CBDT notifies New ITR-3, ITR-4, ITR-5 ITR-6 & ITR -7 for A.Y. 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

New Delhi, the 29th day of July, 2015

 

S.O. 2070 (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 (Tenth 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, in Appendix-II, for FORM ITR-3, FORM ITR-4, FORM ITR-5, FORM ITR-6 and FORM ITR-7, the following FORMS shall respectively be substituted, namely:-

[NOTIFICATION NO. 61/2015/ 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 vide notification number S.O.1683 (E), dated 24.06.2015.

_______________________________________________

To Download the Excel Utility follow the below link:

https://incometaxindiaefiling.gov.in/

Received Gift? Check taxability before enjoying!

We receive gifts in cash, ornaments, land, car, gadgets, vouchers and many more on various occasions like on birthday, marriage, achievements and even sometimes out of gratitude too. Feel special and happy on its receipt, right? But have you ever bothered to check its taxability under Indian Income Tax Law? If not, then here are the provisions of income tax law related to gift. Some of the gifting transactions are to be taxed under the Income Tax Act, 1961 and the onus to offer such gift for tax and then to pay tax on it; is on the recipient of such gift. Remember in this article, we will be testing only those transactions for “taxability” which are having gift value exceeding Rs.50,000/- and that too received without consideration i.e. nothing is exchanged for such gift by an individual on or after October 1, 2009.  

There are 3 aspects of the transaction which need to be considered in consolidation before concluding its taxability…

1. Money or Property received as Gift.

2. Relationship with the person gifting such money or property.

3. Occasion on which gift is received.

Let us first understand; what are those things which can be a taxable gift under the law.

1. Money i.e. cash or cheque or draft.

2. Property: The term “Property” is specifically narrated in the law. So besides those items, other gifts will not come in the purview of taxability and property includes;

i. immovable property being land or building or both;

ii. shares and securities;

iii. jewellery;

iv. archaeological collections;

v. drawings;

vi. paintings;

vii. sculptures;

viii. any work of art;

ix. bullion (bullion w.e.f June 1, 2010)

Lesson: Receipt of Gift other than in Money or Property is not liable for tax.

Second aspect to be look upon is the relationship with the person gifting such money or property. Income Tax Act has excluded transactions of gift received from relatives from taxing and relative with respect to an individual includes;

i. spouse of the individual;

ii. brother or sister of the individual;

iii. brother or sister of the spouse of the individual;

iv. brother or sister of either of the parents of the individual;

v. any lineal ascendant or descendant of the individual;

vi. any lineal ascendant or descendant of the spouse of the individual;

vii. spouse of the person referred to in items (ii) to (vi)

Lesson: Receipt of Gift in Money or Property from a relative is not liable for tax.

Now coming to occasions, gift received on specified events or circumstances is excluded from taxability such as;

i. on the occasion of the marriage of the individual;

ii. under a will or by way of inheritance;

iii. in contemplation of death of the payer or donor;

iv. from any local authority;

v. from any fund or foundation or university or other educational institution or hospital or other medical institution or any trust or institution referred to in section 10(23C);

vi. from any trust or institution registered under section 12AA.

Lesson: Receipt of Gift in Money or Property from a relative or from a non-relative on specified occasion/circumstances is not liable for tax.

So whenever you will be doing a taxability test for any gift transaction, go by each of these step and conclude. But it is not as simple and straight as it looks; it also includes many other aspects relating to computation and documentation; so it is always advised to consult your Tax Advocate or Tax Advisor on receipt of gift or if possible before entering into such gifting transactions.

Article found online

Tax Planning - Income From House Property

F.A.Q. on Income from House Property

Q1. How is income to be computed, if a property is partly let out and partly self-occupied?Answer. It has to be treated as two residential units and income from each unit has to be computed according to law by allocating common outgoings on a basis proportionate to area of occupation.

Q2. Is it necessary that the person must be a legal owner in order that the income should be computed under the head “income from property”?Answer. No. If a person is entitled to the income under the law, such income is bound to be assessed under the head “income from property”. Tax laws are generally concerned with beneficial ownership as laid down in CIT vs. Podar Cement Pvt. Ltd.

Q.3. Is municipal tax deductible in computation of income from: (i) self-occupied property; and (ii) where demand notice is reserved but it has not been paid?Answer. Since income from one self-occupied property is nil, subject only to deduction of interest the question of deduction of municipal tax does not arise. For let out proper-ties, municipal tax is deductible only if it is paid during the year.

Q.4. Is deduction for repairs available, when tenant undertakes repairs under the rental agreement? What is meant by repairs?Answer. By repairs we mean only substantial repairs as held in CIT vs. Parbutty Churn Law 1965 57 ITR 609 Cal and Sir Shadi Lai & Sons vs. CIT. Where even substantial repairs other than normal maintenance is undertaken by tenant, annual value should get enhanced by the extent of repairs which should have been borne by the landlord so that any deduction for repairs then available to landlord will neutralise the amount added to annual rent. It would, therefore, mean that where there is specific stipulation that all repairs will be borne by tenant, there can be no deduction for repairs.

Q5. Is an annual charge on rent receivable on account of mortgage of property for obtaining funds for business or paying income tax deductible under section 24(1)(iv) of the Income Tax Act, 1961 ?Answer. No. Since it is a charge created voluntarily by the assessee, it is not deductible as was held in CIT vs. Indramani Devi Singhania in case of a business loan and CIT vs. Tarachand Kalyanji in the case of a charge created for payment of excess profit tax In the latter case, it was held that the amount is not deductible even if the charge has been created before 1st April, 1969, when such amount was deductible in law.

Q6. What are the conditions for deduction of unrealised rent?Answer. Rule 4 of the Income-tax Rules as substituted by the Income-tax (Eighth Amendment) Rules, 2001 prescribes the conditions as under:

Unrealised rent—For the purposes of the Explanation below sub-section (1) of section 23, the amount of rent which the owner cannot realise shall be equal to the amount of rent payable but not paid by a tenant of the assessee and so proved to be lost and irrecoverable where,—
(a) the tenancy is bona fide;
(b) the defaulting tenant has vacated, or steps have been taken to compel him to vacate the property;
(c) the defaulting tenant is not in occupation of any other property of the assessee;
(d) the assessee has taken all reasonable steps to institute legal proceedings for the recovery of the unpaid rent or satisfies the Assessing Officer that legal proceedings would be useless.

Q7. Is salary paid to a caretaker deductible?Answer. No. Only deductions specified under section 24 are deductible.

Q8. How is the income of co-owned property computed?Answer. Income has to be split up between co-owners and each co-owner has to be assessed as his share of the income as provided under section 26 of the Act.

Q9. Where an assessee borrows a second loan for repaying the first loan taken for acquiring a property, will the interest on second loan be deductible as amount borrowed for acquiring the property?Answer. Yes. It is so conceded in Board’s Circular No. 28 dated 20th August, 1969.

Q10. Ground rent—whether arrears of earlier years deductible?Answer. No. The deduction under section 24(1 )(v) is confined to the ground rent of previous year, and thus arrears of earlier years are not deductible. Ground rent is no longer deductible from A.Y.2002-2003.

Q11. Interest deductible under section 24(1 )(vi): whether simple interest or compound Interest?Answer. Only simple interest is deductible.

Q12. What is the treatment given to loss from property?Answer. Loss from property can be set off against other heads of income in the same year and to the extent unabsorbed, it will be carried forward and set off in next eight years.

Q13. Where municipal valuation is higher than the rent charged, what is the basis of computation of property income?Answer. The law requires that either annual value as fixed by the local authorities or actual rent received, whichever is higher, should be treated as annual value. But where the assessee is unable to enhance the rent due to Rent Control Act, there is a case for acceptance of rent receivable as the basis. It was so held in CIT vs. Sampathammal Chordia 2000 245 ITR 290 Mad.

Q14. Are municipal taxes allowed on the basis of tax leviable for a year or on the basis of payment? If it is on the basis of what is leviable, what happens if demand for earlier years is received only during the year with the result that the payments for earlier years are made during the year?Answer. Section 23(1) allows property tax levied by local authority on the basis of payment from assessment year 1985-86 vide amendment by Taxation Laws (Amendment) Act, 1984 so that the controversy in the prior law is now avoided. So, the amount paid during the year, including any amount of arrears for earlier years, is deductible in the year of payment.

Q15. Where the assessee is a mutual association having a property, will the property income be covered by the principle of mutuality so as to be exempt?Answer. Yes, it has been held that principle of mutuality applies even to income from house property in Chelmsford Club vs. CIT (2000) 243 ITR 89 (SC).

Q16. The assessee — Mrs. A is in enjoyment of the property but the right is limited only for life under a Will in her favour. Who has to pay the tax, whether she as the person in enjoyment of the property as the holder of life interest or the remainderman treated as the owner in law?Answer. Ownership is a bundle of rights. Right to enjoy the property is also a right which is part of such ownership right. Hence it will be assessable in the hands of life interest owner. It has been so held in Estate of Ambalal Sarabhai vs. CIT 2000 245 ITR 445 Guj.


Q17. Where an assessee receives interest on deposit taken from a tenant, is it necessary to enhance the annual value by the notional interest which would have otherwise been payable?Answer. Where actual rent received is more than the fair rent, i.e., annual value fixed by the local authorities, notional interest need not be added. It was so held in CIT vs. J.K. Investors (Bombay) Ltd. 2001) 167 CTR (Mad) 163. Where such notional interest is to be taken, as for example, where no rent is charged because of such interest free deposit, the interest or other income earned by deployment of the interest free deposit will have to be correspondingly reduced from the annual value but the law does not provide for the same.

But it stands to reason that such reduction may have to be allowed, though it is doubtful whether such reasonable interpretation will be acceptable to revenue.

Q18. Is it open to the Assessing Officer to substitute reasonable rent where the property is let out to an associate company at a lower rate?Answer. Since annual value is not the only criterion, it is open to the Assessing Officer to adopt a reasonable rate where it is let out at a concessional rate. It was so held in T. V. Sundaram Iyengar & Sons Ltd. vs. CIT.

Q19. Where the property is in existence for less than 12 months, is it possible to assess the income as income from property since the scheme of the Act is to assess the annual rent? Does the income escape assessment in such cases?Answer. The argument that the property should have been held for entire 12 months to be assessable under the head ‘Income from property’ was accepted in P.J. Eapen vs. CIT. But it was held that such income will be assessable under ‘Other sources’. The decision is open to doubt because there is no reason why the proportionate income should not be assessed with reference to the period of holding because such proportionality is recognised in section 23 where the property is let out for part of the year and used for own residence for rest of the year under section 23(2)(a)(ii). Hence, similar apportionment should be possible though the annual value is with reference to the income which the property might fetch if let out from year to year.

Q20. Where the deduction under section 24 exceeds the available income, can such excess be allowable?Answer. Where the property is partly let out and partly used for own residence, the deduction under section 24(1) will be limited to the income determined under that clause under the substituted section 24 by Finance Act, 2001. with effect from 1.4.2002, there are no detailed deductions but only 30% of annual value and interest on borrowed capital subject to the limit of ` 30,000 for self-occupied property with enhanced limit up to `2.00 lakhs subject to conditions as to the date of the loan and the date of construction. Hence, there can be a loss from the property depending upon interest on borrowed capital. It is only in respect of annual value, that there cannot be loss.

Q21. There is a practice of receiving deposit instead of rent. The assessee accounts for interest on such deposits as its income. Should he also account for notional income from property?Answer. The answer was against the assessee in S.Ujjanappa vs. CIT, where it was held that ownership confers the duty to account for notional income from such property. The issue as to whether it involves double taxation was not posed in this case. Interest income earned by the assessee on the deposits or notional interest when used in business could have been set off against such income. There is clearly double taxation implicit in such cases. In Webb’s Agricultural & Automobile Industries vs. ITO , a car received by way of lottery winnings brought to tax as income was held to be eligible for depreciation, though assessee had not paid for the same, because of the notional cost. This line of reasoning should avoid elimination of double taxation by setting off the two incomes one notional and the other real as between them, but the law on the subject is still nebulous.

Q22. Is the amount of interest paid on unpaid consideration for acquiring property deductible as interest on borrowing under section 24(1 )(vi) of the Income-tax Act?Answer. In the context of similar interest on unpaid consideration for acquiring a business; the Supreme Court had held in Bombay Steam Navigation Co. (1953) P. Ltd. vs. CIT that such interest is not deductible under section 36(1)(iii) of the Income-tax Act, 1961. But in the same case, it was found that it can be allowed as deduction under section 37 of the Act. It is for this reason that it has felt that in absence of similar residuary clause, interest on unpaid consideration for acquiring property would not be deductible.

However it was found in CIT vs. Sunil Kumar Sharma following CIT vs. R.P. Goenka and J.P. Goenka that it makes no difference, whether the buyer borrows from a third party to acquire a property or gets the necessary financial assistance from the seller of the property. It should be construed that the seller is the lender and the purchaser is the borrower. It would thus appear that such interest is deductible.

Q23. What is the change in respect of computation of property income by the Finance Act, 2005?Answer. There is no change in computation of property income, but the incentive for re-payment of loan for acquiring a property is enlarged by removing the limit of Rs. 20,000 in respect of such repayment and by providing such repayment as an outright deduction from the gross total income by the new section 80C substituting section 88, subject, however, to the limit of total deduction under section 80C to Rs. 1.50 lakh. Interest payable on such loan would be admissible as deduction, if the property were let out, subject to limit of Rs. 30,000 in case of self- occupation.

Q24. If a person puts up a property on leased land, is the lease rent deductible as income from property?Answer. There is no special provision for deduction of lease rent as was available in the pre-existing law under section 24 either as an annual charge on the property or as ground rent, but all the same, what is payable on leased land gets diverted at source and should not be part of the annual value, so that in determination of annual value, the amount should be deductible. Any other view could not be reasonable. An alternative argument may well be that if it is not deductible, income itself may not be assessable as a property income as the assessee is not the full owner of the property, so that income will be assessable as from “Other sources”, so that the deduction in such a case cannot be denied, though the assessee may not be eligible for an ad hoc deduction at 30%; but only actual repairs, where it is assessable as income from other sources.

Q25. Where a landlord undertakes to meet the expenses of watch and ward, corridor, lighting, lift, etc., are such expenses deductible from property income?
Answer. Expenses which are ordinarily borne by the tenant, but undertaken by the landlord according to terms of rental agreement will go to reduce the annual value, because the rental value of the property can only be the net income after meeting the tenant’s burden.

Q26. Where the assessee allows the property to be used by firm of which he is a partner without charging rent, is he entitled to self-occupation allowance or depreciation?Answer. Since the firm is not a separate legal entity, the use of property by the firm should be treated as use and occupation of the property by the partner itself, so that self-occupation benefit will be available from income from such property. If the property is used for business, there is eligibility for depreciation also.

Q27. Where a partner allows the use of the property by the firm and charges rent for the same, would he be entitled to ad hoc deduction at 30% or depreciation of the property because of the use for business?Answer. Since the rent is received from a firm of which he is a partner, the amount of rent receivable may not be treated as received in his capacity as landlord, but as a partner. If the property is used for business, the owner should be entitled to depreciation. It was so held in CIT vs. Ramlubhaiya R. Malhotra following A.M. Ponnuranga Mudaliar vs. CIT. The latter decision was followed in CIT vs. Texspin Engineering and Manufacturing Works.

Q28. In the case where a tenant sublets the property, is the rent paid by the tenant deductible from the income from subletting?Answer. Since the tenant is not the owner, the income should ordinarily be assessable as income from other sources, so that the rent paid should be deductible. Even if it were lease- hold property, the rent paid may have to be taken into account in determining the annual value. Contrary view taken in CIT Hemraj Mahabir Prasad Ltd. would need review.

Q.29. Where the assessee borrows money on mortgage of his property for his daughter’s marriage, is such interest paid deductible from the property income?
Answer. Merely because the loan is charged on the property, interest does not become deductible, because the amount is not borrowed for purpose of acquiring or constructing the property.

Source Online Article

Reasons Why PAN Card is Important in India

Importance of PAN Card in IndiaPAN card i.e. permanent account number is provided by Income tax department to every income tax payer. But do you know that PAN card is compulsory and required by following authorities while doing financial transactions with them:

While opening a new bank account

It is must to produce a photocopy of PAN card while applying for a new bank account be it public / private / co-operative or other banks. However in the recently started financial inclusion program – Pradhan Mantri Jan Dhan Yojana (PMJDY), PAN card was not required by participating banks. Check out PMJDY benefits.

Applying for credit or debit card

Quoting your PAN is must when applying for debit or credit card. Not submitting this will straight away result in application getting rejected. Credit card application rejection can cause problem in getting loan, credit card etc. in future and impact your credit score.

Insurance payment

CBDT has mandated insurance policy holder to furnish PAN details while making any premium payment to insurance companies for amount exceeding Rs. 50,000 in an year.

Purchase or sell of vehicle

If you are are planning to buy or sell vehicle whose cost is greater than Rs. 5,00,000 then submitting a copy of PAN card is compulsory.

Buying or selling property (immovable asset)

Any property transaction for amount exceeding Rs. 5 Lacs requires this number to be mentioned in the property document. Buying or selling is impossible if you do not have this. In case, it is a joint property then PAN details of each person is required.

Jewellery purchase

High value jewellery purchase for amount greater than Rs.5,00,000 (5 Lacs) requires buyer to provide PAN number.

