Arjuna (Fictional Character): Krishna, festival of Lord Krishna’s Janmashtami is coming closer on 24th Aug. To break the “ Dahi Handi”, human pyramids are formed. Also, the height of Dahi Handi is being a new topic for political debates. The pyramid breaking the Dahi Handi gets sweet curd and rewards. Likewise how many and what are the layers (works) that a taxpayer will have to create to form the pyramid to get the Sweet curd (rewards) in the tax laws?
Krishna (Fictional Character): Arjuna, young “Govindas” are busy in preparation of pyramid team for the festival of Dahi Handi. There is a feeling of joy and excitement everywhere. Similarly, for following the provisions in tax laws, i.e. to complete the pyramid and to break the Dahi Handi, the last date is 30th September 2016. For this, there is no feeling of excitement among taxpayers. But every person should take it as a responsibility and complete it.
Arjuna: Krishna, what is the work (layers of human pyramid) that needs to be done by Govinda (Taxpayer) under Income tax to break the Dahi Handi (get reward) before 30th September 2016?
Krishna: Arjuna, Govinda under Income Tax will have to do the following work by facing various difficulties and by creating one by one layer:
1. The person whose income from business exceeds Rs.1 Crore in the F.Y. 2015-16 or whose income from profession exceeds Rs. 25 Lakhs, then it is mandatory for that person to get his books audited. Similarly, the taxpayer whose turnover is less than Rs. 1 Crore but claims profit less than 8%, will have to get his books audited compulsorily. Many Govinds have to work hard, get his accounts updated, reconciled and get his books audited. Many times Human pyramid fails, tax payers get catches in noncompliance of tax laws in Audit and needs to change his books.
2. The taxpayers who are partners of a firm to which tax audit is applicable, will have to file their individual returns before 30th September.
3. Income Declaration Scheme, 2016: Govinds are called “Makhanchor” likewise few Taxpayers who are “TaxChore” (Black money owners) can be free now. This scheme has been brought up by the government to declare undisclosed investment or income in the country. If specified undisclosed income is declared under this scheme, then income tax at the rate of 30%, 7.5% surcharge and 7.5% penalty totaling 45% will have to be paid on such income. As government has given installment payment of tax, taxpayer will have to effectively rate of paying tax comes to 37% instead of 45%. As various changes are done by government in this scheme, it will be beneficial to participate in this scheme. The last date to participate i.e. to file the form under this scheme is 30th September 2016.
4. Dispute Resolution Scheme: To settle old disputes related to income tax, government has come up with Direct Tax Dispute Resolution Scheme. If the disputed amount is equal to less than Rs.10 lakhs, then taxpayer will only have to pay income tax and interest and he will be relieved from penalty. Similarly, if such amount exceeds Rs.10 lakhs then tax, interest and 25% of the penalty will have to be paid thus taxpayer will get relieved from paying 75% of the penalty. The last date to file the form is 30th September 2016.
Arjuna: Krishna, what is the work (layers of pyramid) that needs to be done by Govinda under Maharashtra Vat law before 30th September 2016 to break the Dahi Handi?
Krishna: Arjuna, as Govinda is confused between the verdict made by High Court and the announcements by political parties on level of Dahi Handi , in the same way the MVAT taxpayer is confused as to how many layers will have to be build for forming pyramid to break the Dahi Handi of filing returns under new SAP system since April 2016 till the date.
1. Every taxpayer will have to compulsorily file his Vat returns either monthly or quarterly from April 2016 onwards. But the government has not yet started the utility for filing the returns. It is expected that it will get started from next week. Probably, this SAP utility will come before 30th September. For this, the layer of bill wise details of sale and purchase will have to be formed by facing various difficulties.
2. To settle old disputes relating to 11 tax laws falling under sales tax department, a separate scheme called “Maharashtra Settlement of Arrears in Dispute Act, 2016” has been introduced.
a. Where the arrears in disputes pertain to any assessment period ending on or before 31st March 2005, then the taxpayers paying tax will get full waiver of interest and penalty.
b. Where the arrears in disputes pertain to any assessment period on and after 1st April 2005 and ending up to 31st March 2012, then the taxpayers will have to pay whole amount of tax and 25% of interest i.e. 75% of interest and 100% penalty will be waived. The last date to file the return is 30th September.
“Profession Tax Enrolment Amnesty Scheme, 2016” has been introduced for every unregistered person. Earlier, if a person has not done profession tax registration then the person after taking registration had to pay profession tax for -
1. the period of 8 years along with the interest and penalty as applicable. But now the person can take benefit of the new Amnesty Scheme introduced, where, after taking registration the person has to pay profession tax only till 01/04/2013 which means he has to pay profession tax and interest only for 3 years. Also, no penalty will be levied. The last date to file the form is 30th September.
Arjuna: Krishna, what is the work (layers of pyramid) that needs to be done by Govinda under other tax law before 30th September 2016 to break the Dahi Handi?
Krishna: Arjuna,
1. The last date to participate in the schemes introduced by the government in direct and indirect tax laws is 30th September. The government has introduced Indirect Tax Dispute Resolution Scheme to settle the disputes related to Excise, Customs and Service Tax. If appeal is made to the commissioner, the same can be withdrawn and, then taxpayers can get relieved by paying tax, interest and 25% penalty. One needs to follow the conditions mentioned in the scheme to avail it.
2. Under Companies Law, the last date for Balance Sheet and Annual report, etc. is 30th September.
3. Under Co-operative law, the last date for filing annual report of societies and other co-operative institutions is 30th September.
Arjuna: Krishna, what lesson Govinda taxpayers should learn from all these?
Krishna: Arjuna, Govinda taxpayer should make the pyramid (do the work) by following the laws. The one who follows it will get the fruit otherwise the pyramid will collapse. Lord Krishna has taught that one should do the Karma and not expect about its fruit. Similarly, a taxpayer should pay tax and not expect any fruit. But, the government utilizes the tax paid for providing services in an effective way, then it can be said that a taxpayer got fruit. Therefore, the taxpayer and government shall together make a pyramid (do the work) so as to break the Dahi Handi of recession and to walk towards economic progress of India.
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