We are delighted to share our 66th E-Newsletter “Weekly Taxation Newsletter” dated 08th March, 2022 from 01st March, 2022 to 07th March, 2022 with you. This E – Newsletter is a weekly reference / compilation of interesting and latest news related to tax including upcoming Timelines / Due Dates, Notifications / Press Information, Case Laws, International Taxation etc.
- Stay updated, Stay connected
|Sl.||Compliance Particulars||Due Dates|
|1||Due date for payment of 4th instalment of advance tax for FY 2021-22.||15.03.2022|
|2||Due date for payment of whole amount of advance tax in respect of FY 2021-22 for assessee covered under presumptive scheme of section 44AD / 44ADA.||15.03.2022|
|3||Due date for filing of return of income for the assessment year 2021- 22 if the assessee (not having any international or specified domestic transaction) is (a) corporate-assessee or (b) non-corporate assessee (whose books of account are required to be audited) or (c) partner of a firm whose accounts are required to be audited or the spouse of such partner if the provisions of section 5A apply. The due date for furnishing of return of income for Assessment Year 2021-22 has been extended to February 28, 2022, vide Circular no. 17/2021, dated 09-09-2021. The due date for filing of return of income has been further extended to March 15, 2022 vide Circular No. 01/2022, dated 11-01-2022.||15.03.2022|
|4||Due date of furnishing of Form 24G by an office of the Government where TDS/TCS for the month of February 2022, has been paid without the production of a challan.||15.03.2022|
|5||Return of income for the assessment year 2021-22 in the case of an assessee if he/it is required to submit a report under section 92E pertaining to international or specified domestic transaction(s). The due date for furnishing of return of income for Assessment Year 2021-22 has been extended to February 28, 2022, vide Circular no. 17/2021, dated 09-09-2021. The due date for filing of return of income has been further extended to March 15, 2022, vide Circular No. 01/2022, dated 11-01-2022.||15.03.2022|
CBDT extends due dates for filing of Income Tax Returns and various reports of audit for Assessment Year 2021-22
|Type of Compliance Requirement (AY 2021-22)||Original Due Date||Extension vide Circular 9/2021||Extension vide Cir. 17/2021||Extension vide Circular 1/2022|
|Income Tax Return (Assessees subject to Audit): u/s 139(1) of the Income Tax Act, 1961||31/10/2021||30/11/2021||15/02/2022||15/03/2022|
|Income Tax Return (Assessees subject to Transfer Pricing Report): u/s 139(1) of the Income Tax Act, 1961||30/11/2021||31/12/2021||28/02/2022||15/03/2022|
|Belated/ Revised Income Tax Return: u/s 139(4)/ 139(5) of the Income Tax Act, 1961||31/12/2021||31/01/2022||31/03/2022||No Change 31/03/2022|
A. Filing Form GSTR-1:
|Tax period||Due Date||Remarks|
|Monthly return (February, 2022)||11.03.2022||“1. GST Filing of returns by registered person with aggregate turnover exceeding INR 5 Crores during preceding year. 2. Registered person, with aggregate turnover of less than INR 5 Crores during preceding year, opted for monthly filing of return under QRMP”|
B. Non Resident Tax Payers, ISD, TDS & TCS Taxpayers
|Form No.||Compliance Particulars||Timeline||Due Date|
|GSTR -7||Return for Tax Deducted at source to be filed by Tax Deductor||10th of succeeding month||10.03.2022|
|GSTR -8||E-Commerce operator registered under GST liable to TCS||10th of succeeding month||10.03.2022|
C. GST Refund:
|Form No.||Compliance Particulars||Due Date|
|RFD -10||Refund of Tax to Certain Persons||18 Months after the end of quarter for which refund is to be claimed|
D. GSTR – 1 QRMP monthly / Quarterly return
|Form No.||Compliance Particulars||Timeline||Due Date|
|Details of outward supply-IFF & Summary of outward supplies by taxpayers who have opted for the QRMP scheme.||GST QRMP monthly return due date for the month of February, 2022 (IFF). Applicable for taxpayers with Annual aggregate turnover up to Rs. 1.50 Crore. Summary of outward supplies by taxpayers who have opted for the QRMP scheme.||13th of succeeding month – Monthly Quarterly Return||13.03.2022|
- Major Update:
Attention: Window to opt in for composition for the FY 2022-23 is made available at GST Portal. The eligible taxpayers, who wish to avail the composition scheme may opt in for composition before 31st March 2022.
- Weekly Departmental updates: Income Tax
- Income Tax: CBDT issues refunds of over Rs 183,579 cr to over 2 cr taxpayers
“CBDT issues refunds of over Rs. 1,83,579 crore to more than 2.09 crore taxpayers from 1st Apr,2021 to 28th Feb,2022. Income tax refunds of Rs. 65,938 crore have been issued in 2,07,27,503 cases & corporate tax refunds of Rs. 1,17,641 crore have been issued in 2,30,566 cases,” Income Tax India tweeted from its official Twitter handle on Wednesday.
(Read more at: Click Here)
- Engage with taxpayers, an upset FM tersely tells CBDT, CBIC
Finance Minister Nirmala Sitharaman on Monday asked the central board of indirect taxes & customs (CBIC) and central board of direct taxes (CBDT) to devote their Saturday’s to address the grievances of assessees, sounding unhappy that the officials were not doing enough to engage with the industry.
Sitharaman was upset because most questions that were raised at her interaction with members of the trade and industry related to tax administration and procedural aspects, and not so much about budget or policy. These questions had come up at this session, she felt, because the two boards were not doing enough to deal with the stakeholders at their level.
The finance minister poured out her anger at field level tax authorities after Karnataka Bank general manager Muralidhar Rao raised an issue related to their bank branches in different states having to raise multiple GST invoices with multiple registrations with net result being
neutral. She was unhappy that top Finance Ministry officials had to explain issues the board officials ideally should have. To read more Click Here
- Govt focus on expeditious framework for Black Money Act
Considering the objective of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (BM Act), the assessment is to be completed at the earliest possible without keeping the same pending till the time barring date, the Central Board of Direct Taxes (CBDT) said in a set of guidelines issues earlier.
Before passing the assessment order, show cause notice would be issued by DDIT (Inv)/ADIT (lnv)/AO concerned to the assessee within 30 days of receipt of substantial information from all sources including relevant foreign jurisdiction(s) and completion of such further inquiries as may be required.
With a view to have more expeditious and efficient administrative framework for implementation of the BM Act for achieving the intended objectives of the separate law (BM Act) enacted to deal with undisclosed foreign assets cases, the CBDT has authorized DGIT (Inv)/Pr DIT(Inv) to assign concurrent jurisdiction of Assessing Officer (AO) to DDIT (Inv)/ADIT(Inv) concerned for exercising the powers and functions of AO under the BM Act.
Once investigation is initiated in an undisclosed foreign asset case, proper reference(s) under available tax treaties/legal instruments should be made to relevant foreign jurisdictions at the earliest possible and preferably, within 21 days of initiation of the investigation. Follow-up references, if any, pursuant to receipt of information should be made preferably within 15 days of receipt of such information. To read more Click Here
- Income Tax Rule Change: Tripple Tax Benefits on NPS; Know How it Works, Who Can Claim
Finance minister Nirmala Sitharaman announced that state government employees will now be able to claim tax benefit of 14 per cent on the National Pension System (NPS) made by their employer from financial year 2022-23. “Under the existing provisions of the Act, any contribution by the Central Government or any other employer to the account referred to in section 80CCD of the Act (NPS account), shall be allowed as a deduction to the assesses in the computation of his total income, if it does not exceed 14 per cent of his salary where such contribution is made by the Central Government. This limit is presently 10 per cent of his salary where such contribution is made by any other employer. The State Governments were given an option to raise the contribution to 14 per cent w.e.f 01.04.2019 on their own volition, based on their own internal approvals and notifications, without seeking the approval of the Pension Fund Regulatory and Development Authority,” the Budget Memorendum mentioned.
