Jul 31, 2013

Income tax department extends due date for filing return to 5 August 2013

3:35 PM 0
Income tax department extends due date for filing return to 5 August 2013
Income tax department has extended due date of filing income tax return from 31 July 2013 to 05 August 2013. This is the big relief of 5 days to the assessee as there is a big rush for filing income tax return. Income tax department updated this extension only on 31 July  at 3 PM. 

If the extension is to be made, it should be earlier as it can give big relief to the assessee who need to file income tax return. 

However, no reason is given for extension but it is a big relief anyway.
Tags-income tax return,extension of income tax return due date,due date extension of income tax return filing, last date extension of return filing,it return filing extension

Rate of interest of rupee denominated bond of Indian company

9:32 AM 0
Rate of interest of rupee denominated bond of Indian company
Income tax department issued a notification no. 56/2013 dated 29 July 2013 about rate of interest of rupee denominated bond of an Indian company. Full notification is as under.

S.O. 2311 (E).- In exercise of the powers conferred by the proviso to sub-section (2) of section 194LD of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies the following rates of interest in respect of rupee denominated bond of an Indian company, namely :- 

(i) in case of bonds issued before the 1st day of July, 2010, the rate of interest shall not exceed 500 basis points (bps) over the Base Rate of State Bank of India as on the 1st day of  July, 2010. 

(ii) in case of bonds issued on or after the 1st day of July, 2010, the rate of interest shall not exceed 500 basis points (bps) over the Base Rate of State Bank of India applicable on the date of issue of the said bonds
Tags-rate of interest of rupee denominated bond,rupee denominated bond rate of interest,rupee denominated bond interest rate,interest rate on rupee denominated bond,what is rupee denominated bond,how rupee denominated bond works,rupee denominated bond interest rate current,rupee denominated bond current interest rate

Jul 30, 2013

Rate of interest on fixed deposit FD/RD of various bank on 30-07-2013

4:20 PM 0
Rate of interest on fixed deposit FD/RD of various bank on 30-07-2013
This is the high time investing your money in fixed deposit or recurring deposits. Prople generally don't know about previling rate of interest on FD and RD and often choose that bank in which an account is active. But for the fixed deposit you must check other's bank offering rate of interest. Some banks give very low rate of interest whereas some banks offer high. This sheet shows you the current rate of interest offering by various banks in India on the date 30 July 2013.

Jul 29, 2013

Advance tax calculator for financial year 2012-13

11:30 PM 0
This is the high time to pay the advance tax liability. The last date to pay the advance tax is 15 December. Finance minister has announced that advance tax liability will be in the case of tax liability is higher than 10000 rupees. So there is the change in the advance tax calculations. So with this calculation there is an advance tax calculator for the financial year 2012-13 which will be very useful to everybody. The main features of this excel based advance tax calculator are as follows.

1- completely excel based calculation.
2- Tell date wise liability ion the case of advance tax arise.
3- Calculation of tax liability in the case of no advance tax payable.
4- Colorful presentation.
So Download advance tax calculator from here
Tags-advance tax calculator,advance tax calculator for fy 12-13,advance tax calculation,how advance tax is calculated,advance tax for 2012-13,advance tax calculator 2011-12,advance tax calculator 2012-13,advance tax calculator for company,advance tax calculator in excel

Jul 28, 2013

Online transfer of PF account will commence on 15 August

1:41 PM 2
Online transfer of PF account will commence on 15 August
Employee’s provident fund organization (EPFO) announced Independence gift to Indians as online transfer of Provident fund account on changing jobs will start on 15 August. This facility will benefit around 13 lakh subscribers in India.

Earlier EPFO has started taking digital signatures of the employer as it will be a vital for system for online transfer. The department hopes a good response from the employer providing digital signatures as the success of online transfer of accounts depends on it.
The department wants to launch the service of online transfer of PF account on 15 august the day of independence.

Digital signatures are used quite often in other sources like in income tax return as well as in big companies, on cheques as well. So there is no harm providing to EPFO as it will make transferring provident fund account really fast and easy.


Once the service is launched, subscribers would be able to apply online for transfer claims through their employers. It has set up a central clearance house for the purpose. 

During 2012-13, 107.62 lakh claims were settled, of which 88 per cent were processed within 30 days, as prescribed by the body's citizen charter. 

EPFO expects 1.2 crore claims in 2013-14, including around 13 lakh PF transfer claims. It plans online settlements of about 10 lakh transfer claims of tech-savy applicants from industries such as IT, this fiscal. 
Tags-online transfer of pf account,pf account transfer online,how to transfer pf account online,online transfer of provident fund account

Banks will not take post dated cheques for EMI of any loan

12:54 PM 0
Banks will not take post dated cheques for EMI of any loan
Banks will no longer take post dated cheques for EMI of any loan. Banks are looking more to ECS and RECS. This mandate is only for the palaces where ECS or RECS facility is available. Full Reserve bank of India note is as under.

We invite a reference to our circular DPSS.CO.CHD.No.1622/04.07.05/2012-13 dated March 18, 2013 wherein all lending banks have been advised not to accept any fresh Post Dated Cheques (PDC)/Equated Monthly Installment (EMI) cheques in locations where the facility of ECS/RECS (Debit) is available and convert existing cheques in such locations into ECS/RECS (Debit) by obtaining fresh mandates.

2. However, instances of banks obtaining fresh cheques (both CTS-2010 and non CTS-2010 standard) in locations where the facility of ECS/RECS is available have been brought to our notice, thus necessitating a reiteration of our earlier instructions in this regard.

3. Accordingly, banks are advised to adhere to the following instructions with immediate effect:
  1. No fresh/additional Post Dated Cheques (PDC)/Equated Monthly Installment (EMI) cheques (either in old format or new CTS-2010 format) shall be accepted in locations where the facility of ECS/RECS (Debit) is available. The existing PDCs/EMI cheques in such locations may be converted into ECS/RECS (Debit) by obtaining fresh ECS (Debit) mandates.

  2. As indicated in our circular DPSS.CO.PD.No.497/02.12.004/2011-12 dated September 21, 2011, Section 25 of the Payment and Settlement Systems Act, 2007 accords the same rights and remedies to the payee (beneficiary) against dishonor of electronic funds transfer instructions under insufficiency of funds as are available under Section 138 of the Negotiable Instruments Act, 1881. Considering the protection available, there is no need for banks to take additional cheques, if any, from customers in addition to ECS (Debit) mandates.

  3. Cheques complying with CTS-2010 standard formats shall alone be obtained in locations, where the facility of ECS/RECS is not available.
4. The above instructions are issued under section 18 of the Payment and Settlement Systems Act 2007 (Act 51 of 2007).

5. Please acknowledge receipt.

Jul 27, 2013

Banks will ask for KYC documents again for operating an account

10:48 PM 1
Banks will ask for KYC documents again for operating an account
Customers will need to full KYC(Know your customer) documents even after opening the bank account .Reserve bank of India issued a note about periodically inspect and interact with the customers. Customers need to fulfill documents KYC periodically that depends about the transactions and risk factor with the minimum tenure is 2 years with the maximum of 10. This includes giving recent photographs with the ID proof self attested. Full RBI note is as under.

