Part-2- Before Filing ITR for Assessment Year 2020-21, Know Important changes in Income Tax Act

 Now Time has come to be ready to file income Tax return for the Assessment Year 2020-21, however there are lot of changes have been made by the Government.

Some changes are more important to know because Income tax Return cannot be filed correctly if are ignorant of these.

I am just making an effort to cover such amendments/changes in a series like what would be Tax Rate for the Assessment year , changes in particular source of income i.e.salary, house property, Business or profession, capital etc.

In first part, we have included the rate of income Tax applicable for the Assessment year 2020-21 (Read Part -1 here) , now we will cover the changes made or brought in  "Exempt income" i.e. INCOMES WHICH DO NOT FORM PART OF TOTAL INCOME  which are applicable for the Assessment year 2020-21 :-

Before Filing ITR for Assessment Year 2020-21, Know Important changes in Income Tax Act

 Now Time has come to be ready to file income Tax return for the Assessment Year 2020-21, however there are lot of changes have been made by the Government.

Some changes are more important to know because Income tax Return cannot be filed correctly if are ignorant of these.

I am just making an effort to cover such amendments/changes in a series like what would be Tax Rate for the Assessment year , changes in particular source of income i.e.salary, house property, Business or profession, capital etc.

First part is on the rate of  tax applicable for the Assessment year 2020-21:-

Habit of reading Books make you more capable and presentable

Why should you read Books?

There is a proverb “A mind needs books as a sword needs a whetst

Extension of due date for filing Income Tax Return-ITR

Extension or relaxation in due date  under Income Tax Act, 1961

In exercise of the powers conferred by sub-section (1) of section 3 of the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 (2 of 2020), the Central Government further extended the due date of furnishing Income Tax Return or Audit report under the Act, as well as relaxation has been given by extending period for making invest under section 54 or section 54B or under chapter-VI-A of the Act.

Brief of the Extension or relaxation are as under:-

 

(1)  Extension of due date to file Income Tax return u/s 139

How to download your E-PAN card

Download E-PAN Card

How can I get my PAN card if I lost or misplaced it, How can I see my PAN card online? Can PAN card be downloaded? Or can I download my Pan card if I have PAN number but not card? These are frequently asked questions or we can say these are the problems faced by the many tax payers about the PAN, Income Tax department has now provided the facility to download your PAN or get it reprinted. Just go through the procedure explained below and get your PAN card in your hand.

How can I Download my PAN card? Is there any facility to get E-PAN card?

TDS on e-commerce Transactions i.e.194-O

TDS on e-commerce Transactions i.e.194-O

Finance Act 2020 has brought a new section i.e. section 194O, this sections has introduced for TDS on e commerce Transactions,
Tax deduction at source (TDS) or Tax collected at source (TCS) are the most convenient mode of tax collection by the government thus it is a tool to collect tax to minimize the tax evasion by taxing the income at the time when income generated and instead of taxing on a later date.
A new section 194O (i.e. TDS on e-commerce ) has been inserted which requires to ecommerce operator to deduct TDS on the amount sale or service effected through his platform. E commerce operator like amazon, Uber, flipkart, Myntra,Zomato ,swiggy,makemytrip, & this provision will affect the their sellers.. I am making an effort to discuss and explain the impact & implication of the provision in following paragraphs in FAQ format.

Change in definition of MSME Enterprise and relaxations under MSME Act

Change in criteria of unit under MSME Act

Union Ministry of Micro, Small and Medium Enterprises (M/o MSMEs) has issued Gazette notification to pave way for implementation of the upward revision in the definition and criteria of MSMEs in the country.

Delhi High Court allowed to file Tran-1 but CBIC amended Law to negate the benefit

Delhi High Court allows taxpayers to claim Transitional Credit

Hon’ble Delhi High Court in case of Brand Equity Treaties Limited Vs Union of Indiahas held that period of 90 days for claiming input tax credit in TRAN-1 is directory and therefore, period of limitation of 3 years under the Limitation Act would apply.  ️The Court has directed the Department to allow all assessees to claim input tax credit in TRAN-1 by 30.6.2020.  The direction would apply to all those who could not file TRAN-1 and claim input tax credit. ️The court has further directed that it should be advertised that all taxpayers who have not filed TRAN 1 can do so by 30.6.2020. The judgment has been made applicable to all irrespective of whether the taxpayer has approached the court or not.

EXCESS CREDIT TAKEN OF ITC IN GSTR-3B

How do I rectify if excess Input Tax Credit taken in GSTR 3B?

Excess Input Tax Credit has been availed while filing GSTR 3B in previous year, now found the mistake and want to correct . How can this mistake be corrected.

Clarification in respect of residency under section 6 of the Income-tax Act, 1961.

Section 6 of the Income-tax Act, 1961 (the Act) contains provisions relating to determination of residency of a person. The status of an individual, as to whether he is resident in India or a non-resident or not ordinarily resident, is dependent, inter-alia, on the period for which the person is in India during a previous year or years preceding the previous year.

New procedure for registration, approval, etc. of certain entities deferred to 1st October, 2020

In view of the unprecedented humanitarian and economic crisis, the CBDT has decided that the implementation of new procedure for approval/ registration/notification of certain entities shall be deferred to 1st October, 2020. Accordingly, the entities approved/ registered/ notified under section 10(23C), 12AA, 35 and 80G of the Income-tax Act, 1961 (the Act) would be required to file intimation within three months from 1st October, 2020, i.e, by 31st December, 2020. Further, the amended procedure for approval/ registration/ notification of new entities shall also apply from 1st  October, 2020.

Deferment of Reporting under clause 30C and clause 44 of Tax Audit Report

The Central Board of Direct Txe has vide Circular No.10 /2020 dated 24th April, 2020 stated that in view of the prevailing situation due to COVID-19 pandemic across the country, the reporting under clause 30C and clause 44 of the Tax Audit Report shall be kept in abeyance till 31 st March, 2021.

Section 44AB of the Income-tax Act, 1961 (‘the Act’) read with Rule 6G of the Income-Tax Rules, 1962 (‘the Rules’) requires specified persons to furnish the Tax Audit Report along with the prescribed particulars in Form No. 3CD. The existing Form No. 3CD was amended vide notification no. GSR 666(E) dated 20th July, 2018 with effect from 20th August, 2018. 

Let us understand the Clause 30C and Clause 44 of the Tax Audit Report.

Coercive Recovery of taxes etc during Corona Virus crisis

UOI vs. P. D. Sunny (Supreme Court)

Coercive Recovery of taxes etc during Corona Virus crisis: The orders of the Allahabad & Kerala High Courts directing the authorities to defer coercive recovery of taxes is stayed in view of the stand of the Government that the Government is fully conscious of the prevailing situation and would itself evolve a proper mechanism to assuage concerns and hardships of every one 

There shall be ex-parte ad-interim stay of the impugned judgment and order(s) passed in the aforesaid writ petitions and of further proceedings before the High Court(s), in view of the stand taken by the Government of India through learned Solicitor General, before us, that the Government is fully conscious of the prevailing situation and would itself evolve a proper mechanism to assuage concerns and hardships of every one 

Implementation of blocking facility of ITC by the GST authorities

CIRCULAR F. NO. 587/CE/167/POL/2019/11219-11269 DATED 13-1-2020

Attention is drawn to the provisions of Rule 86A(1)(a) of the Central Goods and Services Tax Rules, 2017 which empowers the CGST officers to block input tax credit (ITC) under certain circumstances.

Labourer gets Income Tax demand notice of Rs 1.05 crore! Do this if you also get

labourer in Maharashtra recently got a shock of his life when the Income Tax department sent him a notice to pay Rs 1.05 crore as income tax for the assessment year 2017-18 to the government. News agency ANI reported that daily wage labourer Bhausaheb Ahire had received an income tax notice, asking him to pay Rs 1,05,83,564 as income tax for assessment year 2017-18. The notice said that Ahire had an undisclosed amount of Rs 21,00,000 and Rs 56,81,000 as other deposits in his bank account. Shocked with the notice, Ahire told the news agency, “Ï am a labourer who gets work only once or twice a week. I earn my livelihood that way. I have not seen even Rs 1 lakh in my life, how can I pay Rs 1.95 crore? This is fraudulence. Action should be taken.”
https://www.financialexpress.com/money/income-tax/how-to-respond-to-wrong-income-tax-demand-notice-step-by-step-guide-labourer-rs-1-05-crore/1827294/lite/

Is GST liable on hiring charge of vehicle from one GTA to another GTA

The applicant being a Goods Transport Agency (GTA) wants to be registered under GST. It has sought an advance ruling to determine whether it can provide vehicles used for transportation of goods on hire basis to another GTA?

Be ready to face GST Audit- Department has started issuing GST audit notices to Taxpayers

It's almost close to three years since the roll-out of the biggest indirect tax reform, the Goods and Services Tax (GST). The government has now launched a massive enforcement drive, pan-India with a motive to check tax evasion and re-confirm fake credits. The taxman has started issuing GST audit notices to taxpayers for the first year of the roll-out, i.e. GST FY17-18.

Recommendation of the 38 Meetings of the GST Council

The 38 Meetings of the GST Council met under the Chairmanship of the Union Minister for Finance & Corporate Affairs Smt. Nirmala Sitharaman here today. The meeting was also attended by the Union Minister of State for Finance & Corporate Affairs Shri Anurag Thakur besides Finance Ministers of States & UTs and senior officers of the Ministry of Finance. The GST Council recommended the following:

Guidelines for manual selection of returns for Complete Scrutiny during the financial-year 2019-20

1. The parameters for manual selection of returns for Complete Scrutiny during financial year 2019-20 are as under.-

(i) Cases involving addition in an earlier assessment year(s) on a recurring issue of law or fact: –

SABKA VISHWAS (LEGACY DISPUTE RESOLUTION) SCHEME, 2019

Q 1. Who is eligible to file declaration under the SABKA VISHWAS (LEGACY DISPUTE RESOLUTION) SCHEME, 2019?

Ans. Any person falling under the following categories is eligible, subject to other conditions under the Scheme, to file a declaration:

(a) Who has a show cause notice for duty or one or more appeals arising out of such notice pending and where the final hearing has not taken place as on 30.06.2019.

Waive off of filing of FORM ITC-04 for F.Y. 2017-18 & 2018-19 i.e. details of Job work

As per section 143 of The CGST Act 2017 read with Rule 45 of the CGST Rules 2017 , 

A registered person (i.e.“principal”) may send any inputs or capital goods, without payment of tax, to a job worker for job work and from there subsequently send to another job worker and likewise, and shall bring back inputs, after completion of job work or otherwise, or capital goods, other than moulds and dies, jigs and fixtures, or tools, within one year and three years, respectively, of their being sent out, to any of his place of business, without payment of tax. Subject to condition that it will be informed to tax authority and condition prescribed under rule 45 are fulfilled.

Exemption U/S 54B cannot be claimed if new asset bought before trasnfer of capital asset

Assessee purchased two properties on 2-12-2011 and 1-2-2012. Thereafter, he sold certain parcels of agricultural land on 21-2-2012. He claimed exemption under section 54B against sale of such agricultural land. Assessing Officer (AO) had disallowed exemption in respect of one parcel of land and allowed exemption in respect of other.

सुंदर कान्ड में सफलता के सूत्र- भाग ३

राम काजु करि फिरि मैं आवौं।सीता कइ सुधि प्रभुहि सुनावौं।।
तब तव बदन पैठिहउँ आई। सत्य कहउँ मोहि जान दे माई।।
कबनेहुँ जतन देइ नहिं जाना। ग्रससि न मोहि कहेउ हनुमाना।।
जोजन भरि तेहिं बदनु पसारा।कपि तनु कीन्ह दुगुन बिस्तारा।।
सोरह जोजन मुख तेहिं ठयऊ। तुरत पवनसुत बत्तिस भयऊ।।

Gains from transfer of derivatives (F&O) by FPI also exempt from levy of enhanced surcharge

The Central Board of Direct Taxes (CBDT) has decided to withdraw the enhanced surcharge levied by the Finance (No. 2) Act, 2019 on tax payable on income arising from the transfer of equity share/unit referred to in section 111A and section 112A of the Income-tax Act, 1961 from the financial year 2019-20. The capital assets mentioned in the section 111A and section 112A are:

Taxability of GST on Discount

Tax treatment of discount is the most critical area of the discount saga. Discount is generally given by the supplier to boost his sales. Different types of discount prevails in the business like general discount, turnover discount, cash discount etc.

Most preferred and litigation free way of showing discounts is to show the same on the invoice but due to commercial reasons, it may not be possible to show all discounts on the invoice itself and the problem actually starts there.

Tax Authorities does not want to reduce discount from taxable value except when such discount shown in invoice itself while tax payer claim that he has never received the consideration thus it must be reduced. Honourable courts held in many cases that showing discount invoice is not solution to pass discount to customer and arrive the taxable value.

