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New Income Tax E-filing Portal www.incometax.gov.in to be launched on 7th June 2021

The Directorate of Income Tax (Systems) announced that the New Income Tax e-filing portal will be launched on 7th June 2021.

The existing IT portal will be migrated to www.incometax.gov.in. For this transition, the existing portal hosted on incometaxindiaefiling.gov.in will be unavailable from 1st to 6th June 2021 to taxpayers and the Income Tax Department Officers.

Income Tax E-filing Portal launched www.incometax.gov.in. The Income Tax Portal shifted from incometaxindiaefiling.gov.in

What can we expect from the New Income Tax portal?

The new Income Tax e-filing portal is expected to:

  1. User-Friendly interface
    The new Income Tax e-filing portal is expected to be user-friendly, making navigations more intuitive.
  2. E-filing for AY 2021-22
    With the launch of www.incometax.gov.in, the online ITR preparation and filing for AY 2021-22 (FY 2020-21) of ITR 1 & 4, is enabled. Online ITR filing for ITR 2 & 3 will be live soon. ITR filing for ITR 2 is currently available offline.
  3. Change in ITR format to JSON
    The ITR format is expected to change from the existing XML format to JSON files.
  4. Download Pre-filled JSON for AY 2021-22
    As announced by the Income Tax Department, taxpayers can expect pre-filled capital gains data to be download with the launch of a new IT portal.
  5. Immediate processing of ITR
    The new IT portal on www.incometax.gov.in is expected to implement immediate processing of ITR and enable issue of quick refunds.
  6. Dashboard for taxpayers
    Taxpayers will be able to check interactions like upload, pending and follow-up actions through the Income Tax Dashboard
  7. ITR preparing platform
    Taxpayers can prepare their Income tax returns by answering the interactive questions using online and offline software. The ITD will be aid preparing with ITR using the pre-filled data.
  8. Multiple options for Income tax payment
    The ITD will allow payment of income tax with different methods including UPI, Credit Card, NEFT/RTGS, etc.
  9. Better Support
    The ITD is also focused on ramping up the support for the taxpayers by having FAQs, video tutorials, chatbots/live agents etc.
  10. Mobile usability
    The mobile app will have all the key functionality, the ITD is also planning to have all the functions on the mobile.
  11. Different Login options
    Taxpayers will have multiple secure login options to login to the new Income Tax portal such as with your PAN, Aadhaar, TAN, etc.

What will be Impacted?

During this transition between 1st June – 6th June 2021 the taxpayers will not be able to login to the Income Tax Portal for any of the following:

  1. Download ITRs / Documents from the IT Portal
    Users will not be able to download any Income Tax Returns filed previously or documents such as Form 26AS, ITR V, etc. from the income tax e-filing portal.
  2. Respond to Notice/Grievance
    Users will not be able to view/respond to any Income tax notice or grievance raise on the income tax e-filing portal. The Income Tax Department officers are also requested to fix any compliance dates from 10th June 2021 onwards.
    Any notices issued during the period between 1st – 6th June 2021 will be visible to taxpayers on the new portal from 7th June 2021 onwards.
  3. Link PAN and Aadhaar
    It is mandatory to link PAN with Aadhaar before the 30th June 2021. After which your Permanent Account Number may be deemed invalid, you won’t be able to link your PAN with Aadhaar during this downtime.
  4. E-verify ITR
    Your Income Tax Return filed is not considered valid and is not processed unless you e-verify your ITR within 120 days.
  5. File Revise / Belated Return
    The last date to file the revised / belated return for FY 2019-20 (AY 2020-21) has been extended to 31st May 2021. However, in case there is any proceeding going on with the Income Tax department, the taxpayer may be allowed to file the revised/belated return for the previous assessment years. This will be continued once the New e-filing portal goes live on www.incometax.gov.in

At the beginning of the new financial year, the Income Tax Department had announced its vision and activities to focus on tech and make tax filing simpler with ERIs (e-return intermediaries like Quicko).

How will Quicko use these capabilities?

With ITD revamping its portal and providing enhanced capabilities for ERIs like Quicko.
Quicko will build on these capabilities to:

  • Plugging into your Favourite Apps
    We are en-route to simplify taxes for you by integrating into your brokerage, investment, and bank accounts. So you can easily import your trading, investments onto Quicko to easily prepare your ITR.
  • Use Pre-fill JSON to Prepare ITR
    You will be able to easily prepare your ITR by uploading your pre-filled JSON on Quicko, which has your tax credits and other details.
  • Spot common Mistakes
    By enabling these capabilities, Quicko can help you avoid some common mistakes when filing ITR such as spotting mismatch in tax credits, mismatch in personal information, incorrect Bank details, etc.
  • Spot Tax-Saving opportunities
    With the Tax Planner app, you can – generate an aggregate Tax P&L from all your brokers, calculate & pay advance tax, spot tax-saving & tax-loss harvesting opportunities, and much more so you can put your taxes on auto-pilot mode and worry less about taxes.

Taxes are going to be super simple this tax filing season!

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International Money Transfer Through Google Pay

Do you work in the states and send money to your family regularly?

Or do you get those occasional dollars on your birthday from your US relatives? 

How many times have you been stuck finding out if the payment has been made or not?

Well, here is the good news for you.

Transfer of Currency through Google Pay

With the fast movement of things in the fintech industry you can instantly transfer money to your near and dear ones with a click.

If you have family and friends using Google Pay, you probably already know what we are talking about.

Guessed it right, now Google Pay users in India can receive money from users in the USA. With this, the search giant has expanded its Google Pay features to now include remittance services – an industry which sees about $700 billion worth payments annually.

With Indians making a mark in every sphere, it would be interesting to note that Indians form the biggest group of immigrants who send money back home.

Going by the United Nations’ International Organization for Migrants, Indians sent back $78.6 billion in 2018, highest than any other country.

Fees and Taxes on Transfer of Currency

For these payments Google has partnered with Western Union and Wise (formerly known as TransferWise). While sending their money to India or Singapore Google Pay users can choose either of the two options available – Western Union or Wise.

Now the obvious question comes here about fees… and the dreading taxes?

Well, here you got nothing to worry about if you are on the receiving end.

Luckily, the Indian Government has its policies relaxed. It has not provided for any fees or taxation on receiving any money from the states through Google Pay.

However, if you are reading this sitting in the states, you might want to note that you will be levied some charges if you intend to send the money to India or Singapore.

The exchange rate and transfer fee will be displayed while sending money. The receivers in India and Singapore will receive the full amount that the US user intends to send.

So, when sending money, the US user will be asked to enter the exact amount they want to send. The fee and exchange rate will be calculated based on this amount.

New Service Advantage

As of now Google Pay is offering some really enticing offers. It has tied up with Western Union to provide free unlimited transfers till June 16th, 2021.

If you decide to transfer via Wise, your fees on the first transfer up to $500 will be ditched.

On its part, Google will not levy any transfer fee.

It is worth noting that for now, remittances can only be made from the US to India and Singapore, not the other way around.

So next time you are sending an amount to India or new to receive some from the US, you know the fastest gateway to use!

Got a question? Shoot’em on TaxQ&A and we promise to answer them all in the simplest way!

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Can you Incorporate a Company for Trading Markets?

Capital market participation in India rose by a record high of 10.4 million in 2020. As trading and investing become more accessible, more and more people are participating in the stock market. With growing participation in Capital Markets, we have been getting this question lately, is it possible to incorporate a company for trading? And if yes, how so?
Let’s weigh our options.

One might think that incorporating a company is beneficial as it allows you to claim expenses, but that could also be done if you are trading in your individual name using ITR-3. So, why are traders keen on incorporating a company for trading in capital markets? These could be some of the possible reasons:

  • Possible Tax Benefits
    • One of the main reasons why traders consider this is because – the companies need to pay tax at a flat rate of 25% (if annual turnover is up to INR. 400 crore in FY 2017-18) instead of the income tax slab rate applicable to individuals.
  • Limited Liability
    • In a company, the liability of members is limited to the number of shares they have subscribed to as against the unlimited liability of an individual or a sole proprietorship/partnership firm.
  • Perpetual Succession
    • A company has perpetual succession, i.e. it is unaffected by changes or even death of any member.

