Tuesday, January 30, 2024

Simplified Guide on Changes in ITR-6 for AY 2024-25

Simplified Guide on Changes in ITR-6 for AY 2024-25

1. Details of Legal Entity Identifier (LEI)

  • What is LEI?: A unique 20-character code identifying parties in financial transactions.
  • New Requirement: Companies involved in single payment transactions of Rs. 50 crores or more must provide their LEI number, especially if seeking a refund of this amount or more.
  • Preparation Steps: Obtain an LEI if necessary and maintain records of eligible transactions with LEI details.
AspectDetailsAction Required
LEI Code20-character identifier for large financial transactionsObtain LEI; record LEI details for transactions over Rs. 50 crores

2. New ‘Schedule 115TD’ for Tax on Accreted Income

  • Applicability: Affects funds or institutions changing from a charitable to a non-charitable form, or failing to renew registrations under Section 10(23C) or Section 12AB.
  • What to Report: Tax payable on accreted income (assets minus liabilities) at the maximum marginal rate.
  • Preparation Steps: Monitor charitable status; maintain asset and liability records; document tax payments.
AspectDetailsAction Required
Accreted IncomeTax on income from assets during status changesTrack assets, liabilities; calculate and report accreted income tax

3. Capital Gains Accounts Scheme (CGAS) Details in Schedule-CG

  • New Requirements: Include date of deposit, account number, and IFS code for CGAS deposits.
  • Preparation Steps: Document all CGAS transactions with these additional details.
AspectDetailsAction Required
CGASDetails for capital gains depositsRecord date, account number, IFS code for each CGAS deposit

4. Schedule 80GGC for Contributions to Political Parties

  • What to Report: Contributions made to political parties or electoral trusts, including date, amount, contribution method, and transaction reference number.
  • Preparation Steps: Keep detailed records of all political contributions.
AspectDetailsAction Required
Political ContributionsDetails of contributions to political partiesDocument date, amount, method, and transaction details

Summary for Easy Compliance

  • LEI Details: Obtain an LEI if necessary and record LEI details for large transactions.
  • Accreted Income Tax: For entities changing their charitable status, maintain detailed financial records and report tax on accreted income.
  • CGAS Details: Document additional details (date, account number, IFS code) for every CGAS deposit.
  • Political Contributions: Maintain thorough records of all contributions to political entities, including transaction details.

By preparing for these changes in advance and maintaining detailed records, companies can ensure a smooth and compliant income tax return filing process for the Assessment Year 2024-25.

Detailed Guide on Notice u/s 143(1)(a)

What is Notice u/s 143(1)(a)?

Notice u/s 143(1)(a) is a communication from the Income Tax Department (ITD) indicating a preliminary assessment of your Income Tax Return (ITR). It's a computer-generated notice, typically highlighting discrepancies or proposed adjustments in your ITR, based on an electronic processing system at the Centralized Processing Centre in Bengaluru. This notice is not a final assessment but an opportunity for taxpayers to clarify or correct their returns.

Reasons for Issuing Notice u/s 143(1)(a)

Here are common reasons for receiving this notice:

143(1)(a)(i)Arithmetical Error in ITRMiscalculations or mathematical errors in your tax calculations.
143(1)(a)(ii)Incorrect Claim in ITRClaims that are inconsistent or incorrect according to ITD's records.
143(1)(a)(iii)Disallowance of loss claimed in ITRLoss claims made after the due date of filing the return.
143(1)(a)(iv)Disallowance of expense claimed in ITRExpenses claimed that are not allowable or are inconsistent with audit reports.
143(1)(a)(v)Disallowance of deduction claimed in ITRDeductions claimed beyond the prescribed limits or incorrectly.
143(1)(a)(vi)Addition of income in Form 26AS, 16, 16AMismatches in income details or TDS as per the ITR and these forms.

Communication of Proposed Adjustment u/s 143(1)(a)

The notice is sent electronically to the taxpayer's registered email or mobile number. It's password-protected for security, with the combination of the PAN (in lowercase) and the date of birth (DDMMYYYY format) as the password.

Time Limit for Notice u/s 143(1)(a)

  • Deadline: The ITD must issue this notice within nine months from the end of the financial year in which the return was filed.
  • Revising Returns: If you receive the notice before December 31 of the assessment year, you have the option to file a revised return. If you get it after December 31, you can only respond to the notice and cannot file a revised return.

Due Date to Submit Response to Notice u/s 143(1)(a)

  • 30-Day Window: You need to respond within 30 days from the date of receiving the notice.
  • Types of Responses:
    • Agree with the discrepancies and accept the proposed adjustments.
    • Disagree and provide a detailed explanation or evidence supporting your disagreement.
    • Partially Agree and explain the reasons for partial agreement.

How to File Response to Notice u/s 143(1)(a)

  1. Login to the E-filing Portal: Access your account and navigate to Pending Actions > e-Proceedings.

  2. View the Notice: Click on 'View Notice' for adjustment under section 143(1)(a).

  3. Open the Notice PDF: Access the notice/letter in PDF format.

  4. Download and Review: Download the notice for a detailed review.

  5. Initiate Response: Select the option to submit your response.

  6. Review Prima Facie Adjustments: Examine the details of the adjustments proposed by CPC in your filed ITR.

  7. Provide Your Response: Click on each variance and provide your response.

  8. Select Response from Dropdown: For each adjustment, select your response (Agree, Disagree, or Partially Agree) and save.

  9. Verify Your Response Electronically: After responding, e-verify your response to complete the process.

  10. Confirmation of Submission: Upon successful verification, you'll receive a transaction ID and a confirmation email.