Rule 8D has been amended by the Income–tax (14th Amendment) Rules, 2016 notified vide Notification No 43/2016 dated 2nd June 2016. Clause (ii) of Rule 8D(2) dealing with indirect expenditure by way of interest has been omitted. It is also stated that the disallowance u/s 14A r.w Rule 8D cannot exceed the expenditure claimed by the assessee. The limit of 0.5% under clause (iii) has been increased to 1%. However, the 1% will apply to the annual average of the monthly averages of the opening and closing balances of the value of investments, income from which does not or shall not form part of total income. The question whether the disallowance can exceed the exempt income and whether the 1% is to be applied only to investments which have generated exempt income during the previous year has not been clarified and hence litigation on those points will continue

In order to reduce the cash transactions in sale of goods and services, the Finance Act 2016 has expanded the scope of section 206C (ID) to provide that the seller shall collect tax at the rate of one per cent from the purchaser on sale in cash of any goods (other than bullion and jewellery) or providing of any services (other than payment on which tax is deducted at source under Chapter XVII-B) exceeding two lakh rupees. Further, with a view to bring high value transactions within the tax net, it has been provided in sub-section (1F) of section 206C of the Act that the seller who receives consideration for sale of a motor vehicle exceeding ten lakh rupees, shall collect one per cent of the sale consideration as tax from the buyer. To clarify the queries about the scope of the provisions and the procedure to be followed, the CBDT has issued Circular No 22/2016 dated 8th June 2016 in a Q& A format

The CBDT has vide Order No. 104 of 2016 dated 02.06.2016 ordered the postings and transfers of several officers in the grade of Assistant and Deputy Commissioner of Income Tax with immediate effect and until further orders

The CBDT has issued Circular No. 12/2016 dated 30th May 2016 in which it has stated that in accordance with the law laid down by the Supreme Court in TRF Ltd. vs. CIT 323 ITR 397, claim for any debt or part thereof in any previous year shall be admissible under section 36(1)(vii) of the Act, if it is written off as irrecoverable in the books of accounts of the assessee for that previous year and it fulfills the conditions stipulated in sub section (2) of sub-section 36(2) of the Act. The CBDT has directed that no appeals may henceforth be filed on this ground and appeals already filed, if any, on this issue before various Courts/Tribunals may be withdrawn/not pressed upon

The CBDT has issued Circular No. 21/2016 dated 27.05.2016 in which has clarified that it shall not be mandatory to cancel the registration already granted u/s 11 to a charitable institution merely on the ground that the cut-off specified in the proviso to section 2(15) of the Act is exceeded in a particular year without there being any change in the nature of activities of the institution. If in any particular year, the specified cut-off is exceeded, the tax exemption would be denied to the institution in that year and cancellation of registration would not be mandatory unless such cancellation becomes necessary on the ground(s) prescribed under the Act. The CBDT has also advised field authorities that in view of the adverse consequences of Xii-B, the registration of a charitable institution granted u/s 12AA should not be cancelled just because the proviso to section 2{15) comes into play. The process for cancellation of registration is to be initiated strictly in accordance with section 12 (3) and 12AA(4) after carefully examining the applicability of these provisions

The CBDT has issued Circular No. 20/2016 dated 26.05.2016 stating that in order to mitigate any inconvenience caused to the taxpayers on account of the new requirement of mandatory e-filing appeals, it has been decided to extend the time limit for filing of such e-appeals. E-appeals which were due to be filed by 15.05.2016 can be filed up to 15.06.2016. All e-appeals filed within this extended period would be treated as appeals filed in time

The CBDT has issued a press release in which it has given details of the manner of determination of fair market value and reporting requirement for Indian concerns covered by the indirect transfer provisions of section 9(1) of the Income-tax Act, 1961

The CBDT has issued a directive dated 24.05.2016 stating that from FY 2016-17 onwards, the names of defaulters where the undisputed outstanding demand/ tax exceeds Rs. 1 crore shall be published by 31st July

The CBDT has issued Circular No. 15/2016 dated 19.05.2016 in which it has dealt with the issue of allowability of additional depreciation u/s 32(1)(iia) of the Income-tax Act, 1961 in the context of the judgements of the Kerala and Delhi High Courts in Mathrubhoomi Printing & Publishing Co. and Delhi Press Patra Prakashan Ltd

The Ministry of Finance has issued a Notification dated 19th May 2016 enacting “The Income Declaration Scheme Rules, 2016” which are to come into force on 1st June 2016. The Ministry of Finance has issued another notification dated 19th May 2016 specifying the relevant dates for making the declaration and making payment of the tax etc. The CBDT has issued Circular No. 16 dated 20.05.2015 setting out the “Explanatory Notes On provisions Of The Income Declaration Scheme, 2016 As Provided In Chapter IX Of The Finance Act 2016“. The CBDT has also issued Circular No. 17 of 2016 by which it has provided “Clarifications on the Income Declaration Scheme, 2016”.