Jul 26, 2014

ITR 6 income tax form in java format Asst year 2014-15

6:29 PM 0
The income tax department issued ITR 6 income tax return form for the assessment year 2014-15 in java format which will work both online and offline mode.

ITR-6- For Companies other than companies claiming exemption under section 11.

The department already issued all income tax forms in java format for assessment year 2014-15 and the last one ITR 6  is here.


Download ITR 6 java based utility for assessment year 2014-15
Tags-itr 6,itr 6 java based utility,itr 6 java based ay 2014-15

Jul 16, 2014

TDS rates for FY 2014-15 and AY 2015-16

7:19 PM 0
TDS rates for FY 2014-15 and AY 2015-16
Recent budget made some modification in TDS rates as some new income sources attract TDS. So TDS rate list for financial year 2014-15 relevant to analysis year 2015-16 is as under.

In the case of a person other than a company—

(a) where the person is resident in India—

(i) on income by way of interest other than “Interest on securities”
10%
(ii) on income by way of winnings from lotteries, crossword puzzles, card games and other games of any sort
30%
(iii) on income by way of winnings from horse races
30%
(iv) on income by way of insurance commission
10%
(v) on income by way of interest payable on—
10%
(A) any debentures or securities for money issued by or on behalf of any local authority or a corporation established by a Central, State or Provincial Act;

(B) any debentures issued by a company where such debentures are listed on a recognised stock exchange in accordance with the Securities Contracts (Regulation) Act, 1956 (42 of 1956) and any rules made thereunder;

(C) any security of the Central or State Government;

(vi) on any other income
10%
(b) where the person is not resident in India—

(i) in the case of a non-resident Indian—

(A) on any investment income
20%
(B) on income by way of long-term capital gains referred to in section 115E or sub-clause (iii) of clause (c) of sub-section (1) of section 112
10%
(C) on income by way of short-term capital gains referred to in section 111A
15%
(D) on other income by way of long-term capital gains [not being long-term capital gains referred to in clauses (33), (36) and (38) of section 10]
20%
(E) on income by way of interest payable by Government or an Indian concern on moneys borrowed or debt incurred by Government or the Indian concern in foreign currency (not being income by way of interest referred to in section 194LB or section194LC)
20%
(F) on income by way of royalty payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern where such royalty is in consideration for the transfer of all or any rights (including the granting of a licence) in respect of copyright in any book on a subject referred to
in the first proviso to sub-section (1A) of section 115A of the Income-tax Act, to the Indian concern, or in respect of any computer software referred to in the second proviso to sub-section (1A) of section 115A of the Income-tax Act, to a person residentin India
25%
 (G) on income by way of royalty [not being royalty of the nature referred to in sub-tem (b)(i)(F)] payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern and where such agreement is with an Indian concern, the agreement is approved by the Central
Government or where it relates to a matter included in the industrial policy, for the time being in force, of the Government of India, the agreement is in accordance with that policy
25%
(H) on income by way of fees for technical services payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern and where such agreement is with an Indian concern, the agreement is approved by the Central Government or where it relates to a matter
included in the industrial policy, for the time being in force, of the Government of India, the agreement is in accordance with that policy
25%
(I) on income by way of winnings from lotteries, crossword puzzles, card games and other games of any sort
30%
(J) on income by way of winnings from horse races
30%
(K) on the whole of the other income
30%
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(ii) in the case of any other person—

(A) on income by way of interest payable by Government or an Indian concern on moneys borrowed or debt incurred by Government or the Indian concern in foreign currency (not being income by way of interest referred to in section 194LB or section 194LC)
20%
(B) on income by way of royalty payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern where such royalty is in consideration for the transfer of all or any rights (including the granting of a licence) in respect of copyright in any book on a subject referred to
in the first proviso to sub-section (1A) of section 115A of the Income-tax Act, to the Indian concern, or in respect of any computer software referred to in the second proviso to sub-section (1A) of section 115A of the Income-tax Act, to a person resident in India
25%
(C) on income by way of royalty [not being royalty of the nature referred to in sub-item (b)(ii)(B)] payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern and
where such agreement is with an Indian concern, the agreement is approved by the Central Government or where it relates to a matter included in the industrial policy, for the time being in force, of the Government of India, the
agreement is in accordance with that policy
25%
(D) on income by way of fees for technical services payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern and where such agreement is with an Indian
concern, the agreement is approved by the Central Government or where it relates to a matter included in the industrial policy, for the time being in force, of the Government of India, the agreement is in accordance with that policy
25%
(E) on income by way of winnings from lotteries, crossword puzzles, card games and other games of any sort
30%
(F) on income by way of winnings from horse races
30%
(G) on income by way of short-term capital gains referred to in section 111A
15%
(H) on income by way of long-term capital gains referred to in sub-clause (iii) of clause (c) of sub-section (1) of section 112
10%
(I) on income by way of other long-term capital gains [not being long-term capital gains referred to in clauses (33), (36) and (38) of section 10]
20%
(J) on the whole of the other income
30%
www.taxalertindia.com

2. In the case of a company—

(a) where the company is a domestic company—

(i) on income by way of interest other than “Interest on securities”
10%
(ii) on income by way of winnings from lotteries, crossword puzzles, card games and other games of any sort
30%
(iii) on income by way of winnings from horse races
30%
(iv) on any other income
10%
 www.taxalertindia.com

(b) where the company is not a domestic company—

(i) on income by way of winnings from lotteries, crossword puzzles, card games and other games of any sort
30%
(ii) on income by way of winnings from horse races
30%
(iii) on income by way of interest payable by Government or an Indian concern on moneys borrowed or debt incurred by Government or the Indian concern in foreign currency (not being income by way of interest referred to in section 194LB or section194LC)
20%
(iv) on income by way of royalty payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern after the 31st day of March, 1976 where such royalty is in consideration
for the transfer of all or any rights (including the granting of a licence) in respect of copyright in any book on a subject referred to in the first proviso to sub-section (1A) of section 115A of the Income-tax Act, to the Indian concern, or in respect of any computer software referred to in the second proviso to sub-section (1A) of
section 115A of the Income-tax Act, to a person resident in India
25%
(v) on income by way of royalty [not being royalty of the nature referred to in sub-item (b)(iv)] payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern and where
such agreement is with an Indian concern, the agreement is approved by the Central Government or where it relates to a matter included in the industrial policy, for the time being in force, of the Government of India, the agreement is in accordance with that policy—

(A) where the agreement is made after the 31st day of March, 1961 but before the 1st day of April, 1976

50%
(B) where the agreement is made after the 31st day of March, 1976
25%
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(vi) on income by way of fees for technical services payable by Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern and where such agreement is with an Indian concern, the agreement is approved by the Central Government or where it relates to a matter included in the industrial policy, for the time being in force, of the Government of India, the agreement is in accordance with that policy—

(A) where the agreement is made after the 29th day of February, 1964 but before the 1st day of April, 1976
50%
(B) where the agreement is made after the 31st day of March, 1976
25%
(vii) on income by way of short-term capital gains referred to in section 111A
15%
(viii) on income by way of long-term capital gains referred to in sub-clause (iii) of
clause (c) of sub-section (1) of section 112
10%
(ix) on income by way of other long-term capital gains [not being long-term capital gains referred to in clauses (33), (36) and (38) of section 10]
20%
(x) on any other income
40%

Jul 15, 2014

Amendments in TDS rule in budget

11:16 PM 0
Amendments in TDS rule in budget
There are some amendments in TDS rules in union budget 2014 which are as under.

Section 194LC
 In section 194LC of the Income-tax Act, with effect from the 1st day of October, 2014,––
(A) in sub-section (1), after the words “by a specified company”, the words “or a business trust”shall be inserted;

(B) in sub-section (2),––
(a) in the opening portion, after the words “by the specified company”, the words “or the business trust” shall be inserted;

(b) for clause (i), the following clause shall be substituted, namely:––
“(i) in respect of monies borrowed by it in foreign currency from a source outside India,—
(a) under a loan agreement at any time on or after the 1st day of July, 2012 but before the 1st day of July, 2017; or

(b) by way of issue of long-term infrastructure bonds at any time on or after the 1st day of July, 2012 but before the 1st day of October, 2014; or

(c) by way of issue of any long-term bond including long-term infrastructure bond at any time on or after the 1st day of October, 2014 but before the 1st day of July, 2017, as approved by the Central Government in this behalf; and”

Section 194A
 In section 194A of the Income-tax Act, in sub-section (3), after clause (x), the following clause
shall be inserted with effect from the 1st day of October 2014, namely:––
“(xi) to any income by way of interest referred to in clause (23FC) of section 10.”

Section 194DA
After section 194D of the Income-tax Act, the following section shall be inserted with effect from the 1st day of October, 2014, namely:––

“194DA. Any person responsible for paying to a resident any sum under a life insurance policy, including the sum allocated by way of bonus on such policy, other than the amount not includible in the total income under clause (10D) of section 10, shall, at the time of payment thereof, deduct income-tax thereon at the rate of two per cent.:

Provided that no deduction under this section shall be made where the amount of such payment or, as the case may be, the aggregate amount of such payments to the payee during the financial year is less than one hundred thousand rupees.”.

