Sep 30, 2015

Form 15G and 15H can be e-filed- New forms and procedure

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Form 15G and 15H can be e-filed- New forms and procedure
Tax payers seeking non deduction of tax from certain incomes are required to file a self declaration in Form No. 15G or Form No.15H as per the provisions of Section 197A of the Income-tax Act, 1961 (‘the Act’). In order to reduce the cost of compliance and ease the compliance burden for both, the tax payer and the tax deductor, the Central Board of Direct taxes has simplified the format and procedure for self declaration of Form No.15G or 15H. The procedure for submission of the Forms by the deductor has also been simplified.

Under the simplified procedure, a payee can submit the self-declaration either in paper form or electronically. The deductor will not deduct tax and will allot a Unique Identification Number (UIN) to all self-declarations in accordance with a well laid down procedure to be specified separately. The particulars of selfdeclarations will have to be furnished by the deductor along with UIN in the
quarterly TDS statements. The requirement of submitting physical copy of Form 15G and 15H by the deductor to the income-tax authorities has been dispensed with.

The deductor will, however be required to retain Form No.15G and 15H for seven years.

 The revised procedure shall be effective from the 1st day of October, 2015. 

CBDT issued a notification no. 76/2015 dated 29 September 2015 regarding change in format and procedure of filing Form 15G and 15H with 14th amendment rules. Full notification issued by CBDT is as follows.

 In exercise of the powers conferred by section 295 read with section 197A 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 (14th Amendment) Rules, 2015.

(2) They shall come into force on the 1st day of October, 2015.

2. In the Income-tax Rules, 1962 (hereafter referred to as the said rules), for rule 29C, the
following rule shall be substituted, namely:-

“29C. Declaration by person claiming receipt of certain incomes without deduction of tax.
— (1) A declaration under sub-section (1) or under sub-section (1A) of section 197A shall be in  Form No. 15G and declaration under sub-section (1C) of section 197A shall be in Form No. 15H.

(2) The declaration referred to in sub-rule (1) may be furnished in any of the following manners, namely:-
(a) in paper form;
(b) electronically after duly verifying through an electronic process in accordance with the
procedures, formats and standards specified under sub-rule (7).

(3) The person responsible for paying any income of the nature referred to in sub-section (1) or sub-section (1A) or sub-section (1C) of section 197A, shall allot a unique identification number to each declaration received by him in Form No.15G and Form No.15H respectively during every quarter of the financial year in accordance with the procedures, formats and standards specified by the Principal Director-General of Income-tax (Systems) under sub-rule (7).

(4) The person referred to in sub-rule (3) shall furnish the particulars of declaration received by him during any quarter of the financial year along with the unique identification number allotted by him under sub-rule (3) in the statement of deduction of tax of the said quarter in accordance with the provisions of clause (vii) of sub-rule (4) of rule 31A.

(5) The person referred to in sub-rule (3) shall furnish the statement of deduction of tax referred to in rule 31A containing the particulars of declaration received by him during each quarter of the financial year along with the unique identification number allotted by him under sub-rule (3) in accordance with the provisions of clause (vii) of the sub-rule (4) of rule 31A irrespective of the fact that no tax has been deducted in the said quarter.

(6) Subject to the provisions of sub-rules (4) and (5), an income-tax authority may, before the end of seven years from the end of the financial year in which the declaration referred to in subrule (1) has been received, require the person referred in sub-rule (3) to furnish or make available the declaration for the purposes of verification or any proceeding under the Act in accordance with the procedures, formats and standards specified by Principal Director General of Income tax (Systems) specified under sub-rule (7).

(7) The Principal Director General of Income-tax (Systems) shall specify the procedures, formats and standards for the purposes of furnishing and verification of the declaration, allotment of unique identification number and furnishing or making available the declaration to the income tax authority and shall be responsible for the day-to-day administration in relation to the furnishing of the particulars of declaration in accordance with the provisions of sub-rules (4) and (5).

(8) The Principal Director General of Income-tax (Systems) shall make available the information of declaration furnished by the person referred to in sub-rule (3) to the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner to whom the Assessing Officer having jurisdiction to assess the person who has furnished the declaration under sub-section (1) or under sub-section (1A) or under sub-section (1C) of section 197A is subordinate.”.

Due date offiling return of income has extended to 31.10.2015 for Punjab and Haryana tapayers

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Due date offiling return of income has extended to 31.10.2015 for Punjab and Haryana tapayers
CBDT has extended due date of filing income tax return from 30 September to 31 October 2015 for the resident of Punjab, Haryana, Chandigarh and Gujarat. Honorable Punjab and Haryana High Court directs CBDT to extend the due date to 31 October 2015 in the recent case on 29-September 2015. CBDT issued an order u/s 119 of income tax act which is as follows.

The Central Board of Direct Taxes, in compliance to the order of Hon'ble Punjab and Haryana High Court dated 28.09.2015 in case of Vishal Garg & Ors. vs. Union of India & Anr.; CWP 19770-205 and in exercise of powers conferred under section 119 of the Income-tax Act, 1961 ('Act'), hereby orders that the returns of income due to be E-filed by 30th September, 2015 may be filed by 31st October, 2015 in cases of Income-tax assessees of the State(s) of Punjab and Haryana and Union Territory of Chandigarh.

