WISH YOU A VERY HAPPY NEW YEAR

India Taxes- Due Date Alert for the month January 2013

No	Due Date	Related to	Compliance to be made
1	05.1.2013	Service Tax	Payment of Service Tax for the Month of December 2012
2	07.1.2013	TDS/TCS (Income Tax)	·        Deposit TDS for payments of Salary, Interest, Commission or Brokerage, Rent, Professional fee, payment to Contractors, etc. during the month of December 2012. ·        Deposit TDS from Salaries  deducted during the month of December 2012 •   Deposit TCS for collections made under section 206C including sale of scrap during the month of December 2012, if any •    Deliver a copy of Form 15G/15H, if any to CCIT or CIT for declarations received in the month of December 2012, if any
3	15.1.2013	TDS/TCS (Income Tax)	Furnish quarterly statement of tax deducted at source (TDS) and tax collected at source (TCS) for the quarter ended December 2012 in Form 24Q / 26Q / 27Q / 27EQ.
4	20.1.2013	VAT	Payment of VAT & filing of monthly return for the month of December 2012
5	31.1.2013	TDS/TCS (Income Tax)	Issue of TDS Certificate - Non Salary for Q3 FY 2012-13

Why does TRACES (tdscpc.gov.in) have different types of Authentication Codes?

There are two types of validations after which Authentication Code will be generated. Statement Specific Validation:

On this screen, details about a particular statement will be asked. For e.g., If you want to download NSDL Conso File for Financial Year 2010-11, Quarter 2 and Form Type 24Q, you have to provide challan details and PAN-Amount details for this statement. The Authentication Code generated will be for that particular statement

Generic Validation :
On this screen, details about a generic statement will be asked. For e.g., If you want to update your profile, you have to provide challan details and PAN-Amount details about a generic statement will be asked. The Authentication Code generated will be for the FY, Quarter and Form Type displayed on the validation screen

It is advised to copy and save the Authentication Code so that you can reuse it for that day for the same statement.

Whether activity of welfare of dogs and taking care of sick animals is covered within meaning of 'Charitable purpose under Sec 2(15) - YES: ITAT

THE issue before the Bench is - Whether welfare of dogs and taking care of sick animals is covered under the meaning of 'Charitable purpose' u/s 2(15). And the answer goes in favour of assessee.

Facts of the case

Assessee is a trust seeking registration u/s 12A for availing various benefits under the Income Tax Act, 1956. The main objects of the Trust was to help the orphan children, to provide free food to the hungry and poor people and o give medical treatment and food to the animals left in the streets, Food for all combines, conducting Animal Birth Control Program and Anti Rabies Vaccination and to carryout Animal Adoptions Rescue Operations, Humane Education Programmes etc. CIT(A) had rejected the assesee's plea on the ground that, the objects of the trust were not in consonence with sec 2(15), 'charitable purpose'. It had filed appeal to ITAT against the order of CIT(A), for granting registration u/s 12A.

New tax processing number rules to impact NRIs heading to US

Beginning January 1, 2013, the IRS will implement improvements to the Individual Taxpayer Identification Number (ITIN) application process. These changes will impact individuals who have recently moved to the US or who plan to move in the near future.
"The objective of these changes was to prevent fraudulent transactions. The IRS noticed an increase in fraudulent claims of certain provisions such as child tax credits and hence

Reimbursments - Is Service Tax chargeble

Service providers and professionals are aware that Service Tax is payable @ 12.36 percent on the value to taxable services which implies gross amount charged by the service provider for  such service provided or agreed to be provided. However, where the consideration is not in money form, wholly or partly, value means money consideration plus money equivalent of consideration in kind. Also, consideration includes any

Taxation of BPO in India

During the last decade or so, India has seen a steady growth of outsourcing of business processes by non-residents or foreign companies to IT-enabled entities in India. Such entities are either branches or associated concerns of the foreign enterprise or an independent Indian enterprise. Their activities range from mere procurement of orders for sale of goods or provision of services and answering sales related queries, to the provision of services itself, like software maintenance service, debt collection service, software development service, credit card/mobile telephone related service, etc. But sometimes, the entire or major portion of the

Whether when summons are issued to share allottees and they fail to respond to such notices, onus shifts back on assessee who becomes liable to addition u/s 68 - YES: Delhi HC

THE issues before the Bench are - Whether when the summons u/s 131 are issued to share allottees and they fail to respond to such notices, the onus shifts back on the assessee who becomes liable to addition u/s 68 and Whether the concept of 'shifting onus' means that after assessee provides certain details about the share allotees and the assessee's duty gets over. And the Revenue's appeal is upheld.

http://scores.gov.in/ -An Introduction

There will be occasions when you have a complaint against a listed company/ intermediary registered with SEBI. In the event of such complaint you should first approach the concerned company/ intermediary against whom you have a complaint. However, you may not be satisfied with their response. Therefore, you should know whom you should turn to, to get your complaint redressed.
SEBI takes up complaints related to issue and transfer of securities and non-payment of dividend with listed companies. In addition, SEBI also takes up complaints against the various intermediaries registered with it and related issues.
SCORES facilitates you to lodge your complaint online with SEBI and subsequently view its status.

