COMPARISON OF TDS AND TCS REQUIREMENTS IN OLD AND NEW FORM NO. 3CD

COMPARISON OF TDS AND TCS REQUIREMENTS
IN OLD AND NEW FORM NO. 3CD AS REQUIRED
FOR TAX AUDIT U/s 44AB OF THE INCOME TAX ACT

Now Chartered Accountants will have to verify and certify details of TDS and TCS in a very elaborative manner and will have to check TDS/TCS (returns) statements of each quarter in detail.

(1) In Old form No. 3CD:- 27(a) :- (i) complied with all TDS obligations or not as per Chapter XVII-B, 
Yes/No 
(ii) earlier there was no need to inform about non compliance of TCS provisions.

(1) In New Form No. 3CD:- 34(a):- Now section wise details of TDS and TCS are required to be given.

(2) In Old form No. 3CD:- Show amount of Tax deductible and not deducted at all

(2) In New Form No. 3CD:- Show Section wise Gross amount on which tax was required to be deducted or collected

(3) In Old form No. 3CD:- Give amount and details of shortfall in TDS deducted 

(3) In New Form No. 3CD:- (i)Give Sectionwise gross amount on which tax was deducted or collected at lesser rate.

(ii) Give sectionwise amount of TDS and TCS deducted or collected at lesser rate.

(4) In Old form No. 3CD:- Give amount and details of TDS deducted late

(4) In New form No. 3CD:- Give amount and details of Tax deducted but not paid

(5) In New Form No. 3CD:-

(i) Give section wise total amount of payments or receipts, e.g. give gross amount of interest other than interest on securities, gross payment of freight, etc., even if liable to TDS/TCS or not Sec. 192,193, 194, 194A, 194B, 194BB, 194C, 194D, 194E, 194H, 194I, 194IA, 194J, 195, 206C(1), 206C(1C), 206C(1D). However disallowance U/s 192& 194IA will become applicable from A.Y. 2015-16. 
Disallowance U/s 40(a)(ia) presently covers Sec. 193, 194A, 194H, 194I, 194J, 194C, 195(40a-i).

(ii) Give Section wise gross amount on which tax was required to be deducted or collected.

(iii) Give sectionwise gross amount on which tax was deducted or collected.

(iv) Give Sectionwise gross amount on which TDS/TCS was deducted or collected at specified rate.

(v) Give sectionwise amount of TDS and TCS at specified rate.

(6) In New Form No. 3CD:- Details of TDS statement filed:-

(i) If TDS/TCS statement filed in prescribed time then no need to give information required in 34(b).

(ii) If TDS/TCS statement not filed within prescribed time then give due date of furnishing, give date of furnishing if furnished in time. 

(iii) There seems controversy in para 34(b), that, if TDS/TCS statement is not filed within prescribed time then give information Whether statement of TDS/TCS contains information about all transactions which are required to be reported. And if TDS/TCS statement filed within prescribed time then there is no need to give information that TDS/TCS statement contains all required information. If TDS statement is not filed in time then information will also have to be furnished regarding form No. 15G/15H/27C and payment to transporters, not incorporated in statement. It will be difficult for bank auditors and for voluminous payment to transporters etc.

(7) In New Form No. 3CD:- Amount of Interest payable and paid:-

34.(c) If liable to pay interest U/s 201(1A)/206C(7) on delay payment or deduction/collection of TDS/TCS give amount of such interest payable .
(ii) Also give amount of interest paid.

Complied by:-
CA RAJESH MEHTA, INDORE

Old 3CD withdrawn

Department withdraws old utility of form 3CD. Any form 3CD to be uploaded will be in new utility which will be made available.