2. This order shall be subject to the outcome of any further appeal/SLP which the CBDT may file against the said judgment. 


Transport allowance for deaf and dumb exempted to Rs. 3200 per month

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Transport allowance for deaf and dumb exempted to Rs. 3200 per month
CBDT issued a notification no. 75/2015 dated 23 September 2015 on thirteenth amendment rule 2015 about the transport allowance under rule 2BB in sub rule(2) and serial no. 11. Earlier this allowance is for blind or orthopaedically handicapped. Now deaf and dumb word also inserted there. So the new serial no. 11 in rule 2BB is as follows.

1. (1) These rules may be called the Income-tax (Thirteenth 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, in rule 2BB, in sub-rule (2), in the Table, against serial number 11, in the entry under column (2) relating to “name of allowance”, after the words “who is blind”, the words “or deaf and dumb” shall be inserted. 

Transport allowance granted to an employee, who is blind or orthopaedically handicapped or deaf and dumb with disability of lower extremities, to meet his expenditure for the purpose of commuting between the place of his residence and the place of his duty.
All over India
Rs.3200 per month

Quoting PAN is must in form no. MGT-7

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Quoting PAN is must in form no. MGT-7
In exercise of the powers conferred by sections 88, 89,9I,92, 93,94, 70I, 105, 108, 109, 110, 115, 117, 118, 119, 120 and 121 read with sub-sections(1) and (2) of section 469 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following rules further to amend the Companies (Management and Administration) Rules, 2014, namely:-

1. Short title and commencement.--(1) These rules may be called the Companies (Management and Administration) Second Amendment Rules, 2015.

(2) They shall come into force on the date of their publication in the Official Gazette.
2. In the Companies (Management and Administration) Rules, 2014, in Form No. MGT-7 ln paragraph I, under serial number (i), after "Global Location Number (GLN) of the
Company", the following shall be inserted, namely:-

"*Permanent Account Number (PAN) of the Company

Sep 29, 2015

P&H High Court directs CBDT to extend due date for filing return to 31.10.2015

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P&H High Court directs CBDT to extend due date for filing return  to 31.10.2015
Honorable Punjab & Haryana High Court directs CBDT to extend due date of filing income tax return to 31 October 2015. Earlier Gujarat High court also directed CBDT to extend the due date.

Honorable Court has shown disagreement on the matter on not to extend due date further order issued by CBDT.

Court has directed CBDT to issue an order u/s 119 of income tax act to extend the due date of filing income tax return.

Paragraph no. 20 of judgement by High court.
In view of the above, taking the totality of facts and circumstances of the case, it is considered appropriate to extend the due date for e-filing of returns upto 31st October 2015 for which the CBDT shall issue appropriate notification/instructions under Section 119 of the Act. Direction is also issued to the respondents to ensure that the forms etc. which are to be prescribed for the audit report and for e-filing the returns should ordinarily be made available on the first day of April of the assessment year. The writ petition stands disposed of accordingly. 

View Full judgement by Punjab and Haryana High Court

What's Next
CBDT may file an appeal to Honorable Supreme Court or a review petition to High Court. If Honorable court will not give a stay, CBDT needs to issue an order u/s 119 of income tax act to extend the due date of income tax act to 31.10.2015.

Nothing is clear now
We need to wait and watch the CBDT next move as nothing is clear. CBDT will issue some notification soon on this matter.

Latest FVU version 4.8 e-TDS software free download

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Latest FVU version 4.8 e-TDS software free download
Tin.nsdl has launched latest file validation utility version 4.8 on 29.09.2015 for quarterly e-TDS/TCS statements. This FVU version 4.8 is applicable with effect from 29 September 2015. There are many new features added in new fvu version 4.8 which are as follows.

Section code 192A:
In addition to Form no. 26Q, this section will also be applicable for Form no. 27Q where the date of payment to deductee is on or after 01/06/2015.

Discontinuation of C9 Correction Statements:
As directed by Income Tax Department (ITD), C9 correction i.e. addition of new Challans in Correction Statement(s) has been discontinued.

Removal of nature of remittance (applicable only in case of Form no. 27Q):
As directed by ITD, below mentioned nature of remittances has been removed from the list.
o Commission
o Payments to sports person & artists
o Winning from horse races
o Winning from lotteries, crossword puzzles, card games and other games of
any sort

This version of FVU will be applicable with effect from September 29, 2015.
Download FVU version 4.8
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Latest return preparation utility RPU version 1.3 in java platform

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Latest return preparation utility RPU version 1.3 in java platform
Tin.nsdl has launched latest return preparation utility RPU version 1.3 in java platform on 29.09.2015 for TDS/TCS regular and corrective statement from financial year 2007-08 and onwards. There are many new features added in RPU version 1.3 which are as follows.

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

Section code 192A
In addition to Form no. 26Q, this section will also be applicable for Form no. 27Q where the date of payment to deductee is on or after 01/06/2015.

