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News Direct Tax-Misc. Direct Tax

  • Jul 14, 2018
  • Significant Economic Presence: CBDT invites suggestions on ‘revenue/user’ cap for NRIs

    Taking the next step in the ‘Significant Economic Presence’ (SEP) concept, the Central Board of Direct Taxes (CBDT) has invited suggestions on the quantum of ‘revenue’ and ‘user’ thresholds that need to be prescribed for determining the SEP of a non-resident in India. The suggested thresholds and comments should be electronically sent by August 10, the CBDT has said. It may be recalled that the concept of SEP was introduced by the Finance Act 2018, for taxation of non- residents in India by amplifying the scope of the definition of “business connection”.

  • Jul 12, 2018
  • Litigation management: Govt hikes monetary limits for tax appeals

    Seeking to reduce litigation pertaining to tax matters and facilitate ease of doing business, the government has increased the monetary threshold limits for departmental appeals at various levels — appellate tribunals, high courts, and the Supreme Court. This is the second time in two years that the threshold has been hiked for the Central Board of Direct Taxes (CBDT) and the Central Board of Indirect Taxes and Customs (CBIC). “Litigation cases have come down over the last two years and the move to further hike the threshold will cut that down further.

  • Jul 09, 2018
  • CBDT to I-T Department: Curb high-pitched assessments; take action against erring assessing officers

    The CBDT has issued a stern directive to Income Tax Department (ITD) offices in the country, asking them to curb “high-pitched” assessments against taxpayers and ensure that assessing officers who issue such irrational orders are transferred and face disciplinary action. CBDT Chairperson Sushil Chandra, in a recent three-page directive to all regional ITD chiefs, expressed disappointment that a special drive launched in this regard in 2015 had failed to achieve its mandate of resolving taxpayers’ grievances and was under-utilised.

  • Jul 02, 2018
  • PAN-Aadhaar linking deadline extended till March 2019: CBDT order

    The CBDT today extended the deadline for the PAN-Aadhaar linking to March 31 next year.This is the fifth time the government has extended the deadline for individuals to link their Permanent Account Number (PAN) to their biometric ID (Aadhaar).The policy-making body of the tax department issued an order, under Section 119 of the Income Tax Act, late night, extending the deadline. The Central Board of Direct Taxes (CBDT) had last extended the deadline on March 27.The latest order said the deadline for the PAN-Aadhaar linking for filing I-T returns was being extended after "consideration of the matter".It is understood that the fresh CBDT order has come against the backdrop of the Supreme Court earlier this year directing extension of the March 31, 2018 deadline for linking Aadhaar card with various other services.

  • Jun 28, 2018
  • Foreign cos with POEM in India to be taxed at 40%

    The Central Board of Direct Taxes (CBDT) on Wednesday clarified that foreign companies that have their place of effective management (POEM) in India will be taxed at 40%, plus applicable surcharge and cess.Provisions relating to POEM were applicable from the financial year 2016-17. Prior to this, a foreign company was considered as a tax resident of India, only if the control and management of its affairs were wholly in India during that financial year. Now, if such a company has a POEM in India, it becomes a tax resident of India and has to pay tax in India on its global income.CBDT has clarified that, “The rate of income tax applicable to the foreign company shall apply, even though the residency status of the foreign company changes from non-resident to resident on the basis of POEM.” This clarification has retrospective applicability from the date POEM came into effect.

  • Jun 25, 2018
  • Tax breather for e-commerce companies for three more months

    India proposes to defer the implementation of tax collection at source (TCS), a move that will give a breather to Amazon, Flipkart and other ecommerce service providers.“It has been decided to defer it for three months,” said a senior government official aware of the development.Online platforms have to collect the tax from those selling goods on their sites while making payments for goods sold. The tax, designed as a measure to improve compliance by helping to track such track such transactions, was to come into effect on July 1. Ecommerce platforms, which have multiple sellers with small turnovers, have been wary of the provision, fearing an increase in the compliance burden.

  • Jun 23, 2018
  • CBDT proposes clear-cut timelines under transfer pricing

    The income-tax (I-T) department has proposed clear-cut timelines by which excess amount assessed by transfer pricing officials (TPOs) over what was declared by associated enterprises of multinational corporations (MNCs) has to be brought in India. These timelines relate to advance pricing agreements (APAs) and mutual agreement procedures (MAPs).In the Union Budget 2016-17, the government has come out with a concept of secondary adjustments. This basically means that if there is primary adjustment either made by the TPO or suo motu by the companies, which differs from what was declared by companies earlier, the excess amount over Rs 10 million has to be brought back to India within a stipulated time.

  • Jun 13, 2018
  • Tax axe over endorsement pacts: Dealers of imported sports goods under taxman’s lens

    Does getting a sport star to endorse a brand or sponsoring a sports event be treated as imports? The intelligence arm of the tax department seems to think so. They content many dealers of imported sports goods and equipment unvalued their imports and sign contracts that obligates them to plough a sizeable amount of the value into endorsements and sponsorship deals. Revenue sleuths are investigating whether Indian dealers who import golf kits, table tennis rackets, badminton rackets and shuttlecocks must treat any marketing spend like sponsoring events and roping in brand ambassadors as imports.

  • Jun 12, 2018
  • 90,000 ‘non-filers’ on tax radar

    More than 90,000 persons who deposited Rs.10 lakh or more cash in their bank accounts during the demonetisation drive in November 2016 are on the radar of the Income-Tax Department for not filing their tax returns by March 31, 2018. The Department had served notices on nearly 3 lakh non-filers who deposited Rs.10 lakh or more in their bank accounts following the demonetisation announcement. “Of these, nearly 2.1 lakh filed their returns by the March 31, 2018 deadline. The rest will now face action,” a senior I-T Department official told BusinessLine.

  • Jun 08, 2018
  • CBDT marks Jun 1-15 for expeditious disposal of pending appeals

    The Central Board of Direct Taxes (CBDT) has dedicated a fortnight beginning June 1 for expeditious disposal of pending appeals and rectification matters. The direct tax body in a statement said the assessing officers have been directed to accord top priority to such matters and to give special attention to this area of work so that grievances arising on this count may be resolved at the earliest.

  • Jun 04, 2018
  • Tax collection jumps 18% to Rs 7,100 crore in Northeast in FY18: MoS Finance

    Northeast region has witnessed over 18 per cent growth in direct tax collections at Rs 7,097 crore in 2017-18, Union Minister of State for Finance Shiv Pratap Shukla said today. "The net tax collection was Rs 7,097 crore from the North East in 2017-18. This was a growth of 18.3 per cent over the previous year," Shukla said at a press conference here. During the same fiscal, the Income Tax Department has brought 1.89 lakh more people under the ambit of tax net, he added.

  • May 29, 2018
  • Demonetisation effect! Direct tax collection rises dramatically after 2016; here’s proof in 1 chart

    Direct tax collection has surged dramatically post 2016 — thanks to the Income Declaration Scheme and demonetisation. The direct tax collection improved in the last two years, following the Income Declaration Scheme and demonetisation, a report by Crisil has said. “This indicates a significant jump in the number of new income tax filers,” Crisil said. What’s interesting to note is that direct tax collection surged even as GDP growth slowed down in FY17 and FY18.

  • May 28, 2018
  • Start-ups spared of tax on angel investment above fair valuation

    The Income Tax Department has exempted from tax the investments that small start-ups receive from angel investors above their fair valuation. A notification from the department dated 24 May said start-ups approved by an inter-ministerial panel are exempted from the tax which is levied on companies issuing shares to investors above their fair value, treating it as income from other sources. To be sure, this exemption is already available to investments from registered venture capital funds (VCFs) and foreign investors and the latest notification extends it to angel investors—typically, high net worth individuals—too subject to riders specified in an 11 April notification issued by the Department of Industrial Policy and Promotion (DIPP).

  • May 24, 2018
  • India's net direct tax collection rises 18% to Rs 10.03 trillion

    India's net direct tax collection in 2017/18 stood at Rs 10.03 trillion, up 18 percent on year, the finance ministry said on Wednesday. The growth was the fastest in seven fiscal years. Last month, a finance ministry official had said the country's direct tax mop-up had exceeded the budget target.

  • May 23, 2018
  • ‘Google tax’ revenue goes past Rs 1,000 crore

    The “equalisation levy” on online advertising fees paid by Indian customers to foreign companies like Google and Facebook is netting the government a tidy sum of money. The Centre’s EQL revenue in 2017-18 was over Rs 700 crore, much higher than the Rs 315 crore it garnered from the tax in the previous 10-month period. The tax, meant to nullify the advantage of foreign e-commerce firms absent a physical presence in India over local competitors, came into effect in June 2016.

  • May 22, 2018
  • New direct tax code may have to wait until 2019

    The Narendra Modi-led government's plans to simplify the direct tax regime may spill over to next year, and may well have to wait until the next government is in place in 2019. The six-member task force headed by Arbind Modi, member of the apex policy making body Central Board of Direct Taxes (CBDT) may not submit the draft new direct tax law on May 22, the day the task force completes six months.

  • May 14, 2018
  • New direct tax code to benefit corporates, income tax payers

    Businesses and low-income earners will stand to gain the most from the new direct tax code that the government is working on, two people familiar with the matter said. The proposed direct tax code, the draft of which will be ready by July, will take forward the government’s agenda of lowering corporate tax rate to 25% for all businesses and seek to give further relief to individual income tax payers. The idea is to moderate tax rates for assessees without squandering the recent gains in revenue growth and tax base. Therefore, the proposed tax rate cuts will be incremental over a period of time as compliance and revenue collections grow. Between fiscal 2014 and fiscal 2018, income tax returns filed have risen over 80% to 68.4 million.

  • May 10, 2018
  • Government likely to withdraw tax notice on free banking services

    The tax department will likely withdraw a show-cause notice issued to several banks asking them to pay the service tax on ‘free services’ provided to customers, following the finance ministry’s intervention. The department of financial services (DFS) has presented the views of the banks that have opposed the tax to the revenue department. “We have spoken to the revenue department and requested them not to pursue the case. The matter will be settled and the case might not be pursued further,” said a senior finance ministry official.

  • May 08, 2018
  • CBDT approves amendment of India-Kuwait tax agreement

    The Central Board of Direct Taxes (CBDT) on Monday notified the protocol amending the Double Taxation Avoidance Agreement (DTAA) between India and Kuwait. The protocol updates the provisions in the DTAA for the exchange of information as per international standards, and also enables sharing of information received from Kuwait for tax purposes with other law enforcement agencies, subject to an authorisation of the competent authority of Kuwait and vice versa.

  • Apr 25, 2018
  • CBDT lays down conditions for allowing concessional rate

    The Central Board of Direct Taxes (CBDT) on Tuesday laid down the conditions for allowing a concessional rate of 10% tax on long-term capital gains tax (LTCG) arising from transfer of equity shares or equity oriented fund, even when securities transactions tax (STT) has not been paid on such transactions.According to the Income Tax Act, the LTCG tax on such transactions would be 20% if STT has not been paid. The board has now said that in many genuine cases, STT could not be paid while acquiring shares and such transactions would still qualify for a lower LTCG tax rate.