Thursday, 31 January 2013

India Taxes- Due Date Alert for the month February 2013


Due Date
Related to
Compliance to be made
Service Tax
Payment of Service Tax for the Month of January 2013
(Income Tax)
·        Deposit TDS for payments of Salary, Interest, Commission or Brokerage, Rent, Professional fee, payment to Contractors, etc. during the month of January 2013.
·        Deposit TDS from Salaries  deducted during the month of January 2013
•   Deposit TCS for collections made under section 206C including sale of scrap during the month of January 2013, if any
•    Deliver a copy of Form 15G/15H, if any to CCIT or CIT for declarations received in the month of January 2013, if any
Payment of VAT & filing of monthly return for the month of January 2013


Direct Tax

Supreme Court

Financier of vehicles engaged in leasing business is entitled for higher rate of depreciation on the vehicles

The taxpayer, a non-banking finance company, was engaged in the business of leasing of vehicles. It bought vehicles and leased out the same to various customers; such vehicles were registered in the name of the customers under the Motor Vehicles Act, 1988 (“MV Act”). The taxpayer claimed depreciation in respect of such vehicles at a higher rate of

Wednesday, August 22, 2012Can a Bank go back from the promise of ‘Settlement of Default of Debt’ or ‘Settlement of Debt’?

It is known that while some loan transactions with the Bank like Housing Loan, Educational Loan etc. are very simple, some commercial loan transactions are very complex in nature. The Bank may provide various loan facilities to the Borrower and most of these commercial loans are complex to understand and these loans infact involve many complexities. When a Businessmen or a Corporate gets various loan facilities and if there is a default or allegation of default with regard to a particular loan facility, the Bank proceeds against the borrower and claims for the

Whether merely because assessee gets sponsorship exceeding Rs 10 lakh on motor races, its otherwise charitable object of public utility becomes non-charitable and it warrants cancellation of registration - NO: ITAT

THE issue before the Bench is - Whether merely because assessee, a charitable body, receives sponsorship exceeding Rs 10 lakh on motor car races, its otherwise charitable object of general public utility becomes non-charitable and it warrants cancellation of registration u/s 12A. NO is the Tribunal's answer.
Facts of the case

assessee is a registered society and had registration u/s 12A(a) since 1977. Objects of the assessee, inter alia, were to promote sports of motor car and motor cycle and conduct motor races, competitions, etc. During the scrutiny proceedings, for A.Y 2009-10, the A.O. sent a

Spot verification of medical practitioner turning into successful search operation

Search and seizure operation cannot be a fishing expedition under the law.
Before search is authorised the Director Investigation (DI) must on the relevant material have reason to believe that the assessee has not or would not have disclosed his income. S. 131 (1A) is therefore meant for such purpose to enable making of enquiry or investigation on mere suspicion post which the officer can draft a satisfaction note which form the basis for issue of warrant of authorization.

Doctors are often found to be suppressing their incomes. In a case of an AIIMS MD pass out viz. Dr. Roop & Others v. CIT (2012) 79DTR56 who practiced eye surgery in Meerut along with his spouse filed his taxes in the last fifteen years at uniform meagre figures ranging in few thousand rupees for different entities.

In this case initial material was collected by the department for which preparations for search were made in 2002 but actually did not so happen. The successor Additional Director made on the spot verification in this case in 2005 when he paid few visits to the clinic along with decoy patients and on further enquiry collected information on number of patients registered for consultation and various procedures viz. Daily patient no, daily procedures etc based on which he worked out annual consultation and procedure income of more than Rs. 2-2.5 crores. This lead to search which came under challenge before the Allahabad High Court on the proposition that the department had no reliable or sufficient information to proceed with the authorization for search. The High Court held that the DI had credible and reliable evidence to proceed with search action. Not to mention that the Court cannot examine adequacy or sufficiency of such information.

In another case of Doctors X-ray and Pathology Institute P. Ltd. v. Director of Investigation (2009) 318ITR125 based on secret information in writing received by ADIT and on personal verification made by him by visiting the spot, a detailed note was made which successfully got transmitted in search action and also received acceptance of Allahabad High Court.

Wednesday, 30 January 2013

Deduction of Tax at Source-Interest Other Than Interest on Securities u/s. 194A of Notified Institution.

Income Tax Department has been issued a notification regarding Deduction of Tax at Source u/s. 194A for Interest other Than Interest on Securities for notified Institution vide Notification No. 4/2013 [F.NO.275/28/2012-IT(B)], Dated 24-1-2013 regarding Central Government hereby notifies the National Skill Development Fund.


NOTIFICATION NO. 4/2013 [F.NO.275/28/2012-IT(B)], DATED 24-1-2013

In exercise of the powers conferred by sub-clause (f) of clause (iii) of sub-section (3) of section 194A of the Income-tax Act, 1961 the Central Government hereby notifies the National Skill Development Fund (PAN AABTN5824G) for the purpose of sub-clause (f) clause (iii) of sub-section (3) of said section.

How to Check your Tax Credit (Form 26AS Statement) without PAN Registration?

It is the moral duty of Taxpayee to match Tax Credit Statement (Form 26AS) before substitution of Annual Income Tax Return at Assessing Officer, Income Tax

Office/Center. If tax credit statement not match by the Taxpayee, it is more difficult comply paid Tax/TDS which are deducted by Deductor or Employee as well as in case if the Tax payee get refund that time Taxpayee face the problem to get proper Refund. Due to this problem every taxpayee want to register PAN with TRACES, although more taxpayee did not registered with them. Therefore, for those the Taxpayee who did not registered with TRACES they can adopt the following procedure to check their Tax Credit (Form 26AS Statement without PAN Registration.

Login to TRACES web site


Depreciation in finance lease transactions available to lessors | Supreme Court

Indian Supreme Court ruling – Tax depreciation should be available to the lessor in a finance lease transaction

The recent ruling of the Supreme Court of India in the case of ICDS Ltd (‘ICDS’) is an important ruling as it establishes that tax depreciation on a finance lease transaction should be available to the lessor, as the lessor qualifies as the ‘

Whether assessment can be reopened even if AO had prior information about accommodation entries provided to assessee and AO had also issued notice u/s 133(6) before completing assessment - NO: HC

THE issues before the Bench are - Whether assessment can be reopened u/s 147 even if AO had prior information about the alleged accommodation entries provided to the assessee and the AO had also issued notice u/s 133(6) before completing the assessment; Whether when the assessee has replied to the questionnaire and the information sought u/s 133(6), it can be said that AO has failed to apply his mind to the factum of the case and Whether foundation of the notice issued u/s 148 is not vitiated, although the requisite belief u/s 147 has not been established. And the verdict goes in favour of assessee.
Facts of the case

Despite Suspension, Special Bench Verdict In Merilyn Shipping Is Binding

1. Introduction

A great Indian statesman and philosopher ‘Chanakya’, variously described as a ‘Kingmaker’, ‘Ruthless administrator’ etc., courted controversy when he said-

The ends justify the means’ and

Tuesday, 29 January 2013

S. 271(1)(c): Surrender of income without explanation attracts penalty

CIT vs. MAK Data Ltd (Delhi High Court)

A survey u/s 133A was conducted on the assessee’s premises in the course of which certain documents belonged to certain entities who had applied for shares in the assessee company were found. The AO called upon the assessee to prove the nature and source of the monies received as share capital, the creditworthiness of the applicants and the genuineness of the transactions. The

Whether there is anything in Section 147, which prohibits reopening of assessment completed u/s 143(1) on ground that assessee failed to furnish primary facts fully and truly - NO: Delhi HC

THE issues before the Bench are - Whether there is anything in Section 147, which prohibits reopening of an assessment completed u/s 143(1) on the ground that the assessee failed to furnish the primary facts fully and truly and Whether it is difficult to attribute any knowledge to the AO while he is dealing with a return for a particular year u/s 143(1), as to what he had done in the case of the same assessee in the earlier AYs. And the ruling goes against the assessee.
Facts of the case
The petitioner is a law firm specialising in intellectual property and corporate laws and was founded in 1827 by one Henry Oliver at Calcutta. In the year 1957 certain Englishmen took over the firm. By deed dated 04.04.1973 these gentlemen by names Holloway and Silver Stone

Notification regarding Gold & Silver for Taxpayee

No.1 /2013-Central Excise
New Delhi, the 21st January, 2013
G.S.R. (E). - In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 12/2012-Central Excise, dated the 17th March, 2012 which was published in the Gazette of India,

How to Download / Install TRACES PDF Generation Utility & Procedure to convert text file into PDF

Download TRACES PDF Generation Utility
Deductor can download TDS Certificate (Form 16 (Part A) and Form 16A) from TRACES. The file will be provided in text format and will contain certificate details for all requested PANs. Text file is password protected and password will be ‘<TAN>’.
Deductor will have to convert the text file into PDF using TRACES PDF Generation Utility. This utility will convert the text file into individual PDFs for each PAN. The same utility can be used to convert text file for Form 16 / 16A.
Procedure to install utility
  • Download the PDF Generation Utility by logging in to TRACES. Click on ‘Requested Downloads’ under ‘Downloads’ menu then click on ‘TRACES PDF Generation Utility’ link
  • Unzip and save the utility on your desktop
  • Double-click on the utility (exe) and click on ‘Run’
  • Utility will be installed on your desktop
  • Click here for installation procedure
Procedure to convert text file into PDF
  • Open the utility from your desktop and select the text file
  • Select the digital signature to digitally sign the Form 16 / 16A
  • Generate PDFs
  • If PDF is not digitally signed, deductor should manually sign the printed Form 16 / 16A before sending it to Tax Payers
  • TRACES PDF Generation Utility should be used to convert text file for Form 16 / 16A into individual PDFs
  • Download the utility and install it on your desktop
  • Pass the text file through the utility to generate PDFs for individual PANs
  • You can opt for manual / digital signature for the PDFs
  • File name for Form 16 / 16A text file will be as mentioned below. TAN will be masked
    • Form 16 – <TAN>_Form16_<FY>, e.g.,
    • Form 16A – <TAN>_Form16A_<FY>_<Qtr>, e.g.,
  • Password for Form 16 / 16A text file is TAN of deductor. Enter password to open file
  • File name for individual PDF files will be as mentioned below. PAN will be masked
    • Form 16 – Form16_<FY>_<PAN>, e.g., Form16_2012-13_ABCxxxxx4F
    • Form 16A – Form16A_<FY>_<Qtr>_<PAN>, e.g., Form16A_2012-13_Q2_ABCxxxxx4F
  • There is no password for individual PDF files
Sources –


Can I maintain more than 1 Public Provident Fund (PPF) account under my name?
Only one PPF account can be maintained by an Individual, except an account that is opened on behalf of a minor.
What is the eligibility for investing under Public Provident Fund (PPF) Scheme, 1968?
A Public Provident Fund (PPF) account can be opened by resident Indian Individuals and individuals on behalf of minors.
Only one Public Provident Fund (PPF) account can be maintained by an Individual, except an account that is opened on behalf of a minor.
A Public Provident Fund (PPF) account can be opened either by the Mother or Father on behalf of