Although, trading income is treated as business income for income tax purposes, they are not required to have the same compliances as businesses from MCA or GST perspective. Here, MCA does not require traders to incorporate a company for trading. Similarly, traders are not required to have GSTIN.

Now, the question is – can a trader have a company for trading?

Yes, you can still open a demat account for trading as Private Limited Company, similar to registering any other company.

But, does it make sense to have company for trading in capital markets?

When a  company is incorporated with the main objective of trading, it comes under the purview of RBI since the  company would be deriving more than 50% revenue from its financial assets, hence such company would have to take an NBFC license.

There are some other points too that come in the picture while going for incorporation of a company:

  • Tax on Dividend income
    • In order to withdraw the profits made by the company, it shall be paid as a dividend to the members which is taxable at slab rates.
  • Cost of incorporation
    • The cost of setting up, maintaining, and winding up upon dissolution of a company is considerable. A company is also required to abide by other general laws and compliances such as GSTIN, PF, etc, and also specific laws applicable to as per the nature of the company.
  • Compliances
    • A registered company has to bear the cost of certain mandatory annual compliances such as, filing of financial statements, filing forms for making changes in the Board, holding board meetings, etc. & a miss in any of these failing which would lead to incurring huge penalties.

So ultimately, it is upon the trader and their trading perspective to call the shots about whether to incorporate a trading company by balancing out the pros and cons ¯\_(ツ)_/¯

Got a question? Shoot’em on TaxQ&A and we promise to answer them all in the simplest way!

Considering incorporating a company? Quicko is here to help 🙂

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Income Tax Relief for Cash Payments over INR 2 Lakh of Covid Bills

With India battling the second wave of Covid-19, the Income Tax Department issued a notification on 7th May 2021, to allow hospitals, dispensaries, nursing homes, COVID care centres or other similar medical facilities to receive cash payments above INR 2 Lakh.

The exemption to this rule is applicable only from 1st April 2021 to 31st May 2021. You must provide the PAN (Permanent Account Number) or Aadhaar Number of the patient, or anyone making the payment on the patient’s behalf and their relationship with them.

Earlier, it was not allowed to receive cash payments above INR 2 lakh, and a penalty u/s 271DA was applicable.

In case you are receiving such cash payments above INR 2 lakh, the requirement to report the same u/s 269ST of the Income Tax Act when filing the Tax Audit report has been relaxed.

The restriction on the receipt of cash payments above INR 2 Lakh came into effect in 2017. The aim was to curb black money flows post demonetization in November 2016.
Anyone receiving cash payment over INR 2 lakh was liable to a penalty u/s 271DA, which was equivalent to the amount received.

We hope strength & safety for everyone during these testing times.

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Taxes on Cryptocurrency

Have you heard one of those ‘rags to riches’ story through Bitcoins?

Cryptocurrencies in India are helping thousands create this story for them.

Wait, but wasn’t cryptocurrency illegal in India? Has the government allowed the trade of cryptocurrencies yet?

Cryptocurrency in India is unregulated, but that doesn’t mean that it is illegal. As the Government is currently planning on how to regulate it, the Income Tax Department is clear on the taxation front.

Surprisingly, this ambiguity hasn’t stopped people, especially millennials from jumping on to the crypto train. Indian Millennials are spending millions on trading in cryptocurrency daily. This is highlighted by the growth of Indian Crypto-Exchanges like CoinDCX and WazirX seeing upwards of $25M worth of trading everyday. 

Everyone has heard about BitCoin. However, the recent surge in meme coin like Dogecoin, highlights as some traditional investors call it, the speculative side or the FOMO side of CryptoCurrency Trading.

Regardless, Crypto space is an exciting space and there are some serious questions that we plan to answer through this blog post:

Will my crypto gains be taxed?

