Filing of Income Tax Returns

Transcription

1 Filing of Income Tax Returns Assessment year Relevant amendments By Sonalee Godbole Manish Unadkat

2 Agricultural Income Judicial view on Nursery operation Basic operations on land is must Saplings or seedlings Explanation 2 added. Exemption granted irrespective of basic operations on land Saplings and seedlings grown in the nursery shall be deemed to be agriculture income. 2

3 Definition of Charitable purpose Meaning of advancement of any other object of general public utility amended Exclusions Activity in nature of trade, commerce or business Any service in relation to trade, commerce or business Circular No. 11 dated Amendment not to apply to first 3 limbs Associations operating on mutuality principle exempted No generalisation possible To be decided on case to case basis 3

4 Extension of time limits u/s 10A and 10B Extension of exemption from Asst. yr to

5 Section 35 Scientific research Deduction reduced from 150% (Section 35(2AB)) to 125% (Section 35(1)(iia)) The payee company must be Registered in India Has main object as scientific research and development Approved by the prescribed authority Fulfils other prescribed condition 5

6 Extension of scope of section 35D Expenses after commencement of business Till , allowed only for extension of industrial undertaking or setting up a new industrial unit From , allowed for extension of all undertaking or setting up of any new unit. Beneficial for services sector 6

7 Section 40(a)(ia) Extension of time for TDS payment Applicable retrospectively from AY TDS for expenses booked in the month of March, if paid by due date of filing return, then no disallowance. For months other than March, expenses allowable, if TDS paid till March 7

8 40A(3) Disallowance for Payment > Rs. 20,000 Payments made otherwise than by account payee cheque or Bank draft Till , 20% disallowance From , 100% disallowance From , 100% disallowance even if aggregate payments made during a day exceeds Rs. 20,000 New Rule 6DD notification no. 97/2008 dated

9 Section 43(6) Meaning of WDV Explanation 6 added To consider the amount of depreciation provided in the books Even though not allowed as deduction in previous years As deemed to be actually allowed. Retrospectively from AY

10 Change in rate of Depreciation New Commercial Vehicle purchased After And put to use before Shall be depreciated at the rate of 50% instead of 15% 10

11 Reverse Mortgage Scheme (RMS) Meaning Mortgage of property is transfer Hence section 47(xvi) added to exclude mortgage under RMS as transfer Section 10 amended to support that installments/lump-sum received shall be exempt Capital gains applicable on alienation only 11

12 Foreign Currency Exchangeable Bonds (FCEB) Transfer by way of conversion of bonds FCEB into shares or debentures of any Indian company shall not be considered as a transfer. Sec 47(xa) Cost of such converted shares or debentures shall be cost of bonds referred to above Sec 49(2A) This amendment is with effect from asst. year

13 Section 80C New investments avenues Additional eligible investments Five year time deposit under Post office time deposit rules 1981 Deposit in an account under the Senior citizen savings scheme rules 2004 Lock-in period of 5 years If withdrawn, taxable in the year of withdrawal unless received by legal heir 13

14 Sec 80D Additional premium Deduction allowable for parents Rs (Rs. 20,000 if senior citizen) for premium of self, spouse and dependent children Rs (Rs. 20,000 if senior citizen) for premium of parents (whether or not dependent) 14

15 Sec 115JB - MAT Deferred tax or provision thereof to be added back to profit Income tax to include Tax on distributed profits Interest charged under IT Act Surcharge, Education Cess and Secondary & Higher education Cess. Retrospectively from AY

16 Change in rates of tax on short term capital gains Short term gains on following which are subject to STT Equity shares and Unit of an equity oriented fund Rate of tax increased from 10% to 15% 16

17 Relief in Dividend distribution tax Relief provided to Holding Company Dividend received from subsidiary to be reduced from dividend payable to arrive at tax payable u/s 115O Conditions Recipient is not a subsidiary of any company Subsidiary has paid dividend tax u/s 115O Dividend should be received from subsidiary 17

18 Fringe Benefit Tax few Hospitality excludes exemptions Payment through prepaid electronic meals card Should be non-transferable Used only at eating joints or outlets Rs. 100 per day Notification no. 1/2009 for rule 40E Employees Welfare excludes Crèche facility to children of employees Sponsorship of sportsman, being an employee Sports event of employees M i f h d l d 18

19 FBT Valuation / Tax credit Expenditure on festival celebration 20% instead of 50% Tax credit for tax paid by employees on FBT No refund granted No adjustments of such tax against any other income or other tax liability 19

20 TDS Removal of TDS on Interest on Corporate bonds (Sec 193) Security is in Demat form Security is listed on recognised stock exchange Applicable from June 1, 2008 AOPs and BOIs (turnover exceeding limits u/s 44AB) liable to deduct tax (Sec 194C) No TDS on amount on service tax amount for payments u/s 194I - Circular 4/ dated 28/4/08

21 Sec 194J Few persons added Services rendered by these persons in relation to sports activities covered u/s 194J Sports persons Umpires or referees Coaches and trainers Team physicians and physiotherapists Event Managers Commentators Anchors and Sports columnist Notification no. 88/2008 dated 21/8/

22 Treatment of STT /CTT New tax called CTT introduced With effect from Asst. yr , STT and CTT shall be allowed under section 36(1)(xv)/(xvi) as deduction from income. Till , STT paid was allowed as a rebate from taxes payable under section 88E. This shall not be available from AY Sec 40(a)(ib), which provided that STT shall not be allowable is deleted. 22

23 Effect of change in STT Old Scheme New Scheme Income STT paid Total Income Tax on total Income Less: rebate (88E) Tax liability Tax liability higher by (%)

24 Change in Form 3CD In Form No. 3CD, after item 17, the following shall be inserted 17A. Amount of interest inadmissible under section 23 of the Micro, Small and Medium Enterprises Development Act, Notification no. 36 dated

25 THANK YOU!! 25