29 May 2012

IT Return Processing-Instructions




Section 143 of the Income-tax Act, 1961 - Assessment - General - Processing of returns of A.Y. 2011-12 - Steps to clear backlog - Withdrawal of Instruction No. 1/2012, dated 2-2-2012
Instruction No. 4/2012 [F. No. 225/34/2011-ITA.II], dated 25-5-2012
The Board has decided to withdraw Instruction no. 01/2012 issued on 2nd February, 2012 on the subject above with immediate effect. The following decisions have been taken in this regard:
 (i)  In all returns (ITR-1 to ITR-6), where the difference between the TDS claim and matching TDS amount reported in AS-26 data does not exceed Rs. Five thousands, the TDS claim may be accepted without verification.
(ii)  Where there is zero TDS matching, TDS credit shall be allowed only after due verification.
(iii)  Where there are TDS claims with invalid TAN, the TDS credit for such claims is not to be allowed.
(iv)  In all other cases TDS credit shall be allowed after due verification.


old instructions

Section 143 of the Income-tax Act, 1961 - Assessment - General - Processing of returns of assessment year 2011-12 - Steps to clear backlog
Instruction No. 01/2012 [F.NO.225/34/2011-ITA.II], dated 2-2-2012
The issue of processing of returns for the Asst. Year 2011-12 and giving credit for TDS has been considered by the Board. In order to clear backlog of returns, the following decisions have been taken:
(i)  In all returns (ITR-1 to ITR-6), where the difference between the TDS claim and matching TDS amount reported in AS-26 data does not exceed Rs. One lac, the TDS claim may be accepted without verification.
(ii)  Where there is zero TDS matching, TDS credit shall be allowed only after due verification. However, in case of returns of ITR-1 and ITR-2, credit may be allowed in full, even if there is zero matching, if the total TDS claimed is Rs. Five thousand or lower.
(iii)  Where there are TDS claims with invalid TAN, TDS credit for such claims are not to be allowed.

21 May 2012

Section 40(a) Vs Trust Income-Case Law


IT : Disallowances u/s 40(a) are not applicable to computation of income of charitable trust/institution u/s 11.
• Section 40 is applicable only when deductions under sections 30 to 38 are being made in computing the income chargeable under the head "profits and gains of business or profession" under section 28. The exception in section 40 is carved out, only for the purpose of section 28 and not for computing the exemption of income of a charitable trust under section 11. The disallowance made under section 40(a) will only go to enhance the business profit of an assessee whose income is assessable under section 28 and not otherwise. Hence, provisions of section 40(a) are not applicable in case of charitable trust or institution where income and expenditure is computed in terms of section 11 - [2012] 21 taxmann.com 321 (Mumbai - Trib.)

High Court Takes Notice of TDS Refund Harassment by Dept & Demands Answers

High Court Takes Notice of TDS Refund Harassment by Dept & Demands Answers

One Anand Parkash, FCA, addressed a letter dated 30.4.2012 to the High Court in which he set out the numerous problems being faced by the assesses across the Country owing to the faulty processing of the Income Tax Returns and non-grant of TDS credit & refunds. He claimed that because of the department's fault, the assessees were being harassed. The High Court took judicial notice of the letter, converted it into a public interest writ petition and directed the CBDT to answer each of the allegations made in the letter. In addition, the Court demanded an answer to the following issues:

12 May 2012

CBEC on ST Rate

Circular No. 158/9/ 2012 – ST

F.No 354/69/2012- TRU
Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise and Customs
Tax Research Unit
Room No 146, North Block, New Delhi
Dated : 8th May 2012
To
Chief Commissioner of Customs and Central Excise (All)
Chief Commissioner of Central Excise & Service Tax (All)
Director General of Service Tax
Director General of Central Excise Intelligence
Director General of Audit
Commissioner of Customs and Central Excise (All)
Commissioner of Central Excise and Service Tax (All)
Commissioner of Service Tax (All)

Madam/Sir,

Subject: - Clarification on Rate of Tax - regarding.
    
