TAXVANI

Demonetisation crackdown round two: Tax sleuths target corporate accounts

After targeting individuals who made large cash deposits in banks during or after demonetisation, the income-tax department is now going after businesses that deposited lots of cash in corporate accounts in the second round of demonetisation tax notices.

Since Monday last week, the department has been sending notices to entrepreneurs, including some prominent jewellers, diamond traders, textile merchants and real estate developers, who have have deposited money in their corporate bank accounts, a Mumbai-based income-tax official said.

This round of tax notices is focused on "big fish", the official said. "Anyone who may have deposited unexplained cash in bank accounts after demonetisation has received notices. The tax notices were sent through emails of the taxpayers," the person said. People in the know said the number of tax notices sent since last week could be in lakhs.

At the time of deposits, most companies had claimed it was cash on hand from their business activities. The main source cited was from sale proceeds. Along with the notices, the tax department has sent bank statements of such transactions and asked these businesses to disclose details of the source of income through a questionnaire consisting four questions.

"Tax department is seeking the information of the customers to whom the cash sales are made," said senior chartered accountant Dilip Lakhani. "Assessees are asked to give the bifurcation of the customers as to whether they are identified or unidentified and as to whether they hold PAN number or not. The tax department may cross verify the genuineness of the transaction where the customers are identified and having PAN number," he said.

The first set of demonetisation tax notices was sent to individuals around January this year. ET was the first to report on January 28 that about 5,000 tax notices were sent to those who had deposited Rs 1 crore or more in their bank accounts. While the second wave of tax notices has begun, the tax department is continuing with those who were sent notices in January.

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http://economictimes.indiatimes.com/

Optional reporting of details of one foreign bank account by the non-residents in refund cases

Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
PRESS RELEASE

New Delhi,24th July, 2017.

Optional reporting of details of one foreign bank account by the non-residents in refund cases
Refund generated on processing of return of income is currently, credited directly to the bank accounts of the tax-payers. Availability of the detail of bank accounts in which the refund is to be credited is a precondition for direct credit of refund in the bank accounts.

Income-tax Return Forms for the Assessment Year 2017-18 were notified on 30th March, 2017.
A number of representations were received from the non -residents that they are facing difficulties in getting refund as they do not have bank account in India and there is no column in the notified form of return of income for reporting details of foreign bank account by the non-residents for this purpose.

In view of this, a facility has been provided in return utility for reporting of details of bank account
by non -residents, who do not have bank account in India and who are claiming income -tax refund.
Therefore, the non -residents who are not claiming refund or non-residents who are claiming refund but having a bank account in India are not required to furnish details of their foreign bank account in the return of income. However, the non-residents, who are claiming income-tax refund and not having bank account in India may, at their option, furnish the details of one foreign bank account in the return of income for issuance of refund.

(Meenakshi J Goswami)
Commissioner of Income Tax
(Media & Technical Policy)
Official Spokesperson, CBDT.

High-income taxpayers to get priority treatment and extra facilities

Welcome priority taxpayer, how may I help you? That could be the greeting you may get from the taxman, an encounter that's traditionally been far from friendly.

Central Board of Direct Taxes (CBDT) has begun work on a plan based on the recognition that 80 per cent of India's direct tax is paid by 20,000 individuals and entities.

There is a strong view in government circles that they be accorded better treatment along the lines of priority customers, an official official said.
Such a priority taxpayer will be able to meet a tax official across the table to resolve questions over liability.

Any assessment order on such taxpayers will be vetted by a specialist in that sector before being issued to the company, according to the proposal under discussion. This will help reduce litigation and disputes that India's tax system is burdened, it is hoped. "A taxpayer is like a customer to the department," said the official. "One who pays more tax should have some additional facilities."

Another category of taxpayers comprises those who will get better treatment but are prone to evasion and therefore need to be monitored through data feeds. A third category is of individual taxpayers in the Rs 5-10 lakh annual pay bracket. They will get completely non-intrusive service with an emphasis on e-filing, e-assessment and escrutiny, said the official.

As part of the plan, the income tax department is also working on jurisdiction-free assessment, which means the officer concerned doesn't have to be located in the same area as the taxpayer. It is also moving to an environment in which all communication between the department and the taxpayer will be electronic.