Section 194LBA
  After section 194LB of the Income-tax Act, the following section shall be inserted with effect from the 1st day of the October, 2014, namely:––

“194LBA. (1) Where any distributed income referred to in section 115UA, being of the nature referred to in clause (23FC) of section 10, is payable by a business trust to its unit holder being a resident, the person responsible for making the payment shall at the time of credit of such payment to the account of the payee or at the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rate of ten per cent.

 2- Where any distributed income referred to in section 115UA, being of the nature referred to in clause (23FC) of section 10, is payable by a business trust to its unit holder, being a non-resident, not being a company or a foreign company, the person responsible for making the payment shall at the time of credit of such payment to the account of the payee or at the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rate of five per cent.”.

Income tax special provision relating to business trusts- Chapter XII FA

11:05 PM 0
Income tax special provision relating to business trusts- Chapter XII FA
SPECIAL PROVISIONS RELATING TO BUSINESS TRUSTS
115UA. (1) Notwithstanding anything contained in any other provisions of this Act, any income distributed by a business trust to its unit holders shall be deemed to be of the same nature and in the same proportion in the hands of the unit holder as it had been received by, or accrued to, the
business trust.

(2) Subject to the provisions of section 111A and section 112, the total income of a business trust shall be charged to tax at the maximum marginal rate.

(3) If in any previous year, the distributed income or any part thereof, received by a unit holder from the business trust is of the nature as referred to in clause (23FC) of section 10, then, such distributed income or part thereof shall be deemed to be income of such unit holder and shall be charged to tax as income of the previous year.

(4) Any person responsible for making payment of the income distributed on behalf of a business trust to a unit holder shall furnish a statement to the unit holder and the prescribed authority, within such time and in such form and manner as may be prescribed, giving the details of the nature of the income paid during the previous year and such other details as may be prescribed.”.

100% deduction u/s 80G on contribution on Uttrakhand disaster

10:49 PM 0
100% deduction u/s 80G on contribution on Uttrakhand disaster
The income tax department issued a note regarding 100% deduction allowed on contribution made to Uttrakhand disaster last year under section 80G of income tax act.

Jul 14, 2014

Income tax calculator for FY 2014-15 and AY 2015-16

10:50 PM 2
Income tax rate slab changed for financial year 2014-15 and the analysis year 2015-16 on the union budget. Now income tax exemption is raised by 50000 to 250000. New income tax slabs are as under.

For Individual (Male or Female) and H.U.F.
Slabs
Income tax rates
Income upto Rs. 250000
Nil
Income Above250000 to 500000
10%
Income Above 500000 to 1000000
20%
Income more than 1000000
30%

For Senior sitizen above 60 years but less than 80 years 
Slabs
Income tax rates
Income upto 300000
NIL
Income Above300000 to 500000
10%
Income Above 500000 to 1000000
20%
Income more than 1000000
30%

 For Senior citizen above 80 years 
Slabs
Income tax rates
Income upto 500000
NIL
Income Above 500000 to 1000000
20%
Income more than 1000000
30%

One of my friend Mr. Pranab Banerjee has developed complete income tax calculator for financial year 2014-15 and analysis year 2015-16. He is happy to share it with taxalertindia.com. Our team is really thankful to him. Features of this excel based calculator are as follows.


  1. Complete excel based calculator.
  2. Separate Pay sheet.
  3. Work with government as well as non-government employees.
  4. Separate HRA calculation.
  5. Separate form 10 




Download income tax calculator for financial year 2014-15 relevant to analysis year 2015-16.
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How to distribute service tax modvat- Service tax circular

4:19 PM 0
How to distribute service tax modvat- Service tax circular
Service tax department issued a circular no. 178 dated 11 July 2014 about Manner of distribution of common input service credit under rule 7(d) of the Cenvat Credit Rules, 2004. Full circular is as under.