Know your PAN card better

The importance of Permanent Account Number (PAN) card has grown over the years, and it is today an essential part of our lives. The most important purpose of allotting PAN to an entity is for the purpose of identification and to track all the related monetary information of that entity. Initially, the significance of PAN was for filing income tax returns. Over time, PAN was used in dealings with the stock markets, banks and purchase of real estate and vehicles. Today, PAN has started finding use in unconventional areas as well, as follows:

Monday, 28 January 2013


Taxability of a revocable transfer as deemed gift u/s 4(1)(c) of the Gift-tax Act

Satya Nand Munjal vs. CGT (Supreme Court)

The assessee owned 6000 shares of Hero Cycles. On 20.02.1982, he executed a deed of revocable transfer in favour of M/s Yogesh Chandra. The deed permitted the assessee to, after completion of 74 months from the date of transfer but before the expiry of 82 months from the said date, exercise the power of revoking the gift. In other words, there was a window of 8 months within which the gift could be revoked. The deed of revocable transfer specifically stated that the gift shall not include any bonus shares or right shares received and/or accruing or coming to the transferee from Hero Cycles by virtue of ownership of the said shares. Effectively, therefore, only a gift of 6000 equity shares was made by the assessee to the transferee. On 29.09.1982 & 31.5.1986, the company issued 4000 and

Time limit to file financial statements in XBRL mode

s per General Circular number 01/2013 dated 15.01.2013, 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 February´ 2013 or within 30 days of AGM of the company, which ever is later.
  • As per General Circular number 43/2012 dated 26.12.2012, time limit to file Cost Audit Report and Compliance Report for the year 2011-12 [including the overdue reports relating to any previous year(s)] in XBRL mode, without any penalty has been extended upto January 31, 2013 or within 180 days from the close of the company’s financial year to which the report relates, whichever is later.

TDS Deductee to correctly mention th details of TDS in the Return of Income.

To claim the credit of TDS, the deductee has to mention the details of TDS in his return of income. TDS Deductee should take due care while mentioning the TDS details in the return of Income. If any incorrect detail's provided by the deductee, then tax credit discrepancy will arise of the time of processing the return of income and some can course problem in processing the returh income.

Who is TDS Deductee?
As per the schme of the Income Tax Act, in case of certain prescribed payments (e.g. Interest, commission, brokerage, rent, etc.) the person making the prescribed payments is required to deduct tax at source from such payments. In such a situation, the person making these payments has to pay the net amount after deducting the tax of prescribed rates. He is known as Deductor and the person receving the payment after deduction of Tax is called the Deductee.

Deductee should furnish his permanent account number (PAN) to deductor?
Every deductee should obtain a valied PAN (if not obtained) and should furnish the correct PAN to the deductor, if incorrect PAN is provided, then the deducted may be credited to incorrect account.

Dedictee to furnish the certificate of lower deduction or Form No. 15G/15H well in advance?
If any Deductee has obtain lower Tax deduction certificate from the Assession Officer or wants to furnish Form No. 15G/15H for non-deduction of Tax in prescribed case, then he should furnish the certificate/form to the deductor well in advance.

Deductee to obtain and preserved TDS Certificate issued by the Deductor?

Every deductee shall preserve the TDS certificate issued by the deductor. TDS certificate in respect of TDS on payments other than salary is issued on quarterly basis and in respect of TDS on salary on annual basis. If the TDS certificate is lost, the deductee can request form duplicate TDS Certificate.

Valuation of perquisite in respect of free education for Income Tax Purposes

Perquisites provided by the employer (directly or indirectly) to the employee or any member of his household (by reason of his employment) is considered as per Income Tax Act, 1961 and the valuation of the same is done in accordance with the provisions laid down.
“Member of household” shall include –
a. Spouse, whether dependent or not;
b. Children and their spouses, whether dependent or not;
c. Parents, whether dependent or not;
d. Servants and dependants.
Valuation of perquisite in respect of free education is provided below.
Training of employees

Cenvat Credit cannot be denied for procedural defects of minor nature

We have considered arguments on both sides. Firstly, we notice that if the DGM (Projects), Salem followed the procedure of getting registered as “input service distributor” and then distributed the credit to SSA Salem there was nothing wrong in the credit availed by the appellant. Basically the issue involved is one of procedures and not a case of mis-utilisation of any ineligible credit. Further, we note that there has not been any distribution of credit involved because of the entire credit taken at one location was taken in one office making it easy for Revenue to conduct verification as may be necessary. The argument of the appellants that the premises where the equipments are used belong to BSNL and not to any other party and it is also used for completion of services originating from Salem

