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Specified transactions where PAN is mandatory

The government has decided that quoting of PAN is mandatory for transactions of an amount exceeding Rs.2 lakh regardless of the mode of payment. To bring a balance between burden of compliance on legitimate transactions and the need to capture information relating to transactions of higher value, the Government has also enhanced the monetary limits of certain transactions which require quoting of PAN.

The changes to the Rules will take effect from 1st January, 2016.

pan

A chart highlighting the key changes to Rule 114B of the Income-tax Act is as under:

Sr. No. Nature of Transaction Existing provision New provision
1 Immovable property Sale/ purchase valued at Rs.5   lakh or more 1.       Sale/ purchase exceeding Rs.10 lakh2.       Properties valued by Stamp Valuation authority at amount exceeding Rs.10 lakh will also need PAN.
2 Motor vehicle (other than two wheeler) All sales/purchases No Change
3 Time deposit Time deposit exceeding Rs.50,000/- with a banking company. 1.       Deposits with Co-op banks, Post Office, Nidhi, NBFC companies will also need PAN.2.       Deposits aggregating to more than Rs.5 lakh     during the year will also need PAN.
4 Deposit with Post Office Savings Bank Exceeding Rs.50,000/- Discontinued
5 Sale or purchase of securities Contract for sale/purchase of a value exceeding Rs.1 lakh. No Change
6 Opening an account (other than time deposit) with a banking company All new accounts 1.       Basic Savings Bank Deposit Account excluded (no PAN requirement for opening these accounts).2.       Co-operative banks also to comply.
7 Installation of telephone/ cellphone connections All instances Discontinued
8 Hotel/restaurant bill(s) Exceeding Rs.25,000/- at any one time (by any mode of payment) Cash payment exceeding Rs.50,000/-.
9 Cash purchase of bank drafts/ pay orders/ banker’s Amount aggregating to Rs.50,000/- or more on any one day Exceeding Rs.50,000/- on any one day
10 Cash deposit with banking company Amount aggregating to Rs.50,000/- or more on any one day Exceeding Rs.50,000/- on any one day
11 Foreign travel Cash payment in connection with foreign travel of an amount exceeding Rs.25,000/- at any one time (including fare, payment to travel agent, purchase of forex) Cash payment in connection with foreign travel of an amount exceeding Rs.50,000/- at any one time (including fare, payment to travel agent, purchase of forex)
12 Credit card Application to banking company/ any other company/institution for credit card No Change
13 Mutual fund units Payment of Rs.50,000/- or more for purchase Payment exceeding Rs.50,000/- for purchase
14 Shares of company Payment of Rs.50,000/- or more to a company for acquiring its shares 1.       Opening a demat account2.       Purchase or sale of shares of an unlisted company for an amount exceeding Rs.1 lakh per transaction
15 Debentures/ bonds Payment of Rs.50,000/- or more Payment exceeding Rs.50,000/-
16 RBI bonds Payment of Rs.50,000/- or more Payment exceeding Rs.50,000/-
17 Life insurance premium Payment of Rs.50,000/- or more Payment exceeding Rs.50,000/-
18 Purchase of jewellery/bullion Payment of Rs.5 lakh or more at any one time or against a bill Deleted and merged with Sr. No. 19
19 Purchases or sales of goods or services No requirement Purchase/ sale of any goods or services exceeding Rs.2 lakh per transaction

Roadmap for phasing out corporate tax exemptions

The Finance Minister in his Budget Speech, 2015 indicated that the rate of corporate tax will be reduced from 30% to 25% over the next four years along with corresponding phasing out of exemptions and deductions. This is a step towards simplification of tax laws, which is expected to bring about transparency and clarity.

Corporate Tax

The Government proposes to implement this decision in the following manner:

  • Profit linked, investment linked and area based deductions will be phased out for both corporate and non-corporate tax payers.
  • The provisions having a sunset date will not be modified to advance the sunset date. Similarly the sunset dates provided in the Act will not be extended.
  • In case of tax incentives with no terminal date, a sunset date of 31.3.2017 will be provided either for commencement of the activity or for claim of benefit depending upon the structure of the relevant provisions of the Act.
  • There will be no weighted deduction with effect from 01.04.2017.