"All these changes will require amendment to the income tax law that can be taken up in the next budget," the official said. Some of these changes have been already presented to Prime Minister Narendra Modi and he has backed a taxpayerfriendly, non-adversarial regime, the official said.
"There is a dire need to have a resolution mechanism at the first stage of the dispute itself, wherein tax payers, especially large tax payers, could discuss with revenue authorities and arrive at a decision/resolution in time," said Vikas Vasal, national leader, tax, Grant Thornton India LLP. "This would go a long way in India bringing in transparency, ease of doing business and will cut down on unnecessary disputes and litigation in the country."

Tax jurisdictions across the globe have adopted different practices to address tax issues and provide guidance to taxpayers, especially large ones, to help facilitate ease of doing business, provide certainty and cut down on costly litigation.

Bridge the Trust Deficit
Building trust between taxpayer and the tax department makes eminent sense, and is in sync with the recommendations of the Shome panel. The goal should be to minimise taxpayer interface. Now, the goods and services tax is creating multiple audit trails that will help widen and unify the tax base. What India really needs is a modern networked tax administration that is equipped to use big data analytics.

Read more at:
http://economictimes.indiatimes.com

Commercial rental income beyond Rs 20 lakh to attract GST, says Hasmukh Adhia

Rental income from residential property has been exempt from GST but any earning over Rs 20 lakh annually from renting or leasing for commercial purposes would attract the levy.

Revenue Secretary Hasmukh Adhia said that if the house property is rent out for shop or office purpose, no Goods and Service Tax (GST) will be levied up to Rs 20 lakh.

"Rental income received from residential house is exempt. But if you have given your unit to commercial enterprise, then it is taxable if you are getting more than Rs 20 lakh as rent," Adhia said at the GST Master Class.
The taxpayer earning more than the exempted threshold will have to register with the GST Network and pay taxes.

GSTN Chief Executive Prakash Kumar said that as many as 69.32 lakh registered excise, service tax and VAT payers have migrated to the GSTN portal. There are over 80 lakh such assessees in the earlier indirect taxation regime.

Out of the 69.32 lakh, as many as 38.51 lakh have completed the entire registration process and registration certicate is being issued to them.

The remaining 30.8 lakh taxpayers are being sent SMS and emails by GSTN so that they complete the registration process by giving the details of the business like main place of business, additional place of business, promoters details.

Besides, over 4.5 lakh new assessees have registered on the GSTN portal since June 25.

Adhia further said that the facility to amend the details of businesses provided to the GSTN portal at the time of registration will open on July 17. Also, registration for GST practioners will open on the same day.

Besides, cancellation of registration can be done online.
Read more at:
http://economictimes.indiatimes.com

Launch of Aaykar Setu

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

New Delhi, 10th July, 2017.

PRESS RELEASE

Launch of Aaykar Setu - Another E-Initiative by CBDT

The Central Board of Direct Taxes (CBDT) constantly endeavours to provide better taxpayer services and reduce taxpayer grievances. New schemes and e-initiatives to educate the taxpayers and deliver tax payer services in an effective manner are key to this effort.

As a part of this continuous process, a new tax payer service module ‘Aaykar Setu’, was launched by the Honourable Finance Minister, Shri Arun Jaitley from Delhi today. To enhance mobile access experience, a mobile responsive android version was also released along with the desktop version. Shri Jaitley stressed on the Government’s commitment towards continuously upgrading tax payer services.

The new step is an effort by the Income Tax Department (ITD) to directly communicate with the taxpayers, on a range of multiple informative and useful tax services aimed at providing tax information at their fingertips. The module compiles various tax tools, live chat facility, dynamic updates, and important links to various processes within the Income Tax Department in a single module. The tax payers will also be able to receive regular updates regarding important tax dates, forms and notifications on mobile numbers registered with the ITD.

All taxpayers who wish to receive such SMS alerts are advised to register their mobile numbers in the Aaykar Setu module.

(Meenakshi J Goswami)

Commissioner of Income Tax

(Media and Technical Policy)

Official Spokesperson, CBDT.

Direct Tax Collections for F . Y . 2017 - 2018 show Growth of 14 .8 %

Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes

New Delhi, 6th July, 2017.

PRESS RELEASE

Direct Tax Collections for F.Y. 2017-2018 show Growth of 14.8%

The provisional figures for Direct Tax collections up to June, 2017 show that net collections are at
Rs. 1.42 lakh crore which is 14.8% higher than the net collections for the corresponding period
of last year. Net direct tax collections represent 14.5% of the total Budget Estimates of direct taxes
for F.Y. 2017-18 (Rs. 9.8 lakh crore).

