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Showing posts from June, 2016

PPF Account Premature Closure : Latest Rules & Eligibility Amount Calculation

June 22, 2016 | by Sreekanth Reddy
Public Provident Fund (PPF) is one of the best Debt oriented Saving options that are available in India. It is also one of the most tax-efficient financial instruments.
PPF Account has a lock-in period of 15 years.  A Public Provident Fund (PPF) account gets matured after the completion of 15 years only.
There are certain options for an account holder to make partial withdrawals from PPF. But, a PPF account can be closed prematurely only in the event of the death of the Account holder.
The government has recently issued a notification announcing the latest PPF Account premature closure norms or rules. You can now close your PPF account before the maturity date.
When can I close my PPF Account prematurely?As per the latest rules, a subscriber of PPF Account shall be allowed premature closure of his/her account (or) account of a minor of whom he/she is the guardian on the below mentioned reasons;*.A PPF Account can be closed in the event of the death of the…


The CBDT vide Circular No. 23/2016 dt. 24 June 2016 has clarified on FAQs of stakeholders reg. scope of the provisions and the procedure to be followed in case of the amended provisions of Section 206C of the Income Tax Act, as under:

CBDT Circular No. 23/2016 dt. 24 June 2016

In order to curb the cash economy, Finance Act 2016 has amended section 206C of the Income-tax Act to provide that the seller shall collect tax at the rate of one per cent from the purchaser on sale in cash of certain goods or provision of services exceeding two lakh rupees. Subsequent to the amendment, a number of representations were received from various stakeholders with regard to the scope of the provisions and the procedure to be followed in case of the amended provisions of Section 206C of the Act. The Board, after examining the representations of the stakeholders, issued FAQs vide circular.No.22/2016 dated 8th June, 2016. The Board has further decided to clarify the issue as regards applicability of the …

Krishi Kalyan Cess exemption


No. 35/2016-Service Tax

New Delhi, the 23rd June, 2016

G.S.R. ---(E).- In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994), read with sub-section (5) of section 161 of the Finance Act, 2016 (28 of 2016), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts taxable services with respect to which the invoice for the service has been issued on or before the 31st May, 2016, from the whole of Krishi Kalyan Cess leviable thereon, subject to condition that the provision of service has been completed on or before the 31st May, 2016.

[F.No. B-1/21/2016 - TRU]

(Mohit Tiwari)

Under Secretary

FAQ-Company Name Reservation and Incorporation at Central Registration Centre (CRC)-MCA

FAQ-Company Name Reservation and Incorporation at Central Registration Centre (CRC)-MCA1. What is Central Registration Centre (CRC)?The Central Registration Centre (CRC) is an initiative of Ministry of Corporate Affairs (MCA) in Government Process Re-engineering (GPR) with the specific objective of providing speedy incorporation related services in line with global best practices.2. What services are offered by the CRC presently?CRC is presently tasked to process applications for name availability (INC-1) and forms related to new companies incorporations (INC-2/INC-7/INC-29/INC-22 and DIR-12.3. How do I apply for a name for a company?You can use the services of check name availability for first-hand information on whether the proposed name is available and then apply for it in form INC-1 with six alternative names with deferent prefix word or INC-29 (composite Incorporation Form).4. What do I do if the name applied for is put under resubmission due to the following reasons :SIMILAR NA…

CBDT abolishes tax on start ups issuing shares above market value

Cheering news for start ups – 
CBDT abolishes tax on start ups issuing shares above market value
 Closely held companies used to issues shares at substantial premium to convert black money into white money without providing any valuation justifying the premium. Thus, the Finance Act, 2012 inserted Section 56(2)(viib) to impose tax on closely held companies receiving consideration for shares in excess of fair market value.   Valuations of start ups have fallen sharply, recently, on worries over profitability, growth and intense competition. The Income-Tax Dept. discussed a controversial move to impose tax on those startups under the garb of Section 56(2)(viib) on the ground that their last round of valuation was lower than the first round. This move was likely to upset startups who were already worried over funding issue and falling valuations. Thus, there had been a long standing demand of the industry that the Govt. should either do away such tax on startups or…

Radical changes in FDI policy regime

Major impetus to job creation and infrastructure: Radical changes in FDI policy regime; Most sectors on automatic route for FDI The Union Government has radically liberalized the FDI regime today, with the objective of providing major impetus to employment and job creation in India. The decision was taken at a high-level meeting chaired by Prime Minister Narendra Modi today. This is the second major reform after the last radical changes announced in November 2015.  Now most of the sectors would be under automatic approval route, except a small negative list. With these changes, India is now the most open economy in the world for FDI. In last two years, Government has brought major FDI policy reforms in a number of sectors viz. Defence, Construction Development, Insurance, Pension Sector, Broadcasting Sector, Tea, Coffee, Rubber, Cardamom, Palm Oil Tree and Olive Oil Tree Plantations, Single Brand Retail Trading, Manufacturing Sector, Limited Liability Partners…

The Income Tax Central Action Plan 2016-17 talks of blocking of PAN

The Income Tax Central Action Plan 2016-17 talks of blocking of PAN. The important highlights of the suggestions are as under:

1. Pan Blocking shall be after due notice
PAN to be block after due notice to the tax defaulters.

2. PAN blocking shall deprive defaulters from filing their income tax returns
PAN of tax defaulters shall be be blocked in the system, in a such a way that these defaulters would not be allowed to file their Return of Income.