Doubts have been raised regarding the manner and extent of the distribution of common input service credit in terms of amended rule 7 [especially rule 7(d)] of the Cenvat Credit Rules, 2004 (CCR). Rule 7 provides for the mechanism of distribution of common input service credit by the Input Service Distributor to its manufacturing units or to units providing output services. An amendment was carried out vide Notification 
no. 05/2014-CE (N.T.) dated 24th February, 2014, amending inter-alia rule 7(d) providing for distribution of common input service credit among all units in their turnover ratio of the relevant period. Rule 7(d), after the amendment, reads as under: 

‘credit of service tax attributable to service used by more than one unit shall be distributed pro 
rata on the basis of the turnover of such units during the relevant period to the total turnover of 
all its units, which are operational in the current year, during the said relevant period’ 

2. These doubts have arisen with respect to the meaning of the words ‘such unit’ used in rule 7(d). It has been stated in the representations that due to the use of the term ‘such unit’, the distribution of the credit would be restricted to only those units where the services are used. It has been interpreted by the trade that in view of the amended rule 7(d) of the CCR, the credit available for distribution would get reduced by the 
proportion of the turnover of those units where the services are not used.

3. Rule 7 was amended to simplify the method of distribution. Prior to this amendment there were a few issues raised by the trade regarding distribution of credit under rule 7 such as determining the turnover of each unit for each month and distributing by following the nexus of the input services with the units to which such services relate. The amendment in the said rule was carried out to address these issues. The amended rule 7(d) seeks to allow distribution of input service credit to all units in the ratio of their turnover of the previous year. To make the intent of the amended rule clear, illustration of the method of distribution to be followed is given below. 

4. An Input Service Distributor (ISD) has a total of 4 units namely ‘A’, “B’, ‘C’ and ‘D’, which are operational in the current year. The credit of input service pertaining to more than one unit shall be distributed as follows: 

Distribution to ‘A’ = X/Y*Z


X = Turnover of unit ‘A’ during the relevant period 
Y = Total turnover of all its unit i.e. ‘A’+’B’+’C’+’D’ during the relevant period 
Z = Total credit of service tax attributable to services used by more than one unit 

Similarly the credit shall be distributed to the other units ‘B’, ‘C’ and ‘D’.
 Illustration: 
An ISD has a common input service credit of Rs. 12000 pertaining to more than one unit. The ISD has 4 units namely ‘A’, ‘B’, ‘C’ and ‘D’ which are operational in the current year. 
Unit Turnover in the previous year 
(in Rs.) 
A (Manufacturing excisable goods)                                    25,00,000 
B (Manufacturing excisable and exempted goods)             30,00,000 
C (providing exclusively exempted service)                       15,00,000 
D (providing taxable and exempted service)                    30,00,000 
 Total                                                                            1,00,00,000 

The common input service relates to units ‘A’, ‘B’ and ‘C’, the distribution will be as under: 
(i) Distribution to ‘A’ = 12000 * 2500000/10000000 = 3000 
(ii) Distribution to ‘B’ = 12000 * 3000000/10000000 = 3600 
 (iii) Distribution to ‘C’ = 12000 * 1500000/10000000  = 1800 
 (iv) Distribution to ‘D’ = 12000 * 3000000/10000000 = 3600 

The distribution for the purpose of rule 7(d), will be done in this ratio in all cases, irrespective of whether such common input services were used in all the units or in some of the units. 

5. Reference may be made to Sh. G. D. Lohani, Director (TRU) in case of any further doubt. Trade Notice/Public Notice may be issued to the field formations and tax payers. Please acknowledge receipt of this Circular. 

Fertilizers valuation for levy of excise duty

4:09 PM 0
Fertilizers valuation for levy of excise duty
Central excise department issued a circular no. 983 dated 10 July 2014 about valuation of fertilizer for levy of excise duty and inclusion of subsidy value in assessable value. Full circular is as under.

In the Budget 2011-12, excise duty of 1% was imposed on chemical fertilizers falling under Chapter 31 of the Central Excise Tariff such as Urea, Di-ammonium Phosphate (DAP), Ammonium Sulphate, Single Super Phosphate (SSP), etc. and various grades of complex fertilizers. 

2. Consequent upon the levy of excise duty @ 1% (without CENVAT facility) on chemical in the Budget 2011-12, the Department of Revenue had clarified to the Department of Fertilizers that in the case of price-controlled fertilizers which are sold to distributors/wholesale dealers at MRP fixed by the Government at the time of their clearance from the factory the excise duty of 1% would be chargeable on the MRP and not on the total cost of production. In the case of fertilizers not subject to price-control, the excise duty would be chargeable on their wholesale price representing the transaction value at the factory gate. 

3. Trade and Industry Associations have represented that inspite of the clarification issued by the Department of Revenue to the Department of Fertilizers, the field formations have issued show cause notices to the fertilizer companies seeking to levy excise duty on the subsidy component of price-controlled fertilizers in the light of the judgment of the Supreme Court in the case of CCE, Mumbai v/s/ M/s Fiat India Pvt. Limited [2012-TIOL-58-SC-CX]. 