Recently GST wing of CBIC has issued a circular clarifying various issue on discount and its taxability under GST however before going into discussion of circular it would be better to look provisions of CGST Act,2017

Section 15 of the Act deals with valuation of supply in which reference of discount is found under sub section (3) of the said section, which states as under:-

न तो आयकर छूट की सीमा बढ़ी है, न ही कर-दरों में कोई बदलाव

हर कोई खुश दिखा कि आयकर छूट की ढाई लाख रुपए सालाना की मौजूदा सीमा को दोगुना कर सरकार ने पांच लाख रुपए कर दिया है। इस स्लैब की आमदनी पर आयकर की दर दस फीसद है। यानी लोगों को यह लगा कि पांच लाख या उससे ज्यादा आमदनी वाले हर आयकरदाता को सरकार ने पच्चीस हजार रुपए का सीधा लाभ मिलेगा। लेकिन बजट पेश करने के बाद पीयूष गोयल ने प्रेस कांफ्रेंस में स्थिति साफ की तो ज्यादातर लोगों की खुशी काफूर हो गई। गोयल ने साफ कहा कि सरकार ने न तो आयकर छूट की सीमा बढ़ाई है और न मौजूदा कर-दरों में कोई बदलाव किया है।
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Non-Filers Asked To Submit Income Tax Returns Within 21 Days

If you haven't filed your income tax return yet, you have few days left to do so to avoid legal proceedings. Individuals who have not filed their income tax returns (ITR) for the assessment year 2018-19 should do the same within 21 days to avoid proceedings under the Income Tax Act, news agency IANS (Indo-Asian News service) reported citing a government statement. The Central Board of Direct Taxes (CBDT) had identified through the Non-filers Monitoring System several potential individuals who had carried out high value transactions in financial year 2017-18 but had still not filed returns, the agency reported.
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Government may double income tax exemption limit from Rs 2.5 lakh to Rs 5 lakh

Currently, income up to Rs 2.5 lakh is exempt from personal income tax. Income between Rs 2.5-5 lakh attracts 5 percent tax , while that between Rs 5-10 lakh is levied with 20 percent tax. Income above Rs 10 lakh is taxed at 30 percent. Rs 5 lakh exemption is only applicable to individuals of over 80 years.
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Decisions taken by the GST Council in the 32nd meeting held on 10th January, 2019

GST Council in the 32nd meeting held on 10th  January, 2019 at New Delhi took following decisions to give relief to MSME (including small traders), and took following other decisions but same would be given effect to through Gazette notifications/ circulars which shall have the force of law.-

Extension of Due Date for Filing Annual Return & Audit Report Under GST

Restriction on Input Tax Credit-Motor Vehicles-Section 17(5)(a)

Section 17(5) Notwithstanding anything contained in sub-section (1) of section 16 and sub-section (1)

of  section  18,  input  tax  credit shall  not  be  available  in  respect  of  the  following, namely:—

(a)      motor vehicles and other conveyances except when they are used ––

(i)       for making the following taxable supplies, namely: —

(A)     further supply of such vehicles or conveyances ; or

(B)     transportation of passengers; or

(C)     imparting  training  on  driving,  flying,  navigating  such  vehicles  or conveyances;

(ii)      for transportation of goods;

In clause (a) section 17(5) of the Act , restriction has been imposed on input Tax credit relating to motor vehicle ,it means that tax credit of ‘input’ and ‘input service’ both will be restricted.

RESTRICTION OF INPUT TAX CREDIT-Section 17(5)(c) of CGST ACT

“Section 17 (5)    :-        Notwithstanding  anything  contained  in sub-section  (1) of section 16 and subsection (1) of section  18, input  tax credit  shall  not be available  in respect  of the following namely:

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(c ) works contract services (WCS) when supplied for construction of an immovable property (other than plant and machinery) except where it is an input service for further supply of works contract service;

(d) goods or services or both received by a taxable person for construction of an immovable property (other than plant or machinery) on his own account including when such goods or services or both are used in the course or furtherance of business.”

Now question arise whether a works contractor can avail input tax credit for the tax paid on it’s inward supply of goods (i.e. input) or services or it is restricted as per section 17(5) (c) & (d) of the CGST Act,2017?

Extension of due date filing ITR and TAR

*CBDT further extends due* dt for filing of IT Returns & audit reports from *15th Oct,2018 to 31st Oct, 2018* for all assessees liable to file ITRs for AY 2018-19 by 30.09.2018,after considering representations from stakeholders. Liability to pay interest u/s234A of ITAct will remain.

*Source- Income Tax Twitter handle-https://twitter.com/IncomeTaxIndia/status/1049278032157048832?s=19*

Can Input Tax Credit of process loss/waste of Input be taken?

Section 17(5) of the Central Goods and Service Tax Act 2017, says that notwithstanding anything contained in section 16(1) or section 18(1), input tax credit shall not be available for certain inputs or input services.

Clause (h) of the said sub-section talk about the input tax credit not available on “goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples”

Now question arise that  whether input tax credit on inputs which has been wasted or lost during manufacturing process or during the production can be said that “goods lost or destroyed and input tax credit would not be available because of section 17(5) (h) of the Act.

As per section 16(1) of the Act very registered person shall be entitled to take input tax credit on any supply of goods or services or both provided such goods or services is used or intended to be used in the course or furtherance of business and such amount of credit is credit to the electronic credit ledger.

Can Gst arrears be paid in instalments?

The petitioners prayed before the Hon'ble Gujarat High Court that due to financial difficulties, they requested the department to allow them to pay the arrears in instalments.

TD/TCS provisions effective from 1st October, 2018

TD/TCS provisions effective from 1st October, 2018

The Central Government vide Notification No. 50 /2018 –CT dated 13^th September, 2018 has notified 1^st October, 2018, as the date on which the provisions of section 51 (Tax deducted at source) will be effective with respect to a department of central/state Government, local authority, governmental agencies and notified persons as specified below:

Contact Details of GST Seva Kendra

When any problem comes in GST, we generally contact our consultant or advisor and get the solution of the problem but there are situation that when we need conformation or more clarity.
Central Board of indirect taxes provided the area wise contact details of GST Sewa kendra where we can contact and get the solution, Please find the link of the all contact details of the sewa kendra

GST Sewa kendra

Entire law on accountability of public officials

Entire law on accountability of public officials for acts of omission and commission explained. Customs officials directed to pay costs of Rs. 14 lakh + interest @ 9% p.a. from personal account & to face disciplinary action for “high-handedness”, arbitrariness” and seeking to “hoodwink” Court.

Source:-
http://itatonline.org/archives/ms-overseas-enterprises-vs-uoi-patna-high-court-entire-law-on-accountability-of-public-officials-for-acts-of-omission-and-commission-explained-customs-officials-directed-to-pay-costs-of-rs-14-lakh/

Attitude towards work and work-place

I don't know the source of this story but found worthful that'swhy sharing here, credit goes to person who has written wonderfull story.

Reversal of wrongly availed Cenvat Credit under GST and Inadmissible transitional credit

It is clarified that as an alternative method, taxpayers may reverse the wrongly availed CENVAT credit under the existing law and inadmissible transitional credit through Table 4(B)(2) of FORM GSTR-3B.

E way Bill effective date notified

The Central Board of Excise and Customs vide Notification no. 74/2017 – Central Tax dated December 29, 2017 has appointed February 01, 2018 as the date from which the provisions of E-way bill shall come into force.

Read more at: http://www.cbec.gov.in/resources//htdocs-cbec/gst/notfctn-74-central-tax-english.pdf

CBEC-Clarification on filing of Returns under GST- Part-II

CBEC-Clarification on filing of Returns under GST- Part-1

The GST Council, in its 23rd  meeting held at Guwahati on 10th November 2017, has taken certain decisions in regard to filing of returns by taxpayers. Subsequently, various representations have been received seeking clarifications on various aspects of return filing such as return filing dates, applicability and quantum of late fee, amendment of errors in submitting / filing of FORM GSTR-3B and other related queries. In order to consolidate the information in various notifications and circulars regarding return filing and to ensure uniformity in implementation across field formations, the Board, in exercise of its powers conferred under section 168 (1) of the Central Goods and Services Tax Act, 2017 hereby clarifies the following issues:

E way Bill coming with New year

The nationwide e-way bill system will be available on trial basis from January 16, 2018 for traders and transporters to use voluntarily. The rules governing the compulsory implementation of the system will be notified on February 1, 2018.

If Excess Tax Paid By Mistake Under GST than it can be Credited back to Your Bank Account

A new facility has been started by the government on its GSTN portal, under which the taxpayers who paid excess tax money by mistake, can now transfer the money back to their bank accounts. This facility has started online from 29th November. With just one click, the money will be transferred directly to the bank account of the particular taxpayer.

To get back their excess tax money, businesses will be required to log on to GSTN portal by using their GSTN registered numbers and then they can apply for returning of the excess money. The money will automatically be credited to the concerned bank account.

Changes recommended in Composition Scheme

1. Uniform rate of tax @ 1% under the scheme for manufacturers and traders 
(for traders, turnover will be counted only for supply of taxable goods).
 No change for composition scheme for restaurant.

2. Supply of services by Composition taxpayer upto Rs 5 lakh per annum will be allowed by exempting the same

3. Annual turnover eligibility for composition scheme will be increased to Rs 2 crore from the present limit of Rupees 1 crore under the law.
Thereafter, eligibility for composition will be increased to Rs. 1.5 Crore per annum.

Note :The changes recommended by GST Council at (3) above will be implemented only after the necessary amendment of the CGST Act and SGST Acts.