Mar 31, 2015

Credit card charges you must know

5:59 PM 0
Credit card charges you must know
The lure of a credit card is hard to resist, especially when a sales representative from a bank or a retail outlet makes a convincing pitch about you getting a ‘free’ credit card. But did you know that the credit card you are being promised is anything but free?
What sales representatives of credit cards do not tell you is that there are a host of charges that are applicable. Here are the various charges on credit card, you should know about before you agree to apply for one.

1. The annual maintenance fee
When you are told you are being given a free credit card, it probably means that the joining fee and the annual fee has been waived off for a maximum period of one year from the date of issuance, but after this initial period the annual maintenance fee is applicable to your card. This could range from Rs 1500-3000 in a year.

2. Interest costs
If you do not pay the whole of the outstanding amount within the due date stipulated by the bank each month, an interest rate on the expenses incurred on your card is charged at the rate of 3% per month. While this may not seem exorbitant to you, what sales representatives do not tell you upfront is that the monthly interest rate is annualized to arrive at an  annualized percentage rate (APR) which can be as high as 36-38%.

3. Overseas transaction cost
Your bank will also charge you for every overseas transaction you make. This is usually 3.5% of the overseas transaction and is converted to INR depending upon the exchange rate on the day you make the transaction.

4. Cash withdrawal on credit card
The transaction charges on cash withdrawal are as high as 2.5% of the cash advance. Over and above this you need to pay an interest on the cash right from day one, and this interest cost ranges from 24-46% per annum.

5. Cost for crossing card limit
Even if you cross your credit card limit by Rs 1, you bank will charge you a minimum over limit fee of Rs 500 or 2.5% of the over limit amount, whichever is higher.

6. Late payment fee
The Reserve Bank of India has recently come out with the diktat that banks must revisit the late payment charges on overdue amounts on credit cards. While this may relieve the burden of the card user by a tad, penalties are still applicable. Therefore, if you turn delinquent and do not pay your minimum amount due for more than 90 days you will be charged a late fee by your bank. For amounts between Rs 500 to Rs 20,000 the amount will be in the range of Rs 100-600 while for amounts over Rs 20,000 the amount will be in the range of Rs 700-800.

7. A duplicate statement fee
While the monthly statements are delivered free of cost to your postal address, if you request for a duplicate statement fee, your card issuer will levy a duplicate statement fee which may range between Rs 50-100.

8. Card replacement fee
If you lose your card, your bank will charge you a card replacement fee. This can be between Rs 250-300.

9. Cheque bounce or dishonour of ECS charge:
If the payment on your credit card bounces, your bank will charge you a fixed rate for the same which can be between Rs 300-350. If the bank sends a representative to pick up cheque or cash on the overdue account, another fee of Rs 100 is added to your next month’s statement.

10. Surcharges
If you purchase petrol using your credit card, a certain percentage of the transaction value is subject to either 2.5% of the transaction or flat fee of Rs 10-25 (whichever is higher) depending upon the bank. Some banks offer a waiver on the fuel surcharge but these are for certain specified bands say between Rs 400-4000. Therefore any transaction below Rs 399 or over 4000 will continue to be charged as usual.

11. Service tax
Up until now, the service tax levied on service charges was 12.36%. However, while presenting the budget for the year 2015-16, the Finance Minister Arun Jaitley announced that the service tax will be hiked to 14%. This means your credit card transactions will now become costlier as well.

Thus as you can see, the credit card you are being offered is not free at all and most of the charges you are not even told upfront. Knowing about these various fees and charges will put you in good stead and help you use your card prudently. Make sure you go through the issuer’s ‘Most Important Terms and Conditions’ (MITC) before you apply for the card. Prudent use of your credit card will also help you keep your Cibil score intact and keep your overall financial health in order.

Defected return can refiled u/s 139(4) upto 31 March 2015

2:49 PM 1
Defected return can refiled u/s 139(4) upto 31 March 2015
Return for AY 2013-14 in certain cases where defect have been declared as invalid by CPC Bangaluru u/s 139(9) as the defect was not cured with in the time provided in notice u/s 139(9). Such taxpayer can now file a fresh return u/s 139(4) in the e filing portal for AY 2013-14 on or before 31 March 2015. The taxpayers can utilize this utility as the earliest.

Mar 28, 2015

Amendment in Section 80 IB unconstitutional- Gujarat HC

3:41 PM 0
Amendment in Section 80 IB unconstitutional- Gujarat HC
Amendment made in section 80-IB(9) by adding an Explanation was not clarificatory, declaratory, curative or made "small repair" in the Act, but on the contrary takes away the accrued and vested right of the Petitioner which had matured after the judgments of ITAT. Therefore, the Explanation added by Finance (No.2) 2009 was a substantive law. Explanation added to Section 80-IB(9) by Finance Act (No.2) of 2009 is clearly unconstitutional, violative of Article 14 of the Constitution of India and is liable to be struck down

• The disputed question was as to whether the benefits of tax holiday of seven years was available on each undertaking which has now been taken away by the amendment made in section 80-IB(9) by adding on Explanation that provides that all blocks licensed under a single contract shall be treated as a single undertaking

• ITAT had found in favour of petitioner-assessee that each well/cluster of wells was a separate undertaking entitled to seven years tax holiday.

• The Revenue had challenged the decision of the ITAT before the High Court and thereafter, they have a remedy before the Apex Court.

• But, arbitrarily, the 100% tax deduction benefit could not be withdrawn by the Finance Minister or the legislature by amending Section 80-IB(9) of the Act retrospectively from an anterior date.

• The amendment in such cases where already tax benefit had accrued and vested in the assessee could not be taken away by giving retrospective amendment to Section 80-IB(9) which is nothing but a substantive provision inserted by amendment and it can only operate prospectively and not retrospectively.

• Explanation added to Section 80-IB(9) by Finance Act (No.2) of 2009 is clearly unconstitutional, violative of Article 14 of the Constitution of India and is liable to be struck down

Mar 27, 2015

CBDT clarification on section 9 of income tax act

3:00 PM 0
CBDT clarification on section 9 of income tax act
CBDT has issued a circular no. 4/2015 dated 26 March 2015  clarification regarding  Explanation 5 to clause (i) of sub-section (l)  of section 9 of income tax act. Full circular is as under.

 Subject: Clarification regarding Explanation 5 to clause (i) of sub-section (l) of section 9 of Income-tax Act, l96l ('Act') - regarding

Section 9 of the Income-tax Act provides for incomes which are deemed to accrue or arise in India. Clause (i) of sub-section (1) of the said section reads as under:-

"9. (1) The following incomes shall be deemed to accrue or arise in India:-

(i) all income accruing or arising, whether directly or indirectly, through or from any business connection in India, or through or from any property in India, or through or from any asset or source of income in India, or through the transfer of a capital asset situate in India."

2. The Finance Act,2012 inserted Explanation 5 to clause (i) of sub-section (1) of section 9. The said explanation reads as under:-

" Explanation 5.-For the removal of doubts, it is hereby clarified that an asset or a capital asset being any share or interest in a company or entity registered or incorporated outside India shall be deemed to be and shall always be deemed to have been situated in India, if the share or interest derives, directly or indirectly, its value substantially from the assets located in India"

3. A number of representations have been received by the Board stating that the purpose of introduction of Explanation 5 was to clarify the legislative intent regarding the taxation of income accruing or arising through transfer of a capital asset situate in India. Apprehensions have been expressed about the applicability of the Explanation to the transactions not resulting in any transfer, directly or indirectly of assets situated in India. It has been pointed out that such an extended application of the provisions of the Explanation may result in taxation of dividend income declared by a foreign company outside India. This may cause unintended double taxation and would be contrary to the generally accepted principles of source rule as well as the object and purpose of the amendment made by the Finance Act 2012.

4. The matter has been examined in the Board. The Explanatory Memorandum to the Finance Bill 2012 explains the purpose of the amendment to section 9 (l)(i) in the following words:-

"Section 9 of the Income-tax Act provides cases of income, which are deemed to accrue or arise in India. This is a legal fiction created to tax income, which may or may not arise in India and would not have been taxable but for the deeming provision created by this section, Sub-section (1)(i) provides a set of circumstances in which income accruing or arising, directly or indirectly, is taxable in India. One of the limbs of clause (i) is income accruing or arising directly or indirectly through the transfer
of a capital asset situate in India. The legislative intent of this clause is to widen the application as it covers incomes, which are accruing or arising directly or indirectly. The section codifies source rule of taxation wherein the state where the actual economic nexus of income is situated has a right to tax the income irrespective of the place of residence of the entity deriving the income. Where corporate structure ls created to route funds, the actual gain or income arises only in consequence of the
investment made in the activity to which such gains are attributable and not the mode through which such gains are realized. Internationally this principle is recognized by several countries, which provide that the source country has taxation right on the gains derived of offshore transactions where the value is attributable to the underlying assets...................

............Certain judicial pronouncements have created doubts about the scope and purpose of sections 9 and 195. Further, there are certain issues in respect of income deemed to accrue or arise where there are conflicting decisions of various judicial authorities.

Therefore, there is a need to provide clarificatory retrospective amendment to restate the legislative intent in respect of scope and applicability of section 9 and 195 and also to make other clarificatory amendments for providing certainty in law."

5. The Explanatory Memorandum clearly provides that the amendment of section 9(l) (i) was to reiterate the legislative intent in respect of taxability of gains having economic nexus with India irrespective of the mode of realisation of such gains. Thus. the amendment sought to clarify the source rule of taxation in respect of income arising from indirect transfer of assets situated in India as explicitly mentioned in the Explanatory Memorandum. Viewed in this context, Explanation 5 would be applicable in relation to deeming any income arising outside India from any transaction in respect of any share or interest in a foreign company or entity, which has the effect of transfening, directly or indirectly, the underlying assets located in lndia, as income accruing or arising in India.

6. Declaration of dividend by such a foreign company outside India does not have the effect of transfer of any underlying assets located in India. It is therefore, clarified that the dividends declared and paid by a foreign company outside India in respect of shares which derive their value substantially from assets situated in India would not be deemed to be income accruing or arising in India by virtue of the provisions of Explanation 5 to section 9
( I ) (i) of the Act.

7.-This mav be brought to the notice of all concerned for strict compliance.

Special clearing in banks on 30 and 31 March 2015

10:30 AM 0
Special clearing in banks on 30 and 31 March 2015
Special Clearing operations on March 30 and 31, 2015

A reference is invited to the circular issued by our Department of Government and Bank Accounts (DGBA.GAD.No.4318/42.01.029/2014-15 dated March 25, 2015) on ‘Annual Closing of Government Accounts - Transactions of Central / State Governments - Special Measures for the Current Financial Year (2014-15)’.

2. With a view to facilitate accounting of all the Government transactions for the current financial year (2014-2015) by March 31, 2015, it has been decided to conduct special clearing at all clearing houses across the country on March 30 and 31, 2015 as detailed below:

Date
Type of clearing
Presentation clearing
Return clearing
March 30, 2015
(Monday)
Normal Clearing as followed on any working Monday
In addition, a Special Clearing exclusively for Government transactions (receipts and payments) with return clearing on the same day as per the schedule indicated below.
March 31, 2015
(Tuesday)
Normal Clearing as followed on any working Tuesday
In addition, a Special Clearing exclusively for Government transactions (receipts and payments) with return clearing on the same day as per the schedule indicated below.


Schedule for various types of clearing
a. CTS grid locations (Chennai, Mumbai and New Delhi)
Special Presentation clearing on March 30 & 31, 2015***P2F session timings for the instruments presented through the Special ClearingReturn clearing for the instruments presented through the special clearing
Between 20.00 and 20.30 hoursBetween 21.00 and 21.30 hoursBetween 22.00 and 22.15
*** Under the special clearing, single session will be run for both CTS-2010 and non-CTS-2010 standard instruments together. No segregation is required.
b. Special clearing in non-MICR/ECCS clearing houses
Presentation clearingReturn clearing
One hour after the extended business hours keeping in view the operational convenience at the local centerHalf an hour/One hour after the presentation clearing keeping in view the operational convenience at the local center.

3. Participation in the outward clearing is the choice left to banks depends upon the instruments received by them towards credit-to/payment-from Government accounts. However, all member banks of the Clearing House are required to keep their inward clearing processing infrastructure open during the Special Clearing hours and maintain sufficient balance in their clearing settlement account to meet settlement obligations arising out of the Special Clearing.

4. Member banks of Clearing Houses are advised to adhere to the instructions contained in this circular as well as the instructions received from the Regional offices of Reserve Bank of India and Presidents of respective Clearing Houses.

5. Member banks are also advised to be in readiness to participate in the Centralised Payment Systems (RTGS and NEFT) on these days (March 30-31, 2015). A separate broadcast message in this regard will be issued through the respective system indicating the extended time window.
Yours faithfully
(Charulatha S Kar)
General Manager (OIC)

Mar 26, 2015

New Return Preparation utility RPU version 1.0 in java platform

11:26 PM 0
New Return Preparation utility RPU version 1.0 in java platform
Tin.nsdl has launched latest RPU version 1.0 in java platform. Earlier RPU version 4.2 was the latest which have some problems of defaults value. This is in the new look and with new platform. There are some new features of new RPU 1.0 which are as under.

1-  NSDL e-TDS/TCS Return Preparation Utility in JAVA platform.

2-  Preparation of Regular TDS/TCS Statement(s) for Form 24Q, 26Q, 27Q & 27EQ pertaining to Financial Year 2007-08 onwards (for all quarters).

3-  NSDL RPU is a freely downloadable utility.

4- Incorporation of latest FVU Version 4.5 and 2.141.
Download latest RPU version 1.0
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Custom circular on Import of steel and steel products

11:18 PM 0
Custom circular on Import of steel and steel products
Custom department issued a circular no. 8/2015 dated 24 March 2015 about import of steel and steel products. Full circular is as under.

Attention is invited to Steel and Steel Products (Quality Control) Order, 2012, Steel and Steel Products (Quality control) Second Order, 2012, Steel and Steel Products (Quality Control) (Amendment) Order 2014, Steel and Steel Products (Quality Control) Second  (2nd Amendment) Order, 2014  on the above subject . Reference is also drawn to Board’s instruction of even number dated 09.07.2014 regarding implementation of Steel and Steel Products (Quality Control) Order, 2012 and Steel and Steel Products (Quality Control) Second Order 2012.

2. The Steel and Steel Products (Quality Control) (Amendment) Order, 2014 and Steel and Steel Products (Quality Control) Second (2nd Amendment) Order, 2014 insert the following explanation in Steel and Steel Products (Quality Control) Order, 2012  and Steel and Steel Products (Quality Control) Second Order, 2012 respectively:

“Explanation 1.- The provisions of this Order shall apply to the products described under column (2) of the schedule covered under the relevant Indian Standard number mentioned under column (1).
 Explanation 2.- ITC (HS) Codes mentioned under column (3) are generic and indicative in nature.”

3. In this regard, Board has received representations that imports of steel products are being allowed without compliance of mandatory Indian Standards stipulated i.e. IS:2062, IS:2002, IS: 2041, IS: 277 and IS: 1786  in the Steel and Steel Products (Quality Control) Second Order, 2012.  Reportedly this is being done even after the notification of the Steel and Steel Products (Quality Control) Second (2nd Amendment) Order, 2014 with effect from 04.12.2014.

4. The Board desires that the import of Steel and Steel Products in contravention of the Steel and Steel Products (Quality Control) Order, 2012 and Steel and Steel Products (Quality Control) Second Order, 2012 as amended should not be allowed. Chief Commissioners of Customs / Customs and Central Excise are advised to suitably instruct officers and staff in their jurisdiction that provisions of the Steel and Steel Products (Quality Control) Order 2012 and Steel and Steel Products (Quality control) Second Order 2012 as amended are strictly complied with and import of sub standard and steel products in contravention of aforementioned Orders are not permitted.

5. Difficulty faced, if any, may be brought to the notice of the Board.  

Mar 24, 2015

Documents required for import and export from 1 April 2015

11:30 AM 0
Documents required for import and export from 1 April 2015
Directorate General of foreign trade department issued a notification no. 114 dated 12 March 2015 regarding documents required for import and export of goods. This list of documents required will effect from 1 April 2015. Full notification is as follows.

Subject: Specifying documents required for Export and Import
S.O.(E) In exercise of the power conferred by Section 5 of the Foreign Trade (Development and
Regulation) Act, 1992 read with Para 2.1 of the Foreign Trade Policy, 2009-2014, the Central
Government hereby inserts a new Para 2.53 of Foreign Trade Policy, 2009-14:

2. Para2.53: The following mandatory documents are prescribed for exports and imports of goods
from/into India:

(a) Mandatory documents required for export of goods from India:
1. Bill of Lading/Airway Bill
2. Commercial Invoice cum Packing List*
3. Shipping Bill/Bill of Export


(b) Mandatory documents required for import of goods into India
1. Bill of Lading/Airway Bill
2. Commercial Invoice cum Packing List*
3. Bill of Entry

[Note: *(i) As per CBEC Circular No. 01/15-Customs dated 12/01/2015.
(ii) Separate Commercial Invoice and Packing List would also be accepted.]

(c) For export or import of specific goods or category of goods, which are subject to any
restrictions/policy conditions or require NOC or product specific compliances under any statute, the regulatory authority concerned may notify additional documents for purposes of export or import.

(d) In specific cases of export or import, the regulatory authority concerned may electronically or in writing seek additional documents or information, as deemed necessary to ensure legal compliance.

(e). This Notification shall come into effect from 1st April, 2015.

3. Effect of this Notification: Only three documents each {as in para 2.(a) & (b above} would be
mandatory for exports and imports.

Mar 23, 2015

Income tax closely scrutinise indian held foreign assets

9:41 PM 0
Income tax closely scrutinise indian held foreign assets
The Income Tax department will carry out closer scrutiny of those tax statements wherein an assessee has disclosed that he or she holds bank accounts or any other assets abroad before the current financial year ends on March 31.

Sources said the drive has been undertaken by the department under instructions from its apex policy making body — the Central Board of Direct Taxes — which desires that the taxman should “examine all cases related to foreign assets” as a number of these will get time-barred by this month end.
The CBDT, in 2012-13, had introduced a new column in the Income Tax Return (ITR) forms which made it mandatory for individuals and other entities to disclose their foreign assets for the purpose of tax assessment.

“A number of cases will get time barred by March 31 this year. This means that the I-T department will not be able to take action in cases pertaining to 2007-08 assessment year where foreign assets or bank accounts are present and have been disclosed.

“Under the current crack down on black money, instructions have been issued to field offices to undertake a close scrutiny of such cases where the taxpayers have disclosed such assets themselves or I-T investigations or intelligence have indicated presence of such assets in the name of an individual or entity,” a senior Finance Ministry official said.

The taxman has also been asked to obtain from the assessee information about the source of funds used for creating the particular asset or bank account in the foreign land and connected reasons thereof, the official said.

CBDT has also asked tax officials to collect all such information and send it across to its Foreign Tax and Tax Research (FT and TR) unit so that any possible cooperation on such cases can be sought from foreign countries “well in time”.

The latest measures to combat black money, the official said, have made it essential for I-T authorities to obtain any possible assistance from partner countries about any individual or entity holding illegal foreign asset or such property which the department feels is not disclosed to it fully.
“The existing tax information exchange treaties like Double Taxation Avoidance Agreement (DTAA), Tax Information Exchange Agreements (TIEAs) and other bilateral treaties on tax would be activated if the field formations of the I-T department report anything with regard to foreign assets, whether movable or immovable,” the official added.

Officials said the I-T department will verify all such cases as there have been instances of connected or layered holdings of assets by entities or individuals while creation of shell companies have also been reported in the past.

“The exercise is just to ensure that the I-T department knows every financial information about an assessee who holds a foreign asset, whether declared or undeclared,” the official said.

Mar 19, 2015

TRACES drive for closure of short payment defaults

6:04 PM 1
TRACES drive for closure of short payment defaults
This is to inform you that Centralized Processing Cell (TDS) has initiated a special drive for closure of Short Payment Defaults in quarterly TDS Statements due to Unmatched Challans and your active participation is crucial in ensuring successful outcomes. 