  
1.             The rate of service tax has been restored to 12% w.e.f. 1st April 2012.  Representations have been received requesting clarification on the rate of tax applicable wherein invoices were raised before 1st April 2012 and the payments shall be after 1st April 2012. Clarification has been requested in case of the 8 specified services provided by individuals or proprietary firms or partnership firms, to which Rule 7 of Point of Taxation Rules 2011 was applicable and services on which tax is paid under reverse charge.
2.             The rate of service tax prevalent on the date when the point of taxation occurs is rate of service tax applicable on any taxable service. In case of the 8 specified services and services wherein tax is required to be paid on reverse charge by the service receiver the point of taxation is the date of payment. Circular No 154/5/2012 – ST dated 28th March 2012 has also clarified the same. Thus in case of such 8 specified services provided by individuals or proprietary firms or partnership firms and in case of services wherein tax is required to be paid on reverse charge by the service receiver, if the payment is received or made, as the case maybe, on or after 1st April 2012, the service tax needs to be paid @12%.
3.             The invoices issued before 1st April 2012 may reflect the previous rate of tax (10% and cess). In case of need, supplementary invoices may be issued to reflect the new rate of tax (12% and cess) and recover the differential amount. In case of reverse charge the service receiver pays the tax and takes the credit on the basis of the tax payment challan. Cenvat credit can be availed on such supplementary invoices and tax payment challans, subject to other restrictions and conditions as provided in the Cenvat Credit Rules 2004.
4.             Trade Notice/Public Notice may be issued to the field formations accordingly.
5.             Please acknowledge the receipt of this circular. Hindi version to follow.

(Dr. Shobhit Jain)
OSD, TRU
Fax: 011-23093037



05 May 2012

Cost of Collection about 0.6%

Income Tax - Cost of Collection about 0.6%
• COST of collection showed a uniform trend of about 0.6 per cent during 2006-07 to 2010-11 except 2008-09 and 2009-10, where it was 0.7 per cent.
• The direct tax collection exceeded the budget estimates in all the years over the period 2006-07 to 2010-11 except 2008-09. The extent of actual collection exceeding the budget estimates ranged from 2.2 per cent in 2009-10 to 16.7 per cent in 2007-08.
• Direct tax collection increased by 94.2 per cent from Rs. 2,30,181 crore in 2006-07 to Rs 4,46,934 crore in 2010-11 whereas total Gross Domestic Product (GDP) has increased by 90.0 per cent from Rs. 41,45,810 crore in 2006-07 to Rs. 78,75,627 crore in 2010-11 indicating a significantly higher growth rate of tax collection over five years period. During the period 2006-07 to 2010-11, the average rate of growth of direct tax collection was 23.6 per cent. The annual rate of growth ranged from 6.9 per cent in 2008-09 to 35.6 per cent in 2007-08.
• In the case of the corporate assessees, net collection increased from Rs. 1,44,318 crore in 2006-07 to Rs. 2,98,687 crore in 2010-11 at an average annual rate of growth of 26.7 per cent and in the case of non-corporate assessees, net collection increased from Rs. 75,079 crore in 2006-07 to Rs. 1,40,042 crore in 2010-11 at an average annual rate of growth of 21.6 per cent.
• Voluntary compliance by assessees (pre-assessment stage) accounted for 81.4 per cent of the gross collections in 2010-11. The collection by way of voluntary compliance in 2010-11 was higher than 2006-07 but marginally lower as compared to 2007-08 to 2009-10.
• The assessee base grew over the last five years from 313 lakhs taxpayers in 2006-07 to 335.8 lakh taxpayers in 2010-11 at average annual rate of growth of 1.8 per cent.
• The pendency of scrutiny assessments increased from 2.8 lakh in 2006-07 to 3.9 lakh in 2010-11.
• At the end of 2010-11, as much as Rs. 2.9 lakh crore remained uncollected. This comprised demand of Rs. 2.0 lakh crore of earlier years and current demand (2010-11) of Rs. 0.9 lakh crore.
• Internal Audit completed 66 per cent of the targeted audits. Only 14.9 per cent of major findings raised by Internal Audit were acted upon by the assessing officers in 2010-11. Departmental response to Internal Audit was clearly inadequate.
Source: CAG's Report No. 27 of 2011-12 (Direct Taxes)

Advisory Group-International Taxation

Press Information Bureau 
Government of India
Ministry of Finance 
03-May-2012 14:42 IST
Advisory Group for International Taxation and Transfer Pricing Constituted


An Advisory Group for International Taxation and Transfer Pricing has been constituted by Central Board of Direct Taxes , Department of Revenue, Ministry of Finance. The Group would comprise of the following members:-


i.             Revenue Secretary to the Government of India-Head of the Advisory Group
ii.           Chairman, Central Board of Direct Taxes, Department of Revenue- Member
iii.          Director General of Income-tax (International Taxation), New Delhi- Member
iv.          Joint Secretary (FT&TR-I), Department of Revenue- Member Secretary
v.            Joint Secretary (FT&TR-II), Department of Revenue- Member
vi.          Joint Secretary (TPL-I), Department of Revenue- Member
vii.         Shri Som Mittal, NASSCOM, Member
viii.       Shri P. Y. Gurav, CII, Member
ix.          Shri Dinesh Kanabar , FICCI, Member
x.            Shri Ved Jain, ASSOCHAM, Member
xi.          Shri Mahesh P. Sarda, ICAI, Member
xii.        Shri T. P. Ostwal, IFA India, Member
xiii.       Shri Mukesh Butani, ICC India, Member


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