The Kashmir Pulse

NEW DELHI — The Income Tax Department on Tuesday asked taxpayers to link PAN with Aadhaar by May 31 to avoid tax deduction at a higher rate.

As per income tax rules, if a Permanent Account Number (PAN) is not linked with a biometric Aadhaar, TDS is required to be deducted at double the applicable rate.

Last month, the Income Tax Department issued a circular, stating that no action will be taken for a short deduction of TDS in case the assessee links his/her PAN with Aadhaar by May 31.

“Please link your PAN with Aadhaar before May 31, 2024, if you haven’t already, in order to avoid tax deduction at a higher rate,” the department posted on X.

In a separate post, the I-T department asked reporting entities, including banks, forex dealers, to file SFT by May 31 to avoid penalties.

“The deadline to file SFT (Statement of Specified Financial Transactions) is May 31, 2024. Avoid penalties by filing accurately and on time,” the department said.

The reporting entities which are required to file SFT returns with tax authorities include forex dealers, banks, sub-registrar, NBFC, post offices, issuers of bonds/debentures, mutual fund trustees, companies paying dividends or buying back shares.

These specified institutions are required to furnish the details of certain financial transactions or any reportable account registered/recorded/maintained by them during the year.

Delay in filing of SFT returns may attract a penalty of up to Rs 1,000 for each day of default. Non-filing or filing inaccurate statements may also lead to a levy of a penalty.

Through SFT, the Income Tax Department keeps track of high-value transactions undertaken by an individual.

This post first appeared on The Kashmir Pulse

SRINAGAR — The Income Tax Department, Srinagar has taken a serious view of the bogus refunds claimed by various persons in the past few years. The department has filed two FIRs against one Chartered Accountant and 404 other persons in Jammu & Kashmir in bogus refund cases.

The FIRs have been filed by Akash Kumar Meena, Income Tax Officer (Technical), Srinagar with the Crime Branch of Jammu & Kashmir Police at the direction of the Principal Commissioner of Income Tax, Jammu & Kashmir and Ladakh, M.P. Singh based on the investigation carried out by the Income Tax Officer (TDS), Srinagar.

It has been alleged in the FIRs that 404 persons including a Chartered Accountant who runs a firm from Raj Bagh Srinagar have entered into a conspiracy and defrauded the Central government exchequer for a sum of Rs 16.72 crores between financial years 2017-18 to 2019-20.

In the FIRs addressed to the Senior Superintendent of Police, Crime Branch, Srinagar, the Income Tax Department has described the modus operandi of the accused in minute details and has shared their complete details with the crime branch like names, addresses, PAN, bank accounts and the amounts fraudulently claimed as refunds by filing incorrect Income Tax Returns in a clandestine manner.

It has been alleged that all the culprits have taken more than Rs 4 lakhs as refunds by filing incorrect Income Tax Returns for various years. All 405 persons have been booked under sections 420/468/471 and 120B of the IPC & RPC read with section 66-D of the I.T. Act.

It is learnt from reliable sources that Special Investigation Team (SIT) headed by Imtiyaz Ahmed, Dy. Superintendent of Police, Crime Branch, Srinagar has been constituted at the direction of Special Director General of Police (Crime), Jammu & Kashmir for further investigation in the matter. It is also learnt that the Crime Branch sleuths have seized all bank accounts of the accused persons and further investigation is in progress.

The Income Tax Department of Jammu & Kashmir has also filed one complaint against the CA Imran Amin Dara of Srinagar to the Institute of Chartered Accountants of India. In a letter dated 24.05.2023, Akash Meena, Income Tax Officer, Technical has requested the Director Discipline of ICAI to cancel the license of the said CA.

Last year, in the month of November, the Income Tax Department of Jammu & Kashmir had undertaken an analysis of refunds claimed by the taxpayers by claiming bogus deductions. It was found that a large number of salaried employees of Jammu and Kashmir have claimed bogus deductions under various sections of the Income Tax Act with the help of some touts. Such government employees are from different departments like PDD, Health, Tourism, Education, Police, J&K Bank, universities, and even some belt forces.

