Jan 31, 2012

CBDT has extended last date of submission of ITR V to 31 March 2012

5:01 PM
CBDT has extended last date of submission of ITR V to 31 March 2012
CBDT( Central board of direct taxes) has extended the last date of submission ITR-V for A.Y 2011-12 up to 31-03-2012 or 120 days from the date of upload whichever is later. CBDT has informed this extension in it's website.

Jan 26, 2012

Section 80IC of income tax act about deduction on undertaking

12:22 PM
Section 80IC of income tax act about deduction on undertaking
Deduction in respect of certain undertakings or enterprises in certain special category states under section 80 IC of income tax act.

Assessee eligible for deduction: - every assessee is eligible for this deduction irrespective of its residential status or corporate status. Deduction is operative from the assessment year 2004-05 and onwards.
Conditions to be satisfied: - the following conditions to be satisfied for the deductions under section 80 IC of income tax act.

Return of income to be furnished: - under section 80 AC of income tax act, the assessee should furnish return of income within the time limit specified under section 139(1) of income tax act.

Accounts of the enterprises or undertaking to be audited: - under section 80IA (7) of income tax act, the accounts of the assessee should be audited by a chartered accountant from the relevant year for which deduction is claimed. The report of such report should be furnished along with the return of income in the prescribed form duly signed and verified by chartered accountant.

Undertaking should be new and not formed by splitting up or reconstruction of an existing business: - under section 80IC (4) of income tax act, the object of these incentives is to promote new investment and not just relocation of existing ones. Therefore, it has been provided that the eligible undertaking should be new and not formed by splitting up and reconstruction of an existing business.

Exception in case of re-establishment, reconstruction of revival of an undertaking: - however this condition does not apply where the undertaking is discontinued due to extensive damage or destruction of its building, machinery or plant and furniture or account of natural disasters, civil disturbance, accidental fire or explosion, enemy action etc. and such undertaking is re-established within 3 years from the end of such previous year.
New plant and machinery used by the undertaking: - under section 80 IC (4) of income tax act, use of old plant and machinery is prohibited except under the following cases.

-          For import and use of second hand plant or machinery in India is deemed to be a new plant and machinery. Second hand plant or machinery imported and put to use for the first time in India is not to be regarded as machinery or plant previously used provided the following conditions are satisfied.

Jan 24, 2012

Section 44AB of income tax act case and penalty provision

7:00 PM
Section 44AB of income tax act case and penalty provision
Whether for the purpose of attracting section 44AB, receipt of an assessee by way of sale or trading business and receipt for doing job work can be clubbed for the purpose of finding out whether limit of 40 lakh prescribed for attracting provisions of section 44AB is made out and whether the penalty under section 271B could be imposed on the assessee for holding a bona fide belief that receipt from job work is not to be aggregated in computing the limit of Rs. 40 lakh?

Facts of the case: - the assessee was under a bona fide belief that three expressions are related to three types of business activities which are as under.
-          Total sales
-          Turnover
-          Gross receipts

He was in belief that these are to be considered as independent criteria and does not overlap the other. Accordingly, he was not liable statutorily to have his accounts audited under section 44AB, unless the total sales or turnover or gross receipts other than the sale or turnover independently has exceeds Rs. 40 lakh.
As his total receipts from business and job work did not exceed Rs. 40 lakh during the year, he believed that he was not liable for statutory audit under section 44AB.

The assessing officer rejected the connection of the assessee and purpose to impose penalty under section 271B for failure to get his accounts audited under section 44AB of income tax act.
Held: - the expression total qualifies all three expressions which are sales, turnover and gross receipts. Where the assessee is engaged in the business to undertake job work, the raw material being provided by the manufacturer, the assessee has to relate his receipt to labour charges.

The limit of Rs. 40 lakh for audit applies to the aggregate of total of all three aspects. Accordingly the assessee is liable to audit under section 44AB of income tax act.
However the assessing officer cannot impose penalty under section 271B for the reasons given as under.
-          If it appears to the assessing officer that return is not accompanied by auditor’s report under section 44AB, he is required to serve a notice to the assessee under section 139(9) before rejecting the return. The assessee may get his accounts audited, submit the report under section 139(9) (bb) and (d). The return becomes valid and no penalty can be imposed.