Discontinuation of C9 Correction Statements:
As directed by Income Tax Department (ITD), C9 correction i.e. addition of new Challans in Correction Statement(s) has been discontinued.\

Removal of nature of remittance (applicable only in case of Form no. 27Q):
As directed by ITD, below mentioned nature of remittances has been removed from the list.
o Commission
o Payments to sports person & artists
o Winning from horse races
o Winning from lotteries, crossword puzzles, card games and other games of any sort

Incorporation of latest File Validation Utility (FVU) version 4.8 (applicable for TDS/TCS statements pertaining to FY 2010-11 onwards) and FVU version 2.144 (applicable for TDS/TCS statements from FY 2007-08 upto FY 2009-10).
Download RPU version 1.3 in java platform
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RBI reduces repo rate by 50 basis points to 6.75

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RBI reduces repo rate by 50 basis points to 6.75
Reserve bank of India reduces repo rate by 50 basis points on 29 September 2015 from 7.25 percent to 6.75 percent.RBI notification is as follows.

As announced by the Governor today, it has been decided to reduce the Repo rate under the Liquidity Adjustment Facility (LAF) by 50 basis points from 7.25 per cent to 6.75 per cent with immediate effect.

Consequent to the change in the Repo rate, the Reverse Repo rate under the LAF will stand adjusted to 5.75 per cent with immediate effect.
All other terms and conditions of the current LAF Scheme will remain unchanged.

Sep 28, 2015

People with 4 lakh income in small cities are on income tax radar

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People with 4 lakh income in small cities are on income tax radar
Those earning Rs 400,000 lakh per annum, besides people in tier-II and tier-III cities with taxable income but not paying taxes are on the radar of the Income-Tax Department which has launched an ambitious drive to net one crore new assessees this financial year.

The Central Board of Direct Taxes (CBDT), the top policy making body of the IT department, feels if more and more people pay their due taxes, the income tax burden of those already compliant could be gradually eased.

“We want that at least people who are earning taxable income, let them start filing returns. Because, even small payment of tax by a large number of people is a favourable thing and this currently constitutes our tax gap. As far as our understanding goes, after the studies which we got conducted, people who are not filing returns are people who are earning income of about Rs 4 lakh (per year). They are the ones who are missing from over records as filers.

“Then we have people who are filing returns but they are understating their income. Our approach for them was different but now what we are talking about those small taxpayers in the tier-II and tier-III cities who have small income but they have taxable income. There are about 18-20 per cent people in this bracket who are missing,” CBDT Chairperson Anita Kapur told PTI in an interview.

She said the taxman has begun approaching markets and resident welfare associations in large cities to convey the message that they should be paying proper taxes.

“We got a feedback that people living in posh areas, where the property prices are certainly for a category which should be on the tax net, they are not filing returns. We are asking RWAs that please tell your residents that you have a liability (to pay income tax), so you should pay taxes and that it is so easy to pay taxes,” Kapur said.

The CBDT chief said if these small taxpayers also come into the system, it would give the government “leeway” to reduce overall taxes and also lessen individual income tax.

“So, if these assessees, who are in large numbers, start paying, may be their taxes are small but even that small amount bolsters the revenue. So, once you get better tax compliance from a larger population you have the leeway to reduce the taxes. The Finance Minister has also said that,” she said.

“Someone who is not paying tax is actually increasing the burden for someone who is paying the tax and people don’t realise that. That is why we have begun the new project of bringing more and more eligible people into the tax net,” Kapur said.

The CBDT boss said the tax department will not “hunt down” people to pay taxes under the new exercise of adding more assesses and that it would be conducted through the use of technology.

“We will not hunt down (potential taxpayers)…we are not doing door-to-door survey. We are not sending our inspectors to houses etc. We are trying to do in a non-intrusive way to let the taxpayer know that the department knows you have income. We have information about you and you please file your taxes,” she said.

As part of government’s initiative to broaden the tax base, the CBDT recently activated all its field offices to achieve the goal of netting one crore assesses this fiscal with the Pune region being given the maximum target of bringing in over 10 lakh new taxpayers.

The Board has also communicated to the taxman that it should adopt a multi-pronged strategy to achieve this ‘not-so-easy’ target by holding meetings with trade associations and professional bodies and obtaining data on under-reporting assesses through technical and human intelligence.

Due date of filing audit report and return unchanged- Fake order circulated

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Due date of filing audit report and return unchanged- Fake order circulated
CBDT clarifies on fake order circulated on 26 September  about the extension of audit report and return filing date of income tax. There is no change in the date of income tax return filing and audit report which is 30 September 2015. CBDT press release is as under.

Sub: Circulation of Fake order for extension of due date for filing of Audit report and return of Income for Assessment Year 2015-16- regarding

It has been brought to the notice of the Government that a fake order dated 26th September 2015 supposedly under section 119 of the Income-tax Act 1961 under the signature of one Upmanyu Reddy, Under Secretary to the Government of India is in circulation. The fake order extends the due date for filing of audit report under section 119 of the Income-tax Act to 15 October 2015.

It is clarified the order is fraudulent. The Government has not extended the due date for filing of returns and audit report due by 30th September 2015. Tax payer and practitioners are advised not to give any credence to the fraudulent order purportedly signed by one Upmanyu Reddy.

(Shefali Shah)
Pr. Commissioner of Income Tax (OSD)
Official Spokesperson, CBDT 

Sep 27, 2015

How to avoid TDS on fixed deposits

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How to avoid TDS on fixed deposits
Fixed Deposit(F.D)- Fixed Deposit are the fund on which the interest is paid for the fixed term & the funds can’t be withdrawn before maturity, & if the fund is withdrawn before maturity giving notice, there will be a huge loss of interest.