For closure of Short Payment Defaults arising due to Unmatched Challans quoted in TDS Statements, CPC(TDS) has further enhanced the Online Correction facility at TRACES, providing you with the feature of "Move Deductees" from Unmatched Challans to any other Unconsumed OLTAS Challan.
Please note that the above assumes further significance towards ensuring non-intrusive TDS Compliance, since, Short Payment Defaults ought to be closed at the time of submitting requests to download Consolidated Files or TDS Certificates from the web portal TRACES. To facilitate closure of Short Payments due to Unmatched Challans, CPC(TDS) has further improved the intelligence, simplicity and convenience of Online Correction feature, as follows:
New Feature to Move Deductees added to Online Correction facility:

CPC (TDS) has introduced Move Deductees facility in Online Corrections for closure of Short Payment defaults in your quarterly TDS Statements. With use of this feature, a portion of the Deductee Rows can now be moved to any other Unconsumed OLTAS challan with adequate balance. The facility can be used in the following situation:

Issue:
The challan(s) remain unmatched due to data entry errors in the TDS Statement(s).
Multiple OLTAS challans may have been reported in the TDS statement incorrectly, with information pertaining to only one challan, and mapped with the referenced Deductee rows.
The incorrect Challan information furnished above is causing Short Payment Defaults in the TDS Statement due to Unmatched Challans.

For instance, if there are two OLTAS challans reported in the TDS Statement an if:

Total TDS in Deductee Rows, mapped to Unmatched Challan(s): Rs. 1,10,000
OLTAS Challan CIN1: Rs. 1,00,000
OLTAS Challan CIN2: Rs. 10,000
Challan reporting in TDS Statement: Instead of reporting the above challans separately, incorrectly only CIN1 tagged in TDS Statement with TDS amount of Rs. 1,10,000
The above error causes Short Payment Default in the TDS Statement

Solution:
In above situation, CIN 2 should first be added to the relevant TDS Statement using Online Correction facility
Deductee Rows with a total TDS of Rs. 10,000 can now be moved to CIN 2, which has incorrectly not been reported in the TDS Statement
Now CIN 1 (Rs. 1,10,000), as mentioned in the TDS Statement, can be tagged to the Unconsumed OLTAS Challan CIN1 (Rs. 1,00,000).

Action to be taken for Moving Deductee Rows:
Please logon to the website TRACES and Online Correction facility of TRACES needs to be used for closure of the Short Payment default, which is available even without digital signature.
Please select 'Challan Correction' in 'Type of Correction' drop-down menu
Navigate to Unmatched Challan and tag unconsumed challans, if available on TRACES. system.
Select a row and click on Move deductee row - List of deductees attached to the challan are displayed
Select deductee rows to move to a different challan - List of challans with balance greater than total tax deposited of the selected deductee rows are displayed
Select a challan and click on move deductee row - All selected deductee rows are moved to a new challan.

You are encouraged to refer to the e-tutorial for detailed guidance in this regard. You are requested to take corrective actions at the earliest for closure of Short Payment Defaults due to Unmatched Challans
CPC (TDS) is committed to provide best possible services to you.

Mar 18, 2015

Income tax 3rd amendment rules and form 3 CEDA

6:28 PM 0
Income tax 3rd amendment rules and form 3 CEDA
The Income tax department issued a notification no. 23/2015 dated 14 March 2015 about income tax 3rd amendment rules as well as new form 3CEDA. Full notification is as under.

S.O. 758(E).- In exercise of the powers conferred by sub-sections (9) and(9A) of section 92CC 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 (Third Amendment) Rules, 2015.

(2). They shall come into force on the date of their publication in the Official Gazette.
2. In the Income-tax Rules, 1962 (hereafter referred to as the principal rules), -

(a) in rule 10 F,-

(i) after clause (b), the following clause shall be inserted, namely :-
 “(ba) “applicant” means a person who has made an application;”;

(ii) after clause (h), the following clause shall be inserted, namely :-
 “(ha) “rollback year” means any previous year, falling within the period not exceeding four previous years, preceding the first of the previous years referred to in sub-section (4) of section 92CC;”;

(b) in rule10 H, in sub-rule (1),-
 (i) for the word “Every” the word “Any” shall be substituted;
 (ii) for the word “shall” the word “may” shall be substituted;
(c) in rule 10 I, for the words, figures and letter “who has entered into a prefiling consultation as referred to in rule 10H”, the words, figures and letter “referred to in rule 10 G” shall be substituted; 

(d) in rule 10 K, in sub-rule (2) after the words “with understanding reached in”, the word “any” shall be inserted;

(e) in rule 10 M, in sub-rule (1), after clause (v), the following clause shall be inserted, namely:-

 “(va) rollback provision referred to in rule 10 MA;”;

(f) after rule 10 M, the following rule shall be inserted, namely:-

 “Roll Back of the Agreement.
10 MA. (1) Subject to the provisions of this rule, the agreement may provide for determining the arm’s length price or specify the manner in which arm’s length price shall be determined in relation to the international transaction entered into by the person during the rollback year (hereinafter referred to as “rollback provision”).

(2) The agreement shall contain rollback provision in respect of an international transaction subject to the following, namely:-

(i)the international transaction is same as the international transaction to which the agreement (other than the rollback provision) applies;

(ii) the return of income for the relevant rollback year has been or is furnished by the applicant before the due date specified in Explanation 2 to sub-section (1) of section 139;

(iii) the report in respect of the international transaction had been furnished in accordance with section 92E;

(iv) the applicability of rollback provision, in respect of an international transaction, has been requested by the applicant for all the rollback years in which the said international transaction has been undertaken by the applicant; and

(v) the applicant has made an application seeking rollback in Form 3CEDA in accordance with sub-rule (5);

(3) Notwithstanding anything contained in sub-rule (2), rollback provision shall not be provided in respect of an international transaction for a rollback year, if,-

(i) the determination of arm’s length price of the said international transaction for the said year has been subject matter of an appeal before the Appellate Tribunal and the Appellate Tribunal has passed an order disposing of such appeal at any time before signing of the agreement; or

(ii) the application of rollback provision has the effect of reducing the total income or increasing the loss, as the case may be, of the applicant as declared in the return of income of the said year. 

(4) Where the rollback provision specifies the manner in which arm’s length price shall be determined in relation to an international transaction undertaken in any rollback year then such manner shall be the same as the manner which has been agreed to be provided for determination of arm’s length price of the same international transaction to be undertaken in any previous year to which the agreement applies, not being a rollback year.