“Employer contributions to NPS are eligible for deduction u/s 80 (CCD)(2) however limited to 10 per cent of salary as defined. For central government employees, this was available up to 14 per cent of salary, and this benefit has now been extended to state government employees as well. However, this benefit has not been extended to non-government employees where the limit of 10 per cent continues to apply,” said Saraswathi Kasturirangan, Partner, Deloitte India. (Read more at Click Here)
Quick Steps to filing your income-tax returns smoothly
- Visit Click Here for e-filing the return of income.
- Create you login Id and Password on Income tax portal. (Register Yourself).
- Login to e-Filing portal by entering user ID (PAN), Password, Captcha code and click ‘Login’.
- Click on the ‘e-File’ menu and then click ‘Income Tax Return’ link.
- Select ‘Assessment Year’, Select ‘ITR Form Number’, Select ‘Filing Type’ as ‘Original/Revised Return, ‘Select ‘Submission Mode’ as ‘Prepare and Submit Online’ and then Continue.
- Fill all the applicable and mandatory fields of the online ITR form.
- Choose the appropriate Verification option in the ‘Taxes Paid and Verification’ tab.
- Click on ‘Preview and Submit’ button, Verify all the data entered in the ITR.
- Individuals should ensure that correct PAN, Aadhaar and TAN numbers are filed, and that the residential status is correctly determined and mentioned. They should also verify all the details filed in the ITR Form before final submission of the tax return.
- ‘Submit’ the ITR after complete check.
- The ITR filing process gets completed only on e-verification of ITR filed. There are various options available to e-verify tax return i.e. using Aadhaar OTP, using Net banking, using Demat account, using bank ATM, or by simply sending the signed physical copy of Form ITR-V to CPC Bangalore.
The taxpayer must ensure that PAN and Aadhaar are linked (date for linking is currently extended to March 31, 2022) and the Indian mobile number is active to ensure smooth e-verification of returns filed. Once the e-verification is complete, tax authorities consider the return to have been filed.se one discovers any error after filing tax return, then there is the option to file a revised India tax return within a prescribed timeline.
- Key Point – Must remember:
Provide your valid Email ID and mobile number while Registration. On Income Tax Return Page: PAN will be auto-populated.
Use your Form 26AS to summarise your TDS payment for all the 4 quarters of the assessment year.
Read the instructions carefully
- Income tax Return: Documents needed to file ITR
- You need to select appropriate ITR form.
- Primarily you need PAN, Aadhaar card and bank statements for the financial year.
- You also need the Form 16 issued by the employer and Form 16 issued by any other entity.
- You need Form 26AS (downloadable from the income tax portal) to check how much TDS was deducted and by who.
- Details of income from other sources.
- You also need capital gains and share trading statement.
- You may also need investment documents such as PPF (Public Provident Fund), NSC (National Savings Certificate), life insurance, medical insurance, NPS (National Pension System), investment in other tax-saving instruments.
- Interest and principal repayment certificates of housing loan and donation receipt is also needed while filing ITR
There is no need to worry if you are among taxpayers who have not filed ITR by the due date i.e. on or before 31.12.2021, as the process can be completed by March 31, 2022 by filing Belated ITR and the last date to submit Belated ITR for AY 2021-22.
Those who were not able to file their returns by the due date, i.e. by 31.12.2021 (extended due date) can still do so but they have to pay penalty fee for late ITR filing. From FY 21 or Assessment Year 2021-22 (AY22), the penalty amount for late filing beyond ITR filing deadline was reduced to Rs 5,000 from Rs 10,000 earlier. Due Date filing of belated ITR for AY 2021-22 is 31st March 2022.
