One of the most prominent murmurs going on among taxpayers and experts alike is, will the due date for ITR filing get extended? Normally, the due date for filing ITR is 31st July of the assessment year. However, taking into account, the havoc wrecked by covid, the due date was extended to 30th September 2021 where tax audit is not applicable & 30th November 2021 where audit is applicable.

So why are there murmurs of the possibility of it getting extended yet again?

Glitches in the new Income Tax Portal

The ITD launched the new Income Tax portal on 7th June 2021 with a lot of fanfare. The portal with its swanky new interface promised a seamless user experience.
However, it has been a rocky road for the new portal ever since its launch. Taxpayers have been facing difficulties while trying to file their returns as well as while using the other services offered by the portal.

Many taxpayers took to various online platforms, to express their dissatisfaction. This did not go unnoticed by the Financial Minister who urged Infosys, the vendor to step up and resolve the glitches on the new portal at the earliest.

Although several glitches on the new portal have been fixed, some of them still persist making it difficult for many taxpayers to file their returns. The portal went under emergency maintenance on 21st August and was completely unavailable for two days. Filing seemed to have picked up after the portal went live again & an average of 400,000 returns are being filed every day since the past week. Despite significant improvements in the portal and in the number of returns being filed, many taxpayers continue to face glitches on the new portal.

Taking this into account The Finance Minister had summoned the CEO of Infosys for a meeting on 23rd August to seek an explanation for the persisting glitches

Ministry of Finance has summoned Sh Salil Parekh,MD&CEO @Infosys on 23/08/2021 to explain to hon’ble FM as to why even after 2.5 months since launch of new e-filing portal, glitches in the portal have not been resolved. In fact,since 21/08/2021 the portal itself is not available.

— Income Tax India (@IncomeTaxIndia) August 22, 2021

Post the meeting, the FM had given Infosys a deadline of 15th September to Infosys in order to fix all the glitches on the portal.

Due dates extended for e-filing of various forms under Income Tax Act

The CBDT has already extended the due date for filing various forms, such as:

• The due date for uploading of the declarations received from recipients in Form No. 15G/15H during the Q1 FY 2021-22 has been extended till November 30, instead of the previous due date of July 15, 2021 & more
  
• The application for registration or intimation or approval under Section 10(23C), 12A, 35(1)(ii)/(iia)/(iii) or 80G of the Act in Form No. 10A now can be filed by March 31, 2022, instead of the prior due date of June 30, 2021. Also the due date for application for registration or approval under Section 10(23C), 12A, 35(1)(ii)/(iia)/(iii) or 80G of the Act in Form No. 10A has been extended to 31st March 2022 instead of 30th June 2021.
  
• The Equalisation Levy Statement in Form No.1 for the Financial Year 2020- 21 can be filed by December 31, 2021, as against the prior due date of August 31, 2021 & more

So is the due date for ITR filing getting extended too?

Despite the ITR filing picking up pace, many taxpayers are still struggling to file their returns on the new portal. And if we assume that the portal will be fully functional by 15th September, as per the deadline given by the Finance Minister, that leaves a very narrow window for taxpayers to file their returns.

Experts have pointed out that it would be in the best interest of taxpayers to extend the due date for filing since, it would be difficult for them to get accustomed to the new portal and file their returns, all within a span of 15 days. Although the new portal promises a much quicker filing of returns, the narrow window of 2 weeks can prove to be quite uncomfortable for not only ordinary taxpayers but also CAs.

Not to mention that last year the Government had extended the due date for ITR filing 4 times and the final due date was 10th January 2021.

It must be noted that the extension of ITR filing due date will lead to a chain reaction and the due dates for Audits and other formalities may also get extended.

So do you think the due date for ITR filing for FY 2020-21 will get extended? Share your thoughts with us

Filing taxes has always been difficult for traders and investors. Well not, if you are an Angel One trader or investor, you are at the right place! Angel One has partnered with Quicko to simplify taxes for you.

Steps to login with Angel One

After you log on to Quicko’s Tax Planner, under the Tax P&L tab, you can log in with your Angel One credentials, to see all your trades imported.