Fixed or cash deposit

Opening a fixed deposit account or cash deposit for amount greater than Rs. 50,000 at any bank requires the permanent account number. Failure to submit the same would result in TDS getting deducted at 20% if the interest amount of FD account exceeds Rs. 10,000 which is higher than the current 10%.

New telephone connection

All telecom companies have been mandated by Government of India to get PAN details of each applicant for normal or cellular connection to keep a tab on terrorism, extortion charges etc.

Investing in securities

Transactions exceeding Rs. 50,000 for equities/mutual fund/debentures/bonds requires investor’s PAN card.

Opening account at broker

For trading in share market, you need to open account with a share broker for which submitting PAN details is mandatory. Failure to provide this will result in rejection of your application.

There our several other reasons for which PAN Card is important, which might not be discussed above.

Article source allonmoney.com

PAN Card - Is it so Important in India ?

PAN, or Permanent Account Number, is a unique 10-digit alphanumeric identity allotted to each taxpayer by the Income Tax Department under the supervision of the Central Board of Direct Taxes. It also serves as an identity proof. PAN is mandatory for financial transactions such as receiving taxable salary or professional fees, sale or purchase of assets above specified limits, buy mutual funds and more.

The primary objective of PAN is to use a universal identification key to track financial transactions that might have a taxable component to prevent tax evasion. The PAN number remains unaffected by change of address throughout India.

WHO MUST APPLY FOR PAN?* Anybody who earns a taxable income in India, including foreign nationals who pay taxes here
* Anybody who runs a business (be it retail, services or consultancy) that had total sales, turnover or gross receipt exceeding Rs 5 lakh in the previous financial year

HOW TO APPLY?Use 'Form 49A' or 'Form 49AA' as applicable to you. Find more details at www.incometaxindia.gov.in
You can find the location of PAN card offices in any city from the websites of the Income Tax Department or National Securities Depository Limited (NSDL) https://www.tin-nsdl.com/tin-facilities.php.
You will need copies of proof of Identity and address.
Payment can be made using cash, cheque or demand draft.
You can also apply online through websites of the I-T Department or NSDL.
If you are applying online, the processing fee can be paid via net banking, credit card or debit card.
After applying, track the status of your application online https://tin.tin.nsdl.com/tan/servlet/PanStatusTrack

WHY GET A PAN NUMBER?For payment of direct taxes
To file income tax returns
To avoid deduction of tax at higher rate than due
To enter into specific transaction such as:

(a) Sale or purchase of immovable property valued at Rs 5 lakh or more
(b) Sale or purchase of a vehicle other than a two wheeler
(c) Payment to hotels or restaurants an amount exceeding Rs 25,000 at any one time
(d) Payment in cash an amount exceeding Rs 25,000 in connection with travel to any foreign country
(e) Payment of an amount of Rs 50,000 or more to the Reserve Bank of India for acquiring bonds
(f) Payment of an amount of Rs 50,000 or more to a company or an institution for acquiring bonds or debentures
(g) Payment of an amount of Rs 50,000 or more to a company for acquiring shares
(h) Any mutual fund purchase
(j) Deposit exceeding Rs 50,000 with any single banking institution in 24 hours.
(k) Payment exceeding Rs 5 lakh for purchase of bullion and jewellery

Article source online

All about IFSC or Indian Financial System Code

IFSC or Indian Financial System Code is an alpha-numeric code that uniquely identifies a bank-branch participating in the NEFT system. This is an 11 digit code with the first 4 alpha characters representing the bank, and the last 6 characters representing the branch. The 5th character is 0 (zero). IFSC is used by the NEFT system to identify the originating / destination banks / branches and also to route the messages appropriately to the concerned banks / branches.

IFSC            ABCD0XXXXXX

ABCD      -    Bank Code like SBIN for State Bank of India
0               -    5th Digit in IFSC is always Zero
XXXXXX -   Represents the branch like 000630 for SBI, Main Branch Dehradun

So, the complete IFSC of SBI Main Branch Dehradun in SBIN0000630

How can the IFSC of a bank-branch be found?Ans: Bank-wise list of IFSCs is available with all the bank-branches participating in NEFT. List of bank-wise branches participating in NEFT and their IFSCs is available on the website of Reserve Bank of India at http://www.rbi.org.in/Scripts/bs_viewcontent.aspx?Id=2009 . All the banks have also been advised to print the IFSC of the branch on cheques issued to their customers.

Further, banks have also been advised to ensure that their branch staff provide necessary assistance to customers in filling out the required details, including IFSC details, in the NEFT application form, and also help in ensuring that there is no mismatch between the IFSC code and branch details of beneficiary branch as provided by the customer.

Budget 2015 - Changes in Service Tax, Excise & Custom Duty as passed in Lok Sabha

Government of India,
Ministry of Finance,
Department of Revenue,
Tax Research Unit

Alok Shukla,
Joint Secretary (TRU-I),
Tel: 23092687, Fax: 23092031,
Email: alok.shukla@nic.in

D.O.F.No.334/5/2015-TRU New Delhi, the 30th April, 2015.

Dear Principal Chief Commissioner / Chief Commissioner / Director General,

While replying to the discussions on the Finance Bill, 2015 in Lok Sabha today, Finance Minister has announced certain further changes in Central Excise and Customs duty rates. Notifications No.23 to No.27/2015-Central Excise and notifications No. 28 to No.30/2015- Customs, all dated 30th April, 2015 have been issued to give effect to these announcements. Notifications No.12 and No.13/2015-Central Excise (N.T.), dated 30th April, 2015 has also been issued in this regard. As regards Service Tax, notification No.12/2015-Service Tax, dated 30.04.2015 has been issued.

The changes introduced through these notifications are summarised below. In addition, a clarification regarding applicability of customs duty exemption notifications has also been provided. Unless otherwise stated, all changes in rates of duty take effect from the midnight of 29th April / 30th April, 2015.