(5) The applicant may, if he desires to enter into an agreement with rollback provision, furnish along with the application, the request for the same in Form No. 3 CEDA with proof of payment of an additional fee of five lakh rupees:

Provided that in a case where an application has been filed prior to the 1st day of January, 2015, Form No. 3CEDA along with proof of payment of additional fee may be filed at any time on or before the 31st day of March, 2015 or the date of entering into the agreement whichever is earlier:

Provided further that in a case where an agreement has been entered into before the 1st day of January, 2015, Form No. 3CEDA along with proof of payment of additional fee may be filed at any time on or before the 31st day of March, 2015 and, notwithstanding anything contained in rule 10 Q, the agreement may be revised to provide for rollback provision in the said agreement in accordance with this rule.”;

(g) in rule 10 R, in sub-rule (1), in clause (iv), after the words, brackets, figures and letter “under sub-rule (4) of rule 10Q”, the words, brackets, figures and letters “or sub-rule (7) of rule 10 RA” shall be inserted;

(h) after rule 10 R, the following rule shall be inserted, namely:-

 “Procedure for giving effect to rollback provision of an Agreement.
10 RA.(1) The effect to the rollback provisions of an agreement shall be given in accordance with this rule.

(2) The applicant shall furnish modified return of income referred to in section 92CD in respect of a rollback year to which the agreement applies along with the proof of payment of any additional tax arising as a consequence of and computed in accordance with the rollback provision.

(3) The modified return referred to in sub-rule(2) shall be furnished along with the modified return to be furnished in respect of first of the previous years for which the agreement has been requested for in the application. 

(4) If any appeal filed by the applicant is pending before the Commissioner (Appeals), Appellate Tribunal or the High Court for a rollback year, on the issue which is the subject matter of the rollback provision for that year, the said appeal to the extent of the subject covered under the agreement shall be withdrawn by the applicant before furnishing the modified return for the said year.

(5) If any appeal filed by the Assessing Officer or the Principal Commissioner or Commissioner is pending before the Appellate Tribunal or the High Court for a rollback year, on the issue which is subject matter of the rollback provision for that year, the said appeal to the extent of the subject covered under the agreement shall be withdrawn by the Assessing Officer or the Principal Commissioner or the Commissioner, as the case may be, within three months of filing of modified return by the applicant.

(6) The applicant, the Assessing Officer or the Principal Commissioner or the Commissioner, shall inform the Dispute Resolution Panel or the Commissioner (Appeals) or the Appellate Tribunal or the High Court, as the case may be, the fact of an agreement containing rollback provision having been entered into along with a copy of the same as soon as it is practicable to do so.

(7) In case effect cannot be given to the rollback provision of an agreement in accordance with this rule, for any rollback year to which it applies, on account of failure on the part of applicant, the agreement shall be cancelled.”;

(i) in Appendix-II of the principal rules,-
(A) in Form No. 3CEC, in item 10, after the words, “Number of years for which
APA is proposed to be applied”, the words “including the rollback years” shall
be inserted;
 (B) in Form No. 3CED, in item 5, after sub-item (e), the following shall be inserted, namely:-
 “f. whether any rollback request is being made         Yes/No 

 g. If yes, enclose copy of     relevant Form No. 3CEDA.”;

 (C) after Form No. 3CED, following Form shall be inserted, namely: - 
Download Form 3CEDA

Mar 11, 2015

RBI asks Banks to report on Sukanya Samriddhi Account

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RBI asks Banks to report on Sukanya Samriddhi Account
Reserve bank of India asks banks to report on Sukanya Samriddhi Account. RBI issued a note on 11 March 2015 about this issue. Full note is as under.

We forward herewith a copy of the Government of India Notification No. G.S.R.863(E) dated December 02, 2014 regarding the Sukanya Samriddhi Account for necessary action at your end. The Government of India, vide this Notification, has notified the Sukanya Samriddhi Account Rules, 2014, which came into force with effect from December 02, 2014.

2. Reporting of the Sukanya Samriddhi Account transactions i.e. receipt, payment, penalty, etc. may be directly done through the Government Account at Central Account Section, Reserve Bank of India, Nagpur on daily basis like the transactions of PPF, 1968, in order to have uniformity in reporting, reconciliation and accounting.

3. The Agency banks are required to observe the rules and regulations of the Scheme, and non-observance of rules and regulations would attract penal action, including de-authorization of the branch or bank. Pecuniary liabilities, if any, arising from such non-observance shall be borne entirely by the bank.

4. You may, therefore, approach Central Account Section, Reserve Bank of India, Nagpur for necessary arrangements to report Sukanya Samriddhi Account transactions with immediate effect.

5. Specimen of account opening application form and the passbook of the Sukanya Samriddhi Account are also enclosed for ready reference and necessary action at your end.

6. The contents of this circular may be brought to the notice of the branches of your bank operating the PPF, 1968 Scheme. These instructions should also be displayed on the notice boards of your branches for information.

Bench of Supreme court will work all working days on tax matters

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Bench of Supreme court will work all working days on tax matters
A bench has been constituted by the Hon'ble Supreme Court to deal exclusively with Tax matters on all working days which will be functional w.e.f. from 9th March, 2015. This will necessarily entail briefing the counsels for the Department as well as meeting the requirements of the court on real time basis. The Member (A&J) has desired that all the Principal Chief Commissioner/Chief Commissioner/Pr. Commissioner/Commissioner(s) may check the website of the Supreme Court on daily basis, which generally displays advance cause list for next 10 days, and keep themselves prepared for cases in their jurisdiction for any briefing/service of notice/information as may be required by the Counsels or the Supreme Court at very short notice. In case of any officer proceeding on leave etc., their successor in office must be kept duly informed of such cases listed during the period of their absence.

2. All requests from DGIT (L&R) in this regard, in respect of listed cases or other cases which may be fixed by the Hon'ble Supreme Court at short notice, should be attended to on priority basis, Shri K.K. Mishra, Addl. DIT (L&R), New Delhi, Phone No. 011-23378627 Mobile No. 9212721578 has been designated as Nodal Officer in the Directorate of Legat & Research to deal with all such cases and may be contacted for any clarifications or information.

CIT notification on granting approval to religious or charitable trusts

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CIT notification on granting approval to religious or charitable trusts
In pursuance of the provisions contained in sub-clauses (iv) and (v) of clause (23C) of section 10 of the Income-tax Act, 1961 (43 of 1961) read with rule 2C of the Income-tax Rules, 1962, and in supersession of the notification of the Government of India in the Ministry of Finance, Department of Revenue, Central Board of Direct Taxes, published in the Gazette of India, Extraordinary, Part-II, section 3, sub-section (ii), vide number S.O. 3026(E), dated the 1st December, 2014, except as respects things done or omitted to be done before such supersession, the Central Board of Direct Taxes, hereby,—

(i) specifies the 15th day of November, 2014 as the 'specified date' for the purposes of the aforesaid rule 2C.

(ii) authorises the Commissioner of Income-tax (Exemptions) to act as 'prescribed authority' for the purposes of sub-clause (iv) and sub-clause (v) of clause (23C) of section 10 of the Act with effect from the 15th day of November, 2014 :

Provided that in respect of application made before the 15th day of November, 2014 under sub-clause (iv) and sub-clause (v) of clause (23C) of section 10 before the prescribed authority [authorised by the Board by notification number S.O. 851(E), dated 30th May, 2007, published in the Gazette of India, Extraordinary, Part II, section 3, sub-section (ii)] and in respect of which any proceeding is pending, such authorised authorities shall continue to act as the prescribed authority subject to following modifications in view of the fact that some of such prescribed authorities have either been redesignated or have ceased to exist—

(i) for cases falling in the jurisdiction of erstwhile Director of Income-tax (Exemption), Ahmedabad, [redesignated as Commissioner of Income-tax (Exemptions) with effect from the 15th day of November, 2014] the Chief Commissioner of Income-tax, Ahmedabad-1, Ahmedabad shall be the authority;

(ii) for cases falling in the jurisdiction of erstwhile Director of Income-tax (Exemption), Bangalore, [redesignated as Commissioner of Income-tax (Exemptions) with effect from the 15th day of November, 2014] the Chief Commissioner of Income-tax, Bengaluru-1, Bengaluru shall be the authority;

(iii) for cases falling in the jurisdiction of erstwhile Director of Income-tax (Exemption), Chennai, [redesignated as Commissioner of Income-tax (Exemptions) with effect from the 15th day of November, 2014] the Chief Commissioner of Income-tax, Chennai-3, Chennai shall be the authority;

(iv) for cases falling in the jurisdiction of erstwhile Director of Income-tax (Exemption), Hyderabad, [redesignated as Commissioner of Income-tax (Exemptions) with effect from the 15th day of November, 2014] the Chief Commissioner of Income-tax, Hyderabad shall be the authority;

(v) for cases falling in the jurisdiction of erstwhile Director of Income-tax (Exemption), Kolkata, [redesignated as Commissioner of Income-tax (Exemptions) with effect from the 15th day of November, 2014] the Chief Commissioner of Income-tax, Kolkata-3, Kolkata shall be the authority;

(vi) for cases falling in the jurisdiction of erstwhile Director of Income-tax (Exemption), Mumbai, [redesignated as Commissioner of Income-tax (Exemptions) with effect from the 15th day of November, 2014] the Chief Commissioner of Income-tax, Mumbai-1, Mumbai shall be the authority;

(vii) for cases falling in the jurisdiction of erstwhile Director of Income-tax (Exemptions), Delhi, [redesignated as Commissioner of Income-tax (Exemptions) with effect from the 15th day of November, 2014] the Chief Commissioner of Income-tax (Exemptions), Delhi shall be the authority;

(viii) for cases other than those mentioned at (i) to (vii) above, the Chief Commissioner or Director General to whom the Assessing Officer having jurisdiction to assess the fund or trust or institution referred to in sub-clause (iv) and sub-clause (v) of clause (23C) of section 10 of the Act was subordinate prior to the 15th day of November, 2014 and where such Chief Commissioner or Director General who was so authorised has ceased to exist, the Principal Chief Commissioner of Income-tax of that region.

Mar 9, 2015

Service tax registration online from 1 March 2015

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Service tax registration online from 1 March 2015
Service tax department makes registration to service tax easy as online registration is possible w.e.f 1 March 2015. Service tax department issued an order no. 1/2015 dated 28 February 2015 regarding online registration. Full order is as under.

The legal provisions for registration in service tax are contained in section 69 of the Finance Act, 1994, rule 4 of the Service Tax Rules, 1994 and the Service Tax (Registration of Special Category of Persons) Rules, 2005. Paragraph 2 of Circular 97/8/2007-Service Tax dated 23-8-2007 and Order No. 2/2011-Service Tax dated 13-12-2011 also explain some of the procedural aspects of registration in service tax. In supercession of Order No. 2/2011-Service Tax dated 13-12-2011, the Central Board of
Excise and Customs specifies the following documentation, time limits and procedure with
respect to filing of registration applications for single premises, which shall come into effect from 1-3-2015.

2. General procedure

(i) Applicants seeking registration for a single premises in service tax shall file the application online in the Automation of Central Excise and Service Tax (ACES) website www.aces.gov.in in Form ST-1.

(ii) Registration shall mandatorily require that the Permanent Account Number (PAN) of the proprietor or the legal entity being registered be quoted in the application with the exception of
Government Departments for whom this requirement shall be non-mandatory. Applicants, who are not Government Departments shall not be granted registration in the absence of PAN. Existing registrants, except Government departments not having PAN shall obtain PAN and apply online for conversion of temporary registration to PAN based registration within three months of this order coming into effect, failing which the temporary registration shall be cancelled after giving the assessee an opportunity to represent against the proposed cancellation and taking into consideration the reply received, if any.

(iii) E-mail and mobile number mandatory: The applicant shall quote the email address and mobile number in the requisite column of the application form for communication with the department. Existing registrants who have not submitted this information are required to file an amendment application by 30-4-2015. 

(iv) Once the completed application form is filed in ACES, registration would be granted online within 2 days, thus initiating trust-based registration. On grant of registration, the applicant would also be enabled to electronically pay service tax.

(v) Further, the applicant would not need a signed copy of the Registration Certificate as proof of registration. Registration Certificate downloaded from the ACES web site would be accepted as proof of registration dispensing with the need for a signed copy.

3. Documentation required
The applicant is required to submit a self attested copy of the following documents by registered post/ Speed Post to the concerned Division, within 7 days of filing the Form ST-1 online, for the purposes of verification:-

(i) Copy of the PAN Card of the proprietor or the legal entity registered.

(ii) Photograph and proof of identity of the person filing the application namely PAN card, Passport, Voter Identity card, Aadhar Card, Driving license, or any other Photo-identity card issued by the Central Government, State Government or Public Sector Undertaking.

(iii) Document to establish possession of the premises to be registered such as proof of ownership, lease or rent agreement, allotment letter from Government, No Objection Certificate from the legal owner.

(iv) Details of the main Bank Account.

(v) Memorandum/Articles of Association/List of Directors.

(vi) Authorisation by the Board of Directors/Partners/Proprietor for the person filing the application.

(vii) Business transaction numbers obtained from other Government departments or agencies such as Customs Registration No. (BIN No), Import Export Code (IEC) number, State Sales Tax Number (VAT), Central Sales Tax Number, Company Index Number (CIN) which have been issued prior to the filing of the service tax registration application.

4. Where the need for the verification of premises arises, the same will have to be authorised by an officer not below the rank of Additional /Joint Commissioner.

5. The registration certificate may be revoked by the Deputy/Assistant Commissioner in any of the following situations, after giving the assessee an opportunity to represent against the proposed revocation and taking into consideration the reply received, if any:

(i) the premises are found to be non existent or not in possession of the assessee.

(ii) no documents are received within 15 days of the date of filing the registration application.

(iii) the documents are found to be incomplete or incorrect in any respect.

6. The provisions of sub rules (5A) and (6) of rule 4 of the Service Tax Rules, 1994 may be
referred to regarding change in any information or details furnished by an assessee and transfer of business to another person, respectively. Similarly, sub rule (7) of the Service Tax Rules, 1994 may be referred to in case a registered person ceases to provide the service for which he has been granted registration.

