Weekly Taxation Newsletter Period 12/08/2022 To 18/08/2022

About the Newsletter – “Weekly Taxation Newsletter” It is a weekly newsletter with latest updates, news, circular, notification, developments and summary of press releases related to Taxation Laws.

It is a Weekly Newsletter on the followings important segments:

  • Upcoming Due Dates
  • Weekly Departmental Updates – Income Tax (IT) & GST
  • Important Circular & Notification – IT / GST / CBIC / Custom / Excise
  • Important Case Laws in brief – IT & GST
  • International Taxation Corner
  • Knowledge Bucket for NRI
  • Do you know section

Prepared & Compiled by:

Lalit Rajput is a Company Secretary and Commerce Graduate, having 7+ years of post-qualification experience in the Corporate Compliance Management & Advisory Services. He has worked with Listed, Unlisted, Risk Advisory Firms, Corporate Secretarial and Chartered Firms etc. He has a keen interest in the Corporate Governance and Compliance Management.

He has authored many articles at various social media platforms and ICAI / ICSI Newsletters & has taken seminars / webinars for professional institutes including ICSI / ICAI/ LPU etc. He has participated in many quiz / competitions and received recognitions at various platforms.

He is also a part of MAHARERA Study Group Experts Panel. The WIRC

– ICAI honoured for his contribution in “Quick Referencer to Companies Act, 2013” and MAHARERA Law Manual. He has also written articles in many Corporate Magazines, Taxmann and Books etc. He has contributed as Author in many Books and also publishing his own Newsletters on various

Heer Gajjar, an Indian Chartered Accountant by profession. Other feathers in her hat include being an author, learner and avid reader by obsession, explorer by passion.

She has a great quench for knowledge and never stops learning. Her successful and ongoing academic indulgences include CPAO, PAP, FNT, FAFD, BRSR and PGDIFA to name a few. She indulges in manifold avatars professionally and embraces technology and entrepreneurship. Risks stimulate her and challenges motivate her. A staunch believer of “There is always room for improvement”, the hustle to grow is perpetual for her. Currently she handles accounting and finance for an IT business in Canada.

Putting in “Extra” is always her satisfaction and giving up is never an option. Smart-

Hustle is the new black and supporting dreams is a personal virtue.”

Dear Readers,

We are delighted to share our 87th E-Newsletter “Weekly Taxation Newsletter” dated 19th August, 2022 from 12th August, 2022 to 18th August, 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 July 2022.

 

30.08.2022

  • Under the GST, 2017

A. Filing of GSTR –3B / GSTR 3B QRMP

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

Tax period

Due Date

Particulars

 

 

 

July, 2022

 

 

20th August, 2022

Due Date for filling GSTR – 3B return for the month of June, 2022 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

 

 

July, 2022

 

22nd August, 2022

Due Date for filling GSTR – 3B return for the month of June, 2022 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

July, 2022

24th August, 2022

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

20.08.2022

C. 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.

 

25.08.2022

D. 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

  • Weekly Departmental Updates: Income Tax

1. ITR Filing AY 2022-23: 13 lakh returns after July 31! Who can file without penalty even now?

 More than 13 lakh ITRs have been filed after July 31, which was the last date of return filing for salaried individuals and HUFs.

According to the latest Income Tax website data, the total number of returns filed for AY 2022-23 increased to 5.96 crore as on 15 August 2022. Till July 31, the total ITRs filed was over 5.83 crore.

penalty for the late  filers:

Taxpayers have to pay a penalty for late filing. The income tax department can levy a penalty of Rs 5,000 under section 234F for belated ITR filing. However, if taxable income is below Rs 5 lakh, the penalty amount is Rs 1,000. (Read: Other losses due to belated ITR filing). The belated return for FY 2021-22 (AY 2022-23) can be filed on or before 31st December 2022.

Who can file ITR without penalty even now:

 Taxpayers, whose accounts are subject to auditing, can file their returns by 31st October 2022. According to the Income Tax website, 31 October 2022 is the due date of ITR filing for the assessment year 2022-23 if the assessee (not having any international or specified domestic transaction) is a corporate-assessee or non-corporate assessee (whose books of account are required to be audited). 31st October 2022 is also the due date for partners of firms whose accounts are required to be audited or the spouse of such partner if the provisions of section 5A apply.

Section 5A is applicable in the case of individuals covered under the Portuguese Civil Code, which is applicable only in Goa and; the Union Territories of Daman and Diu and; Dadra and Nagar Haveli.

2. Centre hikes windfall profit tax on export of diesel, ATF; cuts tax on domestic crude oil

Amid a recent fall in international oil prices and refining spreads, India on Thursday hiked the windfall profit tax on the export of diesel to ₹7 per litre and brought back a tax on jet fuel exports.

However, the government has slashed the levy on domestically produced crude oil in line with softening rates, a finance ministry notification showed.

At the third fortnightly review, the government raised the windfall profit tax on the export of diesel to ₹7 per litre from ₹5 a litre and brought a ₹2 a litre tax on jet fuel (ATF) exports. Earlier in August, the government had scrapped the windfall profit tax on jet fuel exports. Alongside, the tax on domestically produced crude oil has been cut to ₹13,000 per tonne from ₹17,750.

Tax on exports raised: The tax on exports has been raised as cracks or margins rose but the same on domestically produced oil was reduced as international oil prices slid to 6 month low.

The government first imposed windfall profit taxes on 1 July, joining a growing number of countries that taxes super normal profits of energy firms. But global oil prices have cooled since then, eroding profit margins of both oil producers and refiners.

On 1 July, export duties of ₹6 per litre ($12 per barrel) were levied on petrol and ATF and a

₹13 a litre tax on the export of diesel ($26 a barrel). A ₹23,250 per tonne windfall profit tax

on domestic crude production ($40 per barrel) was also levied.

To read more Click Here

3. Have income tax refunds? Keep deduction proofs ready or get ready to pay 200% penalty

Taxpayers are getting intimations generated automatically online from the Income Tax Department, if additional deductions are claimed in Income Tax Return (ITR) resulting in income tax refund out of the tax deducted at source (TDS) by the employers. Such intimations get auto generated in case there are discrepancies in the figures mentioned in Form 16 and the figures entered in ITR resulting in tax refund.

Following issuance of the auto-generated intimation, the recipients will get 15 days time to revise the returns to remove the discrepancies with Form 16 or will have to pay a 200 per cent penalty if deductions are claimed falsely.

In case of genuine claims, you need to keep ready the proofs of investments (like subscriptions/investments to NPS, PPF, SSY, NSC, SCSS, tax-saving FD, ULIP, ELSS etc.) and/or expenses (like payment of life/health insurance premium, tuition fee receipts of children, home loan interest and repayment of home loan principal etc.) and/or proof of donations given etc. This is because you may get a proper Income Tax Notice after manual verification of the auto-generated intimation, if the ITR is not revised within the 15-day period.

4. Revised, belated and updated income tax returns: Do you know the difference between them?

The last date to file your income–tax return for income earned in the financial year 2021-22 (assessment year 2022-23) has passed. But you can still file your tax return in some cases. For instance, if you have already filed your income tax return, but discovered any mistake or missed reporting any income, you can file a revised return.

If you have not yet filed an income tax return for FY 2021-22, you can file a belated return. If you want to update your older return you can do that too. But there are penalties and limitations associated with it, so let’s read more.

Revised return

 If you have already filed your return, but later realised that you made an error, omission or any wrong statement, you should revise the return by filing a revised return within the prescribed time limit.

“This return can be filed three months before the end of the relevant assessment year or before the completion of the assessment, whichever is earlier,” said Deepak Jain, chief executive, TaxManager.in, a tax e-Filing and compliance management portal. This means that for the AY 2022-23 you can file revised returns by December 31, 2022.

Belated return

 A valid return filed within the due dates is called an original return under section 139(1) of the Income-tax Act, 1961. For AY 2022-23 the due date to file your return was July 31, 2022.

“An assessee who does not file his return within the timelines prescribed in the Act but files

the return after the due date is referred to as a belated return under section 139(4) of the Act,”

said Sehgal.

