NICAI UPDATES

1. The Income-tax Department appreciates taxpayers and tax professionals for making compliances in time with respect to filing of Tax Audit Reports (TARs) and other audit reports in Form No. 29B, 29C, 10CCB, etc. More than 30.75 lakh audit reports, including about 29.5 lakh Tax Audit Reports have been filed for AY 2023-24 on the e-filing portal till the end of the due date.



2. The Supreme Court ruled that 'punchnama' (documents recording the proceedings of searches and seizures) would be deemed inadmissible in a court of law if they were prepared in a manner violative of Section 162 CrPC. Specifically, the Court raised alarm over the role played by witnesses in these proceedings and their failure to adequately disclose how objects were discovered during searches. Case title: Rajesh v State of MP. 



3. The Appointments Committee of the Cabinet has approved the re- appointment of Shri Nitin Gupta as Chairman, Central Board of Direct Taxes (CBDT), on contract basis, with effect from 01.10.2023 till 30.06.2024, or until further orders, whichever is earlier. 

4. The Finance Ministry has notified 1st October 2023 as the date for implementation of the amended GST law provisions for taxing e-gaming, casinos and horse racing.

5. RBI extends the deadline to return Rs 2,000 notes at bank branches till October 7, 2023. 

6. Pension on Higher Wages extends three months’ time for Employers to upload wage details till 31.12.2023. 

7. ICAI extends the last date of KYM and Fees payment by 1 month to 31St October 2023. 

8. TCS @ 20% from 01-10-2023 on foreign remittances: Important features

9. Exemption threshold limit of 7 lacs per financial year per individual shall apply to remittance under liberalized remittance scheme (LRS). No threshold exemption for overseas tour packages

10. TCS Rates for LRS: On an amount exceeding Rs. 7 lacs, TCS shall be collected :

• @ 0.5% on remittance for education financed by loan taken from financial institutions
• @ 5% on remittance for education not financed by financial institutions.

Note : Remittance for education shall include tickets for study abroad, tuition fee and other fee to educational institute and other day to day expenses under codes S0305 or under S1107

• @ 5% on remittance for medical treatment* (including ticket of patient and his attendant and medical expenses and day to day expenses for medical treatment) made under Code S0304and Code S 1108. 
• @ 20% on any other purpose for remittance under liberalized remittance scheme.

11. Liberalised Remittance Scheme: Remittances by individuals up to 250000 USD for following purposes are covered under liberalized remittance scheme attracting TCS on remittance exceeding Rs. 7 lacs:

• Private visits to any country (except Nepal and Bhutan)
• Gift or donation. 
• Going abroad for employment 
• Emigration
• Maintenance of close relatives abroad
• Travel for business, or attending a conference or specialised training or for meeting expenses for meeting medical expenses, or check-up abroad, or for accompanying as attendant to a patient going abroad for medical treatment / check-up.
• Expenses in connection with medical treatment abroad
• Studies Abroad
• Any other Current account transaction

12. Current account transactions means transactions other than capital account transactions and  include 

• payments due in connection with foreign trade, other current business, services, and short-term banking and credit facilities in the ordinary course of business
• payments due as interest on loans and as net income from investments,
• remittances for living expenses of parents, spouse and children residing abroad, and
• expenses in connection with foreign travel, education and medical care of parents, spouse and children.

13. TCS on expenditure through international credit card while being overseas though has also been brought under liberalized remittance scheme by omissions of Rule 7 of Foreign Exchange Management (Current Account Transactions) Rules, 2000 but TCS has been suspended till further orders by guidelines issued under Circular 10/2023 dated 30-06-2023. TCS on expenditure through international debit card/ATM is covered by LRS and shall attract TCS.

14. Expenses of business visits of employees are borne by the entity. Such expenses shall be treated outside LRS and may be permitted without limit and shall not attract TCS

15. TCS @ 5% shall apply on overseas tour packages up to Rs. 7 lacs and TCS @ 20% shall apply on overseas tour packages above Rs. 20 lacs. Overseas tour package should expenditure on any two of followings:

• International travel ticket
• hotel accommodation (with or without food)/boarding/lodging
• any other expenditure of similar nature or in relation thereto.

16. Applicability of limit of 7 lacs:

• Limit of 7 lacs shall apply in aggregate to all types of remittances under LRS for education or medical treatment or any other purpose and not to apply to every purpose individually. However for overseas tour packages the limit of 7 lacs shall not be clubbed with LRS remittances.
• Limit of 7 lacs for LRS shall apply for complete FY 2023-24 and not only period post 01-07-23 or 01-10-2023
• Limit of Rs. 7 lacs is qua every remitter and not qua authorized dealer. Undertaking in this regard may be obtained from remitter by authorized dealer for remittances through other dealers, till RBI develops a system. Remitter shall be responsible for false undertaking, if any

17. Where purchase of overseas tour package is covered by LRS also, TCS shall apply treating the same as overseas tour package and not remittance under LRS.

18. TCS on foreign remittance shall not apply to non-residents who do not have establishment in India. 

19. TCS on foreign remittance shall not apply where TDS is applicable. 

by 

CA (Dr) Raj Chawla