How to read your Income Tax PAN?

The Income Tax Permanent Account Number (PAN) is a ten-digit alphanumeric number, issued in the form of a laminated card, by the Indian Income Tax Department.
A typical PAN for an individual would be AABPS1205E.
However, this appears to be a mysterious coded number to most of the people, there are some elements which would help you to validate a PAN.
The fourth letter of your PAN reflects your status. As such for an individual the letter will be 'P' for an HUF it will be an 'H', for firms - 'F' and for companies - 'C'.
The fifth letter of your PAN is the first letter of your surname in case of individuals and the first letter of the name in other cases. For example, in Nikhil Kumar's PAN the fourth letter will be 'P' and the fifth letter will be 'K'.
The other alphabets and numbers are allotted based on the Income Tax Department's series database.
More information on PAN

Also Read:

• Do all PAN Card Holders Need to File Income Tax Return?
• PAN Holders- View Your Income Tax Credit Status Online
• Online PAN Verification- Step Taken to Check PAN Frauds
• Individuals- How to file your Income Tax Returns Electronically?
• Your Transactions that Income Tax Department Checks

Advertise on ICAI website

The Institute of Chartered Accountants of India (ICAI) has started accepting advertisement banners to be hosted on its portal. The request can be made online at http://www.icai.org/advt.html by uploading your advertisement image file and giving the payment details. Currently the payment options include cheques, demand draft and pay order. However credit card or Internet banking payments could have been added.

Currentely ICAI is charging from Rs. 5 lakhs/month for a small 120 x 90 pixels banner to Rs. 10 lakhs/month for a large 468 x 60 pixels banner. These advertisement banners will be hosted on the ICAIs home page.

However, ICAI will not be accepting advertisement banners for products or commodities but this is a great opportunity for professional firms, financial software development companies , job portals and placement agencies, coaching centres offering coaching to CA students and also companies related to the financial world.

Ministry of Corporate Affairs Notifies New Annual Filing Forms

Its time for the companies to file their Annual Returns and Balance Sheets with the Registrar of Companies. The Ministry of Corporate Affairs (MCA) has notified the revision of four forms namely 20B, 21A, 23AC and 23ACA vide Notification NO: 655(E) dated 12-9-08. Revised Forms will come into force from 28th September 2008.
Form 20B is used for filing annual return by a company having a share capital .
Form 21A is used for giving particulars of annual return for the company not having share capital.
Form 23AC is used for filing Balance Sheet.
Form 23ACA is used for filing Profit and Loss account .

Accounting Technician- ICAI aims at matching the supply with demand

The Institute of Chartered Accountants of India (ICAI) has announced the launch of new curriculum to be named as ‘Accounting Technician’ (AT).
As we are aware that a very small percentage of total candidates who appear in the Chartered Accountancy exams (at various levels) manage to clear the examination, there was a constant need to have a certified degree which, though not equivalent to a full fledged Chartered Accountant, but could recognize the so called C.A. Intermediate in a better way.
The constantly growing KPO sector and also the local town businesses require professional accountants who have the basic knowledge and skills in accounting and financial sector. ICAIs AT aims at filling this vacancy in the best manner.
Similar to the concept, there are many institutes offering courses like ‘Tally Accountant’, ‘Business Accountant’, and ‘Industrial Accountant’ etc. Although an Accounting Technician is expected to have more or less the same level of knowledge as that of a these courses or more specifically a Commerce Graduate, but ICAI certification would ensure that s/he has a reliable level of working skills too.
To become an Accounting Technician, you need to first pass an eligibility test after senior secondary. After that you need to register for the course and complete studies and Information Technology (IT) training as prescribed by the board of studies and then appear for the AT exam.
After passing the examination, you will be required to have practical experience for a period of one year in accounting. You will also be required to undergo orientation programme to be conducted by the Board of Studies.

Individuals- How to file your Income Tax Returns Electronically?

E filing of income tax returns has been made mandatory by the Income Tax Department in India for companies and for firms who need to get their accounts audited u/s 44AB of the Income Tax Act, 1961. However, the option is available to other classes tax payers also.
E filing is also becoming quite popular among the salaried class who can easily prepare their return based on their salary certificate (Form No. 16) provided by their employer. Below are simple steps to be followed to prepare and e-file the income tax return for salaried people.

1. Choose the right form- Salaried people, who have income only from salary and interest can file ITR-1, others should file ITR-2. However if also have income from business sources, you need to file ITR-3 or ITR-4 which require some detailed information too. More help on choosing the form.


2. Once you have chosen your form, download it from the Income Tax India website and fill up the details.


3. After you have filled up all the details, click the 'validate file' button to check for any inconsistencies/errors. After validating your file click the 'generate' button to create the xml file. Save the xml file elsewhere.


4. Register yourself with the Income Tax Department. This is similar to creating an email id but you need to provide information that matches as that of Income Tax Department database prepared from your PAN (Permanent Account Number) application. Your user id will be your PAN.


5. Login to your account, give the path of xml file that you have saved, sign it with your digital signatures and upload your return.


6. Those who don't have digital signatures, can upload the e-return without them but they would additionally need to submit a hard copy of the return to the Income Tax Department.

Practically, e filing of income tax returns is only advantageous when you have digital signatures. Otherwise it doesn't make much sense to first e-file your return and then go to the income tax office to file it again.

Also Read:

• How to Make E-Payment of Taxes
  

Limited Liability Partnerships- An Opportunity for Globalisation of Professional Firms

The concept of Limited Liability Partnerships (LLPs) has facilitated the professional firms especially in the accountancy field to expand on a global scale.
Limited Liability Partnerships can be considered as a mixture of Corporations and Partnerships. Here the partners of the firm have limited as that of shareholders of a corporation. However it is distinct from a corporation in the context that the partners are the ones who manage the regular business of the corporation while the shareholders of a corporation have to appoint board of directors to manage the business.
Moreover, Limited Liability Partnerships can have any number of partners. This enables the partnerships to expand their scale of operations on a global perspective.
In countries like USA, the concept is quite popular. Formation of an LLP requires filing with the county and state offices. Although specific rules vary from state to state, all states have passed variations of the Revised Uniform Partnership Act (RUPA).
In India, the concept is soon expected to be placed before the Parliament for approval. If approved, it would be a major boost for the professional firms such as Chartered Accountancy Firms to have a multinational presence.

USA Tax Payers - How to avoid double taxation?

When calculating your income tax liability for 2008, you can take the advantage of taxes paid in foreign countries on your income. However, the advantage is limited only to those incomes which are included in your US Taxable Income i.e. you may not claim a foreign tax credit or deduction for taxes paid on income not subject to US Tax.
You can ascertain your foreign tax credit by using the following calculation:
Total Income from Foreign Sources x Your US Tax Liability/Your Total Worldwide Income

The amount of your foreign tax credit will reduce your total tax liability.
There is also an option to treat the foreign tax as a deduction from your taxable income but this would be less advantageous than taking the credit as deduction from taxes.
Also, the foreign tax credit is allowed based on some restrictions as to the residency status and types of incomes.

CA students get a bit of relief for Exams

Remember the days of your Chartered Accountancy Exams when you had to appear in stressful examinations for six to eight days consecutively. There used to be situation that owing to constant stress you felt like leaving everything.
Now ICAI has got some relief for the students appearing in November 2008 exams. They will be conducted with a gap of one day after each exam. This initiative will surely enable the students to revise their syllabus better and also be more relaxed and fresh in their exams. Hope we continue to get good news like this from ICAI in the future.

How to Make E-Payment of Taxes

Payment to Income Taxes through Internet Banking has been made mandatory by the Income Tax Department in India earlier this year for all the companies and others whose annual turnover is more than Rs. 40 Lacs. For others also this option is available though not mandatory.
To pay your taxes electronically, all you have to do is to have a net banking account (you may also use the account of someone else also) (list of authorised banks is available at https://onlineservices.tin.nsdl.com/etaxnew/Index.html ) and follow the below mentioned simple procedures :

1. Keep your PAN card available (as you need fill in details from it)
2. Go to https://onlineservices.tin.nsdl.com/etaxnew/tdsnontds.jsp
3. Select the type of challan you need to fill. Individuals need to fill Challan No. 280 for their taxes.
4. The Challan form will open up. Individuals and other tax payers who are not companies select '(0021) Income Tax Other Than Companies' option. Companies need to select '(0020) Income Tax on Companies' option.
5. Fill in the other details from your PAN card.
6. Select the relevant Assessment year. For those paying their advance taxes for their incomes of financial year 2008-09 the assessment year will be 2009-10. For those paying their taxes for their incomes of financial year 2007-08 the assessment year will be 2008-09.
7. Select the bank and click proceed.
8. You will be navigated to the internet banking login page of you bank.
9. Login into your account. The challan filled up by you will appear.
10. Enter the amount of tax to be paid and click on the 'Pay' button.
11. Enter your Net Banking Transaction Password and proceed.
12. The bank will authorise your transaction and you're done.
13. The copy of acknowledgement of payment will appear that can be downloaded and printed.

Cost Inflation Index 582 for F.Y. 2008-09

The Government of India has notified the Cost Inflation Index (CII)for the financial year 2008-09 to be 582.The index for the last year was 551.
This concept was started from Financial Year 1981-82 whose index is kept as 100 (base year). From then the Govt. has been continuously notifying the CII for each year based on the level of inflation. This is mainly used for income tax purposes for calculating the value of long term capital gains. The gain/loss on sale of asset is calculated by subtracting from the sale value, the indexed cost of the asset, which is calculated as follows:
Original Cost of the Asset x Current year CII /CII in the year of purchase

ICAI Members and Students- get your Email id@icai.org

ICAI has provided a new facility for its members and students. Now they can create their own email id with the ICAI domain. Eg: yourname@icai.org
For students, this facility is available for those registered with PCC or Final Course. This facility is powered by Google, so you can expect the good spam filtering as that of Gmail.com
Email ids can be created at http://www.icai.org/
To create an email id all you need to have is your Membership Number or Student Registration Number (SRN)

Send your comments for Simplification of US-GAAP EPS to comply with IFRS

IASB (International Accounting Standards Board) has proposed to simplify the calculation of Earning Per Share so that it complies with the methods of calculation in IFRS (International Financial Reporting Standards). For the purpose it has asked for public comments which will be received till December 05, 2008 by IASB.
Download the draft

Is TDS becoming TeDiouS? NSDL India gives you the procedure to cope with it

The obligations imposed on employers and other deductors by the Department of Income Tax for Tax Deduction at Source (TDS) are proving to be cumbersome day by day. The most basic problem faced by deductors is that of obtaining PAN in case on non salary deductors. However, NSDL has notified the procedure to cope up with this situation which says that file your eTDS return by the due date with the number of available PAN and then afterwards try to obtain the rest of PANs and file a correction return. (detailed instructions can be downloaded from http://tin-nsdl.com/)
The TDS exemption limits are not very high and as such even a non income tax assessee sometimes comes in its purview as deductee. TDS deductors now can only submit TDS return if they provide PAN for atleast 85% of entries in the case of non salary deductee payments and 95% for salary deductees. Non income tax assessees sometimes do not have a PAN (as they are not required to file a return) which poses problems for the dedcutors.
The deductors are left with no other option as a non deduction of TDS would result in penalties and even disallowance of the total expenditure.

Articled Assistants get relief from ICAI

Finally, here's some good news coming from ICAI for the students undergoing articleship. In one of its recent announcements, ICAI has clarified that form 112 has to be submitted only by those articled assistants who had registered after March 31,2008. 

Previously, many students who were undergoing a graduation course along with articleship had to make a choice between the two because of the articleship timing restrictions imposed by ICAI in one of its previous announcements. 

The announcement can be viewed through the following link- 

http://www.icai.org/post.html?post_id=3121&c_id=219