Dec 31, 2012

HAPPY NEW YEAR 2013

10:24 PM
HAPPY NEW YEAR 2013
Genuine success comes only to those who are ready for it.so never step back and always have courage to accept new challenges.wishing you a very happy new year.

From
TAXALERTINDIA
Nitin Aggarwal, the Author


Dec 30, 2012

EXCEL BASED STD CODE CONVERTER

11:00 PM
We often confuse about the STD codes as where is this calls from? Remembering all the std codes is not possible, however we know the major stations STD codes like delhi 011 or Mumbai 022, but not all. Sometimes one need to check where is the call from and to check STD code of the call. So one need to check the diary and need to pay a hard labour for doing it.

Now this is an excel based convertor for std codes to city name as well as city name to std code, which will be very useful for the persons. The features of this convertor as are follows.

Dec 29, 2012

All about income tax on property

11:00 PM
One can get many tax benefits by purchasing a house or property. There are as many as three benefits for purchasing a property. The three benefits are as under.
- Capital appreciation
- Rental income
- Tax exemptions

One can think about purchasing a property now days are not a cup of tea because the property prices are very high. But one can calculate about the housing loan in which one can save income tax as much as interest paid. The complete article about income tax on property is as follows.

Housing loan
Housing loan or home loan is a great tax saving instrument in income tax in India. One can get tax exemption on interest as well as on principal amount. Under section 80C of income tax act, a maximum of Rs. 1 Lakh can be claimed on the principal amount of housing loan. Under section 24, a maximum of Rs 1.5 lakh can be deducted from taxable income. There is a condition that the property should be constructed or acquired within three years from the day when the loan has been taken.

Interest is deductible on accrual basis on home loan. 

One can get interest benefits only by taking home loan from friends or relatives too with a valid proof. But one can’t get exemption on principal in this case.

Second house
There is complete different tax implication on buying a second house. If one has own two properties, one of them (Owner can decide) will be deemed as let out even if not in reality. There will be notional rental income of the assesse who has own two properties and tax is applicable on it. One can get any exemption of income tax on principal amount if loan is taken.
The additional house also attracts wealth tax and 1 percent wealth tax is applicable on the value exceeding Rs. 30 lakh.

Rental income
One can get tax benefits on the second home too. One can deduct municipal taxes as well as 30% of the rental income from the rent for calculation of income tax. 
Like, if A gets the rent of 20000 per month from letting out the second property. The annual interest will be 240000. If A pays 20000 as municipal tax. Municipal tax as well as 60000(240000X30%) will be exempt from the rental income. It means the rental income will be (240000-20000-60000=) 160000 only. If A has housing loan on this property and interest amount is more than actual rent received (160000), entire rent amount will be tax free.

Under construction
The law is changed in the condition of property under construction. One can get the interest exemption on this property loan but the principal amount paid before the completion of property is not exempted under section 80C of income tax act.

Buying land
There is no exemption available under income tax act on loan against buying a piece of land either retain or let out.

Commercial property
No exemption available under section 80C of income tax act on commercial property. But wealth tax is exempted on commercial property. 

Capital gain
If the property is sold after three years from the purchase date, long term capital gain will be applicable and the rate is 20% with the benefits of index cost data.
One can save the capital gain if the total amount of the sale of property is invested in buying residential property or buy REC (Rural Electrification Corporation) or NHAI (National highway authority of India) bonds. Tax exemption on capital gain will only be available if total amount invested in buying a residential property within 2 years or construct a residential property in 3 years.

Joint property
If the property is co-owned, both of them can claim exemptions individually as per the share in the loan. Like if husband and wife are co-owners of the property, they can claim exemption individually. But the condition is that all co-borrowers must be co-owners.