Major changes in new 3CD

Major changes in new 3CD

1. Particulars of registration under excise, vat, iec, service tax etc to be given
2. Location(s) (address(s)) of keeping books of accounts to be given
3. Particulars of sale of Land/Building less than Stamp value to be given
4. Comparison of amount debited vis a vis amount admissible on account of various deductions to be given
5. Detailed information to be given on amount debited to P & L a/c of Capital Exp, Personal Exp. ADVERTISEMENT
6. Details on TDS deducted not deposited or not deducted u/s 40(a) Non resident
7. Name of payee whose TDS not deposited, deducted to be given u/s 40(a)(ia)
8. Amount to be profit u/s 40A(3A) to be given
9. Modavt=Cenvat
10. (28) Whether receive shares below fair value u/s 56(2)(viia)- How it is possible for CA? ???
11. Whether assessee receive security premium taxable u/s 56(2)(viib)
12. Detailed info on TDS/TCS deducted section wise to be given 
13. Late filing of TDS/TCS return 
14. Interest Payable u/s 201(1A) and 206C(7)
15. Audit under Service tax to be reported 
16. Demand/Refund raised under any other law during the PY to be reported

Format of Tax Audit changed

Format of Tax audit report revised vide notification no 33 dated 25 07 14.

Form 3CA, 3CB & 3CD of Income Tax substitute vide Notification S.O. 1902 (E) dated 25th July, 2014 

http://www.taxindiaonline.com/RC2/pdfdocs/wnew/it14not033.pdf

S. 271(1)(c) penalty

CIT vs. M/s Nayan Builders and Developers (Bombay High Court)

Mere admission of Appeal by High Court sufficient to disbar s. 271(1)(c) penalty

This Appeal cannot be entertained as it does not raise any substantial question of law. The imposition of penalty was found not to be justified and the Appeal was allowed. As a proof that the penalty was debatable and arguable issue, the Tribunal referred to the order on Assessee’s Appeal in Quantum proceedings and the substantial questions of law which have been framed therein. We have also perused that order dated 27.09.2010 admitting Income Tax Appeal No.2368 of 2009. In our view, there was no case made out for imposition of penalty and the same was rightly set aside.
www.itatonline.org

http://mygov.nic.in

 

Ministry of Communications & Information Technology26-July, 2014 15:37 IST

MyGov: A portal for Citizen Engagement towards governance launched

The portal MyGov, a platform that serves as a medium for the people, specially the youth, to connect with the Government actively and facilitates their engagement towards nation's development was launched today. Briefing about the initiative, Shri R.S. Sharma, Secretary of the Department of Electronics and IT said that 'MyGov' empowers people to contribute towards good governance through various tasks and discussions.  MyGov presents an opportunity to the citizens to participate in multiple theme-based discussions and to share their thoughts and ideas with a wide range of people. Citizens can upload documents, case studies, pictures, videos, other work plans etc. on the platform. They can volunteer for various tasks and submit their entries. These tasks would then be reviewed by other members and experts. Once approved, these tasks can be shared by those who completed the task and by other members on MyGov. Every approved task would earn credit points for completed the task. National Informatics Centre (NIC), Department of Electronics and Information Technology would manage the poratal .  Groups and corners are an important part of MyGov. The platform has been divided into various groups namely Clean Ganga, Girl Child Education, Clean India, Skilled India, Digital India, Job Creation. Each group consists of online and on ground tasks that can be taken up the contributors. The objective of each group is to bring about a qualitative change in that sphere through people's participation.  Shri Sharma, the Secretary Electronics and IT said that the platforms launched today – "Discuss" and "Do" – will take feedback from the community and improve on a continuous basis. He said that his department has plan to have a mobile app for mygov.in, wherein while on the move, the citizens will have the flexibility to take pictures from mobile and upload on the forum, report in-context problems and issues etc. He said that this platform may even be extended to act like public audit platform for government projects. For example, citizens giving feedback on status of completed infrastructure projects, on availability of various social sector programs etc, he added. http://mygov.nic.in  **** NCJ  (Release ID :107539)

McA Updates

MCA has issued two very important updates:

• Amendment in the Companies (Management and Administration) Rules
• Companies (Removal of Difficulties) Sixth Order, 2014

The details are given below:

 

Amendment in the Companies (Management and Administration) Rules

 MCA vide notification dated 24th July 2014 has amended the Companies (Management and Administration) Rules 2014 through the Companies (Management and Administration) Second Amendment Rules, 2014. The necessary details of the system are given below:

1. In rule 9, after sub-rule (3), the following proviso shall be inserted, namely:-
2. "Provided that nothing contained in this rule shall apply in relation to a trust which is created, to set up a Mutual Fund or Venture Capital Fund or such other fund as may be approved by the Securities and Exchange Board of India".
3. Text of Rule no 9(3) is given below
4. "9. Declaration in respect of beneficial interest in any shares.-
5. (1) A person whose name is entered in the register of members of a company as the holder of shares in that company but who does not hold the beneficial interest in such shares (hereinafter referred to as ("the registered owner"), shall file with the company, a declaration to that effect in Form No.MGT.4 in duplicate, within a period of thirty days from the date on which his name is entered in the register of members of such company:
6. Provided that where any change occurs in the beneficial interest in such shares, the registered owner shall, within a period of thirty days from the date of such change, make a declaration of such change to the company in Form No.MGT.4 in duplicate.
7. (2) Every person holding and exempted from furnishing declaration or acquiring a beneficial interest in shares of a company not registered in his name (hereinafter referred to as "the beneficial owner") shall file with the company, a declaration disclosing such interest in Form No. MGT.5 in duplicate, within beneficial interest in the shares of the company:
8. Provided that where any change occurs in the beneficial interest in such shares, the beneficial owner shall, within a period of thirty days from the date of such change, make a declaration of such change to the company in Form No.MGT.5 in duplicate.
9. (3) Where any declaration under section 89 is received by the company, the company shall make a note of such declaration in the register of members and shall file, within a period of thirty days from the date of receipt of declaration by it, a return in Form No.MGT.6 with the Registrar in respect of such declaration with fee."
10. in rule 13,-
1. the words "either value or volume of the shares" shall be omitted;
2. the Explanation shall be omitted.
3. Text of Rule no 13 is given below
4. "13. Return of changes in shareholding position of promoters and top ten shareholders.-
5. Every listed company shall file with the Registrar, a return in Form No.MGT.10 along with the fee with respect to changes relating to either increase or decrease of two percent, or more in the shareholding position of promoters and top ten shareholders of the company in each case, either value or volume of the shares, within fifteen days of such change.
6. Explanation.- For the purpose of this sub-rule, the "change" means increase or decrease by two percent or more in the shareholding of each of the promoters and each of the top ten shareholders of the company."
11. In rule 23, in sub-rule (1), for the words "not less than five lakh rupees", the words "not more than five lakh rupees" shall be substituted;
12. Text of Rule no 23 is given below
13. "23. Special Notice.-
14. (1) A special notice required to be given to the company shall be signed, either individually or collectively by such number of members holding not less than one percent of total voting power or holding shares on which an aggregate sum of not less than five lakh rupees has been paid up on the date of the notice."
15. In rule 27, in sub-rule (1) and in the Explanation, for the word "shall", the word "may" shall be substituted.
16. Text of Rule no 27 is given below
17. "27. Maintenance and inspection of document in electronic form.-
18. (1) Every listed company or a company having not less than one thousand shareholders, debenture holders and other security holders, shall maintain its records, as required to be maintained under the Act or rules made there under, in electronic form.
19. Explanation.- For the purposes of this sub-rule, it is hereby clarified that in case of existing companies, data shall be converted from physical mode to electronic mode within six months from the date of notification of provisions of section 120 of the Act."
20. The aforesaid amendment relating to maintenance of records in electronic format comes as major relief to the corporates , who were facing various difficulties in finding solutions for converting their existing data in electronic form. Moreover there were also various confusions relating to the period for which the data needs to be converted.

 

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Companies (Removal of Difficulties) Sixth Order, 2014

MCA has issued the 6th ROD order dated 24th July. The ROD deals with definition of the term "related party" under section 2 of the Companies Act 2013 and provides relief for the difficulty arising due to absence of the word "relative" from certain clause of the definition resulting in disharmonious interpretation. As per the ROD, in section 2 of the Companies Act, 2013, in clause (76), in sub-clause (iv), after the word "manager", the word "or his relative" shall be inserted. Relevant text of the Section 2(76) is given below: 2(76) "related party", with reference to a company, means—

1. a director or his relative;
2. a key managerial personnel or his relative;
3. a firm, in which a director, manager or his relative is a partner;
4. a private company in which a director or manager is a member or director;
5. a public company in which a director or manager is a director or holds along with his relatives, more than two per cent. of its paid-up share capital;
6. any body corporate whose Board of Directors, Managing Director, or manager is accustomed to act in accordance with the advice, directions or instructions of a director or manager;
7. any person on whose advice, directions or instructions a director or manager is accustomed to act:
   
   Provided that nothing in sub-clauses (vi) and (vii) shall apply to the advice, directions or instructions given in a professional capacity;
8. any company which is—
1. a holding, subsidiary or an associate company of such company; or
2. a subsidiary of a holding company to which it is also a subsidiary:
such other person as may be prescribed;

Changes Made in Finance (No.2) Bill,2014

Changes made by Finance (No. 2) Bill, 2014 as passed by the Lok Sabha

The list of changes made in the Finance Bill are as under:

1) Unlisted securities and units of MF transferred between 01-04-14 and 10-07-14 shall be deemed to be long-term capital assets, if held for more than 12 months.

2) Long-term Capital Gains on Units of Mutual Funds transferred between 01-04-14 and 10-07-14 shall be taxable at 10% without indexation.

3) A third proviso has been inserted in Section 92C to provide that where more than one price is determined by the most appropriate method, the arm's length price shall be computed in such manner as may be prescribed. Accordingly, the provisions of first and second proviso (arithmetic mean and tolerable range) shall not apply.

4) Taxpayers can approach Settlement Commission even for pending re-assessment cases.

5) Resident taxp
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Alert on Section 158 of Companies Act,2013

DIN to be mentioned with Director's Signature (Section 158)

Now, Director's name & DIN (Director Identification Number) has to be mentioned with their signature on all the documents to be signed in the capacity of director.

PENALTY: – Company and every officer of the company who is in default or such other person shall be punishable with fine which may extend to Rs. 10,000/- and where the contravention is continuing one, with a further fine which may extend to Rs. 1,000/- for every day after the first during which the contravention continues.

IMMEDIATE ACTIONS TO BE TAKEN:-

One should ensure that DIN is written, wherever he is signing as Director of the Company.

Generally its observed that Directors don't mention DIN even on Papers, Returns, Balance Sheet, Annual Return etc. they are filing with ROC, CLB.

EXTRACT OF SECTION 158 OF THE COMPANIES ACT, 2013

Section 158 – Obligation to indicate Director Identification Number

Every person or company, while furnishing any return, information or particulars as are required to be furnished under this Act, shall mention the Director Identification Number in such return, information or particulars in case such return, information or particulars relate to the director or contain any reference of any director.

Source: Taxguru

Digital library

ICAI Launches digital library

U can download many publications FOC.

Very useful and handy.

http://icaidigitallibrary.org/index.php?option=com_booklibrary&view=all_categories&layout=categories&Itemid=697

Payment Banks and Small Banks

RBI releases Draft Guidelines for Licensing of Payments Banks and Small Banks

The Reserve Bank of India released on its website today, the Draft Guidelines for "Licensing of Payments Banks" and Draft Guidelines for "Licensing of Small Banks". The Reserve Bank has sought views/comments on the draft guidelines from all interested parties and general public. Suggestions and comments on the draft guidelines may be sent by August 28, 2014 to the Chief General Manager, Reserve Bank of India, Department of Banking Operations and Development, Central Office, 13th floor, Central Office Building, Shahid Bhagat Singh Marg, Mumbai-400001 or can be emailed by clicking here. Final guidelines will be issued and the process of inviting applications for setting up of Payments Banks and Small Banks will be initiated after receiving feedback, comments and suggestions on the draft guidelines. Both, payments banks and small banks are "niche" or "differentiated" banks; with the common objective of furthering financial inclusion. While small banks will provide a whole suite of basic banking products, such as, deposits and supply of credit, but in a limited area of operation, payments banks will provide a limited range of products, such as, acceptance of demand deposits and remittances of funds, but will have a widespread network of access points particularly to remote areas, either through their own branch network or through Business Correspondents (BCs) or through networks provided by others. They will add value by adapting technological solutions to lower costs. The entities eligible to set up a Payments Bank include existing non-bank Pre-paid Instrument Issuers (PPIs), Non-Banking Finance Companies (NBFCs), corporate BCs, mobile telephone companies, super-market chains, companies, real sector cooperatives, and public sector entities. The entities eligible to set up a small bank include resident individuals with ten years of experience in banking and finance, companies and societies, NBFCs, Micro Finance Institutions and Local Area Banks. The eligible entities should be "fit and proper" in order to be eligible to promote payments banks and small banks. The Reserve Bank would assess the 'fit and proper' status of the applicants on the basis of their past record of sound credentials and integrity; financial soundness and successful track record of at least five years in running their businesses. The minimum paid up capital requirement of both payments banks and small banks is kept at Rs. 100 crore, of which the promoters' initial minimum contribution will be at least 40 per cent, to be locked in for a period of five years. Shareholding of the promoters should be brought down to 40 per cent within three years, 30 per cent within a period of 10 years, and to 26 per cent within 12 years from the date of commencement of business of the bank. Background The Reserve Bank last came out with a set of guidelines for licensing of new banks in the private sector in February 2013. The process of licensing culminated with the announcement by the Reserve Bank (Press Release dated April 2, 2014) that it would grant "in-principle" approval to two applicants who would set up new banks in the private sector within a period of 18 months. While announcing the decision to grant "in-principle" approval to the two applicants, the Reserve Bank also indicated that going forward, it intends to use the learning experience from this licensing exercise to revise the guidelines appropriately and move to grant licences more regularly. Further, the Reserve Bank would work on a policy of having various categories of "differentiated" bank licences which will allow a wider pool of entrants into banking. Further, in the Union Budget 2014-2015 presented on July 10, 2014, the Hon'ble Finance Minister announced that: "After making suitable changes to current framework, a structure will be put in place for continuous authorization of universal banks in the private sector in the current financial year. RBI will create a framework for licensing small banks and other differentiated banks. Differentiated banks serving niche interests, local area banks, payment banks etc. are contemplated to meet credit and remittance needs of small businesses, unorganized sector, low income households, farmers and migrant work force". Taking into account the above, the draft guidelines on payments banks and small banks as differentiated or restricted banks have been prepared. The Reserve Bank is working on the guidelines for continuous authorisation of universal banks and will come out with these separately. Alpana Killawala Principal Chief General Manager Press Release: 2014-15/121

ection 234E – Odisha High Court Stays Recovery Proceeding

Section 234E – Odisha High Court Stays Recovery Proceeding

Hon'ble Odisha High Court has granted stay on the recovery of Late fee charged Under Section 234E of the Income Tax Act,1961. In Separate cases Hon'ble Bombay, Rajashthan, Kerala and Karnataka High Court has already stayed the Recovery Proceeding U/s. 234E of the Income Tax Act,1961 till the final verdict in the case.

RBI-LRS-Immovable Property Outside India

--

Date: Jul 17, 2014

Liberalised Remittance Scheme (LRS) for resident individuals-Increase in the limit from USD 75,000 to USD 125,000

RBI/2014-15/132 A.P. (DIR Series) Circular No.5 July 17, 2014 To All Category – I Authorised Dealer Banks Madam/ Sir, Liberalised Remittance Scheme (LRS) for resident individuals-Increase in the limit from USD 75,000 to USD 125,000 Attention of Authorised Dealer Category-I (AD Category-I) banks is invited to the guidelines regarding the Liberalised Remittance Scheme (LRS) for Resident Individuals (the Scheme). 2. It was decided vide A.P.(DIR Series) Circular No. 138 dated June 3, 2014, to increase the limit to USD 125,000 per financial year (April-March) from USD 75,000. Accordingly, AD Category –I banks have been allowed to remit up to USD 125,000 per financial year, under the Scheme, for any permitted current or capital account transaction or a combination of both. Further, it is clarified that the Scheme can now be used for acquisition of immovable property outside India. 3. All other terms and conditions mentioned in A.P.(DIR Series) Circular No. 64, dated February 4, 2004, A.P.(DIR Series) Circular No. 24 dated December 20, 2006, A.P.(DIR Series) Circular No.51 dated May 8, 2007, A.P.(DIR Series) Circular No.36 dated April 4, 2008, A.P.(DIR Series) Circular No.17 and 18 both dated September 16, 2011, A.P.(DIR Series) Circular No.106 dated May 23, 2013, A.P.(DIR Series) Circular No.24 dated August 14, 2013 and A.P.(DIR Series) Circular No. 138 dated June 3, 2014, shall remain unchanged. 4. Reserve Bank has since amended the Principal Regulations through the Foreign Exchange Management (Permissible Capital Account Transaction) (Amendment) Regulations, 2014 notified vide Notification No. FEMA 311/2014-RB dated June 24, 2014 c.f. G.S.R. No. 488 (E) dated July 11, 2014. 5. AD-Category I banks may bring the contents of this circular to the notice of their constituents and customers concerned. 6. The directions contained in this Circular have been issued under Section 10(4) and 11(1) of the Foreign Exchange Management Act, 1992 (42 of 1999) and are without prejudice to permissions/approvals, if any, required under any other law. Yours faithfully, (C. D. Srinivasan) Chief General Manager

MCA vide circular no 23/2014 dated 17th July 2014

MCA vide circular no 23/2014 dated 17^th July 2014 has issued various clarifications on one of the most of the argumentative section under the Companies Act 2013 i.e. section 188.

Highlights of the clarifications issued are given below:

Voting by related parties in general meeting

As per second proviso to sub-section (1) of section 188 no member of the company shall vote on a special resolution to approve the contract or arrangement (referred to in the first proviso), if such a member is a related party.
It is clarified that 'related party' referred above has to be construed with reference only to the contract or arrangement for which the said special resolution is being passed. Thus, the term 'related party' in the above context refers only to such related party as may be a related party in the context of the contract or arrangement for which the said special resolution is being passed.
But the above clarification will still not provide any solution to the problem faced by the private companies where the directors and shareholders are generally common and are related to each other.

Applicability of Section 188 to corporate restructuring, amalgamations etc.

It is clarified that transactions arising out of Compromises, Arrangements and Amalgamations dealt with under specific provisions of the Companies Act, 1956/Companies Act, 2013, will not attract the requirements of section 188 of the Companies Act, 2013.

Requirement of fresh approvals for past contracts under Section 188.

A very common issue of debate was related to the status of contracts entered into by companies, after making necessary compliances under Section 297 of the Companies Act, 1956, which already came into effect before the commencement of Section 188 of the Companies Act, 2013. Whether any fresh approval was required under section 188 or not for such contracts?
As per the clarification, no fresh approval will be required for aforesaid mentioned contracts u/s 188 till the expiry of the original term of such contracts. But if any modification in such contract is made on or after 1^st April, 2014, the requirements under section 188 will have to be complied with.

Case Law on TDS Credit

 IN THE ITAT MUMBAI BENCH 'A'

LSG Sky Chef (India) (P.) Ltd.

v.

Deputy Commissioner of Income-tax -5(2), Mumbai*

I.P. BANSAL, JUDICIAL MEMBER
AND SANJAY ARORA, ACCOUNTANT MEMBER

IT Appeal No. 4828 (Mum.) of 2012
[ ASSESSMENT YEAR 2009-10 ]

MARCH  27, 2014 

Section 199, read with section 198, of the Income-tax Act, 1961 - Deduction of tax at source - Credit for tax deducted (Short credit) - Assessment year 2009-10 - Whether Form No. 26AS is a statement generated at end of revenue, and assessee cannot be in any manner held responsible for any discrepancy therein or for non-matching of TDS reflected therein with assessee's claims - Held, yes - Whether assessee, by furnishing TDS certificates bearing full details of tax deducted at source, had discharged primary onus on it towards claiming credit in its respect and, accordingly, Assessing Officer was to be directed to allow assessee credit of tax so deducted - Held, yes [Paras 4.2, 4.3 & 4.4] [In favour of assessee]  

Provident fund (PF) wage ceiling limit increased to Rs 15,000

Provident fund (PF) wage ceiling limit increased to Rs 15,000

 

The finance ministry has approved the proposal of the Employees' Provident Fund Organisation's (EPFO) to raise the monthly wage ceiling to Rs 15,000 (as against the earlier cap of Rs 6,500 per month).

Accordingly, an employee earning monthly wage ceiling up to Rs 15,000 will now be mandatorily required to contribute towards employee provident fund scheme and the employer will also have to make a matching contribution. This move is likely to bring enhanced coverage of large employee population under the social security ambit.

Further, for the convenience of the provident fund subscribers, Employees' Provident Fund Organisation proposes to launch the 'uniform account number' service for contributing members to facilitate portability of provident fund accounts.

 

By - CA VMVS RAO 

Source:

(As per Budget Speech of Mr.Arun Jaitley,Ministry of Finance on July 10,2014 (Point No.40)

Income Tax Update Union Budget 2014-15 (5)- Compensation

Income Tax Update Union Budget 2014-15 (5)
Enhanced compensation to be taxable only upon final order :- Presently compensation awarded in the first instance is chargeable under the head Capital Gains of the previous year in which compensation/consideration or part  thereof, was first received, and enhanced or further enhanced compensation is chargeable in the previous year in which such enhanced amount is received by the assessee, and if such compensation or enhanced compensation is reduced by any court, tribunal or other authority, then previously assessed capital gain shall be recomputed by taking such compensation as reduced by the court,tribunal or other authority.
Now in the budget it is proposed to insert a proviso to Sec. 45(b) so that “any amount of compensation received in pursuance of an interim order of a court, Tribunal or other authority shall be deemed to be income chargeable under the head “Capital Gains” of the previous year in which the final order of such court, Tribunal or other authority is made.
CA. Vinay Mittal, Ghaziabad

Service Tax Update Union Budget 2014-15

Service Tax Update Union Budget 2014-15

Please take care in depositing of Service Tax amount to central Govt.
As per proposed budget
Intt. Rate on delay deposit will be very high,  it is not a welcome step by Central Government
If delay upto 6 months
Rate of intt. Will be 18% ( SSP 15%)
if delay more than 6 months to 1 year
Rate of intt. Will be 24% (SSP 21%)
If delay more than 1 year
Rate of intt. Will be 30% ( SSP 27%) annual simple intt.
SSP=assessee who taxable services less than 60 lacs in a FY.
Rate of intt. Given by govt. on refund 6% pa simple intt.
Srrvice tax on ACCURAL BASIS, Original not receive but pay service tax from own pocket
now we understand position of service provider.

Disallowance U/s 40(a)(ia) restricted to 30% of sums paid

 Union Budget 2014-15  (1)
An Amendment proposed by Budget 2014 :- Disallowance U/s 40(a)(ia) restricted to 30% of sums paid :- Presently any interest, commission, brokerage, rent, royalty, fees for professional or technical services payable to a resident, payments to resident contractor or sub contractor are fully disallowed if tax was deductible on such sums but not deducted or not paid before due date specified U/s 139(1).
     Presently no disallowance U/s 40(a)(ia) is made for non deduction of TDS on payment of salary or directors remuneration or purchase of immovable property (Sec. 194IA).

Now “All expenses” on which tds is deductible and not deducted or deducted but not deposited before due date specified U/s 139(1), then 30% of such  expenses will be disallowed U/s 40(a)(ia), therefore salary and directors remuneration, purchase of immovable property exceeding Rs. 50 Lakh by a builder or colonizer are also covered now and disallowance is restricted to 30%.

 And such disallowed 30% sum will be allowed in the subsequent previous year :- (i) in which such tds has been deducted and deposited or (ii) in the year in which such tds has been deposited, if it was deducted in the previous year but paid after due date specified U/s 139(1).

