ASAP & ASSOCIATES C HARTERED ACCOUNTATNTS TAX UPDATES 1.21 Feb , Temple Complex, Shiv Mandir, Tilak Bridge, New Delhi

Transcription

1 ASAP & ASSOCIATES CHARTERED ACCOUNTATNTS TAX UPDATES 1.21 Feb , Temple Complex, Shiv Mandir, Tilak Bridge, New Delhi

2 COMPILED BY Ankit Gupta (CA FINAL) 2

3 INDEX 1. TDS/INCOME TAX SERVICE TAX DVAT...9 3

4 TAX UPDATES Warm greetings! The prime motive of this newsletter is to keep you updated with the day to day changes in the Direct and Indirect Tax scenario. We try to consolidate and refer to amendements and notifications taking effect during the last 15 days. Tax laws have to be interpreted in each context and can have different implications in different circumstances. You are advised to approach us for formal professional advice before you intend to act on any issues. This information may not be exhaustive nor the interpretations given here may be conclusive. ASAP shall not be responsible for any action taken without formal consultancy. 4

5 TDS/ Income tax A. The tax treatment of main allowances which are generally given to employees Taxable allowance i. Dearness allowance : Taxable ii. iii. iv. City compensatory allowance: Taxable. Project Allowance: Taxable Fixed medical allowance: Taxable. v. Servant/helper Allowance: Taxable, if helper is not used for official purpose. vi. Tiffin Allowance: Taxable. vii. Mobile allowance:taxable as it is neither covered under 10(14)(i) nor under 10(14)(ii). However phone facility including mobile phone provided by employer free of cost is not covered under perquisites. Fully Exempted allowances i. Foreign Allowance: Exempt from tax if paid outside India By the government to the Indian citizen for rendering services outside India. ii. iii. Allowances to Supreme court/high court Judges: Not taxable. Servant/helper Allowance: Exempted,if helper used for official purpose. 5 TOP

6 Partially Exempted allowances i. Transport Allowance: means allowance to meet expenses incurred for office to home and home to office is exempted up to 800 per month maximum.1600/ Per month in case of employee who is blind or orthopaedically handicapped(see details in complete List). ii. iii. iv. Allowance to meet the cost of travel on tour or on transfer (including amount paid for packing and transportation of personal effects on such transfer): Exempted to the extent allowances used for said purpose. Allowance (know as DA in TA bill) paid for purpose explained in point above,to meet the ordinary daily charges on account of absence from his normal place of duty): Exempted to the extent allowance used for the said purpose Conveyance allowance: To meet the expenditure on conveyance in performance of duties of an official nature: exempted to extent allowance used for said purpose v. Uniform allowance: exempted to the extent used for the said purpose vi. vii. viii. ix. Children Education allowance: Rs 100 per month per child up to maximum of two child is exempted if expenses made in India. Children hostel allowance: 300 per month per child up to maximum of two child is exempted if expenses made in India. Allowance granted to employee working in transport system where no daily allowance has not been allowed to meet daily expenses, done to meet his personal expenses during duty performance from one place to other place: 70 % of such allowable exempted maximum up to per month. Allowance granted for encouraging the academic, research and other professional pursuits: Exempted to the extent used for said purpose x. Hilly area, remote area, field allowances: Exempted on various rate 6 TOP

7 B. Non compliance with TDS provisions Non compliance with TDS provisions can result in : Disallowance u/s. 40(a)(ia) of Income Tax Act, Raising of demand u/s. 201(1) of the Income Tax Act, Charging of Interest u/s. 201(1A) of the Income Tax Act, Levying penalty u/s. 271C of the Income Tax Act, 1961 up to the amount of tax in default Levying of penalty u/s. 221 of the Income Tax Act, 1961 for non payment of demand raised. Prosecution u/s.276b of the Income Tax Act, 1961 involving rigorous imprisonment up to 7 years with fine. Penalty u/s. 271BB of the Income Tax Act, 1961 for failure to apply for TAN or non quoting thereof. Penalty u/s. 272A (2)(k) of the Income Tax Act, 1961 for non filing of TDS returns. Fee U/s 234E for late filing of TDS Statement Penalty u/s. 271H for late filing or non filing TDS statement. C. Version 2.0 for justification report of TDS and updated version of the PDF converter utility A new version (2.0) of Excel Generation utility for Justification report has been rolled out. Please download and use latest utility version for Justification report requests submitted after 20th Feb While generating Form16 / 16A, if you are getting a message as "0 PDF files generated successfully", please download the updated version of the PDF converter utility 1.3L and also new file format for conso file has been enabled by the department 7 TOP

8 SERVICE TAX A. Service Tax Revised Return can be filed within 90 days In case of any error, mistake or omission realised after filing of the Service Tax Return, the assessee may filed a Service Tax Revised Return to correct such error/mistake/omission. As per Rule 7B of the Service Tax Rules 1994, an assessee may file a service tax revised return in triplicate in Form ST 3 to correct the mistake or omission, with in a period of 90 days from the date of submission of Return under Rule 7. B. Exemption to Rice from Serice tax In Service Tax, exemption has been granted to 'rice' treating it as agricultural produce. Thus, storage, warehousing, packing, loading, unloading etc. for rice would be exempt from Service Tax. Earlier only paddy was exempt. Similarly, blood banks would also be exempt treating them as part of health care services which were already exempt. 8 TOP

9 DVAT A. Maintenance of Books of Accounts in Delhi - Compulsory for VAT Delhi VAT Department has recently notified requirements to have a principal place of business in Delhi. All Delhi VAT dealers must maintain & retain prescribed records in Delhi for 7 years. The records can be in the form of soft / hard copy but should be readily available on demand and dealer should be able to explain all business transactions. Any excuse in producing books or seeking time in so producing books will not be entertained. Where a dealer shuts down or shifts its place of business to outside Delhi, he continues to be responsible to keep books for next seven years. Following actions can be taken against defaulting dealers: Penalty of sum of Rs 50,000 or 20% of tax deficiency whichever is greater, can be levied Registration of dealer is liable to be cancelled Dealers may lose the right to issue tax invoice against which ITC can be claimed by purchasing dealer Dealers would lose right to avail ITC on their purchases In hands of contractees, dealer will become liable for TDS 6% on work contract activities Criminal prosecution leading to rigorous imprisonment up to six months and fine can be imposed. 9 TOP

10 Corporate office 1, Temple Complex, Shiv Mandir, Tilak Bridge, New Delhi Tel , E mail info@asap.net.in Website : Branch offices Kota 5 6 7, Third Floor, Deepshree Bhawan,9 D Gumanpura Opp. Multipurpose School, Kota (Raj.) Tel.: (0744) , , E mail infokota@asap.net.in. Jaipur No. 6, Second Floor, Ratnam Villa, UnchaKuan,HaldiyonKa Rasta, JohriBazar,Jaipur(Rajasthan) t2rajeshjaipur@datainfosys.net, Vasundhara OfficeExtn:2156 Sector 16A Vasundhara, Ghaziabad preeti@asap.net.in. 10