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CBDT has amended Sec. 44AD

New Delhi, 19th December, 2016.Press Release
Measures for Promoting Digital Payments & Creation of Less-Cash Economy
Under the existing provisions of section 44AD of the Income-tax Act, 1961 (the Act), in case of certain assesses (i.e. an individual, HUF or a partnership firm other than LLP) carrying on any business (other than transportation, agency, brokerage and commission) and having a turnover of Rupees Two Crore or less, the profit is deemed to be 8% of the total turnover.
In order to achieve the Government's mission of moving towards a less cash economy and to incentivise small traders / businesses to proactively accept payments by digital means, it has been decided to reduce the existing rate of deemed profit of 8% under section 44AD of the Act to 6% in respect of the amount of total turnover or gross receipts received through banking channel / digital means for the financial year 2016-17. However, the existing rate of deemed profit of 8% referred to in section 44AD of th…

Pradhan Mantri Garib Kalyan Deposit Scheme (PMGKDS), 2016?

*1. What is Pradhan Mantri Garib Kalyan Deposit Scheme (PMGKDS), 2016?*Pradhan Mantri Garib Kalyan Deposit Scheme (PMGKDS), 2016 is a scheme notified by the Government of India on December 16, 2016 which is applicable to every declarant under the Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana, 2016.*2. Who is eligible to deposit in PMGKS?*The deposit under this Scheme shall be made by any person who declared undisclosed income under sub-section (1) of section 199C of the Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana, 2016.*3. In what form will the deposits under this scheme be held?*The Deposits shall be held at the credit of the declarant in Bond Ledger Accounts (BLA) maintained with Reserve Bank of India.*4. Who are the authorized agencies where the application and amount of deposit will be accepted?*Application and amount for the deposit (in the form of Bond Ledger Account) shall be received by any banking company to which the Banking …

Tax incentive for cash less transaction

Tax incentive for cash less transaction: Deemed profit to be reduced from 8% to 6% u/s 44 AD:New Delhi, 19th December, 2016.
Press ReleaseMeasures for Promoting Digital Payments & Creation of Less-Cash EconomyUnder the existing provisions of section 44AD of the Income-tax Act, 1961 (the Act), in case of certain assesses (i.e. an individual, HUF or a partnership firm other than LLP) carrying on any business (other than transportation, agency, brokerage and commission) and having a turnover of Rupees Two Crore or less, the profit is deemed to be 8% of the total turnover.In order to achieve the Government's mission of moving towards a less cash economy and to incentivise small traders / businesses to proactively accept payments by digital means, it has been decided to reduce the existing rate of deemed profit of 8% under section 44AD of the Act to 6% in respect of the amount of total turnover or gross receipts received through banking channel / digital means for the financial yea…

CAG Empanelment

Online Applications are invited from Chartered Accountant firms/LLPs who desire to be empanelled with the office of the Comptroller and Auditor General of India for appointment as auditors of Government Companies/Corporations for the year 2017-18 from 1st January 2017 to 15th February 2017. For more details visit www.saiindia.gov.in

Taxation Laws (Second Amendment) Act,2016

Ministry of Finance16-December, 2016 18:17 IST Taxation Laws (Second Amendment) Act, 2016 came into force yesterday i.e. 15th December, 2016 and rules notified today and placed in public domain; The Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana, 2016 introduced under the said Act to commence from tomorrow i.e.17th December, 2016 and to remain open for declarations up to 31st March, 2017.

The Taxation Laws (Second Amendment) Act, 2016 has come into force on 15th December, 2016.  The Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana, 2016 (the Scheme) introduced vide the said Act shall commence on 17th December, 2016 and shall remain open for declarations up to 31st March, 2017. The rules in this regard have been notified vide Notification No.116 dated 16th December, 2016 and have been placed in public domain. A separate notification has been issued for Pradhan Mantri Garib Kalyan Deposit Scheme, 2016 by Department of Econ…

The CBDT has issued Circular No. 40/2016

The CBDT has issued Circular No. 40/2016 dated 9th December 2016 directing Assessing Officers not to reopen assessments of earlier years u/s 147 of the Act merely because there is an increase in turnover of the present year because of the adoption by the assessee of digital means of payment. The CBDT has pointed out that such move would cause “undue harassment” to the taxpayers