As all know, banks make fixed deposit to customer which have higher rate of interest compare to saving account. But sometimes we all see the bank deduct some amount of fixed deposit as TDS (Tax Deducted at Source). To get back the Tax from Income Tax Department is not easy and most of the people including me avoid doing so. There are some tips to save the interest on fixed deposit from TDS.

What is the procedure to deduct TDS on F.D?

1-      The bank deducts TDS on fixed deposit only when the interest amount on fixed deposit exceeds Rs. 10000.

2-      The TDS rate on the fixed deposit is 10%.

3-      Bank will pay the remaining amount of interest like if you get 20000 Rs interest on your deposit Bank will pay 18000( 20000-10% of 20000).

4-      For getting the refund of your Tax amount, one need to be files the income tax return

.How to Avoid TDS on Fixed Deposit

1-      TDS is deducted at bank branch. So it is advisable to break up the deposit and make the F.D in some branch instead of making it in one branch with larger amount.

2-      Make the F.D of small amount in different branches. It will save your interest as lesser interest less chances of deducting TDS.

3-      You can submit Form 15H. You can submit form 15H if you haven’t any taxable income in previous year. This form is for below 65 years of age.

4-      You can submit Form 15G. You can submit form 15G if you haven’t any taxable income in previous year. This form is for above 60 years of age.

5-      All these forms should be submitted before 31st march of the year. If these forms are submitted on time, the bank will not deduct TDS.

Download Fixed deposit value calculator 

Sep 26, 2015

New online payment gateway for import and export related payments

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New online payment gateway for import and export related payments
Processing and settlement of import and export related payments facilitated by Online Payment Gateway Service Providers

Attention of Authorised Dealer Category-I (AD Category-I) banks is invited to the A. P. (DIR Series) Circular No.109 dated June 11, 2013 read with A.P. (DIR Series) Circular No.17 dated November 16, 2010 in terms of which AD Category-I banks have been permitted to offer the facility to repatriate export related remittances by entering into standing arrangements with Online Payment Gateway Service Providers (OPGSPs) in respect of export of goods and services.

2. To facilitate e-commerce, it has been decided to permit AD Category-l banks to offer similar facility of payment for imports by entering into standing arrangements with the OPGSPs. The revised consolidated guidelines on such imports and exports are as under:
General:

2.1 AD Category-I banks desirous of entering into such an arrangement/s should report the details of each such arrangement as and when entered into to the Foreign Exchange Department, Central Office, Reserve Bank of India, Mumbai. For operationalising such arrangements, AD Category-I banks shall:

(i) carry out the due diligence of the OPGSP;

(ii) maintain separate Export and Import Collection accounts in India for each OPGSP;

(iii) satisfy themselves as to the bonafides of the transactions and ensure that the related purpose codes reported to the Reserve Bank are appropriate;

(iv) submit all the relevant information relating to any transaction under such arrangements to the Reserve Bank, as and when advised to do so; and

(v) conduct the reconciliation and audit of the collection accounts on a quarterly basis.

2.2 Foreign entities, desirous of operating as OPGSP, shall open a liaison office in India with the approval of the Reserve Bank before operationalising the arrangement with any AD category-I bank. It would be incumbent upon the OPGSP to:

(i) ensure adherence to the Information Technology Act, 2000 and all other relevant laws / regulations in force;

(ii) put in place a mechanism for resolution of disputes and redressal of complaints;

(iii) create a Reserve Fund appropriate to its return and refund policy and

(iv) onboard sellers, Indian as well as foreign, following appropriate due diligence procedure.
Resolution of all payment related complaints in India shall remain the responsibility of the OPGSP concerned.

2.3 Domestic entities functioning as intermediaries for electronic payment transactions in terms of the guidelines stipulated by our Department of Payment and Settlement Systems and intending to undertake cross border transactions shall maintain separate accounts for domestic and cross border transactions.

3. Import transactions
(i) The facility shall only be available for import of goods and software (as permitted in the prevalent Foreign Trade Policy) of value not exceeding USD 2,000 (US Dollar Two Thousand) only.

(ii) The balances held in the Import Collection account shall be remitted to the respective overseas exporter's account immediately on receipt of funds from the importer and, in no case, later than two days from the date of credit to the collection account.

(iii) The AD Category –I bank will obtain a copy of invoice and airway bill from the OPGSP containing the name and address of the beneficiary as evidence of import and report the transaction in R-Return under the foreign currency payment head.

(iv) The permitted credits in the OPGSP Import Collection account will be:
collection from Indian importers for online purchases from overseas exporters electronically through credit card, debit card and net banking and charge back from the overseas exporters.

(v) The permitted debits in the OPGSP Import Collection account will be:
payment to overseas exporters in permitted foreign currency;
payment to Indian importers for returns and refunds;
payment of commission at rates/frequencies as defined under the contract to the current account of the OPGSP; and
bank charges

4. Export transactions
As already notified vide our A. P. (DIR Series) Circular No.109 dated June 11, 2013 and A.P. (DIR Series) Circular No. 17 dated November 16, 2010 referred to earlier:

(i) the facility shall only be available for export of goods and services (as permitted in the prevalent Foreign Trade Policy) of value not exceeding USD 10,000 (US Dollar ten thousand) per transaction.