House rent allowance
There are three aspects with house rent allowance which are as under.
- If one is living in a house for which home loan is taken, one can gets exemption under section 24 and 80C of income tax and not house rent allowance rebate.
- If one has taken home loan for constructing a house and living in a rented house, no tax rebates are allowed but house rent allowance allowed.
- If one has rented out his own house and living in a rented home, one can get both the income tax benefits and house rent allowance benefit. But the rented income will be include in the personal income which calculating the income tax.
Keywords-income tax on property,income tax on second property,all about income tax on property,section 24 of income tax act,income tax section 24 exemption,house rent allowance,section 24 income tax,income tax on joint property,rental income

Dec 28, 2012

How to check the refund status of income tax

11:00 PM
Income tax refund is the word which is in minds of many people and we always in waiting for the refund. This   refund is mainly for the salaried person as well as many other peoples. But income tax department needs to see a lot of files and dispatch a lot of refund cheques, so it takes time. We always complaining about the delay in refund of income tax. But don't know what to do in that case.

There is a complete procedure for checking income tax refund status. With this process one can track the EMS number of the speed post to track the refund cheque and documents. So the complete procedure is as follows.

First log to e-filing website to check your return has been processed or not. For this log to incometaxindiaefiling.gov.in and fill the username and password.


Now go to my account<e filing process status



Enter assessment year and click on submit



Step 4: View Processing Status for your return (see highlighted box below). In case of Refund, go to Step 5 to check Refund status. In case or No Demand No refund or Demand, await Intimation from CPC Bangalore



Step 5: To view Refund Status go to Tax Information Network (TIN) Website : https://tin.tin.nsdl.com/oltas/refundstatuslogin.html and enter PAN and Assessment Year and click ‘Submit’




Step 6: View refund Status. In case status is ‘dispatched by speed post’ -> track speed post by clicking on the hyperlinked Speed Post Ref. no: starting with “EY…”. In case ‘Mode of Payment’ is ‘ECS’ then check your Bank Account for Direct Deposit.



Step 7: Or go to http://services.ptcmysore.gov.in/speednettracking/. Enter the ‘Speed Post Ref. no’ in ‘Article Number’ and ‘Date’ in ‘Date of booking’ and click on ‘Track’



Step 8: View Status of Speed Post delivery -> click on ‘Movement’ to view tracking of article (see highlighted box below).



Step 9: Refund may be verified for correctness and in case of any error, the same may be brought to the notice of CPC, Bangalore. Intimation sheet will be directly mailed by Speed Post from CPC Bangalore.

Tags-income tax refund,how to check income tax refund,it refund,tds refund,how to check income tax refund status,income tax refund query,income tax refund form,tax refund online,tax refund status india,tax refund online form,tax refund department

Dec 27, 2012

Aadhar card will require for EPFO transfer

1:57 PM
People thinks that Aadhar card or UID(Unique identification document) number is for poor people with which one can get goods on less price from government shops. But this is not true. Aadhar card is must to have for the middle class as well as higher class people too. The reason is that the middle class as well as high class salaried person and pensioners need to have UID number for getting the retirement benefits from 2013.

Labour ministry has issued a directive on 20 December to EPFO (Employees Provident Fund Organization) to "embed" the Aadhaar number in bank accounts of beneficiaries in 43 districts by December 31.
"There is an urgent need to seed (or embed) Aadhaar numbers in the (bank) accounts of beneficiaries who receive benefits under the various schemes of EPFO," says the communication from the union Labour ministry.


"The ministry has decided that seeding of Aadhaar numbers of beneficiaries be completed by December 31, 2012, for 43 districts, and for beneficiaries in other districts as early as possible," it added. The schemes administered by EPFO include provident fund and pension.


EPFO department already pays the benefit directly to employee’s bank account using NEFT (National Electronic Fund transfer). Labour Ministry asks the EPFO department that these bank accounts must be Aadhar card enabled as soon as possible.

But the problem is that in this circular that what in the case when the employees have not Aadhar card till now. There are only 22 crores Aadhar card issued by the government to the people.

Government wants to transfer the subsidy amount direct to bank account and with this belief, government wants to have Aadhar card enabled saving account of the employees for transfer the EPFO benefits. But the employees are not informed either by the government or by the EPFO department about this new rule. 
Keywords-aadhar card,money transfer with aadhar card,epfo rule about aadhar number,aadhar epfo rule,new rule epfo,provident fund new rule,new rule of provident fund.

