NOTIFICATIONS
AUTHORIZING PUNJAB NATIONAL BANK – SUBSCRIPTION UNDER PUBLIC PROVIDENT FUND SCHEME, 1968 AND SENIOR CITIZENS SAVINGS SCHEME RULES, 2004: In regard to Para 2(b) of Public Provident Fund Scheme and Rule 2(e) (ii) of Senior Citizens Savings Scheme Rules, the Central Government authorized four thousand four hundred twelve branches of Punjab National Bank to receive subscriptions under the above said schemes.
(NOTIFICATION [F.NO.F.7/33/2015-NS.II], DATED 12-11-2015)
SECTION 200 OF THE INCOME-TAX ACT, 1961 - DEDUCTION OF TAX AT SOURCE - DUTY OF PERSON DEDUCTING TAX - STRINGENT AUTHENTICATION MECHANISM THROUGH CORPORATE HEAD QUARTER SERVER FOR FILING OF CORRECTION STATEMENTS & DOWNLOAD OF TDS CERTIFICATE, CONSOLIDATED FILES ETC. BY BANKS/CORPORATES: CPC-TDS initiated "corporate connect" with an intent to pursue TDS compliance related issues of all branches of a corporate with their corporate headquarter. The criticality of this initiative can be understood from the fact that 30% of total TDS defaults and 80% of total PAN errors pertain to only 4000 PAN entities. This will have the following three benefits: (i) Secured access of sensitive third party data: Only authorized representative of banks/corporates will be able to access TRACES portal as the login would be through corporate server only. (ii) Corporate headquarter can keep track of the access requests of the branches and this will help in enforcing discipline among the branches. (iii) No need to procure separate digital signature for each bank/corporate branch to access TRACES portal on account of routing of request through corporate server.
(NOTIFICATION NO.3/2015[F.NO: DGIT(S)/CPC (TDS)/CORP_AUTHENTICATION MECH/2015-16/14557-14690], DATED 1-12-2015)
SECTION 197A OF THE INCOME-TAX ACT, 1961 - DEDUCTION OF TAX AT SOURCE - NON-DEDUCTION IN CERTAIN CASES - SIMPLIFICATION OF PROCEDURE FOR FORM NO.15G & 15H: Section 197A of the Income tax Act provides for no deduction in certain case by submitting a declaration using Form 15G/15H as laid down in Rule 29C of the Income tax Rules. The person responsible for paying any income of the nature referred to in section 197A shall enable the payee to furnish the declaration in electronic form after due verification through an electronic process. The declarant shall mandatorily quote his/her PAN in the declaration form 15G/H in accordance with the provisions of section 206AA(2).
A unique identification number shall be allotted to declaration (paper /electronic). The payer shall digitize the paper declaration and upload all declarations received during a particular quarter at Income Tax Departmental site on quarterly basis.
(NOTIFICATION NO.4/2015 [F.NO: DGIT(S)/CPC (TDS)/DCIT/15H/2015-16/14425-556, DATED 1-12-2015)
SECTION 90 OF THE INCOME-TAX ACT, 1961 - DOUBLE TAXATION AGREEMENT - AGREEMENT FOR AVOIDANCE OF DOUBLE TAXATION AND PREVENTION OF FISCAL EVASION WITH FOREIGN COUNTRIES – THAILAND: Agreement between the Government of the Republic of India and the Government of the Kingdom of Thailand for the avoidance of double taxation and prevention of fiscal evasion with respect to taxes on income was signed in Thailand on the 29th day of June, 2015. The Agreement shall have effect in India in respect of income derived in any fiscal year beginning on or after the first day of April following the calendar year in which the said Agreement enters into force. In regard to Section 90 of the Income Tax Act the Central Government notified that all the provisions of said Agreement be given effect to in the Union of India.