Valuation Of Stock for Income Tax Purposes

Stock may be valued as per the accepted accounting norms as Income Tax Act or Income Tax Rules does not provide for any method for valuation of stock. The assessee can adopt cost or market value (whichever is lower) or can also value stock at cost.
Method of valuation of stock can be changed but it should be consistent in subsequent year and such change should give true reflection of profits and should be done with bonafide intension. The change should be prospective in nature.
The assessee cannot change the value of opening stock by following the new method as in that case, it will affect the profits of earlier year and would lead to chain reaction.
Valuation of stock should be inclusive of taxes, whether paid or unpaid. Even Cenvat credit has to be included in valuation of stock .
  1. If the assessee sells his goods in domestic market then he cannot consider the market price prevailing in the international market.
  2. When a firm is dissolved and the business is discontinued by the firm then the closing stock is valued at Market value and not at cost.
  3. Where on dissolution of assessee firm , its stock –in- trade is revalued and certain amount is shown as ‘ difference on revaluation ’ in the profit / loss account , such surplus on valuation shall be charged to tax as profits of firm .
  4. On the dissolution of firm the business is taken over by a partner without discontinuance, the firm is entitled to adopt cost or market value (whichever is lower). Since the firm has not discontinued the business, adopting the fair market value concept does not arise .
  5. Section 43(6) provides that birds being ‘ live stock ’ cannot be taken as plant so birds , poultry farming , chicks are required to be valued as stock-in-trade and thus be valued on cost or market price ( whichever is lower ) .
  6. The Government securities held by Bank for the purpose of maintaining SLR are also stock-in-trade of business of banks and any notional loss suffered on account of revaluation of the securities at the close of the year, is an allowable deduction in computation of total income of the bank.
  7. If the assessee is consistently following the wrong method of valuation it cannot be adopted and the Assessing Officer has powers to substitute the wrong method by the correct method of valuation of the closing stock.

Saturday, 26 January 2013


Accounting Codes For The Taxable Services Introduced Vide The Finance Act, 2011(8 of 2011)
Heads of Account under the Major Head “0044-Service Tax” in respect of the new taxable services have been allotted by the Office of the Principal Chief Controller of accounts, CBEC.

2. Accounting Codes for the purpose of payment of service tax are as follows:

Sr.NoTaxable Services
Accounting Code
Tax CollectionOther ReceiptsDeduct Refunds
124Services of Air-conditioned restaurants having license to service alcoholic beverages in relation to service of food or beverages.004410670044106800441069
125Services of providing of accommodation in hotels / inns/ cubs/ guest houses/ campsite for a continuous period of less than three months004410700044107100441072

Note :
  1. The sub-head “other receipts” is meant for interest, penalty, leviable on delayed payment of service tax
  2. The sub-head “deduct refunds” is not to be used by the assessees, as it is meant for the Revenue/Commissionerates while allowing refund of tax
  3. Primary education cess on all taxable services will be booked under 00440298 and Secondary Higher Education Cess will be booked under 00440426
  4. If NSDL have issued any dummy codes for revenue collection and interest / penalty for the above eight services, all these dummy codes should be treated as void and may replaced by the correct account codes as stated above
  5. Description of taxable services provided at column (2) of the given table for ease of reference, does not limit the scope of the taxable service.

Compounding of offences under FEMA, 1999

The term ‘compounding’ has not been defined either in the Foreign Exchange Management Act, 1999 or the rules issued there under. However, inference can be drawn from the definition given in the Companies Act, 1956. It defines ‘compounding’ as: ‘Any offence punishable under the Act (whether committed by the company or any officer thereof), not being an offence punishable with imprisonment only or with imprisonment and also with fine may, either before or after the institution of any prosecution, be compounded’. Various terms related to compounding have been defined under The Foreign Exchange (Compounding Proceedings) Rules, 2000.
The compounding of the contravention under FEMA was implemented by the Reserve Bank of India

Friday, 25 January 2013


No Aadhar card? No PF transactions

If you haven’t got your Aadhar card, hurry up and apply. The government has now made it mandatory to provide your Aadhar card number for PF transaction.
Salaried employees in organised sector will have to provide their Aadhaar numbers for seeking benefits under the EPF scheme being operated by retirement fund body Employees’ Provident Fund Organisation (EPFO), reports the PTI.
The report also states that it will be mandatory for new members to submit their Aadhaar numbers as part of the KYC (Know Your Customer) verification from March 1, 2013 onward.
What about exiting members?
For existing members, the seeding of Aadhaar number has to be done in a time-bound manner,” an

RBI Circular - Relaxation of guidelines relating to operation of EEFC accounts

Dear Freinds,

We would like to bring to your attention that RBI has issued circular ref. A. P. (DIR Series) Circular No.79 dated 22nd January,2013 relating to relaxation in guidelines relating to the operation of EEFC accounts.

The circular is reproduced below for your reference:

Exchange Earners Foreign Currency (EEFC) Account, Diamond Dollar Account (DDA) & Resident Foreign Currency (RFC) Domestic Account

Attention of Authorised Dealer (AD) Category - I banks is invited to A.P. (DIR Series) Circulars Nos. 15, 124, 128, 8 and 12 dated November 30, 2006, May 10, 2012, May 16, 2012, July 18, 2012 and July 31, 2012 respectively, in terms of which all the foreign exchange earners were permitted to retain their foreign exchange earnings in EEFC account subject to certain conditions with an Authorized Dealer (AD) Category - I bank in

Free Download Latest e-TDS FVU Software (Statement) 3.4 (Ver.) For Assessment Year 2013-14

Dear Friends, I would like to share with you TIN.NSDL has been launched a Latest e-TDS Software for Preparing of e-TDS Quarterly and Annual Return (FVU) Ver. 3.4 which is for TAN Registered Taxpayee/Tax Deductee. The new FVU has the many features and is applicable with immediate effect. The new FVU 3.4 features as are follows.

FVU 3.4 will be applicable for quarterly TDS/TCS statements pertaining to FY 2010-11 onwards.
  • Deductor can now quote the Date of deduction beyond the quarter.
  • FVU version 3.4 will be applicable with immediate effect.
e-TDS / e-TCS returns prepared for FY 2005-06 and onwards (i.e. Forms 24Q, 26Q, 27Q and 27EQ) can be validated using this utility.

