Income
Tax Provisions Applicable from 1st June 2016
(i)
Amendment relating to Advance Tax (The change is
effective from financial year 2016-17 onwards)
The
schedule for payment of Advance Tax by an Individual and other non-corporate
assessee has been amended w.e.f. 1st
June 2016 as under:
|
Due
Date of Installment
|
Amount
Payable
|
|
On
or before 15th June
|
15%
of Advance Tax
|
|
On
or before 15th September
|
45%
of Advance Tax
|
|
On
or before 15th December
|
75%
of Advance Tax
|
|
On
or before 15th March
|
100%
of Advance Tax
|
Earlier, there was no requirement of paying advance tax in respect of
assessees’ who opted for non maintenance of books of accounts and declared
profit @8% of gross receipts subject to a maximum of Rs. 1 crore which limit
has been enhanced to Rs. 2 crores w.e.f. financial year 2016-17.
In case of such assesses’ (whose businesses are eligible for applying tax
@8% on gross receipt) under section 44AD of the Act are also now required to pay
100% of the tax due on such income before 15th March, from financial
year 2016-17 onwards.
(ii)
Amendments relating to TDS and TCS
(a)
Increase in threshold
limit of deduction of tax at source on various payments mentioned in the
relevant sections of the Act
|
Section
|
Threshold
Limit upto 31st May 2016 (Rs.)
|
Threshold
Limit from 1st June 2016 (Rs.)
|
|
192A
Payment of accumulated balance due to an employee by the trustees of the
Employees Provident Fund Scheme , 1952
|
30,000
|
50,000
|
|
194BB
Winnings from Horse Race
|
5,000
|
10,000
|
|
194C
Payments to Contractors
|
Aggregate
annual limit of 75000
|
Aggregate
annual limit of 100000
|
|
194LA
Payment of Compensation on acquisition of certain Immovable Property
|
2,00,000
|
2,50,000
|
|
194D
Insurance commission
|
20,000
|
15000
|
|
194G
Commission on sale of lottery tickets
|
1,000
|
15000
|
|
194H
Commission or brokerage
|
5,000
|
15000
|
(b) Revision
in rates of deduction of tax at source on various payments mentioned in the
relevant sections of the Act :-
|
Section
|
TDS
Rates up to 31st May 2016 TDS
(%)
|
TDS
Rate w.e.f. 1st June 2016 (%)
|
|
|
|
194DA Payment in
respect of Life Insurance Policy
|
2%
|
1%
|
|
|
194EE Payments in
respect of NSS Deposits
|
20%
|
10%
|
|
|
|
|
|
|
194D Insurance
commission
|
10%
|
5%
|
|
|
194G Commission on
sale of lottery tickets
|
10%
|
5%
|
|
|
194H Commission or
brokerage
|
10%
|
5%
|
|
(c)
Regarding
: TCS on sale of Vehicles; Goods or services
:-
The
following modifications have been made in the scheme of tax collection at
source given under section 206C (with effect from 1st June , 2016) –
Sub-section
(1F) has been inserted.
This
sub-section provides that every person (being a seller who receives any amount
as consideration for sale of motor
vehicle of value exceeding Rs. 10,00,000 shall collect the tax at the rate of 1 per cent of sale
consideration .
This
will be applicable whether payment is made by the purchaser in cash or by the
issue of a cheque or draft or by any other mode.
Under
the existing provisions of sub-section (1D) , seller of bullion (exceeding Rs.
2 lakhs) or jewellery (exceeding Rs. 5 lakhs)
is required to collect tax at source, if the consideration (or any part
of it) is received in cash. In such case, tax was required to be collected at
the rate of 1 per cent of sale consideration.
New
provision
The
requirement of collection of tax at source @ 1% from the buyer of goods or
services exceeding Rs. 2 lacs has become effective from 1st June,
2016 in case the transaction of purchase
of goods or provision of services exceeds Rs. 2 lacs in part or fully is
received in cash in case of a single invoice
To
illustrate in case a purchase of Rs. 2,50,000/- is made through a single
invoice and the buyer pays Rs. 1,50,000/- by cheque and Rs. 1 lac in cash the
provision would be attracted and the seller would have to collect 1% of Rs.
2,50,000/-.
However,
provisions of sub-section (1D) will not be applicable in the following 2 cases
–
(a)
No tax shall be collected at source on
any amount on which tax has been deducted by the payer as applicable.
(b)
Provision of sub-section (1D) will not
apply in relation to sale of any goods (other than bullion or jewellery) or
service to such classes of buyer who fulfill such conditions, as may be
prescribed (As yet no condition has been prescribed).
(iii)
Expenses incurred by the assessee towards specified services
to be covered under section 40(a)(ib) [W.e.f. 1-6-2016]
A new levy @ 6% (referred to as Equalization levy) has been made applicable to payment
of online advertisements, provision
for digital advertising space or any other facility or service for the purpose
of online advertisements or any other notified services to a non-resident (who
does not have a Permanent Establishment (PE) in India) provided to:
(a)
a resident in India or
(b)
a non-resident having
a Permanent Establishment (PE) in
India
Equalization
levy is to be deducted by the payer from the amount paid/ payable to the
non-resident service provider.
Any
consideration paid or payable (to non-resident for a specified service on which
equalization levy is applicable) will be disallowed from June 1, 2016 (i.e.
this assessment year 2017-18) in the following cases –
(a)
Equalization levy is deductible but such
levy has not been deducted.
(b) Equalization
levy is deductible (and it is so deducted) but it is not deposited [on or
before the due date of submission of return of income under section 139(1).
If,
however, equalization levy is deducted / deposited in a subsequent year, the
aforesaid consideration shall be allowed as a deduction in computing the income
of the previous year in which such levy has been paid.
(iv)
Enabling of Filing of Form 15G/15H for rental payments
[Section 197A] [1-6- 2016
At
present form 15G can be filled up by a resident assessee requesting for non-deduction
of tax at source from certain payments made to him if his income is below the
tax exemption limit, similarly, form 15H can be submitted by senior citizen (
above 60 years of age and very senior citizen above 80 years of age). The scope
of income that can be included in the above forms is as under:
(i)
Amount received from withdrawal from Employees Provident Fund
Scheme
(ii)
Dividend Income
(iii)
Interest other than Interest on Securities
(iv)
Sum received from Life Insurance Policy
(v)
Sum received from National Savings Scheme
(vi)
Rental income
has also been allowed to be included in the declarations.
(v)
Relief to a non-resident for
furnishing PAN [Section 206AA]
Section 206AA, inter alia, provides that any person (who is entitled to receive any sum on which
tax is deductible at source) shall furnish his PAN to the deductor, failing
which tax shall be deducted at the rate mentioned in the relevant provision or
at the rate of 20 per cent, whichever is higher.
Amendment
- Which
effect from June 1, 2016, sub-section (7) of the said section has been
substituted to provide that above provisions shall not apply to a non-resident
/ foreign company (who does not have PAN)
subject to such condition as may be prescribed (as yet not prescribed).
(vi)
Amendment
to section 133C
Section 133C empowers
the prescribed income-tax authority to issue notice calling for information and
documents for the purpose of verification of information in its possession.
This section has been amended (with effect from June 1, 2016) to further
provide that the information and documents so obtained by the prescribed
income-tax authority may be scrutinized and the outcome of such scrutiny may be
made available to the Assessing Officer for further necessary action, if any.
Other
amendments not covered in detail effective from 1st June 2016 which
would be communicated in a separate mail which are being mentioned here under
for the sake of information and are as under:-
(vii)
Income
Declaration Scheme 2016 - This scheme will be effective from 1 June 2016
(already notified)
In case you have any
income to declare you may discuss the same with us . The tax involved is 45% of
the amount proposed to be declared and the eligibility for declaration is
subject to certain specified conditions.
(viii)
The
Direct Tax Dispute Resolution Scheme, 2016
In case you have any
appeal proceedings pending before the Commissioner of Income Tax (Appeals) and
the issue involved is not entirely in your favour you may decide to opt for said
scheme.