Based on the above principles, the details of the phasing out plan to be implemented are as under:

Section 32 : The depreciation under the Income-tax Act is available up to 100% in respect of certain block of assets. The highest rate of depreciation under the Income-tax Act is proposed to be reduced to 60%. This is proposed to be made applicable from 01.4.2017. The new rate is proposed to be made applicable to all the assets (whether old or new) falling in the relevant block of assets.

Section 35AD : of the Income-tax Act provides for 100% deduction of capital expenditure (other than expenditure on land, goodwill and financial assets) incurred by certain specified businesses such as laying and operating a cross-country natural gas or crude or petroleum oil pipeline network, building hotel (two star and above), warehousing facility for sugar etc. However, in case of a cold chain facility, warehousing facility for storage of agricultural produce, an affordable housing project, production of fertiliser etc. weighted deduction of 150% of capital expenditure is allowed. It is proposed that no weighted deduction will be allowed on any specified business w.e.f 01.4.2017.

Section 35AC: No deduction under section 35AC will be available from financial year 2017-18 (Assessment Year 2018-19).

Section 35 : Section 35 of the Income-tax Act provides for deduction for expenditure incurred on scientific research. It allows for both capital and revenue expenditure and also allows for weighted deduction for donations made to certain institutions/associations/company for scientific research. It is proposed to provide that

  • deduction under section 35(1)(ii), (iia), (iii) and 35 (2AA) is proposed to be restricted to 100% from F.Y 2017-18, and
  • deduction under section 35(2AB) of the Income-tax Act is proposed to be limited to 100% from Financial Year 2017-18 as against 200% available up to 31.03.2017 under the Income-tax Act.

There are certain tax incentives which at present do not have any sunset date for commencement of activity. It is proposed to provide a sunset date of 31.03.2017 for commencement of activity in the following cases:

  • Development, operation and maintenance of infrastructure facility [Section 80-IA (4)(i)]
  • Development of special economic zone (Section 80-IAB)
  • Export of articles or things or services by a unit located in a Special Economic Zone (Section 10AA)
  • Commercial production of natural gas in blocks licenced under CBM-IV and NELP VIII. [Section 80-IB(9)(iv)&(v)]
  • Commercial production of mineral oil from blocks licenced under a contract awarded up to 31.03.2011. [Section 80-IB(9)(ii)]

Section 35CCC and 35CCD : No weighted deduction is proposed to be provided under Section 35CCC and 35CCD from 01.04.2017. However deduction up to 100% of expenditure referred to therein shall be available.

0.5% Swachh Bharat Cess leviable on all services from November 15

Today the central government has decided to impose 0.5 per cent Swachh Bharat Cess on all taxable services with effect from 15th November, 2015. Finance Minister Arun Jaitley had in budget 2015-16 proposed to levy Swachh Bharat Cess of up to 2 per cent on all or certain services but it ultimately settled to 0.5 per cent.

Swachh Bharat

The government has taken a step to involve each and every citizen in making contribution to Swachh Bharat Programme. The proceeds from this cess will be exclusively used for Swachh Bharat drive.

This Swachh Bharat Cess would be charged in addition to 14 per cent service tax rate. This means the effective rate of Service Tax would be 14.50 per cent.

Related notification as follows:

GOVERNMENT OF INDIA
MINISTRY OF FINANCE
(DEPARTMENT OF REVENUE) 

 

New Delhi, the 6th November, 2015

 

Notification No. 22/2015-Service Tax

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) read with sub-section (5) of section 119 of the Finance Act, 2015 (20 of 2015), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts all taxable services from payment of such amount of the Swachh Bharat Cess leviable under sub-section (2) of section 119 of the said Act, which is in excess of Swachh Bharat Cess calculated at the rate of 0.5 percent. of the value of taxable services:

Provided that Swachh Bharat Cess shall not be leviable on services which are exempt from service tax by a notification issued under sub-section (1) of section 93 of the Finance Act, 1994 or otherwise not leviable to service tax under section 66B of the Finance Act, 1994.

