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Section 234F Needs Urgent Review And Withdrawal

Advocate Narayan Jain has argued that the newly inserted section 234F, which levies a fee for late filing of return, is harsh, oppressive, unreasonable and arbitrary. He has pointed out that so-called “fee” is really a “penalty” in disguise and that it results in a violation of the principles of natural justice. He has given convincing reasons in support of his contention


Section 234F, inserted through the Finance Act, 2017 with effect from assessment year 2018-19 is being debated and has been recently challenged in Madras High the constitutionality of Section 234F of the Income Tax Act, 1961, which prescribes a fee for delay in filing IT Returns. Let us analyse various dimensions and see whether imposition of Late Fee under section 234F is justified or not.

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Date Extension Tug Of War

CA Prarthana Jalan has pointed out that it has become an annual ritual for taxpayers and the CBDT to indulge in a “tug of war” for extension of the due date for filing the returns of income. She explains that this sorry state of affairs is because the CBDT invariably delays issuing the relevant ITR Forms and other utilities necessary for filing the returns. The result of the delay by the CBDT is that the taxpayers are deprived of the time contemplated by the statute for preparing the return. The author has pleaded with the CBDT to rise above petty considerations and magnanimously extend the due date without waiting till the 11th hour to do so

Every year’s date extension Tug of War has started between CA’s, lawyers, tax practitioners, trade associations, tax payers on one side and CBDT on another side. Though this time because of new amendments made in Income Tax Act particularly compulsory levy of Fees u/s 234F (though how far it is justified coupled with interest u/s 234A would surely be decided by Hon’ble Courts in the near future) ranging from Rs 1,000/- to 10,000/- for filing of return after due date, the date extension tug of war has started in the July month itself instead of September.

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New ITR Forms for Financial Year 2017-18 to be filed in time

Advocate Narayan Jain has systematically analyzed the numerous income-tax return (ITR) forms issued by the CBDT for AY 2018-19 and explained the circumstances in which each has to be used. He has also elaborated on the documents that are required to accompany the returns. The consequences of not filing the returns within the prescribed due dates have also been explained in a clear manner

The Central Board of Direct Taxes has notified the ITR forms for the Assessment Year (AY) 2018-19. The Income Tax Returns are to be filed within due date specified under section 139(1) and if these are not filed within such date, it may entail Late Fee, as discussed in this article.

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Section 115BBE And Sections 68/69: Taxation Of Unexplained Income Or Investment

Advocate Narayan Jain has conducted a thorough analysis of the provisions of sections 68, 69 and 115BBE and explained their precise implications. The author has answered all the important queries that arise in day-to-day practice with respect to these statutory provisions. He has also referred to all the important judgements on the subject

1. Section 115BBE

This article aims at highlighting the provisions of Section 115BBE of the Income-tax Act, 1961 (Act), applicable from Asst. Year 2017-18 onwards and some practical concerns surrounding its applicability.

1.1 Certain unexplained cash credit, investment, expenditure, etc., are deemed as income under Section 68, Section 69, Section 69A, Section 69B, Section 69C and Section 69D of the Act and were earlier subject to tax as per the tax rate applicable to the taxpayer. As a consequence, in case of individuals, HUF, etc., no tax was levied up to the basic exemption limit and even if such income was higher than basic exemption limit, it could be levied at the lower slab rate.

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Tax Management Through Will, Family Arrangement And Private Trust

N. M. Ranka, Senior Advocate, has explained the law and procedure of how substantial taxes can be legitimately saved through the mechanism of Wills, Family Arrangements and Private Trusts. The learned author has referred to all the important statutory provisions and judicial pronouncements on the subject. He has also emphasized the safeguards that taxpayers should take to ensure that their tax planning efforts do not fall foul of the law

1. Tax Management

A rupee of tax saved is much more than the rupee of income earned. After understanding the tax laws, availing of various exemptions, deductions and incentives provided under the tax laws and resorting to tax management / tax planning, many tax payers could promote their resources and prosper. So much so that one could reduce the tax burden to a tolerance limit. Brunt of taxation can be substantially reduced by adopting proper tax planning. Tax management is sound law and certainly not bad morality to so arrange one’s affairs as to reduce the brunt of taxation to a minimum.

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The Law On Prosecution And Recovery Proceedings – Remedies Available To Taxpayers

firoze andhyarujina

Firoze B. Andhyarujina, Senior Advocate, has provided a comprehensive review of the constitutional remedies available under the Income-tax law with special reference to prosecution and recovery proceedings. The author has discussed all the important circulars and instructions issued by the CBDT and also referred to important judgements of the Supreme Court and High Courts on the subject

“Legislature would be guilty of an unconstitutional delegation of its legislative function and power if instead of laying down the policy of law or some other standard or objective criteria for the application of the law, it leaves the matter of selection of the persons or objects for directing the law against them, according to the uncontrolled discretion of the administrative authority.”

State of West Bengal vs. Anwar Ali Sarkar AIR 1952 SC 75.

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Thin Capitalisation: The Multinational Tax Avoidance Strategy

CA Ashish Chadha has explained the law on “Thin Capitalisation” in the context of section 94B of the Income-tax Act and the judgements on the point. He has also identified the issues which lack clarity and which can be potential sources of dispute. He has called upon the authorities to clarify the contentious issues so as to enable seamless implementation of the law

1. Introduction

Debt and equity are the elementary sources of raising funds for any business organisation. Although, it is of supreme importance for every business entity to adopt the right financing mix of debt and equity, certain entities tend to become highly leveraged by having a thin capital structure.

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Section 14A & Rule 8D: Analysis Of Recent Important Judgements

CAs Ketan Ved and Rubal Arora have systematically tabulated the recent important decisions on the various contentious issues arising under section 14A and Rule 8D. The key takeaways from the judgements are given. The analysis will prove invaluable as a ready reckoner on the subject

Section 14A of the Income-tax Act, 1961 [Act] was introduced by the Finance Act, 2001 with retrospective effect from 01 April 1962, to provide for disallowance of expenditure incurred / deemed to have been incurred in relation to income not chargeable to tax.
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Are We Doing Injustice With Ourselves While Getting Justice For Others?

CA Prarthana Jalan has issued the timely warning that professionals get so obsessed with their professional duties, that they do not even realize that they are neglecting their own well-being and that of their families. She urges everyone to maintain a healthy work-life balance lest we face health and emotional problems later in life

Just a few days back, somebody asked me “what are your working hours”?

To this question with curved eyebrows I started with “10-6, no actually 9.30 to 7 or sometimes beyond or early to that, depends upon the work” and eventually the correct answer that I was able to arrive at was surprisingly from the time I get up in the morning till the time I am asleep in the night.

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The Law On Taxability Of Loan Waivers Explained

Sashank Dundu

Advocate Sashank Dundu has systematically analyzed all the recent judgements of the Supreme Court and High Courts on the controversial question as to whether benefits arising from waiver of loans constitute a capital or revenue receipt. He has also provided a clear-cut explanation of the interplay between sections 41(1), 28(iv) and 56(2)(x) on the taxability of such benefits

Waiver of Loan – Capital or Revenue – Benefit or Perquisite – Whether the law is settled?

1. Introduction:

1.1 Recently the Supreme Court in the case of Mahindra and Mahindra Ltd. [2018] 93 32 (SC), laid down the law that waiver of loan shall not be taxable either u/s 28(iv) or s.41(1). The law has been laid down in respect of two sections under the Income-tax Act as follows :

• As per the requirement of s.28(iv), the value of any benefit or perquisite, whether convertible into money or not, arising from business or the exercise of a profession. It clearly mentions that such benefit can be in any form, which can also be convertible into money. However, it should not be money. The Apex court has now clarified that ‘waiver of loan’ should be treated as ‘receipt of money’ and hence such receipt of money would fall outside the purview of s.28(iv) and accordingly cannot be taxable.

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