All your trades will be imported, categorized under the right income heads of capital gains or business income as per Income Tax Act along with turnover, P&L, LTCG, and STCG. Moreover, you can view your trades in a tradewise or scripwise manner by selecting your option to view the data. Here’s how the P&L will be classified under the income heads:

Capital Gains Head

Income Head – Capital gain covers gain or loss from the selling of Equity Shares (except intraday transactions), Mutual Funds (MF), Restricted Stock Units (RSU), Equity Traded Funds (ETFs), and Employee Stock Option Plans (ESOPs).

LTCG will be computed by applying grandfathering rule as per section 112A under the following asset types:

• Shares/ESOP/RSU
• MF/ETFs (Equity)

GrandFathering Rule for LTCG

The cost of acquisition to compute the LTCG on the sale of equity shares, equity-oriented MFs & ETFs shall be calculated by using FMV as on 31.01.18.

Under the LTCG tab in Tax P&L Report, the cost is calculated after considering the FMV and the LTCG shall be calculated as a difference in sales value and buy value while filing ITR.

Transfer Expenses under Capital gain

The transfer expenses (such as brokerages, GST, transaction charges, STT, stamp duty etc.) are given separately under both Equity Shares. However, in the case of Mutual funds, the transfer expenses are included in Buy and Sell Prices.

BuyBack & Dividend Transaction

Buyback of shares and Dividend transactions would not be included under the Equity segment in the Tax P&L.

Business Income Head

• Equity Intraday:
  • Trading in the stock cash market on a same-day basis. Thus, it would mean buying and selling on the same day itself.
• Intraday Turnover:
  • For all intraday transactions, the aggregate or absolute sum of both positive and negative differences from trades is to be considered as a turnover.
• Intraday Profit/Loss:
  • Gross P&L is generally calculated by summing up overall sales amount reduced by buy amount.
  • Net P&L = Gross P&L – Transfer expenses.
  • Here, Net P&L and Gross P&L shall remain the same as transfer expenses are adjusted in buy and sale values of respective scrips or trading transactions.
  • Since transfer expenses are adjusted, transfer expenses are disclosed as nil.
• Futures & Options:
  • In the Tax P&L report, F&O turnover and P&L is computed by considering the following trade segments:
    • Equity Futures & Options
    • Commodity Futures & Options 
    • Currency Futures & Options

There are two different methods to calculate turnover for Intraday and Future & Options:

1. Scripwise Method: You calculate the turnover by collating all trades on the particular scrip for the financial year, find the average buy/sell value, and then determine the turnover.
2. Tradewise Method: You calculate the turnover by summing up the absolute value of profit and loss of every trade done during the year.

You can learn more about scripwise and tradewise trading turnover calculation. 

• F&O Profit/Loss:
  • Gross P&L is generally calculated by summing up overall sales amount reduced by buy amount.
  • Net P&L = Gross P&L – Transfer expenses
  • Here, Net P&L and Gross P&L shall remain the same as transfer expenses are adjusted in buy and sale values of respective scrips or trading transactions.
  • Since transfer expenses are adjusted, transfer expenses are disclosed as nil.

Then, proceed to the ‘Tax Planner’ Tab, where you can enter all of the important information for your case, for Income Situation & Advance Tax both.

Once you have filled up the necessary information on the Tax-Planner Tab, move to the Tax Returns Tab to continue to file your taxes for the given assessment year. Here, review your tax planning information and click on ‘Prepare ITR’ to prepare and file your return.

Once you have clicked on ‘Prepare ITR’ you will be redirected to Tax Filing App on Quicko.

Know the Steps to File ITR on Quicko.

That’s it, taxes are going to be super simple for Angel One Traders!

On 6th August 2021, the Government passed The Taxation Laws (Amendment) Bill, 2021 burying the controversial Retrospective Taxation. This step has been hailed by many as a step in the right direction towards creating a conducive business environment. 

But as experts delve into the nitty-gritty of the possible impacts that this amendment can cause, let us take a moment to understand what retrospective taxation is and why has it been so controversial.

What is Retrospective Taxation?

Literally speaking, the word retrospection means looking back into the past. So, if we piece together “retrospective” and “tax” it would roughly translate into taxing an activity or transaction that has happened in the past and that is exactly what Retrospective tax is.

It can be a new charge altogether or an addition to the amount that has been charged. Now an obvious question that would come up is why would government tax a transaction that has happened way back in the past?

Well, it is mainly seen as a corrective measure. If the policies in the past and present are different to the extent that taxes collected under the previous policy is deemed grossly less than the present one, then retrospective tax comes into play in order to make up for that gap.

