No TDS on accidental claim as it is not an income

No TDS on accidental claim as it is not an income

No TDS will be deducted on the award of accidental claim as it is not an income and tax deduction at source will only be deducted if the income is generated by any source like salary, interest, rent, horse race, lottery etc. 


In this case, the National Consumer Disputes Redressal Commission ("Commission") considered the issue whether tax is deductible on the compensation paid to the parents, whose child dies in an escalator mishap maintained by Airport Authority of India ("AAI")?

The Commission relied on the judgment of Delhi Development Authority vs. ITO [1995] 53 ITD 19 (Delhi) wherein it was held that the compensation paid to the customer, for deficiency in service was not an interest, rather it was a damage, which didn't warrant deduction of tax at source under section 194A. Therefore, it was held that the compensation awarded in such cases cannot be equated with income and, thus, it is not liable for deduction of tax at source. Accordingly, the AAI directed to refund the tax it has deducted while paying the compensation - GEETA JETHANI V. AIRPORT AUTHORITY OF INDIA [2012] 25 taxmann.com 23 (NCDRC - New Delhi)
Tags-tds on accidental claim,tds on claim,tds claim
Key points of Rajiv Gandhi equity saving scheme 2012

Key points of Rajiv Gandhi equity saving scheme 2012


Government announced Rajiv Gandhi equity saving scheme 2012 recently in budget. Income tax department issued a notification no. 51 dated 23 November 2012 about the new rajiv Gandhi equity saving scheme 2012. This equity saving scheme allows assessee to invest in share market in equities upto Rs. 50000 and avail tax benefit on 50% on investment made in retail share market by the assessee. There are some key points of Rajiv Gandhi equity saving scheme 2012 which are as follows.

- The investor should have income of less than Rs. 10 lakhs in a year,
- The benefit under the scheme will be given to the first time investors into equity market only.
- investments will be subject to lock-in period of three years
- If the assessee has claimed and has been allowed a deduction under this section for any assessment year in respect of any amount, he shall not be allowed any deduction under this section for any subsequent assessment year. This is as per Section 80CCG

Criticism
Experts and analytics have criticize this scheme because investing directly in the share market by retail investor is always a risky business. Share market is always risky as the markets can go up or down anytime. Some experts said that the money of the assessee should be rout from the mutual fund option. Investing directly in the share market needs knowledge of share market up and down. Without knowledge its very hard to make profit in the share market. One should also know about company portfolio, earning per share, background, sector and financially position to select the stock for investing.

Mutual fund option
Government scheme of Equity linked saving scheme(ELSS) has not performed well in recent years. So government allows the taxpayers to invest directly in the share market for avail the exemption under Rajiv Gandhi equity saving scheme 2012.

Government wants more and more people to enter share market. This is the example of government wanting. This is not only a tax saving scheme but also an opportunity to enter the share market as experience in share market is the most important factor for business as it tells what is up and down.
Tags-rajiv gandhi equity saving scheme,new equity saving scheme,tax exemption for investing in share market,rajiv gandhi equity saving scheme 2012

Government is planning to raise 2% rate in service tax and excise duty

Government is planning to raise 2% rate in service tax and excise duty


Government is planning to increase the rate of service tax and excise duty by 2 percent to 14%. Currently the rate of service tax and excise duty is 12%. Finance ministry is planning to increase the rate in the forthcoming budget 2013. Finance ministry is also planning to roll back some exemptions from excise duty and service tax. The increase will help the finance ministry about 30000 crore more.

Finance ministry is seriously debating now days about increasing the rate of excise and service tax. Some exemptions may be removed like custom duty on crude may be back. Final decision on increasing the rate and stop the exemption will only be taken near to budget.

Government is planning to increase the gross domestic product (GDP) and the harsh decision will be taken in the coming budget. However peak custom duty to be remain as it as at 10%.

The chance in service tax and excise duty comes in effect immediately after the announcement in the parliament in budget speech. Like if the budget is presented on 29 February and the rate of service tax or excise increases, the rate will be in effect from March itself.

Government is also planning to implement GST (goods and service tax) in which the rate of service tax and central excise may be 16%. Service tax will be equally divided to center and the state while excise duty belongs to center only.

So the inflation is tend to rise in the coming months as government is likely to stop exempting crude oil from custom duty as well as increases the rate of service tax and excise duty. This will definitely affect the growth rate which is very down 5.5%.
Tags-service tax rate,excise duty rate,service tax rate list,excise duty rate list

New Rajiv Gandhi Equity Saving Scheme 2012 of Income Tax

New Rajiv Gandhi Equity Saving Scheme 2012 of Income Tax


Income tax department has published a notification no. 51 dated 23 November 2012 about Rajiv Gandhi Equity Saving Scheme 2012. This scheme shall apply for claiming deduction in the computation of total income of the assessment year relevant to a previous year on account of investment in eligible securities under sub-section (1) of section 80CCG of the Income-tax Act, 1961. This scheme will be in force with the date of publication in official gazette. Full notification and the Rajiv gandhi equity saving scheme is as under.

[TO BE PUBLISHED IN PART II, SECTION 3, SUB-SECTION (ii) OF THE GAZETTE OF INDIA, EXTRAORDINARY, DATED THE 23rdNovember, 2012]
Government of India 
Ministry of Finance 
Department of Revenue 
Notification 
New Delhi, the 23rdNovember , 2012. 
(Income-tax) 
S.O. 2777(E).— In exercise of the powers conferred by sub-section (1) of section 80CCG of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby makes the following Scheme, namely:-
1. Short title, commencement and application. - (1) This Scheme may be called the Rajiv Gandhi Equity Savings Scheme, 2012. 

