Weekly Taxation Newsletter From 15th March, 2022 to 21st March, 2022

Dear Readers, 

We are delighted to share our 68th E-Newsletter “Weekly Taxation Newsletter” dated 22nd March, 2022 from 15th March, 2022 to 21st 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

 Due Dates under IT Act 1961

 Sl.  Compliance Particulars  Due Dates 
 1 Due date for furnishing of challan-cum-statement in respect of tax deducted under section 194-IA, 194-IB, 194-IM, in the month of February, 2022  30.03.2022 
      2 Country-By-Country Report in Form No. 3CEAD for the previous year 2020-21 by a parent entity or the alternate reporting entity, resident in India, in respect of the international group of which it is a constituent of such group. Country-By-Country Report in Form No. 3CEAD for a reporting accounting year (assuming reporting accounting year is April 1, 2020, to March 31, 2021) by a constituent entity, resident in India, in respect of the international group of which it is a constituent if the parent entity is not obliged to file report under section 286(2) or the parent entity is resident of a country with which India does not have an agreement for the exchange of the report, etc.       31.03.2022 
   3 Filing of belated/revised return of income for the assessment year 2021-22 for all assessee (provided assessment has not been completed before March 31, 2021). The due date for filing of belated/revised return of income for the assessment year 2021-22 has been extended to March 31, 2022, vide Circular no. 17/2021, dated 09-09-2021.    31.03.2022 
 4 “Due date for linking of Aadhaar number with PAN” The due date for linking of Aadhaar number with PAN has been extended to March 31, 2022, vide Notification S.O. 3814(E), dated 17-9-2021.  31.03.2022 

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 of GSTR –3B 

a). Taxpayers having aggregate turnover > Rs. 5 Cr. in preceding FY 

Tax period Due Date No interest payable till Particulars 
  February, 2022  20th March, 2022   – Due Date for filling GSTR – 3B return for the month of June, 2021 for the taxpayer with Aggregate turnover exceeding INR 5 crores during previous year 

b). Taxpayers having aggregate turnover upto Rs. 5 crores in preceding FY (Group A) 

Tax period Due Date No interest payable till Particulars 
   February, 2022    22nd March, 2022  Due Date for filling GSTR – 3B return for the month of June, 2021 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 No interest payable till Particulars 
February, 2022 24th March, 2022   
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 

d). GST payment for the month of February 2022 under QRMP scheme. 

Tax period Due Date Particulars 
   February, 2022   25th March, 2022 Due Date for Payment of Tax Liability for the taxpayer with Aggregate turnover up to INR 5 crores during previous year and who has opted for Quarterly filing of return under QRMP. 

B. 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 
RFD -10 Refund of Tax to Certain Persons 18 Months after the end of quarter for which refund is to be claimed 
  • 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 
  1. I-T department has made highest tax collection in its history: CBDT chairman 

The Income Tax department has made the “highest” collection in its history, CBDT chairman J B Mohaptra said on Thursday when the direct tax mop up jumped over 48 per cent in the current fiscal backed by a 41 per cent surge in advance tax payments. The net collection numbers as on today is Rs 13.63 lakh crore which is against Rs 11.18 lakh crore of 2018-19, Rs 10.28 lakh crore of 2019-20 and Rs 9.24 lakh crore of 2020-21, he said. 

“If you look at the gross numbers, it is today Rs 15.50 lakh crore which is more by 38.3 per cent of 2020-21, more by 36.6 per cent of 2019-20, more by 32.7 per cent of 2108-19. We have 

never entered gross collection wise beyond Rs 12.79 lakh crore. This year, we have entered into Rs 15 lakh gross numbers which also is a historic high for the department,” he said. 

Advance tax collections, the fourth installment of which was due on March 15, rose to Rs 6.62 lakh crore, up 40.75 per cent, the statement said, adding refunds aggregating to Rs 1.87 lakh crore have been issued in the current fiscal. Almost 53 per cent of all direct tax collection was from corporate tax, while 47 per cent came from personal income tax, including securities transaction tax (STT) on shares. (Read more at: Click Here) 

  1. Businesses Get Time Till June to File Form to Get Tax Rebate, Says CBDT; Details Here 

The form in question, Form 10-IC, is required to file only if a Domestic Company chooses to pay tax at concessional rate of 22 per cent under Section 115BAA of the Income Tax Act, 1961. 

In a good news to business owners, the Central Board of Direct Taxes, or CBDT, has given some extra time to businesses to file a key form that is required to avail lower corporate taxes without incentives in tax, which was offered to them in 2019. This was applicable for the income earned from 2020 onwards. As per a CBDT statement, the deadline has now been extended till June 30 this year to get tax rebate of as much as 22 per cent. 

“Representations have been received by the Board stating that Form 10-IC could not be filed along with the return o f income for A Y 2020-21, which was the first year of filing of this form. It has been requested that the delay in filing of Form I0-IC may be condoned,” it added. 

The statement also noted that “with a view to avoid genuine hardship to the domestic companies in exercising the option” of the tax rate concession, the tax authority has directed that The delay in filing of Form 10-IC as per Rule 21AE of the Rules for the previous year relevant to AY 2020-21 is condoned in cases where the conditions are met. 

  1. Income Tax Return: Be Ready to Pay Higher TDS if you Do Not Do this by March 31 

So if you miss the deadline of March 31 and your PAN card become inoperative due to not linking it with the Aadhaar card, then you have to pay TDS at the highest rate of 20%. 

If you have not linked your Permanent Account Number or PAN with Aadhaar card, be ready to pay higher Tax Deducted at Source (TDS) from next month. The last date for linking your Aadhaar number and PAN has been extended to March 31. Failing to link these two documents within the mentioned deadline, will have an impact on your debit and credit card payments, online transactions, cash withdrawal from ATMs among others. 

According to the Section 139AA of the Income Tax Act, every individual with PAN as on July 1, 2017 and is eligible to obtain Aadhaar, must link these two documents. Over the last three years, the Central Board of Direct Taxes (CBDT) has extended the last date of linking Aadhaar card number with PAN several times. If the PAN is not linked with Aadhaar before the due date, then the PAN will become inoperative, under Section 114AA (3) of Income Tax Act. For 

those who are applying for new PAN cards, it is mandatory to quote Aadhaar numbers, as per Section 139AA of Income Tax Act. 

So if you miss the deadline of March 31 and your PAN card become inoperative due to not linking it with the Aadhaar card, then you have to pay TDS at the highest rate of 20 per cent, as per Section 206AA of the Act. The higher rate of TDS will be applicable on interest on fixed deposit, dividend and other income which are currently subject to TDS. 

  1. The complete guide to saving tax under Section 80D 

Let’s state a fact. As per the Central Board of Direct Taxes (CBDT), approximately 5.89 crore people filed their Income Tax Returns on the new e-filing portal as of 31st December 2021. Though the number, when compared to the total population of 1 billion people, seems minute, but if you look at the Indian tax structure, the income of a decent number doesn’t fall under the eligible category. However, for those filing taxes, the government has laid benefits as every tax paid enables them to function smoothly and provide the citizens with resources. 

Section 80D permits a deduction of ₹25,000 for self, spouse, and dependent children. However, for parents, it is dependent on their age. If they are 60 years or above, i.e. senior citizens, then the maximum tax break would be up to ₹75,000; however, if their age is below 60 years, the highest deduction is up to ₹50,000. Further, if the taxpayer, spouse and parents fall under the senior citizen’s classification, ₹1,00,000 can be claimed as a full deduction. 

  1. Provident Fund Contributions Above ₹ 2.50 Lakh To Be Taxed: 10 Points 

The Centre has planned to tax Employees Provident Fund (EPF) contributions exceeding ₹ 

2.50 lakh yearly. For government employees, the limit has been set at a higher end of ₹ 5 lakh. Under the set of new Income Tax (I-T) Rules, PF accounts are likely to be divided into two parts — taxable and non-taxable contribution accounts from April 1, 2022. 

  1. This comes at a time when retirement body EPFO has reduced interest rates to the lowest in more than 40 years for the ongoing financial year 2021-22 (FY 22). 
  1. The reduction marks the lowest interest rate since 1977-78 when the figure stood at 8 per cent. EPFO is the top decision-making body Central Board of Trustees (CBT). 
  1. Threshold Limits Under I-T Rules: For instance, a non-government employee puts ₹ 5 lakh in PF account, ₹ 2.50 Lakh will be subject to tax; and if a government worker, puts 

₹ 6 lakh in PF, ₹ 1 lakh will be subject to tax. Government employees contribute to the 

General PF or GPF, where just employees make PF contributions. 

  1. With the new rules, the Centre aims to prevent high earning people from taking advantage of government welfare schemes. 
  1. Previously, the government had mentioned that the move would impact less than 1 per cent of taxpayers. 

Source: Read more at Click Here 

  • Quick Steps to filing your income-tax returns smoothly 
  1. Visit Click Here for e-filing the return of income. 
  1. Create you login Id and Password on Income tax portal. (Register Yourself). 
  1. Login to e-Filing portal by entering user ID (PAN), Password, Captcha code and click ‘Login’. 
  1. Click on the ‘e-File’ menu and then click ‘Income Tax Return’ link. 
  1. 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. 
  1. Fill all the applicable and mandatory fields of the online ITR form. 
  1. Choose the appropriate Verification option in the ‘Taxes Paid and Verification’ tab. 
  1. Click on ‘Preview and Submit’ button, Verify all the data entered in the ITR. 
  1. 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. 
  1. ‘Submit’ the ITR after complete check. 
  1. 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. 

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. Deduction of Tax at Source – Income-tax Deduction from Salaries under section 192 of the Income-tax Act, 1961 Circular No. 4/2022 Click Here 
2 Relaxation from the requirement of electronic filing of application in Form No.3CF for seeking approval under section 35(1 )(ii)/(iia)/(iii) of the Income-tax Act,1961 (the Act) Circular No. 5/2022  Click Here 
3 Condonation of delay under section 119(2)(b) of the Income-tax Act, 1961 in filing of Form 10-IC for Assessment Year 2020-21 Circular No. 6/2022 Click Here 

Weekly Departmental updates:

GST Updates

  1. 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.
  1. Odyssey Tech unveils ‘xorkeesign G2C’ to help users in digitally signing GST,
    IT returns

Odyssey Technologies, a Chennai-based company focused on software product development for varied industry sectors, has unveiled ‘xorkeesign G2C’, a product that helps users digitally sign GST and income tax returns for all classes of assesses including corporate taxpayers. It also helps register the digital certificates of company executives with the MCA portal. 

The product ‘xorkeesign G2C’ is a browser extension that stays invisible until a user accesses the income tax, GST or MCA portals and then helps the users sign their returns with no additional tool requirement. This is different from the default tax filing mechanism where the user installs different signature software for each site with each software having its own pre- requisites, thereby making it a time consuming exercise, the company said in a statement. 

The innovations in the new product, Robert Raja said in a global first. The process of preparation of returns in isolated from signing/e-verifying. The consultant may prepare the return and the assessee can sign remotely from wherever he is. It also frees the DSC (digital signature certificate) from the need for token drivers and allows signing from mobile devices. It works on all major platforms and leading browsers. (Read more at: Click Here) 

  1. Formula for jet fuel under GST 

Sources said the Centre planned to come out with a formula so that the revenue of the states does not get hit by the rationalisation of the tax structure. 

The GST Council is likely to discuss ways to bring aviation turbine fuel within the new tax regime. A meeting of the council is due this month as it meets once every quarter and had last met on December 31. 

IndiGo CEO Ronojoy Dutta said the airline was in talks with the government to bring jet fuel under GST as this brings the benefit of input tax credit to carriers. The Centre had raised ATF prices by 18 per cent. 

The Centre is likely to moot the proposal to allow 18 per cent GST in addition to VAT or excise rate, sources said adding that the formula would be placed before the GST Council for discussion only if it is acceptable to all the states. The VAT or excise rate, under the formula, could vary from state to state, they added. To read more Click Here 


  1. GST rates overhaul may be delayed by a few months
     

A delay in the GST slabs recast could have serious implications for state governments’ revenues, since a five-year compensation mechanism for their GST revenue shortfall is set to end on June 30. 

A much-awaited restructuring of the goods & services tax (GST) slabs to raise the revenue- neutral rate (RNR), from a little over 11% now to 15.5%, could be delayed by a few months, as high global commodity prices have resulted in a rise in inflationary expectations among households and firms and brought the Reserve Bank of India’s (RBI) accommodative policy stance under critical review. 

