CBDT notifies ITR Forms for Company/ Firms/ LLP/ Trusts and others

This Tax Alert summarizes amendments made to the Income Tax Return (ITR) Forms for tax year 2014-15, vide Notification No. 61/2015 dated 29 July 2015 (Notification) issued by the Central Board of Direct Taxes (CBDT). The Notification notified ITR 3, ITR 4, ITR 5, ITR 6 and ITR 7 as applicable to an individual/Hindu Undivided Family (HUF) (being partner in a firm or carrying on proprietary business or profession), partnership firm, Limited Liability Partnership (LLP), Association Of Persons (AOP), Body Of Individuals (BOI), Artificial Juridical Person, cooperative society, companies and trust. The CBDT had already notified ITR 1, ITR 2, ITR 2A and 4S as applicable to individuals and HUFs for the tax year 2014-15, vide Notification No. 49/2015 dated 22 June 2015.

 

Most of the changes notified in the new ITR Forms, ITR 3 to ITR 7, are similar to those made in ITR 1 and ITR 2 earlier. Additionally, certain other changes have also been made to these ITR Forms, which the taxpayer will need to note while filing the tax return for tax year 2014-15.

Latest Procedure for Verification and Scrutiny of Service Tax Returns.

The CBEC vide its circular no 185/4/2015 dated 30th June 2015 has revised the procedure for scrutiny of the service tax returns. This is a step towards ensuring whether the self­assessment carried out by the assessees is in line with the provisions of the prevailing service tax law. A two fold procedure has been prescribed which consists of an online scrutiny of all the service tax returns and a detailed manual scrutiny of the returns of select assessees. The new procedure shall be applicable with effect from 1st August 2015. A brief about the new procedure is as below.

Whether HUF can be treated as a 'relative' under provisions of sec 56(2) for purpose of receiving gift and assessee-individual can claim exemption for such gift - YES: ITAT

THE issue before the Bench is - Whether HUF can be treated as a 'relative' under the provisions of section 56(2) for the purpose of receiving gift and the assessee-individual can claim exemption for such gift. YES is the answer.

Facts of the case

The assessee being an individual offered income from house property, interest and share

oI issues Press note 8 (2015 series) introducing composite caps in FDI policy

The Department of Industrial Policy and Promotion (Ministry of Commerce & Industry), Government of India has issued Press Note 8 of 2015 (‘the Press note’), notifying amendments in the Consolidated FDI policy circular dated 12 May 2015 (‘FDI policy’). The Press Note introduces composite caps in Foreign Direct Investment (FDI) Policy for simplification of the said policy and to attract foreign investments.

 

The concept of composite cap brings in a great relief to foreign investors as the separate limits for foreign portfolio investment and foreign direct investment has been done away with, thereby introducing complete fungibility across almost all the sectors. This is another liberalisation measure brought in by the Government in favour of the foreign investors and specially the foreign portfolio investors to help them bring in more investments in Indian listed companies.

Use of Berry ratio as PLI upheld

In a recent ruling, the Delhi Bench of the Income-tax Appellate Tribunal, placing extensive reliance on the ruling made by the same bench in the case of Mitsubishi Corporation India Private Limited, has:

• Upheld the use of the ‘Berry ratio’ as profit level indicator (PLI).
• Rejected the transfer pricing officer’s (TPO’s) re-characterisation of the taxpayer’s service activity to a trading activity.
• Rejected the TPO’s contentions pertaining to attribution of additional returns on account of location savings and certain supply chain and human intangibles owned/ developed by the taxpayer.

India Taxes- Due Date Alert for the month August 2015

 

Sr No	Due Date	Related to	Compliance to be made
1	05.08.2015	Service Tax	Payment of Service Tax for the Month of July 2015
2	07.08.2015	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 July2015.   · Deposit TDS from Salaries deducted during the month of July 2015   • Deposit TCS for collections made under section 206C including sale of scrap during the month of July 2015, if any   • Deliver a copy of Form 15G/15H, if any to CCIT or CIT for declarations received in the month of July 2015, if any
3	20.08.2015	STPI	Submission of July 2015 Softex Forms
4	20.08.2015	VAT	Payment of VAT & filing of monthly return for the month of July 2015
5	31.08.2015	Income Tax	Annual Information return under section 285BA for the financial year 2014-15 in form 61A.
6.	31.08.2015	Income Tax	Filing of Income tax return by Non Corporate assesse without tax audit.

Latest Procedure for Verification and Scrutiny of Service Tax Returns.

The CBEC vide its circular no 185/4/2015 dated 30th June 2015 has revised the procedure for scrutiny of the service tax returns. This is a step towards ensuring whether the self­assessment carried out by the assessees is in line with the provisions of the prevailing service tax law. A two fold procedure has been prescribed which consists of an online scrutiny of all the service tax returns and a detailed manual scrutiny of the returns of select assessees. The new procedure shall be applicable with effect from 1st August 2015. A brief about the new procedure is as below.

Whether if assessee was originally claiming Sec 10B benefits, it can claim Sec 10A benefits once it acquires a running business having entitlement for claiming deduction u/s 10A - YES: ITAT

THE issue before the Bench is - Whether if assessee was originally claiming Sec 10B benefits, it can claim Sec 10A benefits once it acquires a running business having entitlement for claiming deduction u/s 10A. YES is the answer.

Facts of the case

The assessee company had contended that CIT(A) erred in holding that assessee was not entitled to claim relief u/s 10A only on the technical ground that the claim had been made u/s

EY Alert: Social Security Agreement between India and Canada to come into force with effect from 1 August 2015

The Social Security Agreement (the “Agreement”) between India and Canada was signed on 06 November 2012. The Agreement will now come into force with effect from 1 August 2015.

The Agreement will have the following benefits:

1. For Canadian nationals working in India:
                                                                                                                         
a. Exemption from social security contributions in India
b. Early withdrawal of contributions from Provident Fund Scheme on completion of Indian assignment (if

Advance Learning on Section 44AD (Theory)

 

 

To give relief to small assessees, the Income-tax Law has incorporated a simple scheme commonly known as Presumptive Taxation Scheme. There are two schemes, viz., the scheme of section 44AD and the scheme of section 44AE. An assessee adopting these provisions is not required to maintain the regular books of account and is also exempt from getting the books of account audited. In this advance learning we will cover the provisions of the presumptive taxation scheme provided in section 44AD.

 

43C. Special provision for computation of cost of acquisition of certain assets

.- (1) Where an asset not being an asset referred to in sub-section (2) of section 45 which becomes the property of an amalgamated company under a scheme of amalgamation, is sold after the 29th day of February, 1988, by the amalgamated company as stock-in-trade of the business carried on by it, the cost of acquisition of the said asset to the amalgamated company in computing the profits and gains from the sale of such asset shall be the cost of acquisition of the said asset to the amalgamating company, as increased by the

Understanding section 41 of the Income tax act, 1961.

 

 

The caption heading of section 41(1) is ‘Profits Chargeable to tax’. The section falls under Chapter IV –Computation of Income from Business or Profession.

 

In business there are circumstances where a person might have incurred a liability but later on he need not have to pay it for one or other reason. The Income Tax Act brings to tax such liabilities which are no more payable.  

 

Tax implications of fixed deposits

If  you are in the higher tax bracket, that is 20% or 30%, make sure that you pay the additional interest before filing your tax returns.

The biggest disadvantage of FDs is that the interest earned is subject to taxation. This eats into the returns.

Taxed as per income bracket

The interest earned on the FDs is added to the depositor's income and taxed as per income bracket. This reduces its attractiveness, especially for those in the highest tax bracket.

Decoding Secretarial Standards – Adjournment of meetings

In this post, I will discuss Secretarial Standards related to Adjournment of meetings under SS – 2.

Adjournment of Meetings:

A duly convened Meeting shall not be adjourned unless circumstances so warrant. The Chairman may adjourn a Meeting with the consent of the Members, at which a Quorum is present, and shall adjourn a Meeting if so directed by the Members. [Paragraph 15.1]

Meetings shall stand adjourned for want of requisite Quorum. [Background Paragraph 1 after Paragraph 15.1]

The Chairman may also adjourn a Meeting in the event of disorder or other like causes, when it becomes impossible to conduct the Meeting and complete its business. [Background Paragraph 1 after Paragraph 15.1]

The Chairman may adjourn a meeting:

Whether when assessee pays interest on interest, deduction for such sum is not allowable as per provisions of Sec 36(1)(iii) - YES: HC

THE issue before the Bench is - Whether when assessee pays interest on interest, deduction for such sum is not allowable as per provisions of Sec 36(1)(iii). YES is the verdict.

Facts of the case

The assessee is an individual. A return declaring income of Rs.38,590/- was filed alongwith the statement of total income, copies of trading and P/L account, balance-sheet and its annexures. The audit report was also filed u/s 44AB. The assessee had not submitted satisfactory

CBDT extends due date of filing wealth-tax return from July 31, 2015 to Aug. 31, 2015

SECTION 14 OF THE WEALTH-TAX ACT, 1957 - RETURN OF WEALTH - CLARIFICATION ON EXTENSION OF DUE DATE OF FILING RETURN OF WEALTH FOR A.Y. 2015-16

LETTER [F.NO.328/08/2015-WT], DATED 27-7-2015

In terms of Explanation to sub-section (1) of section 14 of the Wealth-tax Act, 1957, 'due date' of filing Return of wealth in relation to an assessee under the Wealth-tax Act shall be the same date as that applicable to an assessee under the Income-tax Act under the explanation to sub-section (1) of section 139 of the Income-tax Act.

2. Central Board of Direct Taxes vide order under section 119 of the Income-tax Act F.No.225/154/ 2015/ITA-II dated 10-6-2015 has extended the 'due date' for filing Return of Income for assessment year 2015-16 in respect of assessees falling under clause (c) of explanation 2 to sub-section (1) of section 139 of the Income-tax Act from 31-7-2015 to 31-8-2015. In view of the same, the 'due date' for filing Return of wealth by such assessees for assessment year 2015-16 also stands extended from 31st July 2015 to 31st August 2015.

3. This issues with the approval of Chairperson, CBDT.

Five Imp Verdicts On S. 271(1)(c) Penalty, S. 221 TDS Penalty, Strictures On Advocates And Top Brass Of Dept Etc

CIT vs. Dalmia Dyechem Industries (Bombay High Court)

S. 271(1)(c): The rigors of penalty provisions cannot be diluted only because a small number of cases are picked up for scrutiny. No penalty can be levied unless if assessee's conduct is "dishonest, malafide and amounting concealment of facts". The AO must render the "conclusive finding" that there was "active concealment" or "deliberate furnishing of inaccurate particulars"

Conditions under Section 271(1)(c) must exist before the penalty can be imposed. Mr.Chhotaray tried to widen the scope of the appeal by submitting that the decision of the Apex Court should be interpreted in such a manner that there is no scope of misuse especially since minuscule number of cases are picked up for

TAXATION OF NON RESIDENT INDIAN.

Everything you want to know about NRI Taxation
With the due dates of filing Indian income tax returns fast approaching and if you have any Income in India, you might have questions as to whether you will be treated as an NRI, whether you need to file tax return in India, by when you need to file tax return, will you get any benefit under DTAA, so on and so forth. We understand it can be quite confusing to understand the above questions. This is why, we have this easy to understand guide to help you understand what may be applicable to you and how you can complete the process.

Cost of Inflation Index

Cost Inflation Index for FY  2015-16 announced at 1024 vide notification no. Notification No. 60 /2015/F.No.142/10/2015-TPL DATED 24-07-2015
 

Financial Year	Cost of Inflation Index (CII)
1981 - 82	100
1982 - 83	109
1983 - 84	116
1984 - 85	125
1985 - 86	133
1986 - 87	140
1987 - 88	150

Importance and Benefits of filing of Income Tax Return in Due Time.

There are too many silent benefits of Income Tax Return filing in due time.  Out of which, some are explained below.   After viewing below points, every assessee should file his Income Tax Return in time.