7. Paragraph 2.0 of Circular 97/8/2007-Service Tax dated 23-8-2007 consisting of sub paragraphs
2.1 to 2.7 may be treated as withdrawn since there have been changes in the relevant legal provisions since the issuance of that Circular. The current legal provisions in the Service Tax Rules, 1994 and the Service Tax (Registration of Special Category of Persons) Rules, 2005 may also be referred to. 

Mar 4, 2015

Advance tax calculator for financial year 2015-16

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Advance tax calculator for financial year 2015-16
In union budget 2015, Finance Minister Mr. Arun Jaitley changes some income tax slabs as putting a surcharge of 12% on the income above Rs. 1 Crore. So it changes the tax liability calculation as well as advance tax payment. So it's rational to check your income tax liability and advance tax liability again.

Income tax slabs for Financial year 2015-16 relevant to Analysis year 2016-17 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%
- There is an additional exemption under section 87A to the assessee whose income comes in 250001 to 500000, the exemption is on tax amount maximum of 2000 Rupees.
- Surcharge of 12% is applicable on income abvove Rs. 1 crore.
 - Education cess @3% will be charged on tax amount.

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%
- There is an additional exemption under section 87A to the assessee whose income comes in 250001 to 500000, the exemption is on tax amount maximum of 2000 Rupees.
- Surcharge of 12% is applicable on income abvove Rs. 1 crore.
 - Education cess @3% will be charged on tax amount.

 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%

- Surcharge of 12% is applicable on income abvove Rs. 1 crore.
 - Education cess @3% will be charged on tax amount.
Advance tax calculator for Financial year 2015-16 is as under.


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Mar 3, 2015

Proposed amendments in TDS/TCS rules in budget 2015

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Proposed amendments in TDS/TCS rules in budget 2015
 The Finance Bill, 2015 proposes to rationalize the provisions of TDS and TCS under the IT Act. As such, the key proposals seek to bring parity between the TDS and TCS machinery provisions, resolve the uncertainty surrounding taxation of interest payments by cooperative banks to members, strengthen TDS provisions relating to salary income and extend reporting requirements under section 195(6) of the IT Act to payments that are not chargeable to income tax.

(a) Finance Bill, 2015 proposes to exempt notified deductors and collectors from the requirement of obtaining PAN. Such amendment is proposed to take effect from June 1, 2015.

(b) Currently, Section 194LD of the Act provides a lower withholding tax rate of 5% on interest payable to FIIs and QFIs in respect of investments in government securities and rupee denominated corporate bonds, if the interest is payable on or before June 1, 2015. Finance Bill, 2015 proposes to extend such concessional withholding tax rate on interest payable up to June 30, 2017. Such amendment is proposed to take effect from April 1, 2015.

(c) Presently, section 194C of the Act exempts payments made to contractors during the course of plying, hiring and leasing goods carriage if the contractor furnishes his PAN. It is proposed to restrict such exemption to cases where such contractor owns ten or less goods carriages at any time during the previous year and furnishes a declaration to such effect, along side PAN. Such amendment is proposed to come in effect from June 1, 2015.

(d) Following changes have been proposed in Section 194A of the Act, which relate to deduction of tax on interest (other than interest on securities). Such changes are proposed to come into effect from June 1, 2015:

(i) The current exemption from TDS on payments of interest to members by a co-operative society will be withdrawn in respect payment of interest by co-operative banks to its members.

(ii) The definition of 'time deposits' currently excludes recurring deposits from its scope. It is proposed to amend the definition of "time deposit" so as to include recurring deposits within its scope.

(iii) The deduction of tax under this section from interest payments on the compensation amount awarded by the Motor Accident Claim Tribunal shall be made only at the time of payment, if the amount of such payment or aggregate amount of such payments during a financial year exceeds INR 50,000.

 (e) It is proposed to amend the IT Act to enable computation of late fee payable under section 234E of the Act at the time of processing of TDS statement under Section 200A of the Act. Such amendment is proposed to take effect from June 1, 2015.

(f) It is proposed to amend the provisions of Section 206C of the IT Act so as to allow the collector of tax to furnish TCS correction statement. Such amendment is proposed to take effect from June 1, 2015.

(g) The Finance Bill proposes to introduce a mechanism for processing of TCS statements on the same lines of the existing provisions for processing of TDS statements(contained in Section 200A of the IT Act).Further, the intimation generated after the proposed processing of TCS statement shall be at par with the intimation generated after processing of TDS statement. Such amendment is proposed to take effect from June 1, 2015.

(h) The Finance Bill proposes to amend section 192 of the IT Act to provide that for purposes of estimating income of the employee for deduction of tax thereunder, the employer will obtain from the employee evidence of the prescribed claims (including claim of set off loss) under the Act in the form and manner prescribed. Such amendment is proposed to take effect from June 1, 2015.

 (i) Currently, section 195(6) of the Act provides that any person responsible for making payments to a non-resident of any sum chargeable under the IT Act will provide such information as may be prescribed. Pursuant to such provision form 15CA and 15CB are required to be furnished by payers.

Such reporting requirements are now proposed to be extended even in respect of payments, which in the opinion of the payer, are not chargeable to tax under the IT Act. Further, currently there is no penalty prescribed for non-furnishing of information or furnishing of incorrect information under section 195(6) of the IT Act (i.e. form 15CA and form 15CB). It is now proposed to provide a penalty of one lakh rupees in case of non-furnishing of information or furnishing of incorrect information under section 195(6) (i.e. form 15CA and form 15CB) of the Act. Such amendments are proposed to take effect from June 1, 2015.
(j) A new provision of the Act has been inserted for deduction of tax at the rate of 10% on pre-mature taxable withdrawal from Employees Provident Fund Scheme, 1952 ("EPFS").2 Such provision casts an obligation on the trustee of the EPFS to deduct tax at source. However, to reduce the compliance burden of employees having taxable income below the taxable limit, it is proposed to provide a threshold limit of payment of INR 30,000 for such provision to apply.

In case of employees paying tax at higher slab rates of 10%, the shortfall in the actual tax liability vis-à-vis TDS will be required to be paid by the employee through advance tax/ self assessment tax.
It is also proposed that in case of non-furnishing of PAN by employees to the trustee of the EPFS, tax would be deductible at the maximum marginal rate.Such amendments are proposed to take effect from June 1, 2015.

TDS fees u/s 234E may be demanded through intimation

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TDS fees u/s 234E may be demanded through intimation
 In order to facilitate smooth administration of tax collection, Chapter XVII-B of the Income-tax Act require certain persons to deduct tax (the deductor) on specified payments at the prescribed rates.

Under Sec.200 the deductor is duty bound to credit the amount so deducted to the Central Government or as the Board directs. Further, having so credited the amount, proviso to Sec.200 enables the deductor to file a correction statement for rectification of any mistakes or update or delete any information furnished under the TDS statement that may be verified by the authority.

