Case Law on VAT transfer to Service Tax

Interesting Case:

Where VAT has been collected without authority of law and Service tax demand also has been raised for the same period then the VAT Assessing Authority is liable to transfer amount of VAT to Service Tax Department

Idea Cellular Ltd. Vs. Union of India [(2015) 57 taxmann.com 293 (Punjab & Haryana)]

Idea Cellular Limited (the Petitioner) is engaged in the business of cellular services and as a part of its business activated SIM cards. The Assessing Authority collected VAT on the premise that activation of SIM cards was a sale.

The Hon'ble Supreme Court in the case of Bharat Sanchar Nigam Ltd. Vs. Union of India [(2006) 3 STT 245] held that activation of SIM card was a service and not a sale. Accordingly, the Service Tax Department raised demand of Service tax for the period, VAT was already been paid. Thus, the Petitioner approached the Haryana VAT Department for refund of the amount of VAT.

The Hon'ble High Court of Punjab and Haryana held as follows:

·         In terms of the Article 265 of the Constitution where the levy and collection of tax is without authority of law, the State does not have right to receive or retain taxes or monies realised from the Assessee without authority of law;

·         The Service Tax Department has raised a demand for Service tax for the period for which the State of Haryana has levied and collected VAT. In order to avoid double taxation, Haryana Vat Department was directed to forward the amount of VAT collected on activation of SIM cards to the Service Tax Department.

Case Law on Section 234E

234E Fee deleted in the absent of the enabling provisions u/s 200A

The Hon'ble Amritsar bench has given a landmark judgement on the issue of 234E Fee levied prior to June,2015 in the case of Sibia Healthcare Private Limited v./s Dy. Commissioner of Income-tax (TDS), in I.T.A. No.90/Asr/2015 and has deleted the addition-

The Hon'ble Tribunal held as under:-

" in our considered view, the adjustment in respect  of  levy  of  fees  under  section  234E  was  indeed  beyond  the  scope  of permissible  adjustments  contemplated  under  section  200A.  This  intimation  is  an appealable order  under  section  246A(a),  and, therefore, the CIT(A) ought  to have examined  legality  of  the  adjustment  made  under  this intimation  in  the  light  of  the scope of the section 200A. Learned CIT(A) has not done so. He has justified the levy of fees on the basis of the provisions of Section 234E. That is not the issue here. The issue is whether such a levy could be effected in the course of intimation under section  200A.  The  answer  is  clearly  in  negative.  No other  provision  enabling  a demand in respect of this levy has been pointed outto us and it is thus an admitted position that in the absence of the enabling provision under section 200A, no such levy  could  be  effected.  As  intimation  under  section 200A,  raising  a  demand  or directing a refund to the tax deductor, can only bepassed within one year from the end of the financial year within which the related  TDS statement is filed, and as the related TDS statement was filed on 19th February 2014, such a levy could only have been made at best within 31st March 2015. That time has already elapsed and the defect is thus not curable even at this stage. In view of these discussions, as also bearing in mind entirety of the case, the impugned  levy of fees under section 234E is  unsustainable  in  law. We,  therefore,  uphold  the  grievance  of  the  assessee  and delete the impugned levy of fee under section 234E  of the Act. The assessee gets the relief accordingly."

CA Prarthana Jalan

Source: Taxguru

LFAR by Concurrent Auditors

Submission of Long Form Audit Report (LFAR) by Concurrent Auditors

RBI/2014-15/626 DBS.CO.ARS.BC.8/08.91.001/2014-15 June 4, 2015 CMD of Nationalized Banks Chairman SBI MD of Associate Banks of SBI Madam/Dear Sir, Submission of Long Form Audit Report (LFAR) by Concurrent Auditors In terms of enclosure 1 of RBI circular DBS.CO.PP.BC.11/11.01.005/2001-2002 dated April 17, 2002 all the banks were advised, inter alia, as under: LFAR in respect of branch should be addressed by the branch auditors to the Chairman of the bank, concerned with a copy thereof to the Central Statutory Auditors. 2. The above matter has been examined in light of Para B (1) (ii) of Guidelines for Appointment of Statutory Auditors in Public Sector Banks hosted on RBI web site (at link http://www.rbi.org.in/scripts/bs_viewcontent.aspx?Id=946#AN2) which is reproduced below: In respect of branches below the cut-off point, which are subject to concurrent audit by chartered accountants, henceforth, LFARs and other certifications done earlier by SBAs will now be submitted by the concurrent auditors and such branches may not generally be subject to statutory audit. 3. You are advised that henceforth Concurrent Auditors, who are chartered accountants, of branches below the cut-off point will submit LFAR only to the Chairman of the bank. The banks in turn will consolidate/compile all such LFARs submitted by the Concurrent Auditors and submit to Statutory Central Auditor as an internal document of the bank. 4. Please acknowledge receipt. Yours faithfully, (Prabhakar Jha) General Manager

