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After the introduction of new section 115BAC on the new taxation regime for Individuals, there is confusion on whether the employer should deduct the income tax from the salary income as per the old regime or as per the new regime. How the employee will decide the option at the beginning of the year? Does the employee need to communicate his option to the employer? And so on.
https://www.taxcorner.co.in/2020/02/section-115bac-option-of-new-tax-to-employee-and-tds-by-employer.html

Read the clarification from the CBDT on the matter here-

https://www.taxcorner.co.in/2020/04/cbdt-issues-circular-to-clarify-option-under-section-115bac-and-tds-by-employer.html

Vide Notification No. 08/2020 dated 29.01.2020, the CBDT has amended the Income Tax Rules, 1962 and inserted new Rule 6ABBA to prescribe for other electronic modes of payments as prescribed for certain sections of the Act as per amendments introduced by the Finance Act, 2019.
https://www.taxcorner.co.in/2020/01/other-electronic-modes-of-payments-prescribed-under-the-income-tax-act.html

[As per section 269SU, only the installation of the requisite facilities of the prescribed modes pf payments will not suffice. A compliance report should also be required to be furnished on the e-filing portal.]

As per section 269SU, only the installation of the requisite facilities of the prescribed modes pf payments will not suffice. A compliance report should also be required to be furnished on the e-filing portal.

Click to read more..... https://www.taxcorner.co.in/2020/01/section-269su-online-compliance-report-on-e-filing-account.html

Dear experts,

I have a query on the time limit for section 143(2) in case of defective return.
In a case return in ITR-6 (company assessee) was filed on 27.09.2016 for AY 2016-17.
CPC issued  notices u/s 139(9) two times pointing out some defects before finally processing the ITR u/s 143(1). The assessee finally uploaded correct return after curing the defect on 27.11.17. The return was processed in Jan 2018 and refund was issued by CPC.

Now in August 2018, notice u/s 143(2) for the AY 2016-17 was issued by the AO. The notice is system generated and gives the reference to the 'return filed on 27.11.2017'.

Now under the circumstances, whether the notice issued in August 2018 is valid or not? Because normally, the time limit for issuing the notice u/s 143(2) was expired on 30.09.2017.

Please guide.

Dear Experts,

The Income for the FY 2014-15 is as under-

Loss from Business = -1,00,000

Deemed short term capital gain u/s 50 on depreciable asset = 2,00,000

Income from other sources  (forfeiture of advance money against capital asset)  = 40,000

The query is - What should be the order of set-off?

I want to set off as follows-

Loss from Business = -1,00,000

Income from other sources = 40,000

Remaining loss = -60,000

Capital gain u/s 50 = 2,00,000

Balance represents income as Capital gains = 1,40,000

Is the set off order correct? Or, Capital gain is first required to be adjusted with Capital gains and then IFOS.

Please guide.

Penalty u/s 271(1)(c) is imposed which may rnage from 100 to 300 percent of tax ought to be avoided. In this case, what does the 'tax' mean? Does it mean only the basic tax or tax including surcharge and education cess?
Please clarify.
Regards
Sujit

A company which deals in real estate transactions has entered in JDA with another developer for development of a project on a piece and parcel of land owned by it. The land is shown as Fixed Assets on the Balance of the Company.

The developer took three years time to complete the project and after which the landowner's share in the project was handed over to the landowner.

The company has paid Capital Gains Tax in the year in which JDA was entered into with the developer by virtue of applicability of Section 2(47)(v) i.e. three years back the capital gains tax was paid.

Now, after three years the landowner will account for the share of project received from the developer in lieu of exchange of land under the JDA.

The landowner will record the share of project as "Buildings" in its books and as per AS-10, the "Building is recorded which is much higher than the proportionate land extinguished in favour of developer. The difference between the land cost and the value of building is thus deriving "Gain" and recognized as "Profit on sale/exchange of assets" and transferred to P&L account.

Once the gain is transferred to P&L a/c, it hits MAT u/s 115JB of the Income Tax Act.

Now my query is-
Due to difference in point of taxation for the same transaction – Exchange of land for Building, "Capital Gains Tax" and "MAT" occurs in different years and taxes are paid on both the years. Is this correct? What should be the correct approach for accounting treatment so that the same transaction should not suffer taxation in two different years?

Had Capital Gain and Recognition of Building in Books took place in the same year; tax on capital gain and MAT would have set off each other in determining the Total Income on which tax is payable. But since here, the two events is taking place on the same transaction in two years, tax is paid in two years and the benefit of combining Capital Gain and MAT income is lost.

Please advice.

Regards
Sujit Talukder

Can someone provide a copy of petition filed before Income Tax ombudsman on refund matter.
Though no format is prescribed but some tradition is surely followed in drafting the petition for better presentation of the case.
I need the same for my own purpose and planning to approach the ombudsman.
Your help in this matter is highly solicited.

Regards
Sujit Talukder

Section 56(2)(vii)(b) provides that where any immovable property is received by an Individual or HUF at a price less than the stamp duty value, then the difference between actual value and stamp duty value would be taken as 'income' under the head "Income from other sources" in the hands of the buyer.

Second proviso to this clause excludes the operation of this clause in respect of 'any property' received from a relative etc. Explanation (d) to this clause defines 'property' to mean 'capital asset' of the assessee which inter alia includes immovable property being land or building or both.

In the background of above legal provision, the facts of a case is given below.

Mr A, an individual, wants to buy a Rural Agricultural Land from Mr B for Rs 1,00,000/- whose circle rate is Rs 5,00,000/-. The land was purchased by Mr B for Rs. 25,000/- and the resulting capital gain will be exempt in the hands of Mr B since the provisions of capital gains does not apply to a capital asset being rural agricultural land u/s 2(14)(iii).

Now, the query is-
Whether the difference between the actual purchase price for Rs 1,00,000/- and circle rate for Rs. 5,00,000/- to the tune of Rs. 4,00,000/- will be added as income in the hands of Mr A if-
(a)   Mr A will hold the asset as capital asset (Fixed Asset)
(b)   Mr A will hold the asset as stock-in-trade.

Regards
Sujit Talukder

[shall apply only in a case]

What is the applicability of section 43CA in respect of agreements entered prior to 01.04.2013 for selling flats to buyers and also part consideration received prior to April 2013 and some part is received after April 2013 and the property will now be registered. In cases the builders enters into agreement to sell after receipt of consideration and hands over the possession of the flats upon registration.

Now the query is-

If the registration takes place say in Sep. 2013 in respect of those agreements (entered before April 2013 and part consideration is also received) whether Section 43CA will be applicable to builders or not? –
Keeping in view the provisions of sub-section (4) of Section 43CA which stipulates "the provisions of sub-section (3) shall apply only in a case where the amount of consideration or a part thereof has been received by any mode other than cash on or before the date of agreement for transfer of the asset"

Further, sub-section (3) states that "where the date of agreement fixing the value of consideration for transfer of the asset and the date of registration of such transfer of asset are not the same, the value referred to in sub-section (1) may be taken as the value assessable by any authority of a State Government for the purpose of payment of stamp duty in respect of such transfer on the date of the agreement."

Will this covers or excludes the agreements entered before April 2013 and registered after April 2013 and consideration is received partly before April 2013 and partly afterwards?
Regards

Sujit Talukder

I have a query whether HUF can take an interest free loan from Karta / members and how income from the same in the hands of HUF will be treated? Will such income be clubbed in the hands of the Karta/ member from whom loan has been taken?

In my view, the income from loan will be taxed in the hands of the HUF and cannot be clubbed in the hands of the Karta/Member. Section 64(2) will be applicable only when the asset is transferred or converted into joint property of the HUF. In case of Loan, the same is not converted into common property of HUF so 64(2) will not operate. Is this correct? Its my interpretation only and if correct, can this be substantiated with judicial precedents on the matter if any available to any esteemed members?

Inversely, it is also opined that this amounts to tax evasion by the Karta/member by diverting the income that could have been generated from the amount given as loan by the individual in his individual capacity. The fact that same individual is working as karta/member of the HUF which is generating the income then why not the same amount was used by the individual in his individual capacity to earn the same income. For eg, Mr x is an individual and also Karta of HUF. He earns income from Salary as an employee of a company (not associated with HUF in any manner). He is in 20% tax bracket. He has Rs 10,00,000 to invest which can generate income to the tune of Rs 3,00,000/- p.a. If this income is included in his individual file, he will move upwards to 30% tax bracket. So he decided to give loan to HUF. As he is the karta of the HUF, he himself will invest the loan amount for Rs 10 Lac and monitor the investment. The income of Rs 3,00,000 if taxed in the hands of the HUF, he will get the benefit-

1. He will continue to be taxed at 20% (so saving of 10% tax)
2. Further, HUF will also get basic exemption limit and also various Deduction say u/s 80C etc and thus reduced tax burden on HUF.

Which one of the contention is correct position of law?
Thanks and regards
Sujit Talukder

The Article 15 of Indo-UK DTAA covers 'Independent Personal Services'. Now, an Indian Hospital wants to appoint an UK resident doctor on year assignment basis in India. He will be present in India and do surgical works and also provide consultancy. He does not have any fixed base in India. The payment will be made in UK Pound and will be required to be remitted to UK net of taxes.

Now the query is:
1.   Whether he will be 'resident in India' or continue to be resident in UK and thereby non-resident under Indian tax law given that his presence and stay in India during the previous is more than 182 days?
Reference may be drawn from Article 4 of Indo-UK DTAA where if an individual is resident of both the countries, residential status shall be determined on the basis of tie-breaker rule.

2.   If the UK doctor remains resident in UK and thereby non-resident under Indian law, whether tax is required to be withheld from such payments?
By virtue of Article 15 – 'Independent Personal Services' of the DTAA, since his stay in India exceeds 90 days, India has got the right to tax the income in India. In this case what will be the rate of TDS u/s 195? (Whether he can be considered as resident for the purpose of TDS under Indian law and thus 194J will apply?)

3.   Whether the UK doctor is required to file ITR in India w.r.t. Indian income? Whether he will be get the benefit of deduction of expenses from his Indian Professional income while offering the Indian Income to tax in India? At what rate his income will be taxed?

Your reply will be highly appreciated.

Thanks and regards

Sujit Talukder

An Indian hospital wants to engage an Australian doctor for surgical works and consultancy services. For this, the Australian national will require to come in and stay India for which the Indian Hospital will make payment to him. He stays in UK and the payment will be required to be remitted to UK.
In this process, he may be required to stay in India during a previous year:
a)   more than 182 days or;
b)   less than 182 days

Under situation a); where he stays for more than 182 days in India he will become a "resident" in India under the Income Tax Act and the provisions applicable to a resident, will apply to him. In this case, DTAA with Australia or UK will not apply and the provisions of the Act will only apply. Also TDS will be made u/s 194J @ 10%, if PAN is available or 20% if no PAN is available.
Also, his other income which accrued or arises outside India will also be taxed in India for that relevant previous year.
Suppose, he stays in India for 200 days in previous year 2012-13 and remaining 100 plus days in UK or Australia then his Indian income as well as world income will be taxed in India for the FY 2012-13. He may get credit for taxes paid in Australia or UK as per DTAA in India.

Under situation b), DTAA with UK or Australia will come into play. Article 14 of DTAA with Australia and Article 15 of DTAA with UK contains the provisions related to 'Independent personal services'. Under Australia DTAA, income from fixed base in India will be taxed in India and withholding rate of tax will apply to such income. Another condition is that if he stays in India for more than 183 days then also such income will be subject to TDS in India. Under DTAA with UK, the former condition is similar whereas in the later condition, 183 days is replaced with 90 days. His other world income will not be subject to tax in India.

Is my understanding for both the situations correct; especially under situation a) where he will be liable for world wide income in India and that he will get credit  for taxes paid outside India?

Members may throw light on new angles which I have missed.
Thanks and regards
Sujit Talukder

I have a query on TDS u/s 195. A company is required to pay fees for technical services (FTS) to another company in Dubai. The DTAA with UAE does not cover FTS payment. Also the Dubai company does not have any PE in India in any form, but the services for which FTS is paid will be utilized in India.
Now my query is whether TDS is required from FTS payment? I have been told that if a payment doesnot covered under DTAA then TDS is not required. In the given case, FTS is not covered in DTAA with UAE and therefore it will be treated as Business Income and fall under that clause of DTAA. Since for Business Income, PE in India is essential for TDS and in the absence of PE in India, no TDS is required.

Is this correct? or TDS is required to be deducted as 'Other Income' clause, keeping in view of amendments made by Finance Act  2010 in Section 9 by inserting/substituting the foloowing explanation-

[Explanation.—For the removal of doubts, it is hereby declared that for the purposes of this section, income of a non-resident shall be deemed to accrue or arise in India under clause (v) or clause (vi) or clause (vii) of sub-section (1) and shall be included in the total income of the non-resident, whether or not,—

(i)  the non-resident has a residence or place of business or business connection in India; or

(ii)  the non-resident has rendered services in India.]

Please enlighten me on the topic and cases that supports the correct view.

Regards
Sujit Talukder

Dear Members,

I have a query on signing of Form 16. An employee of a company sign Form 16 for all the employees including himself.

For eg., Finance Manager or Tax Manager signs the form 16 of all the employees of the organisation.

Now, the query is:
Who will sign the Form 16 of that Finance Manager or Tax Manager? Whether he can sign self for his own Form 16?

Please clarify.

Regards
Sujit Talukder

[G. Rahguram (2010) 46 DTR 136 (Hyd.)]

Dear Friends,
Can anyone please provide the detail case law of the following:

G. Rahguram (2010) 46 DTR 136 (Hyd.)

related to Section  48 of Income tax Act,1961

I searched for the same but failed to found the same.

Regards
Sujit Talukder

Dear Members,

Is there any correlation between the Amount Paid as shown in TDS certificates issued by deductors and the income as shown in the P&L account?

What to do in case reconciliation statement is asked to make by the department to deductee?

On the basis of discrepancy between the same, the department has issued reassessment Notice u/s 148 and that too after the expiry of 4 years but within 6 years?

Is there any case laws on the same issue.
Your cooperation will be of immense help to me.

Regards
Sujit Talukder

I have a query on calculation of time limit u/s 147. It states "no action shall be taken u/s 147 after the expiry of four years from the end of the relevant assessment year...."
So, for Previous year 2005-06, the relevant Assessment year is 2006-07. What is the time limit with which action u/s 147 can be taken? Is it Assessment year 2010-11 or 2011-12? If it is 2011-12, then please clarify also.

Can someone please provide the case law gandhi trading Vs Asst. comm. of income tax on Sec 281B?
Regards
Sujit Talukder

[Facts]

Facts:

A Ltd is the owner of Land and has entered into Joint Development agreement with B Ltd.  B Ltd will the construct the property on the land and 40% of the constructed property will be allocated to the A Ltd and remaining 60% will be allocated to B Ltd.

One of the terms of the agreement provides that if B Ltd fails to complete  the construction within 26 months, B Ltd will pay compensation Rs 5,00,000/- for each month of delay to A Ltd.

B Ltd fails to complete the construction with in the time and now paying Rs 5,00,000/- to A Ltd.

My query is:
Whether the compensation so paid by B Ltd is subject to deduction of tax (TDS) and if yes, under which section?

My view:
I am of the opinion that the same is subject to TDS under section 194A – Interest other than interest on securities.

Sec 2 (28A) defines  "interest" means interest payable in any manner in respect of any moneys borrowed or debt incurred (including a deposit, claim or other similar right or obligation) and includes any service fee or other charge in respect of the moneys borrowed or debt incurred or in respect of any credit facility which has not been utilized.

The importance is going to the last line of the definition which says "in respect of any credit facility which has not been utilized". Whether the said 26 months amounts to credit facility or not that's the confusion to me. Credit facility normally means the period within which the service has to be delivered after which the payer has to compensate for the monetary loss due to loss suffered by the other party.
But I am getting any sufficient case laws or other grounds to support my views. Whether the "credit facility" is applicable only where monetary issue is involved or it is applicable to construction also where no direct monetary issue is there as given in the situation cited above.

That's why I am seeking esteemed members opinion in the matter.

Reasonable reply with proper grounds and explanation is solicited.