CUSTOMS: 

1) Basic Customs Duty on raw and refined / white sugar has been increased from 25% to 40%. S.Nos.76, 77 and 78 of notification No. 12/2012-Customs, dated 17.03.2012 as amended by notification No.28/2015-Customs, dated 30.04.2015 refer.

2) Basic Customs Duty on Colemanite and other Boron ores has been reduced from 2.5% to Nil. S.No.1 13 of notification No. 12/2012-Customs, dated 17.03.2012 as amended by notification No.28/2015-Customs, dated 30.04.2015 refers. S.No.1 13A has been omitted since ulexite ore, being a boron ore, will be eligible for Nil duty under S.No.1 13.

3) Basic Customs Duty on natural rubber (NR) has been increased from 20% or Rs. 30 per kg., whichever is lower, to 25% or Rs. 30 per kg., whichever is lower. S.No.252 of notification No. 12/2012-Customs, dated 17.03.2012 as amended by notification No.28/2015-Customs, dated 30.04.2015 refers.

4) Basic Customs Duty on raw silk (not thrown) has been reduced from 15% to 10%. S.No.276 of notification No. 12/2012-Customs, dated 17.03.2012 as amended by notification No.28/2015-Customs, dated 30.04.2015 refers.

5) All Digital Still Image Video Cameras (DSC) falling under tariff item 8525 80 20 irrespective of their specification [including the restriction with reference to video recording time] and their parts are being exempted from Basic Customs Duty. S.No.428A and 429 of notification No. 12/2012-Customs, dated 17.03.2012 as amended by notification No.28/2015-Customs, dated 30.04.2015 refer.

6) Export duty on iron ore fines (below 58% Fe content) [falling under tariff lines 2601 11 41 and 2601 11 42] has been reduced from 30% to 10%. There is no change in the export duty rate on iron ore other than iron ore fines (below 58% Fe content). Notification No.27/2011-Customs, dated 01.03.2011 as amended by notification No.30/2015- Customs, dated 30.04.2015 [new S.No.20A refers].

7) Exemption from additional duty of customs levied under section 3 of the Customs Tariff Act (both CVD and SAD) in respect of certain entries of notification No.39/96-Customs, dated 23.07.1996 are being withdrawn. Exemption from Basic Customs Duty in respect of these entries, however, would continue. Paragraph 2 of the notification No.39/96- Customs, dated 23.07.1996 as amended by notification No.29/2015-Customs dated 30.04.2015 refers. Further, exemption from Basic Customs Duty, CVD and SAD in respect of direct imports by the Government of India and the State Governments would continue. Notification No.39/96-Customs, dated 23.07.1996 as amended by notification No.29/2015-Customs dated 30.04.2015 [amended S. Nos.9 and 10] refer. These changes, however, will be effective from 01.06.2015.

EXCISE:

1) The speed range for ‘jarda scented tobacco’has been divided into two ranges (as in case of chewing tobacco),
a. first upto 300 pouches per minute; and
b. second from 301 onwards,
and the deemed capacity and duty payable have been notified accordingly. Notification No.11/2010-Central Excise (N.T.), dated 27.02.2010 [The Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) Rules, 2010] as amended by notification No.13/2015-Central Excise (N.T.), dated 30.04.2015 [for deemed capacity of production] and notification No.16/2010-Central Excise, dated the 27.02.2010 as amended by notification No.25/2015-Central Excise, dated the 30.04.2015 [for duty payable per machine per month] refer.

2) Excise duty exemption on finishing agents, dye carriers to accelerate the dyeing or fixing of dye-stuffs, printing paste and other products and preparations of any kind used in the same factory for the manufacture of textiles and textile articles has been withdrawn. S.No.133 of notification No.12/2012-Central Excise, dated 17.03.2012 as omitted by notification No. 24/2015-Central Excise, dated 30.04.2015 refers.

3) The concessional excise duty (and hence, CVD) of 6% on Hard disk, CD ROM drive, DVD drive or writer, Combo drive, flash memory, microprocessors has been restricted only to actual users for manufacture of computer (PCs/desktops) falling under heading 8471. S.No.255 of notification No.12/2012-Central Excise, dated 17.03.2012 as amended bynotification No. 24/2015-Central Excise, dated 30.04.2015 refers.

4) Excise duty exemption presently available to Ordnance Factories is being withdrawn. S.No.1 and 6 of notification No.62/95-CE dated 16.03.1995 as omitted by notification No.23/2015-Central Excise, dated 30.04.2015 refers. Further, excise duty exemption presently available to Defence PSUs is being withdrawn. S.No.2 and 16 of notification No.63/95-CE dated 16.03.1995 as omitted by notification No.23/2015-Central Excise, dated 30.04.2015 refers. These changes, however, will be effective from 01.06.2015.

5) An Explanation has been inserted in notifications No.14/2015-Central Excise and 15/2015-Central Excise, both dated 01.03.2015 to provide that exemption from Education Cess and Secondary & Higher Education Cess contained therein will also apply to DTA clearances of excisable goods from 100% EOU. Notification No.14/2015-Central Excise, dated 01.03.2015 as amended by notification No.26/2015-Central Excise, dated 30.04.2015; and notification No.15/2015-Central Excise, dated 01.03.2015 as amended by notification No.27/2015-Central Excise, dated 30.04.2015 refers.

The CENVAT Credit Rules, 2004 (CCR, 2004):

1) Rule 3(7)(b) of the CCR, 2004 has been amended so as to allow utilisation of credit of Education Cess and Secondary & Higher Education Cess for payment of basic excise duty in the following situations:

a. Education Cess and Secondary & Higher Education Cess on inputs or capital goods received in the factory of manufacture of final product on or after the 1st day of March, 2015;

b. Balance 50% Education Cess and Secondary & Higher Education Cess on capital goods received in the factory of manufacture of final product in the financial year 2014-15; and

c. Education Cess and Secondary & Higher Education Cess on input services received by the manufacturer of final product on or after the 1st day of March, 2015.
Notification No.12/2015-Central Excise (N.T.), dated 30.04.2015 refers. 

CLARIFICATION: The issue as to whether an importer can simultaneously avail the exemption benefits under two notifications, one for Basic Customs Duty and the other for CVD was examined in the Ministry in the matter of import of coal from Indonesia and vide Circular No.41/2013-Customs dated 21.10.2013 it was clarified that an importer while availing of BCD exemption on steam coal under notification No.46/2011-Customs, dated 01.06.2011 can simultaneously avail of concessional CVD at 2% under S.No.123 of Notification No. 12/2012-Customs, dated 17.03.2012. Drawing the same analogy, in the case of muriate of potash and urea for use in the manufacture of other fertilizers, it was clarified to the Central Excise zone of Visakhapatnam and Bhubaneswar that importers can simultaneously avail benefit of S.No. 198 or 203 of Notification No. 12/2012-Customs, dated 17.03.2012 for concessional rate of BCD and S.No.127 of notification No.12/2012-Central Excise for CVD exemption. Representations have been received regarding divergence in assessment practice in respect of such imports. It is, therefore, clarified that importers can avail of the benefit of Notification No. 12/2012-Customs, dated 17.03.2012 for the purposes of BCD [i.e. S.No.197 to 203 as amended by notification No.46/2012-Customs, dated 17.08.2012] and simultaneously avail benefit of S.No.127 of Notification No. 12/2012-Customs, dated 17.03.2012 for the purposes of CVD where such imports are for use in the manufacture of other fertilizers.

SERVICE TAX:

1) Service tax on services of Life Insurance business provided under Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) have been exempted.

2) Service tax on services of Life Insurance business provided under Pradhan Mantri Jan Dhan Yojana (PMJDY) have been exempted.

3) Service tax on services of General Insurance business provided under Pradhan Mantri Suraksha Bima Yojana (PMSBY) have been exempted.

4) Service tax on services by way of collection of contribution under Atal Pension Yojana (APY) have been exempted.

[Notification No.25/2012-Service Tax, dated 20.06.2012 as amended by notification No.12/2015-Service Tax, dated 30.04.2015 [item (p) of entry.26 and items (e) and (f) of entries 26A and 26B refer.]

Budget 2015 - Income Tax Changes made in Finance Bill, 2015 by Lok Sabha

Finance Bill, 2015 was passed in Lok Sabha on 30.04.2015 with certain amendments via notice of amendment dated 30.04.2015. In this article I have covered some of the amendment in Provisions related to Direct Taxes. Read- Lok Sabha approves Finance bill 2015

1. Mat Exemption to Foreign CompaniesIn the original bill it was provided to only FII. Therefore, the Finance Bill, 2015 as passed by Lok Sabha proposes to provide relief from MAT to foreign companies as well. Capital gains from transfer of securities, interest, royalty and FTS accruing or arising to foreign company has been proposed to be excluded from chargeability of MAT if tax payable on such income is less than 18.5%. Further, expenditures, if any, debited to the profit loss account, corresponding to such income shall also be added back to the book profit for the purpose of computation of MAT.

2. MAT exemption on notional gain arising on transfer of share of SPVA new clause is proposed to be inserted to re-compute the gains from transfer of said units (as referred to in point (c) above) which shall be added back for computation of MAT. It is proposed that the amount of gain from transfer of said units shall be computed by taking into account the cost of shares exchanged with units or the carrying amount of the shares at time of exchange where such shares are carried at a value other than the cost through profit & loss account.

Accordingly, notional loss arising from transfer of asset or notional loss arising from change in carrying amount of said units and actual loss from transfer of said units shall be added back to the book profit for the purpose of computation of MAT.

3. Deduction under Section 80D in case of individual
The Finance Bill, 2015 as presented originally omitted to propose amendment to clause (a) and clause (b) of sub-section (2) of Section 80D to enable assessee to claim deduction of Rs. 25,000 instead of Rs. 15,000. However, sub-section (4) of Section 80D was amended to allow deduction of Rs. 30,000 instead of Rs. 25,000 if individual or his family member or any of his parent is a senior citizen or very senior citizen.

4. Residential Status of a CompanyThe Finance Bill, 2015 as presented earlier proposed to amend Section 6 to provide that a company shall be said to be resident in India if its place of effective management, at any time in that year, is in India. In other words, the concept of Control or Management (wholly in India) is replaced with Place of Effective Management (at any time in India).

Thus, the Finance Bill, 2015 as passed by the Lok Sabha has proposed to omit the words ‘at any time’ which shall have effect that a company shall be deemed to be resident in India if its place of effective management is in India.

5. Filing of return is mandatory if assessee has foreign assetsThe Finance Bill, 2015 as passed by the Lok Sabha has proposed mandatory filing of return by a person, being a resident other than not ordinarily resident in India, who at any time during the previous year:

(a) holds, as a beneficial owner or otherwise, any asset (including financial interest in any entity) located outside India or has signing authority in any account located outside India; or

(b) is a beneficiary of any asset (including any financial interest in any entity) located outside India.

However, filing of return shall not be mandatory under this proviso for an individual, being a beneficiary of any asset (including any financial interest in any entity) located outside India, if income arising from such an asset is includible in the income of the person who is beneficial owner of such an asset.

6. Subsidies are no longer capital receipts
To end the dispute, it is proposed to amend the definition of ‘Income’ under Section 2(24) in the Finance Bill, 2015 as passed by the Lok Sabha.

A new sub-clause (xviii) is proposed to be inserted in Section 2(24) to provide that assistance in the form of a subsidy or grant 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 assesse [other than one considered under Explanation 10 to Section 43(1)] would be included in assessee’s income.

Thus, any subsidy which is not reduced from the actual cost of the asset in view of provisions of Explanation 10 to Section 43(1) shall be taxable as revenue receipts of the assessee.