CBDT Clarification on Prosecution of Tax Evaders

Press Information Bureau
Government of India
Ministry of Finance
08-June-2015 18:51 IST

CBDT Clarifies Regarding Prosecution of Tax Evaders;
Effective and Stringent Action only in known and big cases of Tax Evasion to Demonstrate to the Large Number of Compliant Tax Payers that the Tax Laws are just and Fair and to Encourage Voluntary Tax Compliance

It has been noticed that the certain section of media have referred to the Discussion Paper, circulated during the All India Conference of Chief Commissioners and Director Generals of Income Tax held on 25th-26th May 2015, out of context and stated that the Central Board of Direct Taxes (CBDT) has told its officers to go beyond raids and searches to target tax evaders. CBDT clarifies that this is factually not correct. It may be appreciated that the need of the hour is to provide effective deterrence since the soft action in extreme and big cases of tax evasion affects the behaviour of the compliant tax payers. This has been brought out in the latest study conducted by NIPFP. This is the very aspect that was covered by CBDT in the discussion during the All India Annual Conference of senior officers. Effective and stringent action only in known and big cases of tax evasion would go a long way in demonstrating to the large number of compliant tax payers that the tax laws are just and fair and also encourage voluntary tax compliance.

It may be worthwhile to mention here that one of the issues for discussion during the All India Conference of Chief Commissioners and Director Generals of Income Tax was 'Lack of Credible Deterrence through Penalty and Prosecution – Causes and Ways to Improve'. The discussion was within the limited context of cases where action under Section 132 of the IT Act 1961 for search and seizure had been undertaken by the Investigation Division of the Department. These are exceptional cases which are selected for intrusive action after detailed intelligence gathering and due diligence on the basis of credible evidence and are not the norm for routine cases. It may be noted that only 537 searches were conducted in Financial Year 2014-15 in which admitted undisclosed income was to the tune of Rs.10288.05 crore.

In such cases where after intensive fact assessment, the Department undertakes search and seizure action as permissible under the law, mere tax collection does not have deterrence value and these need to be taken to their logical conclusion in terms of levy of penalty and launching of prosecution as per the provisions of the Income Tax Act.

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DSM/KA

Chintan Patel ~Exemptions to Private Limited Companies as per recent MCA notification:

Exemptions to Private Limited Companies as per recent MCA notification:

1.       Holding, associate, subsidiary or fellow subsidiary will not be related party for the purpose of Section 188 (2(76)).

2.       Provision wrt Kind of share capital (Section 43) and voting rights (Section 47) will not apply if articles of private limited company so provides

3.       Number of companies in which auditors can be auditors (20 in number) will not be counted if paid up capital of private company is less than Rs.100 crores (Section 141)

4.       Section 101 to 107 and Section 109 will not apply (notice of general meeting, explanatory statement, proxies etc., which were exempt under Old Act also) if articles so provide

5.       Section 62 – minimum and maximum period for which rights issue should remain open will not be applicable if 90% of members give consent

6.       Section 62- ESOP can be given with Ordinary resolution instead of special resolution

7.       Board resolutions passed under Section 179 are not required to be filed with RoC in MGT 14

8.       Deposit of 1 lakh etc. is not required to be given (Section 160). Entire Section 160 is not applicable

9.       No need to have separate voting on the resolution for appointment of more than 1 director (Section 162)

10.   No approval of shareholders required for matters  under Section 180 (borrowing, security etc.)

11.   Interested director can participate if he/ she has disclosed his interest (Section 184)

12.   Section 185 (loan to director) will not apply if

·         no other body corporate has invested,

·         if borrowing from banks/ financial institution or any body corporate is less than twice paid-up capital or Rs.50 crores whichever is lower and

·         there is no default in repayment of such borrowing

13.   Related party can vote on the resolution (Section 188). Second Proviso will not be applicable

14.   No approval of shareholders etc. required for appointment of managerial personnel of private company and no return needs to be filed with RoC in this regard (Section 196 (4) and 196 (5) will not be applicable)

Non-deposit of Tax Deducted at Source

No. 275/29/2014-IT-(B)

New Delhi, the 1st June, 2015

To,

The CCsIT (CCA)

Subject: Non-deposit of Tax Deducted at Source – regarding. Sir/Madam,

Grievances have been received by the Board from many taxpayers that in their cases the deductor has deducted tax at source from payments made to them in accordance with the provisions of Chapter-XVII of the Income-tax Act, 1961 (hereafter ‘the Act’) but has failed to deposit the same into the Government account leading to denial of credit of such deduction of tax to these taxpayers and consequent raising of demand.

2. As per Section 199 of the Act credit of Tax Deducted at Source is given to the person only if it is paid to the Central Government Account. However, as per Section 205 of the Act the assessee shall not be called upon to pay the tax to the extent tax has been deducted from his income where the tax is deductible at source under the provisions of Chapter- XVII. Thus the Act puts a bar on direct demand against the assessee in such cases and the demand on account of tax credit mismatch cannot be enforced coercively.

3. This may be brought to the notice of all the assessing officers in your region so that if the facts of the case so justify, the assessees are not put at any inconvenience on account of default of deposit of tax into the Government account by the deductor.

4. This issues with the approval of Chairperson, CBDT.

Yours faithfully

(Sandeep Singh)

Under Secretary to the Govt. of India

GST-Formation of Two Committees

Press Information Bureau
Government of India
Ministry of Finance
17-June-2015 17:15 IST

Finance Minister approves the formation of 2 Committees for facilitating implementation of Goods and Services Tax from 1.4.2016.

Finance Minister has approved the formation of 2 Committees for facilitating implementation of Goods and Services Tax from 1.4.2016.

A Steering Committee been formed under the Co-Chairmanship of Additional Secretary, Department of Revenue and Member Secretary, Empowered Committee of State Finance Ministers. This Committee has Members from Department of Revenue, Central Board of Excise & Customs, Goods and Services Tax Network (GSTN) and representatives of State Governments. This Committee shall monitor the progress of IT preparedness of GSTN/CBEC/Tax authorities, finalisation of reports of all the Sub-Committees constituted on different aspects relating to the mechanics of GST and drafting of CGST, IGST and SGST laws/rules. The Committee shall also monitor the progress on consultations with various stakeholders like trade and industry and training of officers.

Another Committee has been formed under the Chairmanship of the Chief Economic Advisor, Ministry of Finance to recommend possible tax rates under GST that would be consistent with the present level of revenue collection of Centre and States. While making recommendations, this Committee would take into account expected levels of growth of economy, different levels of compliance and broadening of tax base under GST. The Committee would also analyse the Sector-wise and State-wise impact of GST on the economy. The Committee is expected to give its report within two months.

Meanwhile, progress is underway to finalise various aspects of GST design like business processes, payment systems, matters relating to dual control, threshold, exemptions, place of supply rules and also making of model GST, SGST and IGST laws and rules. This task is being undertaken through various Sub-Committees formed by the Empowered Committee which has officers from Government of India as well as State Governments as Members.

Goods and Services Tax Network (GSTN) is taking steps for preparing the IT infrastructure for roll out of GST. The IT infrastructure shall enable online registration, filing of returns and getting refunds. Various State Governments are also preparing the necessary back end IT infrastructure for implementation of GST which shall relate to aspects like assessments and audit.

Periodic reviews are being held in the Department of Revenue to monitor the progress of all the above activities.

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DSM/MAM

An opportunity to file 6 year ITR where TDS remain unclaimed.

Presently , An  Assessee Can only file return for last 2 years and claim refund if any due and not beyond that. In case he missed to file return within prescribe timeline he has no choice other than to forget his refund claim. Income Tax Department in Latest circular No 9/ 2015  has guided on how an assessee who has failed to file return and claim Refund according to section 119(2) (B) can now make an application and get Refund due up to last 6 Assessment years.

STEP ONE : FILE AN APPLICATION

In case the amount is less than Rs 10 Lacs CsIT for any one assessment year.  The Application shall be made to the Pr.CsIT/CIT.  CIT will review the application & communicate with reason acceptance/rejection of such applications/claims.--In case the amount is more than Rs 10 Lacs the Application to be made to Chief Commissioner of Income Tax--In case the amount is more than Rs 50 Lacs then to CBDT.

STEP TWO ; MAY FILE UPTO 6 YEARS

Condonation Application can be file up to six previous years---Even Loss can be Claimed for Carry forward---The officer will be ensured that the income/loss declared and /or refund claimed is correct and genuine and also that the case is of genuine hardship on merits.

STEP THREE; CLEARENCE FROM AUTHORTIES

The power of accepting or rejecting the Condonation Application of Delay shall be subject to following Condition that The Income of Assessee is not assessable in the hands of other person under any provision of Income Tax Act. Further  No Interest will be admissible on belated claim of Refunds  and The Refund has arisen due to excess payment of Advance Tax or Self-Assessment Tax or due to excess deduction of TDS.
STEP FOUR ; SUPPLEMENTARY CLAIMS

A belated application for supplementary claim of refund (claim of additional amount of refund after completion of assessment for the same year) can be admitted for condonation provided other conditions as referred above are fulfilled.  Assessee will not receive interest on belated claim of refunds.