(2) It shall come into force on the date of its publication in the Official Gazette. 

(3) This Scheme shall apply for claiming deduction in the computation of total income of the assessment year relevant to a previous year on account of investment in eligible securities under sub-section (1) of section 80CCG of the Income-tax Act, 1961. 

2. Objective of Scheme.-The objective of the Scheme is to encourage the savings of the small investors in domestic capital market. 
3. Definitions.- In this Scheme, unless the context otherwise requires,- 

(i) “Act” means the Income-tax Act, 1961 (43 of 1961); 

(ii) “demat account” means an account opened with the depository participant in accordance with the guidelines laid down by the Securities and Exchange Board of India established under section 3 of the Securities and Exchange Board of India Act, 1992 (15 of 1992); 

(iii) “depository” means a company as defined in clause (e) of sub-section (1) of section 2 of the Depositories Act, 1996 (22 of 1996); 

(iv) “depository participant” means a participant as defined in clause (g) of sub-section (1) of section 2 of the Depositories Act, 1996 (22 of 1996); 

(v) “eligible securities” means any of the following :- 

(a) equity shares, on the day of purchase, falling in the list of equity declared as “BSE-100” or “ CNX-100” by the Bombay Stock Exchange and the National Stock Exchange, as the case may be; 

(b) equity shares of public sector enterprises which are categorised as Maharatna, Navratna or Miniratna by the Central Government; 

(c) Units of Exchange Traded Funds (ETFs) or Mutual Fund (MF) schemes with Rajiv Gandhi Equity Savings Scheme (RGESS) eligible securities as underlying, as mentioned in sub-clause (i) or sub-clause (ii) above, provided they are listed and traded on a stock exchange and settled through a depository mechanism;

(d) Follow on Public Offer of sub-clauses (i) and (ii) above; 

(e) New Fund Offers (NFOs) of sub-clause (iii) above; 

(f) Initial Public Offer of a public sector undertaking wherein the government shareholding is at least fifty-one per cent. which is scheduled for getting listed in the relevant previous year and whose annual turnover is not less than four thousand crore rupees during each of the preceding three years; (vi) “ financial year” means a year commencing on the 1st day of April and ending on the 31stday of March; 

(vii) “Form” means the Form appended to the Scheme; 

(viii) “investment” means investment by an assessee in any of the eligible securities in accordance with the Scheme; 

(ix) “new retail investor” means the following resident individuals:- 

(a) any individual who has not opened a demat account and has not made any transactions in the derivative segment as on the date of notification of the Scheme; 

(b) any individual who has opened a demat account before the notification of the Scheme but has not made any transactions in the equity segment or the derivative segment till the date of notification of the Scheme, 
and any individual who is not the first account holder of an existing joint demat account shall be deemed to have not opened a demat account for the purposes of this Scheme 

(x) “Scheme” means the Rajiv Gandhi Equity Savings Scheme; 

(xi) words and expressions used and not defined in this Scheme, but defined in the Act, shall have the meanings respectively assigned to them in the Act. 

4. Eligibility .- The deduction under the Scheme shall be available to a new retail investor who complies with the conditions of the Scheme and whose gross total income for the financial year in which the investment is made under the Scheme is less than or equal to ten lakh rupees. 

5. Procedure at time of opening demat account.-The new retail investor shall follow the following procedure at the time of opening or designating a demat account :- 

(a) the new retail investor shall open a new demat account or designate his existing demat account for the purpose of availing the benefit under the Scheme; 

(b) the new retail investor shall submit a declaration in Form A to the depository participant who will forward the same to the depository for verifying the status of the new retail investor; 

(c) the new retail investor shall furnish his Permanent Account Number (PAN) while opening the demat account or designating the existing account as a Rajiv Gandhi Equity Savings Scheme eligible account, as the case may be. 

6. Procedure for investment under Scheme.- A new retail investor shall make investments under the Scheme in the following manner :- 
(a) the new retail investor may make investment in eligible securities in one or more than one transactions during the year in which the deduction has to be claimed; 

(b) the new retail investor may make any amount of investment in the demat account but the amount eligible for deduction, under the Scheme shall not exceed fifty thousand rupees; 

(c) the eligible securities brought into the demat account, as declared or designated by the new retail investor, will automatically be subject to lock-in during its first year, as per the provisions of paragraph 7, unless the new retail investor specifies otherwise and for such specification, the new retail investor shall submit a declaration in Form B indicating that such securities are not to be included within the above limit of investment; 

(d) the new retail investor shall be eligible for a deduction under sub-section (1) of section 80CCG of the Act in respect of the actual amount invested in eligible securities , in the first financial year in respect of which a declaration in Form B has not been made, subject to the maximum investment limit of fifty thousand rupees; 

(e)the new retail investor who has claimed a deduction under sub- section (1) of section 80CCG of the Act, in any assessment year, shall not be allowed any deduction under the Scheme for any subsequent assessment year; 

(f) the new retail investor shall be permitted a grace period of three trading days from the end of the financial year so that the eligible securities purchased on the last trading day of the financial year also get credited in the demat account and such securities shall be deemed to have been purchased in the financial year itself; 

(g) the new retail investor may also keep securities other than the eligible securities covered under the Scheme in the demat account through which benefits under the Scheme are availed; 

(h) the new retail investor can make investments in securities other than the eligible securities covered under the Scheme and such investments shall not be subject to the conditions of the Scheme nor shall they be counted for availing the benefit under the Scheme; 

(i) the investment under the Scheme shall consist of all eligible securities covered under the Scheme that are initially bought by the investor under the Scheme or that are bought subsequently by the investor as per the provisions of the Scheme; 

(j) the deduction claimed shall be withdrawn if the lock-in period requirements of the investment are not complied with or any other condition of the Scheme is violated. 

7. Period of holding requirements. - (1) The period of holding of eligible securities shall be three years to be counted in the manner detailed hereunder. 

(2) All eligible securities are required to be held for a period called the fixed lock-in period which shall commence from the date of purchase of such securities in the relevant financial year and end one year from the date of purchase of the last set of eligible securities (in the same financial year) on which deduction is claimed under the Scheme. 

(3) The new retail investor shall not be permitted to sell, pledge or hypothecate any eligible security during the fixed lock-in period. 

(4) The period of two years beginning immediately after the end of the fixed lock-in period shall be called the flexible lock-in period. 

(5) The new retail investor shall be permitted to trade the eligible securities after the completion of the fixed lock-in period subject to the following conditions:- 

(a) the new retail investor shall ensure that the demat account under the Scheme is compliant for a cumulative period of a minimum of two hundred and seventy days during each of the two years of the flexible lock-in period as laid down hereunder:- 

(A) the demat account shall be considered compliant for the number of days where value of the investment portfolio of eligible securities , within the flexible lock-in period, is equal to or higher than the amount claimed as investment for the purposes of deduction under section 80CCG of the Act; 

(B) in case the value of investment portfolio in the demat account falls due to fall in the market rate of eligible securities in the flexible lock-in period, then notwithstanding sub clause(A), - 

(i) the demat account shall be considered compliant from the first day of the flexible lock-in period to the day any such eligible securities are sold during this period; 

(ii) where the assessee sells the eligible securities mentioned in sub-clause (B) from his demat account, he shall have to purchase eligible securities and the said demat account shall be compliant from the day on which the value of the investment portfolio in the account becomes - 

(I) at least equivalent to the investment claimed as eligible for deduction under section 80CCG of the Act or; 
(II) the value of the investment portfolio under the Scheme before such sale, 
whichever is less. 

(6) The new retail investor’s demat account created under the Scheme shall, on the expiry of the period of holding of the investment, be converted automatically into an ordinary demat account. 

(7) For the purpose of valuation of investment during the flexible lock-in period, the closing price as on the previous day of the date of trading, shall be considered. 

(8) While making the initial investments upto fifty thousand rupees, the total cost of acquisition of eligible securities shall not include brokerage charges, Securities Transaction Tax, stamp duty, service tax and all taxes, which are appearing in the contract note. 

(9) Where the investment of the new retail investor undergoes a change as a result of involuntary corporate actions like demerger of companies, amalgamation, etc. resulting in debit or credit of securities covered under the Scheme, the deduction claimed by such investor shall not be affected. 

(10) In case of voluntary corporate actions like buy-back, etc. resulting only in debit of securities, where new retail investor has the option to exercise his choice, the same shall be considered as a sale transaction for the purpose of the Scheme. 

(11) The Securities and Exchange Board of India established under section 3 of the Securities and Exchange Board of India Act, 1992 (15 of 1992) shall notify the corporate actions, referred to in sub-paragraph (9), allowed under the Scheme in this regard. 

8. If the new retail investor fails to fulfil any of the provisions of the Scheme, the deduction originally allowed to him under sub-section (1) of section 80CCG of the Act for any previous year, shall be deemed to be the income of the assessee of such previous year and shall be liable to tax for the assessment year relevant to such previous year. 

9. (1) The depository shall certify the new retail investor status of the assessee at the time of designating his demat account as demat account for the purpose of the Scheme. 

(2) The depository participant shall furnish an annual statement of the eligible securities invested in or traded through the demat account to the demat account holder.
10. The depository shall provide a consolidated statement of details in the electronic format, as specified in Form C, on all the Rajiv Gandhi Equity Savings Scheme beneficiaries to the Director General of Income Tax (Systems) or any other person authorised by him, within a period of thirty days from the end of the relevant financial year.
11. For the purpose of paragraph 10, the Director General of Income Tax (Systems) shall determine the procedures, formats and standards for furnishing of the report in electronic format in Form C by the depositories.
12. Assessees shall be liable to submit the relevant records to the income-tax authorities for verification, as and when required.

[ Notification No. 51 /2012 F. No. 142/35/2012 –TPL)
(Raman Chopra)
Director (TPL-II)
 Form A
[See paragraph 5(b)]
Declaration to be submitted by the investors to the depository participants for availing the benefits under the Rajiv Gandhi Equity Savings Scheme.
Name of the Investor:
(first holder)
Address of the investor:
Permanent Account Number (PAN):
1. It is hereby certified that* ---

(a) I do not have a demat account and I have not traded in any derivatives.
(b) I have demat account no _________________ in ____________________ depository participant but I have not traded in any equity shares or derivatives in this account.
(c) I have a joint demat account no _________________ in ____________________ depository participant but I am not the first account holder.
2. I hereby declare that I have read and understood all the terms and conditions of the Rajiv Gandhi Equity Savings Scheme.
3. It is hereby verified that I am an eligible new retail investor for availing the benefits under the Rajiv Gandhi Equity Savings Scheme.
4. I undertake to abide by all the requirements and fulfill all obligations under the Scheme, and will comply with all the terms and conditions of the Scheme.
5. I understand that, in case I fail to comply with any condition specified in the Scheme, the benefits availed there under will be withdrawn and the tax shall be payable by me accordingly.

