Dear Readers,
We are delighted to share our 109th E-Newsletter “Weekly Taxation Newsletter” dated 19th April, 2023 from 12th April, 2023 to 18th April, 2023 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
- Due Dates under IT Act 1961
| Sl. | Compliance Particulars | Due Dates |
| 1 | Due date for furnishing of Form 24G by an office of the Government where TDS/TCS for the month of March, 2023 has been paid without the production of a challan | 30.04.2023 |
| 2. | Due date for furnishing of challan-cum-statement in respect of tax deducted under section 194-IA in the month of March, 2023 | 30.04.2023 |
| 3 | Due date for furnishing of challan-cum-statement in respect of tax deducted under section 194-IB in the month of March, 2023 | 30.04.2023 |
| 4 | Due date for furnishing of challan-cum-statement in respect of tax deducted under section 194M in the month of March, 2023 | 30.04.2023 |
| 5 | Due date for furnishing of challan-cum-statement in respect of tax deducted under section 194S in the month of March, 2023 Note: Applicable in case of specified person as mentioned under section 194S | 30.04.2023 |
| 6 | Due date for deposit of Tax deducted by an assessee other than an office of the Government for the month of March, 2023 | 30.04.2023 |
| 7 | Due date for e-filing of a declaration in Form No. 61 containing particulars of Form No. 60 received during the period Oct. 1, 2022 to Mar. 31, 2023 | 30.04.2023 |
| 8 | Due date for uploading declarations received from recipients in Form. 15G/15H during the quarter ending March, 2023 | 30.04.2023 |
| 9 | Due date for deposit of TDS for the period January 2023 to March 2023 when Assessing Officer has permitted quarterly deposit of TDS under section 192, 194A, 194D or 194H | 30.04.2023 |
- Under the GST, 2017
A. Filing of GSTR –3B / GSTR 3B QRMP
a) Taxpayers having aggregate turnover > Rs. 5 Cr. in preceding FY
| Tax period | Due Date | Particulars |
| March, 2023 | 20th April, 2023 | Due Date for filling GSTR – 3B return for the month of March, 2023 for the taxpayer with Aggregate turnover exceeding INR 5 crores during previous year. Due Date for filling GSTR – 3B return for the quarter of January to March 2022 for the taxpayer with Aggregate turnover up to INR 5 crores during the previous year and who has opted for Quarterly filing of return under QRMP. |
b). Taxpayers having aggregate turnover upto Rs. 5 crores in preceding FY (Group A)
| Tax period | Due Date | Particulars | |
| March, 2023 | 22nd April, 2023 | Due Date for filling GSTR – 3B return for the month of March, 2023 for the taxpayer with Aggregate turnover upto INR 5 crores during previous year and who has opted for Quarterly filing of GSTR-3B | |
| Group A States: Chhattisgarh, Madhya Pradesh, Gujarat, Maharashtra, Karnataka, Goa, Kerala, Tamil Nadu, Telangana, Andhra Pradesh, Daman & Diu and Dadra & Nagar Haveli, Puducherry, Andaman and Nicobar Islands, Lakshadweep | |||
c). Taxpayers having aggregate turnover upto Rs. 5 crores in preceding FY (Group B)
| Tax period | Due Date | Particulars | |
| March, 2023 | 24th April, 2023 | Annual Turnover Up to INR 5 Cr in Previous FY But Opted Quarterly Filing | |
| Group B States: Himachal Pradesh, Punjab, Uttarakhand, Haryana, Rajasthan, Uttar Pradesh, Bihar, Sikkim, Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura, Meghalaya, Assam, West Bengal, Jharkhand, Odisha, Jammu and Kashmir, Ladakh, Chandigarh, Delhi | |||
B. Non Resident Tax Payers, ISD, TDS & TCS Taxpayers
| Form No. | Compliance Particulars | Timeline | Due Date |
| GSTR-5 & 5A | Non-resident ODIAR services provider file Monthly GST Return | 20th of succeeding month | 20.04.2023 |
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. Monthly Payment of GST – PMT-06:
| Compliance Particular | Due Date |
| Due Date of payment of GST for a taxpayer with Aggregate turnover up to INR 5 crores during the previous year and who has opted for Quarterly filing of return under QRMP. | 25.04.2023 |
- Weekly Departmental Updates: Income Tax
1. Can you change tax regime during financial year 2023-24? CBDT issues circular on TDS on salaries
The Central Board of Direct Taxes (CBDT) has issued a circular dated April 5, 2023, clarifying how employers will be deducting tax on salaries for the current financial year 2023-24.