A delay in the GST slabs recast could have serious implications for state governments’ revenues, since a five-year compensation mechanism for their GST revenue shortfall is set to end on June 30. It could also become more difficult for the Centre to resist states’ demand for an extension of the compensation in order to avoid a revenue shock to states. States’ spending, especially revenue expenditure, surged in the last couple of years in the wake of the pandemic, even amid severe revenue constraints. 

The group of ministers (GoM) led by Karnataka chief minister Basavaraj Bommai could not conclude discussions on how the GST rates could be revised, leading to a delay in the submission of the report. The panel was constituted in September 2021. 

With the hardening of commodity prices after the Ukraine-Russia conflict, India’s wholesale price inflation (WPI) reversed it trajectory in February 2022 and increased to 13.11%, after coming in at 12.96% in January. Retail inflation (CPI) in February also rose marginally to 6.07% from 6.01% in the previous month, hovering over the upper bound of the RBI’s inflation target range of 2%-6%. To read more Click Here 

  1. GST Has Helped In Reducing Transaction Cost, Tax Incidence: PHDCCI 

The number of items under the 12 per cent tax slab has increased to 19 per cent in January 2022 from around 18 per cent in July 2017, he said. He added that GST tax slab of five per cent accommodates around 21 per cent of goods under its ambit as compared with 19 per cent at the time of implementation of the new indirect tax regime. 

The implementation of the goods and services tax and subsequent changes in the indirect taxation regime have benefitted traders and manufacturers by significantly reducing the inter- state transaction costs and the incidence of multiple indirect taxation, PHDCCI President Pradeep Multani said on Friday. “There has been substantial shifting of goods from high tax slabs to lower ones after the implementation of GST. The number of items under the highest tax slab of 28 per cent has come down to only three per cent in January 2022 from 17 per cent at the time of implementation of GST,” said the president of the PHD Chamber of Commerce and Industry (PHDCCI). Many items have been shifted to 18 per cent or less than 18 per cent tax slabs from 28 per cent during the past five years, he said. GST tax slab of 18 per cent contains around 44 per cent of goods under its ambit as of now as compared with around 33 per cent at the time of implementation of GST, Multani added in the statement by the chamber. 

 Important Notifications under Excise / Custom/ GST:

GST UPDATES

Sl. No.  Particulars of the Notification(s) File No. / Circular No. Notification Link(s) 
1 Webinar on Smart Search HSN- An Enhanced search HSN functionality for taxpayers GSTN Circular : 531 Click Here 
2 Appointment of Common Adjudicating authority for adjudicating the show cause notices issued by DGGI under GST. 02/2022-Central Tax Click Here 

     CUSTOM / EXCISE UPDATES

Notification No. & date of Issue Links Notification Particulars 
18/2022-Customs (NT) Click Here Exchange rates Notification No.18/2022-Cus (NT) dated 17.03.2022-regarding 

Important Case-laws

Income Tax

  1. Income Tax Department to seek out tax offenders using new algorithm 

Even as many continue to wait for their ITR refunds, the Income Tax (I-T) Department has started reopening old assessment cases with the help of an algorithm. The I-T Department is leveraging ‘INSIGHT’, a platform that spits out the names of tax offenders after sifting through massive data. Under the new rule, tax officials take an action based on the name generated by the platform. 

Even as many continue to wait for their ITR refunds, the Income Tax (I-T) Department has started reopening old assessment cases with the help of an algorithm. The I-T Department is leveraging ‘INSIGHT’, a platform which spits out the names of tax offenders after sifting through massive data. Under the new rule, tax officials take an action based on the name generated by the platform. Earlier, old assessments were reopened by tax officials based on some information that the assessee may have concealed some income-related information. 

The names are generated randomly. It is possible that tax evasion occurred four years ago and we already have information on the case, an income tax official told Economic Times. 

After getting tipped by the algorithm, the I-T Department, under the newly created Section 148A of the I-T Act, has to send a preliminary to the concerned taxpayer that his or her information has been flagged for a certain financial year. 

The system involves informing the assessee that their profile has been marked by the Directorate of Income Tax (Systems) as ‘high-risk VRU (variable report upload) under ‘risk management system’ in accordance with the ‘risk management strategy’ fo rmulated by the Central Board of Direct Taxes. The taxpayer is then given a week to respond, failing which the case is automatically reopened. 

The I-T department can issue as many as 50,000 letters under the r section 148A in Mumbai region alone, which contributes 30% of all I-T collections, if the new algorithm generates enough names. To read in full: Click Here 

  1. LIC involved in disputed tax claims of Rs 75k cr 

Life Insurance Corporation (LIC) is facing disputed tax claims of Rs 74,894 crore under litigations, which is close to the amount that the corporation is widely expected to raise through an initial public offering (IPO) in the next few weeks. At the same time, the corporation has initiated 227 legal proceedings for recoveries of amounts up to Rs 14,455 crore, which includes defaulting companies. 

The corporation has said in its offer document that it is facing 63 tax proceedings where the total amount involved is Rs 74,894 crore. Of this, income tax claims are Rs 72,762 crore, and indirect tax claims amount to Rs 2,132 crore. Bulk of the claims are differences with the income tax (I-T) department over the years on the actual income of the corporation. 

The cases are pending with the Commissioner of Income Tax (appeals) or the Income Tax Appellate Tribunal. The corporation is also facing Rs 3,265-crore claims from the I-T department for the year 2003, 2004 and 2005, which are pending in the Bombay high court. The tax department has said that LIC cannot claim deductions for dividend income, provisions for solvency margin and for loss arising out of Jeevan Suraksha fund from its income. The department is claiming Rs 756 crore, Rs 964 crore and Rs 1,545 crore as dues for the three assessment years. 

Overall, the corporation is party to 26,919 litigations. These include criminal, consumer, civil and other action by statutory or regulatory authorities. Nearly half (12,323 cases) are consumer complaints, largely relating to claims. There are also 14,263 civil cases that include rival claims on policies and other cases. 

   To read more: Click Here 

Important Case-laws

GST Law:

  1. Job hoppers may have to pay GST for not
    serving the notice period
  • The employer can charge 18 per cent GST on the total recoveries accruing on the employee leaving the organisation without serving the notice period., say experts. 
  • As per recent ruling of AAR, it is responsibility of the recruiters to pay GST through reverse charge mechanism on the recoveries from the employee during notice period, say experts 

Job hoppers may have to pay Goods and Services Tax (GST) if they don’t serve the notice period mentioned in their offer letter at the time of recruitment. The Authority of Advance Ruling (AAR) at GST has said in its recent ruling that GST can be levied on various recoveries from the employee for not serving the notice period. These recoveries include pay during notice, group insurance, telephone bill, etc. In short, an employee will be liable to pay GST on its monthly salary for not serving the notice period. 

A recent ruling in the case of Bharat Oman Refineries, which is a subsidiary of state-owned Bharat Petroleum, by the Central Board of Indirect Taxes and Customs’ Authority of Advance Ruling (AAR) said the GST will be applicable on different employees’ recoveries. 

These include telephone bills paid by companies, group insurance of the company employees, and payment of salaries in lieu of the notice period, The Economic Times reported. As per the definition of GST, the government charges a specific tax on any activity viewed as “supply of service”. These services can either be direct or indirect. Reference: Click Here 

2. Grants, non-philanthropic donations received by charitable trusts to attract 18% GST: AAR 

In the case of donations, the AAR said if the purpose of the donation is philanthropic and leads to no commercial gains and is not an advertisement, then it would not attract GST. 

In the case of donations, the AAR said if the purpose of the donation is philanthropic and leads to no commercial gains and is not an advertisement, then it would not attract GST. 

Charitable trusts are liable to pay 18%GST on grants and non-philanthropic donations received by them, the Maharashtra AAR has ruled. 

Jayshankar Gramin Va Adivasi Vikas Sanstha Sangamner, a Charitable trust registered under Maharashtra Public Charitable Trust Act 1950, had approached the Maharashtra Bench of the Authority for Advance Ruling (AAR), seeking clarity on whether it is liable to pay GST on the amounts received in the form of donations/grants from various entities, including the Central and State governments. 

The Maharashtra Women and Child Welfare Department pay a sum of ₹2,000 per month per child. Other expenses for children are made from donations. In its ruling, the AAR said the trust would be chargeable to 18% Goods and Services Tax (GST) for grants received by it. In the case of donations, the AAR said if the purpose of the donation is philanthropic and leads to no commercial gains and is not an advertisement, then it would not attract GST. 

“This ruling is expected to send jitters to all the charitable organisations, enjoying tax-neutral status under indirect tax laws since the very beginning, mandating them to get registered under GST. Tax demands computed since 2017 would be loaded with additional interest @18% and penalty,” Mr. Mohan added (expert). To read more: Click Here 

  1. 30% tax on income from crytocurrencies to be applicable from July 1: CBDT chief 

The proposed 30 per cent taxation on income from cryptocurrencies and other virtual assets will come into effect from April 1, Central Board of Direct Taxes chairman JB Mohapatra told news agency ANI on Thursday. In addition, the 1 per cent tax deducted at source (TDS) on transactions in such asset classes will be applicable from July 1, Mohapatra said. 

India became one of the few countries to impose tax on digital assets like cryptocurrencies and non-fungible tokens (NFTs) when finance minister Nirmala Sitharaman proposed a 30 per cent tax on transfer of such assets in the Union Budget 2022. 

On income tax collections, the CBDT chief said that net collections jumped 48.4 per cent annually to Rs 13.63 lakh crore, which is the best since 2018-19. CBDT’s budget estimate was Rs 11.08 lakh crore this year, which was increased in the revised estimate (RE) to Rs 12.50 lakh crore. 

He highlighted the efforts put by the I-T department on developing technology and induction in the last 4-5 years, reforms introduced by the government and buoyancy of the economy to be the major contributory factors towards record collection of taxes. “The major reason for higher STT collection is the buoyancy in the stock market, with high volume of transactions.” 

   Read more at: Click Here 

  1. Cryptocurrency Tax: India vs US Crypto Taxation Rules Compared 

The Union Budget 2022 does not address any other income type such as staking, mining, lending, borrowing, airdrops, forks, wallet transfers, P2P transfers, gaming, gifting, donations, etc. 

The Government of India has introduced the tax implications for cryptocurrency for the first time in the Union Budget 2022, while the Internal Revenue Service (IRS) of the US first 

addressed cryptocurrencies in 2014. Let us see the differences in the income tax treatment of cryptocurrencies of both countries. 

However, in the US, cryptocurrencies are treated as capital assets. So, when a person transfers cryptocurrency at a profit, he/she is liable to pay tax depending on whether the assets are long- term crypto assets or short-term crypto assets. The US law states that assets sold after one year of purchase are classified as long-term capital assets. Long term assets are subject to lower tax rates. But if the assets are sold within a year of purchase, they are classified as short-term capital assets.Since the Indian tax law does not treat virtual digital assets as capital assets, crypto investors are not eligible for indexation benefits if the assets are held for long-term and face the full 30% tax rate irrespective of the period of holding. 

Further, the gift received as crypto assets shall be taxable in the hands of the beneficiary. The definition of specified movable assets is expanded to include virtual digital assets. Therefore, the gifts received shall be taxable if the fair market value exceeds the threshold limit specified in the law. Also, the plain reading of the amendment made in the budget conveys that the gift received from relatives or received on specific occasions shall be exempt from tax. 

The US tax law does not require to withhold tax at the time of payment of consideration for the crypto asset, and also receiving cryptocurrency as a gift is a non-taxable event to the recipient (donee). The recipient doesn’t have to pay tax or report it in their returns. However, at the time of sale of such a gift in future, the recipient will have to pay capital gains taxes. But the person who sends a gift needs to report the same if the value of the crypto assets gifted exceeds a certain specified limit. 

As per US law, if any goods or services are purchased using crypto assets, such transactions shall be regarded as exchanging crypto assets for goods or services. The taxpayer is required to pay capital gains tax if the value of such assets exceeds the price which was initially paid for it. Read more at: Click Here 

  1. UAE’s Federal Tax Authority makes new website inclusive with sign 

language services, text-to-speech features 

The UAE’s Federal Tax Authority (FTA) has launched its newly developed website to further improve the efficiency of the tax system in the country. The website has unique features to enable people of determination to access services and information with complete ease. It provides sign language to obtain a virtual assistance service, which directly answers the questions of visitors based on artificial intelligence techniques. When the user points at a specific text, the “Tax Aware Robot Assistant” service translates it into sign language. 