Know Your Customer (KYC) Norms /Anti-Money Laundering (AML) Standards/ Combating of Financing of Terrorism (CFT)/Obligation of banks under Prevention of Money Laundering Act (PMLA), 2002 - Simplifying norms for Periodical Updation of KYC

Please refer to paragraph 4 of our circular RPCD.CO.RRB.No.BC. 50/03.05.33(E)/2007-08 dated February 27, 2008 andRPCD.CO.RF.AML.BC.No. 51/07.40.00/2007-08 dated February 28, 2008 on Know Your Customer (KYC) Norms / Anti-Money Laundering (AML) Standards/Combating of Financing of Terrorism (CFT) which states that “Banks should introduce a system of periodical updation of customer identification data (including photograph/s) after the account is opened. The periodicity of such updation should not be less than once in five years in the case of low risk category customers and not less than once in two years in case of high and medium risk categories”.

2. The issue has been reviewed in the light of practical difficulties/constraints expressed by bankers/customers in obtaining/submitting fresh KYC documents at frequent intervals as the relative documents submitted earlier specially by low-risk customers have remained unchanged in most of the accounts. Accordingly, based on the suggestions received, it has been decided to amend the instructions as under:

a) Banks would need to continue to carry out on-going due diligence with respect to the business relationship with every client and closely examine the transactions in order to ensure that they are consistent with their knowledge of the client, his business and risk profile and, wherever necessary, the source of funds.

b) Full KYC exercise will be required to be done at least every two years for high risk individuals and entities.

c) Full KYC exercise will be required to be done at least every ten years for low risk and at least every eight years for medium risk individuals and entities.

d) Positive confirmation (obtaining KYC related updates through e-mail/letter/telephonic conversation/forms/interviews/visits, etc.), will be required to be completed at least every two years for medium risk and at least every three years for low risk individuals and entities.

e) Fresh photographs will be required to be obtained from minor customer on becoming major.

3. Banks may revise their KYC policy in the light of the above instructions and ensure strict adherence to the same.
Tags-bank kyc rule,kyc rule bank

Jul 26, 2013

Provident fund start digital signatures for online transfer of accounts

6:34 PM 0
Provident fund start digital signatures for online transfer of accounts
EPFO has started registering digital signatures of employer with the aim of starting online transfer of PF account on changing jobs. EPFO is  taking it seriously for providing the facility of online transfer of the accounts.

According to an official circular, theEmployees' Provident Fund Organisation(EPFO) has directed its over 120 field offices to depute a nodal officer to facilitate the registration of digital signatures of firms. 

The facility will be available on the main site epfindia.gov.in to upload digital signature of the employer. The success rate will depend on how many employer upload their signatures as it is essential to authenticate transfer claims.

Taking the first step towards launching online PF transfer claim facilities, EPFO had earlier this month unveiled a revised claim form for the purpose. 

EPFO is likely to start the online PF transfer claim facility by the end of next month. With this, EPF subscribers would be able to apply online to transfer their accounts through their new employers. 

The revised transfer claim form can be presented after verification by the present employer or the previous employer. Previously, the form could be submitted only after verification by the present employer. 

EPFO has set up a central clearance house to enable subscribers to apply online for PF withdrawal and transfer claim settlements. 
Tags-online transfer of pf account,provident account transfer,pf account transfer,transfer of pf account,online transfer of provident fund account

Jul 25, 2013

Salaried income up to 5 Lakh need to file income tax return for AY 2013-14

7:24 PM 0
Salaried income up to 5 Lakh need to file income tax return for AY 2013-14
Central board of direct taxes(CBDT) has not extended the exemption to salaried persons having income up to 5 lakh per year not to file income tax return. Now they need to file income tax return for assessment year 2013-14.

For the assessment year 2011-12 and 2012-13, CBDT had exempted not to file income tax return for salaried person having income up to Rs. 5 lakh including income from other sources upto Rs. 10000. 

"The exemption was available only for the assessment years 2011-12 and 2012-13...the exemption provided during the last two years is not being extended for assessment year 2013-14," the CBDT said in a statement. 

Income tax department also made e-filing mandatory for the person having income more than 5 lakh for the assessment year 2013-14.

CBDT said that because of e-filing of income tax return is user friendly with the advantage of pre-filled return forms, there is no logic for extension of this exemption not filing income tax return.

"Taxpayers are encouraged to file their returns electronically. E-filing is an easy, fast and secure method of filing of income tax return. Moreover, digital signature is not mandatory for these taxpayers...," the Ministry added. 

Income tax department has set up special receipt counter at various palaces for salaried tax payers. But on counters paper return only can be filled.
Tags-return exemption to salaried person,5 lakh income tax return exemption,exemption for not filing income tax return

Audit can be directed without hearing of assessee

7:20 PM 0
Audit can be directed without hearing of assessee
Special audit can be directed without providing an opportunity of personal hearing to assessee
Proviso to section 142(2A) does not envisage any personal hearing to assessee before an passing of an order for special audit.

In the instant case the assessee-company was opposed to the proposal of special audit on the ground that there were no complexities in the accounts and contented that proviso to section 142(2A) provides an opportunity of personal hearing to assessee.

The HC held as under:

1) The requirement of personal hearing is normally not seen as necessary concomitant to a reasonable opportunity of being heard. The same depends on the statutory provisions from which such right flows, the nature of the proceedings and the consequences likely to follow from such proceedings;

2) The proviso to section 142(2A) does not envisage any personal hearing before an order under sub-section (2A) can be passed. The said proviso only requires giving a reasonable opportunity of being heard to the assessee. Such reasonable opportunity ordinarily would not include right of personal hearing;

3) It was strongly argued by assessee that the very fact that the AO believed that the accounts were complex, it meant that the issues were complex and the personal hearing was required. This contention was misconceived. Complexity of accounts and complexity of the question whether accounts were complex or not were two totally different things;

4) Thus, a clear distinction had to be drawn between the two. Whether the accounts were complex so as to call for special audit was one aspect. Another aspect was whether the question to ascertain if the accounts were complex was itself a complex question. This would have a bearing on whether personal hearing was necessary. Thus, assessee’s contention of personal hearing was rejected;

5) Coming to the question of validity of the order on the premise of complexity and the requirement of interest of revenue, it was noticed that the assessee had been given previous notice under section 142(1) with respect to its accounts. For a long time the assessee did not comply with such notices;

6) The authorities had highlighted several aspects of the matter to indicate that the accounts were complex and that interest of revenue would be served if the special audit report was obtained. The various points on which the AO desired that the auditor should make a report itself would demonstrate that the accounts were complex;

7) The AO had sufficient material at his command to form an opinion that the accounts were complex and that it was in the interest of the revenue to get them audited by the special auditor. Thus, there was no merit in instant petition and the same was to be dismissed. - NEESA LEISURE LTD. V. DY. CIT [2013] 35 taxmann.com 216 (Gujarat)

Jul 24, 2013

Income tax department extends due date of filing the return to 31 October 2013

5:06 PM 0
Income tax department extends due date of filing the return to 31 October 2013
Income tax department has extended due date for filing return of income from 31 July 2013 to 31 October 2013 for the resident or assessee assessed in state of Uttrakhand. Income tax department issued an order  regarding extension of due date. 

