Change in Point of Taxation Rule- Service Tax

At present Rule 7 of the Point of Taxation Rules 2011 has overriding effect over all rules.

However in the budget 2014-15 an amendment has been effected which will be effective from 1^st day of October 2014. Under service tax Return is filed on half yearly basis i.e. 1^st April to 30^th Sep and 1^st Oct to march that’s why change has been effected from 1st Oct to avoid any difficulty in implementation of the provision.

After change , Rule 7 will not override the Rule 5 which deals with point of taxation in relation to service tax on new services.

 Presently first proviso to Rule 7 provides that where the payment is not made within a period of 6 months of the date of invoice, the point of taxation shall be determined as if this rule does not exist.

But after amendment, the proviso would be 'where the payment is not made within a period of 3 months of the date of invoice, the point of taxation shall be the date immediately following the said period of 3 months.'

Personal taxation and filing your Income tax return (ITR)

It is my constant endeavor to share knowledge & information to increase the awareness about the provisions of taxation because lack of awareness is the main reason for low level of compliance towards tax laws.

The filing of ITR is a legal obligation of every person whose total income during the previous year ( i.e. F.Y.2013-14) exceeds the maximum amount which is not chargeable to income tax ( i.e. Rs.2,00,000/-).

Presently there is an emphasis on self compliance by the taxpayer and Income Tax department, except in few cases, accept your ITR as it is by intimation given under section of the 143(1) of the Income tax Act. Therefore it is expected that taxpayer should disclose correct & complete information while filing ITR.

  

As 31^st day July is last date for filing your “Income Tax return’ for the Financial year  2013-14 (i.e income earned during the period from 01^st April to 31^st march 2014), we are sharing here some tips on filing of ITR.

Changes in Custom Tariff under Budget 2014-15

SAD on Inputs/components used in manufacture of Personal Computers (laptops/desktops) and tablet computers has been exempted.

Export duty on Bauxite (natural), calcined or not, increased from 10% to 20%

Government has amended the provisions dealing with levy of Safeguard Duty to provide for such levy on inputs/raw material imported by EOU/SEZ and cleared into Domestic tariff Area(DTA )as such or for use in manufacture of final products which are cleared into DTA.

Exemption provided from levy of Education Cess and Secondary and Higher Education Cess on CVD portion of duty leviable on import of various electronic goods such as mobile phones, computers, parts and accessories of computers, etc. has been withdrawn

Be sincere to your statutory dues or bear the cost of insincerity.-Interest on delayed payment of service tax

Be sincere & serious to your statutory dues or bear the cost of insincerity.

In Union budget 2014-15, it has been proposed to increase the rate of interest to the extent 

of period of delay in payment of service tax.

It means that rate of interest would vary on the extent of delay in payment of service tax. 

More delay more interest burden.

Personal Tax Exemption Limit Raised by Rs. 50,000

Personal Tax Exemption Limit Raised by Rs. 50,000/- ; No Change in the Rate of Surcharge; 15% Investment Allowance to Manufacturing Companies, to Incentivize Small Entrepreneurs and Income from Foreign Portfolio Investors to be Treated as Capital Gains.

The General Budget 2014-15 presented by the Union Finance Minister Shri Arun Jaitley has raised the personal income-tax exemption limit by Rs. 50,000/- that is, from Rs. 2 lakh to Rs. 2.5 lakh in the case of individual taxpayers, below the age of 60 years. Exemption limit raised from Rs. 2.5 lakh to Rs. 3 lakh in the case of senior citizens. However there is no change in the rate of surcharge either for the corporates or the individuals, HUFs, firms etc. The budget proposes to continue education cess at 3 percent.

Investment limit under section 80C of the Income-tax Act has also been raised from Rs. 1 lakh to Rs. 1.5 lakh and Deduction limit on account of interest on loan in respect of self occupied house property raised from Rs.1.5 lakh to Rs.2 lakh. To incentivize small entrepreneurs an Investment allowance at the rate of 15 percent to a manufacturing company that invests more than Rs. 25 crore in any year in new plant and machinery. The benefit to be available for three years i.e. for investments upto31.03.2017. Investment allowance to manufacturing company investing more than Rs.100 crore announced last year to continue in parallel till 31.03.2015.

To bring greater certainty and to encourage fund manager to shift to India, income arising to foreign portfolio investors from transaction in securities will be treated as capital gains. Concessional rate of 15 percent on foreign dividends without any sunset date will be continued.

To augment low cost long term foreign borrowings for Indian companies, the eligible date of borrowing in foreign currency has been extended from 31.03.2015 to 31.03.2017 for a concessional tax rate of 5 percent on interest payments. Tax incentive extended to all types of bonds instead of only infrastructure bonds.

The budget proposes introduction of a “Roll Back” provision in the Advanced Pricing Agreement (APA) scheme so that an APA entered into for future transactions is also applicable to international transactions undertaken in previous four years in specified circumstances.To remove tax arbitrage, rate of tax on long term capital gains has been increased from 10 percent to 20 percent on transfer of units of Mutual funds, other than equity oriented funds.

60 more Ayakar Seva Kendras will be opened during the current financial year to promote excellence in service delivery. Net effect of the direct tax proposals will result in revenue loss of Rs.22,200 crore.

PAN is required to mention if entered in transactions:-

In certain situation/transaction, quoting PAN is compulsory if you are entered in these situation.

List of documents required while submitting application for PAN

Resource:- www.Incometaxindia.gov.in

Update your Mobile Number and email for direct communication from IT Department

A valid Email ID and Mobile Number has to be registered/ updated on the e-filing website of the Income Tax Department so that direct communication with taxpayer can be possible.

The Department will send separate One Time Passwords (OTP) also referred as PIN on the mobile and email provided by the taxpayer. The OTPs have to be entered by the taxpayer after logging into their e-filing account to authenticate the same.

TDS Deductor cannot be held liable as ‘assessee in default’ if department has not proved that tax could not be recovered from the recipient of income.

TDS Deductor cannot be held liable as ‘assessee in default’ if department has not proved that tax could not be recovered from the recipient of income.

Assesse, a public sector bank could not deduct tax on interest on deposit made thus held assessee in default u/s 201/210(IA), however ITAT Agra held that Assessee cannot be held liable unless department has discharged that tax could not be recovered from recipient of income or recipient has also failed to pay tax directly.

Crdeit for TDS cannot be denied on the ground of discrepancy in Form 26AS filed by the deductor.

It is common problem faced by Income tax payers that they get demand notice along with penalty (sometime) for the grounds on which they don't have any control like :-

(i) TDS Deductor has committed some mistake while filing his TDS Return consequently figure shown in assessee ITR does not match with figure provided by the deductor to the department, or

(ii) Data given in ITR does not match with data of department because nodal agency ( NSDL or bank collecting Tax) not updated their files in time or not uploaded correctly.

In the situation , Income Tax payer either get demand notice or some time not getting refund for which he is very much eligible.

Last year, Honourable Delhi High Court in a Public Interest Litigation in Court On its Own Motion vs. Commissioner of Income Tax, 2013 (352) ITR 273 took it seriously and the Court noticed that:-