(NOTIFICATION NO.88/2015 [F.NO.503/5/2005-FTD-II] / SO 3244(E), DATED 1-12-2015)
INCOME-TAX (EIGHTEENTH AMENDMENT) RULES, 2015 - INSERTION OF RULE 127- SERVICE OF NOTICE, SUMMONS, REQUISITION, ORDER AND OTHER COMMUNICATION: In regard section 282 read with section 295 of the Income-tax Act the Central Board of Direct Taxes made Income-tax (18thAmendment) Rules, 2015. After rule 126, following rule shall be inserted:
"127. Service of notice, summons, requisition, order and other communication (1) For the purposes of sub-section (1) of section 282, the addresses (including the address for electronic mail or electronic mail message) to which a notice or summons or requisition or order or any other communication under the Act (hereafter in this rule referred to as "communication") may be delivered or transmitted shall be as per sub-rule (2).
(2) The addresses referred to in sub-rule (1) shall be—(a) for communications delivered or transmitted in the manner provided in clause (a) or clause (b) of sub-section (1) of section 282—(i) the address available in the PAN database of the addressee; or (ii) the address available in the income-tax return to which the communication relates; or (iii) the address available in the last income-tax return furnished by the addressee; or (iv) in the case of addressee being a company, address of registered office as available on the website of Ministry of Corporate Affairs: Provided that the communication shall not be delivered or transmitted to the address mentioned in item (i) to (iv) where the addressee furnishes in writing any other address for the purposes of communication to the income-tax authority or any person authorised by such authority issuing the communication; (b) for communications delivered or transmitted electronically— (i) email address available in the income-tax return furnished by the addressee to which the communication relates; or (ii) the email address available in the last income-tax return furnished by the addressee; or (iii) in the case of addressee being a company, email address of the company as available on the website of Ministry of Corporate Affairs; or (iv) any email address made available by the addressee to the income-tax authority or any person authorised by such income-tax authority.”
(NOTIFICATION NO.89/2015 [F.NO.133/79/2015-TPL]/GSR 923(E), DATED 2-12-2015)
SECTION 35AC OF THE INCOME-TAX ACT, 1961 - ELIGIBLE PROJECTS OR SCHEMES, EXPENDITURE ON - NOTIFIED ELIGIBLE PROJECTS OR SCHEMES: The Central Government, with reference to sub-section (1) read with clause (b) of the Explanation to section 35AC of the Income-tax Act, on the recommendation of the National Committee for Promotion of Social and Economic Welfare, notified the institutions approved by the said National Committee and also notified the scheme(s) / project(s) carried out by the notified institutions as eligible projects. The notified institutions and their projects are given in the mentioned notification.
(NOTIFICATION NO. SO 3033(E) [NO.265/2015 (F.NO.V.27015/4/2015-SO (NAT.COM))], DATED 7-12-2015)
SECTION 80C OF THE INCOME-TAX ACT, 1961- DEDUCTION – IN RESPECT OF PENSION FUND: In regard Section 80C (2) (xiv) of the Income Tax Act, the Central Government specified the HDFC Retirement Savings Fund, set up by the HDFC Mutual Fund registered under the Securities and Exchange Board of India (Mutual Funds) Regulations, as a pension fund for the purposes of the said section for the assessment year 2016-17 and subsequent assessment years.