The e-TDS/TCS FVU is a Java based utility. JRE (Java Run-time Environment) [versions: SUN JRE: 1.4.2_02 or 1.4.2_03 or 1.4.2_04 or IBM JRE:] should be installed on the computer where the e-TDS/TCS FVU is being installed. Java is freely downloadable from and or you can ask your vendor providing computer facilities (hardware) to install the same for you.

The e-TDS/TCS FVU setup file (e-TDS/TCS FVU.exe) comprises of three files namely:

TDS FVU Readme.rtf:
This file contains instructions for setup of the e-TDS FVU.

e-TDS FVU Setup.exe:
This is a setup program for installation of FVU.

This is the FVU program file.

FVU for quarterly e-TDS/TCS statement prepration to FY 2010-11

Download Latest e-TDS Software Ver. 3.4 from Here

Get Online Your Income Tax Refund upto Asstt. Year 2014-15.

There are two types of Refund 1. Banker Refund and 2. Other Refund. Both refunds are now check Online with the help of TIN-NSDL.

Refund BankerThe 'Refund Banker Scheme,' which commenced from 24th Jan 2007, is now operational for taxpayers assessed all over India (except at Large Taxpayer Units) and for returns processed at CPC (Centralized Processing Centre) of the Income Tax Department at Bangalore.

In the 'Refund Banker Scheme' the refunds generated on processing of Income tax Returns by the Assessing officers/ CPC-Bangalore are transmitted to State Bank of India, CMP branch, Mumbai (Refund Banker) on the next day of processing for further distribution to taxpayers.

Refunds are being sent in following two modes:
  • RTGS / NECS: To enable credit of refund directly to the bank account, Taxpayer.s Bank A/c (at least 10 digits), MICR code of bank branch and correct communication address is mandatory.
  • Paper Cheque: Bank Account No, Correct address is mandatory.
Taxpayers can view status of refund 10 days after their refund has been sent by the Assessing Officer to the Refund Banker - by entering 'PAN' and 'Assessment Year' below.
Other Refunds
Status of 'paid' refund, being paid other than through 'Refund Banker,' can also be viewed at by entering the 'PAN' and 'Assessment Year' below.

'Refund paid' status is also being reflected in the 'Tax Credit Statements' in Form 26AS.

Check your Income Tax Refund Click Here

Generate your Form 16A from TIN Website issued by Deductor for Asstt. Year 2013-14

Now Tax Deductor Generate his Form 16A with the help of "Form16A Generator" which is developed by Tax Information Network (TIN) of Income Tax Department for our Tax Deductee Quarterwise (Q1, Q2, Q3 and Q4). It generate Form 16A on the basis of data provided by Tax Deductor of the Tax Deductee in Form 24Q and Form 27A Statement. View is provided for the purpose of verification of Form 16A generated from TIN website issued by Deductor to the deductee.

To view of Form 16A provide the following Details:
Financial Year:
TAN of the Deductor:
PAN of the Deductee:
Certificate Number:
Total Amount Deducted:

  • Provide above details as present in Form 16A.
  • The TDS Certificate in Form no. 16A can now be downloaded from the website of TRACES ( ). For further details you may write to
  • In case of any discrepancy in Form 16A the taxpayer is advised to contact the deductor. The taxpayer should inform the deductor to file a correction statement to rectify the discrepancy in the TDS/TCS statement.
  • TIN is not responsible for any mismatch in the TDS Certificate and the actual transaction of the taxpayer with the deductor.
  • Verify complete Form 16A from Form 26AS login.

You have Short period to Save Tax by 18 Ways in Fin. Year 2012-13.

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 various instruments specified under this section to avail maximum tax benefit. Unlike Section 88, there are no sub-limits and is irrespective of how much you earn and under which tax bracket you fall. The following are Qualifying Investments.

1. Saving Schemes NSC, PPF etc. : The total limit under this section is Rs 1 lakh. Included under this heading are many small savings schemes like NSC, PPF and other pension plans. Payment of life insurance premiums and investment in specified government infrastructure bonds are also eligible for deduction under Section 80C

2. Children Education Fee : Besides these investments, the payments towards the principal amount of your home loan are also eligible for an income deduction. Education expense of children is increasing by the day. Under this section, there is provision that makes payments towards the education fees for children eligible for an income deduction.

3. Provident Fund (PF) & Voluntary Provident Fund (VPF) : PF is automatically deducted from your salary. Both you and your employer contribute to it. While employer’s contribution is exempt from tax, your contribution (i.e., employee’s contribution) is counted towards section 80C

Thursday, 24 January 2013

On Salary arrears get benefit of Tax Relief u/s 89(1) and how it calculate?

Tax relief when salary received in arrear or in advance

As the arrears of salary relates to 6th pay commission is being received by the employees. When a person/employee receive arrear or any advance in a financial year , he should collect complete information from their employer like as year wise amount of arrear/advance. If you have year wise amount of arrear then you can bifurcate your income year wise. In this way you can save income tax

Deduction u/s. 10(13A) for House Rent allowance

House rent allowance (HRA) is received by the salaried class. A deduction is permissible under Section 10(13A) of the Income Tax Act, in accordance with Rule 2A of the Income Tax Rules. You can claim exemption on your HRA under the Income Tax Act if you stay in a rented house and get a HRA from your employer.
The HRA deduction is based on salary, HRA received, the actual rent paid and place of residence. The place of residence is important. For Mumbai, Kolkata, Delhi or Chennai, the tax exemption on HRA is 50 percent of the basic salary, while for other cities it is 40 percent of the basic salary.
The city of residence is to be considered for calculating HRA deduction.

Service tax on rent-a-cab payment

Under the erstwhile regime of taxation of services prior to introduction of negative list based on a positive list of services (as applicable prior to July 1, 2012), service tax on rent-a-cab service was payable by the service provider only.
However, with effect from July 1, Service tax liability arising on account of rent-a-cab services is required to be borne partially by the service recipient under the reverse charge mechanism, in cases where the services are rendered by an individual, HUF, partnership firm or an association of persons. Hence, service recipient would be required to discharge service tax under reverse charge mechanism on rent-a-cab services received by you from cab vendors.
The extent of service tax liability to be discharged by service recipient would depend upon whether cab vendor has claimed abatement on the value of services provided by them. In both situations, i.e., whether the cab vendor has claimed abatement or not, your liability would be 12.36% of 40% of total service value. Section 69 of the Finance Act, 1994 has made it mandatory for every person liable to pay service tax to register under the service tax. So, you would be required to obtain registration as a service recipient.


The Income Tax Act provides that on determination of the gross total income of an assessee after considering income from all the heads, certain deductions therefrom may be allowed. These deductions detailed in chapter VIA of the Income Tax Act must be distinguished from the exemptions provides in Section 10 of the Act. While the former are to be reduced from the gross total income, the latter do not form part of the income at all.

Recovery of Demands pending Stay Applications - CBEC Circular No. 967/2013 and recovery stayed:


WP MP No.1509 & 1510 of 2013
WP No.2 & 2 of 2013




R Sudhakar, J

Dated: January 21, 2013

Transfer Pricing: The “Bright Line test” can be applied to disallow the excessive AMP expenses incurred by the assessee for the benefit of the brand owner

L.G.Electronics India Pvt. Ltd vs. ACIT (ITAT Delhi Special Bench)

L.G. Electronics Inc, a Korean company, set up a wholly owned subsidiary in India (the assessee) to which it provided technical assistance. The assessee agreed to pay royalty at the rate of 1% as consideration for the use of technical know how etc. The Korean company also permitted the assessee to use its brand name and trade marks to products manufactured in India on a royalty-free basis. The AO, TPO & DRP held that as the Advertising, Marketing and Promotion (“AMP expenses”) expenses incurred by the assessee were 3.85% of its sales and such percentage was higher

Wednesday, 23 January 2013

S. 50C does not apply to transfer of FSI & TDR

ITO vs. Prem Rattan Gupta (ITAT Mumbai

The assessee owned a plot of land admeasuring 2244.18 sq. mts of which 2110 sq. mts was acquired by the Municipality for development purposes. The assessee was entitled to receive TDR/ FSI in lieu of the land acquired. The assessee sold the development rights to the said property for Rs. 20 lakhs and computed capital gains on that basis. However, for purposes of stamp duty, the property was valued at Rs. 1.19 crores. The AO held that the value of the property as adopted by the stamp duty authorities had to be taken as the consideration u/s 50C for purposes of capital gains. This was reversed by the CIT(A). On appeal by the department to the Tribunal, HELD:

S. 50C applies only to the transfer of “land or building” and not to the transfer of all “immovable property“. Accordingly, though FSI and TDR is “immovable property” as held in Chedda Housing Development vs. Babijan Shekh Farid 2007 (3) MLJ 402 (Bom), it is not “land or building” and so cannot be the subject matter of s. 50C. The property acquired for development (in lieu of which the FSI/TDR was granted) also cannot be considered even though the property continues to stand in the assessee’s name in the property records. The property should be valued by the DVO net of the land transferred to the Developer by the assessee after considering the acquisition made by the Govt & the Municipal Corporation and also excluding the value of TDR or additional FSI included in the consideration shown in the Development Agreement

Whether for claiming Sec 54F benefits, it is essential for assessee to invest in residential house in his own name and not his wife - NO: Delhi HC

THE issues before the Bench are - Whether, for the purpose of claiming Sec 54F benefits, it is essential for the assessee to invest in residential house in his own name and not his wife and Whether purposive construction of law prevails over literal construction. And the ruling goes in favour of the assessee.
Facts of the case

Assessee is a retired individual from IOCL. He had earned income by ways of salary, house

CBDT circular clarifying issues relating to export of computer software and allowance under sections 10A, 10AA, 10B of the Income-tax Act, 1961


In the drive towards cutting down on litigation and with the objective of creating a stable and certain tax environment for industry, including specifically for sectors like the IT / ITES sector which has been the torchbearer of India’s growth story, the issuance of the CBDT circular on several aspects related to the tax holidays under section 10A, 10AA and 10B of the Income-tax Act, 1961 (“the IT Act”) is a welcome move, particularly in an environment where the tax holidays have been constantly denied by the Revenue Authorities (“RA”) on some ground or the other leading to litigation.

Taxability of Leave Travel Allowance (LTA)

Leave Travel Allowance (LTA) is the most common element of compensation adopted by employers to remunerate employees due to the tax benefits attached to it. Section 10(5) of the Income-Tax Act, 1961, read with Rule 2B, provides for the exemption and outlines the conditions subject to which LTA is exempt. Through this write-up, I want to shed light on the taxability and some other interesting relevant aspects which you as a salaried employee must keep in mind.
Who and what is covered?
Exemption of Fare Only – LTA exemption can be claimed where the employer provides LTA to employee for leave to any place in India taken by the employee and their family. Such exemption is limited to the extent of actual travel costs incurred by the employee. Travel has to be undertaken within India and overseas destinations are not covered for exemption.
Exemption on Actual Expense – For example, where an employer provides LTA of Rs 25,000, but an employee spends only Rs 20,000 on the travel cost, then the exemption is limited to only Rs. 20,000.
Travel cost means the cost of travel and does not include any other expenses such as food, hotel stay etc.

