GST Helpdesk   Subscription   Demo   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
What's New Case Laws Highlights Articles News Forum Short Notes Statutory TMI SMS More ...
Extracts
Home List
← Previous Next →

Explanatory Notes to the provisions of the Finance Act 2015

Income Tax - 19/2015 - Dated:- 27-11-2015 - CIRCULAR NO. 19 /2015 Government of India Ministry of Finance Department of Revenue (Central Board of Direct Taxes) Dated, the 27th November, 2015 Finance Act, 2015 ─ Explanatory Notes to the Provisions of the Finance Act, 2015 AMENDMENTS AT A GLANCE Section/Schedule Particulars/Paragraph number Finance Act, 2015 First Schedule Rate Structure, 3.1 - 3.4 Income-tax Act, 1961 2 Taxation Regime for Real Estate Investment Trusts (REIT) and Infrastruc .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ocedure for computing the period of stay in India,6.1-6.4; Amendment to the conditions for determining residency status in respect of Companies,7.1-7.7. 9 Clarity relating to Indirect transfer provisions, 8.1-8.5; Clarity regarding source rule in respect of interest received by the non-resident in certain cases; 9.1-9.8. 9A Fund Managers in India not to constitute business connection of offshore funds, 10.1-10.11. 10 Tax benefits under section 80C for the girl child under the Sukanya Samriddhi A .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ncome by charitable trusts and institutions, 12.1 -12.4. 13 Rationalisation of provisions of section 11 of the Income-tax Act relating to accumulation of Income by charitable trusts and institutions, 12.1 -12.4. 32 Allowance of balance 50% additional depreciation, 13.1-13.3; Incentives for the States of Andhra Pradesh, Bihar, Telangana and West Bengal, 14.1-14.4. 32AD Incentives for the States of Andhra Pradesh, Bihar, Telangana and West Bengal: Additional Investment Allowance, 14.1-14.2.4. 35 P .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ons, 8.1-8.5; Tax neutrality on merger of similar schemes of Mutual Funds, 18.1-18.4. 49 Clarity relating to Indirect transfer provisions, 8.1-8.5; Amendments relating to Global Depository receipts (GDRs), 32.1-32.10; Tax neutrality on merger of similar schemes of Mutual Funds, 18.1-18.4; Cost of acquisition of a capital asset in the hands of resulting company to be the cost for which the demerged company acquired the capital asset ;19.1-19.3. 80C Tax benefits under section 80C for the girl chil .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

h Bharat Kosh and Clean Ganga Fund, 27.1-27.5; One hundred per cent deduction for National Fund for Control of Drug Abuse, 26.1-26.3. 80JJAA Deduction for employment of new workmen, 28.1-28.5. 80U Raising the limit of deduction under section 80DD and 80U for persons with disability and severe disability, 24.1 - 24.8. 92BA Raising the threshold for specified domestic transaction, 29.1 - 29.3. 95 Deferment of provisions relating to General Anti Avoidance Rule ( GAAR ), 30.1 - 30.5. 111A Taxation R .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Real Estate Investment Trusts (REIT) and Infrastructure Investment Trusts (Invit), 34.1 - 34.7. Chapter XII-FB consisting of section 115UB Pass through status to Category -I and Category -II Alternative Investment Funds, 35.1-35.7. 132B Settlement Commission, 49.1 - 49.13. 139 Furnishing of return of income by certain universities and hospitals referred to in section 10 (23C) of the Income-tax Act,36.1-36.4;Return of Income is to be filed by beneficial owner or beneficiary of a foreign asset, 3 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

20. 156 Rationalisation of provisions relating to Tax Deduction at Source (TDS) and Tax Collection at Source (TCS), 47.1-47.20. 158AA Procedure for appeal by revenue when an identical question of law is pending before Supreme Court, 40.1 - 40.6. 192 Rationalisation of provisions relating to Tax Deduction at Source (TDS) and Tax Collection at Source (TCS), 47.1-47.20. 192A Simplification of Tax Deduction at Source (TDS) mechanism for Employees Provident Fund Scheme (EPFS), 41.1- 41.8. 194A Ration .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

gory -II Alternative Investment Funds, 35.1-35.7 194LD Extension of eligible period of concessional tax rate under section 194LD of the Income-tax Act, 44.1-44.4. 195 Rationalisation of provisions relating to Tax Deduction at Source (TDS) and Tax Collection at Source (TCS), 47.1-47.20. 197A Enabling of filing of Form 15G/15H for payment made under life insurance policy, 45.1- 45.4. 200 Rationalisation of provisions relating to Tax Deduction at Source (TDS) and Tax Collection at Source (TCS), 47. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

relating to Tax Deduction at Source (TDS) and Tax Collection at Source (TCS), 47.1-47.20. 234B Interest for defaults in payment of advance tax in case of re-assessment and where additional income is disclosed before the Settlement Commission under section 245C, 48.1-48.7. 245A Settlement Commission, 49.1-49.13. 245D Settlement Commission, 49.1-49.13. 245H Settlement Commission, 49.1-49.13. 245HA Settlement Commission, 49.1-49.13. 245K Settlement Commission, 49.1-49.13. 245-O Eligibility for app .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of order that is erroneous in so far as it is prejudicial to the interests of revenue, 53.1-53.3. 269SS Mode of taking or accepting certain loans, deposits and specified sums and mode of repayment of loans or deposits and specified advances, 54.1-54.6. 269T Mode of taking or accepting certain loans, deposits and specified sums and mode of repayment of loans or deposits and specified advances, 54.1-54.6. 271 Amount of tax sought to be evaded for the purposes of penalty for concealment of income .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

direct transfer provisions, 8.1-8.5. 271-I Rationalisation of provisions relating to Tax Deduction at Source (TDS) and Tax Collection at Source (TCS), 47.1-47.20. 272A Rationalisation of provisions relating to Tax Deduction at Source (TDS) and Tax Collection at Source (TCS), 47.1-47.20. 273B Fund Managers in India not to constitute business connection of offshore funds, 10.1-10.11. 285A Clarity relating to Indirect transfer provisions, 8.1-8.5. 288 Certain accountants not to give reports/certifi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t Trusts (REIT) and Infrastructure Investment Trusts (Invit), 34.1 - 34.7. 101 Taxation Regime for Real Estate Investment Trusts (REIT) and Infrastructure Investment Trusts (Invit), 34.1 - 34.7. 1. Introduction 1.1 The Finance Act, 2015 (hereafter referred to as the Act ) as passed by the Parliament, received the assent of the President on the 14th day of May, 2015 and has been enacted as Act No. 20 of 2015. This circular explains the substance of the provisions of the Act relating to direct tax .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

197A, 200, 200A, 203A, 206C, 220, 234B, 245A, 245D, 245H, 245HA, 245K, 245O, 246A, 253, 255, 263, 269T, 271, 271D, 271E, 272A, 273B, 288, and 295 of the Income-tax Act, 1961; (iii) Substituted new sections for sections 151 and 269SS; (iv) inserted new sections 9A, 32AD, 158AA, 192A, 194LBB, 206CB, 271FAB, 271GA, 271-I and 285A in the Income-tax Act, 1961; (v) inserted Chapter XII-FB consisting of section 115UB in the Income-tax Act, 1961; (vi) repealed the Wealth-tax Act, 1957; (vii) amended sec .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ion of advance tax , deduction of tax at source from Salaries and charging of tax payable in certain cases during the financial year 2014-15. The main features of the rates specified in the said Part I are as follows: 3.1.2 Individual, Hindu undivided family, association of persons, body of individuals or artificial juridical person. - Paragraph A of Part I of the First Schedule specifies the rates of income-tax in the case of every individual, Hindu undivided family, association of persons, bod .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

(very senior citizen) Up to ₹ 2 ,50,000 Nil Nil Nil ₹ 2,50,001 - ₹ 3,00,000 10% ₹ 3,00,001 - ₹ 5,00,000 10% ₹ 5,00,001 - ₹ 10,00,000 20% 20% 20% Exceeding ₹ 10,00,000 30% 30% 30% The amount of income-tax so computed shall be increased by a surcharge at the rate of ten percent. of such income-tax in case of a person having a total income exceeding one crore rupees. However, marginal relief shall be available so the total amount payable as income-ta .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

income-tax at the rate of one per cent of such income-tax inclusive of surcharge. No marginal relief shall be available in respect of Education Cess and Secondary and Higher Education Cess. For instance, if the income of an individual is ₹ 1,01,00,000 and income-tax computed is ₹ 28,55,000. Surcharge on the income-tax at the rate of 10% of such tax is ₹ 2,85,500. Thus the total income-tax inclusive of surcharge is ₹ 31,40,500 without providing marginal relief. On providi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

where the amount of tax computed is ₹ 29,55,000, the Education Cess of two per cent is ₹ 59,100, the Secondary and Higher is ₹ 29,550. The total cess in this case will amount to ₹ 88,650 (i.e., ₹ 59,100 + ₹ 29,550). No marginal relief shall be available in respect of such Cess. 3.1.3 Co-operative Societies In the case of every co-operative society, the rates of income-tax have been specified in Paragraph B of Part I of the First Schedule to the Act. The rates .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the total amount payable as income-tax on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees. The Education Cess on income-tax shall continue to be levied at the rate of two per cent on the amount of tax computed inclusive of surcharge. In addition, the amount of tax computed shall be further increased by an additional surcharge called Secondary and Higher Education Cess on income-tax at the rate of one per cent of such income-tax inclusive of surc .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

er, marginal relief shall be available so that the total amount payable as income-tax and surcharge on total income exceeding one crore rupees shall not exceed the total amount payable as income-tax on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees. The Education Cess on income-tax shall continue to be levied at the rate of two per cent on the amount of tax computed inclusive of surcharge. In addition, the amount of tax computed shall be furthe .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

total income. The tax computed shall be enhanced by a surcharge of five per cent where such domestic company has total income exceeding one crore rupees but not exceeding ten crore rupees. Surcharge at the rate of ten per cent shall be levied if the total income of the company exceeds ten crore rupees. In the case of a company other than a domestic company, royalties received from Government or an Indian concern under an approved agreement made after 31-3-1961 but before 1-4-1976, shall be taxed .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

te of five per cent shall be levied if the total income of the company other than domestic company exceeds ten crore rupees. However, marginal relief shall be allowed in the case of every company to ensure that (i) the total amount payable as income-tax and surcharge on total income exceeding one crore rupees shall not exceed the total amount payable as income-tax on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees, (ii) the total amount payable .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

charge called Secondary and Higher Education Cess on income-tax at the rate of one per cent of the amount of tax computed, inclusive of surcharge. No marginal relief shall be available in respect of Education Cess and Secondary and Higher Education Cess. 3.2 Rates for deduction of income-tax at source from certain incomes during the financial year 2015-16. 3.2.1 In every case in which tax is to be deducted at the rates in force under the provisions of sections 193, 194, 194A, 194B, 194BB, 194D, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

section 115A, made to non-residents (other than a company) or a foreign company, the rate shall be ten per cent. of such income instead of twenty five per cent.. 3.2.2 Surcharge - The tax deducted at source in the following cases shall be increased by a surcharge for purposes of the Union indicated below:- (i) In case of every non-resident person not being a company, the rate of surcharge is twelve percent of tax where the income or aggregate of such income paid or likely to be paid and subject .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ge is five percent. (iii) No surcharge on tax deducted at source shall be levied in the case of an individual, Hindu undivided family, association of persons, body of individuals, artificial juridical person, co-operative society, local authority, firm ,being a resident or a domestic company. 3.2.3 Education Cess - Education Cess on income-tax shall continue to be levied for the purposes of the Union at the rate of two per cent of income-tax and surcharge, if any. For instance, if the amount of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ary and Higher Education Cess on income-tax at the rate of one per cent in all such cases. Thus in the above illustration, where the amount of tax deducted is ₹ 12,00,000, the surcharge is ₹ 24,000, the said Secondary and Higher Education Cess will be computed at the rate of one percent on ₹ 12,24,000 which works out to be ₹ 12,240. The total cess in this case will, therefore, amount to ₹ 36,720 (i.e., ₹ 24,480 + ₹ 12,240). 3.3 Rates for deduction of inc .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

, provisional assessment of shipping profits arising in India to non-residents, assessment of persons leaving India for good during that financial year, assessment of persons who are likely to transfer property to avoid tax, assessment of bodies formed for short duration, etc. The rates are as follows:- 3.3.2 Individual, Hindu undivided family, association of persons, body of individuals or artificial juridical person - Paragraph A of Part III of the First Schedule specifies the rates of income- .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

izen), HUF, association of persons, body of individuals and artificial juridical person. Individual, resident in India who is of the age of sixty years or more but less than eighty years. (senior citizen) Individual, resident in India who is of the age of eighty years or more (very senior citizen) Up to ₹ 2 ,50,000 Nil Nil Nil ₹ 2,50,001 - ₹ 3,00,000 10% ₹ 3,00,001 - ₹ 5,00,000 10% ₹ 5,00,001 - ₹ 10,00,000 20% 20% 20% Exceeding ₹ 10,00,000 30% 30% .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

exceeds one crore rupees. The Education Cess on income-tax shall continue to be levied at the rate of two per cent on the amount of tax computed inclusive of surcharge. In addition, the amount of tax computed shall be further increased by an additional surcharge called Secondary and Higher Education Cess on income-tax at the rate of one per cent of such income-tax inclusive of surcharge. No marginal relief shall be available in respect of Education Cess and Secondary and Higher Education Cess. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ding one crore rupees as against the rate of ten per cent. for the financial year 2014-15. However, marginal relief shall be available. Accordingly, the total amount payable as income-tax and surcharge on total income exceeding one crore rupees shall not exceed the total amount payable as income-tax on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees. Education Cess on income-tax and Secondary and Higher Education Cess on income-tax shall be levi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ch income-tax in case of a firm having a total income exceeding one crore rupees as against the rate of ten per cent. for the financial year 2014-15. However, marginal relief shall be available. Accordingly, the total amount payable as income-tax and surcharge on total income exceeding one crore rupees shall not exceed the total amount payable as income-tax on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees. The Education Cess on income-tax shal .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he rate of income-tax has been specified at thirty per cent in Paragraph D of Part III of the First Schedule to the Act. The amount of income-tax so computed shall be increased by a surcharge at the rate of twelve percent. of such income-tax in case of a local authority having a total income exceeding one crore rupees as against the rate of ten per cent. for the financial year 2014-15. However, marginal relief shall be available. Accordingly, the total amount payable as income-tax and surcharge .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ion Cess. 3.3.6 Companies- In the case of a company, the rate of income-tax has been specified in Paragraph E of Part III of the First Schedule to the Act. In case of a domestic company, the rate of income-tax is thirty per cent of the total income. The tax computed shall be enhanced by a surcharge of seven per cent where such domestic company has total income exceeding one crore rupees but not exceeding ten crore rupees as against the rate of five per cent. for the financial year 2014-15. Surch .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

an approved agreement made after 29-2-1964 but before 1-4-1976, shall be taxed at fifty per cent. On the balance of the total income of such company, the tax rate shall be forty per cent. The tax computed shall be enhanced by a surcharge of two per cent where such company has total income exceeding one crore rupees but not exceeding ten crore rupees. Surcharge at the rate of five per cent shall be levied if the total income of the company other than domestic company exceeds ten crore rupees. Ho .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

and surcharge on a total income of ten crore rupees, by more than the amount of income that exceeds ten crore rupees. Education Cess on Income-tax and Secondary and Higher Education Cess on income-tax shall be levied at the rate of two per cent and one per cent respectively of the amount of income-tax computed including surcharge. No marginal relief shall be available in respect of Education Cess and Secondary and Higher Education Cess. 3.4 Surcharge on Additional Income-tax Where additional inc .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t of such tax as against the rate of ten per cent. for the financial year 2014-15. 4. Rationalisation of definition of charitable purpose in the Income-tax Act 4.1 Section 11 of the Income-tax Act deals with exemption to charitable trusts and institutions. The primary condition for grant of exemption to a trust or institution under the said section is that the income derived from property held under trust should be applied for charitable purposes in India. Charitable purpose is defined in sectio .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

activity. However, as per the second proviso, this restriction shall not apply if the aggregate value of the receipts from the activities referred above is twenty five lakh rupees or less in the previous year. 4.2 The institutions which, as part of genuine charitable activities, undertake activities like publishing books or holding program on yoga or other programs as part of actual carrying out of the objects which are of charitable nature were being put to hardship due to first and second pro .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

protecting the activities undertaken by the genuine organization as part of actual carrying out of the primary purpose of the trust or institution, the definition of charitable purpose in the Income-tax Act has been amended to provide that the advancement of any other object of general public utility shall not be a charitable purpose, if it involves the carrying on of any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, co .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ctivity or activities, of that previous year . 4.5 Applicability: - These amendments take effect from 1st April, 2016 and will, accordingly, apply in relation to the assessment year 2016-17 and subsequent assessment years. 5. Alignment of provisions relating to taxation of Government Grants with the provisions of Income Computation and Disclosure Standards (ICDS). 5.1 Sub-section (2) of section 145 of the Income-tax Act provides that the Central Government may notify Income Computation and Discl .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

3 of the Income-tax Act already contained the guidance for treatment of Government grants relating to acquisition of an asset. However, there was no specific guidance available under the provisions of the Income-tax Act for treatment of other Government grants. During the public consultations for ICDS, the stakeholders suggested that in order to avoid any future controversy in this matter, there should be specific provision in the Income-tax Act for treating these Government grants as income. Th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rant or cash incentive or duty drawback or waiver or concession or reimbursement (by whatever name called) by the Central Government or a State Government or any authority or body or agency in cash or kind to the assessee other than the subsidy or grant or reimbursement which is taken into account for determination of the actual cost of the asset in accordance with the provisions of Explanation 10 to clause (1) of section 43 of the Income-tax Act. 5.2 As mentioned in Press Release dated 5th May, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tay in India 6.1 Clause (1) of section 6 of the Income-tax Act provides the conditions under which an individual is held to be resident in India. The said clause, inter alia, provides that an individual is said to be resident in India in any previous year if he, having within the four years preceding that year been in India for a period or periods amounting in all to three hundred and sixty five days or more, is in India for a period or periods amounting in all to sixty days or more in that year .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n view of the above, the Income-tax Act has been amended to provide that in the case of an individual, being a citizen of India and a member of the crew of a foreign bound ship leaving India, the period or periods of stay in India shall, in respect of such voyage, be determined in the manner and subject to such conditions as may be prescribed in the Income-tax Rules, 1962. Rule 126 of Income-tax Rules, 1962 notified vide S.O. No. 2240(E) dated 17th August, 2015 prescribes the manner for determin .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

eing a company the conditions are contained in clause (3) of section 6 of the said Act. Under the said clause, before its amendment by the Act, a company was said to be resident in India in any previous year, if- (i) it is an Indian company; or (ii) during that year, the control and management of its affairs is situated wholly in India. 7.2 Due to the requirement that whole of control and management should be situated in India and that too for whole of the year, the condition had been rendered p .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ve management' for determination of residence of a company as a tie-breaker rule for avoidance of double taxation. Many countries prefer the POEM test to be appropriate test for determination of residence of a company. The principle of POEM is recognized and accepted by Organisation of Economic Cooperation and Development (OECD) also. The OECD commentary on model convention provides definition of place of effective management to mean the place where key management and commercial decisions th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ia but being controlled and managed from India. 7.5 In view of the above, section 6 of the Income-tax Act has been amended to provide that a person being a company shall be said to be resident in India in any previous year, if- (i) it is an Indian company; or (ii) its place of effective management, in that year, is in India . 7.6 Further, the place of effective management has been defined to mean a place where key management and commercial decisions that are necessary for the conduct of the busi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

med to accrue or arise in India. Clause(i) of said sub-section (1) provides a set of circumstances in which income accruing or arising, directly or indirectly, is taxable in India. The said clause provides that all income accruing or arising, whether directly or indirectly, through or from any business connection in India, or through or from any property in India, or through or from any asset or source of income in India, or through the transfer of a capital asset situate in India shall be deeme .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ubstantially from the assets located in India. 8.3 Considering the concerns raised by various stakeholders regarding the scope and impact of these amendments, an Expert Committee under the Chairmanship of Dr. Parthasarathi Shome was constituted by the Government to go into the various aspects relating to the amendments. 8.4 The recommendations of the Expert Committee were considered and a number of recommendations (either in full or with partial modifications) were accepted for implementation ei .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e amount of ten crore rupees ; and (b) represents at least fifty per cent. of the value of all the assets owned by the company or entity. (ii) value of an asset shall mean the fair market value of such asset without reduction of liabilities, if any, in respect of the asset. (iii) the specified date of valuation shall be the date on which the accounting period of the company or entity, as the case may be, ends preceding the date of transfer. (iv) however, if the book value of the assets of the co .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

directly or indirectly, its value substantially from assets located in India will be on proportional basis. The method for determination of proportionality shall be prescribed in the rules. (vii) the exemption shall be available to a non-resident from transfer, outside India, of a share of, or interest in, a foreign company or entity if such foreign company or entity directly owns the assets situated in India and the transferor along with its associated enterprises, at any time in twelve months .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ng with its associated enterprises, at any time in 12 months preceding the date of transfer,- (a) neither holds the right of management or control in relation to such company or the entity, (b) nor holds any right in, or in relation to, such company or entity which would entitle him to the right of control or management of the direct holding company or entity, nor holds such percentage of voting power, or share capital or interest in such company or entity which entitles him to the voting power, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ct of any transfer, subject to certain conditions, in a demerger, of a capital asset, being a share of a foreign company which derives, directly or indirectly, its value substantially from the share or shares of an Indian company, held by the demerged foreign company to the resulting foreign company. (xi) there shall be a reporting obligation on Indian concern through or in which the Indian assets are held by the foreign company or the entity. The Indian entity shall be obligated to furnish info .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ht of management or control in relation to the Indian concern; and (b) a sum of five lakh rupees in any other case. 8.5 Applicability: - These amendments take effect from 1st April, 2016 and will, accordingly, apply in relation to the assessment year 2016-17 and subsequent assessment years. 9. Clarity regarding source rule in respect of interest received by the non-resident in certain cases 9.1 The provisions of section 5 of the Income-tax Act provide for scope of total income for the purposes o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ble by- (a) the Government ; or (b) a person who is a resident, except where the interest is payable in respect of any debt incurred, or moneys borrowed and used, for the purposes of a business or profession carried on by such person outside India or for the purposes of making or earning any income from any source outside India ; or (c) a person who is a non-resident, where the interest is payable in respect of any debt incurred, or moneys borrowed and used, for the purposes of a business or pro .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

hall apply to the extent they are more beneficial to him. Therefore, the taxpayer is entitled to relief from the provisions of the Income-tax Act if such relief is available under the DTAA and to that extent the provisions of the Income-tax Act are not applicable. 9.3 Further, income of a non-resident from business activity is taxable in India if it has a business connection in India in accordance with the provisions contained in section 9(1)(i) of the Income-tax Act, and only such income is tax .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

that for the purpose of computation of income, the PE shall be deemed to be an independent enterprise with certain restrictions regarding allowability of expense paid to head office by the PE. Under DTAAs, in case of a banking company, the interest paid by a PE to its head office and other branches is allowed as deduction by treating such a permanent establishment as an independent enterprise. 9.4 The CBDT, in its Circular No. 740 dated 17/4/1996 had clarified that branch of a foreign company in .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

f, however, such interest is deductible due to computation mechanism provided under the DTAA but it is not taxable in the hands of the Bank, being income generated from self. The view expressed in the CBDT circular has not found favour in these judicial decisions. If the legal fiction created under the treaty were treated to be of limited effect, it would have led to base erosion. The interest paid by the permanent establishment to the head office or other branch etc. is an interest payment sour .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

exceed the rate specified in paragraph 2(a) of Article 11 (Interest) 9.6 The Special Bench of the ITAT in the case of Sumitomo Mitsui Banking Corporation [136 ITD- 66 TBOM] had mentioned that there are instances of other countries providing for specific provisions in their domestic law which allows for the taxability of interest paid by a permanent establishment to its head office and other branches and had pointed out absence of such a specific provision in the Income-tax Act. Considering that .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ident outside India shall be deemed to accrue or arise in India and shall be chargeable to tax in addition to any income attributable to the permanent establishment in India. The permanent establishment in India shall be deemed to be a person separate and independent of the non-resident person of which it is a permanent establishment and the provisions of the Income-tax Act relating to computation of total income, determination of tax and collection and recovery would apply. Accordingly, the PE .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

2016-17 and subsequent assessment years. 10. Fund Managers in India not to constitute business connection of offshore funds 10.1 The provisions of section 9 of the Income-tax Act deal with incomes which are deemed to accrue or arise in India. Section 9(1)(i) provides a set of circumstances in which income is deemed to accrue or arise in India, and is taxable in India. One of the conditions for the income of a non-resident to be deemed to accrue or arise in India is the existence of a business c .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ther than an individual, the test is dependent upon the location of its control and management . 10.3 In the case of off-shore funds, under the above provisions, the presence of a fund manager in India could create sufficient nexus of the off-shore fund with India and could constitute a business connection in India even though the fund manager may be an independent person. Similarly, if the fund manager located in India undertakes fund management activity in respect of investments outside India .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d management activity undertaken in, and from, India constituting a business connection. Further, presence of the fund manager under certain circumstances may have led to the off shore fund being held to be resident in India on the basis of its control and management being in India. 10.4 There are a large number of fund managers who are of Indian origin and are managing the investment of offshore funds in various countries. These persons were being discouraged from locating in India due to the a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

l to the fact as to whether the investment is made directly by the fund or through engagement of Fund manager located in India; and (ii) that income of the fund from the investments outside India would not be taxable in India solely on the basis that the Fund management activity in respect of such investments have been undertaken through a fund manager located in India. 10.6 The regime provides that in the case of an eligible investment fund, the fund management activity carried out through an e .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

undertaken on its behalf is subject to the following:- (1) The offshore fund shall be required to fulfill the following conditions during the relevant year for being an eligible investment fund: (i) the fund is not a person resident in India; (ii) the fund is a resident of a country or a specified territory with which an agreement referred to in sub-section (1) of section 90 or sub-section (1) of section 90A has been entered into; (iii) the aggregate participation or investment in the fund, dire .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rest, directly or indirectly, in the fund exceeding ten percent.; (vii) the aggregate participation interest, directly or indirectly, of ten or less members along with their connected persons in the fund, shall be less than fifty percent. ; (viii) the investment by the fund in an entity shall not exceed twenty percent of the corpus of the fund; (ix) no investment shall be made by the fund in its associate entity; (x) the monthly average of the corpus of the fund shall not be less than one hundre .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

India other than the activities undertaken by the eligible fund manager on its behalf. (xiii) the remuneration paid by the fund to an eligible fund manager in respect of fund management activity undertaken on its behalf is not less than the arm s length price of such activity. (2) The following conditions shall be required to be satisfied by the person being the fund manager for being an eligible fund manager: (i) the person is not an employee of the eligible investment fund or a connected perso .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ovided that conditions mentioned in items (v),(vi)& (vii) of paragraph 10.7 shall not apply in cases of an investment fund set up by the Government or the Central Bank of a foreign State or a sovereign fund or such other fund as the Central Government may notify. 10.9 It has been further provided that every eligible investment fund shall, in respect of its activities in a financial year, furnish within ninety days from the end of the financial year, a statement in the prescribed form to the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ied that this regime shall not have any impact on taxability of any income of the eligible investment fund which would have been chargeable to tax irrespective of whether the activity of the eligible fund manager constituted the business connection in India of such fund or not. Further, the new regime shall not have any effect on the scope of total income or determination of total income in the case of the eligible fund manager. 10.11 Applicability: - These amendments take effect from 1st April, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

GF) for each segment of each recognized stock exchange to guarantee the settlement of trades executed in respective segments of the exchange. 11.2 Income by way of contributions to the Investor Protection Fund set up by recognised stock exchanges in India, or by commodity exchanges in India or by a depository is exempt from taxation under the provisions of the Income-tax Act. 11.3 On similar lines, income of the Core SGF arising from (a) contribution received from specified persons;(b) investmen .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

shall be deemed to be the income of the previous year in which such amount is shared and shall accordingly be chargeable to income-tax. 11.3.2 The specified person for this purpose is defined to mean any recognised clearing corporation which establishes and maintains the Core Settlement Guarantee Fund, any recognised stock exchange being a shareholder in such recognised Clearing Corporation or a contributor to the Core Settlement Guarantee Fund and any clearing member contributing to the Core Se .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ived from property held under such trust is that the income derived from property held under trust should be applied for charitable purposes in India. Where such income cannot be applied during the previous year, it has to be accumulated and applied for such purposes in accordance with various conditions provided in the section. While 15% of the income can be accumulated indefinitely by the trust or institution, 85% of income can only be accumulated for a period not exceeding 5 years subject to .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nce of the above conditions within time, the Income-tax Act has been amended to provide that the Form 10 shall be furnished before the due date of furnishing the return of income specified under section 139 of the Income-tax Act for the fund or institution. In case the Form is not submitted before this date, then the benefit of accumulation would not be available and such income would be taxable at the applicable rate. Further, the benefit of accumulation would also not be available if return of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ate of furnishing the return of income, such income shall be deemed to have been applied for charitable or religious purpose. There was no standard format for exercising the option. Accordingly, the provisions of section 11 have also been amended to prescribe a format for exercise of option by the trust/institution for the purposes of clause (2) of the Explanation to sub-section (1) of section 11 of the Income-tax Act. 12.4 Applicability: - These amendments take effect from 1st April, 2016 and w .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of general depreciation, the second proviso to section 32(1)(ii) inter alia provides that the allowance for additional depreciation would be restricted to 50% if the new plant or machinery acquired and installed by the assessee is put to use for the purposes of business or profession for a period of less than one hundred and eighty days in the previous year. Non-availability of full 100% allowance for additional depreciation for plant or machinery acquired and installed in the second half of the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ant or machinery acquired and used for less than 180 days which has not been allowed in the year of acquisition and installation of such plant or machinery, shall be allowed in the immediately succeeding previous year. 13.3 Applicability: - This amendment takes effect from 1st April, 2016 and will, accordingly, apply in relation to the assessment year 2016-17 and subsequent assessment years. 14. Incentives for the States of Andhra Pradesh, Bihar, Telangana and West Bengal 14.1 Manufacturing sect .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d in the Income-tax Act to provide for an additional investment allowance of an amount equal to 15% of the cost of new asset acquired and installed by an assessee, if- (a) he sets up an undertaking or enterprise for manufacture or production of any article or thing on or after 1st April, 2015 in any notified backward area in the State of Andhra Pradesh or the State of Bihar or the State of Telangana or the State of West Bengal; and (b) the new assets are acquired and installed for the purposes o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

xisting provisions of section 32AC of the Income-tax Act as well as under this newly inserted section 32AD of the Income-tax Act if it fulfils the conditions (such as investment above a specified threshold) provided in section 32AC as well as conditions specified in section 32AD. 14.2.3 The phrase new asset has been defined as plant or machinery but does not include- (i) any plant or machinery which before its installation by the assessee was used either within or outside India by any other pers .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

on of any previous year. 14.2.4 With a view to ensure that the manufacturing units which are set up by availing this incentive actually contribute to economic growth of these backward areas by carrying out the activity of manufacturing for a reasonable period of time, suitable safeguards have been provided for restricting the transfer of the plant or machinery for a period of 5 years. However, this restriction shall not apply to the amalgamating or demerged company or the predecessor in a case o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

wance is allowed over and above the deduction allowed for general depreciation under section 32(1)(ii) of the Income-tax Act. 14.3.2 In order to incentivise acquisition and installation of plant and machinery for setting up of manufacturing units in the notified backward areas in the State of Andhra Pradesh or in the State of Bihar or in the State of Telangana or in the State of West Bengal, a new proviso has been inserted in section 32(1)(iia) of the Income-tax Act to provide for higher additio .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

enterprise during the period beginning on the 1st day of April, 2015 and ending before the 1st day of April, 2020. The eligible machinery or plant for this purpose shall not include the machinery or plant which are currently not eligible for additional depreciation as per the existing proviso to section 32(1)(iia) of the Income-tax Act. 14.4 Applicability:- These amendments takes effect from 1st April, 2016 and will, accordingly, apply in relation to the assessment year 2016-17 and subsequent a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

out in an approved in-house research and development facility. For availing this weighted deduction, the company is required to enter into an agreement with the Secretary, Department of Scientific and Industrial Research (DSIR) and also required to obtain his approval. The Secretary, DSIR is required to send the report regarding approval to DGIT (Exemption) in the prescribed Form, who generally does not have jurisdiction over the assessee company. Further, the company is required to maintain se .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

r section 35 (2AB) of the Income-tax Act, the provisions of section 35(2AB) of the Income-tax Act has been amended so as to provide that deduction under the said section shall be allowed if the company enters into an agreement with the prescribed authority for cooperation in such research and development facility and fulfils such conditions as may be prescribed with regard to maintenance and audit of accounts and also furnishes prescribed reports. Further a reference of the Principal Chief Commi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

f bad debts with the provisions of the Income Computation and Disclosure Standards (ICDS) 16.1 The Income Computation and Disclosure Standards (ICDS)-IX relating to borrowing costs provides for capitalisation of borrowing costs incurred for acquisition of assets up to the date the asset is put to use. The proviso to clause (iii) of sub-section (1) of section 36 of the Income-tax Act provided for capitalisation of borrowing costs incurred for acquisition of assets for extension of existing busine .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

date the asset is put to use without making any distinction whether the asset is acquired for extension of existing business or not. The Accounting Standard Committee, which drafted the ICDS, also recommended that there is a need to carry out suitable amendments to provisions of the proviso to clause (iii) of sub-section (1) of section 36 of the Income-tax Act for aligning the same with the general capitalisation principles. 16.3 In view of the above, the provisions of proviso to clause (iii) o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ed for computation of taxable income in accordance with the provisions of ICDS without recording the same in the books of account and such income may be required to be reversed in accordance with the provisions of the ICDS. For claiming bad debt, the provisions of section 36(1)(vii) of the Income-tax Act, inter alia, require that the amount should be written off in the accounts of the assessee. 16.5 Therefore, the reversal of income in accordance with the provisions of the ICDS may not be allowa .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

