06 May 2016

Procedure for TCS/ TDS return filing in the ITD e-filing portal

Procedure for TCS/ TDS return filing in the ITD e-filing portal
With effect from 1st May 2016, the online submission of Quarterly TDS/TCS statements will be discontinued at TIN-NSDL website.
The Deductors who desires to upload the Quarterly TDS/TCS e-Returns online, shall upload the same at e-Filing Portal of ITD. 
The Deductor must have registered the TAN at ITD's e-Filing Portal using a valid Digital Signature Certificate. To know detailed procedure on how to register as 'Tax Deductor and Collector' please read this booklet.
Once the Tax Deductor and Collector login is created, user can upload the Quarterly TDS/TCS statements as described below:
  1. Visit ITD's e-filing home page (ITD e-filing) and login using TAN and Password
  2. After successful login, go to TDS menu >> Upload TDS
  3. In the form provided select the appropriate statement details, viz. FVU Version, Financial Year, Form Name, Quarter and Upload Type (Regular / Correction) and verify.
  4. Browse the TDS return filing zip file generated using Saral TDS
  5. Attach Signature file created using DSC Utility and click 'Upload'
  6. On successful upload appropriate message will be displayed along with Transaction ID and the Token Number for future reference. Deductor can check the status of return after 24 hours of upload using the Token Number.
Read here for the detailed procedure of TCS/ TDS return filing statement upload.

Lok Sabha Passed the Finance Bill,2016


Changes in the Finance Bill 2016 as passed by the Lok Sabha

On May 5, 2016, the Lok Sabha passed the Finance Bill. The Bill which was presented originally in the Lok Sabha on February 29, 2016 has not been passed in its original shape. Various changes have been made in the Bill. New amendments have been proposed. Some earlier proposed amendments have been removed, so on and so forth. A snippet of all changes made in the Finance Bill, 2016 as passed by the Lok Sabha viz-a-viz the Finance Bill, 2016 presented originally in the Lok Sabha are presented hereunder.
1. Unlisted shares held for 24 months or less would be treated as short-term capital asset
As per section 2(42A) of the Income-tax Act, any capital asset held by the taxpayer for a period of not more than 36 months immediately preceding the date of its transfer is treated as short-term capital asset.
The aforesaid period of 36 months is treated as 12 months in case of shares held in a company. However, an amendment was made by Finance Act (No. 2) Act, 2014 to provide that the said period of 12 months won't be applicable in respect of shares not listed in recognized stock exchange. Hence, with effect from 01.04.2015, unlisted share is treated as short-term capital asset if it is held for not more than 36 months immediately preceding the date of its transfer.
The Finance Bill, 2016 as passed by the Lok Sabha inserted a new clause to provide that the period of 36 months would be substituted with period of 24 months in case of unlisted shares. In other words, unlisted shares of company would be treated as short-term capital asset if it is held for a period of 24 months or less immediately preceding the date of its transfer.
2. When employer's annual contribution is deemed as income received by employee
The Finance Bill, 2016 proposed an amendment to the Fourth Schedule of the Income-tax Act to provide that lower of the following shall be deemed as income of the employee:
(i)

Annual contribution made by employer in excess of 12% of salary to the recognized provident fund account of the employees; or
(ii)

Rs. 1,50,000
The Finance Bill, 2016 as passed by the Lok Sabha provides that any contribution by employer in excess of 12% of salary to the recognized provident fund account of the employees shall be deemed as income of employee. The ceiling limit of Rs. 1.50 lacs has been removed from the approved Finance Bill.
3. TCS collection at the time of receipt only in specific cases
The Finance Bill, 2016 proposed that every seller of a motor vehicle shall collect TCS at the rate of 1% of value of motor car if such value exceeds ten lakh rupees. Such tax was proposed to be collected from the buyer under section 206C at the time of debiting the amount receivable or at the time of receipt, whichever happened earlier.
The Finance Bill, 2016 as passed by the Lok Sabha provides that tax shall be collected under Section 206C only at the time of receipt of consideration.
4. Section 270A - Computation of tax on underreported income
Under the existing provisions, penalty on account of concealment of income or on furnishing of inaccurate particulars of income is levied under Section 271(1)(c). In order to rationalize and bring objectivity, certainty and clarity in the penalty provisions, new Section 270A has been proposed to be inserted. It provides for levy of penalty in cases of underreporting and misreporting of income.
It is proposed that rate of penalty shall be 50% of tax in case of under reporting of income and 200% of tax in case of misreporting of income. Following amendments to Section 270A have been approved by the Lok Sabha:
(i)

What constitutes under-reporting of income: The Finance Bill, 2016 proposed six instances where a person shall be deemed to have underreported his income. However, the Finance Bill, 2016 as passed by the Lok Sabha has included one more instance of underreporting of income. A person shall also be deemed to have underreported his income where the amount of total income reassessed as per Section 115JB or Section 115JC (MAT or AMT) provisions is greater than the deemed total income assessed or reassessed under provisions of the MAT or the AMT immediately before such reassessment.
(ii)

Tax payable on underreporting of income: The existing clause of the Finance Bill, 2016, proposed a flat tax rate of 30% in respect of underreported income in case of Individuals, HUF, AOP, BOI, Artificial Juridical person. The Finance Bill, 2016 as passed by the Lok Sabha provides that the tax payable in respect of the underreported income shall be as under:

(a)

Return not furnished: Where return of income has not been furnished and the income has been assessed for the first time, the tax shall be calculated on underreported income as increased by maximum amount not chargeable to tax.
(b)

In case of loss: Where the total income assessed or re-assessed is a loss, the tax shall be calculated on underreported income as if it was the total income.
(c)

In any other case: Tax on underreported income as increased by income assessed or re-assessed originally less tax on income assessed or re-assessed originally.
5. Under reporting of income shall be punishable as willful attempt to evade tax
The Finance Bill, 2016 proposed insertion of a new Section 270A to levy penalty in case of under reporting and misreporting of income by assessee. However, there was no corresponding provision to invoke prosecution in this case.
Section 276C provides for rigorous imprisonment of minimum 3 months to 7 years in case an assessee has made willful attempt to evade tax.
The Finance Bill, 2016 as passed by the Lok Sabha amends Section 276C to provide that under reporting of income as per section 270A shall be punishable with rigorous imprisonment under section 276C.
6. Processing of returns before scrutiny assessment
The Finance Bill, 2016 proposed mandatory processing of returns under Section 143(1) even when the scrutiny assessment notice is issued to the assessee. This amendment was proposed so that the assessee need not to wait for the refunds, if any, due to him till the scrutiny assessment was completed.
The Finance Bill, 2016 had provided that return shall be processed before issuing assessment order under section 143(3). However, the finance bill as passed by the Lok Sabha provides that the processing of return is not necessary before the expiry of one year from the end of the financial year in which return is furnished, where a notice is issued for scrutiny assessment under Section 143(2).
7. Benefit of 25 percent tax rates on certain domestic companies
The Finance Bill, 2016 proposed insertion of new section 115BA to provide benefit of concessional tax rate of 25% to certain domestic companies engaged in the business of manufacturing or production of any article or thing, provided such company has been set-up and registered on or after March 1, 2016.
The Finance Bill, 2016 as passed by the Lok Sabha provides that benefit of concessional tax rate shall also be available to the companies engaged in research in relation to or distribution of article or thing manufactured or produced by it.
The Finance Bill, 2016 also proposed that to avail of the concessional rate of tax, domestic company shall exercise the option in the prescribed manner on or before due date of furnishing the return of income under section 139(1) for the relevant previous year.
It is also provided that once the option to avail of benefit of concessional tax rate has been exercised by the company for any previous year, it cannot subsequently withdraw the same or for any other previous year.
8. Cost of acquisition of asset declared under Income Declaration Scheme, 2016
The Finance Bill, 2016 proposed Income Declaration Scheme, 2016 to provide an opportunity to taxpayers to declare their undisclosed income and pay tax, surcharge and penalty in aggregate at 45% of such undisclosed income.
It is provided under the scheme that where the income chargeable to tax is declared in the form of investment in any asset, the fair market value of such asset as on the date of commencement of this scheme shall be deemed to be the undisclosed income.
The Finance Bill, 2016 as passed by the Lok Sabha provides that the cost of acquisition of such asset shall be deemed to be the fair market value taken into account for purposes of Income Declaration Scheme, 2016.
9. LLPs can be 'Eligible start-ups'
The Finance Bill, 2016 proposed a new section 80-IAC to provide 100 percent deduction for 3 consecutive assessment years to an 'eligible Start-up' engaged in an eligible business. Such deduction may, at the option of assessee, be claimed for any three consecutive AYs out of the five years beginning from the year in which eligible startup is incorporated. The 'eligible start-up' is proposed to be defined to mean a 'company' engaged in an eligible business.
The Finance Bill, 2016 as passed by the Lok Sabha extends the definition of 'eligible start-up' to include 'limited liability partnership' also. In other words, LLPs shall also be eligible to claim deductions under Section 80-IAC subject to fulfilment of other conditions.
10. Levy of additional tax on dividend
The Finance Bill, 2016 had proposed an additional tax of 10% if amount of dividend received by a taxpayer exceeds Rs. 10 Lakhs.
The Finance Bill, 2016 as passed by the Lok Sabha clarified that dividend whether paid or declared or distributed by one or more domestic companies, the aggregate of dividend shall be considered for the limit of Rs.10 lakhs but Tax shall be payable only on the amount of dividend exceeding Rs 10 lakhs.
11. Tax on income from patent developed and registered in India
The Finance Bill, 2016 proposed insertion of new section 115BBF to tax royalty income in respect of a patent developed and registered in India at the rate of 10%.
The Finance Bill, 2016 as passed by the Lok Sabha inserts two new sub-sections in Section 115BBF to provide as follows:
(a)

Assessee may exercise the option for taxation of income from patents in accordance with the provisions of section 115BBF, in prescribed manner on or before the due date of furnishing of return of income under section 139(1) of the relevant previous year.
(b)

If assessee opts for taxation of income from patents as per section 115BBF in any previous year and fails to offer tax on income from patents as per section 115BBF in any of the 5 succeeding assessment years then he shall not be eligible to claim benefit of said section for 5 assessment years subsequent to the assessment year in which such income has not been offered to tax as per section 115BBF.
The Finance Bill, 2016 also provided that for the purpose of section 115BBF, patent shall be developed and registered in India. The word 'developed' had been described in the Explanations to mean the expenditure incurred by the assessee for any invention in respect of which patent is granted under the Patents Act, 1970.
The Finance Bill, 2016 as passed by the Lok Sabha specifically provides that the meaning of "developed" shall mean at least 75 percent of the expenditure incurred in India by the eligible assessee for any invention in respect of which patent is granted under the Patents Act, 1970.
12. Transfer of shares through a recognized stock exchange located in IFSC
In order to mobilise growth of International Financial Services Centres (IFCS), the Finance Bill, 2016 proposed that no Securities Transaction Tax ('STT') and Commodities Transaction Tax ('CTT') shall be levied on transactions of securities carried out through recognized stock exchange located in IFSC where the consideration for such transaction is paid or payable in foreign currency.
Consequently, it was proposed to amend the section 10(38) of the Income-tax Act to provide that long-term capital gains arising from transfer of equity shares, equity oriented mutual fund or units of business trust shall be exempt from tax if the transaction is undertaken in foreign currency through a recognised stock exchange located in an IFSC, even if STT is not paid in respect of such transactions.
However, no such amendment was proposed to section 111A [short-term capital gain arising from transfer of listed securities].
Therefore, the Finance Bill, 2016 as passed by the Lok Sabha makes similar amendment to section 111A to provide that short-term capital gains arising from transfer of underlying securities shall be taxable at 15%, if the transaction is undertaken in foreign currency through a recognised stock exchange located in an IFSC, even if STT is not paid in respect of such transactions.
13. Amortization of spectrum fee
The Finance Bill, 2016 proposed to insert a new section 35ABA to provide that the spectrum fee paid for auction of airwaves shall be allowed to be deducted over the useful life of the spectrum.
The Finance Bill, 2016 as passed by the Lok Sabha also provides for consequences if specified conditions are not fulfilled. If subsequently there is a failure to comply with any of the conditions, the deduction shall be treated as wrongly allowed and the Assessing Officer may re-compute the total income of the assessee for the respective previous years. It is also provided that the provisions of Section 154 shall apply for four years from the end of the year in which the default is made.
14. Relief to specific Non-Residents from the tax deduction under section of 194LBB
The Finance Act, 2015 had inserted a special taxation regime in respect of Category I and II Alternative Investment Funds (investment fund) registered with the SEBI. Under this regime the income of the investment fund (not being in the nature of business income) is exempt in the hands of investment fund. However, income received by the investor from the investment fund (other than the income which is taxed at the level of investment fund) is taxable in their hands. Accordingly, Section 194LBB was inserted for deduction of tax in respect of payment made to such investors.
The existing provisions of section 194LBB provide that in respect of any income credited or paid by the investment fund to its investor (resident or non-resident), a tax deduction at source (TDS) shall be made by the investment fund at the rate of 10% of the income. This TDS regime had created certain difficulties that non-resident investors, whose income was not taxable as per the relevant DTAA, were not able to claim benefit of lower or nil rate of taxation. Even section 197 didn't provide for any facility to the deductee to approach the Assessing Officer for seeking certificate for TDS at a lower or nil rate in respect of deductions made under section 194LBB.
The Finance Bill, 2016 proposes to amend the section 194LBB to provide that tax shall be deducted at the rate of 10% where payee is resident. Where the payee is non-resident or foreign company, tax shall be deducted at the rates in force.
The Finance Bill, 2016 as passed by the Lok Sabha inserts a proviso that where payee is a non-resident, no tax shall be deducted in respect of any income which is not chargeable to tax.
15. Withdrawal of amendments relating to retirement funds
I. Recognized Provident Fund
The Finance Bill, 2016 proposed to amend Fourth Schedule so as to provide that:
(a)

Contribution: Employer's contributions to the recognized provident fund account of the employees shall not be chargeable to tax to the extent of 12% of employee's salary or Rs.1,50,000, whichever is less.
(b)

Withdrawal of employee's contribution: Any withdrawal from the accumulated balance in the provident fund account, which is attributable to employee's contribution made on or after April 1, 2016, shall not be chargeable to tax up to 40 % of such accumulated balance.
The Finance Bill, 2016 as passed by the Lok Sabha withdraws such amendment to the Fourth Schedule and maintains the status-quo for the taxability of contribution to and withdrawal from the provident fund account.
II. Withdrawal from superannuation fund account
The Finance Bill, 2016 proposed that any payment in lieu of or in commutation of an annuity purchased out of contributions made on or after April 1, 2016, where it exceeds 40% of annuity, shall be chargeable to tax.
The Finance Bill, 2016 as passed by the Lok Sabha withdraws such an amendment.
16. Rate of MAT for unit located in IFSC
The Finance Bill, 2016 had proposed to reduce the MAT rate from existing 18.5% to 9% in case of unit located in International Financial Services Center ('IFSC')
In order to enjoy the lower MAT rate, following conditions were to be satisfied:

The taxpayer is a unit established in IFSC

The unit must be a new unit established on or after April 1, 2016

It should derive its income solely in convertible foreign exchange
All units that fulfill the above conditions shall have to compute MAT at 9% of book profit instead of normal rate of 18.5%.
The Finance Bill, 2016 as passed by the Lok Sabha withdraws the condition of establishment of new IFSC unit after April 1, 2016. Consequently, the benefit of reduced rate of MAT shall also be given to those units which have been set up before April 1, 2016.
17. Immunity from penalty and prosecution in certain cases
The Finance Bill, 2016 proposed to insert section 270AA to provide immunity to the assessee from penalties under section 270A and prosecution under section 276C if the assessee pays the tax and interest within the time prescribed by the notice, provided assessee does not file an appeal against the order.
The Finance Bill, 2016 as passed by the Lok Sabha also includes immunity from prosecution under Section 276CC in the new Section 270AA.
18. Tax on Accreted Income of Trusts
The Finance Bill, 2016 proposed to insert a new Chapter XII-EB, containing Section 115TD, 115TE and 115TF, under the Act to provide that 'accreted income' of a trust or institution registered under section 12AA shall be chargeable to tax at the maximum marginal rates in following circumstances:
(a)

If the trust or institution gets converted into any form which is not eligible under section 12AA;
(b)

If the trust or institution gets merged into any entity which is not eligible under section 12AA;
(c)

If the trust or institution, in case of dissolution, fails to transfer its assets to exempt entities under section 12AA and section 10(23C) (iv), (v), (vi) & (via).
The difference between the fair market value of the assets and liabilities of the trust or institution would be treated as 'accreted income' and tax thereon shall be paid in addition to the income-tax chargeable in respect of the total income of such trust or institution.
The Finance Bill, 2016 as passed by the Lok Sabha makes certain changes in the proposed Section 115TD, as under:
A. Assets which don't form part of accreted income
A proviso is inserted in Section 115TD to provide that the value of the following assets shall not be taken into consideration while computing the 'accreted income':
(a)

Any asset acquired by a trust or institution out of its agricultural income.
(b)

Any asset acquired by the trust before getting registered under section 12AA provided that no exemption under section 11 or 12 is provided to trust or institution during that period.
B. Time-limit to pay tax on accreted income
As per section 115TD, a trust or an institution shall be deemed to have been converted into any form not eligible for registration under section 12AA in a previous year on occurrence of following events:
(a)

when registration granted to it under Section 12AA has been cancelled; or
(b)

It has adopted or undertaken modification of its objects which do not conform to the conditions of registration and it:


has not applied for fresh registration under Section 12AA in the said previous year; or

has filed application for fresh registration under Section 12AA but the said application has been rejected.
It was proposed under Finance Bill, 2016 that the tax on accreted income shall be payable within 14 days from date of receipt of order cancelling registration or date of order rejecting application for fresh registration.
The Finance Bill, 2016 as passed by the Lok Sabha has proposed new time-limit for payment of tax on accreted income. It has been prescribed that tax on accreted income shall be paid within 14 days from:
(a)

the date on which the period for filing appeal before ITAT against the order cancelling the registration (or order rejecting the application) expires, if no appeal has been filed by the trust or the institution; or
(b)

the date on which the order in any appeal, confirming the cancellation of the registration (or application), is received by the trust or institution.
C. Validity of registration obtained under section 12A
The Finance Bill, 2016 as passed by the Lok Sabha has made a clarificatory amendment to provide that registration under section 12AA shall include any registration obtained under section 12A.
19. Section 80-IBA - Profit linked deduction on housing projects
The Finance Bill, 2016 proposed insertion of a new Section 80-IBA which provides for deductions from profit arising from the business of developing and building housing projects. Such deduction is available subject to fulfillment of certain conditions where project is located within cities of Chennai, Delhi, Kolkata or Mumbai or within acceptable distance from municipal limits. The Finance Bill, 2016 as passed by the Lok Sabha provides that the distance from municipal limits shall be measured aerially. Further, it is mentioned clearly that the 'built-up area' of the residential unit shall be relevant to check if the size of the residential unit is within threshold limit of 30 sq. meter or 60 sq. meter, as the case may be.
20. Limit on deduction in respect of expenditure on agricultural extension project
The Finance Bill, 2016 had proposed to limit the deduction allowed under section 35CCC from existing 150% to 100% w.e.f April 1, 2018 (Assessment year 2018-19).
The Finance Bill, 2016 as passed by the Lok Sabha defers the applicability of this provision from April 1, 2018 to April 1, 2021 (Assessment Year 2021-22).

05 May 2016

Welcome step by ITD (Revenue Department)

Welcome step by ITD (Revenue Department)

The facility to upload online quarterly TDS/TCS statements in the e-filing portal shall be available w.e.f. 01.05.2016
Step-by-wise Procedure for e-filing of TDS Returns with effect from 01/05/2016
With effect from 01/05/2016 etds quarterly statements/returns shall not be e-filed or uploaded at TIN NSDL website. However they shall be uploaded at TRACES TDSCPC website

TDS Statement Upload – User Manual

Pre-Requisites for Uploading TDS Statement

To upload TDS, user should hold valid TAN and should be registered in e-Filing
Statement should be prepared using the Return Preparation Utility (RPU) and validated using the File Validation Utility (FVU). The utilities can be downloaded from tin-nsdl website (https://www.tin-nsdl.com/).
Valid DSC should be registered in e-Filing.
Upload TDS/TCS Statement To Upload TDS, the steps are as below:

Step 1: In e-Filing Homepage, Click on “Login Here”
tds return online upload

Step 2: Enter User ID (TAN), Password, and Captcha. Click Login.

tds return online upload

Step 3: Post login, go to TDS   Upload TDS.

tds return online upload

Step 4:         In the form provided, select the appropriate statement details from the drop down boxes for:

FVU Version
Assessment Year
Form Name
Quarter
Upload Type
Note:


TDS can be uploaded from Assessment Year 2011-12
Only Regular Statements can be uploaded, the Correction statement can beØ uploaded only through tin-nsdl portal.
tds return online upload

Step 5: Click Validate to Validate Statement details.

tds return online upload procedure

Step 6: “Upload TDS ZIP file”: Upload the TDS/TCS statement (Prepared using the utility downloaded from tin-NSDL Website)

Step 7: “Attach the Signature file” Upload the signature file generated using DSC Management Utility for the uploaded TDS ZIP file. For further details on generating Signature file click here. Navigate to Step by Step Guide for Uploading Zip File (Bulk Upload)

Step 8: Click on “Upload” button.

Once the TDS is uploaded, success message will be displayed on the screen. A confirmation mail is sent to the registered email id.

online tds return upload procedure


View Filed TDS Statement

To View the Filed TDS statement, the steps are as below:

Step 1: Login to e-Filing, Go to TDS

online tds return upload procedure

Step 2: In the form provided, select the details from the drop down boxes for Assessment Year, Form Name and Quarter respectively for which the TDS was uploaded.

online tds return upload procedure

Step 3: Click on “View Details”.

Step 4: The status of the TDS uploaded is displayed.

online tds return upload procedure

Once uploaded the status of the statement would be “Uploaded”. The uploaded file will be processed and validated. Upon validation the status will be either be “Accepted” or “Rejected” and would be reflected within 24 hours from the time of upload. In case if “Rejected”, the rejection reason will be displayed.

If the status is “Rejected”, click on the Token Number to view the error details.

online tds return upload procedure

Reason for rejection would be displayed as below:

online tds return upload procedure


Step 6: If the status is “Accepted”, click on the Token Number to see the details of acknowledgement of the statement uploaded for all future reference.

04 May 2016

CBDT clarifies on taxability of income from the transfer of unlisted shares


 The Central Board of Direct Taxes has issued a clarification that the income arising from transfer of unlisted shares would be considered under the head 'capital gain', irrespective of period of holding, subject to certain exceptions.
Income from sale of unlisted shares deemed as capital gains irrespective of holding period: CBDT
May 3, 2016
SECTION 45, READ WITH SECTION 28(i), OF THE INCOME-TAX ACT, 1961 - CAPITAL GAINS, CHARGEABLE AS - CONSISTENCY IN TAXABILITY OF INCOME/LOSS ARISING FROM TRANSFER OF UNLISTED SHARES
LETTER F.NO.225/12/2016/ITA.II, DATED 2-5-2016
Regarding characterisation of income from transactions in listed shares and securities, Central Board of Direct Taxes ('CBDT') had issued a clarificatory Circular no. 6/2016 dated 29th February, 2016, wherein with a view to reduce litigation and maintain consistency in approach in assessments, it was instructed that income arising from transfer of listed shares and securities, which are held for more than twelve months would be taxed under the head 'Capital Gain' unless the taxpayer itself treats these as its stock- in-trade and transfer thereof as its business income. It was further stated that in other situations, the issue was to be decided on the basis of existing Circulars issued by the CBDT on this subject.
2. Similarly, for determining the tax-treatment of income arising from transfer of unlisted shares for which no formal market exists for trading, a need has been felt to have a consistent view in assessments pertaining to such income. It has, accordingly, been decided that the income arising from transfer of unlisted shares would be considered under the head 'Capital Gain', irrespective of period of holding, with a view to avoid disputes/litigation and to maintain uniform approach.
3. It is, however, clarified that the above would not be necessarily applied in the situations where:
i.

the genuineness of transactions in unlisted shares itself is questionable; or
ii.

the transfer of unlisted shares is related to an issue pertaining to lifting of corporate veil; or
iii.

the transfer of unlisted shares is made along with the control and management of underlying business and the Assessing Officer would take appropriate view in such situations.
4. The above may be brought to the notice of all for necessary compliance.


CBSE taxpayers day

CBEC vide Letter F. No. DGST/19/2015 dated 12.04.2016 to ICAI has informed that every Wednesday would be taxpayers day wherein heads of all offices in the field will meet the taxpayers/ other stakeholders from 9 AM to 1 PM without any prior appointment in order to address their grievances relating to Central Excise, Service Tax, Customs etc. This step is undertaken by the government in order to live up to its idea of responsive governance and trade facilitation which would ensure ease of doing business for the taxpayers/ other stakeholders.

03 May 2016

CBDT has notified new form no. 12BB for declaration of investments . Employees

Changes w.ef. 1st June 2016:

CBDT has notified new form no. 12BB for declaration of investments  . Employees are now required to submit evidences/particulars of tax savings to employer in Form no. 12BB.
 
The CBDT has also notified revised due dates for filing of quarterly TDS returns by persons (other than government). Due dates for filing TDS return for the quarter ended 30th June, 30th September, 31st December and 31st March has been extended to 31st July, 31st October, 31st January and 31st May respectively (old dates were 15th July, 15th October, 15th January and 15th May respectively).

29 April 2016

CBDT on Inititate penalty

CBDT clarifies that officer below the rank of JCIT can't initiate penalty proceedings u/s 271D or 271E

April 27, 2016
SECTION 271D, READ WITH SECTION 271E, OF THE INCOME-TAX ACT, 1961 - FAILURE TO COMPLY WITH PROVISIONS OF SECTION 269SS - PENALTY FOR - COMMENCEMENT OF LIMITATION FOR PENALTY PROCEEDINGS UNDER SECTIONS 271D AND 271E
CIRCULAR NO.9/DV/2016 [F.NO.279/MISC./M-116/2012-ITJ], DATED 26-4-2016
It has been brought to the notice of the Central Board of Direct Taxes (hereinafter referred to as the Board) that there are conflicting interpretations of various High Courts on the issue whether the limitation for imposition of penalty under sections 271D and 271E of the Income tax Act, 1961 (hereafter referred to as the Act) commences at the level of the Assessing Officer (below the rank of Joint Commissioner of Income Tax.) or at level of the Range authority i.e. the Joint Commissioner of Income Tax./Addl. Commissioner of Income Tax.
Some High Courts have held that the limitation commences at the level of the authority competent to impose the penalty i.e. Range Head while others have held that even though the Assessing Officer is not competent to impose the penalty, the limitation commences at the level of the Assessing Officer where the Assessing Officer has issued show cause notice or referred to the initiation of proceedings in assessment order.
2. On careful examination of the matter, the Board is of the view that for the sake of clarity and uniformity, the conflict needs to be resolved by way of a "Departmental View".
3. The Hon'ble Kerala High Court in the case of Grihalaxmi Vision v. Addl. Commissioner of Income Tax, Range 1, Kozhikode1, vide its order dated 8-7-2015 in ITA Nos. 83 & 86 of 2014, observed that, "Question to be considered is whether proceedings for levy of penalty, are initiated with the passing of the order of assessment by the Assessing Officer or whether such proceedings have commenced with the issuance of the notice issued by the Joint Commissioner. From statutory provision, it is clear that the competent authority to levy penalty being the Joint Commissioner. Therefore, only the Joint Commissioner can initiate proceedings for levy of penalty. Such initiation of proceedings could not have been done by the Assessing Officer. The statement in the assessment order that the proceedings under sections 271D and E are initiated is inconsequential. On the other hand, if the assessment order is taken as the initiation of penalty proceedings, such initiation is by an authority who is incompetent and the proceedings thereafter would be proceedings without jurisdiction. If that be so, the initiation of the penalty proceedings is only with the issuance of the notice issued by the Joint Commissioner to the assessee to which he has filed his reply."
4. The above judgment reflects the "Departmental View". Accordingly, the Assessing Officers (below the rank of Joint Commissioner of Income Tax.) may be advised to make a reference to the Range Head, regarding any violation of the provisions of section 269SS and section 269T of the Act, as the case may be, in the course of the assessment proceedings (or any other proceedings under the Act). The Assessing Officer, (below the rank of Joint Commissioner of Income Tax) shall not issue the notice in this regard. The Range Head will issue the penalty notice and shall dispose/complete the proceedings within the limitation prescribed under section 275(1)(c) of the Act.
5. Where any High Court decides this issue contrary to the "Departmental View", the "Departmental View" thereon shall not be operative in the area falling in the jurisdiction of the relevant High Court. However, the CCIT concerned should immediately bring the judgment to the notice of the Central Technical Committee. The CTC shall examine the said judgment on priority to decide as to whether filing of SLP to the Supreme Court will be adequate response for the time being or some legislative amendment is called for.
6. The above clarification may be brought to the notice of all officers.

SC : Tips collected by hotel from customers and paid to employees couldn't be taxable as salary


Issue
"Whether tips collected by a hotel from customers and paid to employees could be chargeable as salary in hands of employees?"
The Supreme Court held as under-
(1)   Section 15 of the Income-tax Act which talks about salaries provides that there should be a vested right in an employee to claim any salary from an employer. (2)   Tips being purely voluntary amounts that may or may not be paid by customers for services rendered to them would not fall under Section 15 as there is no vested right in the employee to claim any amount of tip from his employer. (3)   Further, the said section provides that salary paid or allowed must have reference to contract of employment, i.e., an amount paid under contract of employment could only be treated as salary. (4)   In the instant case, the amount of tip paid by the employer to the employees had no reference to the contract of employment at all. Tips were received by the employer in a fiduciary capacity as trustee for payments that were received from customers which it disburse to its employees for service rendered to the customer. (5)   Hence, tips so disbursed to employees couldn't be chargeable to tax as salary.

No penalty on ‘Aishwarya Rai’ for TDS default if she relied on her CA’s advice [2016] 68taxmann.com 324 (Mumbai - Trib.)



Facts

a) Assessee (Aishwarya Rai Bachchan) made payment of US $ 77,500 to a non-resident for development of website without deducting TDS under Section 195.

b) The Assessing Officer (AO) observed that payment made for development of website would fall within the meaning of 'fees for technical services' as per Explanation 2 to Section 9(1)(vii). Therefore, payment so made was taxable in India in hands of non-resident and, hence, assessee had made default for not deducting TDS while making such payment. Consequently, the AO imposed penalty under section 271C for not deducting the TDS.

c) Assessee submitted that she had not deducted TDS by relying upon advice of her CA. Therefore, penalty shouldn’t be imposed as there was no mala fide intension on her part.

d) CIT(A) confirmed the order of AO. Aggrieved by the order of CIT(A), assessee filed the instant appeal before the tribunal.

The tribunal held in favour of assessee as under-
1) Section 273B provides that no penalty under section 271C should be imposed if assessee proves that there was a reasonable cause for failure to deduct TDS.

 2) It is a well-accepted fact that every citizen of the country is neither fully aware of nor is expected to know the technicalities of the Income Tax Act. Therefore, for discharging their statutory duties and obligations, they take assistance and advice of professionals who are well acquainted with the statutory provisions.

 3) In the instant case, assessee's CA had issued a certificate opining that tax was not required to be deducted at source on said remittance. Therefore, assessee under a bonafide belief didn’t deduct TDS while making such remittance.

 4) Therefore, failure on the part of the assessee to deduct tax at source was due to a reasonable cause. Hence, no penalty under Section 271C should be imposed-

 [2016] 68taxmann.com 324 (Mumbai - Trib.)

26 April 2016

Service tax date extension

GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE
CENTRAL BOARD OF EXCISE AND CUSTOMS
SERVICE TAX WING
NEW DELHI

ORDER NO

1/2016-Service Tax, Dated: April 25, 2016

In exercise of the powers conferred by sub-rule (4) of rule 7 of the Service Tax Rules, 1994, the Central Board of Excise & Customs hereby extends the date of submission of the Form ST-3 for the period from 1st October 2015 to 31st March 2016, from 25th April 2016 to 29th April 2016.

The circumstances of a special nature, which have given rise to this extension of time, are as follows:

"Difficulties have been faced by assessees in accessing the ACES application on 25th April 2016"

F.No.137/99/2011-Service Tax

(Rajeev Yadav)
Director (Service Tax)
Central Board of Excise and Customs

25 April 2016

Due date of filing ST-3 returns extended to 29th April from 25th

Govt extends the date of filing ST-3 returns to 29th April from 25th due to difficulties faced by taxpayers in ACES application

24 April 2016

Restores Reverse Charge on Senior Advocates

Finance Minister restores "reverse charge" for service tax on Senior Advocates

by CA Bimal Jain

 

The impasse over levying service tax on Senior Advocates seems to have been resolved. According to our sources, Finance Minister Arun Jaitley has restored the "reverse charge" mechanism when it comes to service tax on senior advocates.

Speaking to Bar & Bench, SCBA President Dushyant Dave said,

"I believe the Finance Minister has restored the "reverse charge" position. And if the sources are correct, I would like to personally thank the Finance Minister Arun Jaitley on behalf of the Bar and the fraternity of Senior Advocates for this clarification."

With this clarification from the Finance Minister, Senior Advocates like other advocates and law firms would now be covered under reverse charge mechanism i.e. the clients would deposit the tax with government directly.

In this year's Budget, Finance Minister Jaitley had decided to tax the services offered by senior advocates to an advocate or a law firm on a forward charge basis. This meant that the senior counsel would have to collect the tax (at the rate of 14 per cent) and deposit this with the authorities.

As expected, the provisions were immediately challenged in different courts; the Gujarat High Court had granted a stay, followed by a similar direction from the Delhi High Court.

Extension of Time Limit-ED-Jewellery

Extension of time limit for taking Central Excise registration by an establishment of Jeweller and payment of Excise Duty by Assessee Jeweller.
The Ministry of Finance vide Circular No. 1026/14/2016-CX dated April 23, 2016 has further extended the time limit for taking Central Excise registration of an establishment by jewellers up to July 1, 2016 which was earlier 60 days from March 1, 2016. Also, Assessee jeweller may pay Excise Duty of March, 2016 to May, 2016 with Excise duty of June, 2016.

23 April 2016

Excise duty on Jewellery industry

Institute of Chartered accountant has published a book on excise duty on Jewellery industry. Which answers 105 questions on excise law. It also includes format of records and documents to be maintained. It can be downloaded from following link
http://icai.ind.in/newsletter/lt.php?c=627&m=364&nl=1707&s=2029b9226f3ef6655f1f5e7d142f39fb&lid=27685&l=-http--ucanapply.s3.amazonaws.com/icai/download/CELP_Jewellery%20sector_final_29.3.pdf

19 April 2016

MCA Waives Addl Penalty

MCA waives off additional fee on e-forms due for filing from 25-03-2016 to 30-04-2016
April 14, 2016

SECTION 398 OF THE COMPANIES ACT, 2013 - PROVISIONS RELATING TO FILING OF APPLICATIONS, DOCUMENTS, INSPECTION, ETC., IN ELECTRONIC FORM - RELAXATION OF ADDITIONAL FEES AND EXTENSION OF LAST DATE OF FILING OF VARIOUS E-FORMS UNDER COMPANIES ACT

GENERAL CIRCULAR NO.3/2016 [F.NO.01/34/2013 CL-V], DATED 12-4-2016

This Ministry has launched V2R2 on 28th March, 2016, downtime was given to Infosys from 25th March, 2016 to 27th March, 2016. Since the launch of the system, a number of stakeholders have faced issues and representations have been received from stakeholders to resolve the issues including, for allowing waiver of additional fee till the new system stabilizes.

2. In view of the above, it has been decided to relax the additional fee payable on e-forms which are due for filing by companies between 25th March, 2016 to 30th April, 2016 as one time waiver of additional fee and it is also clarified to stakeholders that if such due e-forms are filed after 10-5-2016, no such relaxation shall be allowed.

3. This issues with the approval of the Competent Authority.

Empanelment of Concurrent Auditors

Empanelment of Concurrent Auditors / Revenue Auditors for Bank of Maharashtra. BANK OF MAHARASHTRA invites applications from practicing firm...