The Union Finance Minister Arun Jaitley today introduced the Taxation Laws (Second Amendment) Bill, 2016 with a view to tax unaccounted black money deposited in bank accounts pursuant to demonetisation. The salient terms of the proposal to tax the unaccounted cash are as follows: (i) 30 per cent tax on undisclosed income plus 10 per cent penalty as also a 33 per cent surcharge; (ii) 25 per cent of undisclosed income post demonetisation has to be deposited in the Pradhan Mantri Garib Kalyan Deposit Scheme; (iii) undisclosed wealth deposited post demonetisation which is detetcted by the income-tax authorities will attract 75 per cent tax and 10 per cent penalty. The money from the Pradhan Mantri Garib Kalyan Deposit scheme would be used for projects in irrigation, housing, toilets, infrastructure, primary education, primary health and livelihood so that there is justice and equality, states the Statement of Objects and Reasons of the Bill

The Chamber of Tax Consultants has organized a public meeting to discuss the tax and legal implications of the demonetisation of currency. The meeting will be addressed by an expert panel comprising of four eminent Advocates and Chartered Accountants. The experts will consider implications under the Income-tax Act, FEMA, PMLA, Prohibition of Benami Property Transactions Act, Service Tax , VAT, Excise etc. Members of the public are requested to send their queries in advance so that the expert panel can express a considered opinion on them

The Directorate of Income Tax Systems has addressed a letter dated 07.11.2016 stating that the Directorate is in the process of modifying the CASS parameters so as to select cases for scrutiny assessment for returns filed in AY 2016-17. The Directorate has made important recommendations and invited suggestions for improving the process

The CBDT has issued Circular No. 37/2016 dated 2nd November 2016 in which it has accepted the settled position that if the disallowances made under sections 32, 40(a)(ia), 40A(3), 43B, etc. of the Act and other specific disallowances, related to the business activity against which the Chapter VI-A deduction has been claimed, result in enhancement of the profits of the eligible business, the deduction under Chapter VI-A is admissible on the profits so enhanced by the disallowance. The CBDT has also directed that appeals should not be filed on this ground by the Department and appeals already filed should be withdrawn/ not pressed upon

The Institute of Chartered Accountants of India (ICAI) has issued a comprehensive publication dated 28th October 2016 titled “ICAI Guidance Note On Report Under Section 92E Of The Income-tax Act, 1961 (Transfer Pricing)” in which it has explained all the nuances of the law relating to transfer pricing. The publication is useful not only for Chartered Accountants who have the onerous responsibility of issuing the report under section 92E of the Income-tax Act but also for other tax professionals and tax payers who desire to understand the mechanics of the law

Hon’ble Sushil Chandra, who has been recently appointed as the Chairman of the CBDT, has got off to a flying start. He has issued a detailed communiqué to the Income-tax department in which he has set out the road map that has to be followed over the next six months

The CBDT has vide Order No. 181 of 2016 dated 22.10.2016 ordered the postings and transfers of several officers in the grade of Commissioner of Income-tax with immediate effect and until further orders

The CBDT has issued an order u/s 119 of the Income-tax Act dated 25.10.2016 stating that in instances where a valid return-of-income having ‘claim of refund’ for AYs 2014-2015, 2013-2014 and 2012-2013 was filed either under section 139 or 142(1) of the Act and in which the time for sending intimation under sub-section (1) of section 143 has lapsed, the time-frame prescribed in second proviso to sub-section (1) of section 143 is required to be processed by 31.03.2017. Further, intimation of processing and consequential refund, if any, is required to be issued expeditiously as per the prevailing norms and existing provisions of the Act

The CBDT has issued a letter dated 26.10.2016 in which it has drawn attention to its Circular No 3/2015 dated 12.2.2015. In the said Circular it was clarified that for the purpose of making disallowance of “other sums chargeable” under Section 40(a)(i) of the Income-tax Act, 1961, in the case of non-residents, the appropriate portion of the sum chargeable to tax under the Act, i.e. income component therein shall form the basis of such disallowance. The CBDT has noted that this Circular is not being kept in view by administrative Commissioners & Commissioners (Appeal) while filing further appeals and while deciding cases. Further, the Circular is not kept in view by departmental representatives in ongoing litigation cases, who still take a position that the disallowance should be based on the gross amount of offshore payments such as purchases. The CBDT has directed the departmental officers including representatives of the department in litigation before ITAT/Courts etc. to be sensitized to the content of this circular

The CBDT has issued Circular No. 35 /2016 dated 13.10.2016 in which it has clarified that lump sum lease premium or one-time upfront lease charges, which are not adjustable against periodic rent, paid or payable for acquisition of long-term leasehold rights over land or any other property are not payments in the nature of rent within the meaning of section 194-1 of the Therefore, such payments are not liable for TDS under section 194-I of the Act