Year-end precaution under income-tax act J B Nagar CPE Study Circle of WIRC of ICAI Paras K Savla

Salary earners Submit proof of investment to employer When employee has changed job during the year, submit details of income earned from previous employer or consider the same payment of advance tax at the time of each installment Submit proof of LTA Review of salary structure for next FY Review salary structure of directors of private companies Paras Savla 17/03/2019

Advance Tax Advance tax is required to be paid on 15 June 15 September 15 December 15 March (Assessee offering income u/s 44AD & 44ADA are required to pay advance tax on or before 15 March) Where any person received any income without deduction or collection of tax he is liable to pay advance tax (S.209 amended w.e.f. 2012-13). Care to be taken to determine whether otherwise exempt income is being taxed due to non-compliance etc. contribution to recognised PF exceeding 12% of salary, interest on recognised PF exceed notified rate of 9.5%, etc., Any payment of tax on before 31 March would also be treated as advance tax paid during the financial year. Any short fall (tax paid less than 100% of advance tax payable) can be paid be 31 March to avoid interest u/s 234B. Paras Savla 17/03/2019

Purchase /Sale of depreciable assets Sale of depreciable asset from the block of asset and block is negative value Purchase of new asset Purchase of new Asset Claim for depreciation or additional depreciation Make new asset put to use if not yet Defer sale of depreciable assets to next financial year so as not to loose depreciation during the current year Paras Savla 17/03/2019

Deduction allowed on payments Municipal Taxes while computing income form HP - proviso to S.23(1) All expenses-Cash system of Accounting Chapter VIA deductions 80C – Various Investments etc.* 80CCC – Contribution to pension fund* 80CCD – National Pension Scheme* [* aggregate deduction restricted to Rs1,50,000] 80D – Medical insurance premium and preventive health care expenses 80DD – deposit under any scheme for handicapped dependents 80E – interest paid on education loans 80G – Donations 80GG – Rent payments (assessee is non-receipt of HRA) 80GGA – Donation for scientific research or rural development (not having income chargeable under the head PGBP) 80JJAA – Employment to new employees [No. of employees vis-à-vis last year, salary paid] … PF Registration Scheme Paras Savla 17/03/2019

Filing of ITR Last date for filing of belated ITR u/s 139(4) for AY 2018-19 (incase assessment is not completed) Non filing of ITR not only attract interest & penalties but can also lead to prosecution Last date for filing revised ITR (including belated ITR) u/s 139(5) for AY 2018-19 Non-discloser of required information in ITR e.g. foreign bank account can lead to initiation of prosecution Paras Savla 17/03/2019

Linking of PAN/Bank with Aadhar The ITD will be issuing e-refunds from March 1, 2019, onwards in the bank accounts of only those individuals who have linked their respective bank account number with the PAN Individuals are required to validate the bank account with the income tax department e-filing portal to receive the income tax refunds  U/s 139AA PAN will be considered invalid if it is not linked to Aadhaar by March 31 Paras Savla 17/03/2019

Capital Gains If an assessee has taxable capital gains during the financial year 2018-19, Try to identify his capital assets, especially shares, Mutual funds, debentures etc, which if sold during the financial year, will result into a capital loss, he can sale such assets on or before 31st March 2019 and book a capital loss which will help to set off against the taxable capital gain This can a reduce or nullify the capital gains tax As a matter of planning the same capital asset can again be purchased on or before 31st March 2019 and continued to be held. Paras Savla 17/03/2019

Unabsorbed Losses Verify carried forward unabsorbed losses under the head House Property / PGBP/Capital gains/IFOS which are about to expire If carry forward is allowed upto 8 years, losses incurred during FY 2010-11 or AY 2011-12 would lapse during FY 2018-19 if not set off against eligible income If the assesse has a possibility of having taxable Capital Gain for Financial Year 2018-19, he should not postpone it to the next year, but book the gain on or before 31st March 2019 so as to set off the Capital loss of AY 2011-12 against the Capital Gain for FY 2018-19 Paras Savla 17/03/2019

Trust Registration u/s 12AA Capital Gains earned by trust Deduction is allowed u/s 11 & 12 for the FY 2018-19 to trust/institution who file application for registration anytime during FY and registration is obtained. Capital Gains earned by trust Deduction is allowed if gains are invested in another capital assets Spend 85% of the income earned during the year also include unrealised income of earlier year received now e.g. TDS resulted in refund of IT and received Accumulation of income of earlier year Income can be accumulated upto 5 year Income accumulated during FY 2013-14 and not applied for charitable purposes upto 31-3-2019, would be taxable in the hands of trust Paras Savla 17/03/2019

Cleanup Loan Accounts Verify loan accounts and cleanup them up if necessary. If an assessee has given or taken any temporary loans, hand loans and are outstanding, try to repay / recover the same on or before 31st March 2019. This will help in improving the balance sheet position of the ratio of assets and liabilities, Debt Equity Ratio etc. Temporary loans, hand loans can be again given or taken on or after 1st April 2019. Since the balance sheet will be prepared as on 31st March 2019, try to square off the assets and liabilities which would show unfavourable position if not squared off on or before 31st March 2019 Paras Savla 17/03/2019

Others Submission of 15H/15G declarations for income which would be credited on 31 March Review turnover for the purpose of applicability of 44ADA and 44AD Payment of undisputed statutory dues for more than 6 months, in case of company to avoid qualification in CARO reporting. Filing of application for lower deduction of TDS for FY 2019-20. CbC Report (local filing) in respect of reporting accounting years ending on or before 28th February, 2018 to be filed up to 31st March, 2019. Paras Savla 17/03/2019

Thank you…. Paras Savla 17/03/2019