Taxability of Gifts received from Relatives & Non Relatives

If you receive a gift from any of your relatives or friends for Christmas or New Year or Pongal or any festival, worth more than Rs. 50000, as per income tax laws, it may be taxable income on your hands in certain situations.
Not only the income, if a person receives a gift, if the value of the gift is exceeding the certain limit then he/she must add it in his

New Feedback on e-Filing of Income Tax Returns e-Signature by Income Tax Department

FEEDBACK ON INTRODUCTION OF E-SIGNATURE

Income Tax Department proposes to introduce Electronic Signature for e-Filing of Income Tax Returns in addition to existing Digital Signature Certificate / ITR V. The e-signature shall be based on the validation of the taxpayer on the basis of the data available with the Income Tax department such as bank A/c number, CPC intimation number, valid TAN and the personal details of the taxpayer. This e-signature proposed to be given to the existing e-filers (will not be available to first time e-filers) in select categories of ITRs such as ITR 1, ITR 2 and ITR 4S. Your response/suggestion/comment on introduction of e-signature is sought in the email of efiling_schema_utility@incometaxindia.gov.in.

What are the situations to TDS deduction or Non-deduction at lower rate?

Non deduction or deduction at lower rate in certain situations

No Tax has to be deducted for the payment made to Government, RBI, Corporation whose income is exempt from tax or mutual fund specified u/sec. 10(23D). Also in case where deductee produces a non deduction certificate or lower deduction certificate u/sec. 197 of the Income Tax Act 1961.

Self declaration in Forms 15G and 15H can be filed by the deductee if his income doesn't exceed the amount chargeable to tax. This self declaration can be filed for dividends, interest and mutual fund income only. In these cases no tax has to be deducted. However the tax deductor is required to furnish copies of this self declaration to the concerned CCIT or CIT as per the rules.

Foreign Companies/Firms having issues in registration

Registration - FAQ
Company/Firm

Q: The Principal Contact is a Foreigner/Non-resident and does not have a PAN and hence, not able to register in the new e-Filing Application. What should be done?
A: As per CBDT guidelines, Foreigners without PAN is allowed to be an authorized signatory and can file on behalf of the Company/Firm without a PAN encrypted DSC. The assessee Company is required to send an email to efilinghelpdesk@incometaxindia.gov.in mentioning details such as Name of the Company, PAN

Responsibility of Professionals Signing MCA Annual Return

W.e.f from Financial Year 2011-12, Professional (CA, CMA, CS) signing MCA Annual Return have to certify whether Cost Accounting Record Rules -2011 (CARR) or Cost Audit Orders (CAO) are applicable on company or not and mention Product or Service Category Code (ITC/ NPCS 4 Digit Code).  They have to certify it on Form 23 AC and Form 23 ACA on the following page:

Form 23 AC – On Page no 11, point VII,

Form 23ACA – On Page no 5, point IV,

Selling under-construction flat before possession saves tax

The steep rise in property prices over the past three-four years, particularly in larger cities such as Mumbai, has placed one category of homebuyers in a very fortunate situation. Those who booked yet-to-be-constructed flats three or four years ago, made payments over the past few years at the old booking rates and are now getting possession of the ready flats, are tempted to sell the flats at the high prices that the ready flats now command compared with the price at which they were booked. How would the gain that they make be taxed if they were to sell the ready flats now?

Once the asset merges in block of assets is entitled to get depreciation till the block of asset equals to zero or company is closed

Court INCOME TAX APPELLATE TRIBUNAL Brief Fact of the case is depreciation on block of asset. Citation ITO, Ward 2 (4), Room No.301, 3rd Floor, CR Building, IP Estate, New Delhi. (Appellant) Vs. Bhandari Engineers & Builders (P) Ltd., 91, Bhandari House, Nehru Place, New Delhi. PAN: AAACB1043K(Respondent)

Whether when assessee is a public limited company and also attracts provisions of Sec 179 because of complex nature of case, it is a fit case for AO to invoke principle of lifing of corporate veil - YES: Gujarat HC

THE issues before the Bench are - Whether the provisions of Sec 179(1) can be applied even in the case of a public limited company; Whether such provisions are required to be applied only in very extraordinary cases; Whether when assessee is a public limited company and also attracts the provisions of Sec 179, it is a fit case for the AO to invoke principle of lifing of corporate veil and Whether provisions of Sec 179 can be invoked only after it is established that the taxes due were attributable to negligence of Directors. And the verdict partly goes in favour of Revenue.

Facts of case

The petitioner is a director of a private limited company M/s. M. Kantilal & Co. ltd. (“the company”). On 7.1.1999 there were search proceedings on the company u/s 132 of the Act. Pursuant to such operations, block assessment u/s 158BC of the Act was framed on 23.3.2001 computing total income of the company at Rs.259,22,64,020/-. The company preferred an appeal before the Commissioner(Appeals) who by his order dated 18.9.2002 reduced the computation of total income to

legal fiction to utilise the CENVAT credit

A person who is not a actual service provider, but discharges the Service Tax liability on the notified taxable services under Section 68(2) of the Finance Act, 1994 read with Notification No. 36/2004 dated 31.12.2004 and Rule 2(1)(d) of Service Tax Rules, 1994 as a deemed service provider, is entitled, by virtue of the legal fiction to utilise the CENVAT credit availed on inputs/input services/capital goods for payment of service tax on Goods Transport Agency (GTA) Services, even though such inputs/input services/capital goods were not used for providing such

Understanding International payments with latest case laws : Part –III

We had earlier discuss in detail about the concepts of International taxation and payments  along with various case laws earlier in two different articles. In case you want to refer, the same, please click on the link below:

http://taxbymanish.blogspot.in/2012/02/understanding-international-payments.html

&

http://taxbymanish.blogspot.in/2012/05/understanding-double-tax-avoidance.html

Over a period of time, there are number of judgements comes from various levels of courts from different locations of India and hence it is very important to know the same for the correct treatment of international payments.

Commission : Payment of commission to Indian agent at arm’s length price does not relieve non-resident from further attribution of profits to PE in India. Refer, MTV India Limited.

