The Concept of HUF

The fact remains that every individual is interested to save his tax. Tax saving can be possible either by legal tax planning or by illegally tax avoidance. Many tax payers resort to illegal activities to save income tax but frankly speaking, such illegal activities are not a part of tax planning process but are part of tax evasion process which I deprecate always. However one can go ahead with legal ways of saving Income Tax and this is possible only when we screen very carefully the provisions contained in the Income Tax Act, 1961 and find out the pointers which are of advantage looking to our facts & circumstances. A very effective and legal way advised by CA’s is creating a HUF. A Hindu Undivided Family offers specific advantages as far as taxation is concerned.  Income Tax Act & Wealth Tax Act recognise the HUF as an independent assessable or taxable entity. Therefore, HUF enjoy all deductions and exemptions as a separate assessee. Overall objective behind the formation of HUF is to save tax by having an extra benefit of slab rate, deductions & exemptions.

Exposure for Liaison Offices in India!

 

Clarity delivered on long standing issue of Permanent Establishment –

Recent decision of the Hon’ble Supreme Court in the case of UOI & Anr. Vs U.A.E. Exchange Centre (Civil Appeal No. 9775 of 2011)

Introduction

 

CONTRACTUAL OBLIGATION TO PAY TO VENDORS AFTER 180 DAYS – A CONTROVERSY ON ITC REVERSAL

 

Management of cashflows during the COVID-19 pandemic present novel challenges. To manage cash flows, Taxpayers would reshape their payment plans to vendors in this crucial time. The buyers of goods and services would demand extended payment terms from the supplier.

FAQ on Foreign Trade Policies for Lockdown reliefs.

1. Whether the Central Government has introduced new Foreign Trade Policy ('FTP'), as the FTP 2015-20 has expired on 31st March 2020?

Answer: No, the Central Government has not introduced the new FTP. The Directorate General of Foreign Trade (‘DGFT’), vide Notification No. 57/2015-20 dated 31.03.2020, has extended the validity of FTP 2015-20 upto 31st March 2021.

 

Reliefs given by Government in GST during April and May 2020

 

 

1.         Notification No. 38/2020 – Central Tax, dated 5th May, 2020

Central Goods and Services Tax (Fifth Amendment) Rules, 2020

Taxation of ESOPs.

In this article, we will discuss the amendment bought by the finance Act 2020 relating to Taxation of ESOPs.

  What is ESOPs:-

On a general note, ESOPs is an employee benefit scheme provided by the company being employer to its employee to acquire the share at subsidized price or at free of cost.

  How it works and its important terminology:-

 

RECTIFICATION OF GST RETURNS IN FORM GSTR-3B TO BE PERMITTED FOR THE MONTH TO WHICH IT RELATES: DELHI HC

 

 

The Delhi High Court in Bharti Airtel Ltd. v. Union of India [WP(C) 6345/2018] considered the validity of CBIC Circular No. 26/26/2017-GST dated 29.12.2017 which restricted rectification of errors in Form GSTR-3B to the period in which the error is noticed and corrected, by way of net reporting, and not correction in the period to which the original return relates. In reading the scheme of return filing as provided within the Central Goods and Services Tax Act, 2017 (“CGST Act”), the High Court, vide order dated 05.05.2020, allowed the Petition and quashed the Circular dt. 29.12.2017 as ultra vires the statutory provisions.

AMENDMENTS UNDER THE SABKA VISHWAS (LEGACY DISPUTE RESOLUTION) SCHEME RULES, 2019

 

 

Background:

 

The Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (the ‘Scheme’) was introduced

w.e.f. 01.09.2019. The objective of the Scheme was to enable taxpayers to clear their baggage of disputes under legacy taxes (i.e. Service Tax and Central Excise) amongst others.

 

Under the said scheme, an applicant was required to file declaration in Form SVLDRS-1 on or before 15.01.2020, as extended vide Notification No. 07/2019 CE-NT dt. 31.12.2019.

FAQ ON REVISED RATE OF PF.

FREQUENTLY ASKED QUESTIONS

Reduction in statutory rate of EPF contribution from 12% to 10%

 

 

Q.1: What is revised rate of EPF contribution announced by the Central Govt. under Atmanirbhar Bharat package?

Ans.Under this package the statutory rate of EPF contribution of both employer and employee has been reduced to 10 percent of basic wages and dearness allowances from existing rate of 12 percent for all class of establishments covered under the EPF & MP Act, 1952.

 

Safe Harbour Margins- AY 2020-2021

The Central Board of Direct Taxes vide Notification No. 25/2020/ F. No. 370142/14/2020-TPL dated May 20, 2020 has notified that the rates applicable from AY 2017-18 to 2019-20 will continue to apply for AY 2020-2021 (April 2019- March 2020). The applicable Safe Harbour rates for AY 2020-21 are as below:

CBDT exempts taxpayers carrying on only B2B transactions from providing prescribed mandatory electronic modes of paymen

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This Tax Alert summarizes a recent Circular^[1] (Circular) issued by the Central Board of Direct Taxes^[2] (CBDT) clarifying that the taxpayers engaged only in business- to-business (B2B) transactions are not required to provide mandatory electronic modes of payment as prescribed for the purpose of newly inserted section (S.) 269SU of the Indian Tax Law (ITL), which came into effect from 1 November 2019 but was operationalized from 1 January 2020. 

 

Pursuant to various representations made by stakeholders, the CBDT has granted relaxation to taxpayers engaged in B2B transactions. The Circular further states that the relaxation is available provided a taxpayer, during the tax year, does not undertake any transaction with retail customers and the cash receipts during the tax year does not exceed 5% of the aggregate of all amounts received, including the sum received for sales, turnover or gross receipts.

Understand Transfer for Capital Gain

Introduction

Income Tax Act, 1961 provides a comprehensive machinery to deal with the computation of incomewhich in turn has principally been divided into five main heads. The expression `Transfer’ by itself is used at varied places in law amongst the computational heads and specifically been dealt with by the provisions of section 2(47). The expression `Transfer’ as is so defined by provisions of section 2(47) and as it stands today is the outcome of its substitution by the Taxation Laws (Amendment) Act, 1984 with effect from 01st April, 1985. Part E of Chapter IV of the Income Tax Act deals with the computational head `Capital Gains’ which by itself contains exhaustive propositions dealing with the expression denoted as `Transfer’ which is at various times the area of conflict between the department and the assessee. Section 45(1) inserted by the Finance Act, 1964 with effect from 01st April, 1964 provides the methodology of working out the capital gains arising from transfer of capital assets. Any profit or gain arising from the transfer of a capital asset effected in the previous year shall, save as otherwise provided in sections 54, 54B, 54D,54E, 54EA, 54EB, 54F, 54G and 54H be chargeable to income tax under the head `Capital Gain’ and shall be deemed to be the income of the previous year in which the transfer took place.

CESTAT APPELLATE PROCEDURE: MOVING ONLINE

We are all aware that the entire world is reeling under severe pandemic, COVID 2019 or Corona virus and India too has been badly affected causing social disruption, economic shut down and health concerns. The economy is at a virtual standstill and entire nation is under lockdown since 25th March, 2020 resulting in shutdown of all offices, shops, showrooms, factories and everything. All individuals are confined to their homes. This has resulted in inability to fulfill statutory obligations in relation to payment of taxes and filings, besides other corporate and other responsibilities.

 

Understanding Section 115BBE of the Income tax act.

 

Any income either received by an assessee or accrued to the assessee in the previous year for which source of income is known and accounted is subject to income-tax under the particular had under which that source of income falls.

 

Issue  arises  when  the  source  of  income  is  unknown  or  hidden  from  the  revenue.  In order  charge  income  tax  on  such  unaccounted  income,  the  Parliament  introduced section 115BBE in the Income Tax Act, 1961 through the Finance Act, 2012.

 

Atma Nirbhar Bharat – is same actually helping?

 The  Hon’ble PM announced a big relief package for people of India during this pandemic and the middle class of India start cheering that for the first time, middle class, expecting some financial relief from the government.  The next day finance minister makes few announcements which according to them will reduce difficulties of citizens but we unable to understand how these steps will reduce the hardship caused by people of India especially the middle class.

Tax Loss Harvesting.

Tax-Loss Harvesting is an opportunistic way to increase your post-tax returns on investment. Even though an indirect way, tax-loss investing can help you maximise wealth accumulation, especially in the beginning of the life of a portfolio.

SUPREME COURT HOLDS THERE IS NO ESTOPPEL IN CASE OF PUBLIC INTEREST

[Union of India & Anr. vs. M/s. V.V.F Limited] (JUDGMENT DT. 22.04.2020)

 

BACKGROUND

The doctrine promissory estoppel is that when one individual with the intention of creating or affecting lawful relationship makes a promise with another individual and that individual acts on it, that promise must be binding for the individual who is making it. It would not be allowed to go back from its words. The doctrine is based on the principles of justice, fair play, as well as a good conscience.

ADMINISTRATION OF RULES OF ORIGIN OF FREE TRADE AGREEMENTS UNDER DOMESTIC LAW

1.       Background on Free Trade Agreements (FTAs)

 

Free Trade Agreements (FTAs) are multilateral international treaties which provide for reduced Exim tariffs to encourage cross-border trade between signatory countries. FTAs function as self-sufficient provisions of law, including rules of origin, in respect of the matters governed by them.

 

TDS deducted but not deposited – Demand against Deductee

What the rule says?

Bar against direct demand on assessee.

205. Where tax is deductible at the source under the foregoing provisions of this Chapter, the assessee shall not be called upon to pay the tax himself to the extent to which tax has been deducted from that income.

What is TDS?

FIle Trans -01 before June 30, 2020.

This is in relation to recent pronouncement of Hon’ble Delhi High Court in case of Reliance Elektrik Works vs. UOI; W.P. (C) 13203/2019 wherein it has been held that, all the tax payers can file FORM TRAN-1 within the period of 3 years from the appointed date (i.e., by 30th June 2020).