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News INCOME TAX

  • Jan 17, 2019
  • Angel Tax: A third of start-ups got tax notices in 2018

    Over 38% of the start-ups in the country — 39,000 at last count — have received one or more ‘angel tax’ notices in 2018, causing critical capital infusion in these firms at the seed stage to go down by 21% year-on-year. This was highlighted by iSPIRT, a think-tank for the Indian software products industry, in a recent letter to Prime Minister Narendra Modi seeking his immediate intervention to halt these tax notices. The Start-up India movement is under serious threat and will slide further if immediate structural policy measures are not taken to halt the tax notices, Nakul Saxena of iSPIRT wrote.

  • Jan 17, 2019
  • Get income tax refund in one day from 2020

    The Cabinet on Wednesday cleared an ambitious Rs 4,242 crore project for e-filling and centralised processing of income tax return, which will allow taxpayers to get a refund in one day through a pre-filled tax return form, the Times of India reported. Currently, the average time taken for return processing and giving a refund is 63 days, which will get reduced to one day, the daily quoted railway minister Piyush Goyal as saying.

  • Jan 16, 2019
  • Startups may soon get shield against angel tax demons

    India is likely to soon announce concessions to shield startups from the so-called ‘angel tax’, including relief from levies on past investments as well. The changes will be made to conditions specified for benefits under Section 56(2)(vii)(b) of the Income Tax Act, 1961, to remove any ambiguity and allow exemption for past as well as proposed investments that do not exceed Rs 10 crore, including paid-up share capital and premiums. The need for an inter-ministerial group to approve exemptions may also be scrapped on investments up to Rs 10 crore.

  • Jan 10, 2019
  • Deadline for public comments on draft IT rules extended to January 31

    The government has extended till January 31 the deadline for public comments on draft IT rules mainly focused on social media platforms. Earlier, the last date for public comments on Draft of Intermediary Guidelines 2018 was January 15. "The closing date for submission of comments/suggestions is now extended to January 31, 2019," the Ministry of Electronics and IT (Meity) said in a statement.

  • Jan 03, 2019
  • Companies may not face 30% tax bump over valuation premium

    Companies facing a 30-percent tax bill over valuation premium may not face the tax bump as the government has recently asked officials not to scrutinise such transactions, according to a report by The Economic Times. The clarification comes after many firms received tax demands after premiums were paid over the 'fair price' or 'fair market value' for fresh equity or preference shares. The demands could be withdrawn in the coming weeks, a source told the paper.

  • Dec 24, 2018
  • Start-ups accredited by DIPP will no longer be asked to pay angel tax

    Facing flak from start-ups, the government may announce modifications to the “angel tax” law in the coming weeks. All start-ups accredited by the Department of Industrial Policy and Promotion (DIPP) will no longer be asked to pay angel tax, sources involved in the inter-ministerial discussions said.Earlier, the rule said only those start-ups that have been given such an exemption by a government board will be excused. That is likely to change as the government is planning to exempt “any and all start-ups” (that qualify as start-ups according to prevailing.

  • Dec 22, 2018
  • MNC units, Indian firms get tax notices for receiving FDI

    After slapping ‘angel tax’ notices on startups, the taxman’s attention seems to have turned to foreign direct investment (FDI) in multinationals and Indian companies where a ‘premium’ was paid over and above the ‘fair market value’ of shares. The income tax department has started issuing notices to several companies that have received FDI, claiming that the ‘premiums’ they received on such transactions are ‘unexplained credits’ that can be held as income, people familiar with the development told ET.

  • Dec 22, 2018
  • Relief for startup ecosystem: Angel tax recoveries put on hold

    Amid widespread concerns over ‘angel tax’ notices being slapped on start-ups, the Central Board of Direct Taxes (CBDT) in the finance ministry has asked field officials to desist from taking any coercive action or recovery of demands of completed assessments from these firms till a policy decision is taken. The department of industrial policy and promotion (DIPP) would soon constitute a committee of experts drawn from reputed institutions like IITs and IIMs to consider grant of tax exemptions to start-ups, and the issue of premiums among other related matters, sources said.

  • Dec 11, 2018
  • Direct tax receipts rise 15.7% in April-November

    The income tax department has collected Rs. 6.75 trillion in direct taxes this year up to November, accounting for close to half of its full-year target of Rs 11.5 trillion, an official statement said here. The April-November gross direct tax receipts show a 15.7% jump in revenue compared to the same time a year ago. During the first eight months of this fiscal, the department issued Rs.1.23 trillion of refunds, which is 20.8% more than the amount refunded during the same period a year ago. Net direct tax collections after refunds stood at Rs 5.51 trillion, a 14.7% jump from the year-ago period.

  • Dec 06, 2018
  • ITR forms will soon be pre-filled for you: CBDT’s Sushil Chandra

    The process of filing tax returns will soon become a lot easier, with the tax department planning to introduce pre-filled fields based on information already available with it, cutting out the tediousness of this annual chore.Data available from entities that deduct tax at source such as employers and banks would be used to offer pre-filled tax return forms to people, Sushil Chandra, chairman of Central Board of Direct Taxes (CBDT), said, adding that work on this project was on. A pre-filled return could be submitted directly or after modification, he said.The new form is aimed at encouraging people, who are daunted by the complexity of the process, to file their taxes. It’s also part of the department’s efforts to present a taxpayer-friendly interface and give officials fewer discretionary powers.

  • Dec 06, 2018
  • Taxman starts questioning & issuing notices to BPOs

    One month after the Authority of Advance Ruling (AAR) ruled that back office support services qualify as “intermediary” support services and not exports, officers of the indirect tax department have started issuing preliminary notices to captive units of multinationals and Indian companies exporting offshore support services.AAR’s directive meant several back offices of multinationals and Indian companies providing offshore support services to foreign companies now face 18% GST liability. The AAR held that some services provided by BPO may qualify as intermediary service and therefore, may not qualify as export service.

  • Dec 04, 2018
  • ITR filing up 50% so far this year: CBDT chairman

    Income tax return filing for assessment year 2018-19 has so far seen a 50 per cent rise since last year, a top finance ministry official said Tuesday. "This is the effect of demonetisation," Central Board of Direct Taxes (CBDT) Chairman Sushil Chandra said on the sidelines a CII event. Demonetisation has been very good for increasing the tax base of the country. This year, we have already got around 6.08 crore income tax returns, which is 50 per cent higher than last year by this particular date, he said.

  • Dec 03, 2018
  • Converting company to LLP is a transfer, hence taxable, rules I-T Appellate Tribunal

    A new tax ruling threatens to challenge a strategy that allowed thousands of businesses and professionals to reorganise themselves and attract foreign investors. This involved converting closely held companies into limited liability partnerships (LLPs) — a structure that was introduced a decade ago. While LLP was intended to help businesses to scale up, many were also allured by its ability to freely distribute profits to partners as dividend without deducting any dividend distribution tax.

  • Nov 29, 2018
  • NRIs don’t need to reveal details of foreign bank accounts, assets to Indian tax dept: I-T Tribunal

    The Income-Tax Appellate Tribunal (ITAT) has said NRIs do not need to reveal details of their foreign bank accounts and assets to Indian authorities. The tribunal has also ruled that the onus is on the I-T Department to prove an assessee has parked undeclared income arising from India in foreign bank accounts. The recent judgment was passed in the case involving Japan-based NRI Hemant Mansukhlal Pandya, who has an account with HSBC Bank in Geneva. Pandya has been living in Japan since 1990, is a non-resident taxpayer since 1995-96, and received a Japanese residency certificate in 2001.

  • Nov 24, 2018
  • ITAT ruling on premium earned on preference shares may benefit start-ups

    In what could benefit many start-ups in the country, the Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has ruled that premium earned on allotment of preference shares by a loss-making entity cannot be taxed. The tribunal said the valuation of shares is not relevant for determining the genuineness of the transaction. The ruling, pertaining to Section 68 of the Income Tax Act, stated that the assessing officer (AO) can only verify the nature and source and not question the genuineness of the premium on allotment of preference shares.

  • Nov 17, 2018
  • National capital jumps closer to business capital in I-T collections

    The changing economic landscape of India is showing up in the region-wise break-up of income tax collections. Mumbai, the business capital of the country, still contributes the largest, 29%, of total income tax revenues, but its share has been falling. Delhi, the second-largest contributor to the tax kitty, saw collections rising 45% from April to November 13 this year over the same period in 2017. Collections in Mumbai rose only 5%. Slower growth in Mumbai is attributed to hefty refunds.

  • Nov 05, 2018
  • 75 Lakh New Tax Filers Added To Income Tax Net This Fiscal Year: Official

    About 75 lakh new tax filers have been added to the income tax payers list in the country so far this fiscal year, a senior official said. The number of policy and enforcement measures undertaken to check tax evasion are among the reasons for achieving these numbers, the official told PTI. The target is to add 1.25 crore fresh tax filers by the end of the financial year 2018-19 that ends in March, as per a directive of the Central Board of Direct Taxes. The Income Tax department is hopeful of meeting that 1.25 crore target, the official added.The department, last fiscal, had added 1.06 crore new tax filers to the income tax net. A new income tax filer is defined as a person who is not included in the tax filing base at the beginning of the year, but who files the return during the year.

  • Oct 27, 2018
  • Income tax dept may seek first right on recovery of dues under IBC

    The income tax (I-T) department may soon request authorities in the finance ministry to intervene so that I-T dues get a higher priority over dues to unsecured creditors under the insolvency law. At present, the recovery of tax dues is possible only after payment to financial creditors under the Insolvency and Bankruptcy Code (IBC), which comes under the Ministry of Corporate Affairs.

  • Oct 27, 2018
  • Robust growth: E-filing of income tax returns rises 65% in Apr-Sept

    Even after the deadline for filing income tax returns ended on August 31, the growth in taxpayers filing e-returns continued to grow robustly, and for April-September, a 65% growth was witnessed over the year-ago period, data from the Central Board of Direct Taxes (CBDT) showed. The growth in the April-August period was 70%. Moreover, the average tax paid by an individual filer came in at close to Rs 35,000 in H1, up from a little over Rs 27,000 in April-August. Industry experts said that the rise in the average tax paid was attributable to the second tranche of advance tax — 45% of the assessed advance tax was to be paid by September 15 — paid by larger assessees.

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