Why is it so controversial?

This provision was introduced in 2012 by the UPA government as an amendment to the Income Tax Act, 1961. This introduction was almost a reaction to the Government’s spat with Vodafone.

Vodafone had acquired Hutch for an $11 billion deal by acquiring the shares of an overseas subsidiary company in 2007. Now, the government stated that the telecom giant owed the ITD around  INR 22,100 crores including taxes and penalties.

Vodafone took the case to the Supreme Court and the Court ruled in favour of Vodafone.

The Government had a similar tussle with Cairn wherein the ITD demanded INR 24,000 crore from the company. Both the companies took the government to the International tribunal with regards to Retrospective Tax and the government lost in both cases.

This tax had proven to be a roadblock when it came to the inflow of international investment in the country and hence there have been constant demands for doing away with this provision. 

What changed?

The Government has introduced an amendment in the 1961 Income Tax Act which calls for burying the provision of Retrospective Tax. It states that no tax demand can be raised in future as per this retrospective amendment for any indirect transfer of Indian assets if the transaction was undertaken before May 28, 2012.

The government has also stated that it stands committed to refund the money that it has collected from this levy.

This move has mostly been appreciated from all circles and is a reflection of the Government’s commitment towards building a conducive and favourable business environment in India. Over the last years, many initiatives have been taken to induce a sense of confidence among Global investors regarding doing business in  India. An increase in foreign investments in the last few years bears witness to the fact that these endeavours have been borne fruit. 

The number of companies registered in F.Y 2020-21 rose by 24.3% as compared to the F.Y. 2019-20 as per the data from the Ministry of Corporate Affairs.

So what pushed more businesses to be registered? Well, it was the Government’s new initiative of Ease of Doing Business.

What were the reforms that led to this push?

As a part of the Government of India’s Ease of Doing Business (EODB) initiatives, the Ministry of Corporate Affairs (MCA) introduced a new Web Form called ‘SPICe+’ replacing the old SPICe form. All companies getting incorporated on or after 23^rd February 2020, are required to file SPICe+.

Through SPICe+, a business can offer 10 services by 3 Central Government Ministries & Departments, namely- Ministry of Corporate Affairs, Ministry of Labour & Department of Revenue in the Ministry of Finance, and 1 State Government (Maharashtra). This has led to a reduction in company registration fees and also saving procedures and time..

These 10 services include:

1. Application for reservation of name
2. DIN of the proposed directors
3. PAN registration of the company (Mandatory)
4. TAN registration of the company (Mandatory)
5. PF registration of the company (Mandatory)
6. ESI registration of the company (Mandatory)
7. GST registration of the company (Optional)
8. Professional Tax registration of the company (only in Maharashtra, Karnataka, and West Bengal)
9. Opening of Bank Account (Mandatory)
10. First time registration of shops and establishments for all new companies getting incorporated in Delhi

Incorporation Fees Calculator

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Post-Incorporation Compliances

Once the company is incorporated, it should comply with certain requirements of MCA. These include:

1. Appointment of Auditor

Upon incorporation, the Board of Directors is required to appoint the Company’s first statutory auditor. This has to be done within a period of 30 days from incorporation by filing form ADT-1. In case the Board fails to do so, it shall be the duty of the members to appoint an auditor by holding an Extra-Ordinary General Meeting. Such an auditor will act as the statutory auditor of the company until the conclusion of the first AGM.

2. Commencement of Business

A newly incorporated company shall not commence any business or exercise any borrowing power unless it has filed a declaration in eForm-INC-20A that every subscriber has paid the value of shares agreed. This declaration should be made within a period of 180 days from the date of incorporation.

Annual Compliances

Other than post-incorporation compliances, there are certain annual compliances to be done each year. These include:

• Annual General Meeting
• Statutory Audit
• Appointment of Subsequent Auditor
• RoC Forms- AOC-4 and MGT-7
• Board Meetings
• Declaration by Directors- MBP-1 and DIR-8
• Statutory Registers

Seems like when you have the spirit of hustling, even a pandemic can’t stop you from scaling new heights. This initiative of the Government has made the process of starting a business in India very simple and seamless.

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How to Download the Tax P&L Report from Axis Direct?

You can download the Tax P&L Report from Quicko’s tax planner on the tax P&L tab.