(ii) AD Category-I banks providing such facilities shall open a NOSTRO collection account for receipt of the export related payments facilitated through such arrangements. Where the exporters availing of this facility are required to open notional accounts with the OPGSP, it shall be ensured that no funds are allowed to be retained in such accounts and all receipts should be automatically swept and pooled into the NOSTRO collection account opened by the AD Category-I bank.

(iii) The balances held in the NOSTRO collection account shall be repatriated to the Export Collection account in India and then credited to the respective exporter's account with a bank in India immediately on receipt of the confirmation from the importer and, in no case, later than seven days from the date of credit to the NOSTRO collection account.

(iv) The permitted debits to the OPGSP Export Collection account maintained in India will be:
payment to the respective Indian exporters’ accounts;
payment of commission at rates/frequencies as defined under the contract to the current account of the OPGSP; and
charge back to the overseas importer where the Indian exporter has failed in discharging his obligations under the sale contract.

(v) The only credit permitted in the same OPGSP Export Collection account will be repatriation from the NOSTRO collection accounts electronically.

5. AD Category-I banks may bring the contents of this circular to the notice of their constituents and customers concerned.

6. The directions contained in this circular have been issued under Section 10 (4) and Section 11 (1) of the Foreign Exchange Management Act (FEMA), 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law.

Sep 25, 2015

No FEMA processing against persons declaring money in compliance window

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No FEMA processing against persons declaring money in compliance window
In connection with the declarations made by persons resident in India under the provisions of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (Black Money Act), it is clarified that:

a) No proceedings shall lie under the Foreign Exchange Management Act, 1999 (FEMA) against the declarant with respect to an asset held abroad for which taxes and penalties under the provisions of Black Money Act have been paid.

b) No permission under FEMA will be required to dispose of the asset so declared and bring back the proceeds to India through banking channels within 180 days from the date of declaration.

c) In case the declarant wishes to hold the asset so declared, she/he may apply to the Reserve Bank of India within 180 days from the date of declaration if such permission is necessary as on date of application. The Reserve Bank of India will deal with such applications as per extant regulations. In case such permission is not granted, the asset will have to be disposed of and proceeds brought back to India.

Necessary notification under FEMA is being issued separately

No MAT on foreign companies not having PE in India from 1.4.2001

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No MAT on foreign companies not having PE in India from 1.4.2001
Issues relating to taxation of foreign companies, having no permanent establishment in India, have been under consideration of the Government. In this regard, the Government has already clarified the inapplicability of MAT provisions to FIIs/FPIs.

The Government has now considered the issue of applicability of MAT under section 115JB of the Income-tax Act to foreign companies having no place of business/permanent establishment in India.

After due consideration of the various aspects of the matter, the Government has decided that with effect from 01.04.2001 the provisions of section 115JB shall not be applicable to a foreign company if —

• the foreign company is a resident of a country having DTAA with India and such foreign company does not have a permanent establishment within the definition of the term in the relevant DTAA, or

• the foreign company is a resident of a country which does not have a DTAA with India and such foreign company is not required to seek registration under section 592 of the Companies Act 1956 or section 380 of the Companies Act 2013.

An appropriate amendment to the Income-tax Act in this regard will be carried out. 

No capital assets transfer on facilities lease out for less than 12 years

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No capital assets transfer on facilities lease out for less than 12 years
No "transfer" of capital asset takes place in the ordinary sense of the word 'transfer' or even within the extended meaning given to the term 'transfer in section 2(47)(vi) when the plant and machinery along with land and building is leased out for a limited period of 10 years giving limited right to the lessee to hold and possess the facilities leased to it with further restriction on sub-letting it or transferring any right or interest therein to anyone without the permission of the lessor and with the lease agreement making it explicit that at the end of the lease period the facilities leased would revert to the lessor-assessee. This is in view of Explanation1 to section 2(47) which incorporates reference to section 269UA(d) for which purposes 'transfer' has been defined to section 269UA(f)(i) to include lease for a period of not less than 10 years

• No "transfer" of capital asset takes place within the meaning of section 2(47) when the plant and machinery along with land and building is leased out for a limited period of 10 years giving limited right to the lessee to hold and possess the facilities leased to it with further restriction on sub-letting it or transferring any right or interest therein to anyone without the permission of the lessor and with the lease agreement making it explicit that at the end of the lease period the facilities leased would revert to the lessor-assessee.

• This is in view of Explanation1 to section 2(47) which incorporates reference to section 269UA(d) for which purposes 'transfer' has been defined to section 269UA(f)(i) to include lease for a period of not less than 10 years.

• This is especially so when assessee-lessor has claimed depreciation on plant and machinery leased out and the facilities indeed did revert back to assessee-lessor at the end of the 10 years lease period and assessee-lessor did indeed sell these facilities to another party and was assessed for long-term capital gains on such sale.

• The mere fact that the Assessee may have applied under Section 230A of the Act to seek permission of the Department cannot be held against it as far as the correct legal position is concerned. In other words the fact that certain columns in the concerned form were filled by the Assessee to imply that there was a transfer of leasehold/ownership rights cannot be read to constitute a waiver by the Assessee of the legal defences that flow from a correct interpretation of the clauses of the lease agreement and from a correct reading of Section 2 (47) with Section 45 of the Act.

• The lease agreement had to form the fundamental basis for understanding what the transaction in effect was. The relationship between the parties could not be re-configured on the basis of surmises and conjectures.