As per the circular issued, an employee is required to inform the income tax regime that he/she intends to choose for the purpose of TDS on salaries. Once the intimation is received by an employer, then tax on salary will be deducted accordingly. The employee can choose either the new or an old tax regime, at his convenience.
If an employee does not inform the employer of the same, then it will be assumed that the employee has opted for the new regime. The TDS on salary will be deducted on the basis of the income tax rates applicable under the new tax regime.
The new circular has been issued by the income tax department after changes in the Income-tax Act, 1961 were announced in the Budget 2023. One of the announcements was the new tax regime becoming the default option. Till FY 2022-23 (i.e., March 31, 2023), the old tax regime was the default option and an individual was specifically required to opt for the new tax regime. However, April 1, 2023 onwards, the new tax regime has become the default tax regime. This means that if an individual wants to claim the benefit of tax deductions and exemptions, he/she is specifically required to opt for the old tax regime.
However, the circular does not mention whether an individual can change the tax regime during the financial year for TDS on salaries. The circular issued by CBDT in April 2020 had not allowed the individual to change the tax regime for the purpose of TDS on salary during the financial year. The tax regime can only be changed at the time of filing income tax return only.
- To read more Click Here
2. Income Tax Department notifies Cost Inflation Index for current fiscal
The Income Tax Department has notified the Cost Inflation Index for the current fiscal beginning April 2023, for calculating long-term capital gains arising from sale of immovable property, securities and jewellery.
The Cost Inflation Index (CII) is used by taxpayers to compute gains arising out of sale of capital assets after adjusting inflation.
The Cost Inflation Index for FY 2023-24 relevant to AY 2024-25 stood at 348, as per a notification of the Central Board of Direct Taxes (CBDT). Usually, the Income Tax Department notifies CII in the month of June. The CII number for last fiscal was 331 and for 2021-22 financial year it was 317.
CII or Cost Inflation Index is notified under the Income-Tax Act, 1961 every year. It is popularly used to calculate “indexed cost of acquisition” while calculating capital gains at the time of sale of any capital asset.
Normally, an asset is required to be retained for more than 36 months (24 months for immovable property and unlisted shares, 12 months for listed securities) to qualify as ‘long-term capital gains’.
- To read more Click Here
3. Income Tax: How to choose between the old and new tax regime for FY 2023-24?
It is the start of a new financial year, and as such, salaried individuals must submit their proposed investment declarations – indicating the tax-saver investments they plan to make during the financial year – to their employers.
The Central Board of Direct Taxes (CBDT) issued a circular on April 5th, stating that if an employee does not intimate their choice for the new tax regime, the employer should deduct taxes as per the rates prescribed for the new tax regime. This will serve as the default tax regime.
This means that unless employees specifically state their intent to stick to the old tax regime, their employers will compute their tax liability after factoring in the new tax regime’s tax slabs and rates.
Understanding the old and new tax regimes
The tax liability under the old tax regime was based on income slabs with a tax rate of 5% for income between 2.5 lakhs to 5 lakhs, and 15% for income between 5 lakhs to 7 lakhs. This was further reduced by a rebate available under section 87A, but only if the income was less than 5 lakhs. Under the new regime, the rebate has increased to 7 lakhs, thus providing relief to those with income up to 7 lakhs.
The new tax regime has been a great attraction for many people due to the low tax rate applicable to different tax slabs. However, one should not make a decision in haste and should thoroughly evaluate their tax liability with the help of an expert before choosing a tax regime.
Calculating tax liability using an income tax calculator
In order to make the best decision between the old and new regime, one should use an income tax calculator. This calculator is available online and provides a comparative analysis of the tax liabilities under both regimes.
Step 1: Enter your income details
The foremost step is to select your age and enter your income details such as your salary, income from other sources, and any deductions you may be eligible for. This will help the calculator determine your total taxable income.
Step 2: Enter your tax saving investments
Next, enter the details of any tax-saving investments you may have made. You should include Section 80C investments, Section 80D investments, and investments under any other applicable sections.
Step 3: Select your tax regime
The next step is to select the tax regime you wish to use. You can select either the old tax regime or the new tax regime.
Step 4: Calculate your tax liability
Once you have entered all the required information, you can click on the ‘Calculate’ button to calculate your tax liability. The calculator will automatically compute your tax liability under both the old and new tax regimes and display the results.
Step 5: Compare the results and select the best option
Once the calculator has calculated your tax liability under both the regimes, compare the results and select the option that offers the maximum tax savings.
Making the right choice
Under the old tax regime, one may effectively lower their tax obligation by properly investing in tax-saving products and claiming exemptions. But under the new regime, the sole exemption that applies to people with income up to Rs. 7 lakhs is the tax rebate under Section 87A.
Therefore, if investing in different tax-saving tools and making expenditures that qualify for exemptions, one may choose the old system if the math indicates that doing so will result in more savings. If not, one should choose the new regime because it is easier to use and does not involve spending money in order to save on taxes.
- To read more Click Here
4. Old or new tax regime: You may get a notice from the I-T dept if you don’t choose correct regime now
According to the Central Board of Direct Taxes (CBDT), employees are required to notify their preferred tax regime to their employers at the start of the financial year. Failure to do so may result in employers deducting TDS on salary based on the New Tax Regime rates under Section 192. However, it should be noted that the declaration filed with the employer is not binding, as you can reconsider your decision at the time of filing the Income Tax Return (ITR).
“It should be noted that the declaration filed with the employer is not absolute, as the option is exercised only at the time of filing the income tax return. Accordingly, the taxpayer can choose to file an income tax return under the old tax regime even if no declaration was filed to the employer and taxes are deducted by the employer based on the default regime i.e., the new tax regime,” said Neeraj Agarwala, Partner, Nangia Andersen India.
However, there is a possibility that the taxpayer may receive an income tax notice from the tax department if there is a discrepancy between the income reported by the employer and the income submitted by the taxpayer in their income tax return. “The taxpayer may receive an income tax notice from the tax department in case of difference in income reported by the employer and submitted by the taxpayer in their income tax return. In this case the taxpayer should submit the documents supporting the deductions such as proof of investment under Section 80C, house interest payment etc. to the income tax department,” said Agarwala.
For example, say an employee does not file a declaration with their employer ( and by default new tax regime is chosen) and later claims a gross deduction under 80C and HRA while filing the income tax return. In this case, the income under Form 26AS will not tally with the income tax return and the employee may receive a system-generated notice asking for information.
The CBDT has clarified that an employer needs to seek information from each of its employees regarding their intended tax regime whether the new regime, which offers low tax rates with no deduction of various allowances and investments, etc.) or the old regime, which permits deductions and allowances under certain sections of the Income Tax Act.
“In order to avoid the genuine hardship in such cases, the Board, in the exercise of powers conferred under section 119 of the Act, hereby directs that a deductor, being an employer, shall seek information from each of its employees having income under section 192 of the Act regarding their intended tax regime and each such employee shall intimate the same to the deductor regarding his intended tax regime for each year and upon intimation, the deductor shall compute his total income, and deduct tax at source thereon according to the option exercised,” CBDT said.
- To read more: Read full at Click Here
- Important Circulars and Notifications:
| Sl. | Particulars of the Notification(s) | File No. / Circular No. | Notification Link(s) |
| 1 | Central Government hereby makes the following further amendments in the notification of the Government of India, Ministry of Finance (Department of Revenue), Central Board of Direct Taxes | Notification No. 21/2023 | Click Here |
| 2 | Central Government hereby notifies for the purposes of the said clause, ‘Greater Noida Industrial Development Authority’, (PAN AAALG0129L) | Notification No. 18/2023 | Click Here |
| 3 | ‘Central Board of Secondary Education’, Delhi (PAN AAAAC8859Q) | Notification No. 20/2023 | Click Here |
Weekly Departmental updates:
- GST Updates
1. Hike in custom duty, GST on solar modules increases cost
The Indian manufacturers sourced raw materials such as cells, polysiloxanes, and ingots from China, however, the duties coupled with higher raw material prices have increased the input cost for domestic manufacturers, making domestic panels costly.
The increase in the rate of tax on solar components from 5 per cent to 12 percent and a 40 percent import duty on photovoltaic modules and 25 percent duty on photovoltaic cells is having a negative effect on growth and development in the renewable energy sector in the country.
The Indian manufacturers sourced raw materials such as cells, polysiloxanes, and ingots from China, however, the duties coupled with higher raw material prices have increased the input cost for domestic manufacturers, making domestic panels costly. This is affecting the Ministry of New and Renewable Energy (MNRE) subsidized ‘Rooftop Solar Programme’ as the cost of installation has increased substantially.
According to the Telangana State Renewable Energy Development Corporation (TSREDCO) chairman Y Satish Reddy Centre had launched the Rooftop Solar Programme to encourage the installation of rooftop solar systems on homes and other residential buildings, however, due to increase in GST and import duties the cost of solar panels have gone up and people were now forced to shell out more. “This is discouraging people to opt for solar energy,”he said.
The Centre mandating purchase of solar modules through the Approved List of Models and Manufacturers (ALMM) policy was also creating problems and discouraging the prospective customers, Satish Reddy said, adding that since for subsidized ‘Rooftop Solar Programme’ only ALMM approved modules could be used it has become difficult for the company to meet the demand.
- (Read more at: Click Here)
2. Auto parts industry seeks reduction of GST
The auto parts manufacturing industry of Ludhiana has once again raked up the demand for reducing the 28% GST applicable on several articles being manufactured by them. According to the businessmen, the high rate is leading to blockage of their funds with the taxation department in the form of GST. They are of the view that if the rate of GST is reduced to 12% for all the categories of auto parts, tax revenue of the government will increase.
Gurpargat Singh Kahlon, president, Auto Parts Manufacturers Association said, “Ever since 2017, growth of the auto parts manufacturing industry of Ludhiana has come to a standstill, for which a major reason is the high rate of 28% GST on a lot of our products. Due to this, a large amount of our money gets stuck with GST departments in the form of Input Tax Credit (ITC).” Kahlon added that they have sent a memorandum to the state finance minister Harpal Singh Cheema, urging him to raise the matter with the centre and fix a common slab of 12% for the auto parts industry. Nitin Sharma, executive member of Auto Parts Manufacturers Association, said it would enhance government revenue.
- (Read more at: Click Here)
3. New GST rule for these businesses from May 1, 2023
Businesses with turnover of Rs 100 crore and above will have to upload their electronic invoices on IRP within 7 days of the issue of such invoice with effect from May 1, GST Network has said.
Currently, businesses upload such invoices on Invoice Registration Portal (IRP) on the current date, irrespective of the date of issue of such invoice.
In an advisory to taxpayers, GST Network (GSTN) said the government has decided to impose a time limit on reporting old invoices on the e-invoice IRP portals for taxpayers with aggregate annual turnover greater than or equal to Rs 100 crore.
In order to provide sufficient time for taxpayers to comply with this requirement, this new format would be implemented from May 1, 2023.
This restriction will apply to invoice, and there will be no time restriction on reporting debit/credit notes, it added.
Giving example, the GSTN said if an invoice has a date of April 1, 2023, it cannot be reported after April 8, 2023.
The validation system built into the invoice registration portal will disallow the user from reporting the invoice after the 7-day window.
Hence, it is essential for taxpayers to ensure that they report the invoice within the 7-day window provided by the new time limit, the GSTN said.
As per GST law, businesses cannot avail input tax credit (ITC) if invoices are not uploaded on the IRP.
Under Goods and Services Tax (GST) law, e-invoicing for business-to-business (B2B) transactions was made mandatory for companies with turnover of over Rs 500 crore from October 1, 2020, which was then extended to those with turnover of over Rs 100 crore effective January 1, 2021.
From April 1, 2021, companies with turnover of over Rs 50 crore were generating B2B e-invoices, and the threshold was brought down to Rs 20 crore beginning April 1, 2022. From October 1, 2022, the threshold was further lowered to Rs 10 crore.
- To read more Click Here
4. Automobile, infra development drive U.P’s GST revenue growth
Automobile, infrastructure development, and iron & steel sectors saw the highest GST revenue growth in Uttar Pradesh in 2022-23, with overall growth of 21% despite the lack of compensation from the Centre after June 2022. The government’s GST and VAT revenue collection in the last financial year stood at ₹1.8 lakh crore, which is 86% of the ₹1.24 lakh crore revenue target. The automobile sector registered a revenue increase of 47%, while infrastructure development grew by 37% and iron & steel by nearly 21%. Other businesses that showed significant revenue growth include FMCG, electronics, petroleum products, electrical goods, coal and coke, and chemicals.
Automobile, infrastructure development and iron & steel have registered the highest GST revenue growth in Uttar Pradesh in 2022-23, according to a report prepared by the state tax department.
The overall GST growth in the state in the fiscal that ended last month was found to be 21 per cent over the figure in the previous year, when Covid-19 interrupted economic activities to a large extent, the “business sector-wise collection report” stated.
“2022-23 saw economic buoyancy for the first time since the pandemic began in March 2020 and this resulted in positive growth in most of the sectors with the overall growth staying over 20 per cent despite the fact that U.P. didn’t receive any compensation from the Centre after June 2022,” a senior department official said. “Till June, UP received a compensation of around ₹11,000 crore,” he added.
The government’s GST and VAT revenue collection in the last financial year stood at ₹1.8 lakh crore, which is 86 per cent of the ₹1.24 lakh crore revenue target fixed for the year.
- To read more Click Here
- Important Notifications under
Excise / Custom/ GST:
- GST Updates
| Sl. No. | Particulars of the Notification(s) | File No. / Circular No. | Notification Link(s) |
| 1 | Updated Advisory: Time limit for Reporting Invoices on the IRP Portal | GSTN 578 | Click Here |
| 2 | Advisory: Time limit for Reporting Invoices on the IRP Portal | GSTN 577 | Click Here |
Custom / Excise Updates
| Links | Notification Particulars |
| Click Here | Seeks to amend notification No. 55/2022- Customs, dated 31.10.2022, in order to exempt Rice in the husk (paddy or rough), of seed quality, from export duty of 20% |
| Click Here | Fixation of Tariff Value of Edible Oils, Brass Scrap, Areca Nut, Gold and Silver- Reg. |
| Click Here | Seeks to impose definitive anti-dumping duty on imports of “Ursodeoxycholic Acid (UDCA)” originating in or exported from China PR and Korea RP for a period of 5 Years. |
| Click Here | Online filing of AEO-LO application |
| Click Here | Customs (Waiver of Interest) Second Order, 2023 |
- Important Case-laws
- Income Tax
1. Joseph George and Co. (High Court)
Can an assessee engaged in letting out of rooms in a lodging house also treat the income from renting of a building to bank on long term lease as business income?
While lodging is a business, however, letting out of building to the bank on long-term lease could not be treated as business. Therefore, the rental income from bank has to be assessed as income from house property.
2. Asian Hotels Ltd. (High Court)
Can notional interest on interest-free deposit received by an assessee in respect of a shop let out on rent be brought to tax as business income or income from house property?
The High Court observed that section 28(iv) is concerned with business income and brings to tax the value of any benefit or perquisite, whether convertible into money or not, arising from business or the exercise of a profession. Section 28(iv) can be invoked only where the benefit or amenity or perquisite is otherwise than by way of cash. In the instant case, the Assessing Officer has determined the monetary value of the benefit stated to have accrued to the assessee by adding a sum that constituted 18 per cent simple interest on the deposit. Hence, section 28(iv) is not applicable. Section 23(1) deals with the determination of the expected rent of a let out property for computing the income from house property. It provides that the expected rent is deemed to be the sum for which the property might reasonably be expected to be let out from year to year. This contemplates the possible rent that the property might fetch and certainly not the interest on fixed deposit that may be placed by the tenant with the landlord in connection with the letting out of such property. Thus, the notional interest is neither assessable as business income nor as income from house property.
- Important Case-laws
- GST Cases:
1. Liquidated damages in certain cases to draw 18% GST, rules Andhra AAR
Liquidated damages received by a service receiver from a service provider for not meeting terms of contract would attract 18 per cent goods and services tax (GST) in certain cases, the authority for advance rulings (AAR) in Andhra Pradesh has ruled.
Liquidated damages are the sum that one party receives when the other party fails to meet provisions of a contract between them.
The ruling was given in an application by Andhra Pradesh Development Company (APPDCL), a special-purpose vehicle set up to implement mega power projects in the state.
The order came despite a circular issued by the government in 2022 that says that liquidated damages are a mere flow of money from a party which causes a breach of contract to a party which suffers loss due to such breach. Such payments do not constitute consideration for supply and are not taxable, the circular clarifies.
However, AAR said the circular is not universal and absolute but is only meant to clarify the position of law and shall be applied reasonably having regard to the facts of the case.
- To read more Click Here
2. GST: Credit Relief for Leasing Of Immovable Property Will Lower Operational Costs
Allowing credit on Goods and Services Tax paid on upfront payment of rent would help lower litigation and overall operational cost of companies, experts said while opining on a recent order by the Tamil Nadu Authority for Advance Ruling. The AAR allowed allowed input credit tax on GST paid by Kamarajar Port Ltd. on advance rent paid to Chennai Port Trusts.
“The upfront premium made is the lease rentals as per the allotment order/letter of Chennai Port Trusts and it is nothing, but lease rentals paid for the services of ‘Renting of Immovable property’ for business purpose,” the Tamil Nadu AAR said in the ruling.
So far, various AARs and AAARs have previously held that input tax credit is not available on GST paid on lease premiums but those were cases where there was an element of construction was involved, Saurabh Agarwal, partner at EY India, explained.
The facts in this case before the Tamil Nadu AAR didn’t involve construction on the leased land. To read more: Click Here
- International Taxation Corner (ITC)
1. Brazil to end tax exemption on international orders, targeting Asian e-commerce giants
BRASILIA, April 12 (Reuters) – Brazil’s government announced on Tuesday it would end a tax exemption on international orders up to $50 as part of an effort to tax purchases from global retail giants.
The revenue service said that the exemption never applied to e-commerce but only to shipments from individual to individual, and had been “widely and fraudulently used for sales made by foreign companies.”
Confirming information first published by the UOL news portal on Sunday, the revenue service said that there would no longer be any distinction in treatment between legal entities and individuals’ shipments, with international orders subject to the existing 60% taxation on their value.
The measure is expected to benefit local retailers such as Lojas Renner (LREN3.SA), Magazine Luiza (MGLU3.SA) and Mercado Libre (MELI.O), and comes after widespread complaints from the sector about unfair competition from Asian giants such as AliExpress, owned by Alibaba Group (9988.HK), Shein, and Shopee, owned by Sea Ltd (SE.N).
Finance Minister Fernando Haddad had already stated that the government would soon unveil tax measures aimed at those who were not paying taxes in order to boost revenue and improve public accounts.
- Read more at: Click Here
2. Businesses in gold trading in UAE will still need to register for corporate tax
The exempt categories for UAE corporate tax registration includes those businesses that are into the trading or refining of natural resources. But these need to be natural resources that should ideally be extracted from the UAE, and not imported, tax consultants say.
Gold traders in the UAE will not be getting an exemption from corporate tax registrations.
There had been some talk in the local gold industry that some businesses operating in the bullion space could find themselves exempt after the UAE tax authorities put out a list of categories that do not have to register.
One relates to activities in ‘non-extractive’ natural resource business operations. This is what led gold traders to think they too might be covered. “Bullion is a natural resource – so, the question was whether gold trading – excluding retail sales, of course – could be part of the exemptions,” said a Dubai-based bullion dealer.
But industry analysts say that would be too broad an interpretation of what the UAE defines as exempt categories. And that further updates will be required from the Ministry of Finance or the Federal Tax Authority.
Government-affiliated?
Dr. Nabeel Ahmed is Senior Partner at One DVS. He reckons that some entities within the gold trade could still come under exemptions. This could be “if the trading firm engaged in gold and other precious metals is a government entity or a government-controlled entity,” said Ahmed. “Or, if trading is part of the non-extractive natural resource business, wherein conditions of Article 8 (Exempt Persons) of UAE CT law is applicable.
“To see if gold and other precious metal trading firms are exempt one needs to evaluate the underlying conditions:
“Does the trading firm directly or indirectly hold right, concession, licensing to undertake its non-extractive natural resource business in the UAE and meets all conditions of Clause (1) of Article 8 of UAE CT law and Article 8 in general.
- To read more Click Here
- Knowledge Bucket for NRI’s
- As per section 195 of the Income-tax Act, 1961, any ‘person’, responsible for paying to a non-resident shall, at the time of making payment (accrued or payable), either via cash or by the issue of a cheque or draft or by any other mode, shall deduct tax from the amount paid at the rates in force as mentioned in Section 2(37A) for the respective financial year. This means that every rupee earned by an NRI in India is subject to TDS at the income tax slab rates applicable to their income.
- Section 195 mandates deduction of tax at source (TDS) compulsorily, there is an option provided to the payer of the income as well as payee, i.e., the NRI to make an application to the Assessing Officer (AO) for lower or nil TDS on the income.
- An NRI can make an application in Form 13 for deduction of income tax at lower rates or nil deduction on income received in India.
- If the AO is satisfied that the total income of the payee justifies the deduction of income tax at lower rates or no deduction of income tax, the AO shall give the NRI lower/nil TDS certificate as appropriate for this purpose.
- Non deduction of TDS or failure to deposit tax which has been deducted to the tax authorities would attract penal interest of 1% or 1.5%, respectively, for every month or part of a month for the delay in deduction/payment of tax. In addition to this, the AO may levy penalty for non-compliance with the TDS provisions.
- Do you know ??
- Any code or token which is generated through cryptographic means and functions as a store of value is called Virtual Digital Asset (VDA).
- While computing the gains form transaction of VDA, only the cost of acquisition shall need to be deducted from the selling price.
- The tax rate of gains out of transfer of VDA is 30%, which will need to be increased by the Health and Education Cess and surcharge if applicable.
- Since the tax rate is a special rate of tax, the benefit of basic exemption limit shall not be applicable on VDA.
- In this case total income (excluding Income from VDA) is below the maximum amount of income not chargeable to tax, i.e., less than Rs 2,50,000. Therefore, tax on income other than income from VDA is Nil. Tax on Income from VDA is Rs. 12,000 (Gains form transfer of VDA will be taxed at rate of 30% plus additional surcharge and cess).
- Disclaimer:
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.)
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