Signature of the Investor
Place:
Date:
* Tick which ever is appropriate.
Form B
[See paragraph 6(c) and (d)]
Declaration to be submitted by the new retail investor to the depository participant on purchase of eligible securities.
To
Depository participant
Address
It is hereby informed that I have demat account no _________________ in ____________________ depository participant and the following securities
(a)

(b)
(c)
(d)
(e) purchased in the aforesaid demat account on ______________are not to be included as investment for the purpose of the Rajiv Gandhi Equity Savings Scheme.

Signature
Name of the Investor:
(first holder)
Address of the investor:
Permanent Account Number (PAN):
 Form C
[See paragraphs 10 and 11]
Annual report to be submitted by the depository to the Income Tax Department in Electronic Format before 30th
April.
(For 80 CCG benefits of Financial Year 2012-13)

2012-13
Report to be furnished by 30th
April 2013

2013-14
Report to be furnished by 30thApril 2014
2014-15
Report to be furnished by 30thApril 2015
2015-16
Report to be furnished by 30th April 2016
Name
PAN
Demat A/c No.
Date of opening A/c
Date of investment for the Purpose of lock-in (date of making the last investment in RGESS# eligible scrip)
Amount  of Investment
Scrips locked in RGESS#
Whether A/c eligible under the RGESS# Scheme
Whether A/c compliant with RGESS# with respect to fixed lock-in*
Whether A/c compliant with RGESS# with respect to 270 days period*
Whether A/c compliant with RGESS# with respect to 270 days period*


**The Financial Year shall be enhanced by one Financial Year every year. March, 2013.
#RGESS means the Rajiv Gandhi Equity Savings Scheme
Tags-rajiv gandhi equity saving scheme,rajiv gandhi equity saving scheme 2012,what is rajiv gandhi equity saving scheme,section 80ccg,income tax section 80ccg,section 80ccg income tax,80ccg section,section 80ccg of income tax,section 80ccg of income tax act,80ccg exemption,exemption u/s 80ccg


Notified diseases for deduction under section 80DDB

Notified diseases for deduction under section 80DDB


Deduction in respect of medical treatment etc. under section 80DDB of income tax act. The conditions for this deduction are as follows.

- This deduction is allowed to an individual or HUF who is resident of India.

- If they have incurred during the previous year, or actually paid any amount for the medical treatment of such disease or ailment as may be prescribed in the rule made in this behalf by the board.

- The expenditure must be incurred for himself or a dependent, in case the assessee is an individual.

- The expenditure may be incurred for any member of HUF, in case the assessee is HUF.

- Dependent means
(a) In the case of an individual, the spouse, children, parents, brothers and sisters of the individual.
(b) In the case of a Hindu undivided family, any member of the Hindu undivided family.
(c) Dependent wholly or mainly on such individual or Hindu undivided family for his support for his support and maintenance.

Rate of deduction: - The assessee shall be allowed a deduction of
1- The amount actually incurred or a sum of Rs. 40000, whichever is less, in respect of the previous year in which such amount was actually paid.

2- Where the amount actually paid is in respect of the assessee or his dependent or any member of a Hindu undivided family of the assessee and who is a senior citizen, the deduction under this section shall be allowed Rs.60000. senior citizen means an individual resident in India who is of the age of sixty five years or more at any time during the relevant previous year.

3- The deduction under this section shall be reduced by the amount received, if any, under insurance from an insurer, or reimbursed by the employer, for the medical treatment of the person referred above.

4- No such deduction shall be allowed unless the assessee furnishes with the return of income, a certificate in such form as may be prescribed, from a neurologist, oncologist, a urologist, a hematologist, an immunologist or such other specialist, as may be prescribed, working in a Government hospital.

Notified diseases under section 80DDB are as under.
1- Neurological diseases
- Dementia
- Dystonia Musculorum Deformans
- Motor neutron disease
- Ataxia
- Chorea
- Hemiballismus
- Aphasia
- Parkinson’s Disease
2- Cancer
3- Full blown acquired immune deficiency syndrome(AIDS)
4- Chronic renal failure
5- Hemophilia
6- Thalssaemia 
Tags-section 80ddb,diseases covered under section 80ddb,section 80ddb income tax,section 80ddb of income tax act,income tax section 80ddb,80ddb income tax,section 80ddb deduction,deduction u/s 80ddb
Transactions where quoting PAN is necessary

Transactions where quoting PAN is necessary


These are some transactions for which quoting permanent account number (PAN) is necessary to do the transaction. We often do not know about which transaction can be done without PAN number. So these are some transactions in which quoting PAN number is necessary to do the transactions.

- Sale or purchase of any immovable property valued 5 Lakh rupees or more.

- Sale or purchase of any motor vehicle (other than two wheeler) which requires registration under motor vehicle act 1988.

- Fixed deposit more than 50000 rupees with a bank.

- Deposit exceeding Rs. 50000 in any bank or post office.

- Sale or purchase of shares, debentures exceeding Rs. 1 lakh.

- Opening a current or saving account in bank.

- Making an application for installation of a telephone connection including cellular connection.

- Payment of hotel/restaurants exceeding Rs. 25000 at a time.

- Payment in cash for a bank draft/banker cheque/pay order for a bank aggregating Rs. 50000 or more during one day.

- Cash payment in connection with travel to any foreign country of an amount exceeding Rs. 25000 or more at any one time.

- An application to the bank applying for debit or credit card.

- Payment of an amount of Rs. 50000 or more to a mutual fund for purchase of its unit.

- Payment of an amount of Rs. 50000 or more to a company for acquiring shared issued by it.

- Payment of an amount of Rs. 50000 or more to a company/institution for acquiring debentures or bonds issued by it.

- Payment of an amount of Rs. 50000 or more to the RBI for acquiring bonds issued by it.

- Payment of an amount of Rs. 50000 or more in a year as LIC premium to an insurer.

- Payment to a dealer of an amount of Rs. 5 lakh or more at any one time or against a bill for an amount of Rs. 5 lakh or more in the case for purchase of bullion or jewellery.

Persons exempt from quoting PAN while entering into above transactions.
- Person having agriculture income only. However, such a person is required to furnish a declaration in Form no. 61 in respect of such transaction.

- Non-resident persons.

- The Central/State Government.

- Any person who does not have PAN but makes payment in cash (otherwise than by crossed cheque or through a credit card for any of the above transactions. However, such a person is required to furnish a declaration in Form No. 60 in respect of such transaction.
Tags-pan,permanent account number,pan requirement transactions,transactions which require pan
RBI extends national electronic clearing service NECS in remaining branches

RBI extends national electronic clearing service NECS in remaining branches

Reserve bank of India has extended NECS(National electronic clearing service) and RECS(Regional electronic clearing service) in the remaining branches. NECS and RECS services are like the NEFT or RTGS but people hardly know the service of electronic clearing compare to RTGS and NEFT which are very popular now a days. RBI wants to make the electronic clearing popular with fund transfer services. RBI issued a note no. 825 dated 21 November 2012 about extension of electronic clearing in remaining branches  Full note is as under.


National / Regional Electronic Clearing Service (NECS / RECS) – Extension of service to remaining branches
NECS was launched by Reserve Bank of India in September 2008 to extend the facility of Electronic Clearing Service on pan-India basis. It was expected that banks will gradually bring all their CBS-enabled branches under NECS, thereby extending the benefits of ECS to all their customers. Subsequently, RECS was also launched in a few states to enable ECS payments /receipts across all the branches located in a state / group of states from a centralised location.

2. As you are aware, both NEFT and NECS are pan-India systems with centralised processing at Mumbai and rely on the CBS network of the banks for central processing of transactions on an STP-basis. However, it is observed that while the number of bank branches under NEFT is increasing significantly, the growth in the number of branches covered under NECS is far below the number of CBS-enabled branches. Given that the requirements for participating in both the systems are similar, there does not seem to be any valid reason for this difference in number of branches covered under NEFT and NECS.

3. The Reserve Bank of India has been pursuing with banks to ensure increased branch coverage under RECS and NECS. With a view to extend both NECS and RECS facility to the customers of all bank branches, the participating banks are once again advised to make efforts in bringing all their branches under NECS/RECS. The branches which are on CBS and already participating in NEFT should be taken up on priority basis. The banks may draw a time bound plan for the same under advice to us.

4. The banks may contact the National Clearing Cell, Nariman Point, Reserve Bank of India, Mumbai for guidance in the matter, if required.
Tags-national electronic clearing service,regional electronic clearing service,what is electronic clearing service,necs,recs,how to make necs,how to make recs,how to do electronic clearing
Now B2 saving account with zero minimum balance

Now B2 saving account with zero minimum balance

This is the world of digitization. Everybody wants to save his time with doing transactions on internet, neither go to branches nor ATM. ICICI bank starts a new saving account which has the name B2. In this new saving account, there is no minimum balance requirement as well as opening account cost is also zero. Its all about digital banking in which the accountholder has limited access to the bank. One need to use the internet to do the transactions as well as opening a fixed deposit or apply for credit card. The features of B2 banking are as follows.


  • Zero minimum balance requirement.
  • No cheque book 
  • No passbook
  • NO ATM card
  • Limited access to branch
  • No hidden charges
  • Bank will offer higher rate of interest on B2 saving account.
  • Online balance transfer
  • Online mobile recharge
  • All the transaction one can do which one can do online.
  • Online help/Chat facility
  • One can apply credit card online
  • One can apply for fixed deposit or recurring deposit online
  • Virtual e-wallet
This is the starting did by ICICI bank. Other banks will follow soon and the day will not far when the queue in the banks will be less or no queue at all and the banks will past on the profits from the less staff to customers. 

Tags-b2 banking,new saving account,b2,icici b2
New accounting codes for payment of service tax

New accounting codes for payment of service tax

Service tax department has resorted service specified accounting codes for payment of service tax. Service tax department has issued a circular no. 165/16/2012 dated 20 November 2012 about restoration of service specified accounting codes. The full circular is as under.


Subject: Restoration of service specific accounting codes for payment of service tax - regarding.

          Negative List based comprehensive approach to taxation of services came into effect from the first day of July, 2012. Accounting code for the purpose of payment of service tax under the Negative List approach [“All Taxable Services” – 00441089] was prescribed vide Circular 161/12/2012 dated 6th July, 2012.

2.         Subsequent to the issuance of the Circular, suggestions were received from the field formations that the service specific old accounting codes should be restored, for the purpose of statistical analysis; also it was suggested that list of descriptions of services should be provided to the taxpayers for obtaining registration. These suggestions were examined and a decision has been taken to restore the service specific accounting codes. Accordingly, a list of 120 descriptions of services for the purpose of registration and accounting codes corresponding to each description of service for payment of tax is provided in the annexure to this Circular.

3.         Descriptions of taxable services given in the annexure are solely for the purpose of statistical analysis. On the advice of the office of the C & AG, a specific sub-head has been created for payment of “penalty” under various descriptions of services. Henceforth, the sub-head “other receipts” is meant only for payment of interest payable on delayed payment of service tax. Accounting Codes under the sub-head “deduct refunds” is not to be used by the taxpayers, as it is meant for use by the field formations while allowing refund of tax.

4.         Registrations obtained under the positive list approach continue to be valid. New taxpayers can obtain registrations by selecting the relevant description/s from among the list of 120 descriptions of services given in the Annexure. Where registrations have been obtained under the description ‘All Taxable Services’, the taxpayer should file amendment application online in ACES and opt for relevant description/s from the list of 120 descriptions of services given in the Annexure. If any applications for amendment of ST-1 are pending with field formations, seeking the description ‘all taxable services’, such amendment may not be necessary and the officers in the field formations may provide necessary guidance to the taxpayers in this regard. Directorate General of Systems will be making necessary arrangements for display of the list of 120 descriptions of services and their corresponding Accounting Codes in Form ST-1 and Form ST-2 as may be necessary.

5.         Officers in the field formations are instructed to extend necessary guidance to the tax payers regarding the selection of appropriate description of taxable service and facilitate the payment of service tax/cess due under the appropriate accounting code. Trade Notice/Public Notice may be issued to the field formations and tax payers. Please acknowledge receipt of this Circular. Hindi version follows.

The new service tax codes can be seen from the link
Tags-service tax codes,new service tax codes
India sign Double Tax Avoidance Agreement DTAA with Macau

India sign Double Tax Avoidance Agreement DTAA with Macau

India sign double tax avoidance agreement with Macau which is a special administrative region of China. This agreement for exchange of information with respect of taxes. Income tax department issued a notification no. 43/2012 dated 10-10-2012 about the DTAA with Macau. Full notification is as under.


NOTIFICATION NO.43/2012[F.NO.503/04/2009-FT&TR-II]/SO 2427(E), DATED 10-10-2012
Whereas the annexed Agreement between the Government of the Republic of India and the Government of the Macao Special Administrative Region of the People's Republic of China for the exchange of information with respect to taxes signed in Macao on the 3rd January, 2012 shall come into force on the 16th day of April, 2012, being the date of receipt of later of the notifications after completion of the procedures as required by the respective laws for the entry into force of this Agreement, in accordance with article 13 of the said Agreement.

Now, therefore, in exercise of powers conferred by section 90 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies that all the provisions of the said Agreement annexed hereto shall be given effect to in the Union of India with effect from the 16th day of April, 2012.

Agreement Between the Government of the Republic of India and the Government of the Macao Special Administrative Region of the People's Republic of China for the exchange of information with respect to taxes

The Government of the Republic of India and the Government of the Macao Special Administrative Region of the People's Republic of China, desiring to facilitate the exchange of information with respect to taxes, have agreed as follows :
ARTICLE 1
OBJECT AND SCOPE OF THE AGREEMENT
The competent authorities of the Contracting Parties shall provide assistance through exchange of information that is foreseeably relevant to the administration and enforcement of the internal laws of the Contracting Parties concerning taxes covered by this Agreement. Such information shall include information that is foreseeably relevant to the determination, assessment and collection of such taxes, the recovery and enforcement of tax claims, or the investigation or prosecution of tax matters. Information shall be exchanged in accordance with the provisions of this Agreement and shall be treated as confidential in the manner provided in article 8. The rights and safeguards secured to persons by the laws or administrative practice of the requested Party remain applicable to the extent that they do not unduly prevent or delay effective exchange of information.
ARTICLE 2
JURISDICTION
Information shall be exchanged in accordance with this Agreement without regard to whether the person to whom the information relates is, or whether the information is held by a resident of a Contracting Party. However a requested Party is not obligated to provide information which is neither held by its authorities nor is in the possession or control of persons who are within its territorial jurisdiction.
ARTICLE 3
TAXES COVERED
1. The taxes which are the subject of this Agreement are :
(a)  In India, taxes of every kind and description imposed by the Central Government or the Governments of political sub-divisions or local authorities, irrespective of the manner in which they are levied ;
(b)  In Macao, taxes of every kind and description imposed by the Government of the Macao Special Administrative Region.

2. This Agreement shall also apply to any identical taxes imposed after the date of entry into force of the Agreement in addition to, or in place of the existing taxes. This Agreement shall also apply to any substantially similar taxes imposed after the date of entry into force of the Agreement in addition to or in place of the existing taxes if the competent authorities of the Contracting Parties so agree. Furthermore, the taxes covered may be expanded or modified by mutual agreement of the Contracting Parties in the form of an exchange of letters. The competent authorities of the Contracting Parties shall notify each other of any substantial changes to the taxation and related information gathering measures covered by the Agreement.

ARTICLE 4
DEFINITIONS
1. For the purposes of this Agreement, unless otherwise defined :
(a)  the term "India" means the territory of India and includes the territorial sea and airspace above it, as well as any other maritime zone in which India has sovereign rights, other rights and jurisdiction, according to the Indian law and in accordance with international law, including the U.N. Convention on the Law of the Sea ;

(b)  the term "Macao", means the Macao Special Administrative Region of the People's Republic of China ; used in a geographical sense, it means the peninsula of Macao and the islands of Taipa and Coloane ;

(c)  the term "Contracting Party" means India or Macao as the context requires ;

(d)  the term "competent authority" means
  (i)  In the case of India, the Finance Minister, Government of India, or his authorised representative ; and
 (ii)  In the case of Macao, the Chief Executive or his authorised representative ;

(e)  the term "person" includes an individual, a company, and any other entity which is treated as a taxable unit under the taxation laws in force in the respective Contracting Parties ;