,it shall be deemed to be written off as irrecoverable in the accounts. 16.6 Applicability:- These amendments take effect from 1st April, 2016 and would accordingly apply to assessment year 2016-17 and subsequent assessment years. 17. Deduction for payment made for purchase of sugar cane by co-operative sugar factories at a price fixed by or fixed with the approval of the Government. 17.1 Sugar factories operating in the cooperative sectors in certain states of India pay to sugarcane growers a f .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

gar factories were claiming this excess payment as business expenditure whereas the same has been disallowed in the assessment on the ground that the excess price paid for purchase of sugar cane over and above SMP is in the nature of appropriation/distribution of profit and hence not allowable a deduction. 17.3 In order to provide certainty in this matter and to encourage co-operative movement in sugar sector, a new clause (xvii) has been inserted in sub-section (1) of section 36 of the Income-t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ent assessment years, the price paid for purchase of sugarcane which has been fixed or approved by the Government shall be allowed as deduction under section 36(1)(xvii) of the Income-tax Act even if the same is in excess of the SMP. 17.4 Applicability:- This amendment are takes effect from 1st April, 2016 and would accordingly apply to assessment year 2016-17 and subsequent assessment years. 18. Tax neutrality on merger of similar schemes of Mutual Funds 18.1 Securities and Exchange Board of In .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the consolidation is of two or more schemes of an equity oriented fund or two or more schemes of a fund other than an equity oriented fund by amending section 47 of the Income-tax Act. Section 49 of the Income-tax Act has also been amended to provide that the cost of acquisition of the units in a consolidated scheme of a mutual fund shall be the cost of units in the consolidating scheme and period of holding of the units of the consolidated scheme shall include the period for which the units in .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

, 2016 and will accordingly apply, in relation to the assessment year 2016-17 and subsequent assessment years. 19. Cost of acquisition of a capital asset in the hands of resulting company to be the cost for which the demerged company acquired the capital asset 19.1 Under clause (vib) of section 47 of the Income-tax Act any capital asset transferred by the demerged company to the resulting company in the scheme of demerger is not regarded as transfer if the resulting company is an Indian company. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ade by the Finance Act, 2015, there was no express provision to this effect. Accordingly, sub-clause (e) of clause (iii) of sub-section (1) of section 49 of the Income-tax Act has been amended so as to provide that the cost of acquisition of an asset acquired by resulting company shall be the cost for which the demerged company acquired the capital asset as increased by the cost of improvement incurred by the demerged company or the resulting company ,as the case may be, and the period of holdin .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t for the welfare of the girl child has been introduced under the Sukanya Samriddhi Account Rules, 2014. The following tax benefits have been envisaged in the Sukanya Samriddhi Account scheme:- (i) The investments made in the Scheme will be eligible for deduction under section 80C of the Income-tax Act. (ii) The interest accruing on deposits in such account will be exempt from income tax. (iii) The withdrawal from the said scheme in accordance with the rules of the said scheme will be exempt fro .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

der clause (viii) of sub-section (2) of section 80C of the Income-tax Act vide Notification number 9/2015 S.O.210 (E),F.No. 178/3/2015-ITA-I dated 21.01.2015.With a view to provide that the deduction under section 80C may be availed by the parent or legal guardian of the girl child, amendment of section 80C of the Income-tax Act has been made to provide that a sum paid or deposited during the year in the Scheme in the name of any girl child of the individual or in the name of any girl child for .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

idual was allowed a deduction upto one lakh rupees in the computation of his total income, of an amount paid or deposited by him to effect or keep in force a contract for any annuity plan of Life Insurance Corporation of India or any other insurer for receiving pension from a fund set up under a pension scheme. 21.2 In order to promote social security, sub-section (1) of section 80CCC has been amended to raise the limit of deduction under section 80CCC from one lakh rupees to one hundred and fif .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

r an individual employed by any other employer, or any other assessee being an individual has paid or deposited any amount in a previous year in his account under a notified pension scheme, a deduction of such amount not exceeding ten per cent. of his salary in the case of an employee and ten per cent. of the gross total income in case of any other individual is allowed. Similarly, the contribution made by the Central Government or any other employer to the said account of the individual under t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rds NPS, sub-section (1A) of section 80CCD has been omitted. The overall limit of one hundred and fifty thousand rupees under section 80CCE shall apply in respect of the contribution made in accordance with sub-section (1) of section 80CCD. In addition to the enhancement of the limit under section 80CCD(1), a new sub-section (1B) has been inserted in section 80CCD so as to provide for an additional deduction in respect of any amount paid, upto fifty thousand rupees for contributions made by any .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

uction in respect of health insurance premia 23.1 The provisions contained in section 80D of the Income-tax Act, before its amendment by the Act, inter alia, provided for - a) deduction upto fifteen thousand rupees to an assessee, being an individual in respect of health insurance premia, paid by any mode, other than cash, to effect or to keep in force an insurance on the health of the assessee or his family or any contribution made to the Central Government Health Scheme or any other notified s .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the HUF. The section also provided for a deduction of twenty thousand rupees in both the cases if the individual insured is a senior citizen of sixty years of age or above. 23.3 The quantum of deduction allowed under Section 80D to individuals and HUF in respect of premium paid for health insurance had been fixed vide Finance Act, 2008 at ₹ 15000/- and ₹ 20,000/- for senior citizens. In view of continuous rise in the cost of medical expenditure, section 80D has been amended to raise .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

de on account of medical expenditure shall be allowed as a deduction under section 80D, in respect of a very senior citizen, if no payment has been made to keep in force an insurance on the health of such person. The aggregate deduction available to any individual who is a very senior citizen in respect of health insurance premia and the medical expenditure incurred for his family would, however, be limited to thirty thousand rupees. Example: (i) For Individual and his family Rs. Health insuranc .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t year 2016-17 and subsequent assessment years. 24. Raising the limit of deduction under section 80DD and 80U for persons with disability and severe disability 24.1 The provisions of section 80DD of the Income-tax Act, before its amendment by the Act, inter alia, provided for a deduction to an individual or HUF, who is a resident in India, and has incurred- (a) Expenditure for the medical treatment (including nursing), training and rehabilitation of a dependant, being a person with disability as .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

on to an individual, being a resident, who, at any time during the previous year, was certified by the medical authority to be a person with disability (as defined under the said section). 24.4 The said section provided for a deduction of fifty thousand rupees if the person is suffering from disability and one lakh rupees if the person is suffering from severe disability (as defined under the said section). 24.5 The limits under section 80DD and section 80U in respect of a person with disability .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ty five thousand rupees. 24.7 Section 80DD and section 80U have further been amended to raise the limit of deduction in respect of a person with severe disability from one lakh rupees to one hundred and twenty five thousand rupees. 24.8 Applicability:-These amendments take effect from 1st April, 2016 and will, accordingly, apply in relation to the assessment year 2016-17 and subsequent assessment years. 25. Raising the limit of deduction under section 80DDB 25.1 Under the provisions contained in .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

at any time during the relevant previous year. 25.2 The above deduction is available to an individual for medical expenditure incurred on himself or a dependant. It is also available to a Hindu undivided family (HUF) for such expenditure incurred on its members. Dependant in case of an individual means the spouse, children, parents, brother or sister of an individual and in case of an HUF means a member of the HUF ,wholly or mainly dependant on such individual or HUF for his support and mainten .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

o not have doctors specialising in the above branches of medicine. Therefore, it may be difficult for the taxpayer to obtain a certificate from a Government hospital. 25.4 In view of the above, section 80DDB has been amended to provide that the assessee will be required to obtain a prescription from a specialist doctor for the purpose of availing this deduction. 25.5 Section 80DDB has been amended further to provide for a higher limit of deduction of upto eighty thousand rupees, for the expendit .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

der the provisions of section 80G of the Income-tax Act, before its amendment by the Act, an assessee was allowed a deduction from his total income in respect of donations made by him to certain funds and charitable institutions. The deduction is allowed at the rate of hundred percent of the amount of donations made to certain funds and institutions formed for a social purpose of national importance, like the Prime Ministers National Relief Fund, National Foundation for Communal Harmony etc. 26. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

pply in relation to the assessment year 2016-17 and subsequent assessment years. 27. Tax benefits for Swachh Bharat Kosh and Clean Ganga Fund 27.1 Under the provisions of section 80G of the Income-tax Act, before its amendment by the Act, a deduction was allowed in computing the total income of a person in respect of donations made to certain funds and charitable institutions. The deduction is allowed at the rate of fifty percent of the amount of donations made except in the case of donations ma .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

to mobilize resources for improving sanitation facilities in rural and urban areas and school premises through the Swachh Bharat Abhiyan. Similarly, Clean Ganga Fund has been established by the Central Government to attract voluntary contributions to rejuvenate river Ganga. 27.3 With a view to encourage and enhance people s participation in the national effort to improve sanitation facilities and rejuvenation of river Ganga, section 80G of the Income-tax Act has been amended to incentivise dona .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

