Saving bank interest in Income tax Act 1961

 Interest on savings bank account earned upto ₹10,000 per year is allowed as deduction under Section 80TTA of the Income Tax Act. This limit of ₹10,000 includes interest from all savings accounts with banks, co-operative banks, and post offices. If the interest earned from these sources exceeds ₹10,000, the additional amount will be taxable under the head 'Income from other source.'

An important point to note here is that the deduction under Section 80TTA is available is not per bank account but on the total interest earned on all your bank accounts.

Deduction under Section 80TTA is not allowed on interest earned on time deposits such as fixed deposits, recurring deposits or any other time deposits. Also no tax is deducted at source on interest income on bank savings accounts.

Section 80TTA is not applicable to senior citizens. They enjoy a higher tax benefit under a different section. Interest earned on saving deposits and fixed deposit with banks or post office or co-operative banks for an amount up to ₹50,000 earned by the senior citizen is eligible for deduction under Section 80TTB.

Also, there will be no deduction of tax at source up to ₹50,000. This limit of ₹50,000 has to be computed for every bank individually.

Gist of Latest Gst notifications

1. Notification no 74,75,76 

Due dates of filing of GSTR-1 and GSTR-3B for the period October, 2020 to March,2021 have been notified vide Notification No. 74/2020 – Central Tax , Notification No. 75/2020 – Central Tax and Notification No. 76/2020 – Central Tax, all dated 15-10-2020.

GSTR 1 

For quarterly tax payers 

From Oct 20 to Dec 20- 13th Jan 2021

From Jan 21 to Mar 21- 13th April 2021

For monthly dealers - 11th of next month

For Gstr 3B

For turnover above 5 crores- 20th of next month 

For turnover upto 5 crores - 22nd and 24th of next month as per the States /UT categories 

2. Notification no 77 

The Central Government vide Notification No. 77/2020 – Central Tax dated 15-10-2020 has amended Notification No. 47/2019 – Central Tax, dated 09-10-2019 whereby the benefit of optional filing of annual return for registered persons whose aggregate turnover in a financial year does not exceed Rs 2 crore, has been extended for FY 2019-20 as well.

This means that such taxpayers are not required to furnish annual return for 2019-20 and they can choose to not to file such return. However, if they want they can definitely file the same.

3. Notification no 78

Notification No. 78/2020- Central Tax dated 15-10-2020 has been issued by the Central Government wherein changes have been made in the Notification No 12/2017- Central tax dated 28-6-2017 with effect from 1st April, 2021.

Turnover upto 5 crores - 4 digits

Turnover above 5 crores - 6 digits 

The Govt has reserved the power to notify upto 8 digits. 

HSN codes of 8 digits are mandatory only in case of export and imports of goods.

A registered person having aggregate turnover up to Rs 5 Cr in the previous FY may not mention the number of digits of HSN Code in a tax invoice issued by him under the said rules in respect of supplies made to unregistered persons. i.e. B2C supplies. Currently no distinction between B2B and B2C supplies exists for purpose of disclosure of HSN/ SAC Codes.

4. Notification no 79

The Central Government vide Notification No. 79/2020–Central Tax dated 15-10-2020 has made some amendments to CGST Rules, 2017 out of which one of the amendment is in proviso to Rules 80(3) of the CGST Rules,2017.

Thus from above substitution of proviso to Rule 80(3), the tax payers with turnover upto Rs 5 crore will continue to be exempt from requirement of GST Audit under Section 35(5) of the CGST Act,2017 for turnover upto 5 crores for the financial year 2019-20 also apart from 2018-19.

GST Updates

The Summary of 42nd GST Council Meeting 📣📣

🔹 Effective 1st January 2021, *small taxpayers* with turnover less than Rs 5 crore, can file quarterly GSTR-3B and GSTR-1.

🔹 The due date of furnishing quarterly GSTR-1 will be the *13th of the month* succeeding the quarter; this is effective from 01.1.2021. However, taxpayers can upload invoices every month.

🔹 Starting from 1st January 2021, the number of returns have been reduced to *8 from 24* for taxpayers with less than Rs 5 crore turnover.

🔹 Such quarterly taxpayers would, for the first two months of the quarter, have an option to pay *35% of the net cash tax liability* of the previous quarter, using an auto-generated challan.

🔹 A roadmap has been prepared for the *auto-generation of GSTR-3B*, where the ITC will be auto-populated from the supplier’s GSTR-1, and the tax liability will be auto-populated from the business’ GSTR-1. To achieve this, the GSTR-1 should be filed mandatorily before filing GSTR-3B w.e.f.01.04.2021.

🔹 All taxpayers will continue to pay GST dues monthly through a simple challan. A nil CMP-08 will be allowed to be filed through an SMS.

🔹 Effective 1st April 2021 - Taxpayers with turnover exceeding Rs 5 crore, HSN code up to 6 digits must be mentioned. For turnover less than Rs 5 crore, HSN code up to 4 digits need to be mentioned for B2B supplies for both goods and services. For notified classes of goods, 8 digits will need to be mentioned.

🔹 Refunds to be given into bank accounts where *PAN and Aadhaar linking* is done. Aadhaar authentication facility (with OTP) is now allowed for refund applications. This discourages taxpayers from misusing the system.

🔹 GST exemption provided to *satellite launch services* by ISRO and Antrix Corporation, to encourage the space launching services in India.

🔹 *Non-alcohol based sanitisers* will continue to be taxed at an 18% GST rate.

🔹 The *compensation cess collected till now* accounts to Rs.20,000 crore, and the same will be disbursed to the states by tonight.

🔹 The amount of Rs.25,000 crore towards IGST of 2017-18 will also be disbursed to specific states by next week.

🔹 The next Council meeting will be held on *12th October 2020* to resolve compensation issues for states.