(f)  the term "company" means any body corporate or any entity that is treated as a body corporate for tax purposes ;

(g)  the term "publicly traded company" means any company whose principal class of shares is listed on a recognised stock exchange provided its listed shares can be readily purchased or sold by the public. Shares can be purchased or sold "by the public" if the purchase or sale of shares is not implicitly or explicitly restricted to a limited group of investors ;

(h)  the term "principal class of shares" means the class or classes of shares representing a majority of the voting power and value of the company ;

 (i)  the term "recognised stock exchange" means in India, the National Stock Exchange, the Bombay Stock Exchange, and any other stock exchange recognised by the Securities and Exchange Board of India or any stock exchange in Macao agreed upon by the competent authorities of the Contracting Parties ;

 (j)  the term "collective investment fund or scheme" means any pooled investment vehicle, irrespective of legal form ;

(k)  The term "public collective investment fund or scheme" means any collective investment fund or scheme provided the units, shares or other interests in the fund or scheme can be readily purchased, sold or redeemed by the public. Units, shares or other interests in the fund or scheme can be readily purchased, sold or redeemed "by the public" if the purchase, sale or redemption is not implicitly or explicitly restricted to a limited group of investors ;

 (l)  the term "tax" means any tax to which the Agreement applies ;

(m)  the term "requesting Party" means the Contracting Party :
  (i)  submitting a request for information to, or
 (ii)  having received information from the requested Party ;

(n)  the term "requested Party" means the Contracting Party :
  (i)  which is requested to provide information, or
 (ii)  which has provided information ;

(o)  the term "information gathering measures" means laws and administrative or judicial procedures that enable a Contracting Party to obtain and provide the requested information ;

(p)  the term "information" means any fact, statement, document or record in whatever form.

2. As regards the application of this Agreement at any time by a Contracting Party, any term not defined therein, unless the context otherwise requires or the competent authorities agree to a common meaning pursuant to the provisions of article 12 of this Agreement, shall have the meaning that it has at that time under the law of that Party, any meaning under the applicable tax laws of that Party prevailing over a meaning given to the term under other laws of that Party.

ARTICLE 5
EXCHANGE OF INFORMATION UPON REQUEST
1. The competent authority of the requested Party shall provide upon request information for the purposes referred to in article 1. Such information shall be exchanged without regard to whether the requested Party needs such information for its own tax purposes or whether the conduct being investigated would constitute a crime under the laws of the requested Party if such conduct occurred in the requested Party.

2. If the information in the possession of the competent authority of the requested Party is not sufficient to enable it to comply with the request for information, that Party shall use all relevant information gathering measures to provide the requesting Party with the information requested, notwithstanding that the requested Party may not need such information for its own tax purposes.

3. If specifically requested by the competent authority of the requesting Party, the competent authority of the requested party shall provide information under this article, to the extent allowable under its internal laws, in the form of depositions of witnesses and authenticated copies of original records.

4. Each Contracting Party shall ensure that its competent authority for the purposes specified in article 1 of this Agreement, has the authority to obtain and provide upon request :
(a)  information held by banks, other financial institutions, and any person, including nominees and trustees, acting in an agency or fiduciary capacity ;
(b)  information regarding the legal and beneficial ownership of companies, partnerships, collective investment funds or schemes, trusts, foundations, and other persons, including, within the constraints of article 2, ownership information on all such persons in an ownership chain ; in the case of collective investment funds or schemes, information on shares, units and other interests ; in the case of trusts, information on settlors, trustees and beneficiaries ; in the case of foundations, information on founders, members of the foundation council and beneficiaries ; and equivalent information in case of entities that are neither trusts nor foundations.

5. This Agreement does not create an obligation on the Contracting Parties to obtain or provide ownership information with respect to publicly traded companies or public collective investment funds or schemes unless such information can be obtained without giving rise to disproportionate difficulties.

6. The competent authority of the requesting Party shall provide the following information to the competent authority of the requested Party when making a request for information under the Agreement to demonstrate the foreseeable relevance of the information to the request :
(a)  the identity of the person under examination or investigation ;
(b)  the period for which the information is requested ;
(c)  a statement of the information sought including its nature and the form in which the requesting Party would prefer to receive it ;
(d)  the tax purpose for which the information is sought;
(e)  grounds for believing that the information requested is held in the requested Party or is in the possession or control of a person within the jurisdiction of the requested Party ;
(f)  to the extent known, the name and address of any person believed to be in possession of the requested information ;
(g)  a statement that the request is in conformity with the law and administrative practices of the requesting Party, that if the requested information was within the jurisdiction of the requesting Party then the competent authority of the requesting Party would be able to obtain the information under the laws of the requesting Party or in the normal course of administrative practice and that it is in conformity with this Agreement;
(h)  a statement that the requesting Party has pursued all means available in its own territory to obtain the information, except those that would give rise to disproportionate difficulties.

7. The competent authority of the requested Party shall forward the requested information as promptly as possible to the requesting Party. To ensure a prompt response, the competent authority of the requested Party shall confirm receipt of a request in writing to the competent authority of the requesting Party and shall notify the competent authority of the requesting Party of deficiencies in the request, if any, within 60 days of the receipt of the request.

8. If the competent authority of the requested Party has been unable to obtain and provide the information within 90 days of receipt of the request, including if it encounters obstacles in furnishing the information or it refuses to furnish the information, it shall immediately inform the requesting Party, explaining the reason for its inability, the nature of the obstacles or the reasons for its refusal.
ARTICLE 6
TAX EXAMINATIONS ABROAD
1. At the request of the competent authority of the requesting Party, the requested Party may allow representatives of the competent authority of the requesting Party to enter the territory of the requested Party, to the extent permitted under its internal laws, to interview individuals and examine records with the prior written consent of the individuals or other persons concerned. The competent authority of the requesting Party shall notify the competent authority of the requested Party of the time and place of the intended meeting with the individuals concerned.

