AMENDMENT TO RULE 11UA OF INCOME TAX RULES, 1962

  

DETERMINATION OF FAIR MARKET VALUE

NOTIFICATION NO. 81/2023 DATED SEPTEMBER 25, 2023

Mumbai Tribunal upholds penalty under black money law for non-disclosure of foreign assets in tax return

 This Tax Alert summarizes a ruling of the Mumbai Income Tax Appellate Tribunal (Tribunal) dated 9 August 2023, in the case of Shobha Harish Thawani v. JCIT ^[1] (Taxpayer), wherein the Tribunal upheld penalty under The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (BMA) for failure to disclose foreign assets under “Schedule FA-Details of foreign assets and income from any source outside India” of the tax return. The Tribunal rejected the Taxpayer’s contentions that investment in the foreign asset was from disclosed sources and was explainable; income from such foreign asset was offered to tax in the relevant tax year and non-disclosure was due to an inadvertent error by the Taxpayer.

^[1] TS-554-ITAT-2023(Mum)

DGFT clarifies the issues pertaining to applicability of pre-import condition under Advance Authorization

 This Tax Alert summarizes a recent Trade Notice ^[1] issued by Directorate General of Foreign Trade (DGFT) pertaining to fulfilment of pre-import condition under Advance Authorizations (AA) issued during the period between 13 October 2017 to 9 January 2019. 

^[1] Trade Notice No. 27/2023 dated 25 September 2023

CBDT notifies new valuation rules for equity and compulsorily convertible preference shares for angel tax provisions

 This Tax Alert explains the Notification ^[1] issued by Central Board of Direct of Taxes (CBDT) dated 25 September 2023 which amends valuation rules relevant for “angel tax” provisions.

STAY ON TAX DEMAND BY DELHI HIGH COURT

 Source: TS-534-HC-2023(DEL)

Recently, the Delhi High Court made a significant ruling regarding tax demands, the key points of which are as follows:

FAQ ON GST ON ONLINE GAME

 1: How is the value of supply determined for online gaming in this chapter?

Ans: According to this chapter, the value of supply for online gaming is calculated as the total amount paid or payable to the gaming service provider. This includes any form of payment, such as money, virtual currencies, or other assets of value, made by the player or on their behalf.

 

GLOBAL TAX UPDATE

 §  The Australian Taxation Office (ATO) publishes the updated guide to taxation of financial arrangements (TOFA). TOFA aims to reduce the influence of tax considerations on how financial arrangements are structured. TOFA also aims to closer align the taxation recognition of gains and losses on financial arrangements with commercial recognition of gains and losses.Although Tob FA provides a comprehensive and overarching framework to address the economic substance of arrangements, it is not an exclusive code for the taxation of gains and losses from financial arrangements. Unless otherwise specified, other provisions of the Income Tax Assessment Act 1936 (ITAA 1936) or the ITAA 1997 still deal with gains or losses from financial arrangements where TOFA does not. 

NIC issues advisory on new time limit for reporting of invoices on the Invoice Registration Portal

 This Tax Alert summarizes a recent advisory ^[1] issued by National Informatics Centre (NIC) regarding new time limit for reporting of the invoices on the Invoice Registration Portal (IRP).

As per the Advisory, taxpayers having aggregate annual turnover (AATO) of more than or equal to INR100 crores will have to report invoices on the e-invoice portal within 30 days from the date of invoice. Such taxpayers will not be allowed to report invoices older than 30 days on the date of reporting.

The above restriction will apply to all document types for which invoice reference numbers (IRNs) are required to be generated. Thus, credit and debit notes will also have to be reported within 30 days from the date of issue.

This validation will come into effect from 1 November 2023.

Comments:

Few thoughts on new Rule 31B

 

The new Rule 31B changes the very plank of GST valuation from 'transaction value' to 'deposit value' for online gaming platforms and betting websites. Sharing few thoughts on the new rule, which might necessitate changes in the algorithms and promotional strategies used by the platforms.

Understanding Interest Rate Risk in Fixed-Income Investments

 

Fixed-income investments, such as bonds, play a crucial role in diversifying an investment portfolio and providing a steady stream of income. However, they are not immune to risks, and one of the most significant risks associated with bonds is interest rate risk. Bond sensitivity, often referred to as duration and convexity, is a fundamental concept that every investor should grasp to make informed decisions in the world of fixed-income securities. In this comprehensive article, we will delve deep into bond sensitivity, exploring what it is, how it works, and why it matters to investors.

I. What is Bond Sensitivity?

Understand Make Available Concept

 

The "Make Available Clause" is a concept often found in Double Taxation Avoidance Agreements (DTAAs), also known as tax treaties, between countries. DTAAs are bilateral agreements negotiated between two countries to prevent double taxation of income earned by residents of one country in the other country. These treaties provide rules for allocating taxing rights over different types of income, such as dividends, interest, royalties, and capital gains, to ensure that taxpayers are not subjected to double taxation.

𝗧𝗗𝗦 𝗱𝗲𝗱𝘂𝗰𝘁𝗲𝗱 𝗶𝗻 𝘄𝗿𝗼𝗻𝗴 𝗙𝗬 𝗰𝗮𝗻 𝗯𝗲 𝗰𝗼𝗿𝗿𝗲𝗰𝘁𝗲𝗱 𝗳𝗿𝗼𝗺 𝗢𝗰𝘁 𝟭 𝗼𝗻𝘄𝗮𝗿𝗱𝘀

 CBDT has just issued Notification No. 73/2023 on August 30, 2023, and it's a game-changer for tax payers. Let's break down the key points you need to know:

📌 New Rule 134: CBDT has introduced Rule 134 pursuant to Section 155(20), which was recently brought in by the Finance Act, 2023. This rule addresses a crucial aspect of claiming tax credit for deductions at source.

📌 Form No. 71: To apply under Section 155(20), you'll need to use Form No. 71. This form is central to the process and should be your first step.

📌 Submission Process: Form No. 71 must be submitted to PDGIT (Systems), the DGIT (Systems), or an authorized person designated by them. Ensure you follow the prescribed submission channels.

📌 Electronic Submission: You have the option to furnish Form No. 71 electronically. It can be submitted using either a Digital Signature Certificate (DSC) or an Electronic Verification Code (EVC), depending on how you are filing your return.

📌 Procedures and Policies: PDGIT (Systems) and the DGIT (Systems) are responsible for specifying the procedures for submitting Form No. 71. They will also formulate security, archival, and retrieval policies to safeguard your forms.

📌 Forwarding to the AO: PDGIT (Systems), DGIT (Systems), or their authorized representatives will forward Form No. 71 to the Assessing Officer (AO).

📌 Effective Date: This new Rule 134 will come into force from October 1, 2023.

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𝗘𝘅𝗮𝗺𝗽𝗹𝗲: Imagine you earned FD interest of Rs 1 lakh in FY 2022-23 (AY 2023-24), and the bank mistakenly deducted TDS in FY 2023-24 (AY 2024-25).

The result?
You can't claim TDS credit in FY 2023-24 (AY 2024-25) for an income that was actually taxable in FY 2022-23 unless rectified by the bank.

But here comes to Form 71: starting from October 1, 2023, you can skip the bank visit and directly contact the income tax department using this form.
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This form works wonders for resolving TDS mismatches from previous financial years, providing a lifeline to countless taxpayers who have faced this predicament

Compounding of Offence

 

Compounding of an offence committed u/s 276B, r/w. Section 287B - Period of limitation for filing compounding application - Power of the CBDT (Board) u/s 119 r.w.s. 279(6) to restrict compounding where application is filed beyond stipulated period - Failure to deposit the TDS amount, which was deducted u/s 192 from salary -

Is design service is fees for technical service?

 

ncome deemed to accrue or arise in India - fees for technical services - Treating the services provided by the assessee to Reliance Corporation IT Park Limited and the payment received as Fees for Technical Services u/A 12 of India – Singapore DTAA

CHANGE IN Most Appropriate Method

 

Can Assessee/Revenue resort to a Most Appropriate Method ('MAM') during Transfer Pricing proceedings (at the assessment or appellate stage) which is different from the one used by Assessee in the Transfer Pricing Study Report ('TPSR')?

CBIC prescribes valuation rules for supplies made in online gaming and casinos

 This Tax Alert summarizes the recent Notification^[1] issued by Central Board of Indirect Taxes and Customs (CBIC), amending Central Goods and Services Tax Rules, 2017 (CGST Rules).

Earlier, Parliament had passed bills to amend the Central Goods and Services Tax Act, 2017 (CGST Act) and the Integrated Goods and Services Tax Act, 2017 (IGST Act) for taxability of supplies made in casinos, horse racing and online gaming^[2].

Vide present Notification, Rule 31B and 31C are being inserted in the CGST Rules to provide for value of supply in case of online gaming and casinos as follows:

GSTN introduces new Electronic Credit and Re-claimed Statement

 

This Tax Alert summarizes a recent update ^[1] issued by the Goods and Services Tax Network (GSTN) regarding the introduction of the Electronic Credit and Re-claimed Statement.

Some more economic indicators.

 01.  Divergent consumption trend. 

 

Divergence generally means two things are moving apart while convergence implies that two forces are moving together. In the world of economics, finance, and trading, divergence and convergence are terms used to describe the directional relationship of two trends, prices, or indicators.    Divergence is when the price of an asset is moving in the opposite direction of a technical indicator, such as an oscillator, or is moving contrary to other data. Divergence warns that the current price trend may be weakening, and in some cases may lead to the price changing direction. 

BALANCE SHEET INTERNAL CONTROLS

 

New Rule 134 & Form 71.

 Rule 134 - Application u/s 155(20) regarding credit of tax deduction at source

The Central Board of Direct Taxes (“CBDT”) has issued a new rule, Rule 134, along with Form No. 71, related to the application u/s 155(20) for the credit of tax deduction at source (TDS) vide notification no 73/2023 dated 30^th August 2023.

Standard Operating Procedure notified on joint declarations for updating member profile on EPFO online portal

 The Employees’ Provident Fund Organisation (EPFO) issued a circular on 23 August 2023 notifying the Standard Operating Procedure (SOP) on processing the joint declarations for updating the member profile on the EPFO online portal.

The SOP is issued to streamline the process for receipt of joint declaration for updating/ correction in the Universal Account Number (UAN) records by the member/employer and the process to be followed by the Regional Provident Fund offices for processing the same. The SOP would help reduce the anomalies in the member profile which lead to rejections/failures/ frauds as well as difficulties for members in claim settlement.

Some of the key aspects of the SOP are listed below: