Important

LET US CELBRATE SWAMI VIVEKANANDA

You are all aware that Swami Vivekananda was born on the 12^th Of January 1863 in Kolkatta. He was then called Narendranath.

Due to his family background he got appropriate religious upbringing as well as very spiritual and knowledgible.

I take this opportunity to highlight some of his Golden Thoughts which is very relevant even today:

He was very fond of addressing the Youth

He was very fond of talking on Education and its importance.

On education he always advised the youth to have Physical education, Mental Education, Relegious Education, Educating the women, and Value added education.

He opined that education should lead to expansion of humanity and completeness in mind.

Education is the only solution to all the problems of the Country. It will solve all the personal, Social and National problems.

Education will carry the man from limited boundries to limitless eternity.

Education is that one which will build personality, leading to Character building which results in Nation building. A person has to educate and shape himself, leading to a good society and resulting in a healthy nation and the World was his opinion.

He always felt that in order to inculcate new dimensions in life, one should take shelter in education and religion. Unless great ideas are given to a person, he will become a NARI instead of HULI.

Study of Religion and culture along with Science is very important, which will increase the worldly knowledge he always said.

He always mentioned that those who are rich and educated who treat those successful from their sweat and hardwork with contempt, as traitors.

By seeing the foolishness of the Rich and the educated, he said - “Give light to the Poor, more light to the Rich and Give light to uneducated and more light to educated”

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Income Tax Act 1961

What has changed in “The Finance Act, 2020”

ISSUE:TCS ON REMITTENCE OF FOREX UNDER LIBERALISED REMITTANCE SCHEME

Be aware that The Liberalised Remittance Scheme (LRS) now attracts Tax Collected at Source (TCS)

It is known that any remittance in Foreign Currency upto USD 250000 in a Financial year is permitted by RBI

either on Current account/Capital Account or Both combined to all resident indivicuals.

Due to amendments in the Finance Act, now any remittance exceeding Rs.700000 shall attract TCS at the rate

as specified below, with effect from 1^st October 2020.

For the purpose of TCS the remittance is segregated into THREE Types

1.LRS Remittances of any type other the those mentioned below, wherein the TCS will be at 5%

on the amount remitted exceeding Rs.7,00,000.

2.Remittances for pursuing overseas education will attract TCS of 0.5% on the remittance of amount

exceeding Rs.7,00,000 and amount remitted is obtained through a loan from a financial institution.

For calculating the amount limit, both the above will be considered together.

3.Remittances to Foreign Tour Operators will attract TCS at 5%, but this will be not under the overall

limit of the Rs.700000 limit. It is separately considered and not subsumed with the above two types of remittances

NOTE: If the above mentioned remittances are by NRI, then the applicable TCS shall be increased by

Surcharge and CESS (Education/Health)

Though the Provision is applicable from 1^st October 2020, during the First year (FY 2020-21) for calculating

the Threshold limit of Rs.750000 all remittances made from 1^st April 2020 will be considered.

Forex remittance will include availling facility of Cash/Forex Cards.

The above provisions have been introduced to create a Train of Foreign transactions like foreign travel,

forex expenditure and the remitter is elibible to take credit of the TCS made in his returns.

RECENT CHANGES FOR NRI’S IN TAXATION:

The Small savings window is no more open to NRI’s.

Before the recent amendments, NRI’s were allowed to continue their PPF accounts as

well as National Savings Certificates till maturity, and no extensions were permitted after maturity.

But the rules have been tweaked and as and when one attains a status of NRI, the accounts are

deemed to be closed with respect to PPF account and NSC’s are treated to have been encashed.

They will just earn the savings bank rate of interest which is at 4% as of now.

Further, NRI’s are not eligible for tax deductions under Chapter VI, with respect to the following sections:

Sec.80DD - Medical treatment for the Dependent disabled person,

Sec.80DDB – Medical treatment for specified diseases for family members,

Sec.80U – Disability as specified in the section for self or dependent family member;

Sec.80 QQB – Royalty Income.

