors and the others referred to the whole-time directors like Managing Directors treated as the employees of the company.


Important Points Of The Circular


The circular was released by the Central Board of Indirect Taxes and Customs (CBIC), the policy making body for indirect taxes under the Finance Ministry. It stated, “The part of director's remuneration that are declared as ‘salaries’ in the books of a company and subjected to TDS under Section 192 of the IT Act, are not taxable being consideration for services by an employee to the employer in the course of or in relation to his employment in terms of Schedule III of the CGST Act, 2017.”


However, there are other factors that can be subjected to GST. Below are the conditions under which the directors’ remuneration will be taxable:


·     The remuneration that is not declared as ‘salary’ in the company’s accounts and is subjected to TDS under Section 194J of the IT act as fee for professional and technical services.

·     The remuneration paid to independent directors or those directors who are not the employees of the company on reverse charge basis. These lie clearly outside the scope of Schedule III of the CGST and are taxable.


As per the media reports, at least 18 per cent GST will be charged on the payments. Also, it is the responsibility of the company to collect the GST and give it to the government.


The Controversy

 

The controversy around company directors’ began earlier in this financial year when Advance Ruling Authorities held different views on the levy of GST on remuneration paid to Directors of a company.


In the case of M/s Clay Craft Indian Private Limited, ARA Rajasthan held that company directors cannot be treated as the employees of the company and their remuneration should be taxable. This was later troubled when ARA, Karnataka stated the contrasting statement. It said that all the remuneration paid to the directors cannot be said to be leviable under GST.


These contradictions caused a lot of stir in the industry and everyone was keenly waiting for a judgement by the higher authorities. The new circular has now given relief to all taxpayers by interestingly intertwining the Income Tax Act and the GST provisions and ending the controversy.


For more such articles and updates, keep browsing BankingOnTips.

Tax

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ITR filing for AY 2020-21: What is new in the New 26AS Form? Here is all you need to know

Thu Jun 11 2020 / By: Rashmi

During Budget 2020, Finance Minister Nirmala Sitharaman had announced that a new Form 26AS will replace the older one. Now, a new Form 26AS has been released by the Income Tax Department, and it will contain more information than ever. The information embedded in the Form 26AS is very vital, but unfortunately, only a few know about it.


Here is all you need to know about the new form:


What's New?

In the older version of Form 26AS, only a few personal details were provided. like PAN number, full name, and address. While now, additional information like Phone Number and email address. The Income Tax Department now sends all the new information and notifications through emails and texts on the phone number. Till now, you may have ignored updating your phone number when changing the sim card but not anymore.


Apart from email address and phone number, the new Form 26AS now also includes your birthdate for unknown reasons.


Taxes And Proceedings

The new Form 26AS will have all the details of taxes that deducted by your company and collected by your bank. In addition to that, the details of advance tax or self-assessment tax will also be included in it.


If some tax filing is missing from your new Form 26AS, you can call your employer and bank in the court. This also works the other way around.


The outstanding demands will also be enlisted on the new Form 26AS. This will help you in knowing if the demand is really outstanding or should you raise a dispute on it.


Details About Taxes And Proceedings


In addition to that, your pending income tax proceedings will also be mentioned in the new Form 26AS. Both the taxpayer and the Income Tax Departement will have to go to just one single place to look up for all pending cases and their details. It's a win-win situation for both parties.


Until now, Form 26AS only had a few info included in it about your financial transactions. But from now on, various details like banks, listed companies, mutual funds, registrar, stock exchanges, etc. will also be included in the Form 26AS, as they were already available to the department.


If your transactions for credit cards, foreign exchange, shares, and bond purchases exceed a certain threshold, the details of all these transactions will also be written on Form 26AS.


To understand it in simple words, the Income Tax Department has made sure that Form 26AS become the one-stop-shop for taxpayers.


For More Such Updates And News, Keep Reading BankingOnTips.

Latest Updates

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Extension of PPF Deposit: What You Need To Know Before June 30

Tue Jun 09 2020 / By: Rashmi

After the announcement of nation-wide lockdown, the government also allowed the extension of deposits such as Public Provident Fund (PPF) and Sukanya Samriddhi Account (SSA) holders.


When the extension of three months was announced, the deadline was March 31, 2020. But later, it was pushed till June 30, 2020, for the complete the tax-saving exercise for FY2019-20. And now with the date coming closer, people are a bit confused about what to do.


Here are five things you must know about PPF extension for FY20:


1.      Even though you have passed the last final date i.e., 31st March 2020, you will not be charged with any penalty or revival fee if you make the PPF deposit till June 30. This is also applicable to other small savings schemes.

2.     The default fee will be charged only if your account has remained inoperative before FY20.

3.    Not just deposit, you can also extend their accounts, if they have matured on 31st March 2020.

4.    Due to some changes in the rules in the last fiscal year, PPF account holders can now make deposits in the multiples of Rs. 50 any number of times in a financial year, with a maximum of a combined deposit of Rs. 1.5 lakh a year. 

5.    Now for the withdrawn limit and loan, the balance in PPF and SSY on March 31 will be taken into account instead of June 30.

Other Financial Deadlines


It was not just PFF and SSA holders who got the extension. The government has also extended the last date for various payments and extensions in the past two months.


Here are some of the money-related tasks you must complete along with your PPF deposit before June 30, 2020:


●      Tax Saving Investments For FY20


For tax-saving investments, the government extended the last date to June 30, 2020, from March 31, 2020. So, if you have any investments eligible under section 80C, expenditure on health insurance premium eligible for deduction under section 80D, etc., start making it soon.


