Skip to main content


Showing posts from May, 2016

income accruing to foreign e-commerce companies from India

In order to tap tax on income accruing to foreign e-commerce companies from India, the Finance Act 2016 said a person making payment to a non-resident (who does not have a permanent establishment) exceeding in aggregate Rs 1 lakh in a year will withhold tax at 6 per cent of gross amount paid, as equalisation levy.The levy will only apply to business to business transactions.The salient features of this Equalisation Levy is as under:-* It is to tax the e-commerce transaction/digital business which is conducted without regard to national boundaries.* The equalization levy would be 6% of the amount of consideration for specified services received or receivable by a non-resident not having permanent establishment (‘PE’) in India, from a resident in India who carries out business or profession, or from a non-resident having permanent establishment in India.* Specified services means online advertisement, any provision for digital advertising space or any other facility or service for the p…

Annual Return under Service Tax (Applicable w. e. f. 01.04.2016):

Annual Return under Service Tax (Applicable w. e. f. 01.04.2016):Rule 7, 7B and 7C of Service Tax Rules 1994 are being amended to provide for filing of annual return by assessee. The important points are as under:(i)       This return shall be in addition to the half yearly returns filed by the assessee;(ii)       The due date for filing the annual return is 30th November of succeeding financial year;(iii)       Annual return can be revised within one month from the date of filing of return;(iv)      Late filing fees for delay in filing the annual return is Rs. 100/- per day for the period of delay, subject to maximum amount of Rs. 20,000/-;(v)      The format for the same shall be prescribed separately. Further, assessee or a class of assessee exempted from filing the annual return shall also be notified separately.

CBDT Ciruclars

CBDT Circular No. 20/2016 dated 27-5-2016
Extension of time-limit for e-filing of CIT(A) appeals to mitigate taxpayers' inconvenience Appeal due on or before May 15, 2016 can be filed upto June 15, 2016 without being treated as delayed appealsEVC functionality for verification of e-appeals was made operational from May 12, 2016 for individuals and from May 19, 2016 for other personsThe word limit for filing grounds of appeal and mapping of jurisdiction of CIT(A) also caused grievance in some casesCBDT Press Release dated 27-5-2016
Implementation of General Anti Avoidance Rule Provisions- Issuance of Guidance Note-Comments of the Stakeholders
CBDT Clarification dated 26-5-2016
Clarifications for implementation of FATCA and CRSCBDT issues FATCA/CRS clarification, allows account holders' self-certification through internet banking platform CBDT issues further clarifications for implementation of FATCA and CRS pursuant to consultation hel…

High Value Financial transaction Information collected by Income tax

Annual Information Return (AIR) of 'high value financial transactions' is required to be furnished under section 285BA of the Income-tax Act, 1961 by 'specified persons' in respect of 'specified transactions' registered or recorded by them during the financial year. The due date of filing of the return is the 31st of August of the following year. The 'specified persons' and the 'specified transactions' are listed in Rule 114E of the Income-tax Rules, 1962. Briefly, these are as under:

Sl. No. (1)Class of Person(2)Nature and Value of transaction(3)Clarifications by Central Board of Direct Taxes vide Circular No.07/2005 dated 24thAug, 2005(4)1.A Banking Company to which the Banking Regulation Act, 1949(10 of 1949), applies (including any bank or banking institution referred to in section 51 of that Act).Cash deposits aggregating to ten lakh rupees or more in a year in any savings account of a person maintained in that bankOnly the aggregate of all …

Draft Indirect Transfer Rules

CBDT notifies draft rules for determination of Fair Market Value (FMV)  and reporting requirement for Indian concerns in respect of indirect transfer provisions u/s 9(1) ; Sec 9(1) states  'share or interest is said to derive its value substantially from assets located in India, if fair market value (FMV) of assets located in India comprise at  least 50% of the FMV of total assets of the company or entity'; Draft  rules introduce 11 areas of reporting by Indian company ; CBDT seeks comments on draft rules by May 29