-          Where assessee objection as to his liability to get his accounts audited under section 44AB is over ruled, his reason for non-compliance cannot be considered to be not bona fide. The fact that ultimately, on the analysis of the provision, the successive authorities or the count may come to the conclusion that the objection raised by the assessee about the requirement to the company with the provision of the act are not sustainable, does not make the objection raised by the assessee to be not bona fide or groundless. Hence, no penalty can be imposed [Bajrang oil mills vs. ITO (2007) 163 Taxman 154(Raj.)

Jan 23, 2012

Indian custom rules 2012

9:43 PM
Indian custom rules 2012
Many of us don't know the custom rules and regulation which result to never think about the business of import and export. The overseas market may be very good for the product which is currently sold in the domestic market. But not taking risk and less knowledge of import, export and custom stops the common man to go in this business. So these are the some rules of custom in India which will benefit everyone which are as follows.

Jan 22, 2012

Capital gain on lease and sub-lease

1:10 PM
Capital gain on lease and sub-lease
Whether transfer of lease hold right in a property by an assessee by way of a sub-lease to another person would amount to transfer, attracting capital gain?

Jan 20, 2012

Selling own land after plotting is business income or capital gain

6:05 PM
Selling own land after plotting is business income or capital gain
Whether selling of own land after plotting it out in order to secure better prices, in an advantage of trade or business?

Facts of the case: - the assessee received certain agricultural land by way of gift-deed. Therefore, the assessee got the said land diverted for non-agricultural purposes.

The land was converted into plots. The assessee tool development work of the colony such as leveling of the land, construction of the roads and drainage system etc. and thereafter sold the plots. The assessing officer proposes to assess the income from sale of plots as business income, being adventure in the nature of trade.
Held: - the earning from the sale of land is from capital gain and not from business. The selling of own land after plotting it out in order to secure better prices is not an adventure in the nature of trade. An isolated transaction or activity cannot be a part of the business.

To consider the question of business, there must be regular activities of purchase and sale. In this case, there was nothing on record to show that the land was purchased for the purpose of selling into plots. Basically, it was gifted land which was developed into plots to secure better prices. The isolated activities could not come within the preview of adventure in the nature of trade or usiness.

Jan 19, 2012

Prosecution can be ordered in the case of late payment of TDS

3:29 PM
Prosecution can be ordered in the case of late payment of TDS
Whether on company’s default to deposit TDS within the prescribed time, prosecution can be ordered against such company even though a company is not a natural person?

Jan 18, 2012

QUOTE PAN IN TDS TRANSACTIONS OR PAY HIGHER TAX

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QUOTE PAN IN TDS TRANSACTIONS OR PAY HIGHER TAX
Get ready to cough up higher tax upfront from the next fiscal in case you do not quote the Permanent Account Number (PAN) in transactions subject to tax deduction at source. 

“Tax at the higher prescribed rate or 20% will be deducted on all transactions liable to TDS where the PAN of the deductee is not available,” the finance ministry said in a statement on Wednesday.

Jan 17, 2012

Recovery of less TDS deducted Rule

5:40 PM
Recovery of less TDS deducted Rule
Whether the department could again recover tax from the deductor of tax at source on income which has been fully assessed in the hands of the deductee recipient?

The assessee company hired warehouse for the sale of the soft drink and deducted TDS on warehouse charges. The TDS deducted at 2% under section 194C. The assessing officer held that warehouse charges were in the nature of rent and tax ought to have been deducted at 20% under section 194I. Meanwhile, the lesser has been fully assessed on its income and claimed the refund of the tax. The assessing officer having held the assessing company in default for the shortfall in the amount of TDS wants to recover the shortfall and interest thereon from the deductor company. So he rejects the claim of refund and ordered fresh claim of the tax.

Under circular number 275/201/95/IT(B) dated 29-1-1997, it declares that no demand visualized under section 201(1) should be enforced after the deductor has satisfied the officer in charge of TDS that tax due have been paid by the deductee-assessee. However, this will not alter the liability to charge interest under section 201(1A) till the date of payment of taxes by the deductee-assessee. [Hindustan Coca cola beverage (P) ltd. Vs. CIT (2007) 163 TAXMAN 355 (SC).]