●      Linking of PAN with Aadhaar

Earlier, the last date for linking your PAN card to Aadhaar was March 31, 2020. But due to the coronavirus lockdown, the Indian government decided to shift the date to June 30, 2020.


Now, if you do not link your PAN with Aadhaar before this deadline, it will become invalid. You will not be able to conduct financial transactions using your PAN.


●      Income Tax Returns

Just like others, the government also extended the deadline for filing belated and revised ITRs for FY 2018-19 to June 30, 2020. If you miss it, you will have to pay a penalty for the same.


To get more tips and insights on banking and savings, keep reading BankingOnTips.

Investment and Saving

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SBI Recurring Deposit: Earn Big By Depositing Just Rs 100 Per Month With New SBI Scheme!

Thu Jun 04 2020 / By: Rashmi

They say precaution is better than cure. And it doesn't just apply to health, but also personal finances. Only those people have relief in the lockdown who have savings in their bank accounts. To promote the same behavior, SBI has come with a new savings scheme. In this scheme, customers will have to deposit as minimum as Rs 100 per month, and they will get huge interest rates in returns.


What Exactly Is The Scheme?


The scheme comes under a specific type of bank account that is called RD or Recurring Deposit. In the RD scheme, one has to keep depositing a specific sum of money regularly for a specific period of time. Once that time completes, the customer gets a huge return on his deposits.


The biggest advantage of RD schemes is that they give higher interests than standard savings accounts.


Deposit From Home


If you want to take benefits from this scheme in SBI, the biggest perk is that all procedures - from opening an account to money deposits - can be done sitting at your home. All you have to do is just install the YONO SBI app on your smartphone.


Step By Step Procedure


1.      Log in into your SBI account in YONO app

2.     Click on 'Deposits'

3.    Click on 'Create Recurring Deposits'

4.    Fill the money that you want to deposit per month in your RD account

5.    Choose the bank account in which you want to deposit the money

6.    Choose the time period for which want to deposit the money

7.     Choose the monthly date on which you will deposit the money in your account

8.    Click on 'View interest rates' to know RD interest rates

9.    You will see different interest rates for different maturity periods

10. Choose the maturity period that suits your interests



Account Nominee


Another good thing about RD accounts is that you can also choose nominee, just like you do in a standard savings account. After completing the aforementioned steps, you will be taken on the page where you will have to choose your RD account nominee. Once you choose the nominee, your RD account will be opened, and the necessary details will be sent to your email id.


Features of RD Account


The minimum amount that you can deposit monthly in RD accounts is Rs 100. There is no maximum bar. In this scheme, you can open an RD account for a minimum of one year and a maximum of 10 years. You can also take a loan of 90% of your deposited money.


Right now, SBI is giving interest rates of 2.9% to 5.4% for different maturity periods. Seniors Citizens will get an extra interest of 0.5%.


To get more tips and insights on banking and savings, keep reading BankingOnTips.

Investment and Saving

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Post Office Saving Scheme: Offers 15 Lakh On Investment Of 9 Lakh With 100% Security On Returns!

Wed Jun 03 2020 / By: Rashmi

When it comes to small savings schemes, India Post's Sukanya Samriddhi Yojana is the best in terms of returns. In the Sukanya Samriddhi Yojana, the depositor will get a yearly interest rate of 7.6%. This interest rate is way more than that of FD, NSC, Monthly Income Scheme, KVP, or RD schemes.


In other words, if you want to invest peanuts and get loads of money after some time, Sukanya Samriddhi Yojana is the way to go.


In Sukanya Samriddhi Yojana (SSY), a person has to deposit at least 250 rupees monthly while the maximum deposit limit is 1.5 lakh rupees.


Because the scheme is availed by India Post, your money will be secure in the hands of the government. Not only that, there is also a 100% guarantee of returns. Because the India Post comes directly under the central government, this guarantee is given by the central government itself.


In this scheme, once your interest gets locked, you will get the return accordingly. The parents will have to invest the sum for a period of 14 years, while the maturity period of the scheme is 21 years. The remaining 7 years will get a yearly interest rate of 7.6 % on the closing balance of the first 14 years.


Rs. 15 Lakh Return On Deposit Of Rs. 9 Lakh


For current quarters, the interest rate of SSY is set at 7.6%. Suppose the interest remains the same, and you deposit Rs. 3,000 monthly or Rs. 36,000 yearly for 14 consecutive years. At a compound interest rate of 7.6 percent, this sum will amount to Rs. 9,11,574.


After the completion of the first 14 years, the compound interest rate will turn into a yearly interest rate. For the next 7 years, a yearly interest rate of 7.6% will apply to these Rs. 9,11,574. After the maturity period of 21 years, you will get a return of Rs. 15,22,221.


How Much Profit Can You Make


You can deposit a maximum of 12,500 rupees monthly or 1.5 lakh rupees yearly. You will have to keep depositing the same amount for the next 14 years. As per your compound interest, this sum will amount to 37,98,225 rupees. After another 7 years of yearly 7.6% interest rate, you will get a return of 63,42,589 rupees.


Earlier, the minimum monthly deposit sum was set to 1,000 rupees, but it has been reduced to 250 rupees monthly only. Not only can you earn money by high-interest rates, but you will also save your hard-earned income in terms of taxes. According to Act 80C of Income Tax Rules, the money you will deposit in SSY will be exempted from tax.


To get more tips and insights on banking and savings, keep reading BankingOnTips.