Considering the large-scale devastation due to recent natural calamity in the State of Uttarakhand, the Central Board of Direct Taxes, in exercise of powers conferred under section 119 of the Income-tax Act,
1961, hereby extends the 'due-date' for filing Returns of Income required to be furnished by 31st July, 2013
to 31st October, 2013, in respect of income-tax assessees residing or assessed in the State of Uttarakhand.
Tags-last date for filing the return,extension for return filing 2013-14,due date extension of income tax,income tax due date extension income tax,income tax due date extension,

Central Excise circular about excise duty on sedan cards like SX4,Honda civic and Altis

4:58 PM 0
Central Excise circular about excise duty on sedan cards like SX4,Honda civic and Altis
Central Excise department issued a circular no. 972/2013 dated 24 July 2013 about applicable excise duty on sedan cars like Maruti SX4, Honda Civic and Toyota corolla altis. Full circular is as under.

1-I am directed to invite your attention to the above mentioned subject and to say that references have been received from motor vehicle manufacturers, seeking clarification as to whether the excise duty of 30% is applicable on sedan cars like Maruti SX4, Honda Civic and Toyota Corolla Altis. It has been stated that these motor vehicles satisfy all the three conditions mentioned at Sl. No. 284A of the Table in notification No. 12/2013-CE, dated the 1st March, 2013, viz.   (i) the engine capacity exceeds 1500 cc;  (ii) the length exceeds 4000 mm and  (iii) ground clearance is  170 mm and above. However, these vehicles are not popularly known as Sports Utility Vehicles and that these are in the nature of sedans.

2.  The matter has been examined.  In the Budget 2013-14,   excise duty was increased from 27% to 30% on motor vehicles of engine capacity exceeding 1500 cc, popularly known as Sports Utility Vehicles (SUVs) including utility vehicles. In the Explanation appended at Sl. No.  284A of the  aforecited  notification,  it has been mentioned that for the purposes  of this entry,  SUV  includes a  motor vehicle  of length exceeding 4000 mm and having ground clearance of 170 mm and  above. From this,   it may be seen that the higher excise duty of 30% is applicable on motor vehicles which are popularly known as SUVs and which satisfy all the three conditions, viz. (i)  the engine capacity exceeds 1500 cc, (ii) the length  exceeds  4000 mm; and (iii) the ground clearance is 170 mm and above. Maruti SX4, Honda Civic and Toyota Corolla Altis are stated to satisfy all the three conditions but, they are not popularly known as SUVs and neither are they known so in trade parlance. They are reportedly known as sedans in trade and common parlance.

3.            In view of the above, it is clarified that the aforecited motor vehicles, which are known as sedans, will attract the excise duty of 27% as applicable  to large segment cars.[Sl.No. 284 (ii) of the Table in notification ibid]

4.            Difficulties, if any, faced in the implementation of above instructions may be brought to the notice of the Board.
Tags-excise duty on cars in india,excise duty in india on cars,excise duty increased on cars,excise circular no. 972,excise circular no. 972/2013,central excise circular 972 on cars

Jul 23, 2013

ITR 6 for assessment year 2013-14 in excel free download

3:12 PM 0
Income tax department updated income tax return form ITR-6 for the assessment year 2013-14 in excel format. Earlier ITR-1 SAHAJ, ITR-2, ITR-3, ITR-4 and ITR-4S Sugam form also updated by income tax department in excel as well as pdf format. 

ITR-6
This Form can be used by a company, other than a company claiming exemption under section 11. This Form has to be compulsorily furnished electronically under digital signature to the Income Tax Department.



Download ITR-6 for assessment year 2013-14 in excel from here
Tags-itr 6,itr 6 in excel,itr 6 ay 13-14,itr 6 ay 2013-14,download excel itr 6,download excel format itr 6,itr 6 in excel for assessment year 2013-14

Jul 21, 2013

CBDT instruction on TDS mismatch if deductor has deposited amount

5:51 PM 0
CBDT instruction on TDS mismatch if deductor has deposited amount
SECTION 199 OF THE INCOME-TAX ACT, 1961 - CREDIT FOR TAX DEDUCTED – CREDIT OF TDS UNDER SECTION 199 TO AN ASSESSEE WHEN THE TAX DEDUCTED HAS BEEN
DEPOSITED WITH REVENUE BY DEDUCTOR – DIRECTION OF HON'BLE DELHI HC IN THE CASE 'COURT ON ITS OWN MOTION VS. UNION OF INDIA' IN W.P.(C) 2659/2012 & W.P. (C ) 5443/2012*

INSTRUCTION NO. 5/2013 [F.NO.275/03/2013-IT(B)], DATED 8-7-2013

1. The CBDT issues instructions with respect to processing of Income-tax returns and giving credit for TDS thereon in the case of TDS mismatch. A few of the instructions on this subject issued in previous years are Instruction No. 1/2010 (25-2-2010) for returns pertaining to A.Y, 2008-09; Instruction No. 05/2010 (21-7-2010), Instruction No. 07/2010 (16-8-2010) and Instruction No. 09/2010 (9-12-2010) for returns pertaining to AY. 2009-10; Instruction No. 02/2011 (9-2-2011) for returns pertaining to A.Y. 2010-11; and Instruction No. 1/2012 (2-2-2012) and Instruction No. 04/2012 (25-5-2012) for returns pertaining to A.Y. 2011-12. The instructions gave decisions and the manner in which the TDS claims were to be given credit while clearing the backlog of returns pending processing. In the cases that did not fall under the specific TDS amount limit or refund amount computed, the residuary clause in these instructions gave the manner of processing those returns and it stated that "TDS credit shall be given after due verification ".

2. The Hon'ble Delhi High Court vide its judgment in the case 'Court On its Own Motion v. UOI and Ors. (W.P. (C) 2659/2012 & W.P. (C) 5443/2012 dated 14-3-2013) has issued seven mandamuses for necessary action by Income-tax Department, one of which is regarding the issue of non-credit of TDS to the taxpayer due to TDS mismatch despite the assessee furnishing before the Assessing Officer, TDS certificate issued by the deductor.

3. In view of the order of the Hon'ble Delhi High Court (reference: para 50 of the order); it has been decided by the Board that when an assessee approaches the Assessing Officer with requisite details and particulars in the form of TDS certificate as an evidence against any mismatched amount, the said Assessing Officer will verify whether or not the deductor has made payment of the TDS in the Government Account and if the payment has been made, credit of the same should be given to the assessee. However, the Assessing Officer is at liberty to ascertain and verify the true and correct position about the TDS with the relevant AO (TDS). The AO may also, if deemed necessary, issue a notice to the deductor to compel him to file correction statement as per the procedure laid down.

4. Thus, the manner laid down by the Hon'ble HC in the above mandamus may be one of the method of due verification as mentioned in the various instructions referred in para (1) above.