The FTA director-general, Khalid Ali Al Bustani, said: “The development of the website came within the framework of the Authority’s strategy aimed to provide the best services in light of the continuous review of its operational plans to achieve the best levels of performance efficiency. The officials also discussed the need to address base erosion, profit shifting, economic substance regulations, and common reporting standards. Additionally, both parties reviewed the OECD’s ongoing work in the economic field and tax reform in the UAE. 

  1. Kuala Lumpur High Court allows GST remission appeal 

S Saravana Kumar and Amira Rafie of Rosli Dahlan Saravana Partnership discuss a case on the statutory duties of the MoF in relation to a remission application and the taxpayers’ right to claim refund of input tax credit. 

The Kuala Lumpur High Court allowed a judicial review application by a taxpayer in a GST dispute. The High Court, by ruling in favour of the taxpayer made clear that the Minister of Finance (MoF) had failed to exercise his discretion under section 62(1) of the Goods and Services Tax Act 2014 (GST Act). The taxpayer was successfully represented by RDS’s Tax, SST & Customs partner, S Saravana Kumar and associate, Amira Rafie. 

The taxpayer in this case is a subsidiary of a major Japanese MNC and, in accordance with Goods and Services Tax Repeal Act 2018 (GST Repeal Act 2018), had submitted its GST return for the last taxable period. 

This decision reaffirms the settled principle of law that every exercise of statutory power cannot be arbitrary. When an authority is conferred with a discretion under the law to grant remission, such discretion must be exercised upon objective appreciation of the evidence before him. 

      Knowledge Bucket for NRI’s  

  1. Taxability of death benefit paid to the nominees of an NRI: 
  1. Death claim benefit is tax-free in India, even in the hands of an NRI nominee 
  1. Policy taken in India would settle claims in Indian rupees only. 
  1. To avail of the claim, the nominee should have an Indian bank account. 
  1. The claims process is the same for residents and NRIs subject to certain eligibility criteria as mentioned above. 
  1. The NRI continues to hold investments in Indian shares and mutual funds (assets), there would not be any additional tax implications or reporting requirements. The assets in India are required to be disclosed under the AL Schedule, if the total income exceeds Rs 50 lakh. 
  1. The NRI can hold investments in India as long as he/she wants to. On sale of such shares or mutual funds, the NRI shall be liable to pay capital gains tax on transfer of such assets. Dividends received would be taxable at the rate of 20% (plus applicable surcharge and cess).” 

(by: Amit Maheshwari, Partner, AKM Global – point B & C) 

  1. As per the current PF Scheme, a PF account is classified as an in-operative account and does not earn further interest where an employee retires from service after attaining the age of 55 years or migrates abroad permanently or dies and does not apply for withdrawal of his accumulated balance within 36 months. 
  • DO YOU KNOW ??  
  1. Form 10-IC, is required to filed only if a Domestic Company chooses to pay tax at concessional rate of 22 per cent under Section 115BAA of the Income Tax Act, 1961. 
  1. As per Section 115BAA of the Income Tax Act, Domestic Companies have the option to pay tax at a concessional rate of 22% (plus applicable surcharge and cess) provided they do not avail specified deductions and incentives. Companies can opt for the concessional rate from the Assessment Year 2020 – 21 onwards only if they file Form 10-IC within the prescribed time limit. 
  1. The Income Tax Department announced that more than 6.63 crore Income Tax Returns (ITRs) were filed for the assessment year (AY) 2021-22. 
  1. Advance tax collections, the fourth installment of which was due on March 15, rose to Rs 

6.62 lakh crore, up 40.75%. India’s collection from tax on personal and corporate income jumped over 48% in the current fiscal after a 41% surge in advance tax payments, mirroring sustained economic recovery in a year that witnessed two waves of coronavirus infections. 

  1. The last date to link your Permanent Address Number (PAN) with your Aadhaar is inching fast, with the deadline being March 31, 2022. The department has made it clear that completing the task is mandatory. If not done within the stipulated time, your PAN will become inoperative. 
  • 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.)