Jan 16, 2012

Foreign investors can directly invest in Indian share market

9:47 PM
Foreign investors can directly invest in Indian share market
 SEBI has allowed qualified foreign investor to invest directly in Indian share market. SEBI has issued a circular no. 3/2012 dated 13-01-2012 about this issue. SEBI has given complete information regarding investment in share market directly by QFI in share market. Full circular is as under.

Jan 11, 2012

INCOME TAX RULE ABOUT RENT FREE ACCOMMODATION

10:08 PM 0
INCOME TAX RULE ABOUT RENT FREE ACCOMMODATION
Rent free accommodation is taxable under section 17 (2) (1) of income tax under perquisite. The value of rent free accommodation provided to the assesse by the employer is a perquisite.

Jan 10, 2012

Last date of submission half yearly return of service tax is extended

9:52 PM
Last date of submission half yearly return of service tax is extended
Last date of submitting half yearly return of April to September is extended from 6 January 2012 to 20 January 2012. Now the assessee can file there service tax return up to 20 January 2012. This relief is given to the assessee of service tax in view that assessee are facing problems in filing service tax return electronically.

Special provision of income tax act apply to centralised processing of returns

1:16 PM
Special provision of income tax act apply to centralised processing of returns
CBDT has issued earlier the complete procedure of centralised processing of income tax return. Now with the notification no. 3/2012 dated 04-01-2012, CBDT has issued some general specified provision of the income tax act 1961 which should apply to centralised processing of income tax return. The full notification and specified provisions of income tax act are as under.

Jan 9, 2012

Banks need to pay interest on delay of NEFT transactions and refund

4:20 PM
Banks need to pay interest on delay of NEFT transactions and refund
Banks will need to pay penal interest for the delay of transactions as well as on delay on refund on the transactions of NEFT(National Electronic Fund Transfer) and RTGS(Remit through gross settlement). Reserve bank of India has taken this step as many complaint are of non-credited the NEFT and RTGS amount on time and refunds are also late. RBI has issued a notification number 342 dated 05-01-2012 about this issue. Banks need to pay penal interest of LAF repo rate plus 2% interest to the customers of the late credited days. Full notification is as under.

Jan 8, 2012

Centralised Processing Scheme 2011 of income tax act

4:03 PM
Centralised Processing Scheme 2011 of income tax act
Central board of direct taxes (CBDT) has issued a notification about centralized processing of income tax return scheme 2011. In this notification CBDT has cleared all the procedure of electronically filing or manual filing of income tax return. In this notification number 2/2012 dated 04-01-2012 CBDT has given step to step information of centralized filing of income tax return scheme 2011. Full notification is as under.

Jan 7, 2012

Refund of 4% duty on custom

10:12 PM
Refund of 4% duty on custom
Custom department has issued a circular about 4% refund of custom duty CVD in the case of AVD importers. In this regard custom department has issued custom notification number 1/2012 dated 5 January 2012 which is as follows.

Jan 5, 2012

New return preparation utility rpu 2.7 for e-tds/tcs

10:38 PM
New return preparation utility rpu 2.7 for e-tds/tcs
  Income tax department has launched new RPU version 2.7 for preparing e-tds/tcs statements. This utility is very useful for preparing corrective as well as regular tds return. The key features of new RPU 2.7 are as follows.

Jan 4, 2012

NO NEED TO FILE INCOME TAX RETURN TO SALARIED PERSON BELOW 5 LAKH

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NO NEED TO FILE INCOME TAX RETURN TO SALARIED PERSON BELOW 5 LAKH
Finance Minister Mr. Pranab Mukarjee said that there will be no need to file income tax return to the salaried person whose income is below 5 lakh. The income should be only from salary and salry components and not income from other sources. Finance Minister said that the circular for not filing income tax return to be published very soon. This rule for not filing income tax return to the salary holder will be applicable from the assessment year 2011-12 and the financial year 2010-11.

Jan 3, 2012

New FVU version 3.3 for TDS/TCS statement

3:10 PM
New FVU version 3.3 for TDS/TCS statement
 Tin.nsdl has launched new File Validation utility 3.3 for TDS/TCS quarterly statements in relation to financial year 2011-12 and onwards. This new FVU has many key features which are required for validation of TDS/TCS statements. The main key features of FVU 3.3 are as follows.