Custom imposes anti dumping duty on Phthalic Anhydride

12:19 PM
Custom imposes anti dumping duty on Phthalic Anhydride
Custom department has imposed anti dumping duty on Phthalic Anhydride. Custom department has issued a notification no. 58/2012 dated 24 December 2012 about imposing anti dumping duty on Phthalic Anhydride. Anti dumping duty is the tool with which the importer of specified goods need to pay more duty and it will cost higher to them. This duty is mainly to save domestic industries from international competition. Full notification is as under.

Notification No.58/2012-Customs (ADD)

            New Delhi, the 24th December, 2012
            G.S.R. _(E). –WHEREAS  in the matter of Phthalic Anhydride (hereinafter referred to as the subject goods), falling under Chapter 29 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), originating in, or exported from, KoreRPTaiwan (Chinese Taipei) and Israel (hereinafter referred to as the subject countries),and imported into India, the designated authority in its final findings published in the Gazette of India, Extraordinary, Part I, Section 1,vide notification No. 14/1/2011-DGAD, dated the 28th September, 2012, had come to the conclusion that –

(i)     the subject goods have been exported to India from the subject countries below its associated normal value, except in the cases wherein the dumping margin habeen found to be negative;

(ii)    the domestic industry has suffered material injury in respect of the subject goods;

(iii)   the injury has been caused by the dumped imports of the subject goods from   subject countries.

AND WHEREAS, the designated authority in its aforesaid findings, has recommended imposition of definitive anti-dumping duty on imports of the subject goods, originating in or exported from the subject countries and imported into India, in order to remove injury to the domestic industry;

          NOW, THEREFORE, in exercise of the powers conferred by sub-sections (1) and (5) of section 9A of the Customs Tariff Act, 1975 (51 of 1975),read with rules 18 and 20 of the Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995, the Central Government, after considering the aforesaid final findings of the designated authority, hereby imposes on the subject goods the description of which is specified in column (3) of the Table below, falling under tariff item of the First Schedule to the said Customs Tariff Act as specified in the corresponding entry in column (2),  originating in the country as specified in the corresponding entry in column (4), and produced by the producer as specified in the corresponding entry in column (6), when exported from the country as specified in the corresponding entry in column (5), by the exporter as specified in the corresponding entry in column (7), and imported into India, an anti-dumping duty at the rate equal to the amount as  indicated in the corresponding entry in column (8), in the currency as specified in the corresponding entry in column (10) and as per unit of measurement as specified in the corresponding entry in column (9) of the said Table.


Tariff Item
Description
Country
Country
Producer
Exporter
Amount US$/MT
of goods
of Origin
of Export

Phthalic
Korea RP
Korea RP
M/s
M/s
NIL
  2917 35 00
Anhydride
AekyungPetro
chemical
HumadeCorporation


Co., Ltd


Phthalic
Korea RP
Any other
Any
Any
91.12
2917 35 00
Anhydride
Than
Subject
countries

Phthalic
Any other
Korea RP
Any
Any
91.12
  2917 35 00
Anhydride
Than
Subject
countries

Phthalic
Taiwan
Taiwan
Nan Ya
Nan Ya
63.33
2917 35 00
Anhydride
Plastics
Corporation
Plastics
Corporation

Phthalic
Taiwan
Any other
Any
Any
150.88
  2917 35 00
Anhydride
Than
Subject
countries

Phthalic
Any other
Taiwan
Any
Any
150.88
2917 35 00
Anhydride
Than
Subject
countries

Phthalic
Israel
Israel
Gadiv
Gadiv
17.99
  2917 35 00
Anhydride
Petro
Chemical
Industries Ltd.
Petro
Chemical
Industries Ltd.

Phthalic
Any other
Israel
Any
Any
139.76
2917 35 00
Anhydride
Than
Subject
countries

Phthalic
Israel
Any other than
Any
Any
139.76
  2917 35 00
Anhydride
Subject
countries

 2.         The anti-dumping duty imposed under this notification shall be levied for a period of five years (unless revoked, amended or superseded earlier) from the date of publication of this notification in the Gazette of India and shall be paid in Indian currency.

