CA SAMACHAR

Thursday, May 14, 2020

INCOME TAX RELIEF UNDER ECONOMIC PACKAGE PART -1 (COVID 19 ECONOMIC PACKAGE)

DETAILS OF ECONOMIC PACKAGE 2020 PART-1

Finance Minister Nirmala Sitharama on 13.05.2020 shared the first part of the most awaited Economic Package for boosting the corona troubled economy of India which had provisions for MSME sector of the country

This has come after Honorable PM Narender Modi, a day earlier has announced that a economic package of approximately 20,00,000.00 crores will be announced by Finance Minister in coming 3-4 days.

The Finance Minister along with MoS Anurag Thakur said that the "ATMANIRBHAR BHARAT" will be based on 5 pillar- Economy, Infrastructure, System, Vibrant Demography and Demand. The focus will be on Land, Labour, Liquidy and Law.

The first part of the package is mainly focused on MSME sector and has been divided into Six major steps:

1. Rs. 3 Lakh collateral free loans to MSMEs. In which emergency credit line to MSMEs from Banks and NBFC's upto 20% of entire outstanding credit. This steps will help 45 lakh units to resume their Business activity.

2. Rs. 20000 crores subordinate Debt for Stressed MSMEs. This will help 2 lakhs MSME's

3. Rs. 50000 crores equity infusion for MSME's through Fund of Funds. A corpus of Rs. 10000 crore for Viable MSME through Funds of Fund.

4. Defintion of MSME's has been changed to increase the base of MSME's in the country.

New Definition of MSME's

Classification	Micro	Small	Medium

Manufacturing & Services	Investment Less than 1 crore and Turnover Less than 5 crore	Investment Less than 10 crore and Turnover Less than 50 crore	Investment Less than 20 crore and Turnover Less than 100 crore

5. Global Government tender upto Rs. 200 crores to be discontinued.

6. E-Market Linkage for MSMEs to act as replacement for Trade Fair and Exhibition. Government will clear all the dues within next 45 days.

Announcement for Employees:

1. Government will contribute the EPF for next 3 months for Employer as well Employee share. This will provide liquidy relief of Rs. 2500 cr to 3.67 lakhs establishments and for 72.22 Lakh employees.

2. EPF rate decreased to 10% from past 12% for next three years for both Employer and Employee share. This will infuse 6750 crores to these institutions.

Announcment for NBFC/HFC/MFI

1. Government will infuse 30000 crore under Special Liquidity scheme into NBFC/HFC/MFI through Investment in Investment Grade Debt Paper.

2. Rs. 45000 crore partial credit Guarantee Scheme for NBFC's. First 20% loss will be borne by the Guarantor i.e. Government of India.

DISCOMs

Rs. 90000 crores liquidity injection for DISCOMs on their due receivables to increase their cash flow.

INCOME TAX RELIEFS

We have complied all the detailed Income Tax reliefs provided in First part in our other post. You can read it here INCOME TAX RELIEF.
Brief reliefs are given below:

1. Due date for ITR extended to 30th November 2020 from 31st July 2020 and 31st October 2020.

2. Due date of Tax Audit increased to 31st October, 2020 from 30th September 2020.

3. Non Salaried TDS and TCS will be reduced by 25% on rates applicable for payments made from 14-05-2020 to 31.03.2021.

4 Vivad pe Vishwas Scheme to be extended till 31st December 2020.

5. Assessments that are getting barred on 30th September 2020 extended to 31st December 2020 and that getting barred on 31st March 2021 to 30th September 2021.

OTHER RELIEFS

1. Extension of works of Government contracts by Six months for pending contracts.
2. Partial release of Bank Grantees to the extent of work completed by the Contractors.
3.Extension of due dates of Registration and Completion of Real Estate Projects under RERA by 3 months.

Thursday, June 2, 2016

FAQs on The Income Tax Declaration Scheme, 2016

FAQs

Circular No.17 of 2016

Question No.1: Where an undisclosed income in the form of investment in asset is declared under the Scheme and tax, surcharge and penalty is paid on the fair market value of the asset as on 01.06.2016,then will the declarant be liable for capital gains on sale of such asset in the future? If yes, then how will the capital gains in such case be computed?

Answer: Yes, the declarant will be liable for capital gains under the Income-tax Act on sale of such asset in future. As per the current provisions of the Income-tax Act, the capital gains is computed by deducting cost of acquisition from the sale price. However, since the asset will be taxed at its fair market value the cost of acquisition for the purpose of Capital Gains shall be the fair market value as on 01.06.2016 and the period of holding shall start from the said date(i.e. the date of determination of fair market value for the purposes of the Scheme)

Question No.2: Where a notice under section 142(1)/ 143(2)/ 148/ 153A/ 153C of the Income-tax Act has been issued to a person for an assessment year will he be ineligible from making a declaration under the Scheme?

Answer: The person will only be ineligible from declaration for those assessment years for which a notice under section142(1)/143(2)/148/153A/153C is issued and the proceeding is pending before the Assessing Officer. He is free to declare undisclosed income for other years for which no notice under above referred sections has been issued.

Question No.3 :As per the Scheme, declaration cannot be made where an undisclosed asset has been acquired during any previous year relevant to an assessment year for which a notice under section 142, 143(2), 148, 153A or 153C of the Income-tax Act has been issued. If the notice has been issued but not served on the declarant then how will he come to know whether the notice has been issued?

Answer: The declarant will not be eligible for declaration under the Scheme where the undisclosed income relates to the assessment year where a notice under section 142, 143(2), 148, 153A or 153C of the Income-tax Act has been issued and served on the declarant on or before 31stday of May, 2016. The declarant is required to file a declaration regarding receipt of any such notice in Form-1.

Question No.4:In a case where the undisclosed income is represented in the form of investment in asset and such asset is partly from income that has been assessed to tax earlier, then what shall be the method of computation of undisclosed income represented by such undisclosed asset for the purposes of the Scheme?

Answer: As per sub-rule (2) of rule 3 of the Income Declaration Scheme Rules, 2016, where investment in any asset is partly from an income which has been assessed to tax, the undisclosed income represented in form of such asset will be the fair market value of the asset determined in accordance with sub-rule (1)of rule 3asreduced by an amount which bears to the value of the asset as on the 1.6.2016, the same proportion as the assessed income bears to the total cost of the asset.

This is illustrated by an example as under: Investment in acquisition of asset in previous year 2013-14 is of Rs.500 out of which Rs.200 relates to income assessed to tax in A.Y. 2012-13 and Rs.300 is from undisclosed income pertaining to previous year 2013-14. The fair market value of the asset as on 01.06.2016 is Rs.1500. The undisclosed income represented by this asset under the scheme shall be: 1500 minus (1500 X 200) =Rs.900

500

Question No. 5 :Can a declaration be made of undisclosed income which has been assessed to tax and the case is pending before an Appellate Authority?

Answer: As per section 189 of the Finance Act, 2016, the declarant is not entitled to re-open any assessment or reassessment made under the Income-tax Act. Therefore, he is not entitled to avail the tax compliance in respect of such income. However, he can declare other undisclosed income for the said assessment year which has not been assessed under the Income-tax Act.

Question No.6: Can a person against whom a search/ survey operation has been initiated file declaration under the Scheme?

Answer:(a) The person is not eligible to make a declaration under the Scheme if a search has been initiated and the time for issuance of notice under section 153A has not expired, even if such notice for the relevant assessment year has not been issued. In this case, however, the person is eligible to file a declaration in respect of an undisclosed income in relation to an assessment year which is prior to assessment years relevant for the purpose of notice under section 153A.

(b) In case of survey operation the person is barred from making a declaration under the Scheme in respect of an undisclosed income in which the survey was conducted. The person is, however, eligible to make a declaration in respect of an undisclosed income of any other previous year.

Question No. 7: Where a search/ survey operation was conducted and the assessment has been completed but certain income was neither disclosed nor assessed, then whether such un assessed income can be declared under the Scheme?

Answer: Yes, such undisclosed income can be declared under the Scheme.

Question No.8: What are the consequences if no declaration under the Schemeis made in respect of undisclosed income prior to the commencement of the Scheme?

Answer: As per section 197(c) of the Finance Act, 2016, where any income has accrued or arisen or received or any asset has been acquired out of such income prior to the commencement of the Scheme and no declaration is made under the Scheme, then such income shall be deemed to have been accrued, arisen or received or the value of the asset acquired out of such income shall be deemed to have been acquired in the year in which a notice under section 142/143(2)/148/153A/153C is issued by the Assessing Officer and the provisions of the Income-tax Act shall apply accordingly.

Question No.9: If a declaration of undisclosed income is made under the Scheme and the same was found ineligible due to the reasons listed in section 196 of the Finance Act, 2016, then will the person be liable for consequences under section 197(c)of the Finance Act, 2016?

Answer: In respect of such undisclosed income which has been duly declared in good faith but not found eligible, then such income shall not be hit by section 197(c)of the Finance Act, 2016. However, such undisclosed income may be assessed under the normal provisions of the Income-tax Act, 1961

Question No.10: If a person declares only a part of his undisclosed income under the Scheme, then will he get immunity under the Scheme in respect of the part income declared?

Answer: It is expected that one should declare all his undisclosed income. However, in such a case the person will get immunity as per the provisions of the Scheme in respect of the undisclosed income declared under the Scheme and no immunity will be available in respect of the undisclosed income which is not declared.

Question No.11: Can a person declare under the Scheme his undisclosed income which has been acquired from money earned through corruption?

Answer: No. As per section 196(b)of the Finance Act,2016,the Scheme shall not apply, inter-alia, in relation to prosecution of any offence punishable under the Prevention of Corruption Act, 1988. Therefore, declaration of such undisclosed income cannot be made under the Scheme. However, if such a declaration is made and in an event it is found that the income represented money earned through corruption it would amount to misrepresentation of facts and the declaration shall be void under section 193of the Finance Act, 2016. If a declaration is held as void, the provisions of the Income-tax Act shall apply in respect of such income as they apply in relation to any other undisclosed income

Question No.12: Whether at the time of declaration under the Scheme, will the Principal Commissioner/Commissioner do any enquiry in respect of the declaration made?

Answer : After the declaration is made the Principal Commissioner/ Commissioner will enquire whether any proceeding under section 142(1)/143(2)/148/153A/153Cis pending for the assessment year for which declaration has been made. Apart from this no other enquiry will be conducted by him at the time of declaration.

Question No.13: Will the declarations made under the Scheme be kept confidential?

Answer: The Scheme incorporates the provisions of section 138 of the Income-tax Act relating to disclosure of information in respect of assessees. Therefore, the information in respect of declaration made is confidential as in the case of return of income filed by assessees.

Question No.14: Is it necessary to file a valuation report of an undisclosed income represented in the form of investment in asset along with the declaration under the Scheme?

Answer: It is not mandatory to file the valuation report of the undisclosed income represented in the form of investment in asset along with the declaration. However, the declarant should have the valuation report. While e-filing the declaration on the departmental website a facility for uploading the documents will be available

Everything You Need to Know about The Income Tax Declaration Scheme, 2016

Everything You Need to Know about

The Income Tax Declaration Scheme, 2016

The Income Tax Declaration Scheme, as the name suggest is disclosure of Income which has escaped assessment under Income Tax Laws. The Scheme defines the criteria of Income to be termed as Undisclosed, manner of its disclosure and Tax thereon. Before we start detailed analysis of the scheme it is important to know the reasons for bringing such a scheme for the citizens of India.

No Extention of Due Date for E filing Tax Audit Reports and Income Tax Returns

Since the last date for filing Income Tax return is finally over, all the Tax Practitioners has started Efiling the Tax Audit Report and Income Tax returns of Audited as well as company form of Tax Payers. Rumors has already been running nation wide that Last date of filing Income Tax Returns for these Tax Payers will increase to 31st October or 30th November. Due to which many Income Tax payers who are required to get Tax Audit done can be seen relaxing. But today Ministry of Finance has issued some bad news for them. Ministry of Finance has recently issued Press Release in which it has clearly mentioned that:

"No Extension of Date for Filing of Returns due by 30th September for Assessment Year 2015-16 for Certain Categories of Assessees Including Companies, and Firms and, Individuals Engaged in Proprietary Business/Profession etc whose Accounts are required to be Audited; Taxpayers are Advised to file their Returns Well in Time to Avoid Last Minute Rush "

Income Tax Return Filing Dates Extended to 7th September (All Taxpayers)

Last date for filing Income Tax Return for AY 2015-2016 was extended earlier to 31st August from 31st July 2015. After the end of due date CBDT has been receiving a lot of representations from various groups regarding hardships faced in filing of Income Tax Returns. The dates were Increased for Gujarat recently but nothing was done for Other states taxpayers. After a lot of representations CBDT has finally increased the due date for filing the Income Tax Returns for AY 2015-2016 to 7th September, 2015.

Efiling of ITR 6 and ITR 7 is Enabled

Income Tax Department has recently notified ITR Forms for AY 2015-2016 for filing manually to Income Tax Department. Department has also issued Utility for Efiling of these ITR1, ITR2, ITR3, ITR4, ITR4S and ITR5 till now and same has also been enabled at Income Tax Website for Efiling. To read our Updates regarding these forms please click on below mentioned links: