Category: Latest Updates
Alert! PAN card holders may have to pay Rs 10,000 penalty after June 30! Do this nowTue 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
- 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.
- Now, enter your details like PAN card number, Aadhaar number and Name as mentioned on the cards.
- Tick the square box if you have mentioned your birth year on Aadhaar Card.
- Now, enter the computer-generated Captcha code. For visually-impaired, the site has an option of sending OTP on the registered mobile number.
- Click on the “Link Aadhaar” option and you are done.
2. Through SMS
- Send an SMS UIDPAN<SPACE><12 Digit Aadhaar Number><SPACE><10 Digit PAN> to 567678 or 56161 from registered number.
- 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.
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CBIC Puts End to Controversy Over GST On Company Directors’ SalarySun 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 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.
Extension of PPF Deposit: What You Need To Know Before June 30Tue 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.
Know How to Get A New PAN Card In 10 Minutes!Sat May 30 2020 / By: Rashmi
After a lot of beta testing, Finance Minister Nirmala Sitharaman has finally launched the service of instant allotment of online PAN card. The KYC will be done online, and the only thing applicants will need to apply is the Aadhaar card and a mobile number registered with the same Aadhaar card. To get the e-KYC done, the applicants will have to go the website of the Income Tax Department.
How to get PAN card online?
The Income Tax department itself described the process of applying PAN online. In the official statement, it said that the application process is very easy. “The applicant may go to the e-filing website of the Income Tax Department to provide her/his valid Aadhaar no & submit the OTP generated on the Aadhaar registered mobile no.”
Here is the step by step procedure of applying for PAN
1. Go to the official website of the Income Tax department.
2. The form will ask to register your first name, middle name, email id & mobile number linked to Aadhaar card.
3. An OTP will be sent to the number you have provided in the form.
4. Once you submit the OTP, the website will generate you a 15-digit acknowledgment number.
5. You can check your application status by submitting your Aadhaar number.
6. If the IT department doesn't find any problem in your application, it will release your e-PAN card.
7. The e-PAN will be sent to the email attached to your Aadhaar card.
Finance Minister Nirmala Sitharaman did announce this instant PAN service in the Union Budget of 2020. In the official statement, the Ministry of Finance said that the e-PAN facility would be available for every applicant who has minimum two things- Aadhaar card and a mobile number registered to the same Aadhaar card. The allotted PAN card will be digital.
Notably, the Income Tax Department used to charge processing fees from applicants, but the e-PAN card will be provided to the applicants free of cost.
Before officially announcing the start of instant PAN card services, the Income Tax Department had started a ‘Beta version’ of the same facility from Feb 12, 2020. Since then, more than 6 lakh instant PAN cards have been released by the Income Tax Department.
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Supreme Court issues notice to RBI, Centre on plea against charging interest on loansWed May 27 2020 / By: Rashmi
Almost every bank customer was happy when RBI announced that it is going to give loan borrowers a moratorium period of three months. But, there was a catch. The payment of the principal amount was postponed, but borrowers still had to pay interest on the unpaid principal amount.
But this may change. A person has filed a petition saying that banks should not charge interest from customers during the moratorium period.
The Reserve Bank of India announced in April that the banks could not force their customers to pay the loan EMIs or Credit card dues for a period of three months, i.e., from March 1, 2020, to May 31, 2020.
Later, RBI extended the moratorium period to six months. Now, the customers don't have to pay the EMIs up to August 31, 2020. But, the loan borrowers are still facing problems as they are not even able to pay interest money. One such customer, Mr. Gajendra Sharma, filed a petition in Supreme Court against the charging of interest during the moratorium period.
The Supreme has directed the Central government and the Reserve Bank of India to file their response regarding the case.
What Exactly Is The Petition?
Gajendra Sharma said that giving the option of a moratorium without wavering the interest means giving something with one hand but taking away the same with another hand.
The petitioner used strong words while making his plea. He called the charging of interest a "devastating, wrong, arbitrary, and capricious."
"In the present scenario, when all the means of livelihood has been curtailed by the government of India by the imposition of complete lockdown pan India, due to worldwide outbreak of Covid-19 pandemic and the petitioner being a citizen of India has no way to continue his work and earn livelihood, imposition of interest during the moratorium will defeat the purpose of permitting moratorium on loans." says Gajendra Sharma in his petition.
What If The Petitioner Wins?
The petitioning lawyer said that the moratorium period would end on August 31, which means that if they win the case, then banks will have ample time to reschedule the loan payments.
The government and the Reserve Bank have a time of one week to file their response to the Supreme Court. The case seems stronger on the side of the petitioner.
If the Supreme Court rules in favour of Gajendra Sharma, borrowers will save a large sum of money, which otherwise they would have paid to the banks in the form of interest. We will update the news as soon as the court decides on the matter.
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RBI Makes Loans Cheaper, Offers Big Relief On Interest Payments TooSat May 23 2020 / By: Rashmi
In good news for loan borrowers, the Governor of the Reserve Bank of India (RBI) announced a number of updates for the Indian economy. He announced that the RBI is going to reduce the repo rate, extend the loan moratorium, and a few other changes to give a breath of ease to common people.
Shaktikanta Das, the Governor of RBI, said that RBI has decided to reduce repo by 0.4 percent further. Right now, the repo rate is 4.4 percent, which means that it will drop down to 4 percent once the new rules are implemented.
How is it going to affect common people?
Since the year 2000, RBI has made an interest rate benchmark called repo rate. Basically, it is the interest rate at which RBI gives short term funds to PSUs and private banks. According to the banking rules, if RBI reduces its repo rate; banks will also have to reduce their interest rates on loans granted to the general public
Hence, this new reduction in the repo rate will ultimately push other banks to lower their interest rates for the loan borrowers.
Apart from the lowering of repo rate, RBI has made another announcement that's going to give common people consolation in these hard times.
In his speech, Shaktikanta Das said that the moratorium on loan EMIs and Credit cards is being extended by three months. Earlier, it was supposed to end on May 31, 2020, but now with this new update, the loan moratorium will end on August 31, 2020.
RBI ruled in April that the banks can not push customers to pay their EMIs or Credit card dues of the period starting from March 1, 2020. This move relaxed small business owners, employees, and self-employed people who were affected by the lockdown since March 25. Now, these loan borrowers have a choice of paying their EMIs and Credit card dues or to avail the moratorium option.
It was the first press conference of RBI governor after the announcement of the 20 lakh crore relief package by the central government, and he has already announced some relief for the common people. Economic pundits are speculating that we can further expect to see more of him in the future to announce similar relief packages.
Every bank has rescheduled its customers' loan repayment timeline. After this move, the banks will again have to reschedule the loan-repayment cycle as most of the borrowers are at the economic condition as they were before.
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