2. At the request of the competent authority of the requesting Party, the requested Party may allow representatives of the competent authority of the requesting Party to be present at the appropriate part of a tax examination in the requested Party, in which case the competent authority of the requested Party conducting the examination shall, as soon as possible, notify the competent authority of the requesting Party about the time and place of examination, the authority or official designated to carry out the examination and the procedures and conditions required by the requested Party for the conduct of the examination. All decisions with respect to the conduct of the tax examination shall be made by the Party conducting the examination.
ARTICLE 7
POSSIBILITY OF DECLINING A REQUEST FOR INFORMATION
1. The competent authority of the requested Party may decline to assist:
(a)  where the request is not made in conformity with this Agreement; or
(b)  where the requesting Party has not pursued all means available in its own territory to obtain the information, except where recourse to such means would give rise to disproportionate difficulty; or
(c)  where the disclosure of the information would be contrary to public policy (ordre public) of the requested Party.

2. This Agreement shall not impose on a Contracting Party the obligation :
(a)  to supply information which would disclose any trade, business, industrial, commercial or professional secret or trade process, provided that information described in paragraph 4 of article 5 shall not be treated as such a secret or trade process merely because it meets the criteria in that paragraph ; or
(b)  to obtain or provide information, which would reveal confidential communications between a client and an attorney, solicitor or other admitted legal representative where such communications are :
  (i)  produced for the purposes of seeking or providing legal advice ; or
 (ii)  produced for the purposes of use in existing or contemplated legal proceedings ; or
(c)  to carry out administrative measures at variance with its laws and administrative practices, provided nothing in this sub-paragraph shall affect the obligations of a Contracting Party under paragraph 4 of article 5.

3. A request for information shall not be refused on the ground that the tax claim giving rise to the request is disputed.

4. The requested Party shall not be required to obtain or provide information which the requesting Party would be unable to obtain in similar circumstances under its own laws for the purposes of the administration or enforcement of its own tax laws or in response to a valid request from the requested Party under this Agreement.

5. The requested Party shall not decline to provide information solely because the request does not include all the information required under article 5 if the information can otherwise be provided according to the law of the requested Party.
ARTICLE 8
CONFIDENTIALITY
Any information received by a Contracting Party under this Agreement shall be treated as confidential and may be disclosed only to persons or authorities (including courts and administrative bodies) in the jurisdiction of the Contracting Party concerned with the assessment or collection of, the enforcement or prosecution in respect of, or the determination of appeals in relation to, the taxes covered by this Agreement. Such persons or authorities shall use such information only for such purposes. They may disclose the information in public court proceedings or in judicial decisions. The information may not be disclosed to any other person, entity or authority or any other jurisdiction without the express written consent of the competent authority of the requested Party. Information received by a requested Party in conjunction with a request for assistance under this Agreement shall likewise be treated as confidential in the requested Party.
ARTICLE 9
COSTS
Unless the competent authorities of the parties otherwise agree, ordinary costs incurred in providing assistance shall be borne by the requested Party and extraordinary costs incurred in providing assistance shall be borne by the requesting Party.
ARTICLE 10
IMPLEMENTATION LEGISLATION
The Contracting Parties shall enact any legislation necessary to comply with, and give effect to, the terms of the Agreement.
ARTICLE 11
LANGUAGE
Request for assistance and answers thereto shall be drawn up in English or any other language agreed bilaterally between the competent authorities of the Contracting Parties under article 12.
ARTICLE 12
MUTUAL AGREEMENT PROCEDURE
1. Where difficulties or doubts arise between the Contracting Parties regarding the implementation or interpretation of the Agreement, the competent authorities shall endeavour to resolve the matter by mutual agreement.
2. In addition, the competent authorities of the Contracting Parties may mutually agree on the procedures to be used under articles 5 and 6 of this Agreement.
3. The competent authorities of the Contracting Parties may communicate with each other directly for the purposes of reaching agreement under this article.
ARTICLE 13
ENTRY INTO FORCE
1. The Contracting Parties shall notify each other in writing of the completion of the procedures required by the respective laws for the entry into force of this Agreement.
2. The Agreement shall enter into force from the date of receipt of later of the notifications and shall thereupon have effect forthwith.
ARTICLE 14
TERMINATION
1. This Agreement shall remain in force until terminated by either Contracting Party.

2. Either Contracting Party may, after the expiry of five years from the date of its entry into force, terminate the Agreement by serving a written notice of termination to the other Contracting Party.

3. Such termination shall become effective on the first day of the month following the expiration of a period of six months after the date of receipt of notice of termination by the other Contracting Party. All requests received up to the effective date of termination shall be dealt with in accordance with the provisions of the Agreement.

4. If a Contracting Party terminates this Agreement, notwithstanding such terminations, both parties shall remain bound by the provisions of article 8 of this Agreement with respect to any information obtained under this Agreement.

In Witness Whereof the undersigned, being duly authorised thereto, have signed this Agreement.
Done in duplicate at Macao, on the 3rd day of January, 2012, in the Hindi, Chinese, Portuguese and English languages, all texts being equally authentic. In case of divergence between the texts, the English version shall prevail.

For the Government of the Republic of India
Tags-dtaa,dtaa with china,dtaa with macau,double tax avoidance agreement
 
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