At the request of the Income Tax Department, various UT departments issued advisories in the month of March to their employees to update their Income Tax Returns and file ITR-U in case they have claimed bogus refunds.

It is learnt from reliable sources that more than 9000 employees had updated their returns before March 31 and refunded the excess amounts of refunds to the government along with additional tax, totaling more than Rs 56 crores. However, it is in the notice of the I.T. Department that many employees have not updated their returns and have not returned the fraudulently earned refunds to the government with additional tax (penalty).

Reliable sources have indicated that such persons will be dealt with strictly as per the law in the coming months. Their cases are also likely to be selected for scrutiny in the near future and more FIRs are likely to be filed against such employees and the touts who are active in the UT of Jammu & Kashmir.

A senior officer of the I.T. Department, on the conditions of anonymity, has revealed that more than 20,000 employees of the UT government and more than 8,000 personnel belonging to various other belt forces are on the radar of the Tax Department for fraudulently claiming income tax refunds for the years 2020-21 and 2021-22 for which return filing dates are over.

The Principal Commissioner of Income Tax, M.P. Singh said that the taxes paid by the citizens are used for development of the infrastructures like roads, bridges, tunnels, rail lines, schools, colleges, and hospitals.

"The department respects honest taxpayers for their significant role in nation-building but will deal firmly with dishonest taxpayers and such elements who misguide the public and help them in tax evasion and bogus refund claims," he warned.

This post first appeared on The Kashmir Pulse

Life can be uncertain, and you never know what the future holds for you. You may have an emergency at any time without any prior warning, causing financial turmoil. While you cannot predict or prevent any crisis, you can be prepared to handle such situations by having sufficient savings.

Let us look at some of the critical reasons you must save and invest your money for the future.

Financial protection

One of the most significant benefits of investing and saving for the future is that it allows you to be financially independent and gives you a financial cushion against unexpected circumstances. Every penny you save and invest will make your future a little better.

No matter your financial status, money plays a vital role as you never know what will happen the next day. You may suddenly lose your job, and your family may face financial turmoil in the event of your unexpected demise, etc. In such a situation, you may rely on your savings to take care of your regular expenses and live a life of dignity without relying on anyone else.

Be debt free

Regular savings and investments in financial instruments like an assured savings plan can help you accumulate a considerable corpus over time. Upon maturity of the savings plan, you can use the wealth to pay off the loans or mortgage (if any) and live a debt-free life. The earlier you start saving, the more considerable wealth you can accumulate, and the earlier you can be debt-free.

Take an early retirement

Many people aspire to retire at a young age and pursue their dreams. However, only a few are able to achieve this because they don’t have enough financial backing, and they are forced to work till they reach their 60s or even beyond. However, you can accumulate funds for your retirement by saving and investing money from a young age (as soon as you get your first paycheque).

There are many avenues, including special retirement plans and assured savings plans, allowing you to build a sizeable corpus. By investing in a savings plan, you can get assured savings as well as guaranteed returns. Depending on your future goals, once you have accumulated enough funds, you can take early retirement and live the life you have envisioned for yourself.

Have peace of mind

When you have enough savings and investments, you automatically feel a sense of security and peace of mind knowing that you have the necessary financial resources to fall back on during an emergency. With sizeable savings, you can be confident in making certain life decisions and even take risks like starting a new business or voluntarily taking early retirement to pursue your other life goals.

Be future-ready

Most people invariably consider applying for a personal or mortgage loan during an emergency. However, when you avail of a loan, you not only feel the burden of debt repayment, but also you end up paying more than you borrow in the form of interest. However, if you have savings, you can easily use the amount to get through an emergency or whatever situations you face in the future.

Enjoy tax benefits

Tax saving is a critical aspect of a sound financial plan. When you save and invest your money in different financial instruments like life insurance, ULIP assured savings plans, and retirement plans, you get valuable tax benefits under different sections of the Indian Income Tax Act.

As they say, in the financial world, every penny saved is a penny earned. The sooner you start saving and investing, the more tax saving you can enjoy.

Final Word

Now that you know the importance of saving and investing for your future, start investing and saving now so that you and your family never face any financial hardship.

This post first appeared on The Kashmir Pulse

The thought or impression of not having saved anything for the future shakes all of us to the core. Everyone seems to be battling with the realisation that they haven't done anything to protect and save something for their old age. The common man is the most adversely affected by inflation and economic disruption. Therefore, it is crucial to be aware of the pension schemes in India.

Opportunities abound after retirement. Finally, you have enough time to complete everything on your wishlist. However, you will need enough money to support your existing way of life and realise your long-held aspirations. (You can mark the estimates of your investments using a compound interest calculator).

Relying solely on your savings and investments would not be a good choice given the rising rate of inflation and the restricted social security programmes accessible for seniors.

Why choose a pension plan?

There are many different reasons why one should choose the best pension schemes in India. Some of them are listed below:

1. Increase in Life Expectancy

According to the report of the World Bank, India's life expectancy in the year 2017 was 68.78 years. In nearly 20 years, the life expectancy rate has improved by 10 years. The amount required in old age or after retirement will rise as life expectancy increases.

2. Lack of Social Security System

We’re a developing nation. India is yet to be equipped with a social security system. When all sources of money are cut off, people usually avail of these services to support themselves or their families. There aren't enough policies and programmes in India that will take care of retirement benefits, the needs of the crippled, etc. Even when there are a few, they might not meet the needs of everyone. That’s why investing in pension schemes in India is highly recommended.

3. Regular Flow of Income

A pension or retirement plan guarantees you an income stream that is consistent once you retire; helping you live a relaxed and comfortable life.

4. Tax Advantages

Making an investment in a pension plan at a young age is always a good idea. You can receive tax benefits under Section 80C of the Income Tax Act's rules that can help you save taxes.

5. Rising Inflation and Health Care Expenses

The cost of healthcare has increased dramatically along with the country's population increase and the average life expectancy. Prices for hospital stays and medications are continually rising. All of this has a negative impact on our economy. So much so that anyone can face financial burdens if they remain unprepared.

Having a pension plan and using a compound interest calculator to calculate returns would undoubtedly reduce stress and give you financial security during your post-retirement years.

Best pension schemes in India

Knowing the many plans available on the market and selecting the one that best suits your needs will help you choose the option that is the most effective.

Plans With and Without Life Cover

With Life Cover: Those that have a life component also have life cover. The family members are given a lump sum payment in the event of death under this arrangement.

Without Life Insurance: As the name suggests, there is no life insurance in these pension schemes. The only money returned to the nominees is the premiums paid (depending on the type of policy).

Immediate and Deferred Annuity Plan

In an immediate annuity plan, a lump sum investment is required, and the pension payments begin right away. While in deferred annuity plans, the pension stats after a few years, mostly when the policy term's accumulation period is complete. There is a tax advantage applicable to this type of plan as well.

National Pension Programme (NPS)

In this programme, subscribers can invest and generate wealth by investing in market-linked assets. NPS invests in the equities and debt markets according to the subscriber’s preferences. At maturity, 60% of the money is available for withdrawal, and the remaining 40% must be utilised to buy an annuity plan.

Understanding the benefits provided by different pension schemes in India, as well as the features and advantages of retirement planning, is crucial if you're looking for the finest pension schemes in India. Each pension plan offers a unique set of retirement benefits.

A compound interest calculator can help you in making a safe retirement decision as it helps you calculate the growth of your investment. So, start investing in the best pension schemes in India today!

This post first appeared on The Kashmir Pulse