(NOTIFICATION NO.91/2015 [F.NO.178/21/2014-ITA-I]/SO 3313(E), DATED 8-12-2015)
INCOME-TAX (TWENTIETH AMENDMENT) RULES, 2015 - INSERTION OF RULE 12CB & FORM NO.64C & FORM NO.64D: In regard Section 295 read with sub-section (7) of section 115UB of the Income-tax Act, CBDT made the Income-tax (20th Amendment) Rules, 2015. In the Income-tax Rules, 1962, after rule 12CA, the following rule shall be inserted:
"12CB. Statement under sub-section (7) of section 115UB. (1) The statement of income paid or credited by an investment fund to its unit holder shall be furnished by the person responsible for crediting or making payment of the income on behalf of an investment fund and the investment fund to the— (i) unit holder by 30th day of June of the financial year following the previous year during which the income is paid or credited in Form No. 64C, duly verified by the person paying or crediting the income on behalf of the investment fund in the manner indicated therein; and (ii) Principal Commissioner or the Commissioner of Income-tax within whose jurisdiction the Principal office of the investment fund is situated by 30th day of November of the financial year following the previous year during which the income is paid or credited, electronically under digital signature, in Form No. 64D duly verified by an accountant in the manner indicated therein(2) The Principal Director General of Income-tax (Systems) or Director General of Income-tax (Systems), as the case may be, shall specify the procedure for filing of Form No. 64D and shall also be responsible for evolving and implementing appropriate security, archival and retrieval policies in relation to the statements of income paid or credited so furnished under this rule”
(NOTIFICATION NO.SO 3357(E) [NO.92/2015 (F.NO.142/22/2015-TPL], DATED 11-12-2015)
INCOME-TAX (TWENTY FIRST AMENDMENT) RULES, 2015 - SUBSTITUTION OF RULE 37BB: In regard Section 195(6) read along with section 295 of the Income-tax Act, CBDT made the Income-tax (21st Amendment) Rules, 2015. In the Income-tax Rules, for rule 37BB, the Rule "37BB. Furnishing of information for payment to a non-resident, not being a company, or to a foreign company” given in the mentioned notification should be inserted.
(NOTIFICATION NO.GSR 978(E) [NO.93/2015 (F.NO.133/41/2015-TPL], DATED 16-12-2015)
SECTION 90 OF THE INCOME-TAX ACT, 1961 - DOUBLE TAXATION AGREEMENT - AGREEMENT FOR AVOIDANCE OF DOUBLE TAXATION AND PREVENTION OF FISCAL EVASION WITH FOREIGN COUNTRIES – MACEDONIA: In regard to Section 90 of the Income Tax Act the Central Government directed that all the provisions of theAgreement between the Government of the Republic of India and the Government of the Republic of Macedonia for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income as set out in the mentioned notification, shall be given effect to in the Union of India from the first day of April, 2015 being the first day of the next fiscal yearfollowing the year in which the said Agreement entered into force.
(NOTIFICATION NO. 94/2015 [F.NO.503/08/2004-FTD-I], DATED 21-12-2015)
CIRCULARS
SECTION 192 OF THE INCOME-TAX ACT, 1961 - DEDUCTION OF TAX AT SOURCE - SALARY - INCOME-TAX DEDUCTION FROM SALARIES DURING FINANCIAL YEAR 2015-16 UNDER SECTION 192: The Circular contains the rates of deduction of income-tax from the payment of income chargeable under the head "Salaries" during the financial year 2015-16 and explains certain related provisions of the Act and Income-tax Rules, 1962. The relevant Acts, Rules, Forms and Notifications are available at the website of the Income Tax Department- www.incometaxindia.gov.in.
(CIRCULAR NO.20/2015 [F.NO.275/192/2015-IT(B)],DATED 2-12-2015)
SECTION 119 OF THE INCOME-TAX ACT, 1961 - INCOME-TAX AUTHORITIES - INSTRUCTIONS TO SUBORDINATE AUTHORITIES - EXTENSION OF TIME FOR DEPOSIT OF TAX DEDUCTED AT SOURCE AND TAX COLLECTED AT SOURCE AND LAST DATE OF PAYMENT OF DECEMBER INSTALMENT OF ADVANCE TAX FOR F.Y. 2015-16 FOR STATE OF TAMIL NADU: The Central Board of Direct Taxes extended the due date [under section 200 (1) of the Act] for paying to the credit of the Central Government, tax deducted at source and the due date [under section 206C(3)] for paying to the credit of the Central Government, tax collected at source, in respect of deductions or collections made during the month of November, 2015, from 7th of December, 2015 to 20th of December, 2015 in respect of deductor located in the State of Tamil Nadu.
The Central Board of Direct Taxes extended the last date of payment of December installment of advance tax for FY 2015-16 from 15th December, 2015 to 31st December, 2015 in case of all the assessees, corporate and other than corporate, in the State of Tamil Nadu and Union territory of Puducherry.
(ORDER [F.NO.385/26/2015-IT(B)] AND [F.NO.385/26/2015-IT(B)] , DATED 5-12-2015 AND 15-12-2015 RESPECTIVELY)
SECTION 268A OF THE INCOME-TAX ACT, 1961 - FILING OF APPEAL OR APPLICATION FOR REFERENCE BY INCOME-TAX AUTHORITY - REVISION OF MONETARY LIMITS FOR FILING OF APPEALS BY THE DEPARTMENT BEFORE INCOME TAX APPELLATE TRIBUNAL, HIGH COURTS AND SUPREME COURT: In supersession of the Central Board of Direct Taxes Instruction No. 5/2014, dated 10-7-2014, CBDT prescribed monetary limits and other conditions for filing departmental appeals (in Income-tax matters) before Appellate Tribunal and High Courts and SLP before the Supreme Court. The monetary limits are Rs 10, 00,000/-, Rs 20, 00,000/- and Rs 25, 00,000/- before the Appellate Tribunal, High Court and Supreme Court respectively. It was clarified that an appeal should not be filed merely because the tax effect in a case exceeds the monetary limits prescribed above. Filing of appeal in such cases is to be decided on merits of the case. The word "tax effect" means the difference between the tax on the total income assessed and the tax that would have been chargeable had such total income been reduced by the amount of income in respect of the issues against which appeal is intended to be filed.
(CIRCULAR NO.21/2015 [F. NO. 279/MISC. 142/2007-ITJ (PT.)], DATED 10-12-2015)
SECTION 43B OF THE INCOME-TAX ACT, 1961 - BUSINESS DISALLOWANCE - CERTAIN DEDUCTIONS TO BE ALLOWED ONLY ON ACTUAL PAYMENT - EMPLOYER'S/EMPLOYEE CONTRIBUTION - ALLOWABILITY OF EMPLOYER'S CONTRIBUTION TO FUNDS FOR WELFARE OF EMPLOYEES IN TERMS OF SECTION 43B(b): In the light of the Supreme Court's decision in the matter Commissioner vs. Alom Extrusions Ltd, [2009] 185 TAXMAN 416 (SC), CBDT decided that no appeals may henceforth be filed on the grounds of non allowance of any sum payable by the assessee as an employer by way of contribution to any provident fund or superannuation fund or gratuity fund or any other fund for the welfare of employees, on or before the 'due date' and appeals already filed, if any, on this ground before Courts/Tribunals may be withdrawn/not pressed upon.
(CIRCULAR NO.22/2015 [F.NO.279/MISC./140/2015-ITJ],DATED 17-12-2015)
SECTION 119 OF THE INCOME-TAX ACT, 1961, READ WITH SECTIONS 6 AND 84 OF THE BLACK MONEY (UNDISCLOSED FOREIGN INCOME AND ASSETS) AND IMPOSITION OF TAX ACT, 2015 - INCOME-TAX AUTHORITIES - INSTRUCTIONS TO SUBORDINATE AUTHORITIES - NOTIFIED INCOME-TAX AUTHORITY: In regard to section 6 and section 84 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 ['Act'), the Central Board of Direct Taxes directed that w.e.f 18th December 2015he purposes of making declaration of undisclosed foreign assets under section 59 of the said Act and matters related thereto, shall be the designated Income-tax authority Shri Rahul Navin, CIT(TP)-1, New Delhi .
(ORDER [F.NO.225/322/2015/ITA.II], DATED 17-12-2015)
SECTION 6 OF THE INCOME TAX ACT,1961- RESIDENTIAL STATUS- DRAFT GUIDING PRINCIPLES FOR DETERMINING PLACE OF EFFECTIVE MANAGEMENT (POEM) OF A COMPANY: The Explanatory Memorandum to the Finance Bill, 2015 stated that a set of guiding principles to be followed in the determination of Place of Effective Management (PoEM) would be issued for the benefit of the taxpayers as well as the tax administration. Accordingly, the guiding principles were proposed to be issued in the mentioned circular.
(LETTER [F NO. 142/11/2015- TPL] DATED 23-12-2015)
PRESS RELEASES
SECTION 145 OF THE INCOME-TAX ACT, 1961 - METHOD OF ACCOUNTING - INCOME COMPUTATION AND DISCLOSURE STANDARDS (ICDS) NOTIFIED UNDER SECTION 145(2): The Central Government notified 10 ICDS vide Notification No.S.O.892(E) dated 31st March, 2015. After notification of the ICDS the stakeholders stated that certain provisions of ICDS may require clarifications/ guidance for proper implementation. These implementation issues raised by the stakeholders were referred to an expert committee comprising of departmental officers and professionals and the committee is currently examining these issues.
(PRESS RELEASE, DATED 26-11-2015)
SECTION 92CC OF THE INCOME-TAX ACT, 1961 - TRANSFER PRICING - ADVANCE PRICING AGREEMENT (APA) - The APA programme was introduced in the Income-tax Act, 1961 in 2012 vide the Finance Act, 2012. 5 APAs were concluded in the first year and 4 APAs got signed in the second year. This year has already witnessed the conclusion of 22 APAs. It is the aim of the CBDT to finalize another 30 to 40 APAs before the end of this fiscal to provide stability and confidence to foreign enterprises operating in India.
(PRESS RELEASE, DATED 27-11-2015)
SECTION 90 OF THE INCOME-TAX ACT, 1961 - DOUBLE TAXATION AGREEMENT - AGREEMENT FOR AVOIDANCE OF DOUBLE TAXATION AND PREVENTION OF FISCAL EVASION WITH FOREIGN COUNTRIES - JAPAN - PROTOCOL BETWEEN GOVERNMENT OF INDIA AND GOVERNMENT OF JAPAN ON AMENDMENT OF SAID AGREEMENT : The Union Cabinet approved signing and ratification of Protocol between India and Japan for amending the Double Taxation Avoidance Convention (DTAC) signed between the two countries in 1989 for avoidance of double taxation and for prevention of fiscal evasion, through a protocol. The Protocol will facilitate exchange of information, as per accepted international standards, on tax matters including bank information and information without domestic tax interest. There is a further provision in the Protocol for sharing any information received from Japan, with authorization of the competent authority in Japan and vice versa, in respect of a resident of India, with other law enforcement agencies. The Protocol also has a provision for India and Japan to lend assistance to each other in collection of revenue claims, as well as for exemption of interest income from taxation in the source country, with respect to debt-claims insured by the Government or Government-owned financial institutions.
(PRESS RELEASE, DATED 2-12-2015 AND 11-12-2015)
SECTION 90 OF THE INCOME-TAX ACT, 1961 - DOUBLE TAXATION AGREEMENT - MEETING BETWEEN - MEETING BETWEEN HEADS OF REVENUE ADMINISTRATION OF INDIA AND KOREA FOR SUSPENSION OF COLLECTION OF TAXES DURING PENDENCY OF MUTUAL AGREEMENT PROCEDURE (MAP): A meeting was held on 9th December, 2015 between Indian and Korean delegations headed by Revenue Secretary and Commissioner, National Tax Service, Korea under the Memorandum of Understanding for Mutual Co-operation between the countries. During the meeting, a new Memorandum of Understanding (MoU) on suspension of collection of taxes during pendency of Mutual Agreement Procedure (MAP) was signed. This MoU will relieve the burden of double taxation for the taxpayer in both the countries during the pendency of MAP proceedings. Further, both sides noted that transfer pricing dispute cases will be taken up for MAP under the revised DTAA between India and Korea.
(PRESS RELEASE, DATED 9-12-2015)
NEW FACILITY OF PRE-FILING TDS DATA WHILE SUBMITTING ONLINE RECTIFICATION: Central Board of Direct Taxes simplified the process of online rectification of incorrect TDS details filed in the Income Tax Return. Taxpayers were required to fill in complete details of the entire TDS schedule while applying for rectification on the e-filing portal of the Income-tax Department. To avoid this inconvenience, a new facility has been provided for pre-filling of TDS schedule while submitting online rectification request on the e-filing portal to facilitate easy correction or up-dating of TDS details. This is expected to considerably ease the burden of compliance on the taxpayers seeking rectification due to TDS mismatch
(PRESS RELEASE, DATED 10-12-2015)
CLARIFICATION REGARDING DEFECTIVE RETURNS NOTICES ISSUED TO FII/FPIs: Notices of defective returns were issued under section 139(9) of the Income-tax Act to Foreign Institutional Investors/Foreign Portfolio Investors (FIIs/FPIs) in cases where Balance Sheet and P&L account were not filled. In order to overcome this difficulty, it was clarified that such returns will not be treated as defective in cases where the FIIs/FPIs: (i) is registered with SEBI (ii) has no Permanent Establishment/ Place of Business in India (iii)
has provided basic information required under section 139(9)(f) of the Income-tax Act, if there is business income
(PRESS RELEASE, DATED 10-12-2015)
SECTION 139A OF THE INCOME-TAX ACT, 1961 - PERMANENT ACCOUNT NUMBER - AMENDMENT OF RULES REGARDING QUOTING OF PAN FOR SPECIFIED TRANSACTIONS: The Government decided that quoting of PAN will be required for transactions of an amount exceeding Rs.2 Lakh regardless of the mode of payment. The monetary limits have now been raised to Rs. 10 lakh from Rs. 5 lakh for sale or purchase of immovable property, to Rs.50,000 from Rs. 25,000 in the case of hotel or restaurant bills paid at any one time, and to Rs. 1 lakh from Rs. 50,000 for purchase or sale of shares of an unlisted company. In keeping with the Government's thrust on financial inclusion, opening of a no-frills bank account such as a Jan Dhan Account will not require PAN. Other than that, the requirement of PAN applies to opening of all bank accounts including in co-operative banks. The changes to the Rules will take effect from 1st January, 2016. A chart highlighting the key changes to Rule 114B of the Income-tax Act is attached to the mentioned press release.
(PRESS RELEASE, DATED 15-12-2015)
INSTRUCTIONS
SECTION 115JB OF THE INCOME TAX ACT, 1961- APPLICABILITY OF MINIMUM ALTERNATE TAX (MAT) - FOREIGN COMPANIES: In view of the decision as reflected in the Press Release dated 24.09.2015 and the commitment made by the Government before the Supreme Court it was reiterated that with effect from 01.04.2001, the provisions of section 1151B shall not be applicable to a foreign company (including an FlI/FP1) if —(i) the foreign company is a resident of a country with which India has a Double Taxation Avoidance Agreement and such foreign company does not have a permanent establishment in accordance with the provisions of the relevant Double Taxation Avoidance Agreement, or (ii) the foreign company is a resident of a country with which India does not have a Double Taxation Avoidance Agreement and such foreign company is not required to seek registration under section 592 of the Companies Act, 1956 or section 380 of the Companies Act, 2013. In view of the above the Supreme Court disposed of the Civil Appeal No. 4559/2013 in the case of Castleton Investment Ltd. The field authorities were advised that pending assessments involving applicability of MAT on foreign companies (including Ells/FP1s) should be completed in accordance with the decision of the Government.
(INSTRUCTION NO. 18/2015 [F.NO. 153/12/2015-TPL] DATED 23-12-2015)