Income Tax


Thursday 29 March 2018

Deadline, File Income Tax Return On or Before 31st March 2018

Income tax return is a document you file with the Internal revenue service or the state tax board reporting your tax board reporting your income, profit and losses of your business and other deductions as well as details about your tax refund or tax liability. If you are earning more than Rs.2,50,000/- per year then you are liable to file income tax return. 

The process is no more flexible from this year to file tax return. You are required to file return On or before 31st March 2018, its last date to file your previous return also after that return cannot be filed, but there is a option to file the return, for that to pay fix penalty or late fees of Rs 5,000/-

If you are among those taxpayers who have not yet filed their income tax return (ITR) for the financial year 2016-17, assessment year (AY) 2017-18, you must have received emails and messages from the income-tax department reminding you to file the tax return by 31 March 2018. You must remember that if you had income that was above the exempted limit during F.Y. 2015-16 & 2016-17, then it is mandatory for you to file a tax return. If you had income that was less than the threshold limit for taxes to apply, but you deposited a considerable amount of cash in your bank accounts during the demonetization period, you should file a tax return.

There is a concept called as a late tax return. The last date to file a tax return is usually 31st July of each assessment year (AY). This is the year in which income is assessed properly, tax is paid and return tax is filed for the previous year means financial year. So, for  the financial year 2016-2017 assessment year is 2017-2018. 31st July 2017 was the last date to file tax return for financial year 2016-2017. This date was later changed to 5th August 2017.  If someone has filed the tax tax return after the concerned date, then that is considered as "Belated return."

Belated returns can be filed before the end of the relevant assessment year, that is by 31st march 2018, till financial year 2015-16, taxpayers had some extra time so that they could even file belated returns before the end of two years from the end of the relevant financial year. 

You can do two things at a time.
1. File the tax return of the Financial year 2016-17 i.e., previous year,
2. File the return for financial year 2015-2016 also.

Let’s focus on one major point. Disadvantage of belated return :

You may face penalties & lose out benefits if you don’t file a tax return on given time.

For starters, there are penalties and interest levied on the income tax that was due. “The person who files a belated return for AY 2017-18 may be subject to a penalty of Rs 5,000 under Section 271F of the Income-tax Act, 1961,”Apart from the penalty, interest too may be levied under various sections. “If any tax is due, interest may have to be paid under sections 234A, 234B and 234C of the Act,”

From the next AY, 2018-19, a fixed amount of penalty will be charged on belated tax returns. “Section 271F will get replaced by section 234F, which prescribes a late fee of Rs 5,000 if the return is filed after due date and up to 31 December, and Rs 10,000 (from 1 January) up to 31 March of AY. However, if the total taxable income of a person doesn’t exceed Rs 5 lakh, late fee shall not exceed Rs 1,000”.

Besides penalty and interest, there are other disadvantages to filing tax returns late. One of these is not being able to carry forward capital losses. Certain losses like those from business and profession and short-term capital loss may not be allowed to be carried forward.

If there is any refund, it may be delayed and taxpayers will not receive interest on refund from 1 April of the AY. Interest will be paid from the date on which the tax return was furnished till the date on which refund is granted. “If return is filed within the due date, interest is paid effective 1 April of the AY to the date on which refund is granted,” for example you were eligible for a refund of Rs 10,000, you filed the ITR in June, which is before the due date (31 July); and you get a refund in September. In this case, you will get interest on the refund from April till September. But if you file late, say, in October, and you get refund in December, you will get interest on the refund only from October till December.

Penalties if you don’t even file a Belated Tax return : 

Besides the penalties and other disadvantages that a belated tax return invites, the income-tax department can send you a notice of inquiry (under section 142(1)) or a notice of income escaping assessment (section 148). Through these notices, it can seek clarification on why the tax return was filed late, and you will be asked to file the return online as per the date specified in the notice. There may also be penalties.

If you don’t receive any notice and you have a genuine reason for not having filed the return, “you may send a written request to the AO (assessment officer) for filing a return,” said Gupta. You can do this even after the last date, that is 31 March of the AY, but the permission will depend on AO’s discretion.

If you don’t reply to the notice or don’t file your return within the stipulated time mentioned there, your problem can escalate, depending on the tax due. “If the person has taxable income and still doesn’t file a tax return, then in addition to penalty for non-filing of return, the person may also be subject to a penalty for under-reporting of income at 50% of the tax payable on under-reported income,”can be initiated in some cases.

Thursday 15 March 2018

Basic Rights of an Employee in India

Basic rights each & every Indian employee should know 

If you are an employee  in private or government sector, It's your duty to know your primary rights. Knowing about our rights is the major step towards avoiding many issues in professional life so that you can enjoy your work life as well as personal life. Also, it is a sign which explains that you are a smart employee no matter, wherever you are working. In to days article, we will discuss very important 10 rights which every Indian employee should know. This article may help you to know legal statements, what law states about your rights, how can you get a proper help if you need. 

1. Leave is the right of each Employees-
Employee gets different kind of leaves during his/her working period, according to the reason he/she provides. Leaves are categorized into following main three criteria. 

a). Casual Leave : This leave is an incidental leave provided to an employee in case of emergency such as family issue, to attend meetings called by school for child’s welfare. In any casual seen, this one or two day leave is provided to an employee by an employer. Another type comes under casual leave section is Sick leave. Obviously one may get sick at any time due to unconditional health issues, by modified lifestyle or anything serious. So, you have the right to get sick leave and as an employee of any firm, organization you can apply for sick leave without any hesitation. Another leave under casual section is ‘Privileged leave.’ This is the leave which you need to plan in advance. If you have earned any extra leaves during working period then you can take advantage of this leave. Generally for going on trips with family or friends, this leave is provided to each & every employee because it’s very difficult to arrange tours in one or two days. Other leaves is one of the type which is paid, unpaid or half paid according to duration & reason. 

b). Medical Certificate for one-day sick leave : In case of sick leave of 2-3 days, you are supposed to show a medical certificate as a proof according to rules & regulations. But if a sick leave is just about a day then it is not necessary for you to show a medical certificate. Also leave can be provided to an employee if she/he is on notice period, only on the basis of a genuine reason such as maternity, health issues, declared by 'Delhi High Court.'

c). Maternity leave is a statutory right of female employee. Period of maternity leave has been already decided by maternity benefit act. 

d). Encashment leave : Basically this concept is nothing but the converting a bond into a money. As an employee you have the right to get many leaves as mentioned above but sometimes what happens you may not use all these leaves due to no emergency or whatever may be the reason. Result of this condition turns into ‘remaining leaves.’ So you can make a best use of encashment leave concept here. You can get your remaining leaves converted into money. This is known as leave encashment. Amount of money is obviously depend your salary. You can use this policy to get money after retirement as well. 

2. Protection from Sexual Harassment at Workplace-
Protection should be provided to all employees from sexual harassment, especially female employees. If any of such illegal activity happens at workplace, then employers &  managers are supposed to take a quick actions immediately. 

No one should consent to the inappropriate behavior at workplace. If anyone harasses someone then he/she is punishable under Indian penal code. Any woman who is aggrieved can seek remedy under the sexual harassment of women Act 2013 (Prevention, prohibition, redressal ).

Under this law, employers are supposed to generate a policy act against sexual harassment. Any organization should have this policy to provide healthy & safe environment to the employees. Policy must define constitutes of sexual harassment & what are penalties for that, policy should always follow "impartiality" during investigation. 

Law states that internal complaint committee should be established for firms/companies which should include a panel of ten or more employees as a committee member. Also, district local complaint committee can be formed under the law for other organizations.

It is an employers responsibility to nominate member for internal complaint committee. It generally consists of a senior woman, two other employees  and a non government member.

3. Maternity Benefit-
Maternity benefit act was established with respect to the employment of women. This law, Maternity Benefit (amendement) 2016 passed by Rajya sabha in august 2016 and has been passed by Lok sabha in march 2017. 

Earlier the law mandated this benefit for pregnant women for 12 weeks , which has been raised to 26 weeks according to the changes made in the law. Earlier, of these 12 weeks, 6 weeks leave was for post natal care which has also been raised to 8 weeks now. 

Employees also have the right of taking additional  one month leave(paid). This special policy provided by law because many a times, complications may arise due to pregnancy, delivery, premature birth, miscarriage, tubectomy operation( two weeks in this case).

According to maternity benefit act, employer should not employ a woman in the six weeks in case, she is following a date of delivery or miscarriage. No empoyer can dismiss her in case if she is absent in the scenario mentioned above. 

Employee cannot be dismissed if she is on maternity leave. Even something disadvantageous can't be done to the condiotion of her employment while she is on maternal leave.

Employee should always remember that, if she is dismissed, still she can claim maternity benefit from employee/firm/organization. 

4. Gratuity-
It is an amount provided to an employee based on his service duration who have rendered service for at least 5 years. Even though there is pension and provident fund secures ones life, still gratuity is a right of each & every employee. It is very important for social security. This is provided as a lump-sum amount which is nothing but the benefit provided to an employee as a gratitude.                          

If any employee terminate job, resign due to some emergency issue or other, due to death of any employee, gratuity is paid to the employee or to his/her family (if one is no more). This amount is increased with an increase in salary of the employee.

5. Provident fund-
Employment provident fund (EPF) is a scheme through which an employer gets an amount which can be used for future. This scheme is for all salaried employees managed by the Employee Provident Fund Organisation of India.  Company having employees more than 20 can register with the EPFO.  Law states that Employer & employee have to contribute 12 % from their salary so that they can get it after retirement.  According to law, no employer can deduct whole PF contribution of any employee & if he does so then he/she will be eligible for penalty.  If you are working in a private sector or government sector then it is necessary for you to contribute for PF.  15,000/- a month and you can contribute for PF. Once you become a part of EPF then you are not allowed to stop contributing. 

6. Working hours-
Well, working hours have already been decided by the 'Shop and Establishment Act.' This law is active in each & every state. Law says, 9 hours per day & maximum 48 hours per week as a working hours. Regulations realted to working hours is managed by Shop and Establishment Act.  Work hours can be extended upto 54 hours a week depending upon the working load & inspector should be informed this with the appropriate notice. Overtime should not be more than 150 hours per year.

7. Right to get Insurance-
Employee State Insurance Act 1948 states that every employee get insurance if he/she face any serious issue regarding health such as injury or medical condition during the course of employment.

8. Right to go on Strikes-
Employees have the right to go on strikes even without giving any notice for their demands. Dispute Industrial Act 1947 plays an important role in case of strikes. Rules & regulations must be followed by employee and employer too during such a scenario. 

9. Right to Equal pay for equal work-    
Right to Equal pay for equal work is a statutory right for employees. No male female partiality should be followed by any employer in case of payment.  Even temporary staff gets an equal amount for the work or task they perform during work. 

10. Written Employment Agreement-
It is a well drafted & designed Letter. Company must provide you a written agreement letter before you start  working and employee should properly read and understand each term, condition. It is a legal document which explains important things about your employment. It contains everything such as rights and obligations of employee, company for the safety and security purpose.  Every Employee should know the importance of agreement. If any situation such as dispute between you and employer occurs in future, then you can resolve the issue with the help of agreement as all the required things are mentioned in the agreement.