Service tax Exemption Notification

No service tax on credit, debit card transactions up to 2,000The Government will waive service tax on debit and credit card transactions of up to Rs. 2,000 to promote digital transactions amid cash crunch following the withdrawal of old Rs. 500 and 1,000 banknotes. The Government has decided to "exempt services by an acquiring bank to any person in relation to settlement of an amount up to Rs. 2,000 in a single transaction through credit, debit card or other payment card service", sources said. A notification to this effect will be tabled by Finance Minister Arun Jaitley in Parliament. Following demonetisation of old high value notes, there has been a cash crunch in the country as people have been making a beeline for banks and ATMs to withdraw new currency. The Government has been taking steps to promote cashless or digital transactions to take India towards a less-cash economy. Recently, the Government asked banks to install additional 10 lakh PoS terminals …

Circular on ;OIDAR

Ministry of Finance11-November, 2016 21:01 IST To provide a level playing field to Indian service providers, the exemption given to service providers located in foreign territory but providing taxable online information and database access or retrieval [OIDAR] services including electronic services in India, is being withdrawn with effect from 1st December, 2016

With a view to provide a level playing field to Indian service providers providing taxable online information and database access or retrieval [OIDAR] services including electronic services in India, the exemption to such services provided in India by service providers located in foreign territory is being withdrawn with effect from 1st December, 2016. Thus cross border business to consumer [B2C] OIDAR services provided by a foreign service provider to a person in India will become taxable from 1st December, 2016 onwards. The salient features of this levy are as under: ·A simplified online mechanism of taki…

Service tax on AC Restaurants is Unconstitutional

Service Tax on AC Restaurants is unconstitutionalNovember 24, 2016[2016] 75 taxmann.com 272 (Kerala) Service Tax : Levy of service tax on Air Conditioned Restaurants is unconstitutional since when food is supplied as part of any service, such transfer would be deemed as sale. Thus, there is no component of service which could be charged to service tax when food is supplied by Air Conditioned Restaurant • The Kerala High Court held that levy of service tax on air conditioned restaurants is unconstitutional. It relied on its own judgment in case of Kerala Classified Hotels & Resorts Association v. Union of India [2013] 35 taxmann.com 568 (Kerala) where it was held that the Article 366(29A)(f) of the Constitution empowers the State Governments to impose sales tax on supply of goods, whether it is by way of or as a part of any service and when food is supplied as part of any service, such transfer would be deemed to be a sale. Thus, there is no component of …

FAQ on PMGKY

FAQs on Pradhan Mantri Garib Kalyan Yojana   The Government has announced demonetization of existing currency of Rs. 500/1000 with effect from the 9th November, 2016. However, concerns have been raised that some of the existing provisions of the Income-tax Act, 1961 ('Act') could possibly be used for concealing black money. So, the Government has introduced Taxation Laws (Second Amendment) Bill, 2016 in the Lok Sabha to amend the provisions of Income-Tax Act. The Bill was also cleared in the Lok Sabha.   The Government has announced Pradhan Mantri Garib Kalyan Yojana 2016 (PMGKY) in the Taxation Laws (Second Amendment) Bill, 2016. As per this PMGKY black money deposited in banks or held in cash can be offered for taxation at 49.9% (i.e., 30% tax, 9.9% surcharge and 10% penalty).

Strict Action against Tax Evaders using other persons’ Bank Accounts to convert their Black Money

Press Information Bureau 
Government of India
Ministry of Finance
18-November-2016 16:23 ISTStrict Action against Tax Evaders using other persons’ Bank Accounts to convert their Black Money into New Denomination Notes; 
Person(s) who allows His Or Her Bank Account to be misused for this purpose can be Prosecuted for Abetment under Income Tax Act; Government appeals to people NOT to come in the Lure of Black Money Converters and be a Partner in this Crime of Converting Black Money into White through this method and help join the Government in eradicating it. It was announced by the Government earlier that small deposits made in the banks by artisans, workers, housewives, etc. would not be questioned by the Income Tax Department in view of the fact that present exemption limit for income tax is Rs. 2.5 lakh. There are some reports received that some people are using other persons’ bank accounts to convert their black money into new denomination notes for which reward is also being given…

ICAI members PAN update Only required for Practicing Members

This refers to the earlier announcements of ICAI regarding the updation of PAN details by the members in the Institute’s records to avoid blocking of e-filing account by the Income Tax Department. Inspite of the earlier said announcements and reminder emails sent from time to time, it has been observed that many members have still not updated their PAN details in the Institute’s record. It is pertinent to mention that in the recent past the Income Tax authorities have blocked the e- filing accounts of the members who either have not submitted their PAN details to the Institute or of those, in whose cases discrepancies have been found between records as available with the Institute and the database of the Income Tax Department on account of the mismatch in ‘Name’/ ‘PAN No.’ / ‘Date of Birth’. These blocked accounts have been reactivated after a lot of efforts by the Office as during this period members had to face lot of hardships. To avoid such a situation in future, we urgently appea…

CBDT Directive On Scope Of Disallowance U/s 40(a)(i) For Failure To Deduct TDS U/s 195 On Payment To Non-Residents

CBDT Directive On Scope Of Disallowance U/s 40(a)(i) For Failure To Deduct TDS U/s 195 On Payment To Non-ResidentsThe CBDT has issued a letter dated 26.10.2016 in which it has drawn attention to its Circular No 3/2015 dated 12.2.2015. In the said Circular it was clarified that for the purpose of making disallowance of “other sums chargeable” under Section 40(a)(i) of the Income-tax Act, 1961, in the case of non-residents, the appropriate portion of the sum chargeable to tax under the Act, i.e. income component therein shall form the basis of such disallowance. The CBDT has noted that this Circular is not being kept in view by administrative Commissioners & Commissioners (Appeal) while filing further appeals and while deciding cases. Further, the Circular is not kept in view by departmental representatives in ongoing litigation cases, who still take a position that the disallowance should be based on the gross amount of offshore payments such as purchases. The CBDT has directed the…

CBEC ON EPCG

CBEC Instructions for Rationalization of procedures reg. handling exporters obligations under EPCG authorizationsThe CBEC has instructed to further rationalize the procedures reg. handling exporters obligations under EPCG authorizations to ensure transparent random selection criteria and selection for 5% check being made at least at Joint/Additional Commissioner level and the relevant exporter being invariably informed, on the date of selection itself, via official email communication that its case is selected for detailed checks. Also CBEC has reiterated to ensure credibility and transparency in the Bond cancellation process by making the process speedier and that the exporter should not be asked to routinely produce information that can be sourced from the Customs EDI system.CBEC Instructions dt. 14 Oct. 2016 F.No.605/71/2015-DBK 1. The undersigned is directed to say that as a part of further rationalizing procedures and avoiding duplication of work based on …

Form 68

Form No. 68 notified to get immunity from penalty for underreporting and misreporting of incomeOctober 7, 2016 INCOME-TAX (TWENTY FIFTH AMENDMENT) RULES, 2016 - INSERTION OF RULE 129 AND FORM NO.68NOTIFICATION NO. SO 3150(E) [NO.90/2016 (F.NO.370142/26/2016-TPL)], DATED 5-10-2016In exercise of the powers conferred by section 295 read with sub-section (2) of section 270AA of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:—1. (1) These rules may be called the Income-tax (25th Amendment) Rules, 2016.(2) They shall come into force on the 1st day of April, 2017.2. In the Income-tax Rules, 1962 (hereinafter referred to as the said rules), after rule 128, following rule shall be inserted, namely:—"129. Form of application under section 270AA.— An application to the Assessing Officer to grant immunity from imposition of penalty under section 270A…

ST Arrest Guidelines

Revised Guidelines of CBEC for arrest in relation to Service Tax offences punishable under the Finance Act, 1994 and Central Excise Act, 1944The CBEC has issued revised guidelines for arrest in relation to Service Tax offences punishable under the Finance Act, 1994 and Central Excise Act, 1944, while emphasizing careful examination of the legal and factual aspects  before proceeding with arrest, as under:CBEC Circular No. 201/11/2016-Service Tax dt. 30 Sept. 2016 F.No. 137/47/2013-Service Tax1. I am directed to draw your attention to the fact that the arrest provisions in Service Tax were introduced with effect from 10.05.2013 vide sub-sections (J) and (K) of section 103 of the Finance Act, 2013 which introduced sections 90 and 91 in the Finance Act, 1994 and also amended section 89 of the Finance Act 1994. Vide sections 155, 156 and 157 of the Finance Act 2016, with effect from 14.05.2016, sections 89, 90 and 91 of the Finance Act, 1994 have been amended. As…

CBDT notifies ICDS

CBDT notifies ICDS to be applicable w.e.f. AY 2017-18 for all assesses other than individual & HUF (who are not under audit u/s 44AB) following mercantile system of accounting.It also amends Form 3CD w.e.f. 1st April 2017 to incorporate compliance of ICDS.

SC on Service Tax Audit

Apex Court stays Delhi HC's judgment of 'Mega Cabs' on service tax audit September 30, 2016[2016] 73 taxmann.com 402 (SC) Service Tax : Judgment of Delhi High Court quashing rule 5A(2) of Service Tax Rules, 1994 and holding service tax audits as invalid, has been stayed by Supreme Court; hence, for time being, service tax audits may continue■■■ [2016] 73 taxmann.com 402 (SC) SUPREME COURT OF INDIA Union of Indiav.Mega Cabs (P.) Ltd.Madan B. Lokur AND DR. D. Y. CHANDRACHUD, JJ. Petition(s) for Special Leave to
Appeal (C) no(S). 26675 of 2016SEPTEMBER  26, 2016  Rule 5A , read with rule 5 of the Service Tax Rules, 1994 and sections 72, 72A, 73, 82 and 94(2)(k) of the Finance Act, 1994 - Audit - Service Tax - Submission of Records - Rule 5A(2) was amended w.e.f. 5-12-2014 authorising officers of Service Tax Department or audit party to seek production of documents on demand and Circulars 181/7/2014-ST a…

GST Council

Press Information Bureau
Government of India
Ministry of Finance
12-September-2016 19:01 IST Cabinet approves creation of GST Council and its Secretariat ; First Meeting of the GST Council to be held on 22nd and 23rd September, 2016 in national Capital.

The Constitution (One Hundred and Twenty-second Amendment) Bill, 2016, for introduction of Goods and Services Tax (GST) in the country was accorded assent by the President on 8th September, 2016, and the same has been notified as the Constitution (One Hundred and First Amendment) Act, 2016. As per Article 279A (1) of the amended Constitution, the GST Council has to be constituted by the President within 60 days of the commencement of Article 279A. The notification for bringing into force Article 279A with effect from 12th September, 2016 was issued on 10th September, 2016. As per Article 279A of the amended Constitution, the GST Council will be a joint forum of the Centre and the States. This Council shall …

CBDT extends 30st September-2016 Returns Filing Due Date to 17th October-2016

Dear Sir / Madam,CBDT extends 30st September-2016 Returns Filing Due Date to 17th October-2016Order Under section 119 of the Income tax Act 1961The last date for making declaration under the income Declaration scheme 2106 is 30th September which coincides with the last date of filling income tax by the tax payers whose accounts are audited and who are required to furnish the returns of income tax for assessment year 2016-2017 by 30th September, 2016 as per provisions of the section 139(1) of income tax Act,1961.In order to remover inconvenience and to facilitate ease pf compliance, the Central board of Direct Taxes, in exercise of the powers conferred under section 119 of the income tax Act, 1961, hereby extends the due date for furnishing such returns of the income from 30th September, 2016 to 17th October 2016 in case of the tax payers through out India, who are liable to furnish their income tax return by the said due date Deepshikha Sharma
Director to the Government of IndiaCopy t…

GST Bill- President's Assent

Dear Professional Colleague,GST Bill gets President's assent – Now becomes a lawThe Government's plan to roll out Goods and Services Tax ("GST") from April 1, 2017, has moved an inched closer to the reality with the Hon'ble President Shri. Pranab Mukherjee signing the Government's flagship Constitution (122nd Amendment) Bill, 2014 on GST ("GST Bill"), just a while ago. The much-awaited GST now becomes a law with President signing the GST Bill after more than 16 States (BJP-ruled Assam being the first one) ratified it.After being assented by the President, the GST Bill will be enacted as the Constitution (101st  Amendment) Act, 2016, to pave the way for much-awaited roll out of the landmark tax reform that will create a common national market of 1.25 billion people. GST, the biggest indirect tax reform since independence, is aimed at dismantling Inter-State barriers to trade in goods and services by subsuming a slew of around 17…

CBDT Circular on Foreign Shipping Companies

Streamlining the process of No Objection Certificate (NOC), Port Clearance Certificate (PCC), voyage return and voyage assessment in the case of Foreign Shipping Companies (FSCs) The CBDT vide Circular No. 30/2016 dt. 26 Aug. 2016 has streamlined the process for 'Port Clearance/ No Objection Certificates and Voyage Return/ Assessment' in the case of Foreign Shipping Companies. CBDT has received representations regarding procedural difficulties faced by foreign shipping companies in issuance of Port Clearance Certificate (PCC) required as per S. 172 of Income-tax Act, 1961, i.e. a self contained code for assessment of shipping business of non residents. it has been represented by the FSCs before the CBDT that no uniform practice is being followed by the port Assessing Officers in giving NOC for each voyage and also in making the voyage assessment in this regard. Further it is represented that at some of the ports, annual NOC issued by the jurisdicti…

Form 15G-H -Date Extended

CBDT extends due date for quarterly furnishing/ uploading of 15G/ 15H declarations The due date for quarterly furnishing of 15G/ 15H declarations received by the payer from 1 April, 2016 onwards and the manner for dealing with Form 15G/15H received by the payer during the period from 1 Oct. 2015 to 31 Mar. has already been specified by CBDT in Notification No.9/2016 dated 9June 2016. The CBDT has extended the due dates for uploading of Form 15G/ 15H received during the period 1 Oct. 2015 to 31 Mar. 2016 and also for the period from 1 April 2016 onwards, based on representations of stakeholders. as under: Sl. NoScenarios Original Due Date Extended Due Date 1 Form 15G /H received during the period from 1.10.2015 to 31.3.2016 30.06.2016 31.10.2016 2 Form 15G/15H declarations received during the period from 1.4.2016 to 30.6.2016 15.07.2016 31.10.2016 3 Form 15G/15H declarations received during the period from 1.7.2016 to 30.9.2016 15.10.2016 31.12.2016 However, the due dates for …

CBEC ON HIRING

CBEC Clarifies the issue of Service Tax Liability on Hiring of Goods without Transfer of 'Right to Use'of Goods
CBEC issues clarification on service tax liability in case of hiring, leasing, licensing of goods without the transfer of right to use them, as provided u/s 66E(f) of Finance Act; States that in such cases, it is essential to determine whether in terms of the contract, there is transfer of right to use goods and the criteria laid down by SC in BSNL should invariably be followed and applied; SC had inter alia laid down that (i) there must be goods available for delivery, (ii) there must be consensus ad idem as to their identity, (iii) transferee should have legal right to use the goods, (iv) such right should be to the exclusion of the transferor i.e. it should not be merely license to use the goods, and (v) during the period of transfer, owner cannot again transfer the same right to others; Further states that cases decided under Sales Tax / VAT legislati…

CBEC ON HIRING

CBEC Clarifies the issue of Service Tax Liability on Hiring of Goods without Transfer of 'Right to Use'of Goods
CBEC issues clarification on service tax liability in case of hiring, leasing, licensing of goods without the transfer of right to use them, as provided u/s 66E(f) of Finance Act; States that in such cases, it is essential to determine whether in terms of the contract, there is transfer of right to use goods and the criteria laid down by SC in BSNL should invariably be followed and applied; SC had inter alia laid down that (i) there must be goods available for delivery, (ii) there must be consensus ad idem as to their identity, (iii) transferee should have legal right to use the goods, (iv) such right should be to the exclusion of the transferor i.e. it should not be merely license to use the goods, and (v) during the period of transfer, owner cannot again transfer the same right to others; Further states that cases decided under Sales Tax / VAT legislati…