Tax Deduction at Source as applicable to NRI’s:

1) Long term capital gain on sale of property - 20%
2) Long Term Capital gain on sale of Gold - 20%
3) Short term capital gains from Stocks – 15%
4) Short term capital gains from Debt funds – 30%
5) Short term capital gains on sale of property – 30%
6) Short term capital gains on sale of Gold – 30%
7) Interest on Bank deposits – 30%
8) Rental Income – 30%

cost of inflation index....... (with new base year)

Cost Inflation Index
FY	Index
2001- 02	100
2002-03	105
2003-04	109
2004-05	113
2005-06	117
2006-07	122
2007-08	129
2008-09	137
2009-10	148
2010-11	167
2011-12	184
2012-13	200
2013-14	220
2014-15	240
2015-16	254
2016-17	264
2017-18	272

Are you a ……….

a) - Banking Company/Co-operative Bank/NBFC/MF Trustee/SRO/RTO/DP/Stock Broker/Share Transfer Agent/Merchant Banker/Portfolio Manager/Investment Advisor

b) - Trader of Goods and your turnover exceeds Rs.1.00 Cr. For FY 2016-17

c) - Service Provider and your turnover exceeds Rs.0.25 Cr. For FY 2016-17

d) - Foreign Tour Operator/Foreign Exchange Dealer

and have received payments of Rs.50000 or more without quoting PAN of the Payee/Depositor

RULE 114E of the Income-tax Rules, 1962 mandates you to file Form 61A within 31^st May 2017 Since extended to 30th June 2017

Cash Transactions for which details needs to submitted by 31.05.2017
a)	Amount Transaction Exceeding Rs. 50,000/-
	1. Payment in cash to hotels or restaurant against a bill or bill at any one time
	2. Payment in cash for foreign travel or purchase of foreign exchange
	3. payment to a mutual Fund for unit purchase
	4. payment for acquiring bounds or debenture issued by a company or institution
	5. payment to RBI for acquiring Bonds issued by RBI
	6. Deposit with banking company or a co-operative bank in a day
	7. payment in a day for purchase of bank drafts or pay order or bankers cheque
	8. Time deposit in a day with
	(i) Banking company or a co-operative bank
	(ii) Post Office
	(iii) A Nidhi
	(iv) NBFC
	9. Pre-paid payment document as defined by RBI
	10. Payment as Life Insurance premium in a year
b)	Exceeding Rs. 1 Lakh Per transaction
	1. Contract for sale or purchase of securities (other than shares)
	2. Sale or purchase of share of utilised companies
c)	Exceeding Rs. 2 Lakh Per transaction
c)	Sale or purchase by any person of goods or services of any nature
d)	Exceeding Rs. 10 Lakh or valued by stamp valuing authority
d)	Sale or purchase by any person of any immovable property

S. no.	Section	Particulars	Cap on cash transaction	Penalty for cash transaction
1	13A	Exemption to political parties	Receipt of cash donation above Rs 2,000	No exemption
2	35AD	Investment linked deduction for capital expenditure	Payment above Rs 10,000 for any capital expenditure	No deduction
3	40A(3)	Disallowance for cash expenditure	Payment of any expenditure above Rs. 10,000	No deduction
3			Payments for plying, hiring or leasing of goods carriage above Rs 35,000
4	43(1)	Determination of actual cost of asset	Payment above 10,000 for purchase of asset	Such payment won't be included in actual cost of asset (viz, No depreciation)
5	80D	Health Insurance premium	No cash payment allowed	No deduction
6	80G	Donations to certain funds and charitable institutions	Donations above Rs. 2,000	No deduction
4	80GGA	Donations for scientific research or rural development.	Cash donation above Rs. 10,000	No deduction
5	80GGB	Donations by companies to political parties.	No cash payment allowed	No deduction
6	80GGC	Donations by any person to political parties	No cash payment allowed	No deduction
7	269SS	Prohibition on acceptanceof cash loans, deposits, etc.	Rs. 20,000 or more	100% of amount received
8	269ST	Prohibition on receiving cash	Rs. 2,00,000 or more	100% of amount received
9	269T	Prohibition on repayment of loans or deposits in cash	Rs. 20,000 or more	100% of amount paid

Sl.	NATURE OF TRANSACTION	MANDATORY QUOTING OF PAN (RULE 114B)
Sl.	NATURE OF TRANSACTION	Existing requirement	New requirement
1.	Immovable property	i) Sale/ purchase valued at Rs.5 lakh or more	i) Sale/ purchase exceeding Rs.10 lakh; ii. Properties valued by Stamp Valuation authority at amount exceeding Rs.10 lakh will also need PAN.
2.	Motor vehicle (other than two wheeler)	All sales/purchases	No change
3	Time deposit	Time deposit exceeding Rs.50,000/- with a banking company	i. Deposits with Co-op banks, Post Office, Nidhi, NBFC companies will also need PAN; ii. Deposits aggregating to more than Rs.5 lakh during the year will also need PAN
4	Deposit with Post Office Savings Bank	Exceeding Rs.50,000/-	Discontinued
5	Sale or purchase of securities	Contract for sale/purchase of a value exceeding Rs.1 lakh	No change
6	Opening an account (other than time deposit) with a banking company.	All new accounts.	i. Basic Savings Bank Deposit Account excluded (no PAN requirement for opening these accounts); ii. Co-operative banks also to comply
7	Installation of telephone/ cellphone connections	All instances Discontinued
8.	Hotel/restaurant bill(s)	Exceeding Rs.25,000/- at any one time (by any mode of payment)	Cash payment exceeding Rs.50,000/-.
9	Cash purchase of bank drafts/ pay orders/ banker’s cheques	Amount aggregating to Rs.50,000/- or more during any one day	Exceeding Rs.50,000/- on any one day.
10.	Cash deposit with banking company	Cash aggregating to Rs.50,000/- or more during any one day	Cash deposit exceeding Rs.50,000/- in a day.
11	Foreign travel	Cash payment in connection with foreign travel of an amount exceeding Rs.25,000/- at any one time (including fare, payment to travel agent, purchase of forex)	Cash payment in connection with foreign travel or purchase of foreign currency of an amount exceeding Rs.50,000/- at any one time (including fare, payment to travel agent)
12	Credit card Application	to banking company/ any other company/institution for credit card	No change. Co-operative banks also to comply.
13	Mutual fund units	Payment of Rs.50,000/- or more for purchase	Payment exceeding Rs.50,000/- for purchase.
14	Shares of company	Payment of Rs.50,000/- or more to a company for acquiring its shares	i. Opening a demat account; ii.Purchase or sale of shares of an unlisted company for an amount exceeding Rs.1 lakh per transaction.
15	Debentures/ bonds	Payment of Rs.50,000/- or more to a company/ institution for acquiring its debentures/ bonds	Payment exceeding Rs.50,000/-.
16	RBI bonds	Payment of Rs.50,000/-or more to RBI for acquiring its bonds	Payment exceeding Rs.50,000/-.
17	Life insurance premium	Payment of Rs.50,000/- or more in a year as premium to an insurer	Payment exceeding Rs.50,000/- in a year.
18	Purchase of jewellery/bullion	Payment of Rs.5 lakh or more at any one time or against a bill	Deleted and merged with next item in this table
19	Purchases or sales of goods or services	No requirement	Purchase/ sale of any goods or services exceeding Rs.2 lakh per transaction.
20	Cash cards/ prepaid instruments issued under Payment & Settlement Act	No Requirement	Cash payment aggregating to more than Rs.50000/- in a year

CBDT Directive regarding Grant of TDS Credit in mismatched cases........Instructions No.275/29/2014-IT-(B)(01-06-2015)

CBDT Directive For Expeditious Disposal Of S. 154 Rectification Applications During FY 2015-16

The CBDT has addressed a letter dated 5th June 2015 expressing concern that the rectification applications u/s 154 filed by the taxpayers before the field officers are not being dealt with promptly. It is pointed out that the Citizen’s Charter of the Department requires that applications for rectification are to be disposed of within two months from the end of the month in which application is received. The CBDT has directed that all rectification applications that were received up to 31″ March 2015 should be disposed of on or before 20th June 2015. It I stated that the Income-tax Department is committed to prompt redressal of taxpayer grievances and all the officers of the Department are expected to take lead in fulfilling this commitment.

CBDT Circular No. 9 Dated 9^th June 2015

CBDT revises guidelines on condonation of delay in filing returns claiming refund or carry forward of loss and set-off

CBDT has vide Notification No. 41/2015 Dated 15.04.2015 notified Form ITR-1, ITR-2 and ITR-4S for Assessment Year 2015-16 i.e Financial Year 2014-15. The Notification also made Several Change in Rule 12 of Income Tax Rules, 1962 which is related to Condition of Filing of Income Tax Return. A brief summary of Changes is as follows :-

General

1) ITR-1 (SAHAJ) & ITR-4S (Sugam) cannot be filed by individual who has earned any income from source outside India.

2) Introduction of EVC for verification of return of income filed as an option to send ITR-V to CPC, Bangalore.

3) Super Senior citizen are now allowed to file ROI in paper form even though their income exceed Rs 5 lakhs subject to other conditions.

ITR-1

1) Introduction of furnishing Aadhar Card Number in ROI. Which will be used for EVC system introduced as mentioned above.

2) Details of all bank accounts with Bank name, IFSC Code, Name of Joint Holder, if any, Account number, Account balance as on 31.03.2015 mandatorily to be provided. Even those accounts which are closed during the year.

ITR-2

1) Introduction of furnishing Aadhar Card Number in ROI. Which will be used for EVC system introduced as mentioned above.