The applicant is an Indian company engaged in the manufacturing and supply of Rice Par Boiling and Dryer Plants as per requirement of customers. It had received orders from two agents situated in Pakistan. The

IT department releases FAQs to redress QFIs grievances

IT  department releases FAQs to redress QFIs grievances

The Income-tax department has issued Frequently Asked Tax Questions (FAQs) by Qualified Foreign Investors (QFIs). The FAQs are issued to help QFI applicants to get generic understanding of the tax framework in India. It addresses various grievances of QFIs, such as:

1) Are QFIs required to obtain PAN Card to comply with tax norms in India?

2) What are the benefits to QFIs of having a PAN Card?

Salaried Employee, How to get Income Tax Exemption of HRA (House Rent Allowance)?

Regarding Tax benefit, Salaried Assessees who are in receipt of House Rent Allowance (HRA) from an employer can claim an exemption u/s 10(13A) of the Income Tax Act-1961.

When the Salaried Employee not receiving HRA then, Any individual who is not in receipt of HRA from the employer can claim deduction towards rent payment for residential accommodation u/s. 80GG of the Income Tax Act.

The condition precedents for deduction u/s 80GG are as under:-

• Salaried Employee has to prepare a declaration in Form No.10BA.
• Salaried Employee or his minor child, spouse or HUF of which he is a member, should not be owner of a house at the place where he ordinarily resides or performs his duties; or he should not be owner of any house at any other place, the income therefrom is to be determined under section 23(2) (a) or, as the case may be, under section 23(4) (a) ( i.e.income from self-occupied house property).

Whether when assessee leases out plant and machinery, installation costs incurred to bring assets into working conditions can be claimed as revenue expenditure - NO: Delhi HC

THE issues before the Bench are - Whether when the assessee leases out plant and machinery, the installation costs incurred to bring the assets into working conditions can be claimed as revenue expenditure and Whether when the assessee procures software compatible with the hardware leased out, such expenditure is to be construed as capital in nature. And the verdict goes against the assessee.

Facts of the case

A) Assessee engages itself in the promotion and establishing telecom services and allied activities, including mobile and

Transport / Rent-a-Cab service of employees to and from factory is input service

This appeal was admitted to consider the following substantial question of law :-

“(1)  Whether the transportation service, provided in the factory of the M/s. Tata Auto Comp. Systems Ltd., to their staff for pick up and drop from their residence to the factory and vice versa, was an input service, in or in relation to manufacture, whether directly or indirectly of the final products within the meaning and comprehension of Rule 2(1) of the Cenvat Credit Rules, 2004?

(2)  Consequently whether the Cenvat credit of the Service tax, so paid for receiving the transportation services by them for pick up and drop from their residence to the factory and vice versa, was eligible for availment and utilization in terms of Rule 3 read with Rule 2(1) and Rule 9 thereof?”

Payment for making logistic arrangements are not FTS even if the same require some managerial skill

Before us, the learned DR has not disputed the nature of services rendered by the concerned service providers to the assessee. He, however, has contended that for providing the said services, managerial skill was also required and even the knowledge of local law was also used by the concerned service provider. In our opinion, merely because some managerial skill is required to render the services, it would not make the services to be managerial services as envisaged in Explanation 2 to section 9(1)(vii).

UNDERSTANDING SECTION 14A IMPACT WITH CASE LAWS PART - II.

To read the article click here

http://taxbymanish.blogspot.in/2012/03/understanding-section-14a-impact-with.html

UNDERSTANDING TAXATION OF TRUST IN INDIA.

To read the article click here

 http://taxbymanish.blogspot.in/2012/02/understanding-taxation-of-trust-in.html

How to deduct Education Loan Interest?

A Salaried Employee or any any other Taxpayee (Individual Assessee) can get deduction in respect interest paid on Education Loan taken from the financial institution or Bank for pursuing higher education either for himself or for specified relatives.

As far as the deductibility of the interest amount is concerned, it may be noted that-

• The deduction is allowed in computing the taxable income of the initial assessment year (i.e., the assessment year in which the assessee starts paying the interest on the loan) and 7 year immediately succeeding assessment years ( or until the above interest is paid in full, whichever is earlier)
• No deduction is admissible towards Principal repayment.
• Interest has to be paid out of the income chargeable to tax.

Taxpayee can claim deduction towards the interest paid on education loan taken by him as a co-applicant and it can be paid any time during the financial year out of his/her income chargeable to tax

FAQ by Qualified Foreign Investors

Q.1. What is Permanent Account Number (PAN) Card?Ans: Permanent Account Number (PAN) is a ten-digit alphanumeric number, issued by the Income Tax Department of India to any “person” to facilitate him in making tax payments filing, returns and claiming refunds. The number, along with other relevant details, is printed on a card called PAN card.
Q.2.      Are QFIs required to obtain PAN Card to comply with tax norms in India?
Ans: Yes. Under the current provisions, QFIs would be required to obtain PAN card. The process of obtaining a PAN card is simple, and user friendly. An application can be filed by a foreign investor online and the process can be completed within 2 to 3 weeks.

FILING OF FORM 68 FOR RECTIFICATION OF MISTAKES IN FORM 1, FORM 1A AND FORM 44

 

GENERAL CIRCULAR NO. 42/2012, DATED 21-12-2012

Rule 20G(1) of Companies (Central Government's) General Rules and Forms (Second Amendment), 2010 allows for filing of an application for rectification of mistakes made while filing Form No.1, Form No.1A and Form No.44 electronically, on the Ministry's website. Such applications are to be made to the Registrar of companies in Form No.68 and are required to be accompanied by a fee of Rs.1000 in case of Form No.1, Form 1A and Rs. 10000 for Form 44. Rule 20G(2) permits filing of an application in Form No.68 to be filed with the Registrar within a period of three hundred and sixty five days from the date of approval of the aforesaid forms by the Registrar concerned.

2. Requests have been received from time to time by this Ministry to extend the facilities for rectification of mistakes as above companies incorporated prior to the year 2009 and to other companies which could not avail of this facility earlier. After due consideration it has been decided to allow such companies to rectify mistakes in Forms 1, 1A and 44 by filing Form 68 on payment of fee stipulated above.

3. Form 68 (electronic mode) may be filed for rectification of mistakes in the forms referred above within a period of 180 days from the effective date.

4. This circular is effective from 23-12-2012.

Extension of last date “for complying with the CPE hours requirement for the calendar year 2012” - from 31st December, 2012 to 31st January, 2013

Subject:        Extension of last date “for complying with the CPE hours requirement for the calendar year 2012” - from 31st December, 2012 to 31st January, 2013

This is for kind information of the members that it has been decided to extend the last date for complying with the CPE hours requirement for the calendar year 2012 by one month, i.e., up to 31st January, 2013

Happy X Mas

Whether when assessee makes investments in mutual fund from which income is tax exempt, whether assessee earns any dividend or not, expenses incurred for investments are to be disallowed u/s 14A - YES: ITAT

THE issue before the Bench is - Whether when the assessee makes investments in mutual fund from which income is tax exempt, whether assessee earns any dividend or not, expenses incurred for investments are to be disallowed u/s 14A. And the answer goes in favour of the Revenue.

Facts of the case

Understanding Cost Behavior (Predict Future Cost)

Managing ‘activities-and-their cost’ is a key to success in business. To be able to manage activities and costs, it is necessary to understand how costs respond to cost drivers—known as “cost behavior.”

Cost Behavior in a Nutshell

Cost behavior, in a nutshell, explains how the total amount—for various costs—responds to changes in activity volume of a business operation. Understanding cost behavior—which refers to the relationship between a given cost item and the quantity of its related cost driver—is essential, for management accountants, to predict future cost.

This post introduces and examines several typical cost behavior patterns and methods for developing cost equations that are useful for predicting future costs. But before that, let’s do a quick round on what an “activity” is and what a “cost driver” is.

•The Banking Companies (Nomination) Rules, 1985 - Clarifications

All Regional Rural Banks

Dear Sir

The Banking Companies (Nomination) Rules, 1985 - Clarifications

1. Witness in nomination forms

As you are aware, the Banking Companies (Nomination) Rules, 1985 have been framed in exercise of powers conferred by Section 52 read with Sections 45ZA, 45ZC and 45ZE of the Banking Regulation Act, 1949. The nomination forms (DA1, DA2 and DA3) have also been prescribed in the Nomination Rules. These forms, inter alia, prescribe that the thumb impression of the accountholder is required to be attested by two witnesses. It has come to our notice that some banks also insist on attestation of signature by witnesses.

We have examined the issue in consultation with Indian Banks' Association and clarify that for the various Forms (DA1, DA2 and DA3 for Bank Deposits, Forms SC1, SC2 and SC3 for Articles left in Safe

A co-owner can face service tax individually

A. As per Notification No. 6/2005-ST dated 1.3.2005 and amended vide Notification No. 08/2008-ST dated 1.3.2008, the threshold exemption limit of `10 lakh is applicable per service provider and not per service. Hence, all the co-owners or joint owners will be eligible to claim the commonly known small service provider exemption of `10 lakh. The CESTAT, in one such case of Dinesh K Patwa, Shrerik. K Patwa & Others vs CST, Ahmedabad (STO 2012 CESTAT 474), observed that such exemption is available. In the said case where the individuals were co-owners of a particular building and have rented out the premises to a person, who issues different cheques to all the above individuals as they are co-owners, the amount received by the individuals would be within the threshold limit of SSI exemption as granted by the notification. However, the revenue department has considered the amounts received by all of the applicants as a collective unit and seeks to charge the service tax liability individually on the persons.
The department has argued that the property involved in this case is jointly owned by all the persons and is being rented out. Hence, there is the service of renting out of an immovable property and threshold limit benefit cannot be extended to individuals. After considering the submissions made by both sides, the CESTAT held that benefit of SSI exemption grants the benefit of exemption of service tax per year, provided that the assessee has not crossed the threshold limit of `10 lakh in the preceding financial year. In these cases, if the cheques for rent are received individually by all the appellants, it’s indicated in the agreement between the individuals for the purpose of renting out the premises to another person so as to make it specific that individually they are renting out the property to a person. The notification talks about the aggregate value of the taxable services rendered, which should be considered for the purpose of exemption and in this case if individually all the appellants be considered as provider of such service, their aggregate value does not exceed the threshold limit.

Whether when there is nothing on record that assessee has claimed TDS credit for deduction made against advance received from customers, any addition is warranted - NO: ITAT

THE issue before the Bench is - Whether when there is nothing on record that assessee has claimed TDS credit for deduction made against advance received from customers, any addition is warranted. And the verdict goes in favour of the assessee.

Facts of the case

AO made an addition on account of TDS claimed on advance against running contracts observing that assessee itself had admitted that the TDS claim had been made in respect of advances receipts also. As per the provisions of Rule 37BA read

Whether assessee is entitled to deduction u/s 54EC on investment made in REC bonds in names of minors against their LTCG in case their income is clubbed with assessee u/s 64(1A) - YES: ITAT

THE issues before the Bench are - Whether the assessee is eligible for deduction u/s 54EC of the Act on investment in REC Capital Gain Bonds on account of minors’ income from Long Term Capital Gains (LTCG) separately, in case income is clubbed u/s. 64(1A) of the Act and Whether prior to insertion of proviso to section 54EC, the investment is limited to Rs. 50 lacs in respect of a person for the purpose of section 54EC and not relating to an assessee and therefore, the assessee is entitled to exemption for the amount invested in the name of minor child, a separate person, whose income is to be clubbed in the hands of assessee. And the verdict goes against the Revenue.

Facts of the case

New PF rule: You may have to relook retirement saving plan

A recent circular about the manner in which the contribution to the Employees Provident Fund will be calculated will have far reaching impact on employees in the days to come. In a nutshell the manner of calculating the base for the application of the rate of deduction of provident fund contribution should include the basic salary, dearness allowance as well as allowances that are ordinarily, necessarily and uniformly paid to employees instead of the basic salary and dearness allowance that is used currently for the calculations. Here are some of the impacts that will be witnessed in the days to come.

Additional

Know Your Customer (KYC) norms by RBI

Know Your Customer (KYC) norms /Anti-Money Laundering (AML) Standards/Combating of Financing of Terrorism (CFT)/Obligation of banks under Prevention of Money Laundering Act (PMLA), 2002

Please refer to our Master Circular UBD.BPD. (PCB) MC.No.16/12.05.001/2012-13 dated July 2, 2012 on Know Your Customer (KYC) norms / Anti-Money Laundering (AML) Standards/Combating of Financing of Terrorism (CFT)/Obligations of banks under PMLA, 2002. The KYC guidelines were formulated to protect the financial system against threat of money laundering/terror financing and frauds. However, it has been brought to the notice of Reserve Bank that some of the provisions made in this regard or their implementation by banks have led to avoidable inconvenience to public and also hindered the efforts at financial inclusion.

2. In this connection, we invite your attention to paragraph 101 (extract enclosed) of the Second Quarter Review of Monetary Policy 2012-13 announced on October 30, 2012, proposing to review the existing KYC norms for simplifying them within the provisions of PML Act/Rules and international standards. Accordingly, it has been decided to effect the following modifications in the existing provisions:

(i) Opening of new accounts – Proof of identity and address

An indicative list of the nature and type of documents/ information that may be relied upon for customer identification is given in Annex I of the aforesaid Master Circular. Paragraphs 2.4 (d) and (e) of the Master Circular clearly state that the said list is only indicative and not exhaustive.

Migrating to CTS 2010 standard - Submission of compliance report

Please refer to our circulars UBD.BPD.(PCB).Cir.No.26/12.05.001/2012-13 dated December 06, 2012 and circular DPSS.CO.CHD.No.955/04.07.05/2012-13 dated December 14, 2012 issued by our Department of Payment and Settlement System, Central Office under section 18 of the Payment and Settlement System Act, 2007 (Act 51 of 2007).
 

2. Taking into consideration the representations received from stakeholders, the time limit for withdrawal/ replacement of non-CTS 2010 Standard cheques with CTS 2010 Standard cheques has been extended up to March 31, 2013. However, it may be noted that the residual non CTS 2010 Standard cheques that get presented in the clearing system beyond this extended period will continue to be accepted for the clearing but will be cleared at less frequent intervals.
 

3. You are therefore, advised to ensure withdrawal of non CTS- 2010 Standard cheques within the extended time limit i.e by March 31, 2013. Please note that since it is final extension of time for adhering to the directions issued for migrating to CTS 2010 standard cheques, all UCBs may adhere to the same, else there will be insufficient clearing arrangement at less frequent intervals for non- CTS 2010 cheque after March 31, 2013.

External Commercial Borrowings for affordable housing and slum rehabilitation projects

With a view to provide impetus to infrastructure development in India and more importantly in the housing sector, the Finance Minister while presenting Budget 2012 had proposed to allow External Commercial Borrowings (“ECBs”) for low cost affordable housing projects.  The proposal, made in the backdrop of shortage of housing for low income groups in major cities and towns, has now been formalized through the issuance of A P (DIR Series) Circular No 61 dated December 17, 2012 (“Circular”) issued by the Reserve Bank of India (“RBI”) (click here to

Exchange Rate Notification No _111-2012-Customs (N,T), Dated 20-12-2012

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

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

DEPARTMENT OF REVENUE

CENTRAL BOARD OF EXCISE AND CUSTOMS

Notification No.111/2012-Customs (N.T.)

DATED THE 20^th December, 2012

29 Agrahayana, 1934(SAKA)

S.O.       (E). – In exercise of the powers conferred by section 14 of the Customs Act, 1962 (52 of 1962), and in super session of the notification of the Government of India in the Ministry of Finance (Department of Revenue) No.108/2012-CUSTOMS (N.T.), dated the 6^th December, 2012 vide number S.O. 2838 (E), dated the 6^th December, 2012, except as respects things done or omitted to be done before such super session, the Central Board of

Some of the case laws on Income Tax decided in the month of Nov’ 2012:

1. Where assessee continued his employment with the firm, and was also given commission under Non-Compete Agreement (‘NCA’) for doing what he was normally expected to do (i.e. work for the said firm in his area of expertise), the commission amount clearly was part of salary – Commissioner of Income-tax – XIII v. Kanwaljit Singh [2012] 28 taxmann.com 28 (Delhi)

2. It cannot be contended that even after the passing of the assessment order, provisional attachment order under section 281B shall still remain in force for six months – Motorola

Forms to be authorized by CA on new E-Filing Website

Who all pertain to this category
“Chartered Accountant” means a person who is a member of the Institute of Chartered Accountants of India (ICAI) constituted under the Chartered Accountants Act, 1949 (38 of 1949).
CA is required to verify and authorize various statutory Income Tax Forms under the Income Tax Law.
CA is a user only to upload Forms other than ITRs

Forms to be authorized by CA
Form Name	Description
Form 3CA	Audit report under section 44AB of the Income-tax Act, 1961, in a case where the accounts of the business or profession of a person have been audited under any other law – Certificate of Audit from CA obtained by the assessee whose Income from Business is more than INR 60 Lakhs or Income from Profession is more than INR 15 Lakhs for Companies
Form 3CB	Audit report under section 44AB of the Income-tax Act, 1961, in the case of a person referred to in clause (b) of sub-rule (1) of rule 6G – Certificate of Audit from CA obtained by the assesssee whose Income from Business is more than INR 60 Lakhs or Income from Profession is more than INR 15 Lakhs for other than companies
Form 3CD	Statement of particulars required to be furnished under section 44AB of the Income-tax Act, 1961 – Annexure Form for audit report u/s 44AB
Form 3CEB	Report from an accountant to be furnished under section 92E relating to international transaction(s) – Every person entering International Transaction
Form 29B	Report under Section 115JB of the Income-tax Act, 1961 for computing the book profits of the company – MAT applicable for companies

What I can do in this application

• Download Income Tax Form and Upload XML
• Digital Signature Certificate (DSC)
• Opt for Higher Security
• View e-Filed Form
• View Status – Income Tax Form

Source of Info :- https://incometaxindiaefiling.gov.in/e-Filing/

Section 90 of the Income-tax Act, 1961 - Double taxation agreement

Section 90 of the Income-tax Act, 1961 - Double taxation agreement - Agreement with foreign countries or specified territories - Notified 'Specified Territory'

NOTIFICATION NO. 54/2012 [F.NO. 503/14/2012-FTD-I(PT)], dated 17-12-2012

In exercise of the powers conferred by Explanation 2 to section 90 of the Income- tax Act, 1961 (43 of 1961), the Central Government hereby notifies Sint Maarten, a part of Kingdom of Netherlands, the area outside India as the 'specified territory' for the purposes of the said section.

2. This notification shall come into force with immediate effect.

Income Tax Refund upto Asstt. Year 2012-13

Income Tax Refund

Press release, dated 14-12-2012

Processing of returns of income, including those with refund claim, is a continuous process. Statutory time limit to process returns of income is with reference to the financial year of their receipt. As per the Income Tax Act, 1961 returns received during the financial year can be processed upto one year from the end of the financial year in which the return is received. Therefore, returns for the accounting periods as F.Ys 2009-10 and 2010-11 if filed during F.Y. 2011-12 can be processed upto 31.03.2013. Normally, after processing

Whether when assessee is engaged in business of manufacturing fuel briquettes from bagasse, a waste of sugar industry, merely because assessee pays for purchase of such waste, it loses entitlement to benefits u/s 80JJA - NO: Bombay HC

THE issues before the Bench are - Whether when the assessee is engaged in the business of manufacturing fuel briquettes from bagasse, a waste of the sugar industry, merely because the assessee pays for the purchase of such waste, it loses entitlement to benefits u/s 80JJA; Whether the wordings of a circular issued by the CBDT, can override the provisions of the statute and Whether bagasse is a 'waste' or a 'by product' of sugar industry. And the verdict goes against the Revenue.

Facts of the case

Assessee, an individual, is engaged in the business of manufacturing fuel briquettes from bagasse. It had filed its ROI after claiming deduction u/s 80JJA. During assessment, AO disallowed the claim for deduction u/s 88JJA on the ground

Whether when there is nothing on record that assessee has claimed TDS credit for deduction made against advance received from customers, any addition is warranted - NO: ITAT

THE issue before the Bench is - Whether when there is nothing on record that assessee has claimed TDS credit for deduction made against advance received from customers, any addition is warranted. And the verdict goes in favour of the assessee.

Facts of the case

AO made an addition on account of TDS claimed on advance against running contracts observing that assessee itself had

The Delhi Bench of the Tribunal, in a recent decision of immense significance, has ruled on the ‘export’ status of services provided by agents/ sub-agents in India to their principals outside India

Facts of the case

·          M/s Western Union Network Ltd. (‘WUN’), Ireland, is a company engaged in money transfer from persons located in one country to persons located in any other country.  M/s Paul Merchants Ltd. (‘PML’) entered into an agreement with WUN for executing part of the business activities of WUN in India as an agent, through sub-agents appointed with the prior approval of WUN.

·          The mechanism of money transfer from a person in a foreign country to a person in India is as follows:

-     

Telephone services at residence of workers are input services.

The appellant was in appeal against the decision of denial of refund of CENVAT credit paid on construction services, security services and maintenance of garden in respect of residential colony of the employees and service tax paid in respect of telephone services installed in the residence of officers.

CESTAT, AHMEDABAD BENCH held

That the availability of CENVAT credit in respect of maintenance, civil construction and security services for employees residential colony should be

Trace e-TDS Return Consolidated File Password.

This is the first experience with new TDS portal to download consolidated file of e-TDS Return (Q1,Q2,Q3,Q4) from www.tdscpc.gov.in but, can't download without Password. It means this file is fully protected. This is new portal for only TDS/e-TDS or TCS/e-TCS.  Before this portal TIN-NSDL is working on consolidated file which is directly download from www.tin-nsdl.com.  The 15 Digits Token number of the original receipt is the passward for this file.  But it is very difficulat to extract "ZIP" File because this file will be be extracted with the help of   password  as TAN_request number.    For Example if your TAN number is  MUMR03066R  and request number is  1083 (available under download link at tdscpc.gov.in), your password will be as given below :-

password    =   MUMR03066R_1083

After all working you may now able to submit correction e-TDS return

Save Income Tax u/s 80C, 80CCC by 18 Ways.