Explanation. - For the purposes of this notification, rate of exchange applicable for the purposes of calculation of such anti-dumping duty shall be the rate which is specified in the notification of the Government of India, in the Ministry of Finance (Department of Revenue), issued from time to time, under section 14 of the Customs Act, 1962 (52 of 1962) and the relevant date for determination of the rate of exchange shall be the date of presentation of the bill of entry under section 46 of the said Customs Act.
 Keywords-anti dumping duty,what is anti dumping duty,anti dumping duty on phthalic anhydride, custom notification no 58/2012

Dec 25, 2012

Payment of interest for special deposit scheme in 2012

3:40 PM
Payment of interest for special deposit scheme in 2012
Special Deposit Scheme (SDS) was launched by the Central government on July 1, 1975. The purpose of the scheme was to provide better returns to non-government provident funds, superannuation and gratuity funds, surplus funds of the Life Insurance Corporation (LIC) and Employees' State Insurance Corporation, etc. Initially, the scheme was supposed to be only for 10 years. However, subsequently it was extended for another 10 years in 1985, three years in 1995 and for a further five years in 1998.


pecial Deposit Scheme 1975 –
Payment of interest for the calendar year 2012
Please refer to our letter DGBA.CDD.H-3986/15.01.001/2011-12 dated December 22, 2011, on the captioned subject.

2. In this connection, we advise that interest for the calendar year 2012 may be promptly disbursed to the SDS account holders, @ of 8.6% per annum from 1st January 2012 to 31st March 2012 and @ 8.8% per annum from 1st April 2012 to 31st December 2012, through electronic mode such as ECS/NECS/ NEFT/RTGS or by way of account payee cheques on January 01, 2012 itself, subject to instructions, as applicable now, contained in paragraphs 3 and 4 of our circular CO.DT.No.15.01.001/H-3527/2003-04 dated December 30, 2003.

3. Please issue suitable instructions to all your Deposit Offices and acknowledge receipt.
Yours faithfully,
(Surendra Prasad)
Manager
Keywords-special deposit scheme,special deposit scheme 1975,special deposit scheme rate of interest,special deposit scheme interest

FAQs by qualified foreign investors QFIs about income tax

3:17 PM
FAQs by qualified foreign investors QFIs about income tax
Q.1. What is Permanent Account Number (PAN) Card?
Ans:   Permanent Account Number (PAN) is a ten-digit alphanumeric number, issued by  the Income Tax Department of India to any “person” to facilitate him in making tax payments filing, returns and claiming refunds.  The number, along with other relevant details, is printed on a card called PAN card.

Q.2. Are QFIs required to obtain PAN Card to comply with tax norms in India?
Ans:   Yes. Under the current provisions, QFIs would be required to obtain PAN card. The process of obtaining a PAN card is simple, and user friendly.  An application can be filed by a foreign investor online and the process  can be completed within 2 to 3 weeks. 

Q.3. What are the benefits to QFIs of having  a PAN Card?
Ans:   QFIs who have a PAN card would be eligible for tax deduction at source (TDS) as per the rates applicable in the Double Taxation Avoidance Treaty (DTAA) of the country of which the QFI is a resident, if it is more beneficial than the rate prescribed under the domestic law.  If a QFI has not  obtained a PAN card it would  be subject to a higher rate of tax deduction under Section 206 AA of Income Tax Act, 1961.
Q.4. How QFIs can apply for a PAN Card?

Ans:   In order to facilitate QFIs in applying for a PAN as well as to comply with Know our Customer (KYC) norms of the Securities Exchange Board of India (SEBI), a combined form (FORM 49 AA) has been notified by the Central Board of Direct Tax (CBDT).  Form 49 AA and detailed instructions regarding how it is to be filled up are available at :
http://law.incometaxindia.gov.in/DITTaxmann/IncomeTaxRules/pdf/itr62form49aa.pdf
http://law.incometaxindia.gov.in/DITTaxmann/IncomeTaxRules/pdf/Not58_2011.pdf

