BRIEF - THE BLACK MONEY BILL

PrintPDF

Undisclosed Foreign Income and Assets (Imposition of New Tax) Bill, 2015 (The black money bill) was passed by the Rajya Sabha on Wednesday Dt. 13.05.2015.  It is awaiting Presidents assent.

The Bill provides for separate taxation of any undisclosed income in relation to foreign income and assets. Such income will henceforth not be taxed under the Income-tax Act but under the stringent provisions of the new legislation.

Main features of the  Bill :

1.      Rigorous imprisonment

Ø  Those who conceal income and assets and indulge in tax evasion in relation to foreign assets can face rigorous imprisonment up to 10 years.

2.    Non compoundable

Ø  The offence will be non-compoundable and the offenders will not be permitted to approach the Settlement Commission for resolution of disputes.

3.   Tax & penalty

Ø  Undisclosed foreign income or assets shall be taxed at the flat rate of 30 per cent. No exemption or deduction or set off of any carried forward losses which may be admissible under the existing Income-tax Act, 1961.

Ø  Further concealment of income in relation to a foreign asset will attract penalty equal to three times the amount of tax (90 per cent of the undisclosed income or the value of the undisclosed asset).

4.   Offence liable to confiscation

Ø  The Bill also proposes to make concealment of income and evasion of tax in relation to a foreign asset a 'predicate offence' under the Prevention of Money Laundering Act, which will enable the enforcement agencies to attach and confiscate the accounted assets, held abroad and launch proceedings.

5. Non filing or inadequate disclosure may lead to imprisonment

Ø  Non-filing of income tax returns or filing of returns with inadequate disclosure of foreign assets liable for prosecution with punishment of rigorous imprisonment of up to 7 years.

6.  Protection for minor balances

Ø  Failure to report bank accounts with a maximum balance of up to Rs.5 lakh at any time during the year will not entail penalty or prosecution.

7.  Liability to be computed on current price and not cost

Ø  The tax liability on an overseas property would be computed on the basis of its current market price, not the price at which it was acquired.

8.  Short window to come clean

Ø  The Income Tax assesses with overseas assets will get a one-time opportunity for declaring them. The time-frame of the short window will be notified.

9.  Additional penalty for non declaration after the short window is over

Ø  Failure to furnish return in respect of foreign income or assets shall attract a penalty of Rs.10 lakh. The same amount of penalty is prescribed where the assesse has filed a return of income, but has not disclosed the foreign income and asset or has furnished inaccurate particulars of the same.

Amendment in Section 194C relating to TDS on Transporters w.e.f. 01.06.2015

PrintPDF

With Effect From 01.06.2015 TDS on amount paid or credited to Transporters/Goods Carriers is applicable.

But TDS will not be required if a declaration by transport owner is provided stating that he does not own more than 10 goods carriages at any time during the previous year.

Further, Obtaining PAN of Transporter is still a requirement alongwith the above declaration. Threshhold  Limit of INR 75,000 for Total payment and Single payment of INR 30,000 is still applicable.

It means if payment or credits to any transporter exceeds the threshold limit then a declaration alongwith PAN would be required.

Applicability of New Service Tax Rate of 14% w.e.f. 01st June, 2015

PrintPDF

The New Service Tax @ 14% shall come into effect from 1^st June 2015 as notified by the Central Government vide notification 14/2015. However an additional tax in the case of Swach Bharat Cess yet to be notified.

Date for Calculation of Interest U/s 234- Date of Cheque presentation or Clearing?

PrintPDF

MADRAS HIGH COURT

Commissioner of Income Tax Chennai.
Vs.
REPCO Home Finance Ltd.

T.C.(A).No.601 of 2014
DATED: 11.11.2014

Issue- Whether interest under Section 234C of the Act is to be calculated based on date of clearing of the cheque or date of presentation of the cheque.

Held- It is not the case of the department that the cheque issued by the assessee was dishonourned. Once the cheque issued by the assessee is encashed, in the light of the decisions referred supra, the payment relates back to the date of receipt of the cheque.

No processing of returns for I-T refund if selected for Scrutiny

PrintPDF

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

North Block, New Delhi,

 Instruction No.1/2015

Dated -13th January, 2015

Subject: – Clarification regarding applicability of section 143(1D) of the Income-tax Act, 1961 -reg.

Sub-section (ID) of section 143 of the Income-tax Act, 1961 (‘Act’) provides that where a notice has been issued to a taxpayer under sub-section (2) of section 143 of the Act, it shall not be necessary to process the return in such a case.

 2.      Some doubts have been expressed, in view of the words “shall not be necessary”  used in the said sub-section, as to whether this provision permits processing of returns having a  refund claim, where notice under section 143(2) of the Act has been issued.

 3.        The matter has been examined by the Board.  Sub-section (1D) of section 143 of the Act was introduced by the Finance Act, 2012 with effect from 01.07.2012. The purpose of introduction of this sub-section has been stated in the Explantory Note to the Finance Act as under: “Under the existing provisions, every return of income is to be processed under sub-section (1) of section 143 and refund, if any, due is to be issued to the taxpayer. Some returns of income are also  selected for scrutiny which may lead to raising a demand for taxes although refunds may have been    issued earlier at the time of processing. It is therefore proposed to amend the provisions of the Income-tax Act to provide that processing of return will not be necessary in a case where notice under sub-section (2) of section 143 has been issued for scrutiny of the return.” Thus, in cases where an unprocessed return is selected for scrutiny, the legislative intent is to prevent the issue of refund after processing as scrutiny proceedings may result in demand for taxes on finalisation of the assessment subsequently.

4. Considering the unambiguous language of the relevant provision and the intention of law as discussed above, the Central Board of Direct Taxes, in exercise of the powers conferred on it under section 119 of the Act hereby clarifies that the processing of a return cannot be undertaken after notice has been issued under sub-section (2 ) of section 143 of the Act. It shall however, be desirable that scrutiny assessments in such cases are completed expeditiously.

5.     This may be brought to the notice of all concerned for strict Compliance.

6.     Hindi version to follow.

REVISED PATH OF IMPLEMENTATION FOR IFRS CONVERGENCE

PrintPDF

MINISTRY OF CORPORATE AFFAIRS

PRESS RELEASE

In pursuance of the Budget statement the Ministry of Corporate Affairs, after wide consultations with various stakeholders and regulators, has drawn up a revised Road Map for companies other than Banking Companies, Insurance Companies and Non- Banking Finance Companies ( NBFC’s) for implementation of Indian Accounting Standards (Ind AS) converged with the International Financial Reporting Standards (IFRS).

The Ind AS shall be applicable to the companies as follows:

(i)               On voluntary basis for financial statements for accounting periods beginning on or after April 1, 2015, with the comparatives for the periods ending 31^st March, 2015 or thereafter;

(ii)              On mandatory basis for the accounting periods beginning on or after April 1, 2016, with comparatives for the periods ending 31st March, 2016, or thereafter, for the companies

                    specified below:

(a)    Companies whose equity and/or debt securities are listed or are in the process of 

 listing on any stock exchange in India or outside India and having net worth of Rs.

                          500 Crore or more.

(b)   Companies other than those covered in (ii) (a) above, having net worth of Rs. 500     

Crore or more.

(c)    Holding, subsidiary, joint venture or associate companies of companies covered 

under (ii) (a) and (ii) (b) above.

(iii)            On mandatory basis for the accounting periods beginning on or after April 1, 2017, with comparatives for the periods ending 31st March, 2017, or thereafter, for the companies specified below:

(a)    Companies whose equity and/or debt securities are listed or are in the process of being

listed on any stock exchange in India or outside India and having net worth of less than rupees five hundred Crore.

(b)   Companies other than those covered in paragraph (ii) and paragraph (iii)(a) above that 

is unlisted companies having net worth of two hundred and fifty crore or more but less than rupees five hundred Crore.

(c)     Holding, subsidiary, joint venture or associate companies of companies covered under paragraph (iii) (a) and (iii) (b) above.

However, Companies whose securities are listed or in the process of listing on SME exchanges shall not be required to apply Ind AS. Such companies shall continue to comply with the existing  Accounting Standards unless they choose otherwise.

 

(iv)              Once a company opts to follow the Indian Accounting Standards (Ind AS), it shall be required   to follow the Ind AS for all the subsequent financial statements.

(v)                Companies not covered by the above roadmap shall continue to apply existing Accounting Standards prescribed in Annexure to the Companies (Accounting Standards) Rules, 2006.

A notification on the above lines shall be issued shortly.

Dividend on shares held as stock is taxable as income from other sources

PrintPDF

HIGH COURT OF JUDICATURE AT ALLAHABAD

Income Tax Appeal No. 3 of 2003

Sangam Investments Limited

Versus

The Commissioner of Income Tax, Allahabad.

Dated: 03.09. 2014

Hon.Tarun Agarwala, J.
Hon. Dr. Satish Chandra, J.

it is immaterial whether the shares are held by the appellant as stock-in-trade. The dividend income derived from these shares is specifically chargeable under the head “Income from other sources”. Consequently, it is immaterial whether the appellant is a dealer or a trader and caries on business of purchase and sale of shares. We find that the Tribunal after relying upon the decisions of the Bombay High Court in Commissioner of Income-Tax, Bombay City-II Vs. D.G.Goenka, 1981 ITR (129), 260 and of the Gujarat High Court in additional Commissioner of Income-Tax Vs. Laxmi Agents P.Ltd.,1980 ITR (125), 227 had rightly come to the conclusion that the dividend income arrived at by the appellant was chargeable under the head “Income from other sources”.