Important Circulars and Notifications:
|Sl.||Particulars of the Notification(s)||File No. / Circular No.||Notification Link(s)|
|1.||Central Government hereby approves ‘Sri Shankara Cancer Foundation, Bangalore||Notification No. 14/2022||Click Here|
- Window to opt in for composition for the FY 2022-23 is made available at GST Portal. The eligible taxpayers, who wish to avail the composition scheme may opt in for composition before 31st
- How GST is killing small businesses with inspector raj and suffocating compliance
The introduction of the Goods and Services Tax or GST was supposed to create a unified market of 1.4 billion people and encourage entrepreneurship and job creation. The other aim was to bring more and more firms into the formal sector of India’s economy, which will help expand the tax base needed to raise the country’s tax-to-GDP ratio that has been hovering around 10- 11 per cent for a long time.
The current discourse on GST is mostly about how unscrupulous elements are using fake invoices to claim more input tax credits (ITC) than they should. That’s true. However, the major reason for that is too many rates and wide gaps between rates (0-28 per cent) for different inputs that facilitate over-claim of ITC. For instance, cement attracts 28 per cent GST while steel bars 18 per cent. Obviously, real estate firms will use more cement (on paper) than steel to claim more ITC than they should. The solution is to cut multiple rates into fewer ones and reduce the rate differentials. However, the regulators responded by dis-allowing input tax credit for real estate players, which defeats the purpose — to check cascading effects of tax on tax.
(Read more at: Click Here)
- GST Council plans to raise 5% tax slab to 8% : Report
The GST Council in its next meeting might raise the lowest tax slab to 8%, from 5%, according to a report by the PTI news agency, citing sources. A panel of state finance ministers is likely to submit its report by this month end to the Council suggesting various steps to raise revenue, including hiking the lowest slab and rationalising the slab.
- The increase in tax slab from 5% to 8% may yield an additional ₹1.50 lakh crore annual
- GST Council is looking to create GST a 3-tier structure with revision of rates at 8%, 18%, and 28%, respectively
Essential items are either exempted or taxed at the lowest slab, while luxury and demerit items attract the highest slab. Luxury and sin goods attract cess on top of the highest 28% slab. This cess collection is used to compensate states for the revenue loss due to GST rollout.
If the proposal comes through, all the goods and services which are currently taxed at 12%, will move to an 18% slab. Besides, the ministers are also looking to add more items under the various tax slabs and remove the items exempted from GST. Currently, unpackaged and unbranded food and dairy items are exempted from GST. To read more Click Here
- Inflation fears may force GST Council to defer rate hikes
Although the proposed rejig of GST slabs are meant to raise the revenue-neutral rate to 15- 15.5% from a little over 11% now, and thereby enable the state governments to absorb a revenue shock from the absence of compensation mechanism from July this year, an increased threat of inflation and uncertainties over economic growth in the aftermath of the East European conflict may force the GST Council to postpone the restructuring of rates
It was envisaged that GST would produce significant incremental economic growth and improve revenue productivity. But revenues from this comprehensive destination-based consumption tax have consistently been below the government’s expectations. (Revenues improved in recent months due to a crackdown on evasion and formalisation of the economy).
The GST compensation mechanism ensures 14% annual revenue growth for states for five years through June 2022. The designated cess fund fell way short of the required level in FY21 and is seen to face a huge shortfall in the current financial year as well. States are looking for an extension of the cover. GST collections have been buoyant in recent months. Gross collections rose 18% on year to Rs 1.33 lakh crore for February (January transactions). For the fifth month in a row, the collections crossed Rs 1.3 lakh-crore mark. To read more Click Here
- GST evasion: CBIC cautions against sharing Aadhaar, PAN details without valid reasons
The CBIC on Thursday cautioned the public against sharing Aadhaar and PAN details without a valid reason or for monetary gains, saying that the information could be misused by fraudsters for GST evasion.
In a tweet, the Central Board of Indirect Taxes and Customs (CBIC) said Aadhaar and PAN details can be used for creating fake entities in GST for evasion of taxes and hence people should refrain from sharing these without a valid reason. “Protect your personal data which may be used for creating fake entities in GST for evasion of taxes.”
Important Notifications under Excise / Custom/ GST:
|Sl. No.||Particulars of the Notification(s)||File No. / Circular No.||Notification Link(s)|
|1||Auto-population of e-invoice details into GSTR-1||GSTN Circular : 528||Click Here|
CUSTOM / EXCISE UPDATES
|Notification No. & date of Issue||Links||Notification Particulars|
|13/2022-Customs (NT)||Click Here||Exchange rates Notification No.13/2022-Cus (NT) dated 03.03.2022-regarding|
|14/2022-Customs (NT)||Click Here||Amendment in the Notification No. 12/97-Customs (NT) dated the 2nd April, 1997|
- India accuses Huawei of tax evasion
An Indian tax investigation into China’s Huawei Technologies has found the telecoms equipment maker manipulated account books to reduce its taxable income in the country, an Indian government source told Reuters on Thursday.
Without naming the company, the finance ministry said on Thursday a major multinational telecom group, whose ultimate shareholding “lies with a foreign entity of a neighbouring country”, did not account for income of Rs 4 billion ($52 million) in its books, and showed expenses of Rs 4.8 billion that the firm failed to justify.
The revelation made by the Income Tax department came from last month’s searches at Huawei’s office premises in New Delhi, neighbouring Gurugram and tech hub Bengaluru. The government conducted raids at the residences of its senior executives as well.
A Huawei spokesperson in India did not immediately respond to a Reuters’ request for comment. After the searches on February 15, Huawei had said the company was “firmly compliant” with the laws in the country.
The government said more investigations were in process.
Huawei Asia Pacific Vice President Jay Chen, in a virtual roundtable from Barcelona on Tuesday, had said the company will cover India under all of its initiatives. He was responding to questions around Huawei’s business plans in India under the present situation when the government has kept it out of the 5G business and also not approved it as a trusted source for telecom gear procurement. To read in full: Click Here
- Cairn gets $1.06 bn in retro tax case refund
The British energy major said that a circular is expected to be issued in early March detailing the shareholder resolutions required in connection with the company’s proposed shareholder return of up to US$700 million.
Capricorn Energy PLC., formerly Cairn Energy Plc., said on Thursday it has received $1.06 billion in tax refund from the Indian government after the company withdrew its law suits seeking to enforce a favourable arbitration award in a controversial tax dispute.
The British energy major also said that a circular is expected to be issued in early March detailing the shareholder resolutions required in connection with the company’s proposed
shareholder return of up to US$700 million. This comprises $500 million tender offer and $200 million ongoing share repurchase programme, the company said.
The tax refund is made under India’s Taxation (Amendment Act) 2021 which sought to end all the disputes arising from a retrospective amendment to the Income Tax Act made in 2012. The tax refund is made after nullifying the tax assessment originally levied against the company in January 2016 under the 2012 amendment. The settlement of the tax dispute meant that Capricorn forgoes its rights under a 2020 arbitral tribunal award in its favour asking India to pay $1232.8 million plus interest and $22.38 million towards arbitration and legal costs.
This is one of the 17 long-drawn disputes over taxation of offshore sale of Indian assets that the government is trying to settle. The settlement scheme seeks to nullify the tax demands raised or confirmed before 28 May 2012 by applying an anti-abuse provision introduced the Income Tax Act in 2012 during the previous United Progressive Alliance (UPA) government. There is unanimity among the government and the opposition leaders about the need for settling
- GST to be applicable on partner’s property rented out to partnership
firm for business: AAR
Goods & Services Tax (GST) is required to be paid for the properties rented out by the partner to his partnership firm, Tamil Nadu Authority for Advance Rulings (TNAAR) has said. This will be applicable even if there is NIL rent.
The applicant, Chennai based Shanmuga Durai is the Managing Partner of a partnership firm and also owns certain properties. The firm in which he is partner is carrying out businesses in those properties, free of rent. In his application, he stated that under the Income Tax Act, it is clear that when the partner uses his property for businesses carried out by the firm, then deemed rent does not arise. The applicant sought clarity from AAR under GST law for the same.
The applicant raised four queries. First, whether GST liability does arise in respect of property of the partner used by the partnership firm to carry out the business by the firm, free of rent. Second, if so, what is the relevant section or rule or provision in GST law, under which the partner of the firm is required to pay GST on notional rent? Third, is it mandatory to execute rental deed between partner and partnership firm, when there is no furtherance of business for that partner? And fourth, what is the applicable valuation rule, when consideration is not fixed and not received by the Partner?
After going through all the facts and arguments, AAR ruled that where the supply is between related persons, the value of such supply will be the open market value of that. In case open
market value is not available, the value of supply of goods and or services of like kind and quality will be the taxable value.
Further, it said that in this particular matter, the property being rented, and the supplier and recipient are related. Accordingly, Rule 28 (related with determining value of supply of goods/services or both between distinct or related persons) of GST Act will apply. Accordingly, value should be arrived at for the purpose of taxation. Reference: Click Here
- Maharashtra: Your dazzling smile will cost you GST @ 18%
our dazzling smile comes at a price. Your dental bill, for services like teeth whitening or application of veneer (also known as smile-fixing treatment), will be subject to a levy of Goods and Services Tax (GST) at 18%.
The GST-Authority for Advance Rulings (AAR), Maharashtra bench, in its recent ruling, has distinguished between dental services that would be in the nature of ‘healthcare services’ and those that will constitute a ‘cosmetic treatment’. Only dental services that can be categorized as healthcare services will be exempt from the tax.
The advance ruling was sought by Jyoti Ceramics, which in addition to manufacturing and supplying ceramic material used for making dental crowns and artificial ceramic teeth, also runs a dental clinic. Services provided at the dental clinic, include all dental treatment, including bleaching or whitening of teeth and affixing dental veneers. The latter, also known as smile-fixing treatment, involves fixing of thin custom-made ceramic shells (veneers) that cover the front surface of teeth and improve appearance.
The AAR bench observed that ‘healthcare services’ under the GST laws means any service by way of diagnosis or treatment or care for illness, injury, deformity, abnormality or pregnancy, in any recognized system of medicine in India. It also includes transport services of the patient to and from a clinical establishment. However, it does not include hair transplant or cosmetic or plastic surgery, except if it is undertaken to reconstruct anatomy or function of a body part affected owing to congenital defects, development abnormalities, injury or trauma.
To read more: Click Here
- Amazon shareholders call for tax transparency: Report
Twenty-four Amazon investors are calling on the tech giant to increase transparency in tax disclosures and adopt a new reporting standard, the Financial Times reported on Sunday. Investors are trying to get a shareholder resolution demanding a new tax reporting standard brought at the company’s annual meeting this year, FT said, citing a letter which will be sent to the U.S. Securities and Exchange Commission this week.
The investors, which include asset managers Nordea, Royal London and several large European and U.S. pension funds, will require Amazon to issue a transparency report in accordance with the Global Reporting Initiative’s (GRI) tax standard, according to the newspaper.
In December, Greater Manchester Pension Fund and Oblate International Pastoral Investment Trust also filed a shareholder proposal urging Amazon to implement the new GRI Tax Standard, including public country-by-country reporting of financial, tax and worker information. Read more at: Click Here
- Non-Resident Indians from the UAE, follow these customs duty tax rules
A large majority of the expat population in the UAE are Indian citizens, some of whom have spent decades in the country and face the prospect of having to one day move back to their home country. When making arrangements to take their belongings back to India, expats would most often either contemplate taking high-value carry-ons with them to the airport or shipping big-ticket items beforehand.
When doing so, it’s common to come across terms like ‘customs’, ‘customs duty’ or ‘customs duty taxes’. While it’s vital to account for this tax so as to be prepared when hit with it, let’s first know what it is.
Indian nationals, foreign nationals including those of Indian origin, transferring their residence to India or coming to India on employment, can import their personal belongings and household goods into India free of duty – subject to the following conditions:
- Owner of the goods must have lived overseas for at least two years and must be transferring his or her residence to India. Indian nationals must not have visited India for more than 180 days in the preceding two years.
- Foreign nationals must have a resident, business, work or an entry visa. Goods also
must be shipped out within 30 days of the owner’s arrival into India.
- Cars can be shipped with six months of the owner’s arrival. If there is a delay then goods can be cleared only if customs condone the delay. Each case will be decided on their respective merits.
- Presence of the owner is required during customs clearance and therefore he or she should have arrived into India before shipment arrives else container detention will be quite costly.
Generally put, the customs tax on goods sent from the UAE, that don’t fall under the duty-free allowance, is around 36.05 per cent. This is charged on the market rate of the same products in India. Read more at: Click Here)
- ROR has to report foreign assets in the ITR
Under the India Income tax (IT) law, there is a requirement to report all foreign assets in the ITR if the individual qualifies as “resident and ordinarily resident” (ROR) of India during the relevant financial year. Also, the income earned from such foreign assets during the relevant financial year along with the nature of income and head of income under which such income has been offered to tax in the ITR needs to be reported in relation to each foreign asset.
The foreign assets which are to be reported include foreign bank accounts, financial interests, immovable property, accounts in which an individual has signing authority, trusts, any other capital asset held by the individual outside India. One has to be very careful in reporting foreign assets/ income in the ITR. Any omission or inaccurate particulars may invite additional taxes, interest and penal consequences under Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. Source: Click Here
Knowledge Bucket for NRI’s
- A girl child is eligible for a Sukanya Samriddhi Yojana (SSY) account only if she is a resident Indian citizen when the account is opened and remains so until the maturity or the closure of account. Non-resident Indians cannot open a Sukanya Samriddhi Yojana (SSY) account. In fact, if you or your child’s residential status changes to non- resident or she takes up another country’s citizenship during the term of the scheme, no interest shall be paid from the date of citizenship or residential status changes and the account will be considered closed.
- Budget 2020 had proposed to exempt Non-resident Indians (NRIs) from filing income tax return in certain conditions. It had also proposed to modify residency provisions to prevent tax abuse.
- Prior to that, NRIs were liable to pay tax in India if they spent over 165 days in India in a year. This was reduced to 120 days. This decision was taken after the Government noted instances where period of 182 days specified in respect of an Indian citizen or person of Indian origin visiting India during the year, was being misused.
- Many NRIs have investment in multiple properties in India. The existing provisions of the IT Act provide the taxpayer to declare up to two of their residential properties as ‘self-occupied’ properties for which the annual valued would be taken to be Nil. Any other property, whether let out or not, would be subject to taxation under the head ‘House Property’. Thus, even if the property is not let out, the same would be subjected to tax based on fair rent.
- DO YOU KNOW ??
NPS Tax Benefits: State Government Employees Must Know
- You can claim tax benefits on your contribution and employer’s contribution towards National Pension System under various sections of Income Tax Act, 1961. State government employees can claim a tax exemption of up to Rs 1.5 lakh for the contribution towards NPS fund under Section 80CCD(1). For private sector employees, the tax benefit is restricted to 10 per cent.
- Further, employees can also claim an additional deduction of up to Rs 50,000 for contributing to NPS under Section 80CCD (1b). Only those investing in Tier 1 NPS
accounts, will be able to claim this additional deduction of Rs 50,000. No tax benefits are available for those investing in Tier 2 NPS funds.
So, taxpayers can claim a tax exemption of up to Rs 2 lakh in a financial year by investing in NPS. The mentioned tax deductions will be availanle if one opts to pay income tax via old income tax regime.
- Now, salaried employees are also eligible to claim tax exemption for employer’s contributions towards NPS under Section 80CCD (2) of the Income Tax Act. Now, both the central government and state government employees will be able to claim tax benefit of 14 per cent on the NPS contributed by their employers. It must be noted that employer’s contribution is employee’s NPS account will become taxable if the employer’s contribution to NPS account, EPF and superannuation exceeds Rs 7.5 lakh in a financial year.
Every effort has been made to avoid errors or omissions in this material. In spite of this, errors may creep in. Any mistake, error or discrepancy noted may be brought to our notice which shall be taken care of in the next edition. In no event the author shall be liable for any direct, indirect, special or incidental damage resulting from or arising out of or in connection with the use of this information. *(We consider various sources including ET, BS, HT, Taxmann etc.)