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Monday, July 29, 2024

NICAI UPDATES


1. An amendment in the Black Money Act will give taxpayers relief from penalty in case they fail to disclose overseas assets worth Rs 20 lakh, however the obligation to report the transaction is not done away with. The Black Money Act amendments in Section 42 and 43 will be a part of the Finance Bill.

2. Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 aims to curb black money, or undisclosed foreign assets and income and imposes tax and penalty on such income. Currently under the Act, even if the taxpayers fail to disclose a foreign asset worth Rs 5 lakh, they have to pay a Rs 10 lakh penalty on it.

3. At present if the taxpayer is holding any asset abroad, which is not declared in the income tax return then there is a penalty of Rs 10 lakh. An amendment in the Black Money Act is proposed that If the value of the overseas asset is up to Rs 20 lakh, and is not disclosed, there will be no penalty if it's a bonafide mistake on the part of the taxpayer.

 4. Budget 2024 proposes an amendment to Section 206C of the Income-tax Act, addressing concerns from entities with tax-exempt income facing difficulties with tax collected at source (TCS) on their transactions.  

5. The new amendment, effective from October 1, 2024, will enable the Central Government to notify specific persons, institutions, or classes of entities for whom TCS may be either exempted or applied at a reduced rate. This provision aims to alleviate the tax burden on organizations that are not required to file income tax returns due to their exempt status, thereby simplifying compliance and reducing undue financial strain. 


Sunday, July 28, 2024

ITR filing 2024: Filing returns at the last minute? Know the list of crucial documents you would need :-money control news

 

Income tax: Why you must gather all your vital documents before filing returns at the last minute

The due date for filing income tax returns for the financial year 2023-24 – July 31 - is nearly here.

There is absolutely no time to lose. According to the income tax department, over 5 crore tax-payers have already filed their returns so far and you need to act right now to prevent last-minute glitches from derailing the exercise.

Even before you log on to the official e-filing portal - www.incometax.gov.in - you need to start with gathering all the documents critical to the process. This will help you complete the process faster when you are filing at the last minute.

Here’s a list of essential documents that you must start obtaining right away:

ITR filing 2023-24: Must-have documents

The relevant ITR form – ensure that you file returns using the right form, else your return will be considered defective.

  • Bank TDS certificates

  • Bank account statements

  • Aadhaar and PAN – ensure that these two are linked

  • Form-26AS

  • Annual Information Statement (AIS)

  • Tax return filing documents that salaried individuals need

  • Form-16 issued by employers – all the forms if you have switched jobs during the FY

  • Past tax returns filed

  • Salary slips, including income earned abroad, if any

  • Rent agreements and receipts to claim HRA

  • Foreign bank account statements if you were deputed abroad

  • Transaction statements of foreign investments made to make the relevant disclosures

  • Form 67 if you are claiming credit of taxes paid in a foreign country with which India has double taxation avoidance treaty

  • Details of your assets and liabilities if your income exceeds Rs 50 lakh and you have to file returns using ITR-1, which contains AL (asset-liability) schedule Tax deduction documents

Do note that you need not attach these documents with your ITR form when you submit returns. However, preserve these documents to address any queries that may arise due to any mismatch in Form-16 and Form-26AS or AIS. This is particularly the case if you have chosen the new regime in your proposed investment declarations submitted to the employer but wish to switch to the old regime while filing returns.

For Sections 80C and 80CCD(1B) deductions


For section 80D

  • Health insurance premium receipts

For Section 80E

  • Interest certificate from the bank that has extended the education loan

  • For Section 24B

  • Interest certificate from your bank to claim deduction of up to Rs 2 lakh under section 24(B)

For Section 80G


  • Receipts of donations to charitable institutions eligible for deductions under section 80G

  • Earn income from other sources? Keep these documents at hand

  • Capital gains/loss statements issued by mutual fund house or intermediaries, stock brokers etc

  • Bank account statements and TDS certificates

  • Virtual digital assets (VDA) transaction statements to make appropriate disclosures, particularly in the VDA schedule
MONEYCONTROL PF TEAM

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India considering Modi's visit to Ukraine in August :-The Economic Times

 

PM Narendra Modi is examining the possibility of a visit to Ukraine in August after his trip to Moscow early this month with a message on dialogue and diplomacy as the way forward to end the conflict.

No final decision has been taken on the trip and the two sides are examining the possibility of the visit in August, ET has learnt. While there are some suggestions to plan the visit on August 23, which is Ukraine's Independence Day, there has been no decision on this yet.

The visit is being explored in the backdrop of the Ukrainian Foreign Minister's recent China visit. During the visit the Ukrainian FM stated that Kyiv was prepared to negotiate with Russian representatives when Moscow is willing to hold talks "in good faith". Despite getting weapon systems from the West, Ukraine has not been able to make progress on the battlefield with Russia and a number of Western weapons have been jammed by the Russian military, military experts claimed.

Ukrainian officials have admitted that many American-made weapons relying on satellite guidance have been compromised by Russian jamming technology.

The PM held talks with Ukrainian President Volodymyr Zelenskyy last month on the sidelines of the G7 Summit in Italy's Apulia. At that meeting, Modi conveyed to the Ukrainian president that India would continue to do everything within its means to support a peaceful solution to the Russia-Ukraine conflict and that the way to peace is through "dialogue and diplomacy".

Modi also told Zelenskyy that India believes in a "human-centric" approach to find a solution to the conflict in Ukraine. At the meeting, the Ukrainian president invited the PM to visit Kyiv.

The two NSAs and the two foreign ministers have been in touch this month.India on Thursday affirmed that it has a long-standing relationship with Russia that is based on mutuality of interests.



Friday, July 26, 2024

Budget 2024: New income tax regime vs old current old tax slab rates compared Income Tax Budget 2024: Mint

 

New income tax vs. old income tax slabs: Finance Minister Nirmala Sitharaman presented the Narendra Modi 3.0 government's first budget on July 23. In sops for the middle class, FM hiked the standard deduction by 50 per cent to 75,000 and tweaked tax slabs under the new income tax regime to provide more money for the salaried class. The new tax slabs under the new income tax regime will be effective from April 1, 2024 (Assessment Year 2025-26).

Sitharaman said income of up to 3 lakh will continue to be exempted from income tax under the new regime.

As per the proposal, a 5 per cent tax will be levied on income between 3-7 lakh, 10 per cent between 7-10 lakh, 15 per cent for 10-12 lakh.

However, 20 per cent tax will continue to be levied on income between 12-15 lakh and 30 per cent for income above 15 lakh.

Under the existing new I-T regime, a 5 per cent tax is levied on income between 3-6 lakh, 10 per cent for income between 6-9 lakh.

Income between 9-12 lakh and 12-15 lakh is subject to 15 per cent and 20 per cent tax, respectively. A 30 per cent I-T would be applicable on income above 15 lakh.

However there were no changes announced for the old income tax regime

Budget 2024: New regime tax slabs

0- 3 lakh - Nil;

3-7 lakh - 5% ;

7-10 lakh - 10% ;

10-12 lakh - 15%;

12-15 lakh - 20%; and

Above 15 lakh - 30%

Budget 2024: Old regime tax slabs

1) Income up to 2.5 is exempt from taxation under the old tax regime.

2) Income between 2.5 to 5 lakh is taxed at 5 per cent under the old tax regime.

3) Personal income from 5 lakh to 10 lakh is taxed at a rate of 20 per cent in the old regime

4) Under the old regime, personal income above 10 lakh is taxed at a rate of 30 per cent.


Children of legal immigrants in the US at risk of deportation: What's next for Indian Americans? Read more at: https://economictimes.indiatimes.com

 

Washington: There does not seem to any light at the end of the tunnel for children of legal immigrants, a significantly large number of whom are Indian Americans who came to the US as a young kid with their parents and now risk being deported back to the country where they don't know anyone because of them being aging out when they turn 21. There are around 250,000 of such children of legal immigrants, a significantly large number of whom are Indians. The White House on Thursday blamed the Republicans for this legislative impasse.

"I talked about the bipartisan agreement that came together from the Senate where we negotiated a process to help the so-called documented Dreamers. And sadly, Republicans, and I've said this many times already at this podium today, which is that they voted it down twice. They voted it down twice,' White House Press Secretary Karine Jean-Pierre told reporters at her daily news conference.

