Government ask Income Tax Department to unearth domestic black money

Indian Government asked income tax department to take strict steps to unearth domestic black money as one year ago they promised people that whatever the circumstances, they will bring black money back to India .Now they are also working toward domestic black money.

They are keeping a close watch on ponzi schemes, bogus IPOs and other such illegal means of raising money. The government is determined to fight menace of black money both abroad and inside the country

Parliament recently passed the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Bill, 2015, to deal with black money stashed abroad.

It is goal for every officer to give equal emphasis on domestic black money. There are so many initiatives had been taken but there are some areas that are mainly targeted.

Ponzi schemes should be checked strictly which are unregulated and result in cheating the poor citizens of the country. In such a situation, Officers need to be very alert and if there are such schemes coming up then it needs to be referred to the respective regulatory agencies whether at state level or Reserve Bank level apart from taking deterrent action or taking effective action from tax point of view.

The second area is with regard to bogus IPOs and accommodation entry cases. There are so many cases identified in last couple of months so all the cases need to be taken to a logical conclusion.

All the assessment which requires to be completed before March 31, they have been completed. Investigation need to be completed expeditiously and finally.

Tax officials effectively share information with Central Economic Intelligence Bureau to check tax evasion and fraud.

The target of 7.98 lakh crore, direct tax collection that has been set in 2015-16, is very much achievable, it is a very realistic target, aligned with the kind of GDP growth which has been forecast in the economic survey and it is also based on our internal analysis and past and historical trends.

Service tax rate increased from 12.36% to 14 %

The new service tax rate of 14 percent will come into effect from June 1. It includes all things from eating out in restaurants or insurance and phone bill expense.

Currently service tax levied at the rate 12.36 percent including education cess.

It includes advertising, air travel, services if architect, certain type of constructions, credit card, even management, and tour operator.

Government is concentrating on economy. It is required to boost Indian economy.  

How your vacation helps you in tax deduction

There are many ways of tax deduction but many people prefer vacation. Here’s how they do it.

You need to make all your business appointments before you leave for your trip. Most people believe they can go on vacation and in the end they hand out their bill and get deductions. But you must have at least one business appointment before you leave in order to make it looks like business purpose. You can set up business appointment with your business colleagues in the various cities that you plan to visit.

You need to make sure that your trip is all business trip. You can deduct all your on-the-road expenses only when you are travelling on business. Suppose you go to a regional meeting which is only two-hour drive from your home. If you have some problem there like traffic problem and you need to sleep for one night then that expenses also count in business travel.

You need to make sure that you are deducting all your on-road-expenses for each day you are away. For every day you are on business travel, you can deduct 100 percent of lodging, tips, car rentals, and 50 percent of your food.

Suppose you have a weekend between your business days. If you have a business day on Friday and another one on Monday, you can deduct all on-the-road expenses during the weekend.

Make the trip days count as business days. You can deduct transportation expenses if business is the primary purpose of the trip. A majority of days in the trip must be for business activities.

To make sure that you can legally deduct your vacation when you combine it with business, call the office before you plan your trip.

It is good to take advice from tax advisor before you plan such an event.

Things to do if you forget to fill a tax return

All the tax returns should be file by the taxpayers which are due. A taxpayer may qualify for the payment plan depending upon the situation. The most important thing to know is that full payment of taxes can save your money.

Things to do when your return is late

You need to gather return information and need to bring all information related to income and deductions for the tax years for which a return is required to be filed. There are different ways of doing payment on your taxes. Payments can be made by credit card, electronic funds transfer, check, cashier’s check, or cash. There are also payment options for those who cannot pay full payment at a time. By paying as much as possible now, the penalties and amount of interest will be lessened. Based on situation, a taxpayer could qualify for an extension of time to pay, a temporary delay, an installment agreement or an offer of compromise.

There are generally two types of extensions. One is short-term payment extension and other is monthly payment plan.

A taxpayer gets 60 to 120 days to pay in short term extension. No fee is charged, but the late-payment penalty plus interest will apply. Generally taxpayers will pay less in penalties and interest if the debt were repaid through an installment agreement over a greater period of time. Penalties and interest will continue to be charged on the unpaid portion of the debt throughout the duration of the installment agreement/payment plan. When you are going to pay tax bill, it is necessary to check penalties and interest imposed. It is possible that your interest and penalties amount is more than the interest rate on a loan or credit card. You should pay as much as possible before entering into an installment agreement. You can also pay your tax via credit card or debit card. There is no IRS fee for credit or debit card payments, but the processing companies charge a convenience fee or flat fee. There is user fee you need to pay if the installment agreement is approved.

It is necessary to understand consequences of not filing a past due return and the steps that the IRS will take. Taxpayers who continue to not file a tax return and failed to respond to IRS requests for a return may be considered for a variety of enforcement actions.

If you haven’t filed a tax return yet, please contact a tax consultant for assistance.