Income Tax Department revised Tax Law and Change some Section and combine with another. The IT Section 80C replaced the existing Section 88 with more or less the same investment mix available in Section 88. The new section 80C has become effective w.e.f. 1st April, 2006. Even the section 80CCC on pension scheme contributions was merged with the above 80C.However, this new section has allowed a major change in the method of providing the tax benefit. Section 80C of the Income Tax Act allows certain investments and expenditure to be tax-exempt. One must plan investments well and spread it out across the

Transfer Price in Advanced Management Accounting

Transfer pricing comes into use when various divisions of a company deal with one another. A transfer price is that notional value at which goods and services are to be transferred by the supply division to receiving division. The goods that are produced by the buying division and sold to the outside world are known as final products. The department that supplies the goods is called Supply Division. The department that receives the goods is called Receiving Division. Transfer price becomes revenue for Supply

deemed dividend

1. Deemed dividend under section 2(22) from an Indian company or any dividend from a foreign company is taxable in the hands of shareholders under the head “Income from other sources”, regardless of the fact whether shares are held by the assessee as investment or as stock-in-trade.

Highlights of the Companies Bill, 2011

(as passed in Lok Sabha on 18.12.12)

Ø    The Bill has 470 clauses as against 658 Sections in the existing Companies Act, 1956.

Ø    The entire bill has been divided into 29 chapters.

Ø    Many new chapters have been introduced, viz., Registered Valuers (ch.17); Government companies (ch. 23); Companies to furnish information or statistics (ch. 25); Nidhis (ch. 26); National Company Law Tribunal & Appellate Tribunal (ch. 27); Special Courts (ch. 28).

Ø    The Bill is forward looking in its approach which empowers the Central Government to make rules, etc. through delegated legislation (clause 469 and others).

Income of non-residents engaged in providing geophysical services to oil and gas exploration industry is entitled to taxation on a deemed profit basis under section 44BB of the Income-tax Act

The Delhi High Court has affirmed that the income of non-residents engaged in the business of providing geophysical services to oil and gas exploration industry is taxable as per the provisions of section 44BB of the Income-tax Act, 1961 (“Act”).  Thereupon, the Delhi High Court has dismissed the writ petition filed by the Revenue Authorities.  The Revenue Authorities had filed a writ against the ruling of the Authority for Advance Rulings (“AAR”) in the case of DIT-II vs OHM Limited.

Framework for taxation of non-resident oilfield service providers in India and related controversy

India Income Tax at a Glance

Section

Head

Limit

Remarks

Reimbursement of Expenses not subject to Service Tax

We are sharing with you an important analysis of judgment of Hon’ble Delhi High Court in the W.P. (C) 6370/2008 of Intercontinental Consultants and Technocrats Pvt. Ltd. Vs. Union of India & ANR (2012-TIOL-966-HC-DEL-ST) on the following issue:

Issue:

a. Whether reimbursement of expenses includible in gross consideration for the chargeability of Service Tax?

b. Whether Rule 5(1) of Service Tax (Determination of Value) Rules is ultra vires Sections 66 and 67 of Finance Act, 1994?

Facts:

XBRL filing limit extended upto 15th Jan, 2013 for Financial Year 2011-12

As per General Circular number 39/2012 dated 12.12.2012, time limit to file financial statements in XBRL mode (for the financial year commencing on or after 01.04.2011) without any additional fee has been extended upto 15th January´2013 or within 30 days of AGM of the company, which ever is later.

The audited statement i.e. Balance sheet and Profit and Loss Account submission which is in form XBRL is extended upto 15th Jan, 2013 by General Circular No. 39/2012 dated 12.12.2012 for Financial year 2011-12.  Before this circular the due date to filing Balance Sheet and Profit & Loss Account is 15th December, 2012.

Filing of Balance Sheet and Profit and Loss Account in extensible Business Reporting Language (XBRL) mode for the financial year commencing on or after 01.04.2011

GENERAL CIRCULAR NO. 39/2012, DATED 12-12-2012

In continuation of the Ministry's General Circular Nos: 16/2012 dated 6-7-2012 and 34/2012, dated 25-10-2012 on the subject cited above, it is stated that the time-limit to file the financial statements in the XBRL mode without any additional fee/penalty has been extended up to 15th January 2013 or within 30 days from the date of AGM of the company, whichever is later.

2. All other terms and conditions of the General Circular No: 16/2012, dated 6-7-2012 will remain the same.

Whether when AO initiates reassessment proceedings after giving notice, AO's jurisdiction is restricted to reassess income only to the extent of materials, which were basis for issuance of notice - NO, entire assessment: Delhi HC

THE question before the Bench is - Whether when the AO initiates reassessment proceedings after giving notice, the AO's jurisdiction is restricted to scrutinise or reassess the income only to the extent of materials, which were the basis for issuance of the notice or the entire assessment. And the verdict goes against the assessee.

Facts of the case

Assessee is an NBFC, engaged in the business of sale and purchase of shares and financing. It showed a loss of Rs. 2.01 lakhs in share trading. Its assessment was reopened u/s 147 on the basis of the report of search opeartions conducted on certain accommodation entry providers. As per the report of Investigation Wing, assessee had received accommodation

Standalone vs Consolidated Financial Statements

Companies often report two types of financial statements when they have majority stake (more than 50%) in other companies. E.g. when Company A has 60% stake in Company B, Company A will report both standalone and consolidated financial statements.

