How to Maintain Safe Distance from Income Tax Department?

In day to day transaction, we do some transaction which may attract Income Tax Department to serve you a notice ask about. But we always want to keep an Arm’s Length Distance from the Income Tax Department!

But the question here is HOW???

Here are lists of expenses/ investments, which at any point of time performed by you may invite undue attention from the Income tax Personnel.

1) Depositing Cash aggregating to Rs.10 Lacs p.a. in your Savings Bank Account.

2) Making Credit Card Payments of more than Rs.2 Lacs p.a.

3) Investment in Mutual Fund Units worth more than Rs. 2 Lacs.

4) Investment in Debentures/ Bonds, amounting more than Rs. 5 Lacs

5) Investment in Shares worth more than Rs. 1 Lakh.

6) Investment in Gold ETF worth more than Rs. 1 Lakh.

7) Investment in RBI Bonds worth more than Rs. 5 Lacs.

8) Purchase / Sale of any Immovable Property exceeding Rs.30 Lacs.

9) Receipt of Cash Payment exceeding Rs.2 Lacs for sale of any goods/ services.

10) Cash deposits or withdrawals aggregating to Rs 50 lakh or more in a financial year in one or more Current Account.

The Next question which may strike us is how does the Income tax Personnel get to know about all these activities.

To keep an eye on such high value transactions of the tax payers, the IT Department has developed a statement of financial transactions called Annual Information Report(AIR).

On the basis of this AIR, the department shortlists their targets and further sends them a notice.

What do you mean by a Annual Information Report (AIR).

Annual Information Return (AIR) of ‘high value financial transactions’ is required to be furnished under section 285 BA of the Income-tax Act, 1961 by ‘specified persons’ in respect of ‘specified transactions’ registered or recorded by them during the financial year.

Who provides the high value transaction information to prepare the AIR?

     Banks

       Mutual Fund Companies

     Companies Issuing Bonds/ Debentures

     Companies issuing shares

     Credit Card Companies

     Sub- registrar offices on real estate deals.

How can I trace my High Value Transactions reported under AIR?

The assessee can trace his/ her high value transactions reported under AIR, in their 26AS Report under AIR section. Any transaction of the assessee which has been categorized as a High Value Transaction will be reflected therein.

In the end, one last question which everyone might have. 

How to avoid receiving a notice from the IT department?

The most important step is to file your Income Tax returns on time and file them correctly.

Always re-check your Tax Credit with the 26AS statement.

Disclose all your Taxable as well as Exempt income under the right head.

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Revised Rates of Interest under Various Financial Transaction in LIC

LIC revised rate of interest chargeable under various financial transaction for the financial year 2016-17 vide circular ref no.ACTL/PS/2224/4 Dt.18th April 2016

Details are here as follows :

Sr. No.	Type of Transaction	Rate of Interest
1.	(i) Policy Loans [under all plans except Jeevan Aastha (Plan195), Jeevan Vridhhi (Plan 808), Jeevan Vaibhav (Plan 809), Jeevan Sugam (Plan 813), Jeevan Shagun (Plan 826), Jeevan Sangam (Plan 831) And Jeevan Shikhar (837) (ii) Policy Loan under Jeevan Aastha (Plan 195), Jeevan Vridhhi (Plan 808), Jeevan Vaibhav (Plan 809), Jeevan Sugam (Plan 813), Jeevan Shagun (Plan 826), Jeevan Sangam (Plan 831) And Jeevan Shikhar (837)	10.00        10.50
2.	For Policies issued on or after 01/01/1957 – (I)     Arrears of premiums within six months from the date of FUP. (II)   For revivals	9.50 (Subject to a minimum int. of Rs.5/-)
3.	Arrears of premiums for alterations and age proving higher.	9.50
4.	Dating back the policies	9.50
5.	Discount factor for (i)   Commutation of instalments under Educational Annuity Policies. (ii)   Commutation of Income Benefits under Multi-Purpose,             Guaranteed Benefits under Annuity Settlement Options. (iii)   Unpaid instalments under Settlement Options.	9.50
6	Settlement options for Maturity Claims	6.00
7.	Advance payment of premiums under (i)    Jeevan Sneha (Plan 128) (ii)  Jeevan Bharati (Plan 160) and Jeevan Bharati I (Plan 192)	10.00   6.00
8.	Delayed payment of claims	9.00
9.	Discounted Value or Accumulated Value for Calculation of SSV under Jeevan Saral (Plan 165)	7.50
10.	Accumulation of S B under Jeevan bharati (Plan 160) and Jeevan Bharati –I (Plan 192)	4.00
11	Discounting of Claims during the last year of policy term	9.00
12	Reinstatement of Surrendered Policies	10.50

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List of Alteration Allowed with LIC Policy

While taking life insurance we miss certain things by mistake like so we need to make some alteration in Insurance Bond after receiving it.

Here are the LIST OF ALTERATIONS, WHICH ARE PERMISSIBLE WITH LIC POLICY:-

(1) In class (plan) or term.

(2) Reduction in sum assured.

      *Alteration in above case is allowed if basic risk cover is not increased &

        same time premium should not be decreased.

(3) Mode of Premium :

      During term, IN POLICY ANNIVERSARY MONTH Life Assured can change             premium paying mode.

      In case of higher mode to lower mode (not require for SSS or ECS) Rs. 
      50/- service charge to be paid.

(4) Splitting up of single policy into two or more policy.

(5) Merging of the policies in one policy if having same plan / term /             doc.

(6) Without profit to with profit plan.

(7) Grant of accident benefit.

         If any time of taking policy L.A. has not availed D.A.B., but after issue of 

         policy, request for granting D.A.B. if the L.A. is eligible for it, may be
         granted.

         Use form no. 3772 & if accident benefit is not asked from date of 

         commencement of policy then Rs. 50/- service charge be paid.

         In case of minor life assured on completion of their age 18 years, he or 

         she can avail double accident benefit.

        (Maximum up to 50 lakhs or equal to basic S.A. Whichever is less.)

        This benefit may be granted from the due date of policy anniversary 

        following immediately after the date of application.

(8) Grant of premium waiver benefit:

      (1) From no. 300 / 302 of proposer 

      (2) Standard age proof of proposer 

      (3) Medical requirement of proposer as per rules. 

      (4) An Application is required.

ALL Above 1 to 8 alterations will be allow only after 1 policy year complete.

(9)Alteration in Name :

      (1) If original name is required to be changed : GAZZET COPY & I.D. Proof

      (2) In case of female life after her marriage : Marriage certificate with                     application is required.

(10) Settlement option of Payment of Sum assured by installment. At time of           maturity payment.

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Service Tax Effect As on 19th April & From 01st June 2016

Dear LIC Agent

Please note that from 1st June 2016 Service Tax Rate has been changed on life insurance premium of diffrent LIC product. Details are as follows :

                          Existing          Revised
New Business       3.625%          3.75%
Renewal.              1.8125%       1.875%
Term/Health.        14.50%         15.00%
Jeevan Akshay      1.45%           1.50%

So please take care of your customers.

Complete all booked business on or before 31st May 2016.

Contact customers and guide them to pay renewal on or before 31st May 2016 to save a little Service Tax. 

Saving is Saving, size of saving is not necessary but saving is necessary. 

Start from yourself and guide others.

All The Best.

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