Major changes in Income Tax Returns

Major changes in Income Tax Returns this year are as under:

1. All taxpayers filing E-Returns will have to compulsorily update correct mobile number and E- Mail ID's. Otherwise there will be login issues before uploading of return on income tax Depts Website.

2. Now onwards Income Tax Refund will be issued directly in the bank account of the taxpayer through ECS only, cheques are discontinued. Therefore at most care should be taken while mentioning Bank Account Number and IFSC Code in the income tax returns.

3. From this year while claiming TDS in Income Tax return facility has been given to carry forward the TDS of previous year and brought forward TDS to next year. Due to this reconciliation of TDS claimed on Income and total available TDS as per Form 26 can be made. Tax payers which follow cash system of accounting will be benefited, like Doctors, Advocates, CAs and other professionals.

4. As per newly inserted Section 87A if annual income of the taxpayer is up to Rs. 5,00,000/- then Tax relief of maximum of Rs. 2,000/- is given. For claiming this relief separate space has been inserted in the return.

5. As per newly inserted Section 80EE if taxpayer has purchased house up to Rs. 40 Lakh and taken housing loan of Rs. 25 Lakh then taxpayer can claim deduction of interest up to Rs. 1 Lakh. For claiming this deduction separate space has been inserted in the return.

6. If income of the taxpayer is more than Rs. 1 crore then surcharge of 10% is applicable. For this separate space has been inserted in the return.

7. All salaries taxpayers will now have to give now separate details of LTA (Leave Travel Allowance) and HRA (House Rent Allowance) and other allowances separately. This will help Govt. to track proper claim of such deductions, recent HRA and LTA fallacious claimed by some MPs and Govt. taxpayers may have forced for such changes.

8. From this year the details of short and long term capital gain will have to be given in three parts viz.

a) sale of plot / flat

b) sale of STT paid shares and mutual funds

c) sale of other assets.

Further in case of sale of land or building Stamp Duty Value will have to be mentioned. Further if taxpayer is availing exemption under capital gains then value of newly purchased asset, date of acquisition of the asset and if invested in capital gain account then its details will have to be mentioned.

9. Corporate or LLP assessee will have to mention Corporate Identification Number or LLP Identification Number. Further Director or Designated Partner Identification Number will have to be mentioned. This will help in cross check of information with other legal departments by income tax dept or visa a versa.

10. If assessee carrying on business is taking deduction of bad debts of more than Rs. 1 Lakh of single person, then his PAN will have to be mentioned.

11. As per newly inserted section 43 CA if, taxpayer have sold other than capital assets below stamp duty value (eg. builders / developers) then the difference between the two will be considered as deemed income of the assessee and tax will have to be paid on it. For this separate space has been inserted in the return.

12. If there is more than one owner of the house then, while mentioning details in the schedule of Income from House Property the percentage of co ownership will have to be given.

13. From this year e-filing of wealth tax return is compulsory and in this return the details of all wealth whether taxable or not, will have to be given in depth.

Multipurpose Empanelment Form (MEF)

Multipurpose Empanelment Form (MEF) for the year 2014-15 has been hosted on www.meficai.org.
Last date for online submission of MEF/ Bank Audit form is 4th August, 2014.

Tax Audit limit for a Financial Year

The Council of the Institute at its 331st meeting held in February, 2014 decided to increase the specified number of tax audits from 45 to 60 and an Announcement dated 11.2.2014 in this regard was hosted on the website of the Institute. The Council subsequently at its 333rd meeting held in May, 2014 decided that the specified limit of 60 would relate to an assessment year as against the existing stipulation of a financial year.
In view of the aforesaid decisions of the Council, the existing Para 6 of Chapter VI of the Council Guidelines No. 1-CA(7)/02/2008 dated 8th August, 2008 as contained in Appendix No. (34) to the Chartered Accountants Act, 1949 stands modified as under:-
1. In para 6.1 (a) and (b), the figure “45” pertaining to specified number of tax audit assignment has been substituted by the figure “60”.
2. In para 6.0 and 6.1, the words “in a financial year” have been substituted by the words “relating to an assessment year”.
3. In para 6.1.6, the words “in each financial year” have been substituted by the words “relating to each assessment year”.
As already announced the revised limit of 60 tax audits would be applicable w.e.f. 1st April, 2014. The above announcement is published for information of the members at large.

