What if you missed your tax filing deadline

If you missed the due date for filing income tax returns, you haven't missed the bus entirely. How? The last date for filing returns for salaried individuals and companies was July 31.

The Income Tax Department will still allow you to file your return of income for the assessment year ended March 31. So if you missed the due date for filing, you can still do it by March 31, 2015, without any penalty.

However, you may lose claim to tax refunds when you file it after the due date. For example, if you made some tax saving investment during the assessment year and it does not reflect in your Form 16 because you could not submit proof of the investment to your office in time, you are likely to lose out on the refund you were eligible for from the tax department.

"Deductions under section 80C like life insurance, PPF (public provident fund), tuition fees (for full-time education of children) etc.  are not available in case returns are filed after the due date," Omshila Karki, a tax consultant said.

Also when you claim refunds after the due date, it takes longer to process and hence you get the refund that much later, she said.

You need to be extra careful while filing tax returns after the due date, because filings post the deadline cannot be altered. So, there is no margin for error, unlike when filing within the due date, when you can make changes to your tax returns as many times as required.

In case you owe some money to the taxmen from 'Income from other sources', a one per cent penalty will be charged on the outstanding amount of unpaid tax for every month of delay, when you file your returns after the due date.

If you miss the March 31, 2015 deadline as well, the taxmen can levy a fine of Rs 5,000.

Income tax returns for the assessment year 2013-14 have to be compulsorily filed by everyone whose income is over Rs 2 lakh. If one has a taxable income of over Rs 5 lakh, one has to compulsorily file the returns online

Banks' merger plan on the anvil; SBI and SBP first in queue

The government has asked IDBI Bank and United Bank of India to prepare a consolidation plan. A daily newspaper has reported that the government will first begin merger process between State Bank of India and State Bank of Patiala.

It may be recalled that talks have been going on for long for merging SBI’s subsidiaries with the parent bank. SBI first merged its State Bank of Saurashtra with itself in 2008. Two years later in 2010, State Bank of Indore was merged with SBI. 

The country’s largest lender has five associate banks—State Bank of Bikaner and Jaipur, State Bank of Travancore, State Bank of Patiala, State Bank of Mysore and State Bank of Hyderabad. Among these, State Bank of Bikaner and Jaipur, State Bank of Mysore and State Bank of Travancore are listed entities.

Finance Minister Arun Jaitley in his Budget speech had said, "There have been some suggestions for consolidation of Public Sector Banks. Government, in principle, agrees to consider these suggestions."

Jaitley, speaking to reporters after the Budget, had said that the consolidation could be between a big bank and its subsidiaries.

Union Budget 2014-15 highlights

The following are the Union Budget 2014-15 highlights

For individuals

* Tax slab on personal income remains unchanged

* Income tax exemption limit raised by Rs 50,000 to Rs 2.5 lakh and for senior citizens to Rs 3 lakh

* Exemption limit for investment in financial instruments under 80C raised to Rs 1.5 lakh from Rs 1 lakh.

* Investment limit in PPF raised to Rs 1.5 lakh from Rs 1 lakh

* Deduction limit on interest on loan for self-occupied house raised to Rs 2 lakh from Rs 1.5 lakh.

* Kisan Vikas Patra to be reintroduced, National Savings Certificate with insurance cover to be launched

* Long term capial gain tax for mutual funds doubled to 20 pc; lock-in period increased to 3 years

* Mandatory wage ceiling of subscription to EPS (Employee Pension Scheme) raised from Rs 6,500 to Rs 15,000

* Minimum pension increased to Rs 1,000 per month

* LCD, LED TV become cheaper

* Cigarettes, pan masala, tobacco, aerated drinks become costlier

Budget 2014: Why Arun Jaitley Should Cut Income Tax

Here are the reasons why Mr Jaitley should rationalize income tax structure in India.

1) India's tax system is lopsided with an estimated 4 lakh people paying over 60 per cent of income tax collected in the country. Salaried Indians pay more income tax than high earners in US and China according to a survey. However, many millionaire farmers do not have to pay taxes as agricultural income is exempt from income tax.

2) Many of the current tax provisions were formulated more than a decade ago and need to be upgraded. For example, the tax benefit on housing loan interest (for self-occupied property) has not changed since 2001 even though property prices have gone up by 2-3 times during the same period.

3) Persistent high inflation has ruined household budgets and impacted savings. Consumer price or retail inflation in India was at 8.59 per cent in April year-on-year after running near or above 10 per cent for almost two years through the end of 2013.

4) Tax laws in India continue to be complex and lead to many disputes. According to an Assocham survey of 3,000 assesses, the tax administration's sole aim remains maximization the collections from a small group of people. Tax policies and administration are opaque while the refund process is fraught with complications, the survey noted.