5. This may be brought to notice of all Officers working under your jurisdiction for compliance.

Standard unit quantity code UQC in custom

2:00 PM 0
Standard unit quantity code UQC in custom
Custom department introduced standard unit quantity code(UQC). Custom department issued a circular no. 26/2013 dated 19 July 2013 about standard unit quantity code. Full circular is as under.

Subject: Standard Unit Quantity Code (UQC) - regarding.


1.  The issue of poor quality of trade data has been engaging the attention of the Government. Further, an analysis of National Import Data Base (NIDB) reveals that there  are at times variations between the lowest and highest unit values of the same item, which might escape detection on account of the use of different unit codes.

2.         The matter has been carefully examined with the objective of improving data quality both from the view point of generating error free trade statistics as well as providing usable contemporary reference values to the assessing officers. The Board notes that Standard     Unit Quantity Codes (UQC) indicated in the Customs Tariff Act, 1975 are not being uniformly declared by importers and exporters for the same items across different Customs locations. This impacts data quality and makes comparisons and aggregations difficult. The use of non-uniform UQCs for the same item also vitiates the quality of the NIDB data and reduces its utility to the assessing officers, who are unable to ascertain the contemporaneous values or assessment practice of a given item in different Customs locations. Therefore, the solution lies in improving the quality of data by using standard UQCs.

3.         In this regard, it is seen that the Customs Tariff Act, 1975 prescribes only a single Unit Quantity Code (UQC) against each Tariff Item, and it is the requirement of the law that the same is properly declared by importers/exporters/Customs Brokers in the Bills of Entry/Shipping Bills. It is the view that the correct declaration of the UQC, as indicated in the Customs Tariff Act, 1975 would resolve the aforementioned difficulties. Accordingly, it is directed by the Board that Customs field formations should ensure that only the correct and prescribed Standard UQC as per the Customs Tariff Act, 1975 is mentioned in Bills of Entry/ Shipping Bills.

4.         Board desires the Chief Commissioners of Customs to ensure that instructions as aforementioned are complied with scrupulously. There should, however, be an endeavour that the exercise does not result in delays in clearance of cargo. The Directorate of Valuation shall monitor the correct use of UQCs and DG (System) shall modify the software applications suitably to give effect to mandatory compliance of correct UQC.

5.         Difficulty faced, if any, in implementation of aforementioned instructions may be brought to the notice of the Board.
Tags-standard unit quality code,uqc in custom,custom uqc

Income tax new rule 6AAF for guidelines for approval of skill development project

1:55 PM 0
Income tax new rule 6AAF for guidelines for approval of skill development project
Income tax department insert new rule section 6AAF about guidelines for approval of skill development under section 35CCD of income tax act. Income tax department issued a new notification no. 54/2013 dated 15 July 2013. Full notification is as under.

S.O. 2166(E).– In exercise of the powers conferred by section 295 read with sub‐section (1) of section 35CCD of the Income‐tax Act, 1961 (43 of 1961),the Central Board of Direct Taxes hereby makes the following rules further to amend the Income‐tax Rules, 1962, namely:‐

Jul 20, 2013

Income tax calculator for financial year 2013-14 and analysis year 2014-15

11:30 PM 0

There are not very many changes in the calculation of income tax for the financial year 2013-14 and the analysis year 2014-15. But there are some changes too in the finance bill 2013 which are as follows.

1- Income tax section 87A provides the additional relief of 2000 to the income tax slabs 200000-5000000. It means now the income is exempted up to 220000 as this is 10% slab of income tax.

2- Section 80TTA is already introduced in which interest on saving account is exempted up to Rs. 100000.

3- Rajiv Gandhi equity saving scheme under section 80CCG.

4- Payment of advance tax must be online if taxable income is more than 10 lakh.

One of my friend Mr. Pranab Banerjee has developed an excel based income tax calculator for financial year 2013-14 and the analysis year 2014-15 and he shares this excel based utility with Taxalertindia.com






The features of this excel based income tax calculator for central government employees are as under.
1- It’s an excel based calculator.

2- Full explanation given of different sections in which one can get relief (New section introduced).

3- Full instruction given on how to use it.

4- Data input sheet, pay sheet, salary calculation and hra calculation given on different pages.

5- Available for free download.
Download income tax calculator for fy 2013-14 and ay 2104-14 

Keywords-income tax calculation, income tax calculator for fy 2013-14,income tax calculator for ay 2014-15,income tax calculator in excel,income tax calculator for financial year 2013-14,income tax calculator for analysis year 2014-15,excel income tax calculation, income tax calculator xls

Jul 19, 2013

Guidelines for deduction at 150% on expenditure on skill development u/s 35CCD

5:34 PM 1
Guidelines for deduction at 150% on expenditure on skill development u/s 35CCD
Income tax department has issued a press release on guidelines for weighted deduction @150% of the expenditure incurred on skill development under section 35CCD of income tax act. Full press release is as under.

Subject: Guidelines for weighted deduction @150% ofthe expenditure incurred on skill development under section 35CCD ofthe Income­taxAct,1961.

The National Manufacturing Policy (NMP), 2011 proposed to provide inter alia,  the  following  direct  taxes  incentives  to  promote  skill development: 

“Weighted deduction of 150% of the expenditure (other than land or building) incurred in Public Private Partnership (PPP)projects for skill development in manufacturing sector in separate facilities in coordination with National Skill Development Corporation (NSDC).”

2.  As  a  follow  up  of  NMP,  Finance  Act,  2012  inserted  a  new  Section 35CCD  in  the  Income‐tax  Act,  1961(‘the  Act’)  which  provides  that  for computing  business  income,  a  company  shall  be  allowed  a  weighted deduction  of 150%  of expenses  (other  than land  or  building) incurred  on 
skill  development  project  notified  by  the  Board  in  accordance  with the guidelines as may be prescribed. 

3. The guidelines for approval of skill development project are prescribed in new Rules 6AAF, 6AAG and 6AAH inserted in the Incometax Rules, 1962 by Notification No. S.O.2166(E) dated 15th July, 2013.
 The salient features of the guidelines are as under:

(1)A company engaged in the business of manufacturing any article or thing (other than alcoholic spirits and tobacco products) or engaged in providing specified services, as listed under Rule 6AAH, shall be eligible 
for weighted deduction of the expenditure incurred on skill development. 

(2)The project should be undertaken in separate facilities in a training institute set up by the Central or State Government or a local authority or a training institute affiliated to National Council for Vocational Training 
(NCVT) or State Council for Vocational Training (SCVT). Besides Government training institutes, private sector training institutes affiliated to NCVT or SCVT shall also be eligible. 

(3)National Skill Development Agency (NSDA) shall be the nodal agency to scrutinize the applications made by eligible companies in Form No. 3CQ. The Central Board of Direct Taxes(CBDT) shall notify the skill 
development project based on the recommendation of NSDA in this regard. 

(4) All expenses (not being expenditure in the nature of cost of any land or building), incurred wholly and exclusively for undertaking a notified skill development project shall be eligible for deduction under section 
35CCD,except the expenditure which is reimbursed or reimbursable to the company by any person, whether directly or indirectly. 