2) Details of Foreign Travel made if any (For resident and nonresident both) includes, Passport No, Issued at, name of country, number of times travelled and expenditure

3) Details of utilization of amount deposited in capital gain account scheme for years preceding to last two assessment years. Particulars asked include year of utilization, amount utilized, amount unutilized lying idle in capital gain account scheme till the date of filing of return of income.

4) In case of LTCG & STCG not chargeable to tax to Non-resident on account of DTAA benefit, It is required to furnish Country name, Article of DTAA, TRC obtained or not?,

5) For Non-resident, Income from other sources, If any income chargeable to tax at special rate provided in DTAA, It is now required to provide details of Name of Country, Relevant article of DTAA, Rate of Tax, Whether TRC obtained or not?, Corresponding rate of tax under income tax act.

6) Details of all bank accounts with Bank name, IFSC Code, Name of Joint Holder, if any, Account number, Account balance as on 31.03.2015 mandatorily to be provided. Even those accounts which are closed during the year.

7) In schedule FA- Foreign assets disclosure, Following details added.

a) Foreign Bank accounts details: It is now further require to furnish Account number, account opening date, Interest/income accrued from such account, If any along with details of head of income and schedule under which such income is shown, if offered to tax in India.

b) In similar manner, details of income from Financial interest in any entity outside India along with details of income offered to tax in ITR-2 from such income.

c) Similar disclosure requirement is also required for Immovable property outside India, capital asset held outside India, trust held outside India.

ITR-4S

1) Introduction of furnishing Aadhar Card Number in ROI. Which will be used for EVC system introduced as mentioned above.

To read a copy of the notification click here:

http://www.incometaxindia.gov.in/communications/notification/notification41_2015.pdf

CBDT Circular On Non-Chargeability Of Interest U/s 234A On S. A. Tax

The CBDT has issued Circular No. 2/2015 dated 10.02.2015 on the issue of chargeability of interest u/s 234A of the Income-tax Act, 1961 on self-assessment tax paid before the due date of filing the return of income. The CBDT has pointed out that in CIT vs. Prannoy Roy 309 ITR 231 (SC), the Supreme Court has held that interest u/s 234A of the Act on default in furnishing return of income shall be payable only on the amount of tax that has not been deposited before the due date of filing the return for the relevant assessment year. The CBDT has accordingly reviewed the present practice of charging interest u/s 234A of the Act on self-assessment tax paid before the due date of filing the return of income. The CBDT has decided that no interest u/s 234A of the Act is chargeable on the amount of self-assessment tax paid by the assessee before the due date of filing the return of income.

Rashmikant Kundalia vs. UOI (Bombay High Court)

S. 234E: The late filing of TDS returns by the deductor causes inconvenience to everyone and s. 234E levies a fee to regularize the said late filing. The fee is not in the guise of a tax nor is it onerous. The levy is constitutionally valid

CIRCULAR NO. 1/2014 [, DATED 13-1-2014

Subject: TDS under Chapter XVII-B of the Income-tax Act, 1961 on service tax componentcomprised in the payments made to residents - clarification regarding

The Board had issued a Circular No.4/2008 dated 28-04-2008 wherein it was clarified that tax is to be deducted at source under section 194-I of the Income-tax Act, 1961 (hereafter referred to as 'the Act'), on the amount of rent paid/payable without including the service tax component. Representations/letters has been received seeking clarification whether such principle can be extended to other provisions of the Act also.

2. Attention of CBDT has also been drawn to the judgement of the Hon'ble Rajasthan High Court dated 1-7-2013, in the case of CIT (TDS) Jaipur v. Rajasthan Urban Infrastructure (Income-tax Appeal No.235, 222, 238 and 239/2011), holding that if as per the terms of the agreement between the payer and the payee, the amount of service tax is to be paid separately and was not included in the fees for professional services or technical services, no TDS is required to be made on the service tax component u/s 194J of the Act.

3. The matter has been examined afresh. In exercise of the powers conferred under section 119 of the Act, the Board has decided that wherever in terms of the agreement/contract between the payer and the payee, the service tax component comprised in the amount payable to a resident is indicated separately, tax shall be deducted at source under Chapter XVII-B of the Act on the amount paid/payable without including such service tax component.

4. This circular may be brought to the notice of all officer for compliance

Point to Ponder

Income Tax Act 1961

CBDT Directive For Expeditious Disposal Of S. 154 Rectification Applications During FY 2015-16

CBDT Circular No. 9 Dated 9th June 2015

CBDT Circular On Non-Chargeability Of Interest U/s 234A On S. A. Tax

Rashmikant Kundalia vs. UOI (Bombay High Court)

CBDT Circular No. 9 Dated 9^th June 2015