Are cryptos legal according to the Indian Government?

If the cryptos are taxed, how do I file them?

Let us dive in a little deep to find answers to all these questions.

Cryptocurrency Trading in India

Crypto trading has faced a lot of regulatory challenges in India. RBI initially banned cryptocurrencies. However, the Supreme Court quashed the RBI ban and legalised  crypto trading again from March 2020 onwards. Since then, banks and financial institutions could trade in digital currencies again. As soon as the ban was lifted, the number of transactions skyrocketed. However, this tip-toeing of the government meant ambiguities persisted for investors, especially in the tax treatment of crypto-gains. 

Ambiguity Around Taxes on Cryptocurrencies

Cryptocurrencies can be acquired in various forms and are not functionally similar to other assets. This has created quite an ambiguity as to how the tax is to be levied on the profit arising from different crypto-transactions.

Let us look at each of the scenarios. It is important to note: regardless of the regulatory ambiguity, income from crypto trade or use will be taxed.

Case 1: Mining

Any cryptocurrency created by mining is a self-generated capital asset. A self-generated asset is any asset which does not cost any thing to the assesses in monetary terms relating to its acquisition or creation.

If you sell the currency further, your profits arising out of it will give rise to capital gains.

However, the twist here is that you cannot determine the acquisition cost of a self-generated asset.

Also, cryptocurrencies do not come under Section 55 of Income Tax Act, 1961, which provides a definition for cost of acquisition of self-generated assets. You can not tax capital gains without knowing the cost of acquisition.

Hence, no capital gains tax will be levied on mining of cryptocurrencies.

Case 2: Cryptocurrency held as an Investment and being exchanged for Fiat Money

The gains realized on holding cryptos for less than 3 Years and exchanged for fiat money will be taxed as Short Term Capital Gain (STCG).

Short term capital gains are taxed at the individual slab rate.

However, if the cryptos are held for more than 3 years as an investment, then they are taxed as Long Term Capital Gains (LTCG).

Long term capital gains are taxed at a flat rate of 20%.

Case 3: Cryptocurrency held as stock-in-trade being exchanged for Fiat Money

If you realise an income in the form of cryptocurrencies by transferring your stock in trade, it will be considered as income from business.

Now, stock in trade is any equipment, merchandise, or materials necessary to or used in a trade or business.

One can in their Income Tax Return classify their crypto trade activity as a part of their business. Then income from crypto currencies will be considered as income from business.

Any such profits would be subject to taxes as per individual slab rates.

Case 4: Cryptocurrency Exchanged Against Sale of Goods and Services

Any cryptos exchanged against sale of goods and services shall be treated at par with receipt of money.

Just like receipt of money, it will be considered as income in the hands of the recipient.

Further, since you received this income out of a business or profession, you will be taxed, normally, under the head profits or gains from business or profession.

So, how to File Taxes on Cryptos?

Now that, it is established that cryptocurrencies are legal in India, it has also been established that you will be taxed on any profit arising out of them.  It is important to know how you should pay taxes on these crypto earnings. 

According to the Central Board of Direct Taxes, it is mandatory that you declare and pay the relevant tax on your income/ profits from your cryptocurrencies.

As mentioned above, any profits arising from cryptocurrency will be taxed as short term or long-term capital gains.

However, because of the ambiguity on cryptos and owing to the fact that Indian Government does not consider crypto as a legal tender of currency, the debate on the head under which they can be declared still continues.

If experts are to be believed some think they come under Income from Capital Gains, while some believe they should fall under Income From Other Sources.

How can Quicko Help you file Taxes on your Crypto Gains?

Quicko has simplified taxes for capital traders in the last 2 years, we are now onto simplifying taxes for crypto traders. Currently, we offer CA assisted Tax preparation and filing for Crypto Traders. But, keep a look out for this place we have some exciting news coming up for Crypto traders!

For any doubts and questions regarding taxes on crypto currencies hit us up at TaxQnA and we’ll be happy to help!

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