Sec.200A provides for processing of TDS statements for determining the amount payable or refundable to the deductor.

In order to improve compliance with furnishing TDS and discourage delays, the Finance Act, 2012 inserted Sec. 234E whereby fee was levied for late furnishing of TDS statement.

II. Proposed Amendment
The existing provisions of Sec.200A does not provide mechanism for determination of late fee under Sec. 234E at the time of processing of TDS statements. It is, therefore, proposed to amend the provisions of Section 200A of the Act so as to enable computation of fee payable under section 234E of the Act at the time of processing of TDS statement under section 200A of the Act.

Further, the existing scheme of payment of TDS follows a book entry system in case of Government deductor. Thus, the government deductors are allowed to make payment of tax deducted by them without production of challan. Under this system, the Drawing and Disbursing Officer (DDO) intimates the TDS amount to the Pay and Accounts Officer or the Treasury Officer or the Cheque Drawing and Disbursing Officer (PAO/TO/CDDO) who then credits the TDS amount to the Central Government through book entry.

In order to improve the reporting of payment of TDS/TCS through book entry and to make the existing mechanism enforceable, the provisions of sections 200 of the Act are proposed to be amended. Accordingly, where the tax deducted (including paid under section 192(1A)) has been paid without the production of a challan, the PAO/TO/CDDO or any other person by whatever name called who is responsible for crediting such sum to the credit of the Central Government, shall furnish within the prescribed time a prescribed statement for the prescribed period to the prescribed income-tax authority or the person authorised by such authority by verifying the same in the prescribed manner and setting forth prescribed particulars.

TCS intimation to be deemed as demand notice

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TCS intimation to be deemed as demand notice
Current Provisions
When any tax, interest, penalty, fine or any other sum is payable in consequence of any order passed under this Act, the Assessing Officer shall serve upon the assessee a notice of demand in the prescribed form specifying the sum so payable.

Provided that where any sum is determined to be payable by the assessee or by the deductor under sub-section (1) of section 143 or sub section (1) of section 200A, the intimation under those sub-sections shall be deemed to be a notice of demand for the purposes of this section.

II. Proposed Amendment
The Finance Bill, 2015 proposes to insert a new section 206CB relating to processing of statements of tax collected at source.

The existing provisions contained in the Income-tax Act provide the method of processing of statements of TDS. Since there was no procedure specified with respect to the processing of TCS, it is proposed to insert a new section 206CB relating to processing of statements of TCS and the said section provide that statement of TCS or a correction statement made under section 206C shall be processed in the manner specified therein.

Consequently, it is proposed through amendment in Sec. 156 that where any sum is determined to be payable by the assessee or the deductor or the collector under sub-section (1) of section 143 or sub-section (1) of section 200A or sub-section (1) of section 206CB, the intimation under those sub-sections shall be deemed to be a notice of demand for the purposes of this section.

III. Conclusion
As new section 206CB proposed to be inserted with effect from 1st June, 2015 has reference to tax collected at source which has to go hand in hand with tax deducted at source, amendment to section 156 incorporating the word "collector" and further reference to sub-section (1) of section 206CB is consequential.

Mar 2, 2015

Excise circular on recovery of arrears in installments and amendment of garnishee notice

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Excise circular on recovery of arrears in installments and amendment of garnishee notice
Central excise department issued a circular no. 996/2015 dated 28 February 2015 about recovery of arrears in installments and amendments of garnishee notice. Full circular is as under.

 Your attention is invited to provisions of sub-section (2) of section 11 of the Central Excise Act, 1944. Central Excise Officers are empowered under this provision to issue an order to any other person from whom money is due to such person from whom recovery of arrears is required to be made. Such notice for recovery to the other person is generally referred as Garnishee Notice. Similar provisions are contained in section 142(1)(d) of the Customs Act, 1962 and section 87(b) of the Finance Act, 1994 . It has been brought to the notice of the Board that clarification is required regarding powers of recovery officer to amend or withdraw the Garnishee Notice.

2. The issue has been examined. There are occasions when the assessee comes forward for payment of arrears, once Garnishee Notice are issued to the persons from whom money is due to the assessee. There would be a practical need to amend or withdraw the Garnishee Notice issued in such situations. Further, section 21 of the General Clauses Act, 1897 clearly provides that power to issue an order includes power to add, amend, vary or rescind the order. Furthermore, an interpretation that Garnishee Notice cannot be amended or rescinded would make the provisions unworkable. Such interpretations should be avoided in law.

3. In view of the above, it is hereby clarified that recovery officers do have powers to add, amend, vary or rescind any Garnishee Notice issued. However, the interest of revenue has o be suitably safeguarded.

4. Attention is also invited to the issue of recovery of arrears in installments. On Central Excise side, three circulars/instructionshave been issued in the past viz. instructions from F. No. 289/10/91-CX.9 dt 18-3-1991, Circular no. 32/32/94/CX dt. 11-4-94 and Circular no. 208/42/96-CX dt. 2-5-1996. There is a need to provide uniform instructions regarding facility to pay arrears in installments in Central Excise, Service Tax and Customs.It has therefore been decided that in supersession of all earlier circulars and instructions, following instructions shall be followed hereafter to allow payment of arrears in installments under the Central Excise Act, 1944, Chapter V of the Finance Act, 1994 (for
Service tax) and the Customs Act, 1962.

5. It has been decided by the Board to allow recovery of arrears of taxes, interest and penalty in installments. The power to allow such payment in monthly installments shall be discretionary and shall be exercised by the Commissioners for granting sanction to pay arrears in installments upto a maximum of 24monthly installments and by the Chief Commissioners for granting sanction to pay arrears in monthly installments greater than 24 and upto a maximum of 36monthly installments.

6. The facility to pay arrears in installments shall generally be granted to companies which show a reasonable cause for payment of arrears in installments such as the company being under temporary financial distress. Approval to pay in installments and the number of installments should be fixed such that an appropriate balance between recovery of arrears and survival of business is maintained taking into consideration the overall financial situation of the company, its assets, liabilities, income and expenses. Frequent defaulters may not be allowed payment of arrears in installments. The decision shall be taken on a case to case basis taking into consideration the facts of the case, interest of the revenue, track record of the company its financial situation. 

7. The application for allowing payment of arrears shall be made to the jurisdictional Commissioner giving full justification for the same. The approval of the application should be in writing with due acknowledgment taken on record.The permission should clearly identify the number of installment and the month from which the payments of installments should begin and should also clearly stipulate that in case of default in payment of installments, the permission shall be withdrawn and action shall be taken for recovery of arrears.

8. For this purpose, Commissioner shall also exercise the power to cancel the permission to pay arrears in installments. Cancellation should be resorted to in cases of default in the payment of installments or when the company is becoming financial unviable and there is likelihood of winding up of business. After cancelling the permission to pay in installments, action should be taken forthwith for recovery of arrears.

9. Any difficulty in implementing the circular may be brought to the notice of the Board. Hindi version would follow.