10(23C) of the Income-tax Act provide for exemption from tax in respect of the income of certain charitable funds or institutions like the Prime Minister s National Relief Fund; the Prime Minister s Fund (Promotion of Folk Art); the Prime Minister's Aid to Students Fund; the National Foundation for Communal Harmony. Considering the importance of Swachh Bharat Kosh and Clean Ganga Fund, section 10(23C) of the Income-tax Act has also been amended to exempt the income of Swachh Bharat Kosh and .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

actory. The quantum of deduction allowed is equal to thirty per cent of additional wages paid to the new regular workmen employed by the assessee in such factory, in the previous year, for three assessment years including the assessment year relevant to the previous year in which such employment is provided. 28.2 Clause (a) of sub-section (2), inter alia, provides that no deduction under sub-section (1) shall be available if the factory is hived off or transferred from another existing entity or .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

units to claim this incentive, the benefit under section 80JJAA has been extended to units employing 50 (instead of 100) regular workmen. 28.4 Accordingly, sub-sections (1) and (2) of the section 80JJAA have been amended. Further, clause (i) of the Explanation to section 80JJAA has been amended to provide additional wages to mean the wages paid to the new regular workmen in excess of fifty workmen employed during the previous year. 28.5 Applicability:-These amendments take effect from 1st April, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

id section. Before amendment by the Act, this threshold was rupees five crore. 29.2 In order to address the issue of compliance cost in case of small businesses on account of low threshold of five crore rupees, the said section 92BA has been amended to provide that the aggregate of specified transactions entered into by the assessee in the previous year should exceed a sum of twenty crore rupees for such transaction to be treated as specified domestic transaction . 29.3 Applicability: - This ame .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

A provides the procedure to be undertaken for invoking GAAR and passing of the assessment order in consequence of GAAR provisions being invoked. 30.2 As provided in the Income-tax Act before its amendment, GAAR provisions were to come into effect from 1.04.2016. These provisions, therefore, would have been applicable to the income of the financial year 2015-16 (Assessment Year 2016-17) and subsequent years. 30.3 The implementation of GAAR provisions was reviewed. Concerns had been expressed rega .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

0.4 Accordingly, the Income-tax Act has been amended to defer the implementation of GAAR by two years and GAAR provisions have been made applicable to the income of the financial year 2017-18 (Assessment Year 2018-19) and subsequent years. Further, investments made up to 31.03.2017 will be protected from the applicability of GAAR by undertaking amendment in the relevant rules in this regard. 30.5 Applicability: - This amendment takes effect from 1st April, 2015. 31. Reduction in rate of tax on I .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n the gross amount of such income at the rate provided therein. The Finance Act, 2013 had provided the rate to be 25%. 31.2 In order to reduce the hardship faced by small entities due to high rate of tax of 25%, the Income-tax Act has been amended to reduce the rate of tax provided under section 115A on royalty and FTS payments made to non-residents to 10%. 31.3 Applicability: - This amendment takes effect from 1st April, 2016 and will, accordingly, apply in relation to the assessment year 2016- .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Income-tax Act, before amendment by the Act, was aligned with the earlier scheme which was limited to issue of Global Depository Receipts (GDRs) based on the underlying shares of the company issued for this purpose (i.e sponsored GDR) or FCCB of the issuing company and where the company was either a listed company or was to list simultaneously. Besides, the holder of such GDRs was a non-resident only. Further, section 47(viia) provided exemption from capital gains arising from transfer of GDRs .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ersion of DRs into the underlying shares involves the non-resident holding the DRs in the overseas market giving instruction to its foreign broker regarding cancellation of DRs and release of underlying shares. The foreign broker then delivers the DRs to the foreign depository for cancellation and instructs it to deliver the underlying shares into a demat account held by the foreign investor in India. The foreign depository thereafter cancels the DRs and issues an instruction to its local custod .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rovided in respect of sponsored GDRs and listed companies only, the definition of GDR in section 115ACA of the said Act has been amended to mean only those instruments i.e. depository receipts as are issued to non-resident investors against (i) ordinary shares of issuing company, being a company listed on a recognised stock exchange in India; or (ii) foreign currency convertible bonds of issuing company. 32.6 Clause (42A) of section 2 of the Income-tax Act has been amended to provide that in the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

by him, then the cost on acquisition of the share shall be the price of such share prevailing on any recognized stock exchange in India on the date on which a request for redemption was made. 32.8 In view of the process of conversion of GDR into underlying shares referred to above, it is hereby clarified that the date on which a request for redemption was made for purposes of Section 49(2ABB), shall be the date on which the instruction from foreign depositary is received by the local custodian i .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

y listed on a recognized stock exchange in India ( sponsored issue). The benefit of these sections would not be available in respect of depositary receipts issued other than under sponsored issuance of a listed company. Accordingly:- i. The gains arising on transfer of such depository receipt(i.e. other than sponsored issue) between non-resident investors, outside India, would not be exempt from Capital gains; ii. On conversion of these DRs into the underlying shares, the provision of Section 49 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

that in the case of a company, if the tax payable on the total income as computed under the Income-tax Act in respect of any previous year relevant to the assessment year commencing on or after the 1st day of April, 2012, is less than eighteen and one-half percent of its book profit, such book profit shall be deemed to be the total income of the assessee and the tax payable for the relevant previous year shall be eighteen and one-half percent of its book profit. This tax is termed as minimum al .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

come of the AOP in certain circumstances. However, under the provisions of section 115JB prior to its amendment by the Act, a company which is a member of an AOP is liable to MAT on such share also since such income is not excluded from the book profit while computing the MAT liability of the member. In the case of a partner of a firm, the share in the profits of the firm is exempt in the hands of the partner as per section 10(2A) of the Act and no MAT is payable by the partner on such profits. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t for the purpose of computation of MAT. 33.4 The provisions of section 115JB have also been amended to provide that the amount of income from (i) capital gains arising on transactions in securities; or (ii) interest, royalty or fees for technical services chargeable to tax at the rates specified in Chapter XII, accruing or arising to a foreign company shall not be liable to MAT if such income is credited to the profit and loss account and the income-tax payable in accordance with the other prov .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he units of business trust, however, no neutrality/deferment of Minimum Alternate Tax (MAT) liability under section 115JB of the Income-tax Act has been provided. The liability under MAT may arise due to recording of exchange of shares with the units at fair value by a shareholder, being a company in compliance with the provisions of Accounting Standard - 13 prescribed under the Companies Act, 2013 as per rule 7 of the Companies (Accounts) Rules, 2014. The recording of said exchange at fair valu .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

me-tax Act have been amended to provide that notional gain or loss on transfer of a capital asset, being share of a special purpose vehicle to a business trust in exchange of units allotted by that trust referred to in clause (xvii) of section 47 of the Income-tax Act shall not be taken into account for computation of book profit for the purposes of levying MAT under section 115JB of the Income-tax Act. 33.5.2 It has been further provided that notional gain or loss resulting from any change in c .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of the Income-tax Act. These amendments are explained by way of the following illustration:- Company A is holding 100 shares of Special Purpose Vehicle (SPV) which are carried at ₹ 2000 in the books of the company as on 1st April, 2015. During the financial year 2015-16, these 100 shares are exchanged with the 100 units of Business Trust (BT) and the same is recorded at the fair value of ₹ 3000 resulting into a notional gain of ₹ 1000. At the end of financial year 2016-17, the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ual gain of ₹ 2000, computed by taking into account the carrying cost of shares i.e. ₹ 2000 and the actual sale price of unit i.e. ₹ 4000 shall be included in the book profit of financial year 2017-18 for the purposes of levying MAT under section 115JB of the Income-tax Act. 33.6 Applicability: - These amendments take effect from 1st April, 2016 and will, accordingly, apply in relation to the assessment year 2016-17 and subsequent assessment years. 34. Taxation Regime for Real .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

in this regard. 34.2 The said tax regime for the business trust and their investors as contained in different sections of the Income-tax Act, inter alia, provided that:- (i) The listed units of a business trust, when traded on a recognised stock exchange, would be liable to securities transaction tax (STT), and the long term capital gains shall be exempt and the short term capital gains shall be taxable at the rate of 15%. (ii) In case of capital gains arising to the sponsor at the time of exch .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

these units at the time of their transfer. (v) For the purpose of computing capital gain, the cost of these units is considered as cost of the shares to the sponsor. The holding period of shares is included in computing the holding period of such units. (vi) The pass through is provided in respect of income by way of interest received by the business trust from SPV i.e., there is no taxation of such interest income in the hands of the trust and no withholding tax at the level of SPV. (vii) Howe .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d by the trust to the unit holders is also exempt. 34.3 The deferral of capital gains provided to the sponsor of business trust had placed such a sponsor at a disadvantageous tax position vis-a vis direct listing of the shares of the SPV. In case the sponsor holding the shares of the SPV decides to exit through the Initial Public Offer (IPO) route, then the benefit of concessional tax regime relating to capital gains arising on transfer of shares subject to levy of STT is available to him. The t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ame tax treatment on offloading of units under an Initial offer on listing of units as it would have been available had he offloaded the underlying shareholding through an IPO. (ii)Chapter VII of the Finance (No. 2) Act, 2004 has been amended to provide that STT shall be levied on sale of such units of business trust which are acquired in lieu of shares of SPV, under an Initial offer at the time of listing of units of business trust on similar lines as in the case of sale of unlisted equity shar .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tal income arises from the assets held directly by REIT or held by it through an SPV. While the rental income received at the level of SPV gets passed through by way of interest or dividend to the REIT, the rental income directly received by the REIT was being taxed at REIT level and did not get pass through benefit. 34.6 In order to provide pass through to the rental income arising to REIT from real estate property directly held by it, it has been provided that :- (i) any income of a business t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

l income allowed to be passed through. In case of resident unit holder, tax shall be deducted @ 10%, and in case of distribution to non-resident unit holder, the tax shall be deducted at rate in force as applicable for deduction of tax on payment to the non-resident of any sum chargeable to tax . (iv) no deduction shall be made under section 194-I of the Income-tax Act where the income by way of rent is credited or paid to a business trust, being a real estate investment trust, in respect of any .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ndertaking (VCU) shall not form part of its total income. Section 115U of the said Act provides that income accruing or arising or received by a person out of investment made in a VCC or VCF shall be taxable in the same manner, on current year basis, as if the person had made direct investment in the VCU. 35.2 These sections provide a tax pass through (i.e. income is taxable in the hands of investors instead of VCF/VCC) only to the funds, being set up as a company or a trust, which are registere .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Regulations, 2012 (AIF regulations) . 35.3 Under the AIF regulations, various types of AIFs have been classified under three separate categories as Category I, II and III AIFs. Category I includes AIFs which invest in start-up or early stage ventures or social ventures or SMEs or infrastructure or other sectors or areas which the Government or regulators consider as socially or economically desirable. Category II AIFs are funds including private equity funds or debt funds which do not fall in C .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

vehicles (other than hedge funds) engaged in making passive investments have been accorded pass through in certain tax jurisdictions. In order to rationalize the taxation of Category-I and Category-II AIFs (hereafter referred to as investment fund), a special tax regime has been provided. The taxation of income of such investment fund and their investors shall be in accordance with the new regime which is applicable to such funds irrespective of whether they are set up as a trust, company, or l .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ess, shall be exempt from tax. The income in the nature of profits and gains of business or profession shall be taxable in the case of investment fund. (iii) income in the hands of investor which is of the same nature as income by way of profits and gains of business or profession at investment fund level, shall be exempt. (iv) where any income, other than income which is taxable at investment fund level, is payable to a unit holder by an investment fund, the fund shall deduct income-tax at the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

against income of the next year in accordance with the provisions of Chapter VI of the Income-tax Act. (vii) the provisions of Chapter XII-D (Dividend Distribution Tax) or Chapter XII-E (Tax on distributed income) shall not apply to the income paid by an investment fund to its unit holders. (viii) the income received by the investment fund would be exempt from TDS requirement vide Notification S.O. 1703 (E)dated 25th June,2015. (ix) it shall be mandatory for the investment fund to file its retur .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

plained in the Memorandum explaining the provisions in the Finance Bill, 2015 by way of illustrations. 35.7 Applicability: - These amendments take effect from 1st April, 2016 and will, accordingly, apply in relation to the assessment year 2016-17 and subsequent assessment years. 36. Furnishing of return of income by certain universities and hospitals referred to in section 10 (23C) of the Income-tax Act 36.1 Under the provisions of section 10 of the Income-tax Act, exemption under sub-clause (ii .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