(5) The company undertaking skill development projectshall be required to maintain separate books of account of the project notified under section 35CCDand getsuch books of account audited.

(6) Itisintended thatthe skill development projectshall provide training to potential employees or newly recruited employees. Skill developmentof existing employees of the company shall not be eligible for
notification under section 35CCD, if the training of such employees commences after six months  of their recruitment.
Tags-section 35ccd,section 35ccd of income tax act,35ccd it,it section 35ccd,deduction on expenditure on skill development, deduction on skill development section 35ccd

Jul 18, 2013

ITR-1 SAHAJ auto fill in excel for assessment year 2013-14

10:28 PM 0
ITR-1 SAHAJ form is to be used by an individual whose total income for the assessment year 2013-14 includes:- 


a) Income from Salary/ Pension; or 
(b) Income from One House Property (excluding cases where loss is brought forward from previous years); or
(c) Income from Other Sources (excluding Winning from Lottery and Income from Race Horses)


Further in case where the income of another person like spouse, minor child etc. is to be clubbed with the income of the assessee, this return form ITR1(SAHAJ) can be used only if the income being clubbed falls into the above income categories.

One of mine friend Mr. Pranab Banerjee has developed an automated auto fill itr-1 sahaj form excel based utility which is very useful for filling the SAHAJ form. One need to just enter some data in input sheet and automated fill SAHAJ form is ready to print. He is very happy to share with taxalertindia.com.






Download excel based automated sahaj income tax form for the assessment year 2013-14 from here.
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Jul 17, 2013

Fixed deposit and recurring deposit comparison and excel calculator

7:27 PM 5
Fixed deposit and recurring deposit comparison and excel calculator
Now a day’s interest rates are very fluctuating and RBI recently change the bank rate. So many people want to lock their money by depositing in the banks. But always there is a choice of fixed deposit or recurring deposit.

When we compare both of them, both have some advantages and disadvantages too. Like in fixed deposit, the interest income is always high compare to recurring deposit.  Whereas recurring deposit has no TDS rule. Some of the features of fixed as well as recurring deposit are as follows.

Fixed deposit
- Always give higher return compare to recurring deposit as you need to lock the entire amount in starting and all the amount fetch interest.

- The longer the amount, maximum the interest income.

- TDS will deduct if the interest income exceeds Rs. 10000 in a year. Investor will get the balance amount after deducting tax deduction at source.

- FDs are always advised when you have cash in hand.

Recurring deposit
In this scheme a fixed amount needs to submit in the account like the EMI and after the tenure, you will get entire amount with compound interest. Features are as follows.

- Both fixed deposit and recurring deposit gives same rate of interest on deposits.

- No TDS deduction.

- However the interest earned is not tax free and always taxable.

- It is advisable when one can save a certain amount every month and has not big cash in hand.
Interest calculation is as follows in this sheet.



Tags-recurring deposit calculator,fixed deposit calculator,rd calculator,fd calculator,fd vs rd,comparison between rd and fd,what is rd,income tax treatment of rd

Jul 15, 2013

89(1) arrears relief calculator for financial year 2013-14

11:30 PM 0
Section 89(1) of the income tax act is the relief when an employee receives his/her salary in advance, arrears. In this condition income will be calculated at higher rate as per section 17(3) of income tax act. The relief is to be allowed in terms of rule 21 A of the Income-tax Rules, 1962.

After implemented 6th pay commission of income tax act, employees get a high portion of the arrears of salary. So everybody is in thinking of save the tax on the arrears amount. There is the way to save the tax amount of the salary arrears under Section 89(1) of income tax act.

This is section 89(1) relief calculator for the financial year 2013-14 and the analysis year 2014-15 which is prepared by Mr. Pranab Banerjee and he wish to share with taxalertindia.com. This is updated excel based section 89(1) relief calculator which is very easy in calculation.

The features of this section 89(1) arrears relief calculator are as follows.



  • This is an excel based calculator.
  • Very easy and accurate calculation.
  • It also prepares 10 E anex & Table A automatically.
  • It also prepares Form 10E automatically.
  • Available for download.
Download calculator
Keywords-section 89(1) relief calculator,section 89(1) relief calculator for fy 13-14,section 89(1) relief calculator for fy 2013-14,section 89(1) relief calculator for ay 2014-15,section 89(1) relief calculator for ay 2013-14,89(1) relief calculator,section 89(1) arrears relief calculator,section 89(1) relief calculator free download, 89(1) relief calculator xls,section 89(1) relief calculator in excel,89(1) relief calculator in excel

Jul 12, 2013

Fixed deposits are eating your money for the last 5 years

9:30 AM 0
Fixed deposits are eating your money for the last 5 years
You may wonder that your fixed deposit is fetching negative return to your income or eating your money. This looks impossible at one stage but this is true in context of last five years as fixed deposits are giving negative return thanks to inflation.

Further, income tax law on TDS on interest makes it worse as the depositors are taxed on interest income which is nominal.

However, TDS rule on interest is always on and banks always want to cut your money but the rules are tight now as we used to create FDRs in installments which are not over 50000 to save TDS deduction and divided the amount in some branches or even in some banks.

Threshold limit on TDS on interest income is 10000. If the interest income is 10000 or over in a financial year, bank will deduct TDS if the depositor does not submit form 15G or 15H timely.

Study tells that investors are getting negative return on fixed deposits for the last five years.

The lowest real return was -5 .4% in 2009-10 when consumer price index for industrial workers CPI-IW rose by 12.4% and the weighted average deposit rate on term deposits was 6.97%. The weighted average return takes into account the average cost of deposits for banks after factoring in the extent in each maturity basket. Although bankers offer the highest return on deposits of 3-years and above, bulk of bank deposits are around the one-year category.
Tags-fixed deposits,rate of interest on fixed deposits,fixed deposit negative return,negative return of fdr,negative return of fixed deposit

Penalty may be waived if assessee co-operate in proceedings of service tax

8:30 AM 0
Penalty may be waived if assessee co-operate in proceedings of service tax
Where a assessee having limited operations had co-operated in proceedings and paid service tax alongwith interest, penalty was liable to be waived off under section 80

In the instant case assessee neither paid service tax nor filed the return in respect of Rent-a-Cab services provided by him. After show-cause notice was issued, he paid service tax alongwith interest, but sought waiver of penalties imposed on him under sections 76 & 77. He sought waiver on the ground that he was a small businessman, he had not collected service tax from service recipients and was passing through financial difficulties.

The Tribunal partly waived off penalty with following observations:-

Taking note of size of operations of assessee and fact that he had co-operated in proceedings and paid service tax alongwith interest, it was appropriate that penalties under section 76, which were almost equal to service tax liability, were required to be waived off by invoking provisions of Section 80. However, penalty imposed under section 77 was to be sustained. - ROYAL TRAVELS V. COMMISSIONER OF CENTRAL EXCISE [2013] 35 taxmann.com 19 (Ahmedabad - CESTAT)

Jul 11, 2013

Banking starts charges on sending SMS and internet services

6:17 PM 1
Banking starts charges on sending SMS and internet services
Banks become greedy day by day more due to inflation. Banks increased charges or levy charges on such services which are used to be free earlier. This includes looking saving account either by SMS or internet.

Some banks which used to offer free debit cards now levy charges and other increased the charges. Also some banks increased charges for cash deposit or issuing a demand draft.

This all make banking costlier and it will affect more to a common man.

This all because of high cost operations of the banks and low income generation. Thus as per banks, there is no option left to them but to increase or levy charges on the services.

SMS
Now the account holder needs to pay some charges for getting SMS by the bank on debit or credit entries as well as to know the balance of the accounts.

Banks say that the cost of SMS has increased 5 times compare to past as well as telecom companies have increased the cost of SMS. So they pass it on customers.

Some banks like Axis bank and ICICI bank charge 15 Rupees per quarter whereas Kotak Mahindra bank charges 120 Rupees per year.

PNB has revised the cash deposit charges at all branches within the same clearing centre and city. From April 2, customers are being charged Re 1 per Rs 1,000 or a minimum of Rs 25 per transaction on select products such as savings account. Monish Shah, Senior Director at Deloitte India, said though banks started with free services to remain competitive, there is now an increasing emphasis on operational efficiency.

“There is a realization that being value driven is also important. Moreover, there is a segment of customers willing to pay for these services.”
Tags-bank cahrges,sms charges,internet charges by banks

Jul 9, 2013

Income tax new rule 6DDC 6DDD and new form 3BC

9:29 PM 0
Income tax new rule 6DDC  6DDD and new form 3BC
Income tax department amend income tax rules 2013 which is the 9th amendment and inserted two new rules 9DDC and 9DDD. There is a new form 3BC is also introduced. Income tax department issued a notification no. 51/2013 dated 4 July 2013 about this new amendment. Full notification is as under.

S.O. 2017(E).— In exercise of the powers conferred by clause (e) of the proviso to clause (5) of section 43 read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:—

1. (1) These rules may be called the Income-tax (9th Amendment) Rules, 2013.
(2) They shall come into force on the date of their publication in the Official Gazette.


2. In the Income-tax Rules, 1962, in Part II, in sub-part C, after rule 6DDB, the following rules shall be inserted, namely :—


“6DDC. Conditions that a recognised association is required to fulfil to be notified as a recognised association for the purposes of clause (e) of the proviso to clause (5) of section 43.—For the purposes of clause (e) of the proviso to clause(5) of section 43, a recognised association shall fulfil the following
conditions in respect of trading in derivatives, namely:—

(i) the recognised association shall have the approval of the Forward Markets Commission established under the Forward Contracts (Regulation) Act, 1952 (74 of 1952) in respect of trading  in derivatives and shall function in accordance with the guidelines or conditions laid down by the Forward Markets Commission;

(ii)   the  recognised  association  shall  ensure  that  the  particulars  of  the  client (including unique client identity number and PAN) are duly recorded and stored in its databases;

(iii) the recognised association shall maintain a complete audit trail of all transactions (in respect of derivative market) for a period of seven years on its system;

(iv)  the recognised association shall ensure that transactions (in respect of derivative market) once registered in the system are not erased;

(v) the recognised association shall ensure that the transactions (in respect of derivative market) once registered in the system are modified only in cases of genuine error and maintain data regarding all transactions (in respect of derivative market) registered in the system which have been modified  and submit a monthly statement in Form No. 3BC to the Director General of Income-tax (Intelligence and Criminal Investigation), New Delhi within fifteen days fromthe last day of each month to which such statement relates.

6DDD. Notification of a recognised association for the purposes of clause (e) ofthe proviso to clause (5) of section 43.— (1) An application for notification of a recognised association (as per clause (j) of section 2 of the Forward Contracts (Regulation) Act, 1952) as a recognized association for the purposes of clause (e) of the proviso to clause (5) of section 43 may be made to the Member (Legislation), Central Board of Direct Taxes, North Block, New Delhi.

(2) The application referred to in sub-rule (1) shall be accompanied with the following documents, namely :

(i)  approval granted by Forward Markets Commission for trading in derivatives;

(ii) up-to-date rules, bye-laws and trading regulations of the recognised association;

(iii)  confirmation regarding fulfilling the conditions referred to in clause (ii) to clause (v) of rule 6DDC;

(iv)  such other information as the recognised association may like to place before the Central Government.

(3) The Central Government may call for such other information from the applicant as it deems necessary for taking a decision on the application.

(4) The Central Government, after examining the information furnished by the recognised association under sub-rule (2) or sub-rule (3), shall notify the recognised association as a recognised association for the purposes of clause (e) of the proviso to clause (5) of section 43 or issue an order rejecting the application before the expiry of four months from the end of the month in which the application is received.

(5) The notification referred to in sub-rule (4) shall be effective until the approval granted by the Forward Markets Commission is withdrawn or expired, or the notification is rescinded by the Central Government.”.

 3.   In the said rules, in Appendix-II, after Form No. 3BB, the following Form shall be inserted, namely:-

Tags-income tax rule 6ddc,income tax rule 6ddd,income tax form 3bc

CBDT instruction on TDS mismatch if deductor has deposited amount

9:05 PM 1
CBDT instruction on TDS mismatch if deductor has deposited amount
SECTION 139, READ WITH SECTION 199 OF THE INCOME-TAX ACT, 1961 - RETURNOF INCOME - CREDIT OF TDS U/S 199 TO AN ASSESSEE WHEN THE TAX DEDUCTED HAS BEEN DEPOSITED WITH REVENUE BY DEDUCTOR - DIRECTION OF HON'BLE DELHI HC IN THE CASE 'COURT ON ITS OWN MOTION VS. UNION OF INDIA &ORS. IN WP(C) 2659/2012 & WP(C) 5443/2012'

INSTRUCTION NO. 5/2013 [F.NO.275/03/2013-IT(B)], DATED 8-7-2013

1. The CBDT issues instructions with respect to processing of Income-tax returns and giving credit for TDS thereon in the case of TDS mismatch. A few of the instructions on this subject issued in previous years are Instruction No. 1/2010 (25-2-2010) for returns pertaining to A.Y, 2008-09; Instruction No. 05/2010 (21-7-2010), Instruction No. 07/2010 (16-8-2010) and Instruction No. 09/2010 (9-12-2010) for returns pertaining to AY. 2009-10; Instruction No. 02/2011 (9-2-2011) for returns pertaining to A.Y. 2010-11; and Instruction No. 1/2012 (2-2-2012) and Instruction No. 04/2012 (25-5-2012) for returns pertaining to A.Y. 2011-12. The instructions gave decisions and the manner in which the TDS claims were to be given credit while clearing the backlog of returns pending processing. In the cases that did not fall under the specific TDS amount limit or refund amount computed, the residuary clause in these instructions gave the manner of processing those returns and it stated that "TDS credit shall be given after due verification ".

2. The Hon'ble Delhi High Court vide its judgment in the case 'Court On its Own Motion v. UOI and Ors. (W.P. (C) 2659/2012 & W.P. (C) 5443/2012 dated 14-3-2013) has issued seven mandamuses for necessary action by Income-tax Department, one of which is regarding the issue of non-credit of TDS to the taxpayer due to TDS mismatch despite the assessee furnishing before the Assessing Officer, TDS certificate issued by the deductor.