Deductor can alternatively furnish form No. 26A as required by second proviso to Sec. 40(a)(ia) from the recipient of sum, but it has to be seen that the recipient has filed his/its income tax return within the due date applicable to payer of sum, otherwise it will be disallowed in the this year and will be allowed in the following year, when the recipient has filled his/ its return.

Highlights of Budget for 2014-15

Highlights of Budget for 2014-15

--------------------------------------

* To hike FDI in defence to 49%
* NDA policy to encourage FDI in selective sectors
* Domestic defence mfg sector at nascent stage
* FDI in selected sectors to help larger interest of country
* Plan to enlarge scope of income tax settlement commission
* To provide certainty in tax laws
* Propose changes in transfer pricing rules
* Propose to strengthen authority for advance ruling in tax
* High level panel to interact with industry on indirect tax
* Clarification on tax issues to be given
* Plan law, administrative changes to reduce tax disputes
* Resident tax payer to get facility of advance tax ruling
* Propose changes to resolve ongoing direct tax disputes
* Aim stable, predictable investor-friendly tax regime
* Tax demands worth 4 trln rupee currently under litigation
* GST to result in higher tax mop-up for Centre, states
* Committed to stable, practical tax regime
* All cases of retrospective tax to be studied by CBDT panel
* GST to streamline tax administration
* Tax regime to be investor friendly
* Assure states govt to be more than fair on GST
* Won't ordinarily bring in tax changes retrospectively
* Govt's right for retrospective legislation unquestionable
* Retrospective taxes should be done with caution
* Hope to bring final solution to GST issue in FY15
* Aim to make food subsidy better directed, more inclusive
* Hope to have final solution on GST this yr
* GST debate must come to an end
* To review food, fuel subsidy
* Food, oil subsidy to be more targeted
* Committed to minimum govt, maximum governance
* New urea policy will be formulated
* To constitute expenditure mgmt panel
* No option but to undertake bold steps to enhance econ
* Time has come to revive efficiency of govt spend
* Today's measures are directional
* Must address problem of black money
* Still not out of the woods on inflation
* Seen gradual moderation in WPI inflation recently
* Aim 3.0% fiscal gap in FY17
* Aim 3.6% fiscal gap in FY16
* Accepted FY15 4.1% fiscal deficit target as a challenge
* Reduction in fiscal deficit achieved by spending cuts
* Jaitley: Aim of 4.1% of GDP fisc gap indeed daunting
* Need fisc prudence that will lead to fisc consolidation
* Jaitley: To continue to remain watchful on CAD front
* Must improve tax-GDP ratio
* Need to revive growth in infra, manufacturing sectors
* Non-tax revenue must be increased
* Must reduce wasteful expenditure
* Urgent need to generate more resources for econ
* Tax GDP ratio must be improved
* Steps today start of macro economic stabilisation
* Fisc prudence of paramount importance
* Cannot spend beyond our needs
* Can't leave behind legacy of debt
* Should we be victims of mere populism?
* Fiscal prudence of paramount importance
* Not wise to expect too much from new 45-day govt
* Task before me today is very challenging
* Need to revive growth in mfg, infra sectors
* Econ situation presents a grave challenge
* Won't leave any stone unturned for vibrant, strong India
* Not wise to expect anything major in first budget
* Higher growth is a sine qua non
* Have to ensure anti-poverty plans are well aimed
* Can't be oblivious that large population below poverty line
* Budget is the most comprehensive action plan
Basic tax exemption limit raised
to Rs 2.5 lakh, and Rs 3 lakh for senior citizens (60-plus).

No changes made incorporate or other direct taxes.

Limits under section 80C raised to Rs 1.5 lakh -as indicated in raising the PPF limit to Rs1.5 lakh.

EMI exemption for self-occupied
property raised to Rs 2 lakh.

Companies to get 15 percent investmentallowance for fresh investments above Rs 25 crore.

Foreign institutional investors to
get tax-breaks to entice them to move back from Mauritius. Their incomes will be treated as capital gains - which is 15 percent for short-term gains and zero tax for long-term gains.

Non deduction of TDS disallowance reduced from 100% of expenditure to 30% of expenditure