Amendment in the definition of Capital Asset wef A.Y. 2014-15

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Amendment in the definition ofCapital Asset

1 The provisions contained in clause (14) of section 2 of the Income-tax Act, 1961, before amendment by the Finance Act, 2013 define the term “capital asset” as property of any kind held by an assessee, whether or not connected with his business or profession. Certain categories of properties including agricultural land have been excluded from this definition. Sub-clause (iii) of clause (14) of section 2 provides that (a) agricultural land situated in any area within the jurisdiction of a municipality or cantonment board having population of not less than ten thousand according to last preceding census, or (b) agricultural land situated in any area within such distance not exceeding eight kilometers from the local limits of any municipality or cantonment board as notified by the Central Government having regard to the extent and scope of urbanization and other relevant factors, forms part of capital asset.

2 Item (b) of sub-clause (iii) of clause (14) of section 2 has been amended so as to provide that the land situated in any area within the distance, measured aerially (shortest aerial distance), (I) not being more than two kilometers, from the local limits of any municipality or cantonment board referred to in item (a) and which has a population of more than ten thousand but not exceeding one lakh; or (II) not being more than six kilometers, from the local limits of any municipality or cantonment board referred to in item (a) and which has a population of more than one lakh but not exceeding ten lakh; or (III) not being more than eight kilometers, from the local limits of any municipality or cantonment board referred to in item (a) and which has a population of more than ten lakh, shall form part of capital asset.

3 The expression “population” has also been defined to mean population according to the last preceding census of which the relevant figures have been published before the first day of the previous year.

4 Similar amendments are also carried out in clause (IA) of section 2 of the Income-tax Act, 1961 relating to the definition of “agricultural income” and in respect of the definition of “urban land” in the Wealth-tax Act, 1957.

5 Applicability – These amendments take effect from 1st April, 2014 and accordingly, apply in relation to Assessment year 2014-15 and subsequent assessment years.

Penalty u/s. 271FA for non-filing of Annual Information Return (AIR)

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Section 285BA of the Income-tax Act mandates furnishing of annual information return by the specified persons in respect of specified transactions within the time prescribed under sub-section (2) thereof. Sub-section (5) of the section empowers the Assessing Officer to issue notice if the annual information return has not been furnished by the due date.

Section 271FA of the income-tax Act, prior to its amendment by the Act, provided that if a person who is required to furnish an annual information return, as required under sub-section (1) of section 285BA of the Income-tax Act, fails to furnish such return within the time prescribed under that sub-section, the income-tax authority prescribed under the said sub-section may direct that such person shall pay, by way of penalty, a sum of one hundred rupees for every day during which the failure continues.

Section 271FA of the income-tax Act has been amended to provide that if a person who is required to furnish an annual information return, as required under sub-section (1) of section 285BA of the income-tax Act, fails to furnish such return within the time prescribed under sub-section (2) thereof, the income-tax authority prescribed under sub-section (1) of the said section may direct that such person shall pay, by way of penalty, a sum of one hundred rupees for every day during which the failure continues.

It is further provided that where such person fails to furnish the return within the period specified in the notice under sub-section (5) of section 285BA, he shall pay, by way of penalty, a sum of five hundred rupees for every day during which the failure continues, beginning from the day immediately following the day on which the time specified in such notice for furnishing the return expires.

Applicability - This amendment takes effect from 1st April, 2014

CBDT kept Revised PAN Allotment procedure in Abeyance

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Source – Press Release by Ministry of Finance Dated 30.01.2014

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Press Release by NSDL

Procedure for PAN application w. e. f. 03.02.2014

Central Board of Direct Taxes (CBDT), Ministry of Finance, Govt. of India, as informed vide press release dated December 30, 2014, has decided to keep in abeyance the decision to changeprocedure for PAN allotment till further orders. Accordingly, the guidelines issued by Income Tax Department (ITD) vide its letter ref no. F.No. oPAN/1/3/2003 /Part dated January 24, 2014, regardingself-attestation of documents and verification of these documents with original documents, has been put on hold till further orders.

However, the guidelines issued vide CBDT notification no. S. O. 3794(E) dated December 23, 2013 regarding changes in Rule 114(4) of Income Tax Rules, 1962  with regard to the listof Proof of Identity, Proof of Address and Proof of Date of Birth documents will be applicable from February 3, 2014.

ST : Change in Defination of governmental authority in Mega Exemption Notification

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Notification No. 02/2014 – Service Tax,  New Delhi, 30^th January, 2014

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), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No.25/2012-Service Tax, dated the 20th June, 2012, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide G.S.R. 467 (E), dated the 20th June, 2012, namely:-

In the said notification, in the paragraph 2, for clause (s), the following shall be substituted, namely:­­–

‘(s) “governmental authority” means an authority or a board or any other body;

(i)  set up by an Act of Parliament or a State Legislature; or

(ii) established by Government,

 with 90% or more participation by way of equity or control, to carry out any function entrusted to a municipality under article 243W of the Constitution;’.

[F.No. 354 /236/ 2013-TRU]

Know status of your PAN/ TAN on Phone

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Interactive Voice Response (IVR) for knowing the status of your PAN/ TAN application is now available at TIN call centre (TCC) in Hindi/English language. You may call on 020- 27218080 to check the status of your application.

Form 15CA only through ITD website from 12.02.2014

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With effect from February 12, 2014, functionality of furnishing the foreign remittance details in Form 15CA will be available on the e-filing portal of Income Tax Department . Contact e-filing portal  1800 4250 0025 for more details.

Source- https://www.tin-nsdl.com/

Clarification with regard to Section 185 of the Companies Act, 2013

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General Circular No 03/2014, Dated:14/2/2014

Subject: Clarification with regard toSection 185 of the Companies Act,2013.

This Ministry has received number of representations on the applicability of Section 185 of the Companies Act, 2013 with reference to loans made, guarantee given or security provided under Section 372A of the Companies Act, 1956. The issue has been examined with reference to applicability of Section 372A of the Companies Act, 1956 vis-a-vis Section185 of the Companies Act, 2013. Section 372A of the Companies Act, 1956, specifically exempts any loans made, any guarantee given or security provided or any investment made by a holding company to its wholly owned subsidiary. Whereas, Section 185 of the Companies Act, 2013 prohibits guarantee given or any security. provided by a holding company in respect of any loan taken by its subsidiary company except in the ordinary course of business.

In order to maintain harmony with regard to applicability of Section 372A of the Companies Act, 1956 till the same is repealed and Section 185 of the Companies Act, 2013 is notified, it is hereby clarified that any guarantee given or security provided by a holding company in respect of loans made by a bank or financial institution to its subsidiary company, exemption as provided in clause (d) of sub-section (8) of Section 372A of the Companies Act, 1956 shall be applicable till Section186 of the_. Companies Act, 2013 is notified. This clarification will, however, be applicable to cases where loans so obtained are exclusively utilized by the subsidiary for its principal business activities.