The Income Tax Department launched the new completely revamped Income Tax Website 2.0. Now, there is a lot of discussion on the social media whether this update was really required or not or regarding the multiple issues which everyone is facing. The old website was project was proposed in 2006 and launched sometime in 2007. So this is almost after a good long 14 years the income tax portal is getting a facelift.
I have tried to summarize the key changes and the new additions to the income tax website. I have purposely left assessment portion as that portion of website is not yet up and running as on the date of this article.
1. Generating Form 15CA / CB
The Income Tax Department has completely revamped the process of obtaining the Form 15CA – Part A & C. Earlier the Assessee’s were required to send all the documents to Chartered Accountant who would generate the Form 15CB and the Assessee was required to enter the acknowledgement number and generate the Form 15CA.
Now, in the new website the Assessee would be required to give four set of details instead of the detailed form.
a. Recipient Details – The Company is required to give the business details of the recipient of the transaction stating the Name of the remitter, PAN Details, Address of the recipient.
b. Remittance Details – The Company is required to select the Country to which the remittance is being made. The system automatically selects the currency. This can be an issue when amount which is being transferred to a country other than its national currency. This can be a real challenge in cases amounts are being transferred to countries where its national currency is very volatile say countries like Venezuela or certain African countries where majority of the vendors require amounts in US Dollar or the Euro. It seems that once the website settles with the technical errors this might be rectified to allow users to choose the currency they want to make remittance.
The Assessee is required to state the amounts to be transferred both in local currency and foreign currency. It is important to note that there is no location to where the Assessee is required to enter the details of the amount of withholding taxes or whether the Assessee would be withholding the taxes as the income tax law or the DTAA agreements. This field would be required to be filled in by the Chartered Accountant through their authorized representative login. This is actually a positive change for the CA’s as instead of Chartered Accountant filling the business transaction details like country of remittance, would only require feed the details regarding the taxation portion.
c. Chartered Accountant Details – The Company is required to enter the details of the CA who is signing the form. The Assessee is required to enter the membership number; the other details are automatically fetched by the system. It is important to note that the CA should be added in the list of “My Chartered Accountant” under Authorized Partner details.
d. Attachments – The Company can attach all the documents relating to the transaction like Form 10F, No PE Certificate, Tax Residency Certificate (TRC) and the invoice. These documents can be viewed by the Chartered Accountant to determine the rate of tax. Also the Income Tax Department would be able to access the documents to confirm whether the withholding tax has been deducted correctly or not.
It is very important that the correct documents are uploaded at all times. In case the Assessee submits incorrect documents or the tax rate is incorrectly determined by the CA it may potentially lead to assessment proceedings u/s. 201(1) / (1A) of the Act or in certain cases may also call for TDS survey u/s. 133A of the Act.
Once all the details are filled in the Assessee would have to send the details to the CA, who would authorize the transaction and add the withholding tax details. Once the 15CB is authorized the Assessee can download the documents from worklist menu.
Further, the new portal allows the Assessee to download all the details for the 15CA in excel.
Further in case a recipient of the funds has furnished a certificate to the Company u/s. 197 / 195(2) / 195(3) and the certificate details would be imported while the filing of Form 15CA – Part B.
2. Details of Company Information.
As a new requirement the new Income Tax website as a part of KYC information requires the Companies to submit information regarding its Key Persons namely the Managing Director, CFO, Directors, Principal Officer and Managers. This data would also include the persons who have been authorized by the Company to sign documents for the purpose of Income Tax.
Additionally the Company is now also required to upload its Memorandum of Association (“MoA”) and Articles of Association (“AoA”). Now as the Company is providing the MOA and AOA it becomes very important that the income stated under Business Income should be from the business which is stated in the MoA/ AoA
Further the Company is also required to submit the details of its Shareholders stating the PAN and the percentage holding in the Company. Now the website only states that information regarding the shareholder to be given in case its holding is determinate. The website does not specify what is determinate, however the Assessee may keep a threshold say shareholders having more than 5% of the shares on the lines of the declaration in the annual report./ This might be a challenge specifically for public listed companies where the shares keep changing hands.
3. Bank Details
The Assessee’s are now as a part of KYC information required to also give details of the Bank Accounts which are held in their name. Once the Assessee updates the bank details, the income tax department validates the information with the bank to confirm whether the bank accounts actually pertains to the Assessee or not. This data would most likely come prefilled in the income tax utility and those banks which are not validated the Assessee would not be able to obtain the refunds in those accounts. This is a positive step as this would reduce refund failures due to incorrect bank details in the ITR Form.
There are many more changes which have been incorporated in the new website like the Annual Information Statement, E-proceedings, Refund reissue validation, compliance and reporting portals.
There is a lot of discussion on the social media that the website change was unnecessary and it is only creating new issues as all the major functions are not working. In my personal opinion the old website was getting dated also it is important to consider that it was created in an era of personal hearings and where the tax audit reports and other forms were manually signed. Though the department was updating the website now and again it was more like a patch work which would ultimately require bringing a complete overhaul. With the new era of online filing of all documents, faceless assessments, appeals and online grievances, I would say this website is a much needed upgrade to the existing system. Though it has certain technical glitches as of now but I am sure they would be fixed and the new Income Tax Portal 2.0 would be possibly would be a much user friendly website. Overall I consider that the website is a positive step towards making the income tax portal more user friendly and updated with the tech age.