Q.5. Can QFIs make an On-line application for PAN Card?
Ans:   Yes, application for allotment of PAN can be made online through the Internet. Further, requests for changes or correction in PAN data or request for reprint of PAN  card (for an existing PAN) may also be made through the Internet. Online application can be made either through the portal of National Securities Depository Limited (NSDL) (https://tin.tin.nsdl.com/pan/index.html)  or portal of UTI Infrastructure Technology and Services Limited (UTITSL) (http://www.utitsl.co.in/utitsl/uti/newapp/new-pan-application.jsp). Supporting
documents required to be submitted by QFIs to obtain PAN card are listed at the
following link: 
http://law.incometaxindia.gov.in/DITTaxmann/IncomeTaxRules/pdf/Not58_2011.
pdf

Q.6. What are the attestation requirements for a QFI for obtaining PAN card?
Ans:   For a QFI who is an individual, Rule 114 of the Income Tax Rules, 1961 read with Form No. 49AA, requires a copy of the passport  to be filed (without any attestation), this will be taken as both proof of identity and proof of residence. For QFIs other than individuals, the process requires filing of copy of certificate of registration duly attested by an “apostille” or at the Indian Embassy in that country.
 In order to meet  the know you client (KYC) requirements as prescribed by Securities Exchange Board of India (SEBI), the list of documents to be submitted by a QFI for
KYC are available at:  
http://www.sebi.gov.in/cms/sebi_data/attachdocs/1340167306959.pdf


Q.7. What are the tax related responsibilities of Qualified Depository Participants (QDPs)?  
Ans:   In order to facilitate investments by QFIs, the QDPs have been assigned the responsibility to act as a single point of contact for QFIs for all purposes including tax. For tax purposes, a QDP will facilitate the QFI to obtain a PAN card. QDPs will be responsible for any withholding tax in India before making remittance to QFIs. 
QDPs will also be treated as a representative assessee/agent of the QFI.  For this purpose QDPs would be required to submit a declaration that they have no objection to being treated as a representative assessee/agent of QFI.  A QDP may ensure that the broker engaged by it for undertaking QFI transactions deducts and deposits tax at source failing which the QDP should deduct and deposit the tax on such transactions.

Q.8. Can QFIs claim refund from Income Tax Department in India?
Ans:   Yes. QFIs can claim refund from Income Tax Department  for which the  QFI would have to file its return of  Income in India  for that year.

Q.9. Can a QFI carry forward losses over the years?
Ans:  Yes. QFIs are allowed to carry forward  losses over years provided the QFI files its return of income declaring the loss for the relevant year within the stipulated time limits.

Q.10. Whether profits earned by QFI from their investments in Indian securities market would be treated as Capital Gain or business income?
Ans:  As per the Income-Tax Act, 1961, whether the profits earned from transaction in securities would be capital gains or business income will depend on facts and circumstances of each case like the number and frequency of transactions etc.  Please refer to circular No.4/2007 dated 15/6/2007 issued by the Central Board of Direct Taxes.

Q.11. Whether QDPs should compute tax deduction at source (withholding tax) on QFI income for one settlement period on settlement basis or on transaction basis?
Ans:   Currently, settlement on Indian stock exchanges is done at the end of every trading day.  Tax deducted at source under  the Income-tax Act, 1961 is to be deposited by the seventh day succeeding the end of each month.  The withholding tax on QFI income will be computed on settlement basis and not on transaction basis since the stock broker would credit the net proceeds of all transactions to QFIs on settlement basis for one settlement period

Q.12. For determining the tax deducted at source (withholding tax) liability, can QDPs set off losses of QFIs against profits earned on monthly basis in a given year?
Ans:   As per TDS provisions, the deductor has to deduct tax either at time of payment of the amount or at time of credit of such amount (whichever is earlier). Therefore, any loss of current year available at such time of deducting tax would be eligible to be set off against the sum payable and the TDS shall be effected on net basis. However, TDS once effected cannot reduced by the deductor even if there is loss in subsequent transaction. 
Example, in a given year, a QFI makes three settlements, it earns profit of Rs. 200 on day one settlement, incurs a loss of Rs. 250 on day two settlement and earns profit of Rs. 100 on day three settlement. The TDS would be deducted on credit of net profit of Rs 200 whereas, no TDS shall be effected against profit of Rs. 100 as at time of credit of Rs. 100 a loss of Rs. 250 is available for set off and net basis there is no amount chargeable to tax.

Q.13. For the purpose of computing tax deducted at source (withholding tax) Can QDPs set off in the case of QFIs, the profits earned in one security against losses earned in another security during a given year?
Ans:   Yes. For computing tax deducted at source (withholding tax) QDPs can set off profits earned by the QFI in one security against losses earned in another security as long as these securities are subject to Securities Transaction Tax (STT). Therefore, this would not be applicable in case of QFI investments in bonds as bond transaction are not subject to Securities Transaction Tax Such setting off for computing tax deduction at source would therefore be permissible only in the case of listed securities and mutual fund Units and redemption by mutual funds as these are subject to STT. The set off  would again be subject to the general principle that an earlier loss of current year can be set off against subsequent profit which is credited or paid to the QFI. However, if tax deduction at source (TDS) has already been effected for a particular credit or payment, it cannot be reduced by subsequent loss. A QFI is, however, eligible to claim refund of excess amount of tax deducted at source (withholding) by filing a return of income for the relevant year.

Q.14. For the purpose of computing tax deducted at source (TDS), can QFIs Set off of profits earned by a QFI in the current year against losses incurred in previous years?
Ans:   No, A QDP cannot set off losses of a previous year of a QFI against profits earned in the current year by the QFI while computing the tax liability for deduction at source, which would therefore be based only on the profits of the year. However, QFIs can themselves set off their profits earned in the current year against losses incurred in previous years. For the purpose, the QFI would need to file its return of income within the time limits stipulated in the Income-tax Act, 1961. For this purpose, QFIs need to file return for the relevant year within the time limits stipulated in the Income-tax Act, 1961.

Q.15. What would be the applicable rates of taxation if a QFI comes from a jurisdiction with which India has a Double Taxation Avoidance Agreement (DTAA) as against one which comes from a non-DTAA Jurisdiction?
Ans:    The applicable rates of taxation in the case of investment from a country will be at the rate provided in the Income-tax Act or the rate provided in the Double Taxation Avoidance Agreement, whichever is more beneficial to the investors. 

Q.16. Whether the capital gains arising on sale of shares are computed in Indian currency or in other currency?
Ans:  The capital gains arising on sale of shares shall be computed by converting the cost of acquisition, expenditure incurred and full value of consideration in the same currency, as was initially utilized for purchase of shares and the gains so computed shall be reconverted in India currency.

Q.17. Whether DTAA provisions will apply while deducting tax at source? 
Ans:  Yes. Also see answer to question No. 15.

Q.18. Will the QDPs be held responsible for withholding taxes against profits on mutual fund investments by QFI’s?
Ans:  Income from investment from mutual fund may arise by way of distribution of profits by the fund or by way of redemption by the fund or by way of sale of units of the fund. In case of distribution of profits by the mutual fund, the mutual fund itself Page 6 of 8pays tax on distribution of profits. In case of sale of units of the fund, the QDP would be required to withhold tax if the buyer of the mutual fund units has not deducted tax. In case of redemption of units by the fund or sale of units of the fund, the QDP would be required to withhold the tax.

Q.19. If the QFI is no longer the client of the QDP, then can the QDP be called upon to make good the shortfall in tax and liable to interest and penalty having acted in bonafide and good faith?
Ans:  QDP, being a deductor, shall be liable for any short deduction or non-deduction of tax even after the QFI ceases to be the client of QDP.

Q.20. What are the deductible expenses that may be incurred by QFI for purchase & sale of shares and Mutual Funds?
Ans:   The deductibility of expenses would depend on the fact that whether the income on the sale of shares is treated as business income or capital gains. In general if the income is treated as capital gains expenses like brokerage fees would be allowed. 

