Jul 31, 2016

New Hard Law for Benami Properties- Some Points to Know

4:47 PM 0
In an attempt to restrain the generation of black money in domestic market, the Lok Sabha has approved the Benami transactions Prohibition (Amendment) Bill.

Key takeaways from Bemani amendment bill are as follows:
1. It empowers the Government to confiscate Benami properties held in the name of another person or under a fictitious name to avoid taxation and conceal wealth.

2. The person found guilty of Benami transaction may have to face rigorous imprisonment for a period not less than one year and which may be extended to seven years. In addition to imprisonment, there would be a penalty of 25 percent which will be calculated on the basis of fair market value of the property.

3. Now following transactions would also be treatedas Benami transaction:
a. Purchase of property by any person in the name of his wife or unmarried daughter
b. The securities held by depository –
As a registered owner under the Depository act, or
As participant as an agent of a depository.
New Hard Law for Benami Properties- Some Points to Know

4. Bill empowers the government to recover property held in following transactions:
a. Where the person in whose name the property is held is a coparcener in a Hindu undivided family and the property is held for the benefit of the coparceners in the family; or
b. Where the person in whose name the property is held is a trustee or other person standing in a fiduciary capacity, and the property is held for the benefit of another person for whom he is a trustee or towards whom he stands in such capacity.

5. It proposes proper Appellate mechanism to deal with Benami transaction.

6. It specifies the procedure to be followed by the authority for imposing penalty in Benami transaction. It also clarifies that any benami transaction on or after the date of commencement of the Benami transaction (Prohibition) Amendment Act, 2016 shall be punishable in accordance with provision laid down by the act.

7.Adjudicating authorities and appellate tribunal appointed under the Money Laundering act, 2002 may discharge the functions until the adjudicating authority are appointed and appellate tribunal is established under the benami act.

Jul 30, 2016

CBDT Extends Last Date of Filing Return of Income to 5 August 2016

8:28 AM 0
CBDT extends last date of filing return of income from 31 July to 5 August whereas in the State of Jammu and Kashmir, the last date of filing income tax return is extended to 31 August as per order issued by CBDT.

Order under Section 119 of the Income-tax Act, 1961 
On consideration of reports of Bank strike on 29th July, 2016 (Friday) and the 31st July, 2016 (Sunday), being a Bank-Holiday, in order to avoid any inconvenience to the taxpayers while making payment of taxes pertaining to returns of income for Assessment Year 2016-2017, which are required to be filed by 31st July, 2016 as per provisions of Section 139(1) of Income-tax Act, 1961, the Central Board of Direct Taxes, in exercise of powers conferred under section 119 of the Income-tax Act, 1961, hereby extends the `due-date' for filing such returns of Income from 31st July, 2016 to 5th August, 2016, in case of taxpayers throughout India who are liable to file their Income-tax return by the said 'due- date' 
Copy to:- 
(Rohit Garg) 
Deputy- Secretary to the Government of India
CBDT Extends Last Date of Filing Return of Income to 5 August 2016

Order under Section 119 of the Income-tax Act, 1961 
On consideration of reports of dislocation of general life in certain areas of the State of Jammu & Kashmir, the Central Board of Direct Taxes, in exercise of powers conferred under section 119 of the Income-tax Act, 1961 (`Act'), hereby extends the 'due-date' for filing Returns of Income from 31st July, 2016 to 315t August, 2016, in case of Income-tax assessees in the State of Jammu & Kashmir who are required to file their return under section 139(1) of the Act by the said 'due date' 

(Rohit Garg) Deputy- Secretary to the Government of India

Home Loan Prepayment Charges are deductible as interest u/s24B

8:11 AM 0
Prepayment charges and processing fee made for purpose of availing loan at lower interest cost are allowable under section 24(b)

Facts

• During relevant year, assessee had been claiming deduction on account of payment of interest to six bankers from whom the assessee had taken loan for construction of property.

• Deduction of interest had been consistently allowed by the Assessing Officer in all the years.

• In the year under concern, the assessee took fresh loan from Axis Bank which was utilized for exclusive purpose of repayment of loans to the aforesaid six parties. In the process of change over of lender, the assessee paid prepayment charges to these six bankers to whom loans were prepaid and also paid processing charges.

• Assessing Officer disallowed the assessee's claim for deduction of prepayment charges as well as processing fee and Commissioner(Appeals) upheld order of Assessing Officer.

• On appeal to the Tribunal.
Home Loan Prepayment Charges are deductible as interest u/s24B


Held
• Any interest paid on impugned loans is allowable under section 24(b). The term 'interest' shall include any services fee or other charges in respect of moneys borrowed and it goes to the extent of saying that any charges in respect of any credit facilities which has not been utilized. The 'processing fee' charged by Axis Bank is nothing but service fee charged by the bank and therefore it is clearly allowable as per plain provisions of the Act. As far as the prepayment charges are concerned, these have been paid for the loans which have been refunded and thus no more utilised by the assessee. It has been clearly provided that any charges incurred even for any credit facility which has not been utilised shall also form part of the term 'interest'. Even, otherwise, both of these payments have been made for the purpose of availing of the loan at lower interest cost. Thus both the prepayment charges and processing fee are allowable under section 24(b).

Jul 29, 2016

How Retail Demat A/c Holder Participate in Negotiated Dealing System – Order Matching (NDS-OM)

8:41 AM 0
As announced in the First Bi-monthly Monetary Policy Statement, 2015-16, an Implementation Group with representation from all the stakeholders was constituted to recommend specific measures to enable seamless movement of securities from Subsidiary General Ledger (SGL) form to demat form and vice versa and to provide demat account holders a functionality to put through trades on Negotiated Dealing System – Order Matching (NDS-OM).

2. Taking into account the recommendations of the Group, the Clearing Corporation of India Ltd. (CCIL) was advised to put in place necessary arrangements in coordination with the depositories viz. National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) to enable demat account holders to trade on NDS-OM.

3. Accordingly, it has been decided to allow Demat Account Holders of NSDL and CDSL to put through trades in Government Securities on the NDS-OM platform through their respective Depository Participant (DP) bank which is an SGL Account Holder and a direct member of NDS-OM and CCIL.

4. Details of the scheme for accessing NDS-OM for execution of trades by demat account holders are given in the Annex. Further operational details of the Scheme will be issued by CCIL separately. The guidelines shall be effective from August 16, 2016.
Yours faithfully
(R. Subramanian)
Chief General Manager

Annex
Access to Individual Retail Investors holding Demat Accounts to Secondary Market in Government Securities via Reserve Bank of India’s NDS-OM System
1. Introduction
The secondary market in Government Securities (G-Sec) predominantly comprises of Banks, Primary Dealers, Insurance Companies, Mutual Funds, Financial Institutions and other institutional investors. Most of these entities, maintain their holdings in Government Securities in their Subsidiary General Accounts (SGL) with the Public Debt Office of Reserve Bank of India. A few of the newer participants maintain Gilt Accounts with designated market players authorized to open and maintain Constituent SGL Accounts with RBI.

Secondary market trades in G-Sec is largely carried out on the Negotiated Dealing System – Order Matching (NDS-OM) owned by RBI , which is hosted, maintained and operated by the Clearing Corporation of India Limited (CCIL) on behalf of RBI. NDS-OM, which primarily provides direct access to SGL Account holders, also supports access to Gilt Account Holders through its Web Based Extension i.e., NDS-OM-Web based on requests by the concerned Primary Member. Both NDS-OM and NDS-OM-Web facilitate anonymous dealing on the Order Matching Segment as also reporting of bilateral trades concluded outside the system.

It has been decided to facilitate access to NDS-OM by the retail segment comprising of individual investors having demat accounts with the depositories viz. National Securities Depository Limited (NSDL) and/or Central Depository Services (India) Limited (CDSL), desirous of participating in the G-Sec market, by using their demat accounts for their transactions and holdings in G-Sec.
How Retail Demat A/c Holder Participate in Negotiated Dealing System – Order Matching (NDS-OM)

Any individual investor who maintains a demat account with either of the depositories would be eligible to avail of these services. Initially, this access would be facilitated through any of the existing NDS-OM Primary Members, who also act as Depository Participants for NSDL and/or CSDL.

2. Objective
The Scheme seeks to facilitate efficient access to the retail individual investor to the same G-Sec market being used by the large institutional investor in a seamless manner.

3. Dealing / Access to NDS-OM
Individuals holding demat accounts would have the following options to trade:
(i) NDS-OM Web: Primary members of NDS-OM who are also Depository Participants can grant demat account holders access to the NDS-OM Web Module for placing buy / sell orders directly on NDS-OM.
(ii) NDS-OM Main: Individuals holding demat accounts can instruct their Depository Participants, who are also primary members of NDS-OM, to place orders on their behalf on the NDS-OM trading platform, similar to the facility available to Gilt Account Holders.
(iii) Bilateral trades in Voice Market: Demat account holders can also conclude a trade in the bilateral voice market. The responsibility of reporting such trades on the Reported Deal Segment of NDS-OM will rest with the Primary member concerned.

4. Settlement & Risk Management
(i) Trades concluded and/or reported in respect of a retail individual investor holding Demat Account under this Scheme, shall flow to CCIL for settlement, which would act as the Central Counterparty for all such trades and undertake clearing and settlement of these trades as per its Bye Laws, Rules & Regulations.

(ii) Primary members shall ensure that demat account holders do not place sell order without sufficient balance of securities in the demat account.

(iii) Trades executed by demat account holders under this Scheme shall be subject to the code of conduct prescribed for NDS-OM from time to time.

Things You Should Know About Excise Duty on Jewellery

8:41 AM
The Central Government proposed to impose excise duty on manufacturing of jewellery except silver jewellery (other than studded with diamond and precious stones) in the Union Budget. However, the jewellers protested against such levy of excise duty. They went on strike across the Country demanding withdrawal of excise duty levy on jewellery. Finally the Govt. did not change its stance and retained such levy in the Finance Act, 2016.
Now the rate of excise duty on jewellery is 1% if assessee does not avail of any credit on inputs and capital goods. However, the rate of excise duty will be raised to 12.5% if assessee avails of credit on inputs and capital goods.

Recently the CBEC has issued set of Circulars and Notifications with regard to excise duty on Jewellery. Key takeaways from such Circulars/Notifications are given hereunder:

1. All persons engaged in manufacturing jewellery should take Excise registration before July 31, 2016. Even if jewellery is manufactured via job-worker then also only Principal-manufacturer is required to take Excise registration.

2. Jewellers exporting 100% of jewellery are not required to take Excise registration. But they will have to furnish a bank guarantee.

3. On recommendation of Sub-Committee constituted to interact with Trade & Industry, the Central Government has increased the higher threshold exemption limit from Rs.6 Crore to Rs.10 Crore and eligibility limit from Rs.12 Crore to Rs.15 Crore for jewellery manufacturers. Earlier, higher threshold limit of Rs.6 crore for SSI exemption was prescribed with eligibility limit of Rs.12 crores for jewellers.

4. The SSI exemption should be calculated individually for each jewellery manufacturer irrespective of number of job-workers or number of premises from which his job-worker operates. This will also apply for determining eligibility of jewellery manufacturer for SSI exemption.

5. If jewellery is manufactured out of jewellery or precious stones supplied by the individual retail customers, then only value of additional material used will be considered to compute aforesaid limits of SSI. . Moreover, the duty liability will arise only on value of additional materials used by manufacture in addition to jewellery or precious stones supplied by the individual retail customers.

6. If multiple manufacturers which operate from same premise but take separate excise registration, then value of all clearances of all such manufacturers will be clubbed to determine SSI exemption and eligibility exemption limits.
Things You Should Know About Excise Duty on Jewellery




7-Following items shall not be included for calculating the eligibility and exemption limit for SSI:
  a) Jewellery exported to foreign countries (except Bhutan).
  a. Jewellery sold as a trader.

8. No excise audit will be carried out for jewellery manufacturer in first two years if their duty liability during the financial year is less than Rs.1 crore. Jewellers who are liable to pay duty more than Rs.1 crore but less than Rs.2 crore may be audited once in every two years. And jewellers who are liable to pay duty more than Rs.3 crore may be audited every year.

9.After expiry first two years:
  i. Commissioner will select maximum 5% of total jewellers who are liable to pay duty less than Rs.50 lakh for excise audit.
  ii. Jewellers who are liable to pay duty more than Rs.50 lakh but less than Rs.1 crore may be audited once in every five years.
Note: However, such audit will under no circumstances involve any physical verification of jewellery stock in the premises.

10. Departmental officers will not do transit checks for checking movement of semi-finished or finished articles of jewellery.

11. Commissioner can visit and search premises of jewellery manufacturer only if he has reason to believe that there is evasion of excise duty. However, search cannot be undertaken for procedure or compliance related matters.

12. Commissioner cannot arrest jewellery manufacturer where duty evasion is up to Rs 2 crores.

13. Commissioner can initiate search and seizure where expected evasion of duty is more than Rs.75 lakhs.

14. Repairs and alterations in Jewellery articles will not attract excise duty if it does not change the identity, character, use of jewellery and do not result in new item.

15. Jewellers which manufactures jewellery from jewellery or precious stones supplied by a retail customers should maintain record of following particulars:
  a) Name and address of retail customer.
  b) Weight and purity of material provided by customer.
  c) Receipt number and date.
  d) Value of additional material used in manufacturing and labour charges

Jul 28, 2016

CBDT Clarification on Attaining Age 60/80 Years Whose DOB falls 1 April

8:52 AM 0
Clarification regarding attaining prescribed Age of 60 years/80 years on 31st March itself, in case of Senior/Very Senior Citizens whose date of birth falls on 1st April, for purposes of Income-tax Act,1961-regd.- 

Higher tax exemption limits have been prescribed under the past Finance Acts for resident senior citizen taxpayers who have attained the age of sixty years. Even in such cases, the exemption limit is still higher for very senior citizens who have attained the age of eighty years. A doubt has been raised about the attainment of the aforesaid qualifying ages for availing higher exemption in cases of the persons whose date of birth falls on 1st April of calendar year. In other words, the broader question under consideration is whether a person born on 1st April of a particular year can be said to have completed a particular age on 31st March, on the preceding day of his/her birthday, or on 1st April itself of that year. 

2. The matter has been examined. Although specific provision does not exist in this regard under the Income-tax Act, 1961, the Hon'ble Supreme Court had an occasion to consider a similar issue in the case of Prabhu Dayal Sesma vs. State of Rajasthan 8,,, another 1986, AIR, 1948 wherein it has dealt with on the general rules to be followed for calculating the age of the person. In this judgment , Apex Court observed that while counting the age of the person, whole of the day should be reckoned and it starts from 12 o'clock in the midnight and he attains the specified age on the preceding, the anniversary of his birthday. The observation of Hon'ble Supreme Court in para 9 of the aforesaid judgment reads as under: 

"9 At first impression, it may seem that a person born on January 2, 1956 would attain 28 years of age only on January 2, 1984 and not on January 1, 1984. But this is not quite accurate. In calculating a person's age, the day of his birth must be counted as a whole day and he attains the specified age on the day preceding, the anniversary of his birthday. We have to apply well accepted rules for computation of time. One such rule is that fractions of a day will be omitted in computing a period of time is years or months in the sense that a fraction of a day will be treated as a full day. A legal day commences at 12 o'clock midnight and continues until the same hour the following night. There is a popular misconception that a person does (sic not) attain a particular age unless and until he has completed a given number of years. In the absence of any express provision, it is well settled that any specified age in law is to be computed as having been attained on the day preceding the anniversary of the birthday" 
CBDT Clarification on Attaining Age 60/80 Years Whose DOB falls 1 April

3. In view of the aforesaid judgment, the Central Board of Direct Taxes, in exercise of powers under section 119 of the Act, hereby clarifies that a person born on 1st April would be considered to have attained a particular age on 31st March, the day preceding the anniversary of his birthday. In particular, the question of attainment of age of eligibility for being considered a senior/very senior citizen would therefore be decided on the basis of above criteria. 

4. The field authorities are directed to take note of above position for ascertaining the age while computing tax liability of a taxpayer falling in 'Individual' category, being resident in India. 
(Rohit Garg) Deputy Secretary to Government of India

7 Things You Must Know About 7th Pay Commission

8:52 AM 0
The Govt. has decided to increase salaries of employees and pensioners in line with the recommendations of 7th Pay Commission. This move will benefit around one lakh employees and pensioners.'

Major decisions taken by Govt. are given hereunder:
1. Non-performing govt. employees will not get the appraisal. Govt. will withhold annual increment in case of those employees who are not able to meet the benchmark either for Minimum Assured Career Progression ('MACP') or a regular promotion within the first 20 years of their service.

2. There shall be two dates for grant of increment (i.e., January 1 and July 1 of every year) instead of existing date of July 1. Employee will get only one annual increment on either of these two dates depending on the date of appointment, promotion or grant of financial up gradation.

3. The minimum pay for employee will be raised to Rs 18,000 per month from the existing level of Rs 7,000. The maximum pay fixed at Rs 2.5 lakh per month.

4. Benchmark for performance appraisal for promotion and financial upgradation under MACPS to be enhanced from "Good" to "Very Good".

5. Consolidated pay package of Rs. 4,50,000 for Chairpersons of TRAI, Central Electricity Regulatory Commission, IRDA, SEBI, CCI, Pension Fund Regulatory and Development Authority, Petroleum and Natural Gas Regulatory Board, Warehousing Development and Regulatory Authority, and Airports Economic Regulatory Authority of India
7 Things You Must Know About 7th Pay Commission

6. Department of Personnel and Training has been authorised to take action regarding pay and related issues concerning IAS, IPS and Indian Forest Service (IFoS).

7. The Finance Ministry will work out a customized group insurance scheme for central government employees.

No Excise Audit for Jewellers if Duty less than 1 Crore in First 2 Years

8:49 AM 0
Guidelines for Excise Audit of Manufacturers / Principal Manufacturers of articles of jewellery or parts of articles of jewellery - regarding.

In this year’s Budget, central excise duty of 1% without input and capital goods tax credit or 12.5% with credit was imposed on articles of jewellery falling under heading 7113 of the First Schedule to the Central Excise Tariff 1985. Subsequent to that, the Government had set up a Sub-Committee of the High Level Committee, headed by Dr. Ashok Lahiri to interact with Trade & Industry on issues relating to procedure and compliance relating to excise duty of articles of jewellery. The Sub-Committee has given its report on 23.06.2016, which has been accepted by the Government.

2. In the context of Excise Audit of manufacturers/principal manufacturers of articles of jewellery or parts of articles of jewellery or both, falling under heading 7113 of the Central Excise Tariff Act [hereinafter referred to as articles of jewellery] the Sub-Committee has made certain recommendations, which have been accepted by the Government. Accordingly, notwithstanding anything to the contrary provided in any other circular/instructions, the following guidelines for conduct of excise audit of manufacturers/principal manufacturers of articles of jewellery or parts of articles of jewellery, falling under heading 7113 may be followed scrumptiously,-

i. No excise audit will be carried out for the first two years for manufacturers/principal manufacturers of articles of jewellery whose duty payment (cash plus credit) is less than Rs. 1 crore. However, after expiry of first two year period,-

a) Manufacturers/principal manufacturers of articles of jewellery paying duty below Rs. 50 lakh [cash plus credit], the proportion of units to be audited every year shall not exceed 5 per cent of total number of registered manufacturers/principal manufacturers of articles of jewellery, and selection of 
such assessees shall be done with the approval of Commissioner or an equivalent rank officer.

b) Manufacturers/principal manufacturers of articles of jewellery whose duty payment (cash plus credit) is more than Rs. 50 lakh and less than Rs. 1 crore may be audited once in every five years;

ii. Manufacturers/principal manufacturers of articles of jewellery whose duty payment (cash plus credit) is more than Rs. 1 crore and less than Rs. 3 crore may be audited once in every two years;

iii. Manufacturers/principal manufacturers of articles of jewellery whose duty payment (cash plus credit) is above Rs. 3 crore may be audited every year.

iv. Excise audit of manufacturers/principal manufacturers of articles of jewellery will be desk audit that is audit done in the office of jurisdictional central excise audit commissionerate. Moreover, such audit will under no circumstances involve any physical verification of stocks in the premises.

v. Any show cause notice to be issued pursuant to such excise audit, irrespective of the quantum of duty demanded, shall be issued and adjudicated by an officer of the rank of Commissioner.
No Excise Audit for Jewellers if Duty less than 1 Crore in First 2 Years

3. Except as herein provided, all existing circulars/instructions relating to central excise audit may also apply mutatis mutandis to the manufacturers/principal manufacturers of articles of jewellery or parts of articles of jewellery, as the case may be.

4. Hindi version will follow. Trade Notice/Public Notice may be issued on the above lines.

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

(Anurag Sehgal)
Under Secretary to the Government of India

Jul 27, 2016

Non Performing Employees won't Get Annual Hike-7th Pay Commission Filalized and Excel Calculator

8:27 AM 1
The Seventh Central Pay Commission (Commission) was set up by the Government of India vide Resolution No. 1/1/2013-E.III (A), dated the 28th February, 2014. The period for submission of report by the Commission was extended upto 31st December, 2015 vide Resolution No. 1/1/2013-E.III(A), dated the 8th September, 2015. The Commission, on 19th November, 2015, submitted its Report on the matters covered in its Terms of Reference as specified in the aforesaid Resolution dated the 28th February, 2014.

2. The Government, after consideration, has decided to accept the recommendations of the
Commission in respect of the categories of employees covered in its Terms of Reference contained in the aforesaid Resolution dated the 28th February, 2014 in the manner as specified hereinafter.

3. The Government has accepted the Commission’s recommendations on Minimum Pay,
Fitment Factor, Index of Rationalisation, Pay Matrices and general recommendations on pay without any material alteration with the following exceptions in Defence Pay Matrix in order to maintain parity in pay with Central Armed Police Forces, namely :- 

12 THE GAZETTE OF INDIA : EXTRAORDINARY [PART I—SEC. 1]
(i) the Index of Rationalisation of Level 13A (Brigadier) in Defence Pay Matrix may be revised upward from 2.57 to 2.67;
(ii) additional three stages in Levels 12A (Lieutenant Colonel), three stages in Level 13 (Colonel) and two stages in Level 13A (Brigadier) may be added appropriately in the Defence Pay Matrix.

4. (1) The Pay Matrix, in replacement of the Pay Bands and Grade Pays as in force immediately prior to the notification of this Resolution, shall be as specified in Annexure I in respect of civilian employees.

(2) With regard to fixation of pay of the employee in the new Pay Matrix as on 1st day of
January, 2016, the existing pay (Pay in Pay Band plus Grade Pay) in the pre-revised structure as on 31st day of December, 2015 shall be multiplied by a factor of 2.57. The figure so arrived at is to be located in the Level corresponding to employee’s Pay Band and Grade Pay or Pay Scale in the new Pay Matrix. If a Cell identical with the figure so arrived at is available in the appropriate Level, that Cell shall be the revised pay; otherwise the next higher cell in that Level shall be the revised pay of the employee.

(3) After fixation of pay in the appropriate Level as specified in sub-paragraph (2) above, the
subsequent increments in the Level shall be at the immediate next Cell in the Level.


DOWNLOAD 7TH PAY SCALE EXCEL BASED CALCULATOR

5. There shall be two dates for grant of increment namely, 1st January and 1st July of every year, instead of existing date of 1st July; provided that an employee shall be entitled to only one annual increment on either one of these two dates depending on the date of appointment, promotion or grant of financial up-gradation.

6. The Commission’s recommendations and Government’s decision thereon with regard to
revised pay structure for civilian employees of the Central Government and personnel of All India Services as specified at Annexure I and the consequent pay fixation therein as specified at Annexure II shall be effective from the 1st day of January, 2016. The arrears on this account shall be paid during the financial year 2016-2017.

7. The recommendations on Allowances (except Dearness Allowance) will be referred to a
Committee comprising Finance Secretary and Secretary (Expenditure) as Chairman and Secretaries of Home Affairs, Defence, Health and Family Welfare, Personnel and Training, Posts and Chairman, Railway Board as Members. The Committee will submit its report within a period of four months. Till a final decision on Allowances is taken based on the recommendations of thiCommittee, all Allowances will continue to be paid at existing rates in existing pay structure, as if the pay had not been revised with effect from 1st day of January, 2016.

8. The recommendations of the Commission relating to interest bearing Advances as well as
interest free Advances have been accepted with the exception that interest free Advances for Medical Treatment, Travelling Allowance for family of deceased, Travelling Allowance on tour or transfer and Leave Travel Concession shall be retained.

9. The recommendations of the Commission for increase in rates of monthly contribution
towards Central Government Employees Group Insurance Scheme (CGEGIS) for various categories of employees has not been accepted. The existing rates of monthly contribution shall continue. Department of Expenditure and Department of Financial Services will work out a customised group insurance scheme for Central Government employees.

10. The Government has accepted the recommendations of the Commission on upgrading of posts except for those specified at Annexure III. The recommendations on upgradation specified at Annexure III will be separately examined by Department of Personnel and Training for taking a comprehensive view in the matter. 

11. The Government has not accepted the recommendations of the Commission on downgrading of posts and normal replacement will be provided in such cases.

12. While revising the pay of Doctors in respect of whom Non Practicing Allowance is
admissible and Railway employees in respect of whom Running Allowance is admissible, it will be ensured that the actual raise in pay at the time of initial fixation is about 14.29 percent as recommended by the Commission.

13. The pay of officers posted on deputation under Central Staffing Scheme will be protected and the difference in the pay will be given to them in the form of Personal Pay to be made effective from the date of notification.

14. Recommendations not relating to pay, pension and allowances and other administrative issues specific to Departments/Cadres/Posts will be examined by the Ministries/Departments concerned as per the Allocation of Business Rules or Transaction of Business Rules. Until a decision is taken by the Government on administrative issues pertaining to 
(i) Non Functional Upgradation (NFU) presently admissible to the Indian Police Service/Indian Forest Service and Organised Group ‘A’ Services, 
(ii) two years’ edge to Indian Administrative Service officers vis-a-vis other All India
Services/Organised Group ‘A’ Services in empanelment under Central Staffing Scheme,
(iii) grant of two additional increments at Senior Time Scale, Junior Administrative Grade and Selection Grade to Indian Police Service and Indian Forest Service at par with Indian Administrative Service and Indian Foreign Service 
(iv) a uniform retirement age for all ranks in Central Armed Police Forces, where the Commission could not arrive at a consensus, status quo shall be maintained.

15. A Committee of Secretaries comprising Secretaries of Departments of Personnel and
Training, Financial Services and Pension and Pensioners’ Welfare will be set up to suggest measures for streamlining the implementation of the National Pension System (NPS).

16. Anomalies Committees will be set up by Department of Personnel and Training to examine individual, post-specific and cadre-specific anomalies arising out of implementation of the recommendations of the Commission.

17. Regarding pay and related issues concerning All India Services, appropriate action will be taken by Department of Personnel and Training to give effect to the decisions on these matters as may be applicable to them.

18. The Government of India wishes to place on record their appreciation of the work done by the Commission.



ORDER
Ordered that this Resolution be published in the Gazette of India, Extraordinary.
Ordered that a copy of this Resolution be communicated to the Ministries/Departments of the Government of India, State Governments, Administrations of Union Territories and all other concerned.
R.K. CHATURVEDI, Jt. Secy. 

Jul 26, 2016

When You Should Say Yes to Personal Loan

8:32 AM 2
We all work hard to sustain ourselves and to save for our future. But every now and then, this is not enough. We fall short of money and may need a hand to push us through life’s tricky situations. So we borrow money.

What are our options? We can borrow from relatives or friends. But this puts us in the unsavoury situation of disclosing the extent of our financial problems. We can approach private lenders, but they will charge us a massive interest rate, sending us spiralling into a debt trap. We can borrow from our employers, but such sums tend to be less than our needs. What option do we have left then? We go to banks or financial institutions which offer us loans.

How do banks help?
Banks allow several loan options to meet your short-term fund requirement. You can take a loan against gold or jewellery, a loan against your LIC policy, overdraft against fixed deposit, loan against property, and personal loan. If you don’t have any security to keep with the bank and raise a loan against, then you are left with only option: go for a personal loan.
Mind the charges

You incur interest on a loan, whether it’s a home loan, car loan, or a personal loan. But there is a sizeable difference in the interest rates of personal loans and other loan products. For example, you can get a home loan with an interest rate in the range of 9.4-11%, car loan at 10-12%, and loan against gold at 11-13%. But personal loan can cost you between 13-24%. The processing charges, penalties, and payment terms can also be fairly strict in a personal loan.

Understanding personal loans
A personal loan fulfils your short to medium term financial requirements without having to pledge an asset as security. You don’t need to disclose the reasons for taking the loan, or have to submit a project report. The major difference between any other loan and personal loan is associated with the security and therefore to its interest rates. For example, for home loans, banks hold the ownership of your home till the repayment of the full loan amount. However, for personal loans, there is no collateral, which forces banks to charge a higher interest rate to cover their risks.

When You Should Say Yes to Personal Loan

Eligibility for a personal loan
One can apply for a personal loan with a bank where he or she holds the account with a regular flow of income. The bank will offer the loan with their terms and conditions.
The banks will scrutinize your source of income, income stability, and assess your other ongoing loans. Net monthly income in hand plays an important role in getting the loan.
If you don’t have any other loan at the time of application and have a good CIBIL score and clear credit history, then your chance of getting a personal loan is high.

Saying ‘no’ to a personal loan
In the modern world, wants are unlimited. We look to upgrade our gadgets, our lifestyle, and our spending habits every few month to keep up with our friends and colleagues. Therefore it is absolutely important that these wants are fulfilled through the income we ordinarily generate. Having to indebt ourselves to support our lifestyle would imply spending way beyond our means. This is not a sustainable habit and can lead to financial ruin.
If your fund requirement is not urgent, avoidable, or can be sourced from other options, then it is better to not take a personal loan.

You may have a healthy income but servicing more than two active loans will damage your credit score with CIBIL. Every bank checks your credit history with CIBIL and you should carefully weigh our decision to take any loan. Too many loans would not only harm your credit score but also impede your ability to repay them, thus sending you into a credit debt.

Saying ‘yes’
Life is full with uncertainty. Let’s say you are in a situation where you absolutely must take a personal loan. It could be for an emergency like settling a hospital bill, a life event like marriage, or funding your child’s tuition fee, or an urgent business payment. And let’s say that all your other avenues—including your savings—are exhausted. This expenditure is not frivolous or avoidable, and a loan must be absolutely taken.
This is where you say yes to a personal loan—but only within your repaying capacity, and no more.

Select your lending bank after properly analysing the interest rate, processing charges, and penalty rates. Make sure you’re comfortable with the loan tenure and would be able to settle the debt in a timely manner.

Finally
Personal loans should be used as a last resort to meet an unavoidable expense. It should ideally be avoided for financing lifestyle choices where you spend beyond your means. Regular savings and financial discipline will give you the financial freedom you need, allowing you to spend on your heart’s desires without indebting yourself.

Jul 25, 2016

CBDT Prescribed Buyback Tax of Shares u/s 115QA

5:52 PM 0
Under section 115QA of the Income-tax Act, 1961 (the Act), additional Income-tax at the rate of 20 percentis levied on the distributed income arising out of buy back of unlisted share by the company. The distributed income was defined to be the consideration paid by the company on buy back of shares as reduced by the amount which was received by the company for issue of such shares.

2. The Finance Act, 2016 amended the definition of “distributed income”, with effect from 01.06.2016, to mean the consideration paid by the company on buy back of shares as reduced by the amount, which was received by the company for issue of such shares, determined in the manner as may be prescribed.

3. Therefore, the methodology for determination of the amount received by the company under different circumstances in which the shares have been issued, is proposed to be provided through the amendments of the Income-tax Rules, 1962. The draft rules, on which comments and suggestion of stakeholders and general public may be sent electronically by 31stJuly, 2016 at the email
address, ustpl1@nic.inin this regard, are as under:

“(1) Where the share has been issued by a company on its subscription by any person, the paid up amount actually received by the company in respect of such share including any amount actually received by way of premium shall be the amount received by the company for issue of the share.

(2) Where the company had at any time, prior to the buy-back of the share, returned any sum out of the amount received in respect of such share the amount as reduced by the sum so returned shall be the amount received by the company for issue of the share.
CBDT Prescribed  Buyback Tax of Shares u/s 115QA


(3) Where the share has been issued by a company being an amalgamated company, under a scheme of amalgamation, in lieu of the share or shares of an amalgamating company, then, the amount received by the amalgamating company in respect of such share or shares determined in accordance with this rule, shall be deemed to be the amount received by the amalgamated company in respect of the share so issued by it.

(4) The amount received by a company, being a resulting company in respect of shares issued by it under a scheme of demerger shall be the amount which bears to the amount received by the demerged company in respect of the original shares determined in accordance with this rule the same proportion as the net book value of the assets transferred in a demerger bears to the net worth of the demerged company immediately before such demerger.

(5) The amount received by the demerged company in respect of the original shares in the demerged company shall be deemed to have been reduced by the amount as so arrived at under sub-rule (4).

(6) Where the share has been issued or allotted, without any consideration, on the basis of existing shareholding in the company, the consideration in respect of such share shall be deemed to be Nil.

(7) The amount received by a company in respect of any share issued by it on conversion of bond or debenture, debenture-stock or deposit certificate in any form, issued by it shall be that part of the amount received by the company in respect of the instrument as is so converted.

(8) In any other case the face value of the share shall be deemed to be the amount received by the company for issue of the share.”

Income Tax Deductions Allowed Beyond 80C Which You May Miss

8:43 AM 1
Most of us are aware of the concept of deductions from gross total income available to a taxpayer. One can claim deductions from one's gross total income by investing in avenues specified by the government. These deductions are available under different sections of the Income Tax Act, 1961. The most popular deduction is under Section 80C, but there are other deductions also which may be available to you but you might miss out on them due to lack of knowledge. 

Here's a list of deductions that you can claim under different sections of Income Tax Act. Make the most of it and reduce your taxable income to the maximum possible. 

Section 80D: Payment of medical insurance premium 
A mediclaim policy is a must nowadays because if you or your family fall sick or, meet with an accident, your medical bills could wipe out your savings. The amount paid as medical insurance premium (mediclaim) is eligible for deduction under this section. One can take the policy in his or spouse's name, dependent parents and children. If you are a Hindu Undivided Family (HUF), then the policy can be taken in the name of any family member. 

To claim deduction, you have to first pay the premium by any mode other than cash. Also, the insurer should be approved by either the central government, or the Insurance Regulatory and Development Authority of India (IRDAI). 

The maximum deduction amount that can be claimed under this section by an individual or HUF is Rs 60000, but there are many sub-limits that one has to take care of. 

An individual can avail a maximum deduction of Rs 25000 for the premium paid for himself, spouse or dependent children. He can get an additional deduction of Rs 25000 for the premium paid for his parents. If the person in whose name the policy has been taken is a senior citizen ( 60 years or more), then the limit of Rs 25000 in each case would be increased to Rs 30000. 

As an HUF, you can get a maximum deduction of Rs 25000 for the premium paid for any member. If the insured person is a senior citizen then the above maximum limit of Rs 25000 will be increased to Rs 30000. One can claim a maximum deduction of Rs 5000 for preventive health check-up and the same can be paid in cash too. 

80DD: Expenditure on the health of disabled person 
This deduction is available to a taxpayer for the expenditure incurred by him on the health  and maintenance of disabled persons -- spouse, children, brother and sister -- who are dependent on him. In the case of an HUF, they can be any family members. The maximum deduction amount that can be claimed under this section is Rs 75000 per annum. The same will be increased to Rs 125000 in case the dependent is suffering from a severe disability. To claim this deduction, you need to attach a copy of the certificate issued by the medical authority (a neurologist or a civil surgeon) along with form 10-IA when you file your return. 

Disability includes autism, cerebral palsy and mental retardation. A person with severe disability would be one who has 80 per cent or more of any of these disabilities, i.e., a medical authority has certified that his level of disability is greater than 80 per cent. 

Section 80DDB: Expenditure on a specified disease 
This deduction is available on the expenditure incurred by a taxpayer on the treatment of specified diseases for self or spouse, and dependent parents, children, brother and sister. In the case of an HUF, this deduction can be claimed for expenditure made for any family member. The deduction amount will be equal to the amount actually expended or Rs 40000, whichever is less. If the person for whom the expenditure is made  is 60 or more, then the limit of Rs 40000 will be taken as Rs 60000 and the same will be taken as Rs 80000 if the age is 80 or more. If you have received any sum from any insurer as reimbursement for the expenditure incurred by you, then the amount received as reimbursement would be reduced from the amount of deduction under this section. 

The list of specified diseases covered in the section is available in Rule 11-DD of Income-tax Rules. Some of them include neurological diseases, AIDS, malignant cancers, hematological disorders. 

Section 80E: Payment of interest on education loan 
If you have taken an education loan from any financial institution for self, spouse, children, or a student whose legal guardian you are, then you can claim this deduction for the interest paid by you on the loan amount. The amount paid as interest in a financial year is eligible for deduction without any limit. To claim this deduction, make sure that the oan is taken for higher education, i.e., any course pursued after completing 12th standard. This deduction is available for eight years, starting from the year in which the interest payment began. 

Section 80EE: Payment of interest on home loan 
This deduction is available to an individual for the amount paid as interest on loan taken for the purchase of a residential property. The maximum deduction that can be claimed under this section is Rs 50000 p.a. 

There are many conditions one has to fulfil to avail this deduction: 
* The loan must be taken between 1.4.2016 and 31.3.2017. 
* The loan amount should be below Rs 35 lakh. 
* The value of the house should be below Rs 50 lakh. 
* The said house property should be the only one in the individual's name. 

Further, if you claim deduction under this section, then a similar deduction which can be claimed under section 24(b) of the act cannot be claimed for that financial year. 

Section 80G: Donations made to certain funds, temples 
If you have donated to a fund notified by the central government under this section, then you would be eligible for deduction of the amount donated, but it should not exceed 10 per cent of the adjusted gross total income. This deduction is also available for donations given for renovation of temples mosque, church, which are approved by CG. 

Some of the funds notified by he government include National Defence Fund, Jawaharlal Nehru Memorial Fund, Prime Minister's Drought Relief Fund, National Children Fund, Prime Minister's National Relief Fund, Swachh Bharat Kosh, Clean Ganga Fund, etc. Here is how you can compute your adjusted gross total income 
Income Tax Deductions Allowed Beyond 80C Which You May Miss 

Income Tax Deductions Allowed Beyond 80C Which You May Miss 


Cash donations of only up to Rs 10000 can be made. No deduction would be allowed over and above 10000 if the amount is paid in cash. 

Section 80GG: Rent paid for accommodation 
If you do not receive House Rent Allowance (HRA) as part of your salary, or are not a salaried employee only then can you claim this deduction. It is available for the rent paid by the taxpayer for his own accommodation in a financial year. A declaration in Form 10BA has to be submitted  to avail this deduction. The deduction amount will be the lower one of the following: 

* Rent paid over 10 per cent of salary (Basic + D.A.). 
* 25 per cent of the total income (before subtracting any deductions). 
* Rs 5000 p.m. 

If you have a house (either owned by you, your spouse or in the name of your minor child) at the place where you are residing, then you can't claim this deduction. 

Section 80GGA: Donation to specified institutions
 If you have donated to an institution carrying on scientific research or to a university or college which is approved by the government (under 35(1)(ii), 35(1)(iii), 35CCA, 35CCB) for the time being, then the amount so contributed would be eligible for deduction under this section. Deductions over and above Rs 10000 can be claimed only if the contribution has been made by any mode other than cash. This deduction is not available to the taxpayer who has income from business or profession. 
 .. 
Section 80GGC: Donations to political party 
If you have donated to a political party, then you can claim deduction under this section equivalent to the amount actually donated. There is no ceiling on this deduction amount that can be claimed under this section. The only condition to claim this deduction is that the payment should be made by any mode other than cash. 

Section 80QQB: Royalty income to author 
If you are the author of a book (other than textbooks for schools and colleges) and have received payment in royalty, either in lump sum or otherwise, then you can claim that amount as deduction from your royalty income under this section. The maximum deduction that can be claimed when royalty is received in lump sum is Rs 300000. When royalty is not received is lump sum then the amount of deduction will be restricted to 15 per cent of the book's revenue that year. 

Section 80RRB: Royalty income from patents
If you are a patentee and have registered any patent after 1/4/2003 and receive royalty income for it, then you can claim deduction under this section for the amount received as royalty. The maximum deduction that can be claimed under this section is Rs 300000. 

Section 80TTA: Interest on savings account 
Interest earned on savings bank account is allowed as deduction. The maximum amount that can be claimed as deduction under this section is Rs 10000. This does does not mean that interest of up to Rs 10000 is exempted income; rather you should show this amount as your income from other sources in your ITR and then claim deduction under section 80TTA.