No TDS on service tax amount if the service tax amount shown seperatly in the bill CBDT Notification

The Central Board of Direct Taxes (CBDT) had previously issued a Circular No. 4/2008 dated 28-04-2008 wherein it was clarified that tax had to be deducted at source under section 194-I of the Income-tax Act, 1961 (the Act), on the amount of rent paid/ payable without including the service tax component.

The Central Board of Direct Taxes (CBDT) has issued a circular (Circular No. 1/2014, F. No. 275/59/2012-IT(B) dated 13 January 2014) to clarify that there is no need to deduct TDS on service tax amount charged separately in the bill by the service provider.

The CBDT received representations seeking clarification whether this principle could be extended to other provisions of the Act also.

The Hon'ble Rajasthan High Court, in the case of CIT (TDS) v. Rajasthan Urban Infrastructure (ITA No. 235, 222, 238 and 239 of 2011), held that tax was not required to be deducted on the service tax component under section 194J of the Act if the amount of service tax was to be paid separately and was not included in the fees for professional services or technical services as per the terms of the agreement between the payer and the payee.

The CBDT, in the light of the aforesaid representation and the decision of the Hon'ble Rajasthan High Court, examined the matter afresh and decided that wherever, in terms of the agreement/ contract between the payer and the payee, the service tax component comprised in the amount payable to a resident is indicated separately, the tax shall be deducted at source under Chapter XVII-B of the Act on the amount paid/ payable without including the service tax component.

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Notification issued by CBDT on new procedure on non-resident payments and revised forms 15CA and CB.

The Central Board of Direct Taxes has issued notification no 67/2013 dated 2 Sept 2013 relating to remittance procedure for non resident payments. The new notification prescribes a revised process for payments made to non-residents.  It is applicable with effect from 1 October 2013.

The new notification prescribes following tax procedure for remittances to the non-residents:

• All taxable remittances (including salary or interest ) are required to be reported in a new Form 15CA

• The new Form 15CA prescribed two categories (i.e. Part A and Part B) of remittance as follows:
• Part A is applicable where amount does not exceed Rs. 50000 and the aggregate of remittance made during the financial year does not exceed Rs. 250000.
• Part B is applicable where remittance is chargeable to tax and exceeds Rs. 50000 and the aggregate of remittance made during the financial year exceeds Rs. 250000. Part B needs to be submitted along with Form 15CB/ a certificate from the assessing officer under section 197 or an order from the assessing officer under sub-section (2) or sub-section (3) of section 195 of the Income-tax Act, 1961.
• For the remittances covered in 'Specified List', Form 15CA and Form15CB are not required to be submitted. This Specified List covers 29 type of remittances (aligned with RBI purpose code in Form A2) such as remittance towards business travel, travel under basic travel quota, travel for medical treatment/education, family maintenance and savings etc

In view  of the above, for processing any foreign remittance from 1 October 2013 onwards, the documents as per the above procedure will be required for processing remittances to the non-residents.

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Cost Inflation Index for Financial Year 2012-13 : 852

CBDT has notified the Cost Inflation Index for Financial Year 2012-13 as 852.

Cost inflation index is a measure of inflation. The Central Government by notification announces this index based on 75% of the average rise in the consumer price index for urban non-manual employees for the previous year.

Cost inflation index is used for calculating the Indexed cost of acquisition or indexed cost of improvements of the assets while calculating the long term capital gain. With the use of this index the cost of the asset is increased to compensate the inflation.

The Indexed cost of acquisition or improvement will be determined using Cost Inflation Index with the following formula.

	___Cost of acquisition/ improvement_____	X	Cost inflation index for the year in which the asset is transferred
	Cost inflation index for the year in which the asset is acquired / improvement took place

Cost of Inflation Index from 1981-82 to 2012-13

Financial Year	Cost of Inflation Index
1981 - 82	100
1982 - 83	109
1983 - 84	116
1984 - 85	125
1985 - 86	133
1986 - 87	140
1987 - 88	150
1988 - 89	161
1989 - 90	172
1990 - 91	182
1991 - 92	199
1992 - 93	223
1993 - 94	244
1994 - 95	259
1995 - 96	281
1996 - 97	305
1997 - 98	331
1998 - 99	351
1999 - 00	389
2000 - 01	406
2001 - 02	426
2002 - 03	447
2003 - 04	463
2004 - 05	480
2005 - 06	497
2006 - 07	519
2007 - 08	551
2008 - 09	582
2009 - 10	632
2010 - 11	711
2011 - 12	785
2012 - 13	852

Extension of due date up to 31st August 2012 for filing of Income tax return for the Assessment Year 2012-13.

In exercise of powers conferred under section 119 of the Income Tax Act, 1961, the Central Board of Direct Taxes (CBDT) hereby extends the ‘due date' of filing of returns of income for the Assessment Year 2012-13 to 31st August 2012 in respect of assessees who are liable to file such returns by 31st July 2012 as per provisions of section 139 of Income Tax Act, 1961.

CBDT has issued the order under section 119 of the Income Tax Act, 1961 on 31^st July 2012.

Click here to see the Order.

No TDS on specified payment for purchase of software under 194J

CBDT issued notification (NOTIFICATION NO. 21/2012, DATED 13-6-2012) exempting the applicability of tax deduction on specified payment under section 194J for acquisition of software.

A buyer purchases software from a resident seller need not deduct tax on payment if the following conditions are fulfilled.

(i)     the software is acquired in a subsequent transfer and the transferor has transferred the software without any modification,

(ii)    tax has been deducted-

        (a) under section 194J on payment for any previous transfer of such software; or

        (b) under section 195 on payment for any previous transfer of such software from a non-resident, and

(iii)   the transferee obtains a declaration from the transferor that the tax has been deducted either under sub-clause (a) or (b) of clause (ii) along with the Permanent Account Number of the transferor.