Last month led by Senator Alex Padilla, Chair of the Senate Judiciary Subcommittee on Immigration, Citizenship, and Border Safety, and Representative Deborah Ross, a bipartisan group of 43 lawmakers called on Biden Administration to take urgent action to protect the more than 250,000 Documented Dreamers - children of long-term visa holders - who are at risk of aging out of their dependent status and are forced to self-deport if they are ineligible for another status.

"These young people grow up in the United States, complete their education in the American school system, and graduate with degrees from American institutions," wrote the lawmakers. "However, due to the long green-card backlog, families with approved immigrant petitions are often stuck waiting decades for permanent resident status," they said in a letter to the Biden Administration on June 13.

Last month, Improve The Dream, an organization representing these children of legal immigrants, met with over 100 congressional offices and senior administration officials.

"It is disappointing to see the lack of action and associated proposed regulations deprioritized and delayed. It is time for action and I hope President Biden and the administration see the support from this bipartisan letter and show they care about one of the most bipartisan issues in Congress and rectify the mistakes of the past,' said Dip Patel, founder of Improve The Dream comments.

At the same time, he expressed gratitude for the bipartisan members of Congress leading in a letter asking for urgent administrative policy improvements and who continue to champion a permanent solution through Congress.

"I was forced to start visa-hopping to be able to stay in this country when I was 20 years old, right before I aged out, as a junior at the University of Minnesota - Duluth. I am about to turn 27 this August. Soon, if my time visa-hopping was personified, they would be older than I was when I first came to the United States," Jefrina, currently a graduate student pursuing my MBA at the Saint Mary's University of Minnesota told PTI.

She came to the US from India in 2005 at the age of 7. "I arrived under a dependent H-4 visa. My family applied for permanent residency in 2010 when I was 12 years old, and I unwittingly fell in love with this country. In the last 19 years, Minnesota has undoubtedly become my home," she said.

"My young adult life has been a series of temporary fixes to avoid self-deportation. I graduate from my Masters program in December, and I'm yet again at the crossroads of leaving my family, pets, friends, and a myriad of unquantifiable reasons I call Minnesota my home," Jefrina said.

Praneetha, a Cloud Engineer based in Texas, who came to the US with her family when she was 8 years old as a dependent on her parents' work visa, and after living in the US for more than 15 years, is left with no clear path toward permanent residency and has to hop from visa to visa in order to continue living and working in the country.

Roshan was forced to leave the US last month. He was working with- an American semiconductor manufacturing company. He came to the US with his Mom and brother at the age of 10 on an H4 visa- he grew up in Boston and graduated from Boston College in 2021 with a degree in Economics.

Roshan grew up in the US for almost 16 years but aged out in 2019. He had to leave the US in June without a clear path for returning, living, and working in the only country that he has truly called home.

Patel said every day without action results in young adults, who have been lawfully raised in the United States by skilled workers and small business owners, to be forced to leave the country, separating them from their families and stopping their ability to contribute to the country.

The administration has heard countless stories and examples of American-raised and educated STEM and health care talent (which comprises 87% of all impacted by aging-out, according to Improve The Dream's survey) contributing in other countries now due to barriers in our legal immigration system.

"Our country is not only losing young talent who were raised and educated here, but we're also losing many of their parents, who have years of practical experience as small business owners or fields like medicine, engineering, and artificial intelligence. The economic case is clear and the moral case is clear. It is common sense," he said in response to a question.

"All major administrative actions have excluded this population from receiving benefit, despite the tools for such relief being available and being used for others. Until Congress can pass the bipartisan America's Children Act, we need urgent action by the administration to prioritize this issue, which has bipartisan support from Congress and the general public, and clear economic benefit," Patel told PTI.

Thursday, July 25, 2024

New LTCG rule on property to hit homeowners hard: Below 9% annual property price growth, common in many cities, could mean higher loss now Read more at: https://economictimes.indiatimes.com/wealth

 


Budget 2024 has taken away the indexation benefit on property. Now, homeowners are required to pay a flat 12.5% long-term capital gain tax on the gain they make by selling the property. The new rule is one of the most significant budget proposals, especially for homeowners planning to sell their property. While the finance ministry claims that a majority of homeowners will be better off under the new rule, ET Wealth’s analysis paints a different picture and shows that some homeowners will even face a double blow. Here is a detailed analysis and also suggestions on how you can minimise the adverse impact.

Homeowners with stagnant price or lower price growth are the biggest sufferer


While the new rule has removed the use of indexation, it has brought down the tax rate from 20% to 12.5%. This has created a confusion as to who are likely to benefit from this rule and who are likely to be the losers.

Any property purchased before April 1, 2001, enjoys grandfathering provision under which its fair market value on this date is taken as the acquisition cost of the property. If the property was purchased after March 31, 2001, the actual acquisition cost is used to calculate the capital gains.

To understand the impact of this new rule, we analysed the impact of the new rule across various periods from 2004 to 2019. We found that this rule hits hard people who have already been a victim of the property market’s vagaries due to stagnant or lower growth in property prices. However, if the compound annual growth in the value of your property has been substantially above inflation, then you may end up saving more tax under the new LTCG rule of 12.5% without indexation.

Cut-off of 9% annual growth in property price decides who wins and who loses


No matter the purchase date of your property, if the annual growth of the property’s price is below 9%, there is a high probability that the new rule will push you towards the losing side. However, if your property price has grown annually by 10% or above, the new rule might end up giving you better benefits.

For instance, if you had bought a property worth Rs 15 lakh in 2009 and its value grew annually at 4%, then you could have sold this property for Rs 27 lakh now. According to the earlier indexation rule, the inflated cost of your property would be Rs 36.79 lakh. As the inflated cost is higher than the selling price, there would be no capital gains. So you would not have to pay any tax on it. However, according to the new rule, you would not be allowed to inflate the cost and your gain would be around Rs 12 lakh. So you would need to pay a capital gain tax of Rs 1.5 lakh.

When property grows 4% annually - Indexed cost goes higher than sale value but you still pay tax with new rule


When property grows 8% annually - Indexed cost goes up but less than sale price; You pay higher tax with new rule.

Property grows 12% annually - Indexed cost significantly lower than sale price; New rule saves tax for you

If you had bought a property worth Rs 25 lakh in 2014 and its value grew annually at 8%, you can sell this property for around Rs 54 lakh now. According to the earlier indexation rule, the inflated cost of your property would be around Rs 38 lakh. This means you would have a capital gain of around Rs 16 lakh and would have to pay a long-term capital gain tax of around Rs 3.23 lakh. However, according to the new rule, your gain would come around Rs 29 lakh and so you would need to pay the capital gain tax on Rs 3.62 lakh — which is Rs 38,951 more than the tax in the old rule. So despite an 8% annual growth in property prices, you would end up losing more money as tax under the new rule.

"On an average, the Cost Inflation Index has risen by 4.6% annually. In such a situation, the old taxation scheme would have resulted in very low capital gain or even a loss, given that the indexed value would replace the cost of acquisition. However, in the proposed law, there may be a tax liability as now the cost of acquisition shall be the cost actually incurred," says Sneha Pai, Senior Director, Direct Tax, Nexdigm

Most prominent cities have registered a property price growth below 10% in last 5 year


Some of the most impacted homebuyers in India will be the ones who purchased a property 5 years ago. This is because most of the cities, except Hyderabad, have seen an annual property price growth of below 9%. So most of these homebuyers in the prominent cities will be paying more taxes under the new rule.

"While MMR and Chennai have seen less than 5% CAGR in average housing prices over the last 5 years (FY19-FY24), rest of the major cities have witnessed about 5-10% CAGR during the same period," says Vimal Nadar, Senior Director & Head, Research, Colliers India.

Double blow to people who paid interest on home loan


Most homebuyers who had taken a loan to make the purchase will have to bear another loss on account of interest payment — apart from the lower returns on property. For instance, if you took a Rs 20 lakh home loan in 2014 with a 20-year repayment tenure and an interest rate of 9%, you would have already paid an interest of Rs 15.80 lakh in the past 10 years.

You can still save this tax by reinvesting your gains but with a higher amount


There is still an option to save this long-term capital gain tax. But for that, you will need to reinvest a higher amount than earlier. “An additional point to be noted is that the amount of taxable capital gain will now increase in the absence of indexation benefit. Capital gains are exempt if the gains are reinvested in specified assets within specified timelines. To avail the exemption now, a larger sum will need to be reinvested,” says Pai.

In case of a loss, you don’t need to pay any tax and can set it off against other capital gains


If you have suffered a loss with the purchase of your property, you do not need to pay any tax. "In case of overall loss, there would not be any tax liability. Additionally, loss in a particular asset is allowed to be set off against overall gains in a particular assessment year. In cases where the entire long-term capital loss cannot be set off against the gain, it is carried forward to the next year," says Nadar.

Costs are allowed to be added in acquisition cost for reducing capital gain

According to Pai, the costs associated with the purchase of the asset that are considered as part of the acquisition cost are:


●Cost of purchase of the asset

●Related expenses like stamp duty, brokerage

●Interest on home loans availed, if same has not been claimed as a deduction while computing income from house property or under any other head of income

●Additional capital expenditure incurred for improvement of an asset, like capital renovation expenses


Please for chart reference read more at:-


Indexation benefit on sale of property removed; new LTCG rate of 12.5% announced for capital gains on sale of property :-ET

 

The budget 2024 announced the removal of indexation benefit available on sale of property. Due to this many people who sell their property will now not be able to inflate their purchase price and reduce their capital gains. Prior to the announcement the long term capital gains arising from sale of property was taxed at 20% with indexation benefit. Now as per the Budget documents, the new LTCG tax rate has been reduced to 12.5% but will be applicable without indexation benefit for capital gains on sale of property.

Here is an example to understand this, for instance Mr. A bought a property with Rs 25 lakh in FY 2002- 2003. He sells the property in FY 2023-2024 for Rs 1 crore. As per the existing rules, the purchase price of Rs 25 lakhs needs to be inflated with Cost Inflation Index (CII) numbers notified by the Income tax department. However, once the new rule comes into effect there will be no need to inflate the purchase price. A taxpayer will calculate the capital gains by directly reducing the purchase price from the sale price.

The Finance Minister in her post-Budget press conference clarified that properties bought before April 1, 2001 will have to choose the purchase price higher of the following:

a) Actual property price
b) Fair market value of house as on April 1, 2001.

Hence, for properties bought on or before March 31, 2001, the purchase price of house will be from the higher of the two mentioned above. For houses bought on or after April 1, 2001, the actual purchase price will be used to calculate capital gains to pay taxes.

According to the FM budget speech 2024, "simultaneously with rationalisation of rate to 12.5%, indexation available under second proviso to section 48 is proposed to be removed for calculation of any long-term capital gains which is presently available for property, gold and other unlisted assets. This will ease computation of capital gains for the taxpayer and the tax administration."

What is Cost Inflation Index?


Every fiscal year, the income tax department publishes a Cost Inflation Index (CII) to be used in calculating indexation benefits. This figure is used to compute the inflation-adjusted cost of a long-term capital asset. To determine the taxable capital gain, the inflation-adjusted acquisition cost is removed from the asset's sale price. However, indexation benefits are only available for specific assets.

For the current financial year 2024-25 (AY 2025-26), the Central Board of Direct Taxes (CBDT) has notified the CII as 363. The notification was issued on May 24, 2024. The CII number for FY 2023-24 (AY 2024-25) was 348.

The inflation-adjusted purchase price of certain assets sold between April 1, 2023, and March 31, 2024, will therefore be determined by using CII 348 when filing income tax returns. The following year, CII 363 will be used to determine the inflation-adjusted purchase price of assets sold in current FY 2024-25 (AY 2025-26) - between April 1, 2024, and March 31, 2025.







Wednesday, July 24, 2024

BUDGET HIGHLIGHTS


Tax Proposals in Finance Bill 2024

Important Direct Tax Proposals

 1.    Change in Tax Rates in the new regime. There is change in 3 slabs ranging from 3 lacs to 12 lacs resulting in tax benefit of Rs. 10000/-.

 2.    For the new tax regime standard deduction increased from 50 thousands to 75 thousands. It is not available, opting for the old regime. Tax benefit 7500/-.

 3.    For new tax regime, family pension deduction increased from 15000 to 25000

 4.    For the new pension scheme, deduction of private employees contribution to NPS was enhanced from 10% to 14%, under the new tax regime.

 5.    Foreign Companies tax Rate reduced from 40% to 35%.

 6.    Long Term Capital gain tax rate to be uniform at 12.5% including

  •  i. STT paid equity shares and units of equity oriented fund
  •  ii. Units purchased in foreign currency
  •  iii. Bonds or GDRs purchased in foreign currency
  •  iv. Securities of FIIs


    7.    Benefit of Indexation for Long term capital gains removed.

     8.    Exemption for long term capital gain of 1 lakh being increased to 1.25 lacs for STT paid equity shares, units of equity oriented funds


     9.    Period of Holding for Long term capital gain for gold, listed debentures, listed bonds, all units of mutual funds reduced from 36 to 24 months. Period of holding for unlisted shares, immovable property shall continue to be 24 months for qualifying as long term capital asset. Period of holding of 36 months being abolished and only two periods of holding of 12 months and 24 months shall continue.

     10.    Capital gain on Unlisted bonds, Unlisted Debentures, units of debt fund shall be treated as short term capital gain only even if period of holding is more than 24 months.

     11.    Short Term capital gain tax rate on STT paid equity shares or units of equity oriented fund shall be @ 20% instead of 15%


     12.    Capital gain exemption for gift, will or irrevocable trust limited to Individual/HUF.

     13.     Amount received by a private company in excess of fair value shall no longer be taxable.

     14.     TDS rate of Commission changed from 5% to 2% w.e.f. 01-10-24

     15.     TDS Rate on rent u/s 194-IB rate reduced from 5% to 2%

     16.     Lower deduction of TDS u/s 194Q/206C(1H) for buyer and seller from 01.1%  allowed

     17. TDS/TCS under other heads of Income also to be considered for determination of TDS on salary income which does not bring TDS on salary below the tax that would otherwise become deductible without considering other particulars.

     18.      TCS on foreign remittances of a child can be claimed by the parent.

     19.     TCS on all luxury goods above 10 lacs @1%. Motor Vehicles were already covered.

     20.    TDS u/s 194T on Salary, Interest to partners above 20 thousands @ 10%.

     21.    TDS on sale of immovable property above 50 lacs to be applied on aggregate limit even if there are more than one buyer.

     22.    Interest on late payment of TCS increased from 1% to 1.5%.

     23.    Exemption from Penalty for delayed filing of TDS return limited from one year to one month from due date of filing returns

     24.    TDS/TCS returns cannot be corrected after 6 years .

     25.    Deduction for Employer contribution in NPS increased from 10% to 14%.

     26.    Settlements amounts paid for infraction of law not to be allowed as deduction.

     27.    Partners’ Salary allowance slabs  changed from first 3 lacs profits to 6 lacs and on first slab deduction shall be allowed to the extent of 3 lacs or 90% whichever is higher and on balance book profits @ 60%.

     28.     Vivaad se Vishwas Scheme:

    •  i.    For appeals filed after 31-01-20, dispute may be settled on payment of tax amount only. Where dispute relates to Interest /penalty/fee only, only 25% of disputed interest/penalty/fee to be paid for appeals filed after 31-01-2020.
    •  ii.    For appeals filed before 31-01-20, dispute may be settled on payment of tax+ 10%. Where dispute relates to Interest /penalty/fee only, only 30% of disputed interest/penalty/fee to be paid for appeals filed before 31-01-2020.


     29.    Scheme of Block Assessment for search cases is introduced. Block period income to be assessed @ 60%, without interest and penalty except in specified circumstances u/s 158BFA where appeal can be filed before ITAT against such order. Block assessment to be completed within 12 months from the end of month in the last authorization is executed.

    30.     Search cases limit reduced to 6 years.

     

     31.     Re-opening of previous years limited to 5 years. Reassessment provisions revamped.

     32.    Re-opening to be done with approval of the Additional/Joint Commissioner.

    33.    Period of return filing in response to notice u/s 148 increased to 3 months and if return is filed within 3 months, it shall be deemed to be return u/s 139

    34.    Employer contribution deduction increased from 10% to 14% and deduction for private employees u/s 80CCD also increased from 10% to 14%.

    35.    Appeal to ITAT to be allowed for penalty u/s 158BFA in search cases.

    36.    Appeal to ITAT within 2 months from end of month in which appeal is communicated to assess/PCIT instead of 60 days from date of receipt of order.

    37.     For trusts, section 10(23C) regime to be merged to section 11 and no application for approval  u/s 10(23C) shall be entertained.


    38.    PCIT is empowered to condone delay in filing 12A, if he considers there was reasonable cause for delay in filing application.

    39.     80G Registration timelines to be rationalized.

    40. 12A/80G registration applications of renewal of registration, abstention of final registration, modification of objects and new trusts not having availed exemption before, to be decided within 6 months from end of quarter in which application is filed instead of 6 months from the end of month in which registration application is filed.

    41.     Merger of charitable trusts with trusts having same/similar objects and registered u/s 12AB/12AB or approved u/s 10(23C)  shall not invite exit tax.

    42.     Income from letting residential houses by owner cannot be taxed under Profits and gains of business or professions.

    43.    Penalty for non-disclosure of foreign assets (except immovable property) up to 20 lacs not to be imposed.

    44.    Option to quote Aadhaar Enrolment ID instead of Aadhaar number for PAN linking abolished and persons who have obtained PAN on the basis of enrolment ID shall intimate their Aadhaar Number.

    45.    Commissioner appeal empowered to set aside ex parte assessments. Such assessments to be completed within one year from end of financial year in which order is passed

    46.     Limit for assessment of belated return return u/s 119(2)(b) shall be 12 months from end of FY in which return is filed.

    47.    Withholding of refund allowed even if grant of refund is not prejudicial to interest of revenue


    48.    Withholding of refund allowed up to 60 days from date on which assessment/ reassessment is made causing the withholding of refund and interest on delayed refund shall be allowed accordingly.

    49.    Buy back of shares shall be treated as dividend in the hands of shareholders and shall be taxable under head Income from other sources and no deduction shall be allowed in respect of original purchase of shares. Exemption on buy back of shares being abolished. Value of consideration on buy back of shares shall be taken as NIL resulting in capital loss equal to the amount invested in shares which shall be set off and carried forward against capital loss only. 20% Tax on the amount distributed on buy back of shares was also abolished. 10% TDS shall apply on income distributed by buy back of shares.

    50.    Presumptive taxation @ 20% from carriage of passengers for non residents engaged in operating cruise ships , being introduced. Where foreign company is operating a cruise ship and another foreign company leases ships on rentals, rental income of the leasing company shall be exempt if both companies are subsidiaries of the same holding foreign company.

    51.    Equalization levy @ 2% on e-commerce supplies being abolished.

    52.    TPO authorized to deal with specified domestic transactions also not referred by AO. Earlier TPO could deal only with international transactions.

    Important GST Proposals:
    1.    Section 16(5) inserted for FY 2017-18 to 20-21 to extend date availment of ITC to 30-11-21. ITC already reversed or payments already made shall not be refunded.

    2.    Waiver of Interest and penalty against SCN u/s 73/74, for periods 17-18 to 19-20 before issue of Order.

    3.    ITC on period between cancellation to revocation will be available if returns filed within 30 days of revocation, subject to tile limit u/s 16(4)

    4.    ENA, Rectified spirit brought outside GST.

    5.    ITC Blocked for payment u/s 74 restricted to demand till 23-24

    6.    Section 73,74 shall operate till 31-03-24 only. New section 74A to be inserted in place to provide uniform period of SCN for demand up to 42 months with higher penalty. Period of Issue of order allowed within 12 months from date of issuance of SCN, which is further extendable by 6 months.

    7.    No refund  to be allowed for goods subject to export duty whether export is made under LUT or on payment of tax.

    8.    Refund on payment IGST payment to be stopped barring notified persons and notified class of goods/services.

    9.    Conditional waiver of Interest and penalty for cases for FY 17-18 to 19-20 by inserting new section 28A

    10.     Additional Pre-deposit rate for appeal to GSTAT reduced from 20% to 10%. Maximum pre-deposit before first appellate authority also reduced from 50 Crores  to 40 Crores. Also maximum pre-deposit before GSTAT reduced from 100 Crores to 40 Crores

    11.    Mandatory filing of monthly TDS returns irrespective of tax liability being introduced.

    12.     Summons can be attended by authorized persons also.



    CA RAJ CHAWLA