Unique Warehouse Code

Allotment of Unique Warehouse Code for Customs Bonded Warehouses The Central Board of Excise and Customs ("the CBEC") vide Circular No. 19 /2016 –Customs dated May 20, 2016 has informed that in terms of changes made in Finance Act, 2016 in regard to shifting towards a record based control with respect to Bonded Warehouses, it is proposed that each Warehouse be allotted a Unique Warehouse Code so that importers can at the into-bond bill of entry stage declare the Warehouse in which goods shall be deposited. In this respect a module has been developed in ICES to capture details of Customs Bonded Warehouses licensed in each Commissionerate and to generate a Warehouse Code in the system. Further, any formation of Central Excise having control over a Customs Bonded Warehouse but not connected on ICES are directed to forward the list of Warehouses licensed by them to the Principal Commissioner/ Commissioner of Customs having jurisdiction over the nea…


*SALARIED EMPLOYEES TO SUBMIT PROOF FOR LTA, HRA CLAIMS*The CBDT (Central Board of Direct Taxes) has introduced a new form (Form 12 BB) for claiming tax deduction towards LTA, LTC, HRA & interest paid for home loans. The new form mandates people to furnish proof of travel while claiming LTA, LTC, and details of landlord in case of HRA claims. Let us understand this in detail:-*Why this Rule?*The main reason behind introducing this rule is to plug the loopholes under tax laws by tightening the entire procedure for claiming these tax exemptions. This becomes more important because there was no standard or prescribed format until now for filing these declarations. And in the Budget 2015, the Finance Act had already introduced Section 192(2D) of the Income Tax Act mandating employers to collect all necessary evidences, but the rules and form were yet to be prescribed. The same has been done now.*What is this form about?*The declaration needs to be filed for claiming deductions in a pr…

Clarification on Arbitral Tribunal

Clarification regarding leviability of Service tax in respect of services provided by arbitral tribunal and members of such tribunal In accordance with Notification No. 30/2012-ST dated June 20, 2012, Services provided or agreed to be provided by an arbitral tribunal to a business entity (turnover exceeding Rs 10 lakh) located in the taxable territory, is taxable under reverse charge mechanism. Further, In the Budget 2016-17, the Entry No. 6(c) of the Notification No. 25/2012-ST dated June 20, 2012 has been omitted with effect from April 1, 2016, which read as: "Services provided by a person represented on an arbitral tribunal to an arbitral tribunal." Now, it has come to the notice of the Board that there is some confusion regarding the legal position with respect to continuance of reverse charge mechanism for services provided by arbitral tribunals and individual arbitrators on the arbitral tribunal, with effect from April 1, 2016 Therefore the Board explains that…

MCA : *Special Courts Notified*

MCA : *Special Courts Notified*In exercise of the powers conferred by sub-section (3) of section 1 of the Companies Act, 2013 (18 of 2013), the Central Government hereby appoints the 18th day of May, 2016 as the date on which the provisions of clause (iv) of sub-section (29) of section 2, sections 435 to 438 (both sections inclusive) and section 440 of the said Act shall come into force.

Finance Bill, 2016 assented to by President

Finance Bill, 2016 assented to by President
The Finance Bill was presented in the Lok Sabha on February 29, 2016. On May 5, 2016, the Lok Sabha passed the Finance Bill, 2016 and later on it was approved by the Rajya Sabha.The Finance Bill, 2016 received the presidential assent on May 14, 2016. Now it becomes the Finance Act, 2016 (28/2016).

*Pre-Multipurpose Empanelment Form

*Pre-Multipurpose Empanelment Form (P-MEF)* for the year 2016-17 is now hosted at MEFICAI website. The status of your firm as on 01.01.16 has been updated in your concerned Regional office. However, if you find any deviation from your actual status, kindly ensure that your status is updated on or before 25th May, 2016 with your concerned Regional Office. Soon after this MEF data verification process, MEF will be hosted at

India, Mauritius plug loopholes in tax treaty

Press Information Bureau
Government of India
Ministry of Finance
10-May-2016 18:12 IST India and Mauritius sign the Protocol for amendment of the Convention for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and Capital Gains

            The Protocol for amendment of the Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital gains between India and Mauritius was signed by both countries today at Port Louis, Mauritius. The key features of the Protocol are as under: i.          Source-based taxation of capital gains on shares:With this Protocol, India gets taxation rights on capital gains arising from alienation of shares acquired on or after 1st April, 2017 in a company resident in India with effect from financial year 2017-18, while simultaneously protection to investments in shares acquired before 1st April, 2017 has also been provided. Fur…

Key Changes in Service Tax

1.    Krishi Kalyan Cess @ 0.5% on gross value of taxable services (from 01.06.2016) Total ST rate @ 15%

2.    AC Bus service by Road Transport Corporation taxable @ 6% (from 01.06.2016)

3.    Rate of ST for the package tour increased from 3.625% to 4.35%

4.    ST on foreman commission at 10.15%

5.    Rate of ST for sale of flats increased from 3.625% to 4.35%

6.    Rate of ST for transport of goods by Rail in container other than by IR increased from 4.35% to 5.8%

7.    Rate of ST for transport of used household increased from 4.35% to 5.8%

8.    Assignment of radio-frequency spectrum and subsequent transfers thereof taxable

9.     Senior advocate service liable to service tax.

10.  Transport of passengers ropeway, cable car or aerial tramway made liable for ST

11.Interest rate reduced to 15% (if ST not collected) and 24% (if ST collected)

12.Due date for issue of SCN extended from 18 months to 30 months

13.The monetary limit for prosecution cases enhanced to Rs.2 Crores.


The Insolvency and Bankruptcy Code at a Glance

The Insolvency and Bankruptcy Code at a glance
Lok Sabha has passed the Insolvency and Bankruptcy Code 2016 on May 05, 2016. It covers individuals, companies, limited liability partnerships and partnership firms. The new code will speed up the resolution process for stressed assets in the country. It attempts to simplify the process of insolvency and bankruptcy proceedings. The highlights of bankruptcy code are enumerated hereunder: 1.Strict deadlines : Authority to decide insolvency applications within 180 days further, an extension of additional 90 days can be allowed 2.Fast track Insolvency process: Fast track process is available for Corporate- Debtor with low income and assets, Specified class of creditors and any other category notified by Govt. Under fast track process, 90 days time-limit to complete whole process and further an extension of 45 days is allowed 3.Adjudicating Authority:     - NCLT for Corporates     - DRTs for Individuals and Partnerships Firms …

Procedure for TCS/ TDS return filing in the ITD e-filing portal

Procedure for TCS/ TDS return filing in the ITD e-filing portal With effect from 1st May 2016, the online submission of Quarterly TDS/TCS statements will be discontinued at TIN-NSDL website. The Deductors who desires to upload the Quarterly TDS/TCS e-Returns online, shall upload the same at e-Filing Portal of ITD.  The Deductor must have registered the TAN at ITD's e-Filing Portal using a valid Digital Signature Certificate. To know detailed procedure on how to register as 'Tax Deductor and Collector' please read this booklet. Once the Tax Deductor and Collector login is created, user can upload the Quarterly TDS/TCS statements as described below: Visit ITD's e-filing home page (ITD e-filing) and login using TAN and PasswordAfter successful login, go to TDS menu >> Upload TDSIn the form provided select the appropriate statement details, viz. FVU Version, Financial Year, Form Name, Quarter and Upload Type (Regular / Correction) and ver…

Lok Sabha Passed the Finance Bill,2016

Changes in the Finance Bill 2016 as passed by the Lok Sabha
On May 5, 2016, the Lok Sabha passed the Finance Bill. The Bill which was presented originally in the Lok Sabha on February 29, 2016 has not been passed in its original shape. Various changes have been made in the Bill. New amendments have been proposed. Some earlier proposed amendments have been removed, so on and so forth. A snippet of all changes made in the Finance Bill, 2016 as passed by the Lok Sabha viz-a-viz the Finance Bill, 2016 presented originally in the Lok Sabha are presented hereunder. 1. Unlisted shares held for 24 months or less would be treated as short-term capital asset As per section 2(42A) of the Income-tax Act, any capital asset held by the taxpayer for a period of not more than 36 months immediately preceding the date of its transfer is treated as short-term capital asset. The aforesaid period of 36 months is treated as 12 months in case of shares held in a company. However, an amendment was …