3. In view of the order of the Hon'ble Delhi High Court (reference: para 50 of the order); it has been decided by the Board that when an assessee approaches the Assessing Officer with requisite details and particulars in the form of TDS certificate as an evidence against any mismatched amount, the said Assessing Officer will verify whether or not the deductor has made payment of the TDS in the Government Account and if the payment has been made, credit of the same should be given to the assessee. However, the Assessing Officer is at liberty to ascertain and verify the true and correct position about the TDS with the relevant AO (TDS). The AO may also, if deemed necessary, issue a notice to the deductor to compel him to file correction statement as per the procedure laid down.

4. Thus, the manner laid down by the Hon'ble HC in the above mandamus may be one of the method of due verification as mentioned in the various instructions referred in para (1) above.

5. This may be brought to notice of all Officers working under your jurisdiction for compliance.

Jul 6, 2013

Income tax law on sum received after termination of employment

4:30 PM 0
Income tax law on sum received after termination of employment
The OECD Committee on Fiscal Affairs, through a sub-group, has undertaken to clarify how variety of payments, such as non-competition payments, notice pay, severance payment, etc., that may be made following the termination of an employment, should be treated for tax treaty purposes. Accordingly, it issued a draft proposal for additions and alterations to the Commentary on the OECD Model Tax Convention. A brief synopsis of suggestions given by OECD Committee on tax treatment of termination payments is provided as follows:

1. REMUNERATION FOR PREVIOUS WORK - Any remuneration paid after the termination of employment for work done before the employment is terminated (e.g. a salary or bonus for the last period of work or commission for sales made during that period) will be considered to have been derived from the State in which the relevant employment activities were exercised.

2. PAYMENT IN LIEU OF NOTICE OF TERMINATION - The payment received ‘in lieu’ of notice of termination should be considered to be derived from the State where employee would have worked during the period of notice, which will be the State where the employment activities were performed at the time of the termination.

3. SEVERANCE PAYMENT - Severance payment should be considered to be remuneration derived from the State where the employment was exercised when the employment was terminated.

4. PAYMENT OF DAMAGES FOR UNLAWFUL DISMISSAL - The tax treatment of such payment will depend on what the damage award seeks to compensate. It can be categorised into following:

a) Remuneration: Sum paid for serving an insufficient period of notice or because a severance payment was required by law should be treated as remuneration for these damages.

b) Capital Gains or Other income: Punitive damages awarded on grounds such as discriminatory treatment or injury to one’s reputation would typically fall under Article 21 (Other Income) or Article 13 (Capital Gains).

Jul 5, 2013

Pen drive is also a admissible evidence in income tax proceddings

1:00 PM 1
Pen drive is also a admissible evidence in income tax proceddings
Pen drive and print outs taken from it constituted admissible evidence in income-tax proceedings and formed a basis for investigation and additions.

In the instant case the assessee was arrested by Punjab Police and pen drive was recovered from him containing details of his dealings, which was forwarded by police to IT Department with the printouts. The AO reopened the assessment and cited the pen drive and printouts in reasons recorded. On appeal, the CIT(A) upheld the additions made by AO. Aggrieved-assessee appealed to the ITAT and contended that that the pen drive was not an admissible evidence for reopening assessment and that various provisions of Cr. P.C., IPC, Indian evidence Act and Cyber Laws had been violated by Punjab Police during search.
The Tribunal held in favour of revenue as under:

1) Assessee’s objections had no effect on recordings of reasons by AO for forming a belief about escapement. It is trite law that technical rules of Evidence Act and Cr. P. C. were not applicable to these proceedings;

2) From the record it had emerged that many of the entries mentioned in the pen drive belonged to various business concerns of the assessee in which he was associated with in the capacity of director or partner;

3) They were explained by the assessee though on a prejudicial basis, but the fact remained that the entries had correlation with assessee’s activities. Thus, the contents of the pen drive would become admissible evidence in Income Tax proceedings and would form a basis for investigations and additions.

4) Consequently, pen drive and printouts thereof constituted admissible evidences in those proceedings. The reasons for reopening were recorded on the basis of those contents;

5) The reasons recorded for escapement of income and the material available on record with AO had a live link with each other. Thus, the reasons for reopening the assessments were properly recorded by AO - CHETAN GUPTA V. ACIT[2013] 34 taxmann.com 306 (Delhi - Trib.)

Jul 4, 2013

Fingerprints will soon be must for having new SIM cards

11:00 PM 2
Fingerprints will soon be must for having new SIM cards
There is no stop on SIM cards on forged documents despite several measures taken by the department of telecommunication. Physical verification of the customer is one of them. But the matter doesn’t solve as there are many cases in which forged documents are attached as ID proof and address proof.

This is the matter of security and Home ministry is also very concerned about this. 26/11 attack on Mumbai is the latest example where terrorist used Indian SIM cards on forged documents. 

Now the home ministry wants to set up a system in which along with documents one biometric feature such as fingerprints can be taken of the subscriber before issuing a SIM cards. Also another system needs to set up where these records can be kept and use when needed.

Physical verification of the subscriber couldn't make much as there is a big competition among mobile companies as well as retailers and they want to sell as much SIM cards as they can. Even police have complaint many times about miss to take the documents by the retailers despite strict rules and immediate action on this offence.

Sometimes there are cases where distributors sell SIM cards in bulk to terrorist or wrong people which are a big threat for the nation.

Selling Pre activation SIM attracts a penalty of Rs. 50000 as well as immediate disconnection of mobile service.

Home Ministry should take big steps like increasing the penalty as well as imprisonment provision on selling SIM cards on forged documents.

Aadhar card can play a big role as biometric features are already added on it. So one can verify the features with Aadhar card but Government as well as mobile service providers need to set up a big infrastructure for this because India is a big cellular market and there is always a demand of new SIM numbers in urban to rural to remote areas.
Tags-new sim cards norms,new rules to buy a sim card,sim card new rules,sim card,how to buy a sim card,documents neccessary for sim cards

Jul 3, 2013

ITR 7 form for assessment year 2013-14 offline mode software free download

3:17 PM 1
ITR 7 form for assessment year 2013-14 offline mode software free download
Income tax department updated income tax return ITR 7 for the assessment year 2013-14. This ITR updated in offline mode whereas other ITR comes in excel or pdf mode. One needs to install JAVA for using this software.

ITR 7
can be used by persons including companies who are required to furnish return under section 139(4A) or 
section 139(4B) or section 139(4C) or section 139(4D).

From assessment year 2013-14 on wards in case of an assessee claiming relief under section 90, 90A or 91 to whom Schedule FSI and Schedule TR apply, he has to furnish the return in the manner provided at 4(ii) or 4(iii).

From assessment year 2013-14 onwards in case an assessee who is required to furnish a report of audit under section 10(23C)(iv), 10(23C)(v), 10(23C)(vi), 10(23C)(via), 10A, 12A(1)(b), 44AB, 80-IA, 80-IB, 80-IC, 80-ID, 80JJAA, 80LA, 92E or 115JB he shall file the report electronically on or before the date of filing the return of income. Further, the assessee who is liable to file the above reports electronically shall file the return of income in the manner provided at 4(ii) or 4(iii).

How to open the software
- Install JAVA first

- To Open a new Form Go to "File->New Form" and select the Form.

 -To open an existing draft (previously saved) click "Open Draft" in the toolbar and select the draft from the path you have saved and click OPEN.

 -Please read the instructions provided at the start of the Form, before filling in the data.

Download ITR 7 income tax return form from this link
Tags-itr 7,itr 7 ay 12-13,itr 7 ay 2013-14,itr 7 in excel,itr 7 ay 2013-14,itr 7 assessment year 2013-14

Jul 2, 2013

Service tax on SEZ and form A1, A2. A3 and A4 download

1:42 PM 1
Service tax on SEZ and form A1, A2. A3 and A4 download
Service tax department issued a notification about the exemption of service tax on special economic zone SEZ. This circular is very vital as it tells in which condition service tax exempts or not. Notification no. 12/2013 dated 1 July 2013 about service tax on SEZ is as under.

G.S.R…….(E).–In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994) (hereinafter referred to as the said Act) read with sub-section 3 of section 95 of Finance (No.2), Act, 2004 (23 of 2004) and sub-section 3 of section 140 of the Finance Act, 2007 (22 of 2007) and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 40/2012-Service Tax, dated the 20th June, 2012, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 482 (E), dated the 20th June, 2012, except as respects things done or omitted to be done before such supersession, the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts the services on which service tax is leviable under section 66B of the said Act, received by a unit located in a Special Economic Zone (hereinafter referred to as SEZ Unit) or  Developer of SEZ ( hereinafter referred to as the Developer) and used for the authorised operation from the whole of the service tax, education cess, and secondary and higher education cess leviable thereon.

2.   The exemption shall be provided by way of refund of service tax paid on the specified services received by the SEZ Unit or the Developer and used for the authorised operations:
Provided that where the specified services received by the SEZ Unit or the Developer are used exclusively for the authorised operations, the person liable to pay service tax has the option not to pay the service tax ab initio, subject to the conditions and procedure as stated below.

3.  This exemption shall be given effect to in the following manner:
(I)  The SEZ Unit or the Developer shall get an approval by the Approval Committee of the list of the services as are required for the authorised operations (referred to as the ‘specified services’ elsewhere in the notification) on which the SEZ Unit or Developer wish to claim exemption from service tax.

(II)  The ab-initio exemption on the specified services received by the SEZ Unit or the Developer and used exclusively for the authorised operation shall be allowed subject to the following procedure and conditions, namely:-

(a)  the SEZ Unit or the Developer shall furnish a declaration in Form A-1, verified by the Specified Officer of the SEZ, along with the list of specified services in terms of condition (I);

(b)  on the basis of declaration made in Form A-1, an authorisation shall be issued by the jurisdictional Deputy Commissioner of Central Excise or Assistant Commissioner of Central Excise, as the case may be to the SEZ Unit or the Developer, in Form A-2;

(c)  the SEZ Unit or the Developer shall provide a copy of said authorisation to the provider of specified services. On the basis of the said authorisation, the service provider shall provide the specified services to the SEZ Unit or the Developer without payment of service tax;

(d)  the SEZ Unit or the Developer shall furnish to the jurisdictional Superintendent of Central Excise a quarterly statement, in Form A-3, furnishing the details of specified services received by it without payment of service tax;

(e)  the SEZ Unit or the Developer shall furnish an undertaking, in Form A-1, that in case the specified services on which exemption has been claimed are not exclusively used for authorised operation or were found not to have been used exclusively for authorised operation, it shall pay to the government an amount that is claimed by way of exemption from service tax and cesses along with interest as applicable on delayed payment of service tax under the provisions of the said Act read with the rules made  thereunder.


(III)  The refund of service tax on (i) the specified services that are not exclusively used for authorised operation, or (ii) the specified services on which ab-initio exemption is admissible but  not claimed, shall be allowed subject to the following procedure and conditions, namely:-
(a) the service tax paid on the specified services that are common to the authorised operation in an SEZ and the operation in domestic tariff area [DTA unit(s)] shall be distributed amongst the SEZ Unit or the Developer and the DTA unit (s) in the manner as prescribed in rule 7 of the Cenvat Credit Rules. For the purpose of distribution, the turnover of the SEZ Unit or the Developer shall be taken as the turnover of authorised operation during the relevant period.

(b) the SEZ Unit or the Developer shall be entitled to refund of the service tax paid on (i) the specified services on which ab-initio exemption is admissible but  not claimed, and (ii) the amount distributed to it in terms of clause (a).

(c)  the SEZ Unit or Developer who is registered as an assessee under the Central Excise Act, 1944 (1 of 1944) or the rules made thereunder, or the said Act or the rules made thereunder, shall file the claim for refund to the jurisdictional Deputy Commissioner of Central Excise or Assistant Commissioner of Central Excise, the as the case may be, in Form A-4;

(d) the amount indicated in the invoice, bill or, as the case may be, challan, on the basis of which this refund is being claimed, including the service tax payable thereon shall have been paid to the person liable to pay the service tax thereon, or as the case may be, the amount of service tax payable under reverse charge shall have been paid under the provisions of the said Act;

(e)  the claim for refund shall be filed within one year from the end of the month in which actual payment of service tax was made by such Developer or SEZ Unit  to the registered service provider or such extended period as the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, shall permit;

(f)  the SEZ Unit or the Developer shall submit only one claim of refund under this notification for every quarter:

Explanation.- For the purposes of this notification “quarter” means a period of three consecutive months with the first quarter beginning from 1st April of every year, second quarter from 1st July, third quarter from 1st October and fourth quarter from 1st January of every year.

(g)  the SEZ Unit or the Developer who is not so registered under the provisions referred to in clause (c), shall, before filing a claim for refund under this notification, make an application for registration under rule 4 of the Service Tax Rules, 1994.

(h)  if there are more than one SEZ Unit registered under a common service tax registration, a common refund may be filed at the option of the assessee.

 (IV)  The SEZ Unit or Developer, who intends to avail exemption or refund under this notification, shall maintain proper account of receipt and use of the specified services, on which exemption or refund is claimed, for authorised operations in the SEZ.

4. Where any sum  of service tax paid on specified services is erroneously refunded for any reason whatsoever, such service tax refunded shall be recoverable under the provisions of the said Act and the rules made there under, as if it is recovery of service tax erroneously refunded;
5. Notwithstanding anything contained in this notification, SEZ Unit or the Developer shall have the option not to avail of this exemption and instead take CENVAT credit on the specified services in accordance with the CENVAT Credit Rules, 2004.

6. Words and expressions used in this notification and defined in the Special Economic Zones Act, 2005 (28 of 2005) or the rules made thereunder, or the said Act, or the rules made there under shall apply, so far as may be, in relation to refund of service tax under this notification as they apply in relation to a SEZ.

7. This notification shall come into force on the date of its publication in the Gazette of India
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