5) A cut in income tax will leave more disposable income in the hands of individuals. It will enhance the spending power and will help drive certain sections of the economy that are dependent on discretionary spend such as autos.

According to the Assocham survey, the government must consider the following five changes to rationalize taxes and provide relief to taxpayers in India.

1) The government should increase income tax exemption limit (currently set at Rs 2 lakh) to factor in high inflation. This will lead to more disposable income in the hands of tax payers.

2) The government should raise the savings rebate (under section 80C) beyond Rs 1 lakh. The tax rebate schemes under Section 80C was introduced by the Finance Act 2005 and is considered to be grossly inadequate under the prevailing macroeconomic scenario. Raising this rebate will encourage domestic savings, which has come down from 25.2 per cent in 2009-10 to 21.9 per cent in 2012-13.

3) The limit of interest paid on home loans needs to be revised upwards from the current Rs 1.5 lakh. This would not only lead to lower tax burden, but also provide impetus to labour intensive housing sector.

4) Medical and education cost of at least Rs. 1 lakh per annum should be made tax exempt. The minimum threshold limit should be determined based on the number of dependents for an individual.

5) The limit on premium paid on medical insurance under section 80D was fixed in 1998-99 and must be revised as they have not kept pace with the changed ground realities. Currently, individuals can claim Rs 15,000 towards mediclaim payment, while for senior citizens the cap is Rs 20,000.

Singapore Govt picks up 1.06% in Muthoot Finance

The Government of Singapore has picked up a 1.06 per cent stake in gold loan company Muthoot Finance Ltd (MFL). This share purchase transaction was part of the recent institutional placement programme by the company raising ₹418 crore.

The stake purchase has been done through GIC, which is the fund manager of the sovereign wealth fund set up by the Singapore Government in 1981, sources close to the development said.

The Government of Singapore now owns 42.06 lakh shares of Muthoot Finance, the latest filing by the company with the BSE showed.

The other investors under the public category who hold investments of more than 1 per cent are Birla Mutual Fund, Wellcome Trust London, Baring India Private Equity Fund, Allard Growth Fund and Matrix Partners India.

http://www.thehindubusinessline.com/markets/stock-markets/singapore-govt-picks-up-106-in-muthoot-finance/article6075525.ece?ref=wl_markets

Form 15 G & 15 H

1. When can the bank deduct tax at source?

The bank will deduct tax at source once the amount of interest to be credited in respect of all the fixed deposits taken together exceeds Rs. 10,000 in a financial year. This limit of Rs. 10,000 is applicable for each branch of a bank and not for all the branches of a bank taken together.

2. Who can submit form No. 15G?

First and foremost only a person who is resident in India can submit form No. 15G. So an NRI cannot submit this form.  Any person other than a Company can submit form No. 15 G. So any Individual and HUF can submit form No. 15G.

However it is not that every Individual or HUF can submit form No. 15G. Only the individual or HUF, whose tax on the estimated income for the year is nil and the amount of interest income from all the sources does not exceed the minimum exemption limit, can submit this form.

So for being eligible for you to submit this form, you need to satisfy both the above conditions.

In a situation where due to various deductions the tax payable on total income may be nil but if the total amount of interest income is expected to exceed Rs. 2 lacs you cannot submit this form.

3. Who can submit form No. 15H?

Any resident Individual who is above sixty years of age or completes sixty years during the financial year can submit form No. 15H provided his tax liability on the basis of his estimated income is nil for the financial year though the total amount of interest from all sources may exceed Rs. 2.50 lacs, the minimum amount liable for tax.

So only senior citizens can submit this form.

4. What precautions to be taken while submitting form no. 15G and 15H?

Please ensure to submit your PAN details to the bank while submitting the form No. 15G or 15 H. In case you fail to provide your PAN number to the bank, the bank will deduct TDS @ 20 percent against the applicable rate of 10 percent even if you have submitted form no. 15G and 15H.

RBI eases forward forex contracts norms for importers

Providing importers with greater flexibility in hedging, Reserve Bank on Tuesday allowed them book forward foreign exchange contracts up to 50 per cent of the eligible limit.

"...it has been decided to allow importers to book forward contracts, under the past performance route, up to 50 per cent of the eligible limit," the RBI said in a notification.

This, the RBI said, has been done after a review of the evolving market conditions and with a view to providing importers with greater flexibility in hedging facility.

It further said importers who have already booked contracts up to previous limit of 25 per cent in the current financial year, will be eligible for difference arising out of the enhanced limits.

Under the extant guidelines relating to hedging of currency risk of probable exposures based on past performance, importers are allowed to book contracts up to 25 per cent of the eligible limit.

The eligible limit is computed as the average of the previous three financial years? import turnover or the previous year's actual import turnover, whichever is higher.