7. Bad debts could be claimed without writing off debt in books of accountIn order to remove this anomaly, it is proposed in the Finance Bill, 2015 as passed by the Lok Sabha that bad-debts could be claimed without writing off in books of account if the amount of debt or part thereof has been taken into account in computing the income of the assessee of the previous year in which the amount of such debt or part thereof becomes irrecoverable or of an earlier previous year on the basis of income computation and disclosure standard notified under section 145(2) without recording the same in the accounts.

Thus, Section 36(vii), once again, proposed to be amended to get back to original position (i.e., the position that stood till Assessment Year 1988-89) but to a limited extent

8. Interest on loan taken for acquisition of an asset could only be capitalized till the asset is first put to useThe Finance Bill, 2015 as passed by Lok Sabha proposes to remove this distinction in allowability of interest in case of existing business and in case of extension of existing business. It proposes to remove the words “for extension of existing business or profession” from proviso to Section 36(1)(iii). Thus, it is proposed that interest on borrowings used for acquisition of asset till the asset is put to use shall not be allowed as deduction in any case.

9. Determination of period of holding and cost of acquisition in case of shares acquired on redemption of GDRsIt is proposed that cost of acquisition of shares acquired by a non-resident on redemption of GDRs shall be the price of such shares as prevailing on any recognized stock exchange on the date on which a request for redemption is made by the assessee.

10. Additional Depreciation and Investment Allowance allowed to industries set-up in Bihar and West BengalThe Finance Bill, 2015 as presented on February 28, 2015 proposed to allow higher additional depreciation at the rate of 35% (instead of 20%) in respect of the actual cost of new machinery or plant acquired and installed by a manufacturing undertaking or enterprise set-up in the notified backward area of the State of Andhra Pradesh and the State of Telangana.

The Finance Bill, 2015 as passed by the Lok Sabha proposes to extend the benefit of additional depreciation and investment allowance to the manufacturing undertaking or enterprise set-up in the notified backward area of State of Bihar and State of West Bengal as well.

Source Online Article

TDS deducted, no need to file Income Tax Return? - A Misunderstanding of Common Man

Arjuna (Fictional Character): Krishna, Income Tax Department is sending notices to Taxpayers for not filling Returns of last 3-4 years based on TDS, etc. What are they?

Krishna (Fictional Character): Arjuna, Income Tax department send notices to Taxpayers on the basis of information linked with PAN , such as TDS by Banks on FDRs, Mutual Fund transaction, Immovable Property Transactions, Cash Transaction in Saving A/c, Credit Card Transaction etc. Many Taxpayers thinks that there is no need to file Income Tax Return as their TDS is already being deducted on Income earned. It is a big misunderstanding for beginners or common man. If Taxpayer has Taxable Income in any year or if he has Refund to claim then it is necessary for him to file Income Tax Return. Further if a notice is received even after Return is filed then compliance of it should be given. Further Limit of TDS deduction and basic exemption limit for taxable income, both are different. Hence even income is below taxable income, TDS is deducted by the payer and above misunderstanding starts. Further salaried persons also have same understanding, as they feel that on their total salary TDS is deducted, hence all tax is paid, no need to file return, etc.

Arjuna: Krishna, What is relation between Income Tax and TDS?

Krishna: Arjuna, TDS means Tax deducted at Source. According to Income Tax Act, in some specified Transactions like salary, rent, interest, commission, fees, etc, while paying or accounting expenditure, whichever is earlier, TDS have to be deducted and required to be paid to the Government treasury. This means the Payer pays Taxes of the Receiver. E.g. “A” is employee at “B” and his monthly salary is Rs. 60,000 then “B” has to deduct TDS from salary of “A” and required to pay TDS to Government. That means TDS depends on the type of Transaction. But responsibility for filling Income Tax Return lies with the receiver. The receiver Taxpayer has to show all the Income received in Financial Year from Salary, Rent, Interest, etc. in Income Tax Return. After considering all incomes, deductions, etc and after computing the tax if it comes to Income Tax payable then it should be paid or if refund arises then it should be mentioned in return. Taxpayer has to mention the details of TDS Credit received in Income Tax Return. I.e, reconciliation of TDS as per Form 26AS and Income Tax return filed needs to be done. Any mis match may lead to further notice to taxpayer.

Arjuna: Krishna, who should file Income Tax Return?

Krishna: Arjuna, A Person is required to file Income Tax Return if he has Taxable income i.e. his Income is exceeding basic exemption limit (For FY 2014-15 Rs. 2.5 lakhs) even if Tax liability arises or not. If TDS of a person is deducted and Refund arises, same can be claimed, by filing Income Tax Return. E.g. many taxpayers have only income of Interest on deposits. If Interest received is not exceeding Basic Exemption Limit then it is not necessary to file Income Tax Return. But if TDS is deducted on the Interest then he has to file Income Tax Return for getting refund. To save himself from TDS deduction such Taxpayers can file Form 15G or 15H before receiving Income for not deducting TDS.

Arjuna: Krishna, what precautions should one takes before filling Income Tax Return?

Krishna: Arjuna, Every Taxpayer should download 26AS from the Income Tax department’s website. Income and TDS as per 26AS should be verified with the Income Tax Return. Taxpayer may have to face the Department if Income is shown less than the Income shown in 26AS.

Arjuna: Krishna, if a Taxpayer receives a notice for not filling Income Tax Return, then what should be done?

Krishna: Arjuna, the Taxpayer has to give Online Compliance if he receives notice for not filling Income Tax Return in this Year and its Status has to be mentioned. The Taxpayer has to mention whether he has filed Income Tax return or not, if he has filed, then he needs to mention the Return filling date, Acknowledgement No., Circle/ Ward and whether online or paper form. If return is not filed then the reason for non-filing is required to be given. Further he has to mention whether the notice received is for his own PAN or for other related PAN. The Taxpayer can file previous year’s returns on the basis of the said notice. If it comes to tax payable then Taxpayer should pay tax and interest, file return and then submit online compliance.

Arjuna: Krishna, What should the Taxpayer learn from the Income Tax Return, TDS and Notice?

Krishna: Arjuna, the responsibility of TDS deduction is of the deductor, Filling of Income Tax Return is of self and to draw notice is of the Department. If a Taxpayer files Income Tax Return correctly then department will not issue notice and no online compliance has to be made. Many taxpayers think that after the TDS is deducted there is no need to File Income Tax Return. A small confusion / misunderstanding in the eyes of law becomes complex in future. Like our health may get damaged, if we don’t pay attention to minor illness. This means Compliance of law and Disease of body should be cured immediately otherwise its effects may create complication in future.

Article Source Tax Guru

UK VAT Tax Calendar for FY 2015-16

UK VAT Tax Calendar for FY 2015-16

Sl. No.	Class of Dealers or Persons	Submission of periodical returns	Payment of tax, composition money, late fee, interest or TDS	Prescribed form for the periodical returns
1	Dealers having GTO of more than 50 lakhs in the preceding year.	Quarterly, for quarter ending June 30, September 30, December 31 and March 31, up to the last date of the succeeding month. Return shall be filed in one of the following ways:- (1) Online on the website of the Department with digital signature of the dealer or the person authorized to sign the return, issued by the certifying authority in accordance with the provisions of Section 35 of the Information Technology Act, 2000 (2) Online on the website of the department without digital signature a duly signed electronically generated hard copy of the return and the “acknowledgement” with the proof of payment or e-payment of tax or any other dues	Monthly, by e-Payment up to 20th of the succeeding month Provided that in case the tax due for a month is NIL the dealer shall submit such information in Form – VI(A) up to 20th of the succeeding month.	Form-III (amended)
2	Dealers having GTO up to 50 lakhs in the preceding year.	Quarterly, for quarter ending June 30, September 30, December 31 and March 31, up to 25th of the succeeding month. Return shall be filed in one of the following ways :- (1) Online on the website of department with digital signature of the dealer or the person authorized to sign the return, issued by the certifying authority in accordance with the provisions of Section 35 of the Information Technology Act, 2000 (2) Online on the website of department without digital signature a duly signed electronically generated hard copy of the return and the “acknowledgement” with the proof of payment or e-payment of tax or any other dues (3) If filed otherwise duly signed copy of the return and two copies of the “acknowledgement” along with proof of payment or e-payment of tax or any other dues.	Quarterly, by e-payment or otherwise up to 20th of the succeeding month	Form-III (amended)
3	Dealers who are in the first year of their business	Quarterly, for quarter ending June 30, September 30, December 31 and March 31, up to 25th of the succeeding month. Return shall be filed in one of the following ways :- (1) Online on the website of the Department with digital signature, of the dealer or the person authorized to sign the return, issued by the certifying authority in accordance with the provisions of Section 35 of the Information Technology Act, 2000 (2) Online on the website of the department without digital signature a duly signed electronically generated hard copy of the return and the “acknowledgement” with the proof of payment or e-payment of tax or any other dues (3) If filed otherwise duly signed copy of the return and two copies of the “acknowledgement” along with proof of payment or e-payment of tax or any other dues.	Monthly, by e-payment or otherwise up to 20th of the succeeding month. Provided that in case the tax due for a month is NIL the dealer shall submit such information in Form – VI(A) up to 20th of the succeeding month.	Form-III (amended)
4	Dealers who have opted for composition scheme under sub-section (1) of section 7 of the Act	Quarterly for quarter ending June 30, September 30, December 31 and March 31, up to 25th of the succeeding month. Return shall be filed in one of the following three ways:- (1) Online on the website of the Department with digital signature, of the dealer or the person authorized to sign the return, issued by the certifying authority in accordance with the provisions of Section 35 of the Information Technology Act, 2000 (2) Online on the website of the department without digital signature a duly signed electronically generated hard copy of the return and the “acknowledgement” with the proof of payment or e-payment of tax or any other dues (3) If filed otherwise duly signed copy of the return and two copies of the “acknowledgement” along with proof of payment or e-payment of tax or any other dues.	Quarterly, by e-payment or otherwise up to 20th of the succeeding month	Form-III (C) (amended)
5	Dealers/ persons carrying on business of transfer of property in goods involved in the execution of works contract	Quarterly for, quarter ending June 30, September 30, December 31 and March 31, up to 25th of the succeeding month. Return shall be filed in one of the following ways :- (1) Online on the website of the Department with digital signature, of the dealer or the person authorized to sign the return, issued by the certifying authority in accordance with the provisions of Section 35 of the Information Technology Act, 2000 (2) Online on the website of the department without digital signature a duly signed electronically generated hard copy of the return and the “acknowledgement” with the proof of payment or e-payment of tax or any other dues (3) If filed otherwise duly signed copy of the return and two copies of the “acknowledgement” along with proof of payment or e-payment of tax or any other dues.	Quarterly, by e-payment or otherwise up to 20th of the succeeding month	Form-III (B) (amended)
6	Persons responsible for making deduction of tax at source under the provisions of sec-35 of the Act Explanation- if such person is a registered dealer he, in addition to the return prescribed for him in clause (1), (2), (3), (4), or clause (5), as the case may be, shall file return in Form-IIIA (amended)	Quarterly for, quarter ending June 30, September 30, December 31 and March 31, up to 25th of the succeeding month. Filing of return shall be filed in one of the following ways :- (1) Online on the website of the Department with digital signature, of the dealer or the person authorized to sign the return, issued by the certifying authority in accordance with the provisions of Section 35 of the Information Technology Act, 2000 (2) Online on the website of the department without digital signature a duly signed electronically generated hard copy of the return and the “acknowledgement” with the proof of payment or e-payment of tax or any other dues (3) If filed otherwise duly signed copy of the return and two copies of the “acknowledgement” along with proof of payment or e-payment of tax or any other dues.	Monthly, by e-payment or otherwise up to 20th of the succeeding month	Form-III-A (amended)

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Compiled by:
Sh. J.K. Grover
Advocate