This notification shall come in to force from the 1^st day of July, 2012.

           

LTA tax exemption - Section 10(5) of the Income Tax Act.

What is LTA?

LTA is an allowance or assistance received from the employer to employee to travel with his family on leave. Section 10(5) of the Income-Tax Act, 1961, read with Rule 2B, provides for the exemption and outlines the conditions subject to which LTA is exempt from income tax.

Rajiv gandhi equity scheme - deduction under Section 80CCG

In Finance Act 2012, Government has introduced Rajiv Gandhi equity saving scheme to resident individuals, which will allow new retail investors to invest directly in to listed equity shares up to Rs. 50,000/- and avail the deduction of 50% of the investment in computation of his total income.  This deduction can be claimed only in one assessment year starting from assessment year 2013-14. The Government will announce a scheme in this regard specifying the shares in which the investment is to be made and eligibility of the individual to claim the deduction and other conditions as may be required.

House rent allowance exemption – HRA tax exemption calculator

What is HRA (House Rent Allowance)?

House rent allowance is an allowance paid to employee as part of salary, specifically paid to meet the expenditure incurred on payment of rent in respect of residential accommodation occupied by the employee.

Compulsory filing of online income tax return for individual and HUF if the total income exceeds ten lakh rupees

CBDT issued Notification No.14 /2012 dated 28^th March 2012 bringing necessary changes in Rule 12  to make it compulsory filing of Income tax return if the total income of Individual or HUF exceeds ten lakh rupees. The compulsory online filing is applicable from the Assessment Year 2012-13 and subsequent assessment years. The online return can be filed in the following two manner.

Income tax return forms and mode of filing the return

Rules 12 of the Income Tax Act prescribes the different forms for filing ofIncome tax returns. Based on the sources of income and classes of person the applicable tax return is to be selected. Income Tax Department has notified ITR 1 to ITR 7. The applicability of these Income tax returns are explained in the following table.

No need to file tax return for AY 2012-13 if income does not exceed five lakh rupees …… do i have to file a tax return.?

During the financial year 2011-12, if you have received salary from only one employer,

You have received interests from savings bank account not exceeding Rs. 10,000/- and your employer has considered this income for deduction of tax.

Your total income does not exceed 5 lakh rupees and you don’t have any income except these two.

Then you don’t have to file the income tax return for the Assessment year 2012-13.

Set off of Losses Under Income Tax Act 1961

The set off of losses may be done in following steps.

Ø      Inter-source adjustment under the same head of income in same   assessment year.

Ø      Inter-head adjustment in the same assessment year if the loss cannot be set off fully under inter-source adjustment

Section 70 & 71 of the Income Tax Act 1961 brings out the rules for set off of losses under inter source and inter head adjustment in the same assessment year.

TDS chart- Tax rates applicable for the Financial Year 2012-13 ( Assessment 2013-14)

Income tax TDS rates Applicable for the Financial year 2012-13

TDS Rate Chart
Financial Year : 2012-2013 (Assessment Year : 2013-2014)
Nature of payment	Applicable section	Threshold Limit	Individual / HUF	Others
Salary	192	Basic exemption limit after all the deductions.	Normal rate as per income tax slab	N.A

PAN application form for Non- resident Form 49AA in Excel with auto fill function

Central Board of Direct Taxes issued notification (NotificationNo. 56/2011/ F.No.133 /48/2011 – SO (TPL)) on 17^th November 2011 to make the necessary amendment in rule no. 114 of the Income tax rules 1962. The necessary changes were made in the PAN application procedure and the following new forms were introduced:

Form49A: to be used by Indian Citizen, Hindu Undivided Families (HUF), Companies, Firm [including Limited Liability Partnership (LLP)], Trust, Association of Person, Body of Individuals, formed or registered in India and

( to download 49A click here )

Form 49AA: to be used by Individuals not being a Citizen of India, LLP, Companies, Firm, Trust, Association of Person, Body of Individuals, formed or registered outside India.

These changes are effective from 1^st November 2011.

New Tax Rates Applicable for Individuals for Financial Year 2012-13 - Tax calculator in Excel

New Tax rates for Individual applicable for the Financial Year 2012-13 (Assessment Year 2013-14) are as follows:

(i)   The rates of income-tax in the case of every individual (other than those mentioned in (ii) and (iii) below) or Hindu undivided family or every association of persons or body of individuals , whether incorporated or not, or every artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2 of the Income-tax Act (not being a case to which any other Paragraph of Part III applies) are as under :—

Income	Tax Rate
Upto Rs. 2,00,000	Nil
Rs. 2,00,001 to Rs. 5,00,000	10 per cent.
Rs. 5,00,001 to Rs. 10,00,000	20 per cent.
Above Rs. 10,00,000	30 per cent.

New PAN Correction Form in Excel with auto fill option

The Data in the PAN card and the data in the income tax database can be updated or changed. To update these data PAN Correction form is to be submitted with the supporting documents to TIN facility center. This PAN Correction form in excel is a easy to prepare form with auto fill function.

New form 49A Pan application in Excel with auto fill function

The Central Board of Direct Taxes (‘CBDT’) has amended the Income-tax Rules, 1962 (‘the Rules’) by notifying Income-tax (7th Amendment) Rules, 2011 in respect of application for allotment of Permanent Account Number (‘PAN’) with effect from 1 November 2011.

As per the amended rules there will be two separate PAN application forms as under:

·Form 49A: To be used by Indian Citizen, Hindu Undivided Families (HUF), Companies, Firm [including Limited Liability Partnership (LLP)], Trust, Association of Person, Body of Individuals, formed or registered in India.