A belated return can be filed till three months before the end of the relevant assessment year. So, any return filed after July 31, 2022 but before December 31, 2022 for AY 2022-23 will be considered a belated return.

To file a belated return you may need to pay a penalty. As per section 234F, late filing fees of Rs 5,000 need to be paid if a return is furnished after the due date. However, the amount of late filing fees to be paid shall be Rs1,000 if the total income of the person does not exceed Rs 5 lakh. Source: Read full at Click Here

  • Important Circulars and Notifications:
Sl.

Particulars of the Notification(s)

File No. /

Circular No.

Notification

Link(s)

 

1

The Central Government hereby specifies the sovereign wealth fund, namely, INQ Holding LLC (PAN: AADCI5071P)………

Notification No. 95/2022

 

Click Here

 

2

The Income-tax (25th Amendment) Rules, 2022.

Notification No. 96/2022

Click Here

 

3

The Income-tax (26th Amendment) Rules, 2022

Notification No. 98/2022

Click Here

 

4

Provisions of Section 206C (1G) of the Act shall not apply to a person (being a buyer) who is a non-resident in terms of section 6 of the Act and who does not have a permanent establishment in India.

 

Notification No. 99/2022

 

Click Here

Weekly Departmental updates:  

GST Updates

1. Finance Ministry issues guidelines for probe, arrests, bail under GST Act

Finance Ministry GST Act guidelines: The Finance Ministry has issued a set of guidelines detailing conditions for investigation, summons, arrests and bail procedures under the Goods and Services Tax Act, 2017 (GST Act); check for more details here

The Finance Ministry has issued a set of guidelines detailing conditions for investigation, summons, arrests and bail procedures under the Goods and Services Tax Act, 2017 (GST Act) for violating GST provisions. These guidelines state that approval for arrest under the GST Act shall be granted for cases wherein a clear intent of tax evasion or committing violation exists. The Ministry of Finance notification also stated that approval for arrest should not be granted if tax discrepancy is based on the difference of legal opinion in interpretation of the law.

These guidelines further mentioned that in case an accused needs to be arrested for violation of the GST Act, arrest procedures under the Criminal Penal Code (CrPC) need to be followed. Information regarding arrests under the Act must be sent to the Directorate General of GST Intelligence (DGGI) every month, as per the guidelines.

These should also indicate the name of the offender(s) against whom the investigation provided the revelation is not detrimental to the cause of the probe to provide a prima facie understanding about the capacity in which the ofendor(s) has been summoned– accused, co-accused or witness. While issuing summons under the GST Act, officials must also ensure that this is done in a judicious manner. Authorities concerned are also advised to look at incidents where a letter of requisition may suffice instead of issuing summons.

 2. CBIC tells GST officials not to haul in CEOs unnecessarily

 The country’s apex indirect taxes body told officials administering the goods and services tax (GST) not to issue summonses to the top management of companies at the first instance and said arrests can only be made after written permission from senior officials.

The Central Board of Indirect Taxes and Customs (CBIC) issued detailed instructions on Thursday to address concerns raised by businesses over the excessive use of summonses and arrest provisions in the law.

Officials should initially call for evidence or documents. The arrest provision in the GST law should be used only in exceptional circumstances such as fraudulent activities or tampering with documents and not be invoked for routine or technical matters, the instructions said.

The move follows complaints by industry and observations made by various courts. Under the GST law, a commissioner may arrest or authorise arrest if there is sufficient “reason to believe” that a person has committed offences such as not issuing an invoice with the intention of evading tax, faking invoices to claim input tax credit or tax refunds, and not depositing tax that’s been collected.

3. Contours of GST tribunal finalised, to help resolve disputes

Five years after the goods and services tax (GST) regime was introduced, the country will have a appellate body to resolve disputes relating to the key indirect tax. A group of ministers (GoM), headed by Haryana deputy chief minister Dushyant Chautala, has proposed that the GST Appellate Tribunal (GSTAT) be set up with a principal Bench in New Delhi and similar Benches at various other locations.