This notification shall come into force from the 15th day of November, 2015.

 [F.No. 354/129/2015 – TRU]

 

(K. Kalimuthu)
Under Secretary to the Government of India

 

Get ready for e-filing Income Tax Return

Salaried individuals, freelancers, sole proprietors and professionals are required to file income tax return on or before extended due date of e-filing income tax return i.e. 31st August, 2015. The preparation of the process of e-filing income tax return requires various documents that will help you to smoothly compute and file your tax return.

E-filing 1

1. What are the documents required for e-filing the income tax return?

Salaried Individuals

1. Form 16 and Part B annexure: This is issued by the employer

2. Housing loan or interest deduction certificate: This is issued by the bank from where the loan is taken

3. TDS certificate from bank if individual receives interest on fixed deposits.

4. Investment details: These are the investments not disclosed in form 16.

a. LIC premium paid receipts

b. PPF pass book

c. Fixed deposits receipts

d. Mutual fund or Equity linked saving scheme (ELSS)

e. Any other investments

5. PAN card

6. Adhaar Card

7. Saving Bank A/c details like A/c No. MICR code, IFSC code, name & address of bank

8. Sale deed: If property is sold during the year

9. Share transaction slip: In case bought and sold the shares during the year.

Sole proprietors, freelancers and professionals

1. Bank statement (savings or current)

2. Profit & Loss A/c and Balance sheet (if already prepared)

3. TDS certificate issued by banks and others

4. Investment details:

a. LIC premium paid receipts

b. PPF pass book

c. Fixed deposits receipts

d. Mutual fund or Equity linked saving scheme (ELSS)

e. Any other investments

5. PAN card

6. Adhaar Card

7. Saving Bank A/c details like A/c No. MICR code, IFSC code, name & address of bank

8. Sale deed: If property is sold during the year

9. Share transaction slip: In case bought and sold the shares during the year.

 

2. How does taxnotion.com helps you in e-filing your income tax return?

At Taxnotion.com, we provide simplified and smooth online income tax return filing experience to our users. Users just have to mail us the above documents, our tax experts will get in touch with you to understand and resolve your queries. Our tax expert will prepare your tax return and efile the same.

 

 

 

 

 

 

Due date of filing Income Tax Return for Financial Year 2014 -15

As per the provisions of Section 139 of Income Tax Act, 1961, the due date of filing income tax return for financial year 2014-15 relevant assessment year 2015-16 for all types of assessees is as under:

Income Tax Return Due Date FY 2014-15

Sr no

Particulars

Due date

1

Corporate assessees which is required to furnish a report u/s 92E (transfer pricing) of the Income Tax Act, 1961

30.11.2015

2

For all  other Corporate assessees

30.09.2015

3

For non corporate assessees such as Partnership Firm, Proprietorship Firm whose accounts are required to be audited  under Income tax act.

Business having turnover more than Rs. 1 Crore, professional or firms engaged in providing services having turnover more than Rs. 25 lacs and businesses covered under section 44AD, 44AE and 44AF which shows turnover less than the prescribed limits under aforesaid sections)

30.09.2015

4

Partners of Partnership firms and Directors of Companies

30.09.2015

5

Assessees  having income from Salary, Income from House property, Interest income , Business Income where accounts are not required to be audited.

30.08.2015

1. Who is required to file Income Tax Return?

  • Every Company (whether makes profit or loss),
  • Every Firm (whether makes profit or loss) and
  • Every Individual/HUF/Association of Person (AOP)/ Body of Indiviuals (BOI)/ Artificial Judicial Person

2. Who is not required to file the Income Tax Return?

Assessees having total income below exemption limits or below maximum amount not chargeable under Income       Tax Act, 1961.

3. What is total income?

Total income means sum of all the incomes less deduction under chapter VI-A (i.e. Section 80C to 80U) and               exemptions under Section 10, 10B and 10BA of Income Tax Act, 1961.