(T. Karthikeyan)

MCA extend last date for filing DPT4 without additional fee upto August 30,2014

MCA extend last date for filing DPT4 without additional fee upto August 30,2014

CBDT releases E-filing Utility of ITR-5 for AY 2014-15

After Long Wait CBDT has Finally Released ITR 5 which is applicable for Income Tax Return (ITR) of firms, AOPs, BOIs and LLPs for Assessment year 2014-15. CBDT has Released Java Utility of ITR-5 and we expect Excel Utility also to be released soon.

The Recent Clarifications issued by MCA on 25th June 2014

The Recent Clarifications issued by MCA on 25th June 2014 and Notification is reproduced below for your ready reference:

1. General Circular no. 24/2014 :

In continuation of the General circular No. 20/2013 dated 2711212073, it is clarified that the shares held by a company in another company in a 'fiduciary capacity' shall not be counted for the purpose of determining the relationship of 'associate company' under section 2(6) of the Companies Act, 2013.

2. General Circular no. 23/2014 :

it is clarified that there is no bar in the new Act for a company incorporated outside India to incorporate a subsidiary either as a public company or a private company. An existing company, being a subsidiary of a company incorporated outside India, registered under the Companies Act, 1956, either as private company or a public company by virtue of section 4(7) of that Act, will continue as a private company or public company as the case may be, without any change in the incorporation status of such company.

3. General Circular no. 22/2014 : 

It is, clarilied that Form MGT-7 shall not apply to annual returns in respect of companies whose financial year ended on or before 1st April, 2014 and for annual returns pertaining to earlier years. These companies may file their returns in the relevant Form applicable under the Companies Act, 1956. 

It is clarified that until the requisite fee is specified by companies, inspections could be allowed wlthout lely of fee.

4. Notification : Companies (Management and Administration) Amendment Rules, 2014. 

In the Companies (Management and Administration) Rules, 2014, in rule 20,

(i) in sub-rule (1), the following shall be inserted, namely:-"Provided that the Company may provide the facillty referred to in this sub rule on or before 1st Day of January 2015.

(ii) in sub-rule (3), for the words "which opts to provide", the words "which

provides" shall be substituted.

Govt extends excise duty sops for capital goods & auto sector for six more months

  Govt extends excise duty sops for capital goods & auto sector for six more months

[TO BE PUBLISHED IN PART II, SECTION 3, SUB-SECTION (i) OF THE GAZETTE OF INDIA, EXTRAORDINARY]

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(DEPARTMENT OF REVENUE)

 

Notification No. 06/2014-Central Excise

 

New Delhi, the 25th June, 2014

            G.S.R.     (E).- In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendment in the notification of the Government of India, in the Ministry of Finance (Department of Revenue), No. 12/2012-Central Excise, dated the 17th March, 2012, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 163(E), dated the 17th March, 2012, namely:-

            In the said notification, in the opening paragraph, in the second proviso, for the figures, letters and words “30th day of June, 2014”, the figures, letters and words “31st day of December 2014” shall be substituted.

 

 

[F.No. 354/85/2014-TRU]

(Akshay Joshi)

Under Secretary to the Government of India

e Wealth Tax Return Mandatory

WEALTH-TAX (FIRST AMENDMENT) RULES, 2014 - SUBSTITUTION OF RULE 3 AND INSERTION OF FORM BB

NOTIFICATION NO.32/2014 [F.NO.143/1/2014-TPL]/SO 1576(E), DATED 23-6-2014

In exercise of the powers conferred by clause (ba) and clause (bb) of sub-section (2) of section 46 read with section 14A and section 14B of the Wealth-tax Act, 1957 (27 of 1957), the Central Board of Direct Taxes hereby makes the following rules further to amend the Wealth-tax Rules, 1957, namely:—

1. (1) These rules may be called the Wealth-tax (First Amendment) Rules, 2014.

(2) They shall come into force on the date of their publication in the Official Gazette.

2. In the Wealth-tax Rules, 1957 (hereinafter referred to as the "said rules"),—

(i) for rule 3, the following rule shall be substituted, namely:—

"3. FORM OF RETURN OF NET WEALTH.—(1) The return of net wealth referred to in section 14 shall—

(a)		in respect of assessment year 2013-14 and earlier assessment years in the case of individuals, Hindu undivided families and companies, be in Form BA and shall be verified in the manner specified therein.
(b)		in respect of the assessment year 2014-15 and any other subsequent assessment year in the case of individuals, Hindu undivided families and companies be in Form BB and shall be verified in the manner specified therein.

(2) Subject to the provisions of sub-rule (3), for the assessment year 2014-15 and any other subsequent assessment year, the return of net wealth referred to in sub-rule (1) shall be furnished electronically under digital signature.

(3) In case of individual or Hindu undivided family to whom the provisions of section 44AB of the Income-tax Act, 1961 (43 of 1961) are not applicable, the return of net wealth referred to in sub-rule (1) may be furnished for assessment year 2014-15 in a paper form.

(4) The return of net wealth required to be furnished in Form BB shall not be accompanied by a statement showing the computation of the tax payable on the basis of the return, or proof of the tax and interest paid, or any document or copy of any account or form of report of valuation by registered valuer required to be attached with the return of net wealth under any provisions of the Act.

(5) The Director General of Income-tax (Systems) shall specify the procedures, formats and standards for ensuring secure capture and transmission of data and shall also be responsible for evolving and implementing appropriate security, archival and retrieval policies in relation to furnishing the returns in the manners specified in sub-rule (2)."

3. In the said rules, in Appendix, after Form BA, the following Form shall be inserted; namely :—

FORM BB RETURN OF NET WET WEALTH [See rule 3(1)(b) of Wealth-tax Rules, 1957]

Chapter XII, section 185 Shall not apply to Private companies

Proposed notification includes: Relaxation given for deposits from shareholders. Provisions Shall not apply to private companies having 50 or less number of members if they accept monies from their members not exceeding twenty five per cent of aggregate of the paid up capital and free reserves or one hundred per cent of the paid up capital whichever is lower.

Private limited companies limit of 20 audits not 2 apply

Chapter XII, section 185 Shall not apply to Private companies - (a) which have borrowings from banks or financial institutions or any bodies corporate not more than twice of their paid up share capital or Rs. 50 crore, whichever is lower;  and   (b) in whose share capital no other body corporate has invested any money”.

SECTION 143(3)(i) OF THE COMPANIES ACT 2013 AND THE RELATED RULES 20-06-2014

APPLICABILITY OF THE PROVISIONS OF SECTION 143(3)(i) OF THE COMPANIES ACT 2013 AND THE RELATED RULES
20-06-2014

Section 143(3)(i) of the Companies Act 2013 requires the auditors of the companies to report as whether the company has adequate internal financial controls system in place and the operating effectiveness of such controls.
The Council of the Institute of Chartered Accountants of India, at its adjourned 333rd meeting held on 18th June 2014, considered the issue of applicability of the provisions of sections 143(3)(i) of the Companies Act 2013 and the related Rules to the audits of the periods beginning on or before 31st March 2014.
The Council noted that the sections 143(3)(i) had come into force in respect of financial years beginning on or after 1st April 2014.  The Council was of the view that the provisions of sections 143(3)(i) of the Companies Act 2013 applied to the auditors appointed under the Companies Act 2013 to audit the financial statements for the year beginning on or after 1st April 2014.  As a corollary, the requirements of these sections and related Rules would not apply to audits of financial statements of the periods beginning on or before 31st March 2014, even if the audits therefor were actually carried out and auditor’s report thereon issued on or after 1st April 2014.   These would continue to be done as per the requirements of the Companies Act 1956.
The Council also decided that as a corollary, the provisions of section 143(3)(i) of the Companies Act 2013 would apply to the audits of the financial year beginning on or after 1st April 2014.

This Announcement has been issued by the President, ICAI under the authority of the Council of the Institute of Chartered Accountants of India.

Mobile mandatory by ITD

From today ITD made mandatory updation of mobile no and email id of all assessees to make website more secure. All assessees to update their credentials this will be used for recreation of passwords in case it is misplaced or forgotten. Information from CPC call centre password regeneration request will be sent on registered new email id

Annual Return-FLA

Date: Jun 18, 2014 Annual Return on Foreign Liabilities and Assets Reporting by Indian Companies – Revised format RBI/2013-14/646 A .P.(DIR Series) Circular No. 145 June 18, 2014 To All Category - I Authorised Dealer Banks Madam / Sir, Annual Return on Foreign Liabilities and Assets Reporting by Indian Companies – Revised format Attention of the Authorised Dealer Category – I banks is invited to A.P. (DIR Series) Circular No.133 dated June 20, 2012 which stipulated that all Indian companies which have received FDI and/or made FDI abroad in the previous year(s) including the current year, should file the annual return on Foreign Liabilities and Assets (FLA) in the soft form to the Reserve Bank by July 15 every year. 2. In order to collect information on Indian companies' Outward Foreign Affiliated Trade Statistics (FATS) as per the multi-agency global 'Manual on Statistics of International Trade in Services', the FLA return has been modified marginally and is made available on the RBI website (www.rbi.org.in → Forms category → FEMA Forms) along with the related FAQs (www.rbi.org.in → FAQs category → Foreign Exchange). 3. Reserve Bank has since amended the subject Regulations accordingly through the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) (Eighth Amendment) Regulations, 2014 which have been notified vide Notification No. FEMA.307/2014-RB dated May 26, 2014, vide G.S.R. No. 400(E) dated June 12, 2014. 4. The directions contained in this circular have been issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and is without prejudice to permissions / approvals, if any, required under any other law. Yours faithfully, (J. K. Pandey) General Manager - Officer-in-Charge  Top

© Reserve Bank of India. All Rights Reserved.

TARC Report

 First Report Of The Tax Administration Reform Commission

It may be recalled that the Tax Administration Reform Commission, headed by Dr. Parthasarathi Shome, was set up in August 2013 to suggest core reforms to the tax administration set-up in the Country. The TARC has now issued a report dated 30.05.2014 called the "First Report of the Tax Administration Reform Commission (TARC)". The said report makes several critical and far-reaching suggestions which are intended to radically change the working of the Income-tax and other Revenue departments.

One of the important recommendations is that the department should treat the taxpayer as a "customer" and have "customer focus" in its attitude, which is totally lacking at present. One of the important "fault lines" identified by the TARC is that there is extreme "risk aversion" amongst the officials with the result that it leads to infructuous tax demands and the filing of frivolous appeals. The TARC has also come down strongly on the rude and arbitrary behaviour of officers and their total lack of accountability. It has noted with regret that taxpayers are totally helplessness against such an attitude and this leads to non-compliance of tax laws.

It may be noted that several recent judgements such as Sairang Developers (Bom High Court), Bharti Airtel (ITAT Delhi) &Growel Energy (ITAT Mumbai) bear out the reality of what the TARC has stated.

Applicability of PAN Requirement for Foreign National

Applicability of PAN Requirement for Foreign National

Ministry has issued a circular dated 10th June, 2014 clarifying that foreign nationals, who are subscribers/promoters of a company are not required to furnish their PAN details, in case they are not allotted a PAN. They may provide a declaration instead in the prescribed proforma.

The corresponding notifications and circulars are available on the Ministry’s website at www.mca.gov.in.

Ministry of Corporate Affairs
13-June-2014 13:00 IST

Sale of Malba (Scrap) on demolition of structure thereon is a Capital Gain

Sale of Malba (Scrap) on demolition of structure thereon is a Capital Gain and not income from other sources, held by High court of P. & H. in the case of CIT, Jalandhar V. Ribu Saggi. The 'a' sold land and malba after demolition of structure. AO treated sale of malba as income from other sources. It was held by HC that there was extinguishment of right of the assessee, in superstructure leading to transfer of the super structure, within the meaning of Sec. 2(47). Capital gain was to be computed by deducting indexed cost of structure from sale value of malba. In the same case capital gain on sale of land was computed by under estimating Fair market value of land as on 1.4.1981 at Rs. 21000/- per Marla only, by AO, Tribunal directed to take FMV at Rs. 125000/- per Marla, after considering valuation by DVO and valuation got done by 'a'. HC held that valuation of land is question of fact based on material on record and there arise no question of law. Hence upheld the order of Tribunal to value FMV as on 1.4.81 at Rs. 125000/- per Marla. [2014] 45
taxmann.com 371
CA. Vinay Mittal, Ghaziabad

Sec 7 clarification about foreign national

SECTION 7 OF THE COMPANIES ACT, 2013 - INCORPORATION OF COMPANY - APPLICABILITY OF PAN REQUIREMENT FOR FOREIGN NATIONALS
GENERAL CIRCULAR NO.16/2014[F.NO.01/12/2013 CL-V], 2014- 06 -10
In continuation of the General Circular No. 12/2014 dated 22.05.2014 regarding the above subject, it is clarified that the provisions of the said Circular are applicable to a Foreign National who is a subscriber/promoter at the time of incorporation of the Company.
2. In case the said subscriber/promoter, does not possess Permanent Account Number (PAN), he/she shall furnish a declaration in the prescribed proforma, as an attachment to the Incorporation Form (INC-7).
3. Further, it is clarified that, in case of a Resident Director of the proposed company he/she shall be required to submit PAN details at the time of incorporation.
4. This issue with the approval of the Competent Authority.
Undertaking
I. . . . . . . . . . . . . (name) . . . . . . . . . . . . ., son of . . . . . . . . . . . . . (father's name) . . . . . . . . . . . ., citizen of . . . . . . . . . . . . . (nationality) R/o (Address) . . . . . . . . . . . . . having passport No. . . . . . . . . . . . . . (passport Number) . . . . . . . . . . . . . hereby declare as under:
(i)   That I am not required to obtain Income Tax Permanent Account Number (PAN) under the provisions of Income Tax Act, 1961;
(ii)   That in view of the above I have not been issued any PAN; and
(iii)   That I undertake to furnish to the Registrar of Companies (mention jurisdiction) details of my PAN as soon as a Permanent Account Number is allotted to me.
Date:  
Place: (Signature)
Name of the Person
■■

Update in ITR form

FYI - Please find updates in the ITR form of Financial year 2013-14 (AY 14-15) as under:

1. There are no refund by Cheque and only e-refund will be allowed

2. Claim of TDS/TCS credit of earlier years - Hence if we don't have sufficient income we can carry forward the credit benefit.

3. CIN/LLPIN in ITR has to be filled by Company/LLP

4. Buy back of shares must be reported in the ITR by CHC

5. PAN of Debtors has to be provided if the assessee is claimed Bad debts

6. In Capital gain Computation

- Details U/s. 50 C is required to be reported
- Sale of securities by FII's

7. Gains U/s. 43CA under PGBP

8. Special income tax Return has to be shown separately

9. Payment details to Non-residents required to be reported in ITR

10. Changes in ITR5/7

- ITR 5 includes Private discretionary trust
- In ITR 7 following details has to be reported:

a. Registration No. & Registration Authority
b. Accumulation of Income details
c. Voluntary contribution like whether from foreign or anonymous

11. Additional details U/s. 36/37

12. Transactions with Cyprus has to be reported if any.

Changes in tax returns

Now in the Income tax return form it will be necessary to show Property's

guideline value and transaction value separately U/s 50C

Now builders and colonizers will also have to show amount of difference in
property sold by them at less than guideline value U/s 43CA

Earlier State Govt. Undertakings used to save tax by making payment of
royalty, fees, charges, licence fee to its own State Government, now U/s
40(a) (iib) they are not allowed any deduction of such expenses, thereofre

in the ITR FORMS such payments will have to be sepaprately shown for
disallowance.
Now credit of unused TDS can be carried forward and brought forward if
the corresponding income is not taxable in the current year.

Now charitable and religious trust will have to give break up of corpus and
non corpus donation from local and foreign nations.
In case of bad debts exceeding 1 Lakh PAN No. will have to be given.

Payments to Non Residents will have to be shown separately by way of Royalty, Commission, Interest, Fees etc. So that it will be checked that Withholding tax U/s 195 has been deducted or not ?

Cost Inflation Index is 1024 for this year

Cost Inflation Index for calculation of Capital Gains for FY 2014-15 is 1024. Notification 31/2014 [F No 142/3/2014-TPL] of  11-6-2014.

Maharashtra BUDGET

The Maharashtra BUDGET for 2014-2015 is announced today 5th June, 2014 and the main tax proposals in respect of Maharashtra VAT and Profession Tax are -
Registration limit increased to 10 lakhs
VAT Audit limit raised to 1 crore from FY 2013-2014
Late Fee reduced to Rs.2,000/- for late upto 1 month in filing Return
Pending Returns can be filed with Tax, interest and Late Fee of Rs.1,000/-.
Retailer composition @1% of total turnover or @1.5% of taxable turnover
No 30(4) penal interest if additional demand as audit or investigation is less than 10% of tax paid with returns.
Rate of Tax on Cotton reduced to 2%
Profession Tax limit for salaried persons increased to Rs.7,500/-