Open a New Branch – ROC Compliances

Only doing business is not the end, one always wishes to expand its business by opening a new Branch. Procedure to be followed by every company registered under the Companies Act to open a new Branch is explained hereunder:
  • Verify Business of New BranchVerify that the business to be transacted at the new branch proposed is covered by Memorandum of Association (MOA).
  • Convene a Board Meeting - Board Meeting is to be convened after giving notice to all the directors of the Company.

DTAA – Interpretation Techniques

A treaty may be said to be a formally concluded agreement between two or more independent nations. The Oxford Companion to Law defines a treaty as “an international agreement, normally in written form, passing under various titles (treaty, convention, protocol, covenant, charter, pact, statute, act, declaration, concordat, exchange of notes, agreed minute, memorandum of agreement) concluded between two or more states, on subject of international law intended to create rights and obligations between them and governed by international law.

Tuesday, 22 January 2013

S. 50C does not apply to transfer of immovable property held through company

Irfan Abdul Kader Fazlani vs. ACIT (ITAT Mumbai)

The assessee held shares in a company called Kamala Mansion Pvt. Ltd. The company owned flats in a building known as Om Vikas Apartments, Walkeshwar Road, Mumbai. The shares were sold by the assessee for Rs. 37.51 lakhs and capital gains were offered on that basis. The AO & CIT(A) held that by the sale of shares in the company, the assessee had effectively transferred the immovable property belonging to the assessee and that it was an indirect way of transferring the immovable properties being the flats in the building. He accordingly ‘pierced the corporate veil‘, invoked s. 50C and computed the capital gains by adopting the stamp duty value of the flats. On appeal by the assessee to the Tribunal, HELD allowing the appeal:
S. 50C applies only to the transfer of a “capital asset, being land or building or both”, “assessed” by any authority of a State Government for stamp duty purposes. The expression “transfer” has to be a direct transfer as defined u/s 2(47) which does not include the tax planning adopted by the assessee. S. 50C is a deeming provisions and has to be interpreted strictly in accordance with the spirit of the provision. On facts, the subject matter of transfer is shares in a company and not land or building or both. The assessee did not have full ownership on the flats which are owned by the company. The transfer of shares was never a part of the assessment of the Stamp duty Authorities of the State Government. Also, the company was deriving income which was taxable under the head ‘income from property’ for more than a decade. Consequently, the action of the AO & CIT(A) to invoke s. 50C to the tax planning adopted by the assessee is not proper and does not have the sanction of the provisions of the Act.

Whether reassessment can be initiated after four years merely on ground that one of Directors of assessee company filed complaint of siphoning of funds before CLB - YES: Delhi HC

THE issues before the Bench are - Whether AO has the authority to reopen assessment after expiry of four years, on receipt of complaint of siphoning of funds, filed by one of the Directors of the assessee company; Whether the fact that such complaint has been filed before a statutory authority like Company Law Board can have any material relevance to ascertain its credibility; Whether when the complaint can constitute tangible material for reopening the assessments, it can equally constitute tangible material giving rise to the belief that the income had escaped assessment and Whether there is no duty of the assessee to disclose all relevant information at the time of original assessment, merely because the AO has not asked for it. And the verdict goes against the assessee.

Taxability of bundled services under Service Tax

Bundled service’ means a bundle of provision of various services wherein an element of provision of one service is combined with an element or elements of provision of any other service or services. An example of ‘bundled service’ would be air transport services provided by airlines wherein an element of transportation of passenger by air is combined with an element of provision of catering service on board. Each service involves differential treatment as a manner of determination of value of two services for the purpose of charging service tax is different.
Two rules have been prescribed for determining the taxability of such services in clause (3) of section

FAQ on Housing Loan & Income tax benefit

Q-1What are Income tax benefits of taking and repaying a housing loan under EMI Plan?
You will be eligible to claim both the interest and principal components of your repayment during the year.
  • Interest can be claimed as a deduction under Section 24. You can claim up to Rs. 150,000 or the actual interest repaid whichever is lower. (You can claim this interest only when you are in possession of the house)
  • Principal can be claimed up to the maximum of Rs. 100,000 under Section 80C. This is subject to the maximum level of Rs 100,000 across all 80C investments.
  • You will need to show the statement provided by the lender showing the repayment for the year as well as the interest & principal components of the same.

Q-2 If I buy a house jointly with my wife and take a joint home loan, Can we both claim income tax deduction?

Deduction U/s. 80G of Income Tax Act, 1961 for donation

INSPITE of all the contributions made to social causes, there is a huge gap between the demand of money from the needy and the amount donated by philanthropists. This probably, is the reason why the Government has given tax benefits on donations. The amount donated towards charity attracts deduction under section 80G of the Income Tax Act, 1961. Section 80G has been in the law book since financial year 1967-68 and it seems it’s here to stay. Several deductions have been swept away but the tax sop for donations appears to have survived the axe. The main features of tax benefit with respect to charity are as follows:
Allowable to all kind of Assessee:- Any person or ‘assessee’ who makes an eligible donation is

Some Helpful Tips For Filing Wealth Tax Returns

The W.T. return for Individuals, Hindu Undivided Families and Companies is to be filed in Form BA. Value of an asset for an assessment year is to be declared as on the relevant Valuation Date i.e. 31st March of each year. Thus, for the assessment year 2012-13, the valuation date will be 31.3.2012, while for the A.Y. 2013-14, the valuation date will be 31.3.2013.
Value of an asset, other than cash, is to be determined on the basis of the rules of Schedule III. The details of calculation of the value of each asset under the relevant rule of this schedule should be attached with the return. Also, Wherever any rule of this schedule prescribes that a particular document in support of the valuation is to be attached with the return, the same must be so attached.

Monday, 21 January 2013

Is TDS applicable to foreign consultant who renders service outside India (namely in USA). Foreign consultant is US based and does not have PE in India.



· First point before us for consideration is to decide whether the Income of the International Software Consultant is taxable in India or not?

a. As per the recent amendment in section 9 of Income tax act 1961proposed by finance bill 2010, as passed by Loksabha on 29th April 2010;all payments made to a non-resident outside India shall be taxable in India regardless of the fact that whether the services have been rendered in India or not. It is the situs of the payer and situs of utilization of

Exchange Rate effective from 18/01/2013






Notification No. 05/2013-Customs (N.T.)

DATED THE 17th January, 2013

27 Pausa, 1934(SAKA)

Latest Procedure for correction of statement of Tax Deducted at Source (TDS).

Central Board of Direct Taxes (CBDT) has issued new instructions vide Notification No 03/2013 bearing S.O. 169 (E) dated 15-01-2013 regarding submission of e-TDS correction statements.

Furnishing of correction statement of tax deducted at source.—

(1) A deductor shall furnish the correction statement of tax deducted at source in the form specified by the Director General—

a) at the authorised agency through electronic mode; or
b) online through the portal.

(2) The correction statement referred to in sub-paragraph (1) shall be furnished under digital signature or verified through a process in accordance with the procedure, formats, and standards specified by the Director General.

Recovery of confirmed demand during pendency of stay application- regarding

Circular No.  967/01/  2013 – CX
F. No. 208/36/2012-CX.6
Government of India
Ministry of Finance
 Department of Revenue
Central Board of Excise and Customs, New Delhi

New Delhi, the Dated 1st January, 2013


      (i)     The Chief Commissioner of Central Excise (All),
     (ii)    The Chief Commissioner of Central Excise & Customs (All),
     (iii)   The Chief Commissioner of Customs (All),
     (iv)   Directors General (All)

Madam/ Sir,

Subject - Recovery of confirmed demand during pendency of stay application- regarding

         I am directed to bring your attention to the following circulars issued from time to time on the above issue

10 lesser known Income Tax Deductions

We all know about the popularly know deductions like deduction u/s. 80C & 80D. But many times we use to forget to claim many other deductions which are available under the Income Tax Act, which can reduce our tax burden significantly. In this article we discussed 10 such lesser know deductions which taxpayers tend to forget to claim while filing there Income Tax Return.
1. Set off of Capital Loss Against Capital Gain
While most of us know that we need to pay taxes on short term or long term capital gains, not many are aware of the fact that capital losses, if any, can be balanced off against gains. So, for instance, if

Investments which qualifies for deduction under section 80C

Under this section, you can invest a maximum of Rs l lakh and if you are in the highest tax bracket of 30%, you save a tax of Rs 30,000. The various investment options under this section include:
Provident Fund (PF) & Voluntary Provident Fund (VPF: PF is automatically deducted from your salary. Both you and your employer contribute to it. While employer’s contribution is exempt from tax, your contribution (i.e., employee’s contribution) is counted towards section 80C investments. You also have the option to contribute additional amounts through voluntary

Protocol to treaty between India and Netherlands notified; Article for ‘Exchange of Information’ substituted

NOTIFICATION NO. 2/2013 [F.NO.501/02/1983-FTD-I], DATED 14-1-2013

Saturday, 19 January 2013


Understanding deductions of section 80-IA & IB with Latest Case Laws

Circular 76/2013: Reporting under Foreign Exchange Management Act, 1999 (FEMA)

RBI/2012-13/383 A.P. (DIR Series) Circular No. 76 January 17, 2013
In terms of Section 11 (2) of FEMA, 1999, the Reserve Bank may, for the purpose of ensuring the compliance with the provisions of the Act or of any rule, regulation, notification, direction or order made thereunder, direct any authorized person to furnish such information, in such manner, as it deems fit. Accordingly, RBI has entrusted to the Authorised Dealers (ADs) the responsibility of complying with the prescribed rules/ regulations for the foreign exchange transactions and reporting the same as per the directions issued from time to time.

Shares Can Be Owned For the Purpose Of Investment And/or For The Purpose Of Trading

The assessee was maintaining separate portfolios for shares in the trading account and for those in the investment account. This was accepted by the department in the earlier years. In AY 2007-08, the assessee sold all the shares in the investment portfolio and offered the gains to tax as long-term and short-term capital gains. The AO held that as the volume (Rs. 52 crores) and frequency of transactions was large, the LTCG & STCG were assessable to tax as business profits. The CIT(A) and Tribunal (order attached) reversed the AO by relying on CBDT Circular No. 4 of 2007 dated 15.06.2007 (291 ITR (Stat) 35). On appeal by the department to the High Court, HELD dismissing the appeal:
The intent and purport of Circular No. 4 of 2007 dated 15.06.2007 is to demonstrate that a tax payer could have two portfolios, i.e., an investment portfolio and a trading portfolio. In other words, shares can be owned by the assessee for the purposes of investment and/or for the purposes of trading. In the former case whenever the shares are sold and gains are made the gains would be capital gains and not profits of any business enterprise. In the latter case any gains would amount to profits in business. This has been made clear by the CBDT circular in the remaining portion of the circular itself. On facts, the finding of the CIT(A) & Tribunal that the short term capital gains and long term capital gains were out of the investment account and were not related to the trading account does not call for any interference.