STEP FIVE: CUMULATIVE ITEREST BEYOND SIX YEARS

In the case of 8% Savings (Taxable) Bonds, 2003 issued by Government of India opting for scheme of cumulative interest on maturity but has accounted interest earned on mercantile basis and the intermediary bank at the time of maturity has deducted tax at source on the entire amount of interest paid without apportioning the accrued interest/TDS, over various financial years involved, the time limit of six years for making such refund claims will not be applicable .

100 things of TAX for common man.!!

Dear All

100 things of TAX for common man.!!

Income Tax:

1)      Detailed information of Income Tax is available on www.incometaxindia.gov.in
2)      As per Income Tax Act, Income is taxable under five heads- Salary, House Property, Business or Profession, Capital Gain and Other Sources.
3)      Salaried person must obtain Form 16 from his Employer Every Year.
4)      Income Tax Return should be filed by considering Form 16 and other Income.
5)      Transport Allowance is exempt up to Rs. 1,600 per month.
6)      30% Standard deduction is available on Income from House Property.
7)      Income to be considered as deemed let out on second House property.
8)      For self-occupied house property, deduction of Interest on Housing Loan is allowed up to Rs. 200,000/- and for other house property actual expenditure of Interest on Housing Loan is allowed.
9)      Repayment of Principal amount of Housing Loan is deductible u/s 80C up to Rs. 150,000/-.
10)  Tax Audit is compulsory if sales turnover exceeds Rs. 1 crore in case of business.
11)  Tax Audit is compulsory if the Gross Receipts of Professionals exceeds Rs.25 lakhs.
12)  If sales turnover is below Rs. 1 crore, then net profit of 8% or higher is to be taken as business income otherwise tax audit is required.
13)  The Due Date for Tax Audit and income Tax Return is 30th September.
14)  Assessee other than Company and those eligible for Tax Audit are required to file Income Tax Return before 31st of July. Extended date is 31st Aug for F.Y. 14-15.
15)  Accurate Stock Valuation should be done on 31st of March.
16)  Cash payment should not be made to a person in single day exceeding Rs.20, 000.
17)  Cash Payment limit for Transporters is Rs. 35,000/-.
18)  Loans, deposits and Immovable Properties transactions should not be carried out above Rs. 20,000 in cash.
19)  Business loss can be carried forward to Next 8 Years.
20)  Tax Audit applicable assesses should deduct TDS on particular transactions.
21)  TDS should be made on the date of Credit or Payment basis of whichever is earlier.
22)  TDS payment should be made on or before 7th day of Next Month.
23)  TDS Returns are to be filed Quarterly.
24)  TDS returns can be revised any number of times.
25)  TDS should be deducted and paid if applicable.
26)  If TDS is not deducted then deduction of 30% of Expenditure is not allowed.
27)  Late filling of TDS return attracts late filing fees of Rs. 200 per day.
28)  Long Term Capital Gain will arise if transfer of specified Capital Assets is made after 3 years.
29)  Generally Long Term Capital Gains is taxable @ 20%
30)  STT paid Long Term Capital Gain on Shares,etc is exempt from Tax.
31)  Short Term Capital Gain is Taxable @ 15% if STT is paid.
32)  Capital Gain on Immovable Properties is chargeable at Stamp Duty Value or Selling Price whichever is higher.
33)  Dividend received from domestic company is exempt from Tax.
34)  Agricultural Income is exempt from Tax.
35)  Gifts received form stranger of an Amount exceeding Rs. 50,000 is taxable.
36)  Income Tax is not chargeable on Gifts received at the time of Marriage, Will, and in case of Succession and from specified relatives.
37)  Maximum deduction limit u/s 80C, 80CCC and 80 CCD is Rs.1, 50,000.
38)  Deduction of Medical Insurance Premium is available up to Rs. 25,000.
39)   Deduction of Medical Insurance Premium paid for Parents is available up to Rs. 20,000.
40)  Deduction limit of Interest earned on Saving Account is up to Rs.10, 000.
41)  Income earned by a Minor child is clubbed in the hands of Parents.
42)  Every Taxpayer should verify his Form 26AS.
43)  Form 26AS provides the Information regarding the TDS, Advance Tax paid and details of refund.
44)   Notice may be sent to the Taxpayer if the Income mentioned in Form 26AS and the Income Tax Return filed is having difference.
45)  Basic Exemption Limit for individuals for F. Y. 2015-16 is Rs. 2,50, 000.
46)  Basic Exemption Limit for Senior Citizen i.e. above 60 years age is Rs. 3,00, 000.
47)  Basic Exemption Limit for Super Senior Citizen i.e. above 80 years age is Rs. 5,00,000.
48)  Advance Tax is to be paid if Tax Liability during the year exceeds Rs. 10,000.
49)  12% of Surcharge is applicable if Income Exceeds Rs. 1Crore.
50)  Income Tax Return should be filed if Income exceeds Basic Exemption Limit.
51)  30% of Tax applicable on Income of Partnership Firm, Company, LLP etc.
52)  For Companies – Minimum Alternate Tax and for other Assesses – Alternate Minimum Tax rate is 18.5%.
53)  Details of all Bank Accounts have to be given in Income Tax return.
54)  Passport number is required to be given in Income Tax return.
55)  Detail of Fixed Assets held in Foreign Country is required to be given in Income Tax return.
56)  If taxable income of Individual is less than Rs. 5 Lakhs then relief of Rs. 2,000/- is available in Tax.
57)  Aadhar Card No. is required to be mentioned in Income Tax return.
58)  E-filling of return is compulsory if income exceeds Rs. 5 lakhs.
59)  In Income Tax, E-filling of return can be done for Previous 2 Years only.
60)  PAN Card is essential for Taxpayer and it should not be used as Id Proof.
61)  From FY 2014-15 Depreciation is to be calculated as per New Companies Act.
62)  Domestic Transfer Pricing is applicable on transaction exceeding an Amount Rs. 20 Crores.

Now some points about MVAT:

63)  VAT registration is compulsory if Gross Turnover exceeds Rs. 10 lakhs.
64)  VAT rate is 1%, 5%, 12.5%, and 20% and CST rate is 2% on respective commodities.
65)  Return Periodicity should be verified every year from the Departments site www.mahavat.gov.in
66)  Periodicities of Returns are Monthly, Quarterly and Half yearly.
67)  Vat payment and return should be filed within 21st of next Quarter, Month or Half Year.
68)  Late payment of VAT will attract Interest @ 1.25% p.m.
69)  A late fee of Rs. 1000 is to be paid if late return is filed.
70)   Late fee of Rs. 5000 is charged if Return filed after 30 days.
71)  Full set off can be taken on Plant and Machinery and Electrical Fitting.
72)  3% of retention is to be taken on Office Equipment’s and Computer.
73)  Setoff of Software, Building and passenger car is not available.
74)   AnnexureJ1 mentioning TIN of sellers has to be filed with Vat return.
75)  AnnexureJ2 mentioning TIN of buyers has to be filed with Vat return.
76)  Vat Setoff cannot be carried forward to next year if it exceeds Rs. 5 lakhs.
77)  VAT Audit is compulsory if Gross Turnover exceeds Rs. 1 Crore.
78)  Due date for filling VAT Audit report is 15th January.
79)  Dealer can verify the details of return filed and Registration from the “Dealer information System.”
80)  Mis-match report of Annexure J1 and J2 should be verified and should be reconciled.
81)  Composition Scheme is available for Retailers having Gross turnover less than Rs. 50 Lakhs.
82)  WCT is to be deducted if Works Contract exceeds Rs. 5 lakhs.
83)  5% of WCT is to be deducted for non-registered dealers instead of 2%.
84)  TDS deductor has to file return before 30th June after end of financial year.

Profession Tax:

85)  Profession Tax is required to be paid for Employer and Employee.
86)  Every Businessmen and Professional assesse has to pay his Professional Tax before 30th June.
87)  Employer has to pay Profession Tax of employees by deducting from the salary.
88)  If Professional Tax Liability exceeds Rs. 50,000 then monthly Return have to be filed otherwise annually.
89)  A late fee of Rs. 1000 is to be paid if Profession Tax return in not filed before due date.
90)  Profession Tax is not Applicable to Men if salary does not exceed Rs. 7, 500.
91)  Profession Tax is not Applicable to Women if salary does not exceed Rs. 10,000.

Service Tax:

92)  Service Tax is applicable if Taxable Service Provided exceeds Rs. 10 lakhs.
93)  14% of service Tax is applicable w.e.f 1st June, 2015.
94)  Company Assesse has to pay Service Tax monthly.
95)  Individual, Partnership Firm, LLP assesse has to pay Service Tax Quarterly.
96)  Service Tax is payable on the 6th after end of Month or Quarter
97)  Interest is payable @ 18%pa if Service Tax is not paid before the due date.
98)  Interest @ 30% is to be paid if service Tax is not paid for a Year.
99)  Service Tax return should be filed Half Yearly before 25th October and 25th April.
100)          If service Tax is not paid of Rs. 50 lakhs then there is imprisonment

MCA Notifications

MCA has released notification dated 29th May,2015 notifying the said date as the effective date of provisions of Section 1 to 12 and  15 to 23 of the Companies (Amendment) Act, 2015. All sections of the amendment act have been made effective w.e.f. 29th May, 2015 except the sections relating to Section 143 (related to 'fraud') and 177 (related to omnibus approval by audit committee) of Companies Act, 2013.
 
Five Related amendment Rules have also been released today in Companies (Registration Offices and Fees) Rules, Companies (Registration of Charges) Rules, Companies (Declaration and Payment of Dividend) Rules, Companies (Incorporation) Rules and Companies (Share Capital and Debentures) Rules.
 
Highlights of each of the Amendment Rules are as under:
 
1. Companies (Incorporation) Second Amendment Rules, 2015 – The Incorporation Rules have also been amended by inserting a new proviso in rules 12 pursuant to which if pursuing of any objects require any Sectoral regulator's approval such as RBI, SEBI etc. then the registration or approval shall be required before pursuing the said objects and a declaration shall be required to be submitted in that behalf. This resolves a long pending confusion as to whether the RoC would require sectoral regulator's approval before approving the application for incorporation of a company. The format of license and MoA of a section 8 company is also amended in the new amendment.
2. Companies (Declaration and Payment of Dividend) Second Amendment Rules, 2015 – Sub Rule 5 of Rule 3 mandatorily requiring the setting off previous losses & depreciation not provided in previous year or years against the profits of the current year before declaration of dividend has been done away and the said sub rule has been omitted by the said amendment Rules.  
3. Companies (Registration of Charges) Amendment Rules, 2015 – In sub rule 4 of Rule 3 relating to verification of instrument / deed consisting of property situated outside India the mandatory requirement of affixation of seal of the company has been done away and now the same has been made optional.
4. Companies (Registration Offices and Fees) Second Amendment Rules, 2015 – The Board Resolutions passed pursuant to section 179(3) and requiring filing with MCA pursuant to section 117(3)(g) would now neither be available for public inspection nor certified copies would be issued by RoC of such BRs filed by cos.
5. Companies (Share Capital and Debentures) Second Amendment Rules, 2015 – In Sub rule 3 of Rule 5 relating to Certification of Share Certificate the mandatory requirement of affixation of seal of the company has been done away and now the same has been made optional. Further issue of Share Certificate would require signatures of atleast 2 directors authorised by Board OR by any one director as authorised by the Board and mandatorily by the Company Secretary of the Company.

ITR Simplified

Ministry of Finance

 

31-May, 2015 13:53 IST

 

Income Tax Return Forms ITR 1, 2 and 4S Simplified for Convenience of the Tax Payers;

A New Form ITR 2A Proposed which can be Filed by an Individual or HUF who does not have Capital Gains, Income from Business/Profession or Foreign Asset/Foreign Income; In Form ITR 2 and the New Form ITR 2A, the Main Form will not Contain more than 3 Pages, and other Information will be Captured in the Schedules which will be Required to be filled only if applicable;

As the Software for these Forms is under Preparation, they are likely to be available for e-filing by 3^rd week of june 2015;Time Limit for Filing these Returns is also Proposed to be Extended up to 31.08.2015;

Only  Passport Number, if available, would be required to be given in forms Itr-2 and itr-2A. Details of Foreign Trips or Expenditure thereon are not required to be Furnished

Forms ITR 1, 2 and 4S for Assessment Year 2015-16 were notified on 15^th April 2015 (15.04.2015). In view of various representations, it was announced that these ITR forms will be reviewed. Having considered the responses received from various stakeholders, these forms are proposed to be simplified in the following manner for the convenience of the taxpayers:-

1)                                 Individuals having exempt income without any ceiling (other than agricultural income exceeding Rs. 5,000) can now file Form ITR 1 (Sahaj). Similar simplification is also proposed for individuals/HUF in respect of Form ITR 4S (Sugam).

2)                                 At present individuals/HUFs having income from more than one house property and capital gains are required to file Form ITR-2. It is, however, noticed that majority of individuals/HUFs who file Form ITR-2 do not have capital gains. With a view to provide for a simplified form for these individuals/HUFs, a new Form ITR 2A is proposed which can be filed by an individual or HUF who does not have capital gains, income from business/profession or foreign asset/foreign income.

3)                                 In lieu of foreign travel details, it is now proposed that only Passport Number, if available, would be required to be given in Forms ITR-2 and ITR-2A. Details of foreign trips or expenditure thereon are not required to be furnished.

4)                                 As regards bank account details in all these forms, only the IFS code, account number of all the current/savings account which are held at any time during the previous year will be required to be filled-up. The balance in accounts will not be required to be furnished. Details of dormant accounts which are not operational during the last three years are not required to be furnished.

5)                                 An individual who is not an Indian citizen and is in India on a business, employment or student visa (expatriate), would not mandatorily be required to report the foreign assets acquired by him during the previous years in which he was non-resident if no income is derived from such assets during the relevant previous year.

6)                                 As a measure of simplification, it has been endeavoured to ensure that in Form ITR 2 and the new Form ITR 2A, the main form will not contain more than 3 pages, and other information will be captured in the Schedules which will be required to be filled only if applicable.

As the software for these forms is under preparation, they are likely to be available for e-filing by 3^rd week of June 2015. Accordingly, the time limit for filing these returns is also proposed to be extended up to 31^st August, 2015 (31.08.2015). A separate notification will be issued in this regard.

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New income tax return forms.

Revenue department notifies new income tax return forms. The tax department extends last date for filing of I-T returns to August 31 (PTI)
The Finance Ministry has notified revised Income Tax Return (ITR) forms. These forms will be used to file return for the assessment year 2015-16 (for income earned during fiscal year 2014-15). It has also been proposed to extend the last date for filing returns to August 31 as against normal practice of July 31.Under the new forms, in lieu of foreign travel details, it is now proposed that only Passport Number, if available, would be required to be given in Forms ITR-2 and ITR-2A. Details of foreign trips or expenditure thereon are not required to be furnished. Similarly, as regard to bank account details in all these forms, only the IFS code, account number of all the current/savings account, which are held at any time during the previous year will be required to be filled-up. The balance in accounts will not be required to be furnished. Details of dormant accounts which are not operational during the last three years are not required to be furnished.The Finance Ministry mentioned that an individual, who is not an Indian citizen and is in India on a business, employment or student visa (expatriate), would not mandatorily be required to report the foreign assets acquired by him during the previous years in which he was non-resident if no income is derived from such assets during the relevant previous year.In Form ITR 2 and the new Form ITR 2A, the main form will not contain more than 3 pages, and other information will be captured in the schedules which will be required to be filled only if applicable. This has been done to ensure simplification.Individuals having exempt income without any ceiling (other than agricultural income exceeding Rs 5,000) can now file Form ITR 1 (Sahaj). At present individuals/HUFs (Hindu Undivided Families) having income from more than one house property and capital gains are required to file Form ITR-2. It is, however, noticed that majority of individuals/HUFs who file Form ITR-2 do not have capital gains. With a view to providing for a simplified form for these individuals/HUFs, a new Form ITR 2A is proposed which can be filed by an individual or HUF who does not have capital gains, income from business/profession or foreign asset/foreign income.It may be noted that on April 15, the Finance Ministry notified ITR Forms 1, 2 and 4S for Assessment Year 2015-16. However, these forms soon got entangled into controversy due to more and more informations were asked to be submitted. Finance Minister Arun Jaitley ordered revision of forms and accordingly new and simplified forms notified.

FEMA Rule-Current Account Transactions-Amendment

RBI fixes USD 2,50,000 for remittances by individual for aggregate of certain current account transactions

The Reserve Bank of India ('RBI') has notified amendment to the Foreign Exchange Management (Current Account Transactions) Rules to specify an aggregate limit of USD 2,50,000 for remittance in foreign currency for certain current account transactions, inter-alia, for private visits to any country (except Nepal and Bhutan), gifts or donations, going abroad for employment, emigration, business travels, or medical treatment abroad, etc.

Remittances in foreign currency by an individual for the following current account transactions shall be made within limit of USD 2,50,000:

a) Holiday/Private Visits abroad

b) Business trip

c) Gifts/Donation

d) Employment or education

e) Remittance for Maintenance of a close relative abroad

f) Medical treatment abroad

g) Emigration facilities

Further, it is provided that an individual can avail of foreign exchange facility of an amount exceeding the limits as prescribed above under the Liberalized Remittance Scheme ('LRS') for the purpose of emigration, education, business travel, medical treatment, etc.

However, the amount so remitted by individual under the LRS shall be reduced from the USD 250,000 by the amount so remitted.

NRI-FDI

Government amends FDI rules to allow NRIs to invest in India

 

The Union Cabinet on Thursday approved amendments to the Foreign Direct Investment (FDI) policy on investments by Non-Resident Indians (NRIs), Persons of Indian Origin (PIOs) and Overseas Citizen of India (OCIs) for greater forex remittances.

A decision in this regard was taken by the Cabinet Committee on Economic Affairs, headed by Prime Minister Narendra Modi.

The Cabinet "approved amendments to FDI policy on investments by NRIs, PIOs & OCIs. This will give PIOs & OCIs parity with NRIs in eco & edu (economy and education)," an official spokesperson said.

"The amendment in FDI for OCIs, NRIs & PIOs will lead to greater forex remittances & investment," he added.

As per the DIPP's proposal any investment made by NRIs. OCIs and PIOs from their rupee account in India, will not be treated as foreign investment.

An official said that the non-repatriable NRI funds would be treated as domestic investments.

The government wants to channelise the funds of NRIs, who now have set up large businesses abroad, by treating non-repatriable investments by NRIs as domestic investment.

The proposal was floated by the Department of Industrial Policy and Promotion to tap the NRIs for investments in defence, railways among other sectors. Last year, the government had formed a committee on this matter

 
Since coming to power in May last year, the Narendra Modi government has liberalised the FDI limit in crucial sectors like defence, insurance, real estate, railways and medical devices. The measures were aimed at improving India's ranking in the World Bank's Ease of Doing Business index, where India stands at 142 among 189 countries.

The measures could also be seen in the context of the Modi government allowing NRIs to vote through e-ballot system or proxy.

Concurrent audit online application link of United Bank of India

Concurrent audit online application link of United Bank of India

http://ubionline.unitedbank.co.in/ca/application.php

Concurrent audit online application link of Punjab & Sindh bank

Concurrent audit online application link of Punjab & Sindh bank

https://www.psbindia.com/OnLine_Application_CCA.php

New CA Course applicable from 2016 ( drafted by ICAI )

FYI - ICAI Notifications
New CA Course applicable from 2016 ( drafted by ICAI ) :
1. Change in CA Foundation :-
- Name changed from CPT to CA Foundation
- Duration increased to 9 months
- Number of Papers 4
Paper 1 - Fundamentals of Accounting (100
Marks)
Paper 2- Quantitative Aptitude (100 Marks)
Paper 3A - Mercantile Law (60 Marks)
Paper 3B - General Economics (40 Marks)
Paper 4A - General English (50 Marks)
Paper 4B - Business Communication (50 Marks)
- Partly descriptive & partly MCQ paper.
2. Change in CA Intermediate :-
- Cost Accounting & FM to be 2 different subject.
- Duration increased from 9 months to 12 months.
- ITSM removed
- Number of Papers 8
Paper 1 - Accounting ( 100 Marks)
Paper 2 - Company Law, Other law and Ethics
Part I : Company Law (60 Marks)
Part II: Other Law (20 Marks)
Part III: Ethics (20 Marks)
Paper 3 - Cost Accounting (100 Marks)
Paper 4 - Direct Taxes (100 Marks)
Paper 5 - Advanced Accounting (100 Marks)
Paper 6 - Auditing & Assurance (100 Marks)
Paper 7 - Financial Management (100 Marks)
Paper 8 - Indirect Taxes (100 Marks)
3. Change in CA Final :-
- New subject added Capital Markets & Financial Services.
- ISCA removed.
- Eligibility to appear to CA Final only after
completion of articleship.
- Number of Papers 8
Paper 1 - Financial Reporting (100 Marks)
Paper 2 - SFM (100 Marks)
Paper 3 - Advance Auditing & Professional Ethics (100 Marks)
Paper 4 - Corporate & other economic law (100 Marks)
Paper 5 - Advance Management Accounting (100 Marks)
Paper 6 - Financial Services & Capital Market (100 Marks)
Paper 7 - Advance tax management (60 Marks) & International Taxation (40 Marks)
Paper 8 - Indirect Taxation (100 Marks)
Note : New course is expected to be introduced somewhere in 2016, ICAI has also previously announced that both the existing as well as new course will continue for the next few years after which ICAI will gradually shift to the new course.
The existing students need not to worry as they would be given ample time to clear their exams.

Forwarded as received

CA. Ashwin Nagar

Draft Circular on Range Concept

Draft norms for range concept in transfer pricing

The tax department on Friday came out with draft norms for introduction of a range concept for calculating an Arms Length Price for valuing transactions between related entities for the purpose of taxation. The Central Board of Direct Taxes has proposed to use multiple year data for determining the price. At present, only one year's data is used for calculating the price.

CBDT Circular No.8

Important CBDT Circular Sets Out Procedure For Speedy Resolution Of Taxpayer's Grievances Regarding Outstanding Tax Demands

The CBDT has issued Circular No. 8 of 2015 dated 14.05.2015 setting out the detailed procedure that has to be followed by taxpayers in response to an arrear demand from the AO. The Ministry of Finance has also issued a press release stating that the said Circular is because the Income Tax Department has taken note of grievances of taxpayers arising on account of outstanding tax demand which may be inaccurate due to non-reporting or delayed reporting of TDS by deductors leading to mismatch between the claim and data available with the Department, non-posting of challans, non-disposal of rectification applications, incorrect details of income or pre-paid taxes reported by taxpayer etc. It is emphasized that the Income Tax Department is committed to early and satisfactory resolution of taxpayers' grievances. It is also stated that about 95% of entries of Demand involve demand up to Rs. 1 lakh and about 90% of such assessees are Individuals and HUFs. It is expected that majority of the grievances of small taxpayers can be redressed by following the procedure prescribed in the circular.ivinayaka Residency,

Income Exempted-No TDS

Unconditional exemption of income under Section 10 and no statutory liability to file return of income under Section 139- NO TDS- SEE CIRCULAR NO.7