The requirement to report both consolidated and standalone results lies on the parent company i.e. Lets assume that Company A has 60% stake in B and B has 75% stake in C. In this case B will prepare consolidated results for B+C using results of C; and A will prepare consolidated results for A+B, using consolidated results of B.

Companies are required to consolidate the financials of every subsidiary in its books fully. It means that if the revenues of Company A, B, and C are $10,000, 4,500, and 2,500 respectively, Standalone Income Statement will show revenues of $10,000 (Company A), while Consolidated Income Statement will show revenues of $17,000 (A+B+C). In consolidation, revenues will NOT be proportioned to respective stake holding in the company. Revenues are not proportioned, as if we see carefully, we can say that B, and C are group companies of Company A, in which 20%, and 40% stake is held by outsiders. So for Company A, the revenues will be total revenues earned by the group. However, the proportionate part of net income is shown as a separate line item in income statement as Non Controlling Interest.

Facilities for Persons Resident outside India – FIIs

RBI/2012-13/258
A.P. (DIR Series) Circular No.45
October 22, 2012
To,
All Authorised Dealer Category – I Banks
Madam / Sir,
Facilities for Persons Resident outside India – FIIs
Attention of Authorised DealersCategory – I (AD Category – I) banks is invited to the Foreign Exchange Management (Foreign Exchange Derivative Contracts) Regulations, 2000 dated May 3, 2000 [Notification No. FEMA/25/RB-2000] and A.P. (DIR Series) Circular No.32 dated December 28, 2010, as amended from time to time.

Minimum Alternate Tax (MAT)

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Carry Forward & Set Off of Losses – Income Tax

While one endeavors to derive income, the possibility of incurring losses cannot be ruled out. Based on the principles of natural justice, a set-off should be available for loss incurred. The income tax laws in India recognise this and provide for adjustment and utilisation of the losses. However, there are conditions which have been introduced to prevent misuse of such provisions. 

To the common taxpayer, income tax is a crunch into the income earned. Accordingly, awareness of the relevant provisions pertaining to set off and carry forward of losses is essential in order to maximize tax benefits. The relevant provisions have been summarised here:

CTC Cheques deadline extended

New cheque norms: You can use your old cheque books till March 2013

The Reserve Bank of India announced that it has extended the deadline for banks to ensure w...

ithdrawal on Non Cheque Truncation System (CTS) cheque till March 31, 2013.

If you are someone who has not yet gotten in touch with your bank for the CTS cheque book, it’s best you do so as soon as possible because, though the non-CTS-2010 Standard cheques will be accepted as of now, if you continue to use them beyond the extended period, the cheque will be cleared at less frequent intervals.

Latest ammendment in Rajiv Gandhi Equity Savings Scheme, 2012

Rajiv Gandhi Equity Savings Scheme, 2012 - Corrigendum

Notification No. 53/2012 [F. No. 142/35/2012 -TPL]/SO 2835(E), dated 5-12-2012

In the notification of Government of India, Ministry of Finance, Department of Revenue, No. 51/2012, dated 23rd November, 2012 bearing S.O. 2777(E) and published in the Gazette of India, Extraordinary, Part II, section 3, sub-section (ii), dated 23rd November, 2012—

• at page 10 of the Gazette Notification, in third and fourth line of sub-clause (c) of clause (v) of section 3 related to "definitions", for "sub-clause (i) or sub-clause (ii)", read "sub-clause (a) or sub-clause (b)" ;
• at page 10 of the Gazette Notification, in sub-clause (d) of clause (v) of section 3 related to "definitions", for "sub-clause (i) and sub-clause (ii)", read "sub-clause (a) and sub-clause (b)"; and
• at page 10 of the Gazette Notification in sub-clause (e) of clause (v) of section 3 related to "definitions", for "sub-clause (iii)", read "sub-clause (c)".

2. The other contents of the Gazette Notification shall remain unchanged

Whether assessee is entitled to claim deduction 80IB(10) proportionately in respect of residential units where there is also commercial area constructed if all other conditions are satisfied - YES: Madras HC

THE issue before the Bench is - Whether the assessee is entitled to claim deduction 80IB(10) proportionately in respect of the residential units where there is also commercial area constructed if all the other conditions are satisfied. And the answer goes in favour of the assessee.

Facts of the case

Assessee is engaged in the business of developing and constructing housing projects. A survey operation was carried

Whether valuation of closing stock at market price is permissible only in cases where business is discontinued and not where business carried on by partnership firm is taken over by a successor company without any interruption on conversion of firm into company - NO: ITAT

THE issues before the Bench are - Whether valuation of closing stock at market price is permissible only in cases where the business is discontinued and not where the business carried on by the partnership firm was taken over by a successor company without any interruption on conversion of firm into company and Whether the provision of section 40A(3) is attracted only when there is actual payment of cash from one person to another and not where transaction takes place only as part of exchange. And the answers favour the assessee.

Facts of the case

How to calculate Travelling Allowance Exemption u/s. 10(14)(ii) from Income Tax.

Friends, under section 10(14)(ii) exempt maximum Rs. 800.00 PM Traveling Allowance from Income Tax. For more details the Tax payee Employee follows Traveling Allowances are exempt under section 10(14) (ii), subject to the limits stated there-against:

• Special Compensatory Allowance or High Altitude Allowance or Uncongenial Climate Allowance or Snow bound Area Allowance or Avalanche Allowance:

Rs. 800/- common for various areas of North East, Hilly areas of U.P., H.P. and J &K (for specific details about the areas eligible for the allowance, please refer to the section 10(14) if I T Rules 1962) and Rs. 7000/- per month for Siachen area of J & K and Rs. 300/- common for all places at a height of 1000 mts or