The report includes details of segment wise trading – scrip name, buy value, sell value, and trading expenses. Segments included are – Equity Shares, Mutual Funds, Equity Intraday, Futures and Options.

Income Head – Capital gain covers gain or loss from the selling of Equity Shares (except intraday transactions), Mutual Funds (MF), Restricted Stock Units (RSU), Equity Traded Funds (ETFs), and Employee Stock Option Plans (ESOPs).

Business Income Head covers Equity Intraday transactions, Futures and Options. This Tax P&L Report can be used to prepare P&L A/C to report it in the Income Tax Return.

However, the trader must take care of the following things where the treatment as per Income Tax may differ.

Expenses

The Tax P&L Report covers transfer expenses that are directly related to trading transactions.

The transfer expenses (such as brokerages, GST, transaction charges, stamp duty etc.) are included in Buy and Sell Prices in case of equity, mutual funds, intraday and F&O segments.

In the case of Intraday and F&O, you can also claim other expenses – such as internet expense, legal fee, subscription expenses, depreciation, etc which are not covered in the Tax P&L Report.

Calculation of Long Term Capital Gains under Section 112A

LTCG on the sale of securities (on which STT is paid), bought on or before 31st Jan 2018 should be calculated using the Grandfathering Rule. As per this rule, the Cost of Acquisition is computed after considering the FMV as on 31st Jan 2018 as per Section 112A.

Under the Equity segment – ‘Shares/ESOP/RSU’ of the Tax P&L Report, the Buy Price is computed after considering FMV as on 31.01.2018 and the LTCG will be calculated as a difference in sales value and buy value. While for Mutual Funds, FMV is not taken into consideration.

Corporate Actions

Buy back Gains

When a company buys back shares issued by it from an existing shareholder, it results in capital gains for the shareholder. Such buyback gains would not be included in the Tax P&L Report.

As per a recent amendment in Budget 2019, the gains from buy-back are exempt in the hands of the individual since the company is now liable to pay the buyback tax under Section 115QA. This amendment is applicable to all the buybacks after 5th July 2019. Therefore, buyback gains before 5th July 2019 are taxable for the trader and the ones after 5th July 2019 are exempt

Dividend

Dividend transactions would not be included under the Equity segment in the Tax P&L.

Transfer In/Out

If you moved your portfolio from another broker to Axis Direct or vice versa, your brokers will have partial data (either buy-side or sell-side depending on transfer in or out). Most of the brokers let traders enter such missing data. However, there are high chances of missing out Capital Gains arising out of such transfers. 

Calculation of Trading Turnover

There are two different methods to calculate turnover for Intraday and Futures & Options:

• Scripwise Method: You calculate the turnover by collating all trades on the particular scrip for the financial year, find the average buy/sell value, and then determine the turnover.
• Tradewise Method: You calculate the turnover by summing up the absolute value of profit and loss of every trade done during the year.

You can learn more about scripwise and tradewise trading turnover calculation.

1. Intraday

Trading in the stock market on a same-day basis. Thus, it would mean buying and selling on the same day itself.

Turnover

For all intraday transactions, the aggregate or absolute sum of both positive and negative differences from trades is to be considered as a turnover.

Profit/Loss

Gross P&L is generally calculated by summing up overall sales amount reduced by buy amount.

Net P&L = Gross P&L – Transfer expenses.

Here, Net P&L and Gross P&L shall remain the same as transfer expenses are adjusted in buy and sale values of respective scrips or trading transactions.

Since transfer expenses are adjusted, transfer expenses are disclosed as nil.

2. Futures & Options

In the Tax P&L report, F&O turnover and P&L is computed by considering the following trade segments:

• Equity Futures & Options
• Commodity Futures & Options
• Currency Futures & Options

Turnover

For Futures transactions, Turnover = abs(sell value – buy value).

For Options transactions, Turnover = abs(sell value – buy value) + sell value.

*abs() stands for absolute value.

Profit/Loss

Gross P&L is generally calculated by summing up overall sales amount reduced by buy amount.

Net P&L = Gross P&L – Transfer expenses

Here, Net P&L and Gross P&L shall remain the same as transfer expenses are adjusted in buy and sale values of respective scrips or trading transactions.

Since transfer expenses are adjusted, transfer expenses are disclosed as nil.

All of the above conditions are considered when you file your Tax Return using Quicko. However, reporting may vary depending on your specific situation, hence it’s always advisable to consult a tax professional when in doubt.