Each of these regional Benches will consist of a judicial officer equivalent of a High Court judge and a senior tax officer from either the Centre or the state as a technical member. The apellate body will be headed by a judge from the Supreme Court or the chief justice of a High Court. In case there is only one or an odd number of Benches in a state, the technical member/members from the Centre and the state concerned will be on a rotational basis to achieve equity.

A four-member search and selection committee (ScSC), headed by either the chief justice of the Supreme Court (SC) or his representative judge from the SC, will be tasked with the appointment of members to the Benches. It will also consist of the president of the GSTAT, a union government secretary and a state chief secretary. The chairperson will have a casting vote.

Since the appointment has to be done on the recommendations of the search and selection committee, the structure of having national, regional, state and area benches, as proposed in the extant Central GST Act, are no longer required.

4. ITR Filing AY 2022-23 Update: Income Tax Return declared invalid? What to do now

ITR Filing AY 2022-23: The due date of Income Tax Return filing for Assessment Year 2022- 23 was July 31, 2022 for salaried employees and HUFs whose accounts don’t need to be audited. After filing the return, taxpayers are required to verify it so that the tax department can further process the ITR and issue a refund if applicable. However, if a taxpayer fails to verify his/her return within the stipulated time then the tax department considers such ITR as invalid. Here’s a look at what you can do if your return is declared invalid.

According to the Income Tax rules, it is considered that the taxpayer has not filed any return in case his ITR is declared invalid. In such a situation, the taxpayer may file a fresh ITR if the due date has not expired. The process becomes more complex upon the expiry of the due date in case of invalid returns.

When ITR verification is not mandatory

 It is mandatory for taxpayers to verify their returns. However, it is not mandatory to verify the original returns of the taxpayer who wants to file a revised return. In such a situation, the taxpayer can verify the revised return. Taxpayers who failed to file their ITRs by 31 Jul can still do so but they will have to pay a penalty.

Experts said that the tax department would process only the revised return, and no action will be taken against the original return.

5. More GST rate changes likely to address inverted duty, exemptions

The Goods and Services Tax (GST) Council may go in for another round of rate changes to correct the remaining instances of inverted duty, apart from withdrawing some more exemptions. A group of ministers (GoM) headed by Karnataka chief minister Basavaraj Bommai is working on the second round, people aware of the matter told ET.

Inverted Duty Structures

 Inverted duty refers to structures where the rate of tax on inputs is more than the rate of tax on outward supplies, which discourages value addition. If required, tax authorities will engage with industry for feedback, the official said.

Inverted duty structures also prevail in automobiles, including electric vehicles, some electronic items, urea and other fertiliser inputs, according to experts.

The resolution of inverted duty structures in sectors where production-linked incentive (PLI) schemes have been introduced will help improve the internal rate of return. Currently, companies in these sectors are not able to utilise the input tax paid on the procurement of capital goods; nor are they able to get refunds toward this, leading to increased working capital costs, Agarwal said.

In June, the council adjusted rates to correct inverted duty on items such as edible oil, solar water heaters, LED lamps, printing ink and knives, among others. Additionally, it imposed 5% GST on pre-packaged and pre-labelled retail packs of certain food items to address tax evasion. It also removed many items from the exemption list.

  • Important Notifications under Excise / Custom/ GST:

GST UPDATES

Sl.

No.

Particulars of the Notification(s)

File No. / Circular No.

Notification Link(s)

1

Guidelines for arrest and bail in relation to offences punishable under the CGST Act, 2017.

Instruction No. 02/2022-23- [GST-INV]

Click Here

2

GUIDELINES ON ISSUANCE OF SUMMONS UNDER SECTION 70 OF THE CENTRAL GOODS & SERVICES TAX ACT, 2017

Instruction No. 03/2022-23 [GST-INV]

Click Here

CUSTOM / EXCISE UPDATES

Links

Notification Particulars

Click Here

Exchange rate Notification No. 70/2022-Cus (NT) dated 18.08.2022-reg.

Click Here

Applying CAROTAR maintaining consistency with the provisions of relevant trade agreement or its Rules of Origin – reg.

Click Here

Seeks to amend No. 18/2022-Central Excise, dated the 19th July, 2022 to decrease the Special Additional Excise Duty on production of Petroleum Crude and increase Special Additional Excise Duty export of Aviation Turbine Fuel

Click Here

Seeks to further amend No. 04/2022-Central Excise, dated the 30th June, 2022 , to increase the Special Additional Excise Duty on Diesel

Important Case-laws

Income Tax

1. Case Details: Shelf Drilling Ron Tappmeyer Ltd.  DCIT

Citation: [2021] 123 taxmann.com 49 (Mumbai – Trib.)

 Set-off of losses couldn’t be denied just because assessment of year in which loss was

suffered is pending

 The assessee claimed set-off of unabsorbed business losses pertaining to a year in subsequent years. AO declined the claim for set off on the ground that the assessment of the year in which such loss was suffered was still pending.

It was contended that the scheme of the Income-tax Act does not visualise any action of declining set off on the part of AO till the assessment is finalised. No matter how desirable such a provision could theoretically be justified, it does not exist in the law. The action of AO in declining the set-off of the carried forward losses was thus without the authority of law and must be vacated.

On the other hand, revenue contended that if the assessee were allowed to set off of this loss in the subsequent years, the assessee would become eligible for a refund of taxes. Consequently, legitimate interests of revenue will be prejudiced by allowing such refunds. Thus revenue urges to defer a decision on this matter till the time the remanded assessment is finalised.

The Mumbai Tribunal held that the assessee’s claim for set-off of losses, if otherwise admissible, could not be denied on the mere fact that the assessment for the year in which such loss was suffered is pending.

2. Case Details: Michael E Desa v ITO

Citation: [2021] 130 taxmann.com 314 (Mumbai – Trib.)

 AO can’t disregard a transaction just because it results in tax advantage to the assessee

 The Mumbai Tribunal has justified the action of the assessee in booking loss in the year in which he had earned profit from another transaction to enable him to set-off the losses. The Tribunal held that it is legitimate tax planning without using colourable devices.

It was held that the benefit of long-term capital loss could not be declined to the assessee, only on the ground that if the assessee had not taken these proactive measures, he would have paid more taxes. The assessee may end up saving taxes, but that is perfectly legitimate.

The AO cannot disregard a transaction just because it results in a tax advantage to the assessee. Just as much as we cannot legitimise and glorify tax evasion through colorable devices and tax shelters, we cannot also deprecate and disapprove genuine tax planning within the framework of the law. The line of demarcation between what is permissible tax planning and what turns into impermissible tax avoidance may be somewhat thin, but that cannot be excuse enough for the tax authorities to err on the side of excessive caution.

Thus, the AO was directed to allow set-off of this long-term capital loss on the sale of shares in VCAM against the long-term capital gains on the sale of the property.

Important Case-laws

GST Cases:

1.  GST on Rent: Government Clarifies on the New Rule on Residential Properties

The Union government has clarified on the new goods and services tax rules (GST) on rent, which came into effect from 18th July. In a tweet, press information bureau (PIB) said that “renting of residential unit taxable only when it is rented to business entity.” It further clarified that “no GST when it is rented to private person for personal use; no GST even if proprietor or partner of firm rents residence for personal use.”

  • Renting of residential unit taxable only when it is rented to business entity
  • No GST when it is rented to private person for personal use
  • No GST even if proprietor or partner of firm rents residence for personal use

As of 17 July 2022, GST was applicable on the rent of a commercial property but, from 18 July 2022, GST is being charged if such residence is rented or leased by a GST-registered person/entity. Accordingly, tenants now have to pay 18% GST on a reverse charge basis (RCM). However, they can claim this value as a deduction while they pay tax on sales in GST returns.

The change is expected to impact corporate houses which have taken residential units on rent for their employees. GST will now be required to be paid by such registered taxpayers under reverse charge. Problems could arise if the tax department can dispute the eligibility of credit, treating it as being used for personal consumption. In such cases, it can negatively impact the profit of the company.

2. Eggs are farm produce, transporting them is exempt from GST: Karnataka AAR

The authority of advