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News Direct Tax-Misc. Direct Tax

  • Sep 18, 2018
  • Hope to cross Rs 11.5 lakh cr direct tax collection target for FY19:CBDT chief

    CBDT Chairman Sushil Chandra Monday expressed confidence in exceeding Rs 11.5 lakh crore direct tax collection target in current fiscal. In 2018-19 budget, the government had projected a 14.3 per cent rise in direct tax collections to Rs 11.5 lakh crore. "We certainly hope to cross the Rs 11.5 lakh crore direct tax collection target for the current fiscal," Chandra told reporters. However, Controller General of Accounts data shows, the direct tax collections grew a paltry 4.2 per cent on year to Rs 1.54 lakh crore in April-June.

  • Sep 18, 2018
  • No withholding tax on interest payment of masala bonds

    The Central Board of Direct Taxes (CBDT) on Monday said no witholding tax will apply on interest payments made by an Indian company or a business trust to a non-resident in respect of offshore rupee denominated bonds issued between September 17, 2018 and March 31, 2019. The move is expected to incentivise foreign exchange inflows into India through low-cost offshore rupee denominated bonds, popularly referred to as masala bonds. Legislative amendments in this regard will be done in due course, an official release said.

  • Aug 29, 2018
  • Physical settlement in F&O to attract 0.10% STT: CBDT

    The Central Board of Direct Taxes (CBDT) today told the Bombay High Court that 0.10 per cent securities transactions tax (STT) would be levied on physical delivery of shares in the equity derivatives segment. A division bench of justices B R Gavai and M S Karnik had last week sought clarity from the CBDT on the STT rate after the Association of National Exchange Members of India (ANMI) filed a petition claiming anomalies on the issue.

  • Aug 20, 2018
  • CBDT defers till March 2019 GAAR, GST reporting under the new tax audit form

    The Central Board of Direct Taxes (CBDT) has put off till March 31, 2019, the proposed GST and GAAR reporting under the amended tax audit form. This dispensation would be available for tax audit reports to be furnished on or after August 20 but before April 1, 2019.In a circular issued on Friday, the CBDT said representations had been received by the Board that the implementation of the reporting requirement under the proposed Clause 30C (pertaining to General Anti-Avoidance Rules or GAAR) and the proposed Clause 44 (pertaining to Goods and Services Tax compliance) of the tax audit Form No 3CD may be deferred.

  • Aug 16, 2018
  • CBDT plan to incentivise ‘quality orders’ worries trade

    Trade and industry is increasingly concerned about the recent plans of the Income Tax Department to incentivise taxmen who pass “quality orders” by imposing a penalty or increasing the amount to be paid. While the move is yet to translate on the ground, trade associations have written to the Finance Secretary seeking relief. Experts warn that the move could impact recent government efforts to project a tax payer-friendly image.“This completely erodes their impartiality and independence, and creates a bias in favour of the IT Department in a quasi-judicial proceeding,” said a recent letter by trade associations to Finance Secretary Hasmukh Adhia.

  • Aug 07, 2018
  • Threat to plan to cut tax arrears

    While the stated policy and to a large extent the efforts of the tax administration are to reduce the mammoth tax arrears (outstanding tax demands), certain moves could frustrate the goal. The Central Board of Direct Taxes’ (CBDT) latest Central Action Plan, for instance, seeks to incentivise the CIT (Appeal), the first appellate forum, to pass ‘quality’ orders with additional credit of two units per order. Tax experts say this would undermine the CIT(A)’s ability to adjudicate the dispute, as the points that help his promotion could prejudice the body against the taxpayer.

  • Aug 02, 2018
  • CBDT signs 9 more unilateral APAs with taxpayers in July

    The Central Board of Direct Taxes (CBDT) has signed nine more unilateral advance pricing agreements (APAs) with Indian taxpayers in July as it looks to reduce litigation by providing certainty in transfer pricing.The nine APAs signed in the past one month pertain to sectors like telecom, healthcare, manufacturing, engineering, media and irrigation.With the signing of these Agreements, the total number of APAs entered into by the CBDT has gone up to 232, which includes 20 Bilateral Advance Pricing Agreements (BAPAs), the finance ministry said in a statement.

  • Jul 30, 2018
  • File all NCLT petitions on shell firms by August: CBDT to IT department

    The CBDT has directed the Income Tax Department to ensure filing all its petitions before the NCLT by next month to recover due taxes worth crores of rupees from a number of de-registered shell or dummy companies. The policy-making body of the tax department has issued the directive as part of the action plan unveiled recently. "A large number of companies have been struck off from the records of the ROC (registrar of companies) during last year. In several cases of such companies, petitions for restoration of registration are required to be filed before the NCLT so as to be able to pursue recovery of demands raised in their cases.

  • Jul 26, 2018
  • CBDT expands scope of tax audit process

    The Central Board Direct Taxes (CBDT) has revised the mandatory tax audit report, also known as Form 3CD, which is to be filed by certain taxpayers, to expand the scope of the exercise. An auditor will now have to furnish details related to GST sales, information on transactions covered by transfer pricing provisions, cash transactions and transaction involving tax deducted at source (TDS). According to income tax rules, non-salaried professionals reporting income of over Rs 50 lakh annually and businesses with a turnover of over Rs 1 crore – or `2 crore in case of presumptive taxation – will have to get their accounts audited.

  • Jul 23, 2018
  • CBDT asks taxman to dispose appeals of over Rs 50-crore by year-end

    Faced with litigation that has assumed “grave proportions”, the Central Board of Direct Taxes (CBDT) has directed the taxman to dispose of appeals cases where the tax demand is above Rs 50 crore on priority by the year-end. “Litigation is not only a cost on the credibility of a tax administration system but also an indicator of the robustness and fairness of a system of taxation. Litigation has been rising over the years and has now assumed grave proportions…,” the policy-making body for the tax department said in a recently released blueprint for the department.

  • Jul 19, 2018
  • CBDT directs tax sleuths to survey, inspect high value transactions

    Banking companies, co-operative banks, trustees of mutual funds (MFs), post offices, registrars, and others who are mandated to file the statement of financial transaction (SFT) report on high-value transactions have come under the income-tax department’s (I-T) scanner. The Central Board of Direct Taxes (CBDT) has directed tax sleuths to conduct quarterly ‘survey and inspection’ of these entities to determine the correctness of the statement filed by them. To track high-value cash transactions, the centre had in January 2017 put out a new rule wherein it had mandated all goods and services providers to report to the I-T department high-value cash transactions and cash receipts.

  • Jul 18, 2018
  • Withdraw by Aug 20 appeals pending before tribunals/courts exceeding threshold: CBDT

    The Income Tax department has directed its field offices to withdraw by August 20 the appeals pending before tribunals and courts that exceed the fixed monetary threshold. In a circular issued today, the Central Board of Direct Taxes (CBDT) said that the pending appeals or special leave petitions (SLPs) should be withdrawn "on priority" to enable the department to focus on high value litigations. In order to reduce litigation, the government had, last week, hiked the threshold limit for filing appeals in tribunals to Rs 20 lakh, while the same for high courts and the Supreme Court has been raised to Rs 50 lakh and Rs 1 crore, respectively.

  • 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.