While the gross collection under Corporate Income Tax (CIT) grew at 4.8%, the growth under Personal Income Tax (PIT) including Securities Transaction Tax (STT) is 12.9%. However, after adjusting for refunds, the net growth in CIT collections is 22.4% while that in PIT is 8.5%. Refunds
amounting to Rs.55,520 crore have been issued during April to June, 2017, which is 5.2% lower than the refunds issued during corresponding period of F.Y. 2016-17.

An amount of Rs.58,783 crore has been received as Advance Tax up to 30th June, 2017 reflecting a growth of 11.9% over the Advance Tax payments of the corresponding period of last year. The growth in Corporate Advance Tax is at 8.1% and that in Personal Advance Tax is at 40.3%.

(Meenakshi J. Goswami)
Commissioner of Income Tax
(Media & Technical Policy)
Official Spokesperson, CBDT
.

Clause 31 of Form No. 3CD amended

MINISTRY OF FINANCE

(Department of Revenue)

(CENTRAL BOARD OF DIRECT TAXES)

NOTIFICATION

New Delhi, the 3rd July, 2017

G.S.R. 821(E).— In exercise of the powers conferred by section 44AB read with section 295 of the Income-tax Act, 1961 (43 of 1961) (hereinafter referred to as the Income-tax Act), 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 (18th Amendment) Rules, 2017.

(2) They shall come into force from the 19th day of July 2017.

2. In the Income-tax Rules, 1962, in Appendix II, in Form No. 3CD, for serial number 31 and the entries relating thereto the following shall be substituted, namely:—

“31. (a) Particulars of each loan or deposit in an amount exceeding the limit specified in section 269SS taken or accepted during the previous year :—

(i) name, address and Permanent Account Number (if available with the assessee) of the lender or depositor;

(ii) amount of loan or deposit taken or accepted;

(iii) whether the loan or deposit was squared up during the previous year;

(iv) maximum amount outstanding in the account at any time during the previous year;

(v) whether the loan or deposit was taken or accepted by cheque or bank draft or use of electronic

clearing system through a bank account;

(vi) in case the loan or deposit was taken or accepted by cheque or bank draft, whether the same

was taken or accepted by an account payee cheque or an account payee bank draft.

(b) Particulars of each specified sum in an amount exceeding the limit specified in section 269SS taken or accepted during the previous year:—

(i) name, address and Permanent Account Number (if available with the assessee) of the person

from whom specified sum is received;

(ii) amount of specified sum taken or accepted;

(iii) whether the specified sum was taken or accepted by cheque or bank draft or use of electronic clearing system through a bank account;

(iv) in case the specified sum was taken or accepted by cheque or bank draft, whether the same

was taken or accepted by an account payee cheque or an account payee bank draft.

(Particulars at (a) and (b) need not be given in the case of a Government company, a banking company or a corporation established by the Central, State or Provincial Act.)

(c) Particulars of each repayment of loan or deposit or any specified advance in an amount exceeding the limit specified in section 269T made during the previous year:—

(i) name, address and Permanent Account Number (if available with the assessee) of the payee;

(ii) amount of the repayment;

(iii) maximum amount outstanding in the account at any time during the previous year;

(iv) whether the repayment was made by cheque or bank draft or use of electronic clearing system through a bank account;

(v) in case the repayment was made by cheque or bank draft, whether the same was taken or accepted by an account payee cheque or an account payee bank draft.

(d) Particulars of repayment of loan or deposit or any specified advance in an amount exceeding the limit specified in section 269T received otherwise than by a cheque or bank draft or use of electronic clearing system through a bank account during the previous year:—

(i) name, address and Permanent Account Number (if available with the assessee) of the lender, or depositor or person from whom specified advance is received;

(ii) amount of loan or deposit or any specified advance received otherwise than by a cheque or bank draft or use of electronic clearing system through a bank account during the previous year.

(e) Particulars of repayment of loan or deposit or any specified advance in an amount exceeding the limit specified in section 269T received by a cheque or bank draft which is not an account payee cheque or account payee bank draft during the previous year:—

(i) name, address and Permanent Account Number (if available with the assessee) of the lender, or depositor or person from whom specified advance is received;

(ii) amount of loan or deposit or any specified advance received by a cheque or a bank draft which is not an account payee cheque or account payee bank draft during the previous year.

(Particulars at (c), (d) and (e) need not be given in the case of a repayment of any loan or deposit or any specified advance taken or accepted from the Government, Government company, banking company or a corporation established by the Central, State or Provincial Act)”.

[Notification No. 58/2017/F. No. 370142/10/2017-TPL]

SALIL MISHRA, Director (Tax Policy & Legislation)

Note :

The principal rules were published vide notification number S.O. 969(E), dated the 26th March, 1962 and last amended by Income-tax (17th Amendment) Rules, 2017 vide notification number G.S.R. 642(E), dated the 27th June, 2017.

RAKESH SUKUL

Clarifications in respect of section 269ST of the Income-tax Act, 1961

Circular No. 22 of 2017

F.No.370142/10/2017-TPL

Government of India
Ministry of Finance
Department of Revenue
(Central Board of Direct Taxes)
(TPL Division)
***

Dated 03rd July, 2017

Clarifications in respect of section 269ST of the Income-tax Act, 1961

With a view to promote digital economy and create a disincentive against cash economy, a new section 269ST has been inserted in the Income-tax Act, 1961(the Act) vide Finance Act, 2017.
The said section inter-alia prohibits receipt of an amount of two lakh rupees or more by a person, in
the circumstances specified therein, through modes other than by way of an account payee cheque
or an account payee bank draft or use of electronic clearing system through a bank account. Penal
provisions have also been introduced by way of a new section 271DA, which provides that if a
person receives any amount in contravention to the provisions of section 269ST, it shall be liable to
pay penalty of a sum equal to the amount of such receipt.
2. Subsequently, representations have been received from non-banking financial companies(NBFCs) and housing finance companies(HFCs) as to whether the provisions of section 269ST of the Act shall apply to one instalment of loan repayment or the whole amount of such repayment.
3.In this context, it is clarified that in respect of receipt in the nature of repayment of loan by NBFCs
or HFCs , the receipt of one instalment of loan repayment in respect of a loan shall constitute a single transaction’ as specified in clause (b) of section 269ST of the Act and all the instalments
paid for a loan shall not be aggregated for the purposes of determining applicability of the provisions section 269ST.

(Salil Mishra)
Director (Tax Policy & Legislation)

Government cuts PPF, NSC rate to 7.8 per cent

The government has reduced interest rates on small saving schemes, including the Public Provident Fund (PPF), NSCs and Kisan Vikas Patra by 10 basis points. PPF and NSCs will now earn 7.8%, while KVPs will fetch only 7.5%. Prior to this rate cut, PPF, NSC and KVP were offering 7.9 percent, 7.9 percent and 7.6 percent respectively.

The Senior Citizen’s Savings Scheme and Sukanya Samriddhi Yojana will now offer 8.3%. Both Senior Citizen’s Savings Scheme and Sukanya Samriddhi Yojana were earlier offering 8.4 percent.
Interest rates on small savings are linked to the benchmark 10-year government bond yields and are revised every three months. The last revision took place in March, when the rates for all schemes had been reduced by 10 basis points.

Observers say the government is not going by the Gopinath panel formula in fixing rates. According to that formula, PPF rate should be 50 basis point above the benchmark bond yield. Given that the 10-year bond yield is hovering around 6.5%, the PPF rates should be not more than 7%. “Now the formula is to reduce the rates by 10 basis points every quarter,” says Manoj Nagpal, CEO of Outlook Asia Capital. This calibrated approach has been taken to reduce the political impact of the rate cut.

Though the rate cut will definitely hurt savers, keep in mind that the real rate of interest is still quite attractive. Retail inflation has come down in recent quarters, declining to 2.1% in May from 2.99% in April. May's retail inflation is the lowest since the government began issuing data based on the consumer price index (CPI) in 2012. “In that context, the real rate of interest offered by small savings schemes is still quite attractive,” says Nagpal.

Read more at:
http://economictimes.indiatimes.com

Mentioning of Aadhaar mandatory in PAN application

Mentioning of Aadhaar/Enrolment ID (EID) and name as per Aadhaar will be mandatory in PAN application form w.e.f. July 01, 2017. Find attached PDF containing PAN New Form 49A i.e. applicable for Indian citizen & PAN Change Request application form containing field for ‘Name as per Aadhaar letter/card’. Use attached forms only for acceptance of PAN application from July 1, 2017. There are no changes in PAN New Form 49AA application form i.e. applicable for foreign citizens.

New Pan Form 49A applicable from 01/07/2017

Pan Correction Form applicable from 01/07/2017