Sep 23, 2016

FAQs on Overview of Goods ans Service Tax GST

8:54 AM 1
Q 1. What is Goods and Service Tax (GST)? 
Ans. It is a destination based tax on consumption of goods and services. It is proposed to be levied at all stages right from manufacture up to final consumption with credit of taxes paid at previous stages available as setoff. In a nutshell, only value addition will be taxed and burden of tax is to be borne by the final consumer. 

Q 2. What exactly is the concept of destination based tax on consumption? 
Ans. The tax would accrue to the taxing authority which has jurisdiction over the place of consumption which is also termed as place of supply. 

Q 3. Which of the existing taxes are proposed to be subsumed under GST? 
Ans. The GST would replace the following taxes: 
(i) taxes currently levied and collected by the Centre: 
a. Central Excise duty 
b. Duties of Excise (Medicinal and Toilet Preparations) 
c. Additional Duties of Excise (Goods of Special Importance) 
d. Additional Duties of Excise (Textiles and Textile Products) 4 5 
e. Additional Duties of Customs (commonly known as CVD) 
f. Special Additional Duty of Customs (SAD) 
g. Service Tax 
h. Central Surcharges and Cesses so far as they relate to supply of goods and services 

(ii) State taxes that would be subsumed under the GST are: 
a. State VAT 
b. Central Sales Tax 
c. Luxury Tax 
d. Entry Tax (all forms) 
e. Entertainment and Amusement Tax (except when levied by the local bodies) 
f. Taxes on advertisements 
g. Purchase Tax 
h. Taxes on lotteries, betting and gambling 
i. State Surcharges and Cesses so far as they relate to supply of goods and services 
The GST Council shall make recommendations to the Union and States on the taxes, cesses and surcharges levied by the Centre, the States and the local bodies which may be subsumed in the GST. 

Q 4. What principles were adopted for subsuming the above taxes under GST? 
Ans. The various Central, State and Local levies were 4 5 examined to identify their possibility of being subsumed under GST. While identifying, the following principles were kept in mind: 
(i) Taxes or levies to be subsumed should be primarily in the nature of indirect taxes, either on the supply of goods or on the supply of services. 
(ii) Taxes or levies to be subsumed should be part of the transaction chain which commences with import/ manufacture/ production of goods or provision of services at one end and the consumption of goods and services at the other. 
(iii) The subsumation should result in free flow of tax credit in intra and inter-State levels. The taxes, levies and fees that are not specifically related to supply of goods & services should not be subsumed under GST. 
(iv) Revenue fairness for both the Union and the States individually would need to be attempted.

Q 5. Which are the commodities proposed to be kept outside the purview of GST? 
Ans. Alcohol for human consumption, Petroleum Products viz. petroleum crude, motor spirit (petrol), high speed diesel, natural gas and aviation turbine fuel& Electricity. 

Q 6. What will be the status in respect of taxation of above commodities after introduction of GST? Ans. The existing taxation system (VAT & Central Excise) will continue in respect of the above commodities. 6 7 

Q 6A. What will be status of Tobacco and Tobacco products under the GST regime? 
Ans. Tobacco and tobacco products would be subject to GST. In addition, the Centre would have the power to levy Central Excise duty on these products. 

Q 7. What type of GST is proposed to be implemented? 
Ans. It would be a dual GST with the Centre and States simultaneously levying it on a common tax base. The GST to be levied by the Centre on intra-State supply of goods and / or services would be called the Central GST (CGST) and that to be levied by the States would be called the State GST (SGST). Similarly Integrated GST (IGST) will be levied and administered by Centre on every inter-state supply of goods and services. 

Q 8. Why is Dual GST required? 
Ans. India is a federal country where both the Centre and the States have been assigned the powers to levy and collect taxes through appropriate legislation. Both the levels of Government have distinct responsibilities to perform according to the division of powers prescribed in the Constitution for which they need to raise resources. A dual GST will, therefore, be in keeping with the Constitutional requirement of fiscal federalism. 

Q 9. Which authority will levy and administer GST? 
Ans. Centre will levy and administer CGST & IGST while respective states will levy and administer SGST. 6 7 

Q 10. Why was the Constitution of India amended recently in the context of GST? 
Currently, the fiscal powers between the Centre and the States are clearly demarcated in the Constitution with almost no overlap between the respective domains. The Centre has the powers to levy tax on the manufacture of goods (except alcoholic liquor for human consumption, opium, narcotics etc.) while the States have the powers to levy tax on the sale of goods. In the case of inter-State sales, the Centre has the power to levy a tax (the Central Sales Tax) but, the tax is collected and retained entirely by the States. As for services, it is the Centre alone that is empowered to levy service tax. 

Introduction of the GST required amendments in the Constitution so as to simultaneously empower the Centre and the States to levy and collect this tax. The Constitution of India has been amended by the Constitution (one hundred and first amendment) Act, 2016 recently for this purpose. Article 246A of the Constitution empowers the Centre and the States to levy and collect the GST. 
FAQs on Overview of Goods ans Service Tax GST

Q 11. How a particular transaction of goods and services would be taxed simultaneously under Central GST (CGST) and State GST (SGST)? 
Ans. The Central GST and the State GST would be levied simultaneously on every transaction of supply of goods and services except the exempted goods and services, goods which are outside the purview of GST and the transactions which are below the prescribed threshold limits. Further, 8 9 both would be levied on the same price or value unlike State VAT which is levied on the value of the goods inclusive of CENVAT. While the location of the supplier and the recipient within the country is immaterial for the purpose of CGST, SGST would be chargeable only when the supplier and the recipient are both located within the State. 

Illustration I: Suppose hypothetically that the rate of CGST is 10% and that of SGST is 10%. When a wholesale dealer of steel in Uttar Pradesh supplies steel bars and rods to a construction company which is also located within the same State for, say Rs. 100, the dealer would charge CGST of Rs. 10 and SGST of Rs. 10 in addition to the basic price of the goods. He would be required to deposit the CGST component into a Central Government account while the SGST portion into the account of the concerned State Government. Of course, he need not actually pay Rs. 20 (Rs. 10 + Rs. 10 ) in cash as he would be entitled to set-off this liability against the CGST or SGST paid on his purchases (say, inputs). But for paying CGST he would be allowed to use only the credit of CGST paid on his purchases while for SGST he can utilize the credit of SGST alone. In other words, CGST credit cannot, in general, be used for payment of SGST. Nor can SGST credit be used for payment of CGST. 

Illustration II: Suppose, again hypothetically, that the rate of CGST is 10% and that of SGST is 10%. When an advertising company located in Mumbai supplies advertising services to a company manufacturing soap also located within the State of Maharashtra for, let us say Rs. 100, the ad company would charge CGST of 8 9 Rs. 10 as well as SGST of Rs. 10 to the basic value of the service. He would be required to deposit the CGST component into a Central Government account while the SGST portion into the account of the concerned State Government. Of course, he need not again actually pay Rs. 20 (Rs. 10+Rs. 10) in cash as it would be entitled to set-off this liability against the CGST or SGST paid on his purchase (say, of inputs such as stationery, office equipment, services of an artist etc). But for paying CGST he would be allowed to use only the credit of CGST paid on its purchase while for SGST he can utilise the credit of SGST alone. In other words, CGST credit cannot, in general, be used for payment of SGST. Nor can SGST credit be used for payment of CGST. 

Q 12. What are the benefits which the Country will accrue from GST? 
Ans. Introduction of GST would be a very significant step in the field of indirect tax reforms in India. By amalgamating a large number of Central and State taxes into a single tax and allowing set-off of prior-stage taxes, it would mitigate the ill effects of cascading and pave the way for a common national market. For the consumers, the biggest gain would be in terms of a reduction in the overall tax burden on goods, which is currently estimated at 25%-30%. Introduction of GST would also make our products competitive in the domestic and international markets. Studies show that this would instantly spur economic growth. There may also be revenue gain for the Centre and the States due to widening of the tax base, increase in trade volumes and improved 10 11 tax compliance. Last but not the least, this tax, because of its transparent character, would be easier to administer. 

Q 13. What is IGST? \
Ans. Under the GST regime, an Integrated GST (IGST) would be levied and collected by the Centre on inter-State supply of goods and services. Under Article 269A of the Constitution, the GST on supplies in the course of interState trade or commerce shall be levied and collected by the Government of India and such tax shall be apportioned between the Union and the States in the manner as may be provided by Parliament by law on the recommendations of the Goods and Services Tax Council. 

Q 14. Who will decide rates for levy of GST? 
Ans. The CGST and SGST would be levied at rates to be jointly decided by the Centre and States. The rates would be notified on the recommendations of the GST Council. 

Q 15. What would be the role of GST Council? 
Ans. A GST Council would be constituted comprising the Union Finance Minister (who will be the Chairman of the Council), the Minister of State (Revenue) and the State Finance/Taxation Ministers to make recommendations to the Union and the States on 
(i) the taxes, cesses and surcharges levied by the Centre, the States and the local bodies which may be subsumed under GST; 
(ii) the goods and services that may be subjected to or exempted from the GST; 11 (
iii) the date on which the GST shall be levied on petroleum crude, high speed diesel, motor sprit (commonly known as petrol), natural gas and aviation turbine fuel; 
(iv) model GST laws, principles of levy, apportionment of IGST and the principles that govern the place of supply; 
(v) the threshold limit of turnover below which the goods and services may be exempted from GST; (vi) the rates including floor rates with bands of GST; 
(vii)any special rate or rates for a specified period to raise additional resources during any natural calamity or disaster; 
(viii) special provision with respect to the NorthEast States, J&K, Himachal Pradesh and Uttarakhand; and 
(ix) any other matter relating to the GST, as the Council may decide. 

Q 16. What is the guiding principle of GST Council? 
Ans. The mechanism of GST Council would ensure harmonization on different aspects of GST between the Centre and the States as well as among States. It has been provided in the Constitution (one hundred and first amendment) Act, 2016 that the GST Council, in its discharge of various functions, shall be guided by the need for a harmonized structure of GST and for the development of a harmonized national market for goods and services.

Q 17. How will decisions be taken by GST Council? 
Ans. The Constitution (one hundred and first amendment) Act, 2016 provides that every decision of the GST Council shall be taken at a meeting by a majority of not less than 3/4th of the weighted votes of the Members present and voting. The vote of the Central Government shall have a weightage of 1/3rd of the votes cast and the votes of all the State Governments taken together shall have a weightage of 2/3rd of the total votes cast in that meeting. One half of the total number of members of the GST Council shall constitute the quorum at its meetings. 

Q 18. Who is liable to pay GST under the proposed GST regime? 
Ans. Under the GST regime, tax is payable by the taxable person on the supply of goods and/or services. Liability to pay tax arises when the taxable person crosses the threshold exemption, i.e. Rs.10 lakhs (Rs. 5 lakhs for NE States) except in certain specified cases where the taxable person is liable to pay GST even though he has not crossed the threshold limit. The CGST / SGST is payable on all intra-State supply of goods and/or services and IGST is payable on all interState supply of goods and/or services. The CGST /SGST and IGST are payable at the rates specified in the Schedules to the respective Acts. 

Q 19. What are the benefits available to small tax payers under the GST regime? 
Ans. Tax payers with an aggregate turnover in a financial year up to [Rs.10 lakhs] would be exempt from tax. 12 13 [Aggregate turnover shall include the aggregate value of all taxable and non-taxable supplies, exempt supplies and exports of goods and/or services and exclude taxes viz. GST.] Aggregate turnover shall be computed on all India basis. For NE States and Sikkim, the exemption threshold shall be [Rs. 5 lakhs]. All taxpayers eligible for threshold exemption will have the option of paying tax with input tax credit (ITC) benefits. Tax payers making inter-State supplies or paying tax on reverse charge basis shall not be eligible for threshold exemption. 

Q 20. How will the goods and services be classified under GST regime? 
Ans. HSN (Harmonised System of Nomenclature) code shall be used for classifying the goods under the GST regime. Taxpayers whose turnover is above Rs. 1.5 crores but below Rs. 5 crores shall use 2 digit code and the taxpayers whose turnover is Rs. 5 crores and above shall use 4 digit code. Taxpayers whose turnover is below Rs. 1.5 crores are not required to mention HSN Code in their invoices. 
Services will be classified as per the Services Accounting Code (SAC) 

Q 21. How will imports be taxed under GST? 
Ans. Imports of Goods and Services will be treated as inter-state supplies and IGST will be levied on import of goods and services into the country. The incidence of tax will follow the destination principle and the tax revenue in case of SGST will accrue to the State where the imported goods and services are consumed. Full and complete set-off 14 15 will be available on the GST paid on import on goods and services. 

Q 22. How will Exports be treated under GST? 
Ans. Exports will be treated as zero rated supplies. No tax will be payable on exports of goods or services, however credit of input tax credit will be available and same will be available as refund to the exporters. 

Q 23. What is the scope of composition scheme under GST? 
Ans. Small taxpayers with an aggregate turnover in a financial year up to [Rs. 50 lakhs] shall be eligible for composition levy. Under the scheme, a taxpayer shall pay tax as a percentage of his turnover during the year without the benefit of ITC. The floor rate of tax for CGST and SGST shall not be less than [1%]. A tax payer opting for composition levy shall not collect any tax from his customers. Tax payers making inter- state supplies or paying tax on reverse charge basis shall not be eligible for composition scheme. 

Q 24. Whether the composition scheme will be optional or compulsory? 
Ans. Optional. 

Q 25. What is GSTN and its role in the GST regime? 
Ans. GSTN stands for Goods and Service Tax Network (GSTN). A Special Purpose Vehicle called the GSTN has been set up to cater to the needs of GST. The GSTN shall provide a shared IT infrastructure and services to Central 14 15 and State Governments, tax payers and other stakeholders for implementation of GST. The functions of the GSTN would, inter alia, include: (i) facilitating registration; (ii) forwarding the returns to Central and State authorities; (iii) computation and settlement of IGST; (iv) matching of tax payment details with banking network; (v) providing various MIS reports to the Central and the State Governments based on the tax payer return information; (vi) providing analysis of tax payers’ profile; and (vii) running the matching engine for matching, reversal and reclaim of input tax credit. 

The GSTN is developing a common GST portal and applications for registration, payment, return and MIS/ reports. The GSTN would also be integrating the common GST portal with the existing tax administration IT systems and would be building interfaces for tax payers. Further, the GSTN is developing back-end modules like assessment, audit, refund, appeal etc. for 19 States and UTs (Model II States). The CBEC and Model I States (15 States) are themselves developing their GST back-end systems. Integration of GST front-end system with back-end systems will have to be completed and tested well in advance for making the transition smooth. 

Q 26. How are the disputes going to be resolved under the GST regime? 
Ans. The Constitution (one hundred and first amendment) Act, 2016 provides that the Goods and Services Tax Council shall establish a mechanism to adjudicate any dispute- 16 
(a) between the Government of India and one or more States; or 
(b) between the Government of India and any State or States on one side and one or more other Sates on the other side; or 
(c) between two or more States, arising out of the recommendations of the Council or implementation thereof. 

Q 27. What are the other legislative requirements for introduction of the GST? 
Ans. Suitable legislation for the levy of GST (Central GST Bill, Integrated GST Bill and State GST Bills) drawing powers from the Constitution would need to be passed by the Parliament and the State Legislatures. Unlike the Constitutional Amendment which requires 2/3rd majority, the GST Bills would need to be passed by a simple majority. Obviously, the levy of the tax can commence only after the GST law has been enacted by the Parliament and respective Legislatures.

Income Tax Department Raids Roadside Eateries to make IDS Sucessful

8:25 AM 0
Income Tax Department Raids Roadside Eateries to make IDS Sucessful
The CBDT had notified Income Declaration Scheme ('IDS') with effect from June 1, 2016. The last date to file declaration under IDS is September 30, 2016. So, with less than 10 days left for the deadline the income tax department intensified its actions and raided small businesses and roadside eateries.

The income tax department has raided many vadapav centers, dosa center in Mumbai. Raids were also conducted in Ahmedabad and on well know shops in New Delhi and Kolkata. The department was asking owners to declare their black money under IDS.

The raids are based on information collected in the past six months. According to a tax official, about 1 lakh small businessmen and shop keeps have been identified as possible tax evaders in India.

Sep 22, 2016

Paperless Account Opening Introduced by Kotak Mahindra Bank

8:49 AM 0
Kotak Mahindra Bank has launched ‘Kotak Now’ – a paperless digital account opening process on mobile. ‘Kotak Now’ is an end-to-end digital process where verification of KYC documents and signature is done via a video call with the bank. This is a complete end-to-end online account opening experience, without any need of physical interaction or biometric verification.

To open an account under this process, one has to download the Kotak Now app and upload KYC documents (PAN card, and either Aadhar Card or Passport), and the image of the signature. On entering a few personal details, the Customer Relationship Number (CRN) and Account Number is generated. The app automatically selects a branch closest to the customer’s address for correspondence. The account is activated, after a video call with a bank executive.

Deepak Sharma, Chief Digital Officer, Kotak Mahindra Bank, said, “About 50 per cent of all transactions in the last few years have moved to digital channels like net banking and mobile banking. Additionally, most services are now being made available on-the-move to customers via these platforms. However, the account opening experience for Indian consumers was still a challenge, and has thus far required high level of manual effort from their end. ‘Kotak Now’ is a step in making banking truly digital.”
Paperless Account Opening Introduced by Kotak Mahindra Bank

Kotak Now, which has been developed with the patented technology of Germany-based WebID Solutions, reduces the time involved in opening a bank account and also ensures data security.
Currently, ‘Kotak Now’ is limited to opening a ‘Jifi’ account. Other savings account variants will be introduced in a phased manner. ‘Kotak Now’ can be downloaded from Google Play Store.

Sep 21, 2016

CBDT will Issue Certificates of Appreciation to Taxpayers for their Contribution

8:37 AM
The Government acknowledges the contribution of individual tax payers in paying taxes within the prescribed time and prompt filing of Income Tax Returns. The Honourable Finance Minister, Shri Arun Jaitley today handed over certificates of appreciation issued by CBDT honoring select tax payers for such contribution. While it is widely acknowledged that the Nation meets its obligations towards spending in various social sector and welfare schemes and infrastructure development out of revenues mobilized through tax payments by millions of honest tax payers, this step marks the first effort by the Government to directly communicate to the tax payer its appreciation for that contribution.

CBDT will be sending out such certificates of appreciation to individual tax payers by e-mail in various categories on the basis of the level of taxes paid by them for the current Assessment Year 2016-17 where taxes have been paid in full and tax payers have no outstanding tax liabilities and where the return is e-filed within the prescribed due date. The tax payers may display these certificates in their homes / offices.

The categories for individual taxpayers and the number of certificates being issued in the first round are:

i. Platinum : Tax contributed Rs. 1 Crore and above
ii. Gold : Tax contributed Rs. 50Lakh to Rs. 1 Crore
iii. Silver : Tax contributed Rs. 10Lakh to Rs.50 Lakh
iv. Bronze : Tax contributed Rs. 1Lakh to Rs.10 Lakh
CBDT will Issue Certificates of Appreciation to Taxpayers for their Contribution

The CBDT urges taxpayers to e-file their returns in time and verify their return by submitting the Electronic Verification Code online or sending their ITR-V within the 120 day period so that they can be also acknowledged for their contribution.

The Department is committed to continuous improvement of taxpayer services and seeks the cooperation of all taxpayers in contributing their fair share of taxes voluntarily.

(Meenakshi J Goswami)
Commissioner of Income Tax
(Media and Technical Policy)
 Official Spokesperson, CBDT.

CBDT Clarification on Unconfirmed Reports on Income Declaration Scheme 2016

8:27 AM 0
Certain sections of the press have been speculating on the taxpayer response to the currently on-going Income Disclosure Scheme 2016 over the last couple of days. The CBDT would like to clarify that these are not based on any statements issued by the Department

The Department has since the commencement of the scheme, set to rest, various concerns of the taxpayers through public meetings and through the issue of FAQs over the last 3-1/2 months. The benefits of the scheme have also been publicised through print and electronic media, in both national and regional languages. The scheme has generated a good interest and the response of the taxpayers has been steadily growing. The last few days remaining for filing of declarations are expected to give good results.
CBDT Clarification on Unconfirmed Reports on Income Declaration Scheme 2016

The CBDT has so far refrained from issuing any statement regarding number of declarations received, amounts declared or taxes paid under the Scheme in order to ensure complete
confidentiality. The confidential handling of declarations made under the Scheme is of utmost importance to the Income Tax Department and the CBDT is aware of its responsibility towards fulfilling this crucial role.

A formal and confirmed press release on the above aspects will be issued from the CBDT after the Scheme closes on 30th September, 2016.
(Meenakshi J Goswami)
Commissioner of Income Tax
(Media and Technical Policy)
Official Spokesperson, CBDT.

Sep 20, 2016

Banks no Longer can Issue Megnatic Strip based Debit Cards

8:53 AM 0
Reserve bank of India denied to give extension to banks for coverting megnatic strip based debit cards to chip based debit cards. So banks can no longer can issue megnatic based debit or credit cards. Full order is as under.

A reference is invited to our circular DPSS (CO) PD No.2112/02.14.003/2014-15 dated May 07, 2015 and DPSS.CO.PD.No.448/02.14.003/2015-16 dated August 27, 2015 on the captioned subject wherein directions were issued with timelines for migration to EMV Chip & PIN cards.

2. Despite the extension of time given to banks in this regard, some banks have approached us seeking further extension of the time line for complying with the above instructions.

3. Keeping in the mind the objective to further enhance the security and risk mitigation in card present transactions, and also the impact it may have on achieving the timeline for complete migration of all existing magstripe cards, it has been decided not to grant any further extension beyond the respective timeline indicated in circular dated August 27, 2015 for new issuances and full migration to EMV Chip and PIN cards.
Banks no Longer can Issue Megnatic Strip based Debit Cards

4. The directive is issued under Section 10(2) read with Section 18 of Payment and Settlement Systems Act 2007 (ACT 51 of 2007).

5. Please acknowledge receipt.
Yours faithfully,
(Nanda S. Dave)
Chief General Manager

FAQs on Direct Tax Dispute Resolution Scheme 2016

8:53 AM 0
FAQs on Direct Tax Dispute Resolution Scheme 2016
The Direct Tax Dispute Resolution Scheme, 2016 (hereinafter referred to as ‘the Scheme’) incorporated as Chapter X of the Finance Act, 2016 (hereinafter referred to as ‘the Act’) provides an opportunity to tax payers who are under litigation to come forward and settle the dispute in accordance with the provisions of the Scheme. The Direct Tax Dispute Resolution Scheme Rules, 2016 (hereinafter referred to as ‘the Rules’) have been notified. In regard to the scheme queries have been received from the stakeholders seeking further clarity on certain provisions of the Scheme. The Central Government has considered the queries and decided to clarify the same in the form of questions and answers as follows.-

Question No.1: In a case an appeal was pending before CIT(Appeals) as on 29.02.2016. However, before making declaration under the Scheme the appeal is disposed of by CIT(Appeals). Is the assessee eligible to avail the Scheme?
Answer: In such a case where the appeal was pending before CIT(Appeals) as on 29.02.2016 and the CIT(Appeals) has already disposed of the same before making the declaration, the declaration under the Scheme cannot be filed.

Question No.2: In a case where the appellant has filed a declaration under the Scheme or has intimated the CIT(Appeals) his intention to file declaration under the Scheme, whether the CIT(Appeals) will dispose-off the appeal?
Answer: The CIT(Appeals) have been instructed vide letter F.No.279/Misc./M-30/2016 dated 30.3.2016 that appeals where the appellants have expressed their intention to avail the Scheme should be kept pending. Further, vide letter F.No.279/Misc./M-74/2016-ITJ dated 19.07.2016, the designated authority have been instructed to obtain an endorsement from CIT(Appeals) concerned that the appeal for which declaration  has been filed was pending on 29.2.2016 and has not yet been disposed. Therefore, in a case where the declaration has been made under the Scheme or an intention to avail the Scheme has been made by the appellant, the CIT(Appeals) shall not dispose the pending appeal.

Question No.3: Appeal against quantum as well as penalty under section 271(1)(c) is pending before CIT(Appeals). If the assessee files a declaration in respect of the quantum appeal under the Scheme, what would be the fate of penalty appeal?
Answer: As per the Scheme, in a case where disputed tax in quantum appeal is more than Rs.10 lakh, the declarant has to pay the disputed tax, interest and 25% of minimum penalty leviable. Further, in a case where the disputed tax in quantum appeal does not exceed Rs.10 lakh, the declarant is required to pay only the disputed tax & interest and there is no requirement for payment of any amount in respect of penalty leviable. Section 205(b) of the Act provides immunity from imposition or waiver of penalty under the Income-tax Act or the Wealth-tax Act in respect of tax arrear covered in the declaration to the extent the penalty exceeds the amount of penalty referred to in section 202(I) of the Act. Hence, in both the situations (i.e. whether disputed tax in quantum appeal exceeds Rs.10 lakh or not), where a valid declaration under the Scheme is made in respect of quantum appeal, the appeal against penalty levied under section 271(1)(c) of the Income-tax Act, relating to the quantum appeal pending before the Commissioner (Appeals) shall be deemed to be withdrawn and the penalty or the balance amount of penalty, as the case may be, shall be deemed to be waived.

Question No.4: Section 203(2) reads that consequent to the declaration in respect of tax arrear, the appeal pending before Commissioner (Appeals) shall be deemed to be withdrawn. From what point of time does the provision become operative?
Answer: The appeal pending with Commissioner (Appeals) shall be deemed to be withdrawn from the date on which the certificate under section 204(1) is issued by the designated authority.

Question No.5: The addition made in assessment has the effect of reducing the loss but penalty has been initiated under section 271(1)(c) of the Income-tax Act. Is the assessee eligible to avail the Scheme?
Answer: The Scheme is applicable to cases where there is disputed tax. Since in the case of reduction of loss, there is no disputed tax the assessee shall not be eligible to avail the Scheme. However, if an appeal is pending before Commissioner (Appeals) in respect of penalty order framed as a result of variation in quantum loss, the declarant may file a declaration in respect of such penalty order.

Question No.6: In a case the time period specified under section 249 of the Income-tax Act for filing of appeal expired on 29.2.2016. The assessee filed an appeal in this case on 5.4.2016 with a request
to condone the delay in filing of appeal. The Commissioner (Appeals) condoned the delay in filing of the appeal. Is the Scheme available to the assessee in such a case?
Answer: In condonation cases, a declarant shall be eligible for the Scheme, if:
(i) the time limit for filing of appeal under section 249 of the Income-tax Act, 1961 has got barred by limitation on or before 29.02.2016;
(ii) the appeal and condonation application has been filed before Commissioner (Appeals) before
01.06.2016; and
(iii) the delay in filing of such appeal is condoned by the Commissioner (Appeals)
Hence, in the present case the Scheme is available to the assessee.

Question No.7: In a case the Commissioner (Appeals) has given a notice of enhancement. Is such a case eligible for availing the Scheme?
Answer: A case where notice of enhancement has been received by the declarant before the date of commencement of the Scheme i.e. 01.06.2016 shall not be eligible for the Scheme.

Question No.8: A survey was conducted during F.Y. 2013-14. Incriminating documents relating to assessment year 2011-12 were found and assessment under section 147 of the Income-tax Act for the said year was made based on these documents and other enquiries  conducted. Is the assessee’s case for A.Y. 2011-12 which is pending with Commissioner (Appeals) eligible for the Scheme?
Answer: As per section 208 of the Act, the Scheme shall not be available for assessment or reassessment on which survey conducted under section 133A of the Income-tax Act has a bearing. Hence, in the present case, A.Y. 2011-12 is not eligible for the Scheme.

Question No.9: In a case, appeal against penalty order under section 271(1)(c) is pending before Commissioner (Appeals) and appeal against quantum addition is pending with higher appellate authority. As per the Scheme, the amount payable is 25% of the minimum penalty leviable and the tax and interest payable on the total income finally determined. What should be construed as ‘total income finally determined’ for computing the quantum of tax, interest and penalty payable under the Scheme? Further, what would be the effect of any variation in quantum addition as a result of appellate order(s) passed subsequent to filing of declaration?
Answer: In case of an appeal relating to penalty under section 271(1)(c), the amount payable under the Scheme is 25% of the penalty amount and also the tax and interest payable on the total income finally determined. For this purpose the total income finally determined shall be the total income as determined after giving effect to the last appellate order passed on or before the date of filing declaration under the Scheme. Any variation to the total income as a result of any appellate order passed subsequent to the date of declaration shall be ignored for the purposes of computing the amount of penalty payable under the Scheme.

Question No.10: Where certain income has been charged to tax in the hands of two different persons or where it has been charged to tax in the case of same person in two different assessment years, one on substantive basis and the other on the protective basis, will the declarant or the other person get advantage in respect of additions made both substantively and protectively?
Answer: The assessees are advised to make declarations in cases or for assessment years where the additions are made on substantive basis. The protective demand is not subjected to recovery unless  it is finally upheld. Once the declaration in a substantive case or year is accepted, the tax arrear in protective case/year would no longer be valid and will be rectified by suitable orders in the normal course.

Question No.11: By filing declaration under the Scheme for one assessment year, does the taxpayer forego his right of appeal on the same issue in another assessment year?
Answer: No. The order under the Scheme does not decide any judicial issue. It only determines the sum payable under the Scheme with reference to tax arrear or specified tax, as the case may be. It only provides for a dispute resolution mechanism in respect of cases for which declaration has been made.

Question No.12: The declarant has not paid the tax payable under the Scheme within 30 days of the order under section 204(1) for any reason including the non-realisation of the cheque presented to the bank. Will the declarant be eligible for the relief under the Scheme?
Answer: No. The tax payable under the Scheme should be paid to the credit of the Government on or before the due date as specified in the Scheme. The assessees are advised to pay the tax well on time so as to avail the relief under the Scheme.

Question No.13: There is no time limit specified for intimating the payments made by the declarant in accordance with the certificate issued in Form-3. Further, there is also no time limit specified for issuance of order under section 204(2) of the Act by the designated authority. Please clarify?
Answer: The declarant shall intimate the fact of payment along with the proof of the same to the designated authority within one month from the date on which time limit for making payment under the Scheme expires. The designated authority shall issue the order under section 204(2) of the Act within one month from the end of the month in which intimation regarding payment is received in Form-4 from the declarant.

Question No.14: Whether refund will be granted in cases where the assessee has already paid the penalty amount in full or in part while the appeal is still pending at CIT(A) stage and the assessee opts for this Scheme?
Answer: As per section 202(I)(b) of the Scheme, in case of pending appeal related to penalty, 25% of the minimum penalty leviable alongwith tax and interest on the total income finally determined is required to be paid. Therefore, if an assessee who has already paid an amount over and above the amounts referred to in section 202(I)(b) opts for the Scheme, he shall be eligible for refund of the excess payment already made. However, the declarant shall not be eligible for claim of interest on such refund under section 244A of the Income-tax Act, 1961. 

Sep 19, 2016

Latest e-TDS FVU version 5.2 and 2.148 Applicable from 17-09-2016

8:51 AM 0
Tin.nsdl has launched latest file validation utility version 5.2 and fvu.exe version 2.148 for preparaing e-tds return software. These FVU version 5.2 and 2.148 are incorporated with latest Return preparation utility version 1.7. FVU 5.2 is applicable from 17 September 2016. There are many new features added in latest fvu 5.2 which are as under.

Addition of new fields for Form 24Q-Q4 under Annexure ll (i.e. salary details) as below:
1. Aggregate rent payment exceeds rupees one lakh during the previous year:
- The above is applicable for regular as well as correction statements pertaining to FY 2016-17 onwards.

- If the rent payment exceeds rupees one lakh, in such case, flag value ‘Yes’ is to be mentioned under the above referred field, else flag value ‘No’ is to be mentioned.

- If the flag value is ‘Yes’, in such case, PAN and Name of the landlord is to be mandatorily mentioned. The details (i.e. PAN and Name) of maximum to four landlords can be mentioned.

2. Deduction of interest under the head ‘Income from house property’ (which is paid to the lender):

- The above is applicable for regular as well as correction statements pertaining to FY 2016-17 onwards.

- If the interest is paid to the lender, in such case, flag value ‘Yes’ is to be mentioned under the above referred field, else flag value ‘No’ is to be mentioned.

- If the flag value is ‘Yes’, in such case, PAN and Name of the lender is to be mandatorily mentioned. The details (i.e. PAN and Name) of maximum to four lenders can be mentioned.

3. Deduction of tax from contributions paid by the trustees of an approved superannuation fund:

- The above is applicable for regular as well as correction statements pertaining to FY 2013-14 onwards.

- If the contribution is paid by the trustee, in such case, flag value ‘Yes’ is to be mentioned under the above referred field, else flag value ‘No’ is to be mentioned.

- If the flag value is ‘Yes’, in such case, below fields are applicable and values in all these fields is to be mandatorily mentioned.

o Name of the superannuation fund
o Date from which the employee has contributed to the superannuation fund
o Date to which the employee has contributed to the superannuation fund
o The amount of contribution repaid on account of principal and interest
o The average rate of deduction of tax during the preceding three years
o The amount of tax deducted on repayment
o Gross total income including contribution repaid on account of principal and interest from superannuation fund.
Latest e-TDS FVU version 5.2 and 2.148 Applicable from 17-09-2016

- Addition of new fields for Form 27Q under Annexure l (i.e. deductee details) as below:
1. The following new fields have been incorporated:
- Email ID of the deductee
- Contact number of deductee
- Address of deductee in country of residence.
- Tax Identification Number/ Unique Identification Number of deductee

2. The above is applicable for regular as well as correction statements pertaining to FY 2016-17 onwards.

3. The values in all the above new fields will be mandatory, if all the below conditions are fulfilled else the values in these fields are optional.

- Value in the field no. 10 i.e. “PAN of the deductee” from deductee details record is PANINVALID or PANAPPLIED or PANNOTAVBL and

- Value in the field no. 26 i.e. “Rate at which Tax Deducted” from deductee details record is less than 20% and

- Value in the field no. 30 i.e. “Remarks 1” from deductee details record is “C”

- Changes in Form 27A generated from File Validation Utility.

The Quarter of the statement is made available in Form 27A as generated from FVU.

Example: if the statement is validated from FVU pertaining to FY 2016-17 of the second quarter (i.e. July 1, 2016 to September 30, 2016), in such case, Form 27A will have the following statement ‘Form for furnishing information with the statement of Deduction / collection of tax at source (tick whichever is applicable) filed on computer media for the period Q2’

- This version of FVU is applicable with effect from September 17, 2016.
Download FVU 5.2
Download FVU.EXE 2.147
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Latest RPU version 1.7 for e-TDS/TCS Regular and Correction Statements

8:50 AM 0
Tin.nsdl presents new return preparation utility RPU version 1.7 in java platform which is usable online or offline mode. This RPU version 1.7 is applicable for all regular and corrective statement pertaining to financial year 2016-17 and onwards. There are many new features of RPU 1.7 which are as follows.

Addition of new fields for Form 24Q-Q4 under Annexure ll (i.e. salary details) as below:
1. Aggregate rent payment exceeds rupees one lakh during the previous year:
- The above is applicable for regular as well as correction statements pertaining to FY 2016-17 onwards.

- If the rent payment exceeds rupees one lakh, in such case, flag value ‘Yes’ is to be mentioned under the above referred field, else flag value ‘No’ is to be mentioned.

- If the flag value is ‘Yes’, in such case, PAN and Name of the landlord is to be mandatorily mentioned. The details (i.e. PAN and Name) of maximum to four landlords can be mentioned.

2. Deduction of interest under the head ‘Income from house property’ (which is paid to the lender):
- The above is applicable for regular as well as correction statements pertaining to FY 2016-17 onwards.

- If the interest is paid to the lender, in such case, flag value ‘Yes’ is to be mentioned under the above referred field, else flag value ‘No’ is to be mentioned.

- If the flag value is ‘Yes’, in such case, PAN and Name of the lender is to be mandatorily mentioned. The details (i.e. PAN and Name) of maximum to four lenders can be mentioned.

3. Deduction of tax from contributions paid by the trustees of an approved superannuation fund:
- The above is applicable for regular as well as correction statements pertaining to FY 2013-14 onwards.

- If the contribution is paid by the trustee, in such case, flag value ‘Yes’ is to be mentioned under the above referred field, else flag value ‘No’ is to be mentioned.
Latest RPU version 1.7 for  e-TDS/TCS Regular and Correction Statements

- If the flag value is ‘Yes’, in such case, below fields are applicable and values in all these fields is to be mandatorily mentioned.

o Name of the superannuation fund
o Date from which the employee has contributed to the superannuation fund
o Date to which the employee has contributed to the superannuation fund
o The amount of contribution repaid on account of principal and interest
o The average rate of deduction of tax during the preceding three years
o The amount of tax deducted on repayment
o Gross total income including contribution repaid on account of principal and interest from superannuation fund.

- Addition of new fields for Form 27Q under Annexure l (i.e. deductee details) as below:
1. The following new fields have been incorporated:
-  Email ID of the deductee
- Contact number of deductee
- Address of deductee in country of residence
- Tax Identification Number/ Unique Identification Number of deductee

2. The above is applicable for regular as well as correction statements pertaining to FY 2016-17 onwards.

3. The values in all the above new fields will be mandatory, if all the below conditions are fulfilled else the values in these fields are optional.

Value in the field “PAN of the deductee” from deductee details record is PANINVALID or PANAPPLIED or PANNOTAVBL and

- Value in the field “Rate at which Tax Deducted” from deductee details record is less than 20% and

- Value in the field “Remarks 1” from deductee details record is “C”

- Incorporation of latest File Validation Utility (FVU) version 5.2 (applicable for TDS/TCS statements pertaining to FY 2010-11 onwards) and FVU version 2.148 (applicable for TDS/TCS statements from FY 2007-08 up to FY 2009-10).
Download RPU 1.7
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Sep 17, 2016

Excel 7th Pay Scale Commission Calculator

9:00 AM 1
Excel 7th Pay Scale Commission Calculator
Recently Seventh pay commission submitted their report to Finance Minister on Thursday, 19 November 2015. The seventh pay commission will be implemented from 1 January 2016. The major highlights of 7th pay commission can be read with this link.

So everybody who benefits with 7th pay commission recommendation want to know about what will he gets after 1 January 2016. But the calculations are quite complex. There is an excel based calculator for 7th pay commission pay scale fixation which will surely solve your worry.
         PAY LEVEL TABLE
Level
Grade pay
Pay band
1
1800
5200-20200
2
1900
5200-20200
3
2000
5200-20200
4
2400
5200-20200
5
2800
5200-20200
6
4200
9300-34800
7
4600
9300-34800
8
4800
9300-34800
9
5400
9300-34800
10
5400
15600-39100
11
6600
15600-39100
12
7600
15600-39100
13
8700
37400-67000
13A
8900
37400-67000
14
10000
37400-67000
15
0
67000-79000
16
0
75500-80000
17
0
80000
18
0
90000



7th pay scale calculator

  1. This is an excel based calculator and very easy to use.
  2. You just need to enter pay(without grade) and current pay level.
  3. All other calculation are done automatically.
  4. One can see pay level from this pay level table.

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