• The AO and CIT (A) appeared to have proceeded on the basic suspicion that the lease agreement was a tax avoidance device and this prevented them from objectively viewing the transaction for what it in effect was.

• There has to be an extinguishment of ownership rights in order that a transaction can be said to be a 'sale'. Here, the lessee does not even have the right of sub-letting the facilities. The leasehold right is only for a period of ten years and at the end of that period the leased facilities revert to the owner.

Sep 24, 2015

New pre-filled income tax return form for easy e-filing

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New pre-filled income tax return form for easy e-filing
As part of efforts to popularise the electronic mode of filing Income Tax Returns (ITRs), the CBDT is planning to provide “pre-filled” return forms to filers which will have an automatic upload of data on income and other vitals of a taxpayer.

The apex policy-making body of the I-T department is actively working to ensure that this customer-friendly measure can be launched for taxpayers from the next financial year.
The move comes in the backdrop of the new e-filing system, put in place in August, which allows online verification of an ITR by using either the Aadhaar number, Internet banking, ATM among others.

Small taxpayers with income less than Rs 5 lakh and without claims of refund can generate an electronic verification code from the e-filing website of the tax department which is later sent to their registered email to e-verify the return.

“We are looking at a possibility of making more entries for a pre-filled form so that it becomes more easier for the taxpayer to file an e-return. We want to ensure that when technology moves, we can always bring in better facilities to make the life (of taxpayers) even easier,” CBDT Chairperson Anita Kapur told PTI.

She said these technology upgrades are proposed to be initially started for small taxpayers who file the one-page ITR (ITR 1) and the thinking in the department is that when the data of income as per previous records is automatically uploaded then the taxpayer can file their ITRs quickly and wherever there are any amendments or changes, those can be corrected by the taxpayer himself.

“We want to give the taxpayers the right to change or correct their figures (in the new system) and help them file their ITR as quickly and easily as possible,” she said.

The Central Board of Direct Taxes (CBDT) is particularly bolstered on this front by the latest figures which recently reported that the tax department received 2.06 crore returns on its e-filing portal as on September 7 (last date for ITR filing), which is an increase of 26.12 per cent over the last year, when 1.63 crore returns were filed online.

Compensation received by denial of employment isn't profit in lieu of salary

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Compensation received by denial of employment isn't profit in lieu of salary
An amount received by a prospective employee 'as compensation for denial of employment' was not in nature of profits in lieu of salary. It was a capital receipt that could not be taxed as income under any other head

Facts:

(a) In terms of employment agreement, the assessee was to be employed as CEO of M/s ACEE Enterprises ('ACEE'). The ACEE was unable to take assessee on board due to sudden change in its business plan. The ACEE paid compensation of 1.95 crores to assessee as a "one-time payment for non-commencement of employment as proposed".

(b) The assessee had not offered such compensation to tax. The AO rejected the claim of assessee on the ground that under Section 17(3)(iii) receipt by the assessee of any sum from any person prior to his joining with such person was taxable.

(c) As per Section 17(3)(iii) "profits in lieu of salary" include any amount due to or received, whether in lump sum or otherwise, by any assessee from any person before his joining any employment with that person or after cessation of his employment with that person.

(d) However, the CIT(A) held that Section 17(3)(iii) had been brought in to account for taxing 'joining bonus' received from the prospective employer as profit in lieu of salary. The ITAT upheld the findings of CIT(A).

(e) The ld. Counsel of department urged that since the wording of Section 17(3)(iii) was that "any amount received from any person", it was not necessary that the amount had to be received only from an employer in order that such sum be brought to tax in the hands of an assessee under the had 'profits in lieu of salary'. It was submitted that the expression any person could include a prospective employer in the present case.
The High Court held as under:

(1) The interpretation sought to be placed by revenue on plain language of Section 17(3)(iii) could not be accepted. The words "from any person" occurring therein have to be read together with the following words in sub-clause (A): "before his joining any employment with that person". In other words, Section 17(3)(iii) pre-supposes the existence of the relationship of employee and employer between the assessee and the person who makes the payment of "any amount' in terms of Section 17(3)(iii).

(2) Therefore the words in Section 17(3)(iii) cannot be read disjunctively to overlook the essential facet of the provision, viz, the existence of 'employment', i.e., a relationship of employer and employee between the person who makes the payment of the amount and the assessee.

(3) The other plea of revenue that said amount should be taxed under some other head of income, including 'income from other sources', was also unsustainable. In case of CIT v. Rani Shankar Mishra [2009] 178 Taxman 324 (Delhi) it was held that where an amount was received by a prospective employee 'as compensation for denial of employment', such amount was not in nature of profits in lieu of salary. Thus, it was a capital receipt that could not be taxed as income under any other head.

Sep 23, 2015

New 500 and 1000 Rs. note with additional features

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The Reserve Bank of India will shortly put into circulation banknotes in the denominations of ₹ 500 and ₹ 1000 incorporating three new/revised features - (i) ascending size of numerals in the number panels, (ii) bleed lines, and (iii) enlarged identification mark.

It may be recalled that the Reserve Bank recently put into circulation ₹ 500 and ₹ 1000 banknotes with numerals in ascending size in number panels but without bleed lines and enlarged identification mark. It has now added two more features to aid visually impaired in easy identification of banknotes part from securing them against counterfeiting.

The current banknotes will be without inset letter in the number panels. The notes will bear signature of Dr. Raghuram G. Rajan, Governor. The year of printing (2015) appears on the reverse. Except for these features, the overall design of ₹ 500 and ₹ 1000 banknotes have been retained.

All banknotes in these denominations issued hitherto by the Reserve Bank will continue to be legal tender.

Details of New Features:
(i) Ascending size of numerals in numbering panels:
Numerals in both the numbering panels of banknotes will be in ascending size from left to right, while the first three alpha-numeric characters will remain constant in size.

(ii) Bleed lines:
The banknotes of ₹ 500 denomination will have five angular bleed lines in three sets of 2-1-2 lines on the obverse in both, the upper left and the right hand edge of the banknote. Similarly, ₹ 1000 banknotes will have six angular bleed lines in four sets of 1-2-2-1 lines on the obverse in both, the upper left and right hand edge of the banknotes. These will facilitate identification of these notes by visually impaired persons.

(iii) Enlarged Identification Mark:
The existing identification mark (circular-shape in ₹ 500 and diamond in ₹ 1000) near the left edge of the banknote has been enlarged.

The Reserve Bank of India is committed to continually bring about modifications in the design of banknotes with changing times.

Private company can take loan from relatives of director

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Private company can take loan from relatives of director
In exercise of the powers conferred by sections 73 and 76 read with sub-section (1) of section 469 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following rules further to amend the Companies (Acceptance of Deposits) Rules, 2014, namely:—

1. (1) These rules may be called the Companies (Acceptance of Deposits) Second Amendment Rules, 2015.

(2) They shall come into force on the date of their publication in the Official Gazette.
2. In the Companies (Acceptance of Deposits) Rules, 2014 (hereinafter referred to as said rules), in rule 2, in sub-rule (1), in clause (c), for sub-clause (viii), the following shall be substituted, namely:—
"(viii) any amount received from a person who, at the time of the receipt of the amount, was a director of the company or a relative of the director of the private company:
Provided that the director of the company or relative of the director of the private company, as the case may be, from whom money is received, furnishes to the company at the time of giving the money, a declaration in writing to the effect that the amount is not being given out of funds acquired by him by borrowing or accepting loans or deposits from others and the company shall disclose the details of money so accepted in the Board's report;".
3. In the said rules, in rule 3,—
(a)for the words "paid-up share capital and free reserves", wherever they occur, the words "paid-up share capital, free reserves and securities premium account" shall be substituted;
(b)in sub-rule (8), in the Table, for item (e) and entries relating thereto the following shall be substituted, namely:—

"(e) Brickwork Ratings India Pvt Ltd (Brickwork)
BWR FBBB".

Sep 22, 2015

Last date for filing declaration under compliance window of black money act

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Last date for filing declaration under compliance window of black money act
The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (the Act) has been enacted to deal with the menace of black money stashed abroad. The Act provides for a one-time compliance opportunity which will end on 30th September, 2015.

Failure to declare an undisclosed foreign asset will entail severe consequences under the Act, including higher penalty, prosecution, and may also result in forfeiture of assets under the Prevention of Money Laundering Act. 

Persons holding undisclosed foreign assets are advised to file their declarations well in time. The information contain in the declaration will be kept confidential as section 138 of the Income-tax Act is applicable to the declarations. The process of filing declaration is simple and the declaration can be filed online also. The fears of harassment of the declarants expressed in certain fora are unfounded.

Sep 21, 2015

EXCEL BASED SALARY CALCULATOR FOR FIRMS

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Salary calculator:- In a firm or small company where the number of employees are upto 50, there is always a need of a salary calculator which can calculate the salary of full month. Because calculating manual salary is full of waste of time as well as it requires a lot of energy. So I m presenting a excel based salary calculator for firms/company with no headache of calculating overtime or basic salary. One need to just enter the hours of work in a day and it will calculate the pay automatically.

Roaming charges paid by telecom company are not FTS

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Roaming charges paid by telecom company are not FTS
The provision of roaming services do not require any human intervention and accordingly, cannot be construed as technical services. Thus, payment of roaming charges by telephone operator does not fall under the ambit of TDS provisions under section 194J.

IT : In the absence of human intervention, the roaming facility does not fall under the definition of 'work' as defined in section 194C and, hence, the provisions of section 194C are not applicable on payment of roaming charges by telephone operator.

IT : The assessee cannot be said to have used the equipment which is involved in providing the roaming facility. The assessee collects the roaming charges from its subscriber and passes it on to the other service provider. Thus, such payment made by telephone operator does not fall under the ambit of TDS provisions under section 194-I.

• The disputed issue was:

Whether sum paid by telecom operator towards roaming facility provided by other telecom operators would be liable to TDS either under section 194J or section 194C or section 194-I?

The Tribunal held as under:

A. On applicability of section 194-J

• Human intervention is required only for installation/setting up/repairing/servicing/maintenance /capacity augmentation of the network. But after completing this process, mere interconnection between the operators while roaming, is done automatically and does not require any human intervention and, accordingly, cannot be construed as technical services.

• It is common knowledge that when one of the subscribers in the assessee's circle travels to the jurisdiction of another circle, the call gets connected automatically without any human intervention and it is for this, the roaming charges is paid by the assessee to the Visiting Operator for providing this service. Hence we have no hesitation to hold that the provision of roaming services do not require any human intervention and accordingly we hold that the payment of roaming charges does not fall under the ambit of TDS provisions u/s 194Jof the Act.

B. On applicability of section 194C

• Provisions of section 194C would become applicable only where some work (works contract) is being carried out and there is some human intervention involved in the carriage of such work. For carrying out any work, manpower is sine qua non and without manpower, it cannot be said that work has been carried out.

• The word 'work' in section 194C referred to and comprehends only the activities of workman. It is the physical force which has comprehended in the word 'work'. We have already held that the payment of roaming charges does not require any human intervention. Hence, in the absence of human intervention, the services rendered in the context of the impugned issue does not fall under the definition of 'work' as defined in section194C and, hence, the provisions of section 194C are not applicable to the impugned issue.

C. On applicability of Section 194-I

• For applicability of section 194-I the real test to be considered is whether it is possible to say that it is the assessee who has used the equipment and has paid the roaming charges to the other service provider with whom it has entered into a national roaming agreement. We hold that it is not possible to say so because if at all anyone can be said to have used the equipment it can only be the subscriber of the assessee but not the assessee. If anything the assessee is placed in a position of a mere facilitator between its subscriber and the other service provider, facilitating a roaming call to be made by the subscriber.

• The assessee cannot be said to have used the equipment which is involved in providing the roaming facility. The assessee collects the roaming charges from its subscriber and passes it on to the other service provider.

• It is relevant at this juncture to get into the judgment of the apex court in the case of BSNL and Another v. Union of India and Others [2006] 282 ITR 273 (SC). One of the questions which arose for consideration was whether there was any transfer of a right to use any goods by providing access or telephone connection by the telephone service provider to a subscriber. The Supreme Court posed to itself the question whether the electromagnetic waves through which the signals are transmitted can fulfil the criteria for being described as "goods". It held that the electromagnetic waves cannot be called goods. Thus, the payment of roaming charges by the assessee to other service provider cannot be considered as rent within the meaning of section 194I of the Act

Sep 18, 2015

Procedure to file new form Sugam 2

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Procedure to file new form Sugam 2
Department of Trade and Taxes, Government of National Capital Territory of Delhi has vide notification dated 10-9-2015 notified an online Form Delhi Sugam-2 (in short DS2) for providing information to the Department in respect of goods purchased or received as stock transfer or received on consignment agreement basis from outside Delhi by all the registered dealers of Delhi. This will come into force with effect from 15th September 2015.

Following are the detailed procedures/instructions for filing of online Form Delhi Sugam-2 (in short DS2):

1. The online Form Delhi Sugam-2 (DS2) shall be filed for each vehicle before its entry in Delhi by each registered dealer, whose goods are carried in that vehicle.

2. For online filing of Delhi Sugam-2 (DS2), the dealer shall login to the website of the department www.dvat.gov. in using his login id and password and file the Delhi Sugam-2 (DS2) details.

3. The Delhi Sugam-2 (DS2) details can be alternatively submitted, through registered mobile number of the dealer, in a summary manner through SMS on mobile No.-7738299899 before entry of his goods in Delhi and all the remaining details in form Delhi Sugam-2 (DS2) shall be filed online (as mentioned at Para 2) within 48 hours of entry of goods in Delhi.

The format of SMS for summary submission of Delhi Sugam-2 (DS2) shall be as under:
(i) In case the vehicle number, in which goods are being carried, is available at the time of filing through SMS-

  DVAT <space> DS2 <space> total amount of invoice/invoices <space> Vehicle number <space> Likely date of entry in Delhi (dd/mm/yyyy)

(ii) In case the vehicle number, in which goods are being carried, is not available at the time of filing through SMS -
DVAT <space> DS2A <space> total amount of invoice/invoices <space> Likely date of entry in Delhi (dd/mm/yyyy)

4. In case, vehicle number, in which goods are being carried, is not available at the time of summary submission through SMS or online filing of form Delhi Sugam-2 (DS2), then the vehicle number shall be updated by sending SMS, through any mobile number including registered mobile number, on mobile Number 7738299899, before entry of the vehicle in Delhi, in the following format:
DVAT <space> DS2B <space> DS2 Ref.No.l,2,3....10 <space> Vehicle No.

Maximum upto 10 DS2 reference numbers can be included in one SMS in above format. Hence, the incharge of the vehicle can inform vehicle number in respect of ten dealers in one go if the goods of all the 10 dealers are being carried over in same vehicle. Further, in case of goods of more than 10 dealers in one vehicle, the vehicle incharge has to send another SMS for the same purpose in a similar manner.

5. In case of change of vehicle half way due to break down or any other reasons, the changed/Palti Vehicle number shall be updated by sending SMS, through any mobile number including registered mobile number, on Mobile Number 7738299899, before entry of vehicle into Delhi, in the following format:

DVAT <space> DS2C <space> Old Vehicle No. <space> Palti Vehicle No. <space> Likely date of entry in Delhi (dd/mm/yyyy)

6. In case, the goods are being imported from outside Delhi in the goods vehicle owned by the supplier/buyer, it may not be possible to provide G.R. number. However, the dealer shall provide the vehicle number before entry of goods in Delhi in the manner as discussed above.

7. The transporter is required to carry a copy of the receipt generated on furnishing of details online or carry with him the unique ID generated and received through SMS on submitting the details through mobile.