3. PAN blocking to deprive defaulters benefit of carry forward of losses
Blocking of PAN would mean that defaulters cannot avail the benefit of carry forward of Business Loss and Losses under other heads where filing of Return of Income u/s. 139(1) is mandatory.

4. Blocked PAN to be shared with CIBIL
List of such Blocked PANs can be shared with credit rating agency like CIBIL & Banks, so that these defaulters are not sanctioned any loans or overdraft facility by Public Sector Banks, as the same would become NPAs.

5. Withdraw of facility l…

CBDT notifies tax exemption on investments above fair market rate for startups

*CBDT notifies tax exemption on investments above fair market rate for startups*In a major incentive, startups can now issue shares to investors at higher than fair value without worrying about tax consequences.In a major incentive, startups can now issue shares to investors at higher than fair value without worrying about tax consequences. The Central Board of Direct Taxes (CBDT) has notified the much awaited tax exemption on investments above fair market rate for startups. "The exemption provided to startups from the 'rigour' of section 56(2)(viib) of Income Tax Act has been long awaited," Amit Maheshwari, Partner Ashok Maheshwaryand Associates LLP, said. The effect of the CBDT's notification is that in case a startup gets investment from resident angel investors, family offices or funds which were not registered as venture capital funds, it will not be taxed even if the investment is made in excess to the fair value. "It has been a long standing industry …

Sectoral impact of likely passage of GST Bill

*2w,Small Cars, CVs – Hero, Bajaj, TVS, Eicher, AL, Maruti*Currently, the total tax outgo is ~27% (Excise + VAT + CST). A Standard rate of 18% would lead to a ~9% reduction in vehicle prices thereby stimulating demand. OEMs would benefit largely from savings on logistics and warehousing related costs and a simplified tax maintenance structure.*Large Cars – M&M*Currently, M&M’s total tax outgo in the UV segment is ~45% (excise + VAT + CST). Luxury cars are recommended to be taxed at higher/demerit tax rate of 40%. UV prices are therefore, likely to reduce by ~5%. We see very little possibility of the SUV segment taxed at a standard rate of 18%, which if happens, can reduce prices by ~27%. Large carmakers would again benefit largely from  savings on logistics and warehousing related costs and a simplified tax maintenance structure.
*Tractors – M&M, Escorts*Tractors is completely exempted from excise and pays an exempted rate of 4% on VAT. As such total tax out…

Ten Features that distinguish the NCLT from CLB

The constitution of these Tribunals marks the dissolution of the Company Law Board (CLB).Fourteen years after its introduction in the Companies (Second Amendment) Act, 2002, and after several rounds of litigation, the Government has finally constituted these tribunals. The primary objective of these tribunals is to provide simpler, speedier and more accessible dispute resolution mechanism for company related disputes, by unburdening the courts.Provided hereunder is a brief summary of the differences between the CLB and the NCLT.*1. Number of Benches*While the CLB was functioning with only five benches, the NCLT will commence action with eleven benches. It is expected to eventually have benches across each state in India.*2. Jurisdiction*While provisions relating to mergers, restructuring and winding-up have not been notified yet, the NCLT, once fully functional, will consolidate the corporate jurisdiction of theCLB;
Board of Industrial and Financial Reconstruction;
Appellate Authority…

Simplified Procedure-Form 15G-H

Simplification of Procedure for Form No. 15G & 15H — CBDT Clarifications The CBDT vide Notification No. 9/2016 dt. 7th June, 2016 has clarified about the due date for quarterly uploading of 15G/H declarations by payers on e-filing portal & the manner for dealing with Form 15G/15H received by payer during the period from 1.10.2015 to 31.3.2016, as under: The existing provisions of section 197A of the Income-tax Act, 1961('the Act') inter alia provide that tax shall not be deducted, if the recipient of certain payment on which tax is deductible furnishes to the payer a self-declaration in Form No.15G/15H in accordance with provisions of the said section. The manner of filing such declarations and the particulars have been laid down in Rule 29C of the Income-tax Rules, 1962 (`the Rules') w.e.f 1.10.2015 vide Notification No.76/2015 dated 29.09.2015. 2. As per sub-rule (7) and (8) of rule 29C of the Rules notified vide aforesaid notification, the Principal …

15 things you should know about Model GST Law

On June 14, 2016 the Finance Ministry has released the 'Model GST Law'. It outlines the structure of the GST regime. Further, the draft of 'Integrated GST Bill, 2016' is also released along with such Model GST laws. It also provides the framework for levy and collection of CGST and SGST. "CGST" is the tax levied under the Central Goods and Services Tax Bill, 2016. "IGST" is the tax levied under the Integrated Goods and Services Tax Bill, 2016. Key takeaways from Model GST law are given hereunder: 1) Threshold limit for registration The dealer is required to take registration under this law if his aggregate turnover in a financial year exceeds Rs.9 lakhs. However, dealers conducting business in any North Eastern State are required to take registration if their turnover exceeds Rs.4 lakhs. 2) Place of registration The dealer has to take registration in the State from where taxable goods or services are supplied. 3) Migration of existing taxpayers to GST Ever…

Separate date for furnishing 15G/15H

Separate date for furnishing 15G/15H announced by CBDT vide Notification dated 09-06-2016Earlier, TDS return for June was required to be filed by 31st July, for Sep by 31st October, for December by 31st January, for March by 31st May as per N/N 30/2012 dtd. 29-04-2016.No separate date was prescribed for 15G/15H.However now, separate dates for uploading 15G/15H have been provided vide Notification dated 09-06-2016.Due Date for QE 30 June shall be 15th July, for 30th Sep shall be 15th October, for 31st December shall be 15th January and for 31st March it shall be 30th AprilIt means for first three quarters 15G/15H to be filed 16 days ahead of due date for TDS return and for last quarter a month ahead for TDS return, thus maintaining a time distance between the TDS return and 15G/15H so that information regarding 15G/15H may be timely submitted in TDS return.

Amended Rule 8D for computation of disallowance u/s 14A

CBDT notifies amended Rule 8D for computation of disallowance u/s 14A, clarifies that amount of disallowance as computed under Rule 8D shall not exceed total expenditure claimed by the assessee; Deletes sub-clause (ii) in Rule 8D(2) which dealt with computation of expenditure towards interest (not directly attributable to any particular income/ receipt) as per the prescribed formula; Increases the rate to be applied on annual average value of investments from 0.5% to 1%; Amended Rule shall come into force on the date of its publication in the Official Gazette: CBDT

No Service tax Audit by Department

In the Delhi High Court Mega Cabs Pvt. Ltd. filed writ petition (C) No. 5192/2015 [[Mega Cab v UOI and Anr.] challenging the validity of Rule 5A(2) of the Service Tax Rules as substituted by Notification No. 23/2014-ST, dated 05.12.2014, clause (k) of sub-section (2) of section 94 of the Finance Act, 1994 as inserted w.e.f. 06.08.2014 by the Finance Act, 2014 and also the Circular No. 181/7/2014-ST dated 10.12.2014 directing departmental officers to conduct audit of the service tax assessees as provided in the departmental instructions. In the matter, Delhi High Court has entertain the said writ petition and by order dated 22.05.2015 please to issue Notice to the Union of India, Ministry of Finance, and also to the Service Tax (Audit) Department, Delhi.  Yesterday, (03.06.2016), the Delhi High Court delivered a landmark Judgment [Mega Cab v UOI and Anr. in WP(C) 5192/2015] - no more audit of assessee records by the Central Excise and Service Tax Department and strike dow…


Analysis of Indirect Tax Dispute Resolution Scheme, 2016 (IDRS)  Indirect Tax Dispute Resolution Scheme, 2016 (IDRS) has been introduced by Finance Act, 2016, vide Chapter XI.  The salient features of the scheme are as follows:
1.         Applicability:  It shall be applicable to the declarations made up to the 31st day of December, 2016. 2.         Who can Apply: Any person whose appeal is pending before Commissioner (Appeals) can opt for this scheme except the following cases, when: (a)     the impugned order is in respect of search and seizure proceeding; or (b)     prosecution for any offence punishable under the Act has been instituted before the 1st day of June, 2016; or (c)     the impugned order is in respect  of narcotic drugs or other prohibited goods; or (d)     impugned order is in respect of any offence punishable under the Indian Penal Code, the Narcotic Drugs and Psychotropic Substances Act, 1985 or the Prevention of Corruption  Act, 1988; or (e)     any …

Income Tax Provisions Applicable from 1st June 2016

Income Tax Provisions Applicable from 1st June 2016
(i)Amendment relating to Advance Tax (The change is effective from financial year 2016-17 onwards)
The schedule for payment of Advance Tax by an Individual and other non-corporate assessee has been amended w.e.f.  1st June 2016 as under:
Due Date of Installment Amount Payable On or before 15th June 15% of Advance Tax On or before 15th September 45% of Advance Tax On or before 15th December 75% of Advance Tax On or before 15th March 100% of Advance Tax
Earlier, there was no requirement of paying advance tax in respect of assessees’ who opted for non maintenance of books of accounts and declared profit @8% of gross receipts subject to a maximum of Rs. 1 crore which limit has been enhanced to Rs. 2 crores w.e.f. financial year 2016-17.