4. The matter has been examined in the light of the facts in the case of M/s Fiat India (P) Ltd. vis-à-vis the facts in the case of fertilizers. The facts in the case of M/s Fiat India (P) Ltd were that the company had declared an assessable value for Uno model cars at a price which was substantially lower than the cost of manufacture, and the company continued to sell the cars at a loss making price for nearly five years. The company admitted that the purpose of doing so was to penetrate the market and to compete with the other manufacturers of similar cars. It was under these circumstances that the Hon’ble Supreme Court held that such sales could not be regarded as sales in the ordinary course of sale or trade, nor could the declared value be accepted as the normal price for sale of cars. As the main reason for selling cars at a lower price than the manufacturing cost and profit was to penetrate the market, the apex court held that this would 
constitute extra-commercial consideration and not the sole consideration. Since the price was not the sole consideration for sale of cars, the Court held that the Department was justified in invoking the provisions of Valuation Rules for the purpose of levy of excise duty. 

4.1 In the case of fertilizers, the manufacturers are mandated to sell the goods at the prices notified by the Government. In the case of urea, the cost of production varies greatly from manufacturer to manufacturer depending upon the use of feedstock, technology and overheads. The Government reimburses the differential between the cost of production and the notified price to the manufacturers in the form of subsidy. As per the current policy, MRP of urea is controlled and fixed by the Government. In P&K fertilizer, however, the MRP is deregulated and companies are free to fix the MRP. They do so after taking into account the subsidy component which is fixed on the basis of nutrient content (i.e per kg subsidy is fixed by the Government for 
phosphate, potash, nitrogen and sulphur). Both in the case of urea and P&K, fertilizer subsidy is given by the Government to benefit the farmers, as subsidy would reduce the MRP paid by farmers. 

4.2 The fertilizer policy of the Government of India is aimed at providing fertilizers to farmers at affordable prices for sustained agricultural growth and to promote balanced nutrient application. The subsidy is not linked to the buyer and it cannot be said that the subsidy given by the Government to the manufacturer is part of the consideration flowing from the buyer to the manufacturer. Likewise, it cannot be said that fertilizer manufacturers have under-declared the value with a view to penetrating the market or competing with the other manufacturers of similar fertilizers. 

4.3 In the Fiat India case, it was a conscious decision on the part of the manufacturer to sell the goods below the cost of production to penetrate the market and to compete with the other manufacturers of similar cars. While dealing with the word ‘consideration’, the Supreme Court has observed that ‘consideration’ means a reasonable equivalent or other valuable benefit passed on by the promisor to the promisee or by the transferor to the transferee and it is for the Excise authorities to show that the price charged to the buyer is a concessional or specially low price or a price charged to show favour or gain in return extra-commercial advantage. 

4.4 From the above, it is clear that the facts at hand are clearly distinguishable from the facts and circumstances of the Fiat India case. The manufacturers of fertilizers do not gain any extra commercial advantage vis-a-vis other manufacturers because of the subsidy received from the Government. The subsidy paid by the Government to the manufacturer is in larger public interest and not for benefitting any individual manufacturer-seller and it is also not paid on behalf of any individual buyer or entity. In view of the above, it can be concluded that the subsidy component is not an additional consideration and hence, the MRP at which the fertilizer is sold to buyers by the manufacturers is the sole consideration for its sale. Even though the subsidy component has money value, it cannot be considered as an additional extra-commercial consideration flowing from the buyer to the seller. 

4.5 The Hon’ble Supreme Court, in the Fiat India case referred to above, has cautioned against drawing general conclusions and inferences, quoting the truism stated by Lord Halsbury that “a case is only an authority for what it actually decides and not for what may seem to follow logically from it”. After examination of the issue as to whether the declared transaction value can be rejected in all cases where the transaction value is lower than the manufacturing cost and profit, the Ministry has clarified vide Circular No. 979/03/2014-CX dated 15th January, 2014 that mere sale of goods below the manufacturing cost and profit cannot be taken as the sole basis for rejecting the transaction value. The Supreme Court, in the Fiat India case, has not ruled that the subsidy component provided by the Government would tantamount to consideration flowing from the buyer to the seller and therefore, should be included in the assessable value an excisable good in terms of the extant Valuation Rules. 

5. It is, therefore, clarified that in respect of fertilizers for which subsidy is provided by the Government, the excise duty will be chargeable on the MRP and not on the subsidy component provided by the Government. 

6. Trade Notice/Public Notice may be issued to the field formations and taxpayers. 

7. Difficulties faced, if any, in implementation of this Circular may be brought to the notice of the Board.