6.3 The Income-tax Act has been amended to provide that entities covered under clauses (iiiab) and (iiiac) of clause (23C) of section 10 shall be mandatorily required to file their return of income. 36.4 Applicability: -This amendment takes effect from 1st April, 2016 and will, accordingly, apply in relation to the assessment year 2016-17 and subsequent assessment years. 37. Return of Income is to be filed by beneficial owner or beneficiary of a foreign asset 37.1 Sub-section (1) of section 139 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he budget announcement of 2015 it was stated that the requirement of furnishing of return of income will be extended to beneficial owner of assets. Before the amendment made by the Act, there was no requirement of furnishing the return if the asset was held by a person as a beneficial owner or he is a beneficiary of the foreign asset. It has been found that in a large number of cases foreign assets are held in the name of trusts/entities where the assessee is a beneficial owner or is a beneficia .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he term beneficiary has been defined to mean an individual who derives benefit from the asset during the previous year and the consideration for such asset has been provided by any person other than such beneficiary. 37.4 It has also been provided that a beneficiary of any asset (including any financial interest in any entity) located outside India is not required to furnish a return of income where, income, if any, arising from such asset is includible in the income of the beneficial owner in a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

cified circumstances, the Assessing Officer is required to obtain sanction before issue of notice under section 148. Section 151, before amendment made by the Finance Act, 2015, specified different sanctioning authorities based on- (i) whether scrutiny under sub-section (3) of section 143 or section 147 has been made earlier or not, (ii) whether notice is proposed to be issued within or after four years from the end of relevant assessment year, and (iii) the rank of the Assessing Officer proposi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

taken effect from 1st day of June, 2015. 39. Assessment of income of a person other than the person in whose case search has been initiated or books of account, other documents or assets have been requisitioned. 39.1 Section 153C of the Income-tax Act relates to assessment of income of any person other than the person in whose case search has been conducted or requisition has been made. The provisions contained in sub-section (1) of the section 153C, before amendment made by the Act, provided th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess income of such other person in accordance with the provisions of section 153A. 39.2 Disputes have arisen as to the interpretation of the words belong to in respect of a document as for instance when a given document seized from a person is a copy of the original document. Accordingly, section 153C has been amended so .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

books of account or documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess income of such other person in accordance with the provisions of section 153A. 39.3 Applicability: This amendment has taken effect from the 1st day of June, 2015. 40. Procedure for appeal by revenue when an identical question of law is .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

final decision on the question of law in that earlier year to the present year, he will not agitate the same question of law once again for the present year before higher appellate authorities. 40.2 There were no parallel provisions in the Income-tax Act, before amendments made by the Finance Act, 2015, enabling revenue not to file appeal for subsequent years where the Department is in appeal on the same question of law for an earlier year. As a result, appeals had been filed by the revenue yea .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

filed by the revenue, against the order of the High Court, the Commissioner or Principal Commissioner may, instead of directing the Assessing Officer to appeal to the Appellate Tribunal under sub-section (2) or sub-section (2A) of section 253 (normal provisions of appeal by revenue to Appellate Tribunal), direct the Assessing Officer to make an application to the Appellate Tribunal in the prescribed form within sixty days from the date of receipt of order of the Commissioner (Appeals) stating t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

to the order passed by the Commissioner (Appeals), direct the Assessing Officer to appeal to the Appellate Tribunal as per the normal provisions of appeal to Appellate Tribunal. 40.5 It has also been provided that where the order of the Commissioner (Appeals) is not in conformity with the final decision on the question of law in the other case (if the Supreme Court decides the earlier case in favour of the Department), the Commissioner or Principal Commissioner may direct the Assessing Officer t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ent Fund Scheme (EPFS) 41.1 Under the Employees Provident Fund and Miscellaneous Provisions Act, 1952 (EPF & MP Act, 1952), certain specified employers are required to comply with the Employees Provident Fund Scheme, 1952 (EPFS). However, these employers are also permitted to establish and manage their own private provident fund scheme (PPFS) subject to fulfillment of certain conditions. The provident funds established under a scheme framed under EPF & MP Act, 1952 or PPFS exempted under .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e long term savings, it has been provided that such withdrawal shall be taxable if the employee makes withdrawal before continuous service of five years (other than the cases of termination due to ill health, closure of business, etc.) and does not opt for transfer of accumulated balance to any recognised provident fund maintained by the new employer. Rule 9 of the said Schedule further provides computation mechanism for determining tax liability of the employee in respect of such pre-mature wit .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nd. The trustees of PPFS, being generally part of the employer group, have access to or can easily obtain the information regarding taxability of the employee making pre-mature withdrawal for the purposes of computation of the amount of tax liability under rule 9 of the Schedule-IV-A of the Act. However, at times, it is not possible for the trustees of EPFS to get the information regarding taxability of the employee such as year-wise amount of taxable income and tax payable for the purposes of c .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e rule 10 of the schedule IV-A read with sub-section (4) of section 192 of the Income-tax Act. 41.5 Further, to reduce the compliance burden of the employees having income below the taxable limit, a threshold of payment of ₹ 30,000/- for applicability of this newly inserted section has been provided. In spite of providing this threshold for applicability of deduction of tax, there may be cases where the tax payable on the total income of the employees may be nil even after including the am .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

o tax and on furnishing of such declaration, no tax will be deducted by the trustee of EPFS while making the payment to such employee. Similar facility of filing self-declaration in Form No. 15H for non-deduction of tax under section 197A of the Income-tax Act has been extended to the senior citizen employees receiving pre-mature withdrawal. 41.7 Some employees making pre-mature withdrawal may be paying tax at higher slab rates (20% or 30%). Therefore, the shortfall in the actual tax liability v .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

source is specified. As mentioned earlier, there may be employees who may be liable to pay tax at the highest slab rate. In order to ensure the collection of balance tax from these employees, it has also been provided that non-furnishing of PAN to the EPFS for receiving these payments shall attract deduction of tax at the maximum marginal rate. 41.8 Applicability:- These amendments take effect from 1st June, 2015. 42. Rationalisation of provisions relating to deduction of tax on interest (other .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tax in respect of following interest payments by co-operative society: (i) Interest payment by a co-operative society to a member thereof or any other co-operative society. [Section 194A(3)(v)of the Income-tax Act] (ii) Interest payments on deposits by a primary agricultural credit society or primary credit society or co-operative land mortgage bank or co-operative land development bank. [Section 194A(3)(viia)(a) of the Income-tax Act] (iii) Interest payment on deposits other than time deposit .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

on 194A(3)(v) of the Income-tax Act provide a general exemption from making tax deduction from payment of interest by all co-operative societies to its members, the co-operative banks tried to avail this exemption by making their depositors as members of different categories. 42.3 This has led to dispute as to whether the co-operative banks, for which the specific provisions of tax deduction exist in the form of section 194A (1), section 194A(3)(i)(b) and section 194A(3)(viia)(b) of the Income-t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ime deposit and cannot avoid the same by taking the plea of the general exemption provided under section 194A(3)(v) of the Income-tax Act. This is because the specific provision of tax deduction provided under section 194A(3)(i)(b) and 194A(3)(viia)(b) of the Income-tax Act for co-operative banks override the general exemption provided to all co-operative societies for non-deduction of tax from interest payment to members under section 194A(3)(v) of the Income-tax Act. 42.4 As there is no differ .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

cieties formed for the benefit of small number of members. However, as mentioned earlier, a doubt has been created regarding the applicability of the specific provisions mandating deduction of tax from the payment of interest on time deposits by the co-operative banks to its members by claiming that general exemption is also applicable for payment of interest to member depositors. 42.5 In view of this, the provisions of the section 194A(3)(v) of the Income-tax Act have been amended so as to expr .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ence, a cooperative bank was not required to deduct tax from the payment of interest on time deposits of its members paid or credited before 1st June, 2015. 42.6 However, the existing exemption provided under section 194A(3)(viia)(a) of the Income-tax Act to primary agricultural credit society or a primary credit society or a co-operative land mortgage bank or a co-operative land development bank from deduction of tax in respect of interest paid on deposit shall continue to apply. Therefore, the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

not be required to deduct tax from the payment of interest on time deposit to a depositor, being a co-operative society. 42.8 The existing provision of tax deduction at source (TDS) on payment of interest by banking company or co-operative bank applies only to the interest payment on time deposits made on or after the 1st day of July, 1995. The definition of time deposits provided in the section 194A of the Income-tax Act excludes recurring deposit from its scope. Therefore, payment of interest .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sting threshold limit of ₹ 10,000 for non-deduction of tax shall also be applicable in case of interest payment on recurring deposits to safeguard interests of small depositors. 42.9 The proviso to clause (i) of sub-section (3) of section 194A of the Income-tax Act provides that the interest income for the purpose of deduction of tax by the banking company or the co-operative society engaged in carrying on the business of banking or the public company shall be computed with reference to a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

omputation of interest income for the purposes of deduction of tax under section 194A of the Income-tax Act shall be made with reference to the income credited or paid by the banking company or the co-operative society or the public company. 42.10 Under section 194A(3)(ix) of the Income-tax Act, tax is not required to be deducted from the interest credited or paid on the compensation amount awarded by the Motor Accident Claim Tribunal if the amount of such interest credited or paid during a fina .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

on, whichever is earlier. Section 145A (b) of the Income-tax Act provides an exception to method of accounting contained in section 145 of the Income-tax Act and provides for taxation of interest on compensation on receipt basis only. Therefore, deduction of tax on such interest on mercantile/accrual basis results into undue hardship and mismatch. Hence, the provisions of section 194A(3) of the Income-tax Act has been amended so as to provide that deduction of tax under section 194A of the Incom .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t to contractors is subject to TDS at the rate of 1% in case the payee is an individual or Hindu undivided family and at the rate of 2% in case of other payees if such payment exceeds ₹ 30,000 or aggregate of such payment in a financial year exceeds ₹ 75,000. Prior to 1.10.2009, section 194C of the Income-tax Act provided for exemption from TDS to an individual transporter who did not own more than two goods carriage at any time during the previous year. 43.2 The Finance (No.2) Act, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e purview of TDS on furnishing of Permanent Account Number (PAN). Thus, the intention was to reduce the compliance burden on the small transporters. However, the language of sub-section (6) of section 194C of the Income-tax Act did not convey the desired intention and as a result all transporters, irrespective of their size, were claiming exemption from TDS under the existing provisions of sub-section (6) of section 194C of the Income-tax Act by furnishing their PAN. 43.3 As there is no rational .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

usiness of transport i.e. plying, hiring or leasing goods carriage and who is eligible to compute income as per the provisions of section 44AE of the Income-tax Act (i.e a person who is not owning more than 10 goods carriages at any time during the previous year) and who has also furnished a declaration to this effect along with his PAN, to the person paying such sum. 43.4 Further, this exemption from TDS is applicable only in respect of transport charges received for plying, hiring or leasing o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

on the date on which the amount is credited or paid but becomes owner of ten goods carriages later in the previous year, the payer shall not be required to deduct tax from the payment made to the transporter during the period of the previous year when he was not owning more than ten goods carriages. However, the tax shall be required to be deducted from the payment made during that part of the previous year during which the transporter owned more than ten goods carriages. 43.6 Further, for deter .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

15-16, the payments made on or after 1st June, 2015 shall only be taken into account. This is explained by way of following illustration:- T , an individual owns five goods carriages from 1st April, 2015 to 31st October, 2015. On 1st November, 2015, he purchased 6 more goods carriages. On 1st January, 2016, he sold 8 goods carriages. P makes following payment of transport charges to T during the financial year 2015-16: 15th April, 2015 - ₹ 35,000 15th July, 2015 - ₹ 40,000 15th Novem .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

section 194C(6) of the Income-tax Act. The tax is also not deductible from payment made on 15th November, 2015 as the payment does not exceed ₹ 30,000 and the aggregate of payments during the period from 1st June, 2015 [i.e. the date of effectivity of the amended provision of section 194C(6) ] to15th November, 2015 does not exceed ₹ 75,000 as specified in proviso to section 194C(5) of the Income-tax Act. Tax at the rate of 1% i.e. ₹ 200/- is deductible from payment made on 15th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

individual and aggregate payments. In view of this, T is not eligible to claim the exemption under section 194C(6) of the Income-tax Act by furnishing declaration along with the PAN in accordance with the provisions of section 194C(6) in respect of payments made on 15th December,2015 and 15the February,2016. 43.7 Further, for the purposes of ensuring uniformity in the format of declaration to be furnished by the payee under section 194C(6) of the Income-tax Act for receiving the payment without .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

…may be paid or credited to my account without deduction of tax under section 194C of the Income-tax Act, 1961. I/We, ……………….. in the capacity of ……………hereby declare that I/We do not own more than ten goods carriage and also did not own more than ten goods carriage at any time duringthe period from 1st April …….. to ……………..My Permanent Account Number (PAN) is &hell .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

(Form 26Q) as per the provision of rule 31A(4)(vi) of the Income-tax Rules, 1962. Non-furnishing or incomplete furnishing of this information shall make the deductor liable for penalty as per the provision of section 271H of the Income-tax Act. 43.9 Applicability:- This amendment takes effect from 1st June, 2015. 44. Extension of eligible period of concessional tax rate under section 194LD of the Income-tax Act 44.1 The provisions of section 194LD of the Income-tax Act provide for lower withhol .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t of reduced rate of tax available under section 194LC in respect of external commercial borrowings (ECB) had been extended from 30th June, 2015 to 30th June, 2017 by Finance (No.2) Act, 2014. 44.3 Accordingly, section 194LD has been amended to provide that the concessional rate of 5% withholding tax on interest payment under section 194LD will now be available on interest payable upto 30th June, 2017. 44.4. Applicability: - This amendment takes effect from 1st June, 2015. 45. Enabling of filing .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

or deduction of tax under this section, there may be cases where the tax payable on recipient s total income, including the payment made under life insurance, will be nil. The existing provisions of section 197A of the Income-tax Act inter alia provide that tax shall not be deducted, if the recipient of the certain payment on which tax is deductible furnishes to the payer a self-declaration in prescribed Form No.15G/15H declaring that the tax on his estimated total income of the relevant previou .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

cability:- This amendment takes effect from 1st June, 2015. 46. Relaxing the requirement of obtaining TAN for certain deductors 46.1 Under the provisions of section 203A of the Income-tax Act, every person deducting tax (deductor) or collecting tax (collector) is required to obtain Tax Deduction and Collection Account Number (TAN) and quote the same for reporting of tax deduction/collection to the Income-tax Department. However, currently, for reporting of tax deducted from payment over a specif .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

TAN for reporting of TDS is a procedural matter and the same result can also be achieved in certain cases by quoting of PAN especially for the transactions which are likely to be one time transaction such as single transaction of acquisition of immovable property from a non-resident transferor by an individual or HUF on which tax is deductible under section 195 of the Income-tax Act. For reducing the compliance burden for these types of deductors, the provisions of section 203A of the Income-ta .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ied rate if the payment exceeds the specified threshold. The person deducting tax ( the deductor ) is required to file a quarterly Tax Deduction at Source (TDS) statement containing the details of deduction of tax made during the quarter by the prescribed due date. Similarly, under Chapter XVII-BB of the Income-tax Act, a person is required to collect tax on certain specified receipts at the specified rates. The person collecting tax ( the collector ) is also required to file a quarterly Tax Col .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

y submission of TDS/TCS statement by the deductor or collector. 47.3 Finance (No.2) Act, 2009 inserted section 200A in the Income-tax Act which provides for processing of TDS statements for determining the amount payable or refundable to the deductor. However, as section 243E was inserted after the insertion of section 200A in the Income-tax Act, the existing provisions of section 200A of the Income-tax Act did not provide for determination of fee payable under section 234E of the Income-tax Act .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ia provides processing of the TDS correction statement. However, there did not exist any provision in the Income-tax Act for allowing a collector to file correction statement in respect of TCS statement already furnished. Therefore, the provision of section 206C of the Income-tax Act has been amended so as to allow the collector to furnish TCS correction statement. 47.5 The Income-tax Act contains detailed provisions for processing of TDS statements, however, there did not exist any provision fo .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sting provisions of the Income-tax Act, after processing of TDS statement, an intimation is generated specifying the amount payable or refundable. This intimation is (i) subject to rectification under section154 of the Income-tax Act; (ii) appealable under section 246A of the Income-tax Act; and (iii) deemed as notice of demand under section 156 of the Income-tax Act. As the intimation generated after the processing of TCS statement is similar to the intimation generated after processing of TDS .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

f the Income-tax Act, the failure to pay the tax specified in the intimation shall attract levy of interest as per the provisions of section 220(2) of the Income-tax Act. However, section 206C (7) of the Income-tax Act also contains provisions for levy of interest for non-payment of tax specified in the intimation to be issued. To remove the possibility of charging interest on the same amount for the same period of default both under section 206C (7) and section 220(2) of the Income-tax Act, the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

cted/collected by them without production of challan i.e. through book entry. For payment of tax deducted/collected through book entry, the Drawing and Disbursing Officer (DDO) intimates the TDS/TCS amount to the Pay and Accounts Officer or the Treasury Officer or the Cheque Drawing and Disbursing Officer (PAO/TO/CDDO) who credits the TDS/TCS amount to the credit of Central Government through book entry. For granting credit to the deductee for TDS/TCS paid through book entry by the Government de .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

er, in the absence of any specific provisions in the Income-tax Act for enforcing the furnishing of Form 24G, it has been noticed that in a large number of cases, PAO/ TO/CDDOs did not file Form 24G in prescribed time. Delay in furnishing of the Form 24G results into delay in furnishing of the TDS/TCS statement by the DDO. 47.11 In order to improve the reporting of payment of TDS/TCS made through book entry and to make existing mechanism enforceable, the provisions of sections 200 and 206C of th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

verifying the same in the prescribed manner and setting forth prescribed particulars. 47.12 To ensure compliance, provisions of section 272A of the Income-tax Act have also been amended to provide that a penalty of ₹ 100/- for every day of default, subject to the limit of the amount deductible or collectible, shall be levied in case of failure to furnish the said statement. 47.13 Under section 192 of the Income-tax Act, the person responsible for paying income chargeable under the head sa .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

payments for claiming loss from self occupied house property etc. is generally not available with the DDO. In these circumstances, the DDO has to depend upon the evidence/particulars furnished, if any, by the employees in support of their claim of deductions, exemptions, etc. As the provisions of the Income-tax Act did not contain any guidance regarding nature of evidence/documents to be obtained by the DDO, there was no uniformity in the approach of the DDO in this matter. 47.15 In order to bri .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

47.16 The existing provisions of sub-section (6) of section 195 of the Income-tax Act, prior to its amendment by the Act, provided that the person referred to in section 195(1) of the Income-tax Act shall furnish prescribed information. Section 195(1) of the Income-tax Act provides that any person responsible for paying any interest (other than interest referred to in sections 194LB or 194LC or 194LD of the Income-tax Act) or any sum chargeable to tax (not being salary income) to a non-resident .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

main principles of obtaining information for foreign remittances i.e. to identify the taxable remittances on which tax was deductible but was not deducted. 47.18 In view of this, the provisions of section 195 of the Income-tax Act have been amended so as to provide that the person responsible for paying any sum, whether chargeable to tax or not, to a non-resident, not being a company, or to a foreign company, shall be required to furnish the information of the prescribed sum in such form and man .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Act, a penalty of one lakh rupees shall be levied. Further, the provisions of section 273B of the Income-tax Act have been amended so as to provide that no penalty shall be imposable under this new provision if it is proved that there was reasonable cause for non-furnishing or incorrect furnishing of information under sub-section (6) of section 195 of the Income-tax Act. 47.20 Applicability:- These amendments take effect from 1st June, 2015. 48. Interest for defaults in payment of advance tax i .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ation of total income under sub-section (1) of section 143 or on regular assessment and ending on the date of reassessment under section 147 or section 153A of the Income-tax Act. 48.2 Interest is charged under section 234B on the principle that the amount of tax determined on the total income determined under section 143(1) or on assessment or reassessment or total income declared in a settlement application was the tax payer s true liability right from the beginning and it was with reference t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n an order of the Settlement Commission under sub-section (4) of section 245D, the amount on which interest was payable under sub-section (1) or sub-section (3) is increased or reduced, the interest shall be increased or reduced accordingly. However, in case an application is filed before the Settlement Commission under section 245C declaring an additional amount of income-tax, there is no specific provision in section 234B for charging interest on that additional amount. 48.4 Accordingly, a new .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

b-section. 48.5 It has also been provided that where as a result of an order of the Settlement Commission under sub-section (4) of section 245D for any assessment year, the amount of total income disclosed in the application under sub-section (1) of section 245C is increased, the assessee shall be liable to pay simple interest at the rate of one per cent for every month or part of a month comprised in the period commencing on the 1st day of April of such assessment year and ending on the date of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

l income determined by the Commission may increase or decrease. Accordingly, section 234B of the Income-tax Act has been amended so as to provide that where as a result of rectification order under sub-section (6B) of section 245D, the amount on which interest was payable under clause (b) of sub-section (2A) of section 234B is increased or reduced, the interest shall also be increased or reduced accordingly . 48.7 Applicability: These amendments have taken effect from 1st day of June, 2015. 49. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

income often involves more than one assessment year. Therefore, before amendment made by the Act, in such case the assessee was eligible to approach Settlement Commission only for the assessment year for which notice under section 148 has been issued. For all other assessment years where there is escapement, the assessee was eligible to file settlement application only after notice under section 148 has been issued for all such assessment years. 49.3 In order to obviate the need for issue of no .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

been furnished under section 139 or in response to notice under section 142 of the Income-tax Act. 49.4 The provision contained in clause (iv) of the Explanation to clause (b) of section 245A of the Income-tax Act, before its amendment by the Act, provided that a proceeding for any assessment year, other than the proceedings of assessment or reassessment referred to in clause (i) or clause (iii) or clause (iiia) of the said Explanation, shall be deemed to have commenced from the 1st day of the a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

on 139 or in response to notice under section 142 and concluded on the date on which the assessment is made or on the expiry of two years from the end of relevant assessment year, in a case where no assessment is made. 49.5 The provision contained in sub-section (6B) of section 245D of the Income-tax Act, before its amendment by the Act, provided that the Settlement Commission may rectify any order passed by it under sub-section (4) within a period of six months from the date of the order. There .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

was passed or, on an application made by the Principal Commissioner or Commissioner or the applicant before the end of period of six months from the end of month in which the order was passed, at any time within a period of six months from the end of month in which such application was made. 49.7 The provision contained in sub-section (1) of section 245H of the Income-tax Act, before its amendment by the Act, provided that the Settlement Commission may, if it is satisfied that any person who mad .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nting immunity from prosecution to any person shall record the reasons in writing in the order passed by it. 49.8 The provision contained in sub-section (1) of section 245HA of the Income-tax Act, before its amendment by the Act, provided for abatement of proceedings in different situations. Sub-section (1) of section 245HA of the Income-tax Act has been amended to provide that where in respect of any application made under section 245C, an order under sub-section (4) of section 245D has been pa .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e to only that person. Therefore, an individual who has approached the Settlement Commission once can subsequently approach again through an entity controlled by him. This defeated the purpose of restricting the opportunity of approaching the Settlement Commission only once. 49.10 Accordingly, section 245K of the Income-tax Act has been amended to provide that any person related to the person who has already approached the Settlement Commission once, also cannot approach the Settlement Commissio .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ty percent. of the shares or voting power in such company at any time before the date of application before the Settlement Commission by such person; (iii) where such person is a firm or association of persons or body of individual, any individual who was entitled to more than fifty percent. of the profits in such firm, association of persons or body of individuals, at any time before the date of application before the Settlement Commission by such person; (iv) where such person is an Hindu undi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

direct the Commissioner to adjust seized cash in their cases towards the tax liability arising on additional income disclosed in the application. Since such liability was not an existing liability and in the absence of specific provision, the Assessing Officer was unable to adjust the same. 49.12 Accordingly, section 132B of the Income-tax Act, has been amended to provide that the asset seized under section 132 or requisitioned under section 132A may also be adjusted against the amount of liabi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

an Additional Secretary to the Government of India. 50.2 In order to widen the scope for eligibility, section 245-O has been amended to provide that a person from Indian legal Service who is, or is qualified to be, an Additional Secretary to the Government of India shall be qualified for appointment as a law Member. 50.3 Applicability: This amendment has taken effect from 1st April, 2015. 51. Orders passed by the prescribed authority under section sub-clauses (vi) and (via) of clause (23C) of se .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rson on behalf of any hospital or other institution for treatment of persons suffering from illness or mental defectiveness or treatment of persons during convalescence or persons requiring medical attention, existing solely for philanthropic purposes and not for the purpose of profit is not liable to tax if such hospital or institution is approved by the prescribed authority. 51.2 The provisions contained in sub-section (1) of section 253 of the Income-tax specify orders that are appealable bef .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nal. Accordingly, sub-section (1) of section 253 of the Income-tax Act has been amended to provide that an assessee aggrieved by the order passed by the prescribed authority under sub-clause (vi) or (via) of section 10(23C) of the Income-tax Act may appeal to the Appellate Tribunal. 51.4 Applicability: This amendment has taken effect from 1st day of June, 2015. 52. Raising the income-limit of the cases that may be decided by single member bench of ITAT 52.1 The provision contained in sub-section .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e Income-tax Act has been amended to provide that a single member bench may dispose of a case where the total income of assessee as computed by the Assessing Officer does not exceed fifteen lakh rupees. 52.3 Applicability: This amendment has taken effect from 1st day of June, 2015. 53. Revision of order that is erroneous in so far as it is prejudicial to the interests of revenue 53.1 The provisions contained in sub-section (1) of section 263 of the Income-tax Act, before amendment by the Act, pr .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

interests of the revenue has been a contentious one. In order to provide clarity on the issue, section 263 of the Income-tax Act has been amended to provide that an order passed by the Assessing Officer shall be deemed to be erroneous in so far as it is prejudicial to the interests of the revenue, if, in the opinion of the Principal Commissioner or Commissioner,- (a) the order is passed without making inquiries or verification which, should have been made; (b) the order is passed allowing any re .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

eposits and specified sums and mode of repayment of loans or deposits and specified advances 54.1 Provisions contained in section 269SS of the Income-tax Act, before amendment by the Act, provided that no person shall take from any person any loan or deposit otherwise than by an account payee cheque or account payee bank draft or online transfer through a bank account, if the amount of such loan or deposit is twenty thousand rupees or more. However, certain exceptions were provided in the sectio .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ection 269SS of the Income-tax Act has been amended to provide that no person shall accept from any person any loan or deposit or any sum of money, whether as advance or otherwise, in relation to transfer of an immovable property(specified sum) otherwise than by an account payee cheque or account payee bank draft or by electronic clearing system through a bank account, if the amount of such loan or deposit or such specified sum is twenty thousand rupees or more. 54.4 Section 269T of the Income-t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ransfer of an immovable property whether or not the transfer takes place. 54.5 Consequential amendments in section 271D and section 271E, to provide penalty for failure to comply with the amended provisions of section 269SS and 269T, respectively, have also been made. 54.6 Applicability: These amendments have taken effect from 1st day of June, 2015. 55. Amount of tax sought to be evaded for the purposes of penalty for concealment of income under clause (iii) of sub-section (1) of section 271 55. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

arisen in the computation of amount of tax sought to be evaded where the concealment of income or furnishing inaccurate particulars of income occurs in the computation of income under provisions of section 115JB or 115JC of the Income-tax Act and also under the provisions other than the provisions of section 115JB or 115JC of the Income-tax Act (hereafter referred as general provisions). Further, courts have held that penalty under clause (c) of sub-section (1) of section 271 of the Income-tax .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n larger amount of such credit becoming available to the assessee for set off in future years. Therefore, where concealment of income, as computed under the general provisions, has taken place, penalty under clause (c) of sub-section (1) of section 271 should be leviable even if the tax liability of the assessee for the year has been determined under provisions of section 115JB or 115JC of the Income-tax Act. 55.4 Accordingly, section 271 of the Income-tax Act has been amended so as to provide t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

r, in a case where the provisions of section 115JB or 115JC are not applicable, the computation of tax sought to be evaded under the provisions of section 115JB or 115JC shall be ignored. 55.5 Applicability: This amendment will take effect from 1st April, 2016 and will accordingly apply, in relation to the assessment year 2016-17 and subsequent assessment years. 56. Certain accountants not to give reports/certificates 56.1 The Income-tax Act contains several provisions (e.g. section 44AB, sectio .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

stered under any State). 56.2 The Comptroller and Auditor General of India (C&AG) published its report on Appreciation of Third Party (Chartered Accountant) Certification in Assessment Proceedings (No.32 of 2014). In para 3.9 of the Report, it has been stated that the Chartered Accountant Act, 1949 debars an auditor to express his opinion on the financial statement of any business or any enterprise in which he, his relative, his firm or partner in the firm, has substantial interest. However, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ax Act is mainly provided for protecting the interests of revenue. An auditor who is not independent cannot meaningfully discharge his function of protecting the interests of revenue. Therefore, the provisions of section 288 of the Income-tax Act have been amended so as to provide that an auditor who is not eligible to be appointed as auditor of a company as per the provisions of sub-section (3) of section 141 of the Companies Act, 2013 shall not be eligible for carrying out any audit or furnish .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ax proceeding referred to in sub-section (1) of section 288 of the Income-tax Act as authorised representative on behalf of that assessee. It has been further provided that the person convicted by a court of an offence involving fraud shall not be eligible to act as authorised representative for a period of 10 years from the date of such conviction. The definition of accountant in Explanation below section 288(2) of the Income-tax Act has also been revised on the lines of definition of chartered .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

on such doubly taxed income, at the Indian rate of tax or the rate of tax of said country, whichever is lower. In cases of countries with which India has entered into an agreement for the purposes of avoidance of double taxation under section 90 or section 90A, a relief in respect of income-tax on doubly taxed income is available as per the respective DTAAs. 57.2 Income-tax Act, before amendment made by the Finance Act, 2015, did not provide the manner for granting credit of taxes paid in any c .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

wealth-tax under Wealth-tax Act, 1957 58.1 Wealth-tax Act, 1957 ( the WT Act ) was introduced w.e.f. 01.04.1957 on the recommendation of Prof. Nicholas Kaldor for achieving twin major objectives of reducing inequalities and helping the enforcement of Income-tax Act through cross checks. Accordingly, all the assets of the assessees were taken into account for computation of net-wealth. The levy of wealth-tax was thoroughly revised on the recommendation of Tax Reform Committee headed by Raja J. C .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

on the valuation date, i.e. last date of the previous year. For the purpose of computation of taxable net wealth, only few specified assets are taken into account. 58.3 The actual collection from the levy of wealth-tax during the financial year 2011-12 was ₹ 788.67 crore and during the financial year 2012-13 was ₹ 844.12 crore only. The number of wealth-tax assessee was around 1.15 lakh in 2011-12. Although only a nominal amount of revenue is collected from the levy of wealth-tax, t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

TMI - Advanced Search

Latest Notifications:

    Dated      Category

20-7-2017 Cus (NT)

20-7-2017 GST CESS Rate

19-7-2017 IT

19-7-2017 IT

18-7-2017 IT

18-7-2017 CE (NT)

18-7-2017 CE

18-7-2017 GST CESS Rate

15-7-2017 Kerala SGST

14-7-2017 Andhra Pradesh SGST

14-7-2017 Cus (NT)

14-7-2017 Cus

13-7-2017 Co. Law

13-7-2017 Co. Law

13-7-2017 ADD

13-7-2017 ADD

12-7-2017 Jammu & Kashmir SGST

12-7-2017 Gujarat SGST

12-7-2017 Gujarat SGST

12-7-2017 CGST Rate

More Notifications


Latest Circulars:

20-7-2017 Goods and Services Tax

19-7-2017 Goods and Services Tax

19-7-2017 Income Tax

18-7-2017 Customs

17-7-2017 Customs

14-7-2017 Income Tax

13-7-2017 Central Excise

13-7-2017 Customs

13-7-2017 Central Excise

13-7-2017 Customs

More Circulars



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version