Q.21. Whether QDP should treat residence certificate as a sufficient proof of residence and beneficial ownership of the shares in India by the QFI?
Ans:   Prima facie, the Tax Residency Certificate is evidence of residence in a particular country and the QDP may rely on such a certificate. However, as per Explanatory Memorandum to the Finance Bill, 2012, the amended section 90 and 90A of the Income-tax Act makes submission of Tax Residency Certificate containing prescribed particular, as a necessary but not sufficient condition for availing benefits of the tax treaties.

Q.22. Whether the QDP is required to obtain an Income Tax Order under Section 195(2) of the Act for determining the income component (capital gains) on the sale of shares?
Ans:   Central Board of Direct Taxes (CBDT) Circular No. 4/2009 dated 29/06/2009, clarifies that the term ‘payer’ also means a remitter. As the QDP is making the payment of the income to the QFI, the QDP could be considered as a ‘payer’ Under Section 195(2) of the Act, if any person responsible for paying any sum chargeable under the Act to a non-resident, considers that the whole of such sum would not be income chargeable in the case of the recipient, he may make an application to the Assessing Officer(AO) to determine the appropriate  proportion to such sum on which tax is to be deducted (TDS).

 The requirement of obtaining CA Certificate is only in the context of remittance of money outside India. It is not in the context of TDS liability. The QDP is custodian of all data in respect of transactions on which income has arisen to a QFI. It will also maintain the QFI account, wherein the QFIs’ income  is determined. Therefore, the QDP is supposed to deduct tax on the basis of sum chargeable to tax. In normal situations such as working out the capital gains on a transaction, there would not be any difficulty and QDP can itself determine the amount chargeable to tax and deduct tax thereon or take help of Chartered Accountant in this behalf. However, in case there is complexity in determining such income the  QDP should approach the Assessing Officer for determination u/s 195(2). Even for other deductees, it is not mandatory that in each and every case, they should  obtain 195(2) order before deducting TDS. However, in case a complex issue, it is advisable to do so. This is because the liability to deduct proper taxes remains on the deductor (i.e. QDP).

Q.23. For the purpose of computing tax deduction at source (withholding tax), what is the proof and declaration that the QDP can rely upon for allowing the full time benefit of a DTAA to a QFI?
Ans:  There is no standard set of documents on the basis of which the DTAA treaty benefit can be said to have been rightly allowed. It depends on the facts of each case. The treaty benefit is to be claimed by the person concerned before it can be allowed. For this purpose, the QDP should obtain the Tax Residency Certificate from the QFI.

Q.24. Having relied on the documentations and given the treaty benefits, if later the same is held not allowable by the tax officer, can the QDP be held responsible and called upon to pay for any shortfall in tax, interest and penalties?
Ans:  The liability to deduct and pay proper taxes remains that of the QDP as a deductor. Therefore, for any shortfall in tax QDP can be held responsible. The responsibility remains both for non-deduction or short deduction of tax if it is found that the treaty benefit have been incorrectly claimed or considered.

Q.25. What is the maximum number of years in which an  assessment can  be done or reopened in case of TDS returns filed by the QDP?
Ans:    As the payment would be made to QFIs, who are non-residents, the Act does not prescribe any time limit for scrutiny of transaction for TDS purposes under section 201 of the Act.

Q.26. Can the QDP be held responsible for withholding of tax at source in case of a QFI on sale considerations received under an open offer or buy back of shares where the purchaser of the shares is responsible for withholding tax and complying with the TDS filings under the Act?
Ans:  Under the Income-tax Act, any person responsible for paying to a non-resident (not being a company) or to a foreign company, any sum chargeable under the provisions of the Act, has to deduct tax at the time of credit of such income to the account of the payee or at the time of payment, whichever is earlier. The responsibility of tax deducted at source by the QDP in the case of sale consideration received by a QFI on account of an open offer or a buyback of shares would depend upon the facts of the case. In case the purchaser of shares is crediting the sum to the account of the QFIs or making payment to QFIs, the purchaser would be required to deduct the tax. However, if the QDP is crediting the sum to the account of the QFIs or making payment to the QFIs, the QDP would be required to deduct the tax. Please also refer to question no.7.