CBDT notifies ITR-1, ITR-2, ITR-2A and ITR-4S to be filed for AY 2015-16

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

GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE
[CENTRAL BOARD OF DIRECT TAXES]
NEW DELHI

NOTIFICATION

Dated: June 22, 2015

S.O. 1660 (E).– In exercise of the powers conferred by section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:-

1. (1) These rules may be called the Income-tax (8th Amendment) Rules, 2015.
    (2) They shall be deemed to have come into force with effect from the 1st day of April, 2015.

2. In the Income-tax rules, 1962,-
   (1) in rule 12,-
        (a) in sub-rule (1),-
            (I) in clause (a), in the proviso, for clause (III), the following clause shall be substituted, namely: –
                “(III) has agricultural income, exceeding five thousand rupees;”;
            (II) after clause (b) the following clause shall be inserted, namely:-
                 ‘(ba) in the case of a person being an individual not being an individual to whom clause (a) applies or a Hindu undivided family where the total income does not include any income chargeable to income-tax under the heads “Profits or gains of business or profession” and “Capital gains” and to whom the provisions of clause (I) and clause (II) of the proviso to clause (a) does not apply, be in Form No. ITR-2A and be verified in the manner indicated therein;';
           (III) in clause (ca), in the proviso, for clause (III), the following clause shall be substituted, namely: –
                 “(III) has agricultural income, exceeding five thousand rupees;”;

        (b) in sub-rule (4), for the words, brackets, letters and figures “in the manners specified in clauses (i), (iii) and (iv) of sub-rule (3)”, the words, brackets, letters and figures “in the manners (other than the paper form) specified in column (iv) of the Table in sub-rule (3)” shall be substituted.

   (2) in Appendix-II, for “Forms SAHAJ (ITR-1), ITR-2 and SUGAM (ITR-4S)” the “Forms SAHAJ (ITR-1), ITR-2, ITR-2A and SUGAM (ITR-4S)” shall be substituted, namely:-

[NOTIFICATION NO. 49/2015/ F.No.142/1/2015-TPL]

(Gaurav Kanaujia)
Director to the Government of India

Note.- The principal rules were published in the Gazette of India, Extraordinary, Part-II, Section 3, Sub-section (ii) vide notification number S.O.969(E), dated the 26th March, 1962 and last amended by the Income-tax (7th Amendment) Rules, 2015, vide notification number S.O. No. 1014 (E), dated 15 April, 2015.

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To Download the Excel Utility follow the below link:

https://incometaxindiaefiling.gov.in/

Cenvat credit cannot be denied merely for not applying for Centralised Registration in proper format

Ketan Motors Ltd. Vs. Commissioner of Central Excise, Nagpur[2015-TIOL-1087-CESTAT-MUM]
The Ketan Motors Ltd. had a centralized accounting office in Nagpur with branch offices at Chandrapur and Amravati. The services received and the Cenvat credit availed thereon was reflected in Nagpur centralized accounting system. The Appellant had applied for Centralized Registration through a letter in which it was stated that “they may be given permission to have only one registered place in terms of rule 3(a) of Service Tax Rules” and letter bears the stamp of the receipt by the Department.

The Department objected availment of Cenvat credit of Rs. 1,27,958/- (along with imposition of penalty) on documents pertaining to unregistered premises of the Appellant at Chadrapur and Amravati by alleging that the Appellant did not apply for Centralised Registration in proper format.

The Hon’ble CESTAT, Mumbai held that there is no dispute that the Appellant vide application dated December 16, 2004 has applied for Centralized Registration and the letter bears the stamp of the receipt by the Department. This request can be considered as an application for Centralized Registration, which was granted subsequently by the Department. Thus, Cenvat Credit should not be disallowed.

DSC issuance process to get stringent from 1st July 2015

Verification process going to be very stringent w.e.f. 1st July 2015. Procure your DSC in Advance expiring in near future

We would like to update that DSC issuance process is going a vital change w.e.f 1st July 2015.

Detailed guidelines may be downloaded by going on below link :
http://cca.gov.in/cca/sites/default/files/IDENTITYVERIFICATIONGUIDELINES2015v1.pdf

You are requested to plan your Digital signatures before 30th June for those DSC expiring in new future as the issuance process would be more stringent and cumbersome post 1st July, 2015. The rates may also undergo change as a part of implementation cost of new guidelines as is being said by the Certifying Authorities. Please find outlined the key new changes which would be required to be adhered to going forward:

1. Attestation procedure:
(a) Attestation of supporting documents by RA will not be allowed.
(b) The documents are to be attested only by Group A/B Gazetted Officers / Bank Manager / Post Master.
(c) The Attesting Officers should also specify their Name, designation, office address andcontact number.
(d) The list of Gazetted Officers are also listed in CCA Guidelines.
(e) The signature of applicant has to be in Blue-ink only.

2. Mobile Verification for all Classes of Certificate
* Before Approval of DSC, Certifying Agency will make a telephonic verification, through the mobile number provided in application.
* The mobile number should also be unique in each application, as is currently in the case of email ID.

3. Video Recording for Class 3
* In place of physical verification, now CA / RA will make a video recording of the applicant for a specified time duration.
* Before providing final Approval, Certifying Agency will verify the applicant through a video recording.
* Applicant will have to answer a specific set of questions to establish his identity
* This recording will happen directly in CA System, in a tamper proof way. That means, if RA is recording the video, the recording has to be made in CA provided software / portal, and will be directly recorded to CA System
* Old videos or the videos sent over email or downloaded from web, etc will not be allowed.

4. Organization application
* New set of documents prescribed for Organization verification. Multiple documents are required, including Incorporation Certificate, AOA (2 pages), MOA(2 pages), Bank Statement, Audit Report of last year along with annual return, Board resolution for Authorized Signatory. Similar set of documents are also listed for Partnership Firms and Proprietorship entities.
* Authorization letter should be signed in Blue Ink Only

5. Application form
The forms shall undergo changes as may be required for new verification guidelines. Old formsshall not be accepted thereafter. The application form will be signed in Blue-ink only.

6. Aadhaar based eKYC: (HASSEL FREE)
New provision of Aadhaar based eKYC has been introduced. In this case, there is NO need for mobile / video verification. A Biometric device will be needed to perform a transaction via this mode. More details on the modus operandi and process related to this mode will be intimated as and when formulated.

Document as proof of identity (Any one):

(a) Aadhaar (eKYC Service)
(b) Passport
(c) Driving License
(d) PAN Card
(e) Post Office ID card
(f) Bank Account Passbook containing the photograph and signed by an individual with attestation by the concerned Bank official.
(g) Photo ID card issued by the Ministry of Home Affairs of Centre/State Governments.
(h) Any Government issued photo ID card bearing the signatures of the individual.

Documents as proof of address (Any one):
(a) Aadhaar (eKYC Service)
(b) Telephone Bill
(c) Electricity Bill
(d) Water Bill
(e) Gas connection
(f) Bank Statements signed by the bank
(g) Service Tax/VAT Tax/Sales Tax registration certificate.
(h) Driving License (DL)/ Registration certificate (RC)
(i) Voter ID Card
(j) Passport
(k) Property Tax/ Corporation/ Municipal Corporation Receipt

7. Foreign Nationals

New procedures have been notified as per Section 3 of the Guidelines.

Please note that in view of the new verification guidelines, there will be many procedural changes which may result in 5 to 7 days for issuance of a DSC until the new process stabilizes.

Article by Mr. Kamal Prateek, Advocate
Source online

Free issue of samples is not liable for VAT

Commercial Taxes Officer vs M/s Indian Shaving Products Ltd.

(Rajasthan High Court at Jaipur)

SB Sales Tax Revision Petition no.718/1999

Date of Judgment -10/4/2015

The fundamental principle of sales tax is that there should be sale of goods involving buyer and seller, there should be transfer of property in goods from the seller to the buyer and flow of consideration from the buyer to the seller.

In case of samples issued by the assessee as a part of promotion program, first of all there is no buyer and seller, there is no transfer of property in goods and there is no consideration.

When none of the conditions are fulfilled, there is no sale as per Sales Tax/VAT Acts.

Even though Trade/Industry/Department is aware of the above statutory position, still demands are raised on free samples issued and the disputes are reaching to the level of High Court, clogging the precious time of the courts.

In a recent judgement, High Court of Rajasthan has held that free issue of samples is not liable for VAT. Observation of the High Court is as follows :-

Free samples is in accordance with trade practice and is one of the major factor where manufacture/producer can put its product in the market. Marketing through free samples is commonly accepted trade practice which one is required to resort in the competitive business environment. The revenue gains substantially when the samples are accepted over the years by the consumers who later on purchases the commodity. It is also noticed that the free samples in the instant case is negligible to the total turnover. The free samples provided to the dealer who in turn provides the same to selected consumers cannot be said to be liable for sales tax. It has no marketable value. To say that the samples provided by assessee can be held to be liable to sales tax, in my view, does not appear to be justified and Tribunal has rightly come to the said conclusion.

Use of Prefix CA by unregistered Members & Students is illegal

Important Announcement

Pre – conditions for using the designation Chartered Accountant

It has been brought to the notice of the Institute that certain students undergoing Chartered Accountancy Course are using "CA" designation before their names on Social Networks as well as their personal E-mail addresses.

Students may please note that Sections 7 and 24 of the Chartered Accountants At 1949 empower on a person who has been enrolled as a member of the Institute of Chartered Accountants of India to use the designation of Chartered Accountant along with his/her name.

Non members of ICAI who are using the designation as Chartered Accountant or designatory letters as CA as a prefix to their names are advised to desist from using these designatory letters failing which suitable steps against them in accordance with the provisions of the Chartered Accountants Act, 1949 and Regulations framed there under will be initiated without prejudice to any other penal action under the law in force for the time being.

Director, Board of Studies

NB: Passing CA final exam is not enough to use Prefix Chartered Accountant or CA
Source- ICAI

Tax Planning- Save tax through your family

Saving Tax through Family! Surprised! Yes, we can save tax through our family members i.e. Parents, Major Children’s and Wife. To Save Tax through Family members we needs to invest in way that our tax burden shifts to our family members and we can take the benefit of Income Tax Slabs. Saving tax Through means not only saving in tax but also means Post Tax higher returns on your Investment.

Here is how we can save tax through our family members.

Through Parents

You can save tax through our own parents as well as through our Parent in-laws. To achieve this goal you needs to give away a portion of your funds, either as a gift or a loan, to your parents as well as your parents in law so that in years to follow your income tax burden becomes lighter as the income on funds transferred by you to them which would bring in income would be taxed in their hands.

Assuming that both the parents are senior citizens. Here’s how you go about it. Income tax deductions allow senior citizens a tax-free income of Rs 3 lakh. To exhaust this limit, say you gift Rs 28 lakh to each parent in cash. Of this, both can individually put Rs 15 lakh in a senior citizens savings scheme that earns a return of nine per cent and pays interest every quarter. Each will get yearly interest of nearly Rs 1.4 lakh. If they invest the remaining Rs 13 lakh each in the long term fixed deposit (FD) of eight-years (assuming interest rate of 7.5 per cent) that pays interest each quarter, it will fetch them an income of nearly Rs 1 lakh annually. That means both parents have earned Rs 2.8 lakh from the senior citizen saving scheme and another Rs 2 lakh from FD each year. A total savings of Rs 4.8 lakh – the tax-free limit (Rs 2.40 lakh) that each parent enjoys. So, they don’t even need to deposit any tax.

Same planning can be done for parents in laws.

Through Major Children

All your adult children are as solid as a rock to help you save your income tax. After October 1, 1998, the provisions relating to gift-tax have ceased to exist. Now you are free to gift away your money to your children without attracting gift tax. Investment made by Major Children out of the gift received by you will be taxed in the hands of your children. If for any reason you are inclined to make gifts to your major children, then you may give interest-free loans to your adult children so as to legally reduce your taxable income.

It is lawful to grant interest-free loans to adult children from your own funds.

Through Your Wife

Married taxpayers can make a substantial saving of income tax by setting up two separate independent income tax files, one each for the husband and the wife. If your wife is already filing Income Tax Return then she may continue filing the return with her new surname and address or with her old surname and address.

Thus, as a result of marriage one should plan a separate income-tax file of the wife. However, care should be taken to ensure that no direct gift or transfer from husband is made to the wife as clubbing provision may get attracted.

Article by CA Sandeep Kanoi

Converting a Partnership firm into a Private Limited Company

Corporatisation is the need of the hour. The entire world is gradually drifting towards one global market without any trade barriers between the countries. A small unincorporated organization led by few partners cannot think of growth on large scale without corporatizing itself. Corporatisation has its own advantages such as Limited Liability, Perpetual Succession, Transferability of shares, easy access to funds etc. Advantages of converting

All the assets and liabilities of the firm immediately before the conversion become the assets and liabilities of the company.

No Stamp Duty - All movable and immovable properties of the firm automatically vest in the Company. No instrument of transfer is required to be executed and hence no stamp duty is required to be paid.

No Capital Gain Tax - No Capital Gains tax shall be charged on transfer of property from Proprietorship firm to Company.

Continuation of Brand Value - The goodwill of the Proprietorship firm and its brand value is kept intact and continues to enjoy the previous success story with a better legal recognition.

Carry Forward and Set off Losses and Unabsorbed Depreciation - The accumulated loss and unabsorbed depreciation of Partnership firm is deemed to be loss/ depreciation of the successor company for the previous year in which conversion was effected. Thus such loss can be carried for further eight years in the hands of the successor company.

Mandatory Conditions

All partners of the partnership firm shall become shareholders of the company in the same proportion in which their capital accounts stood in the books of the firm on the date of the conversion.

* The partners receive consideration only by way of allotment of shares in company and the partners share holding in the company in aggregate is 50% or more of its total voting power and continue to be as such for 5 years from the date of conversion.

Requirements

* Registered Partnership firm with minimum 7 Partners

* Minimum Share Capital shall be Rs. 100,000 (INR One Lac) for conversion into a Private Limited Company

* Minimum Share Capital shall be Rs. 500,000 (INR five Lac) for conversion into a Public Limited Co.

* If the above requirement is not fulfilled by the firm, then the Partnership deed should be altered

* Minimum 7 Shareholders

* Minimum 2 Directors (for Private Limited Co.) and 3 Directors (for Public Limited Co.)

* The directors and shareholders can be same person

* DIN (Director Identification Number) for all the Directors

* DSC (Digital Signature Certificate) for two of the Directors

Process

* Filing of requisite form for Conversion

* Preparation of Foundation documents of the Company

* Filing for name approval

* Filing of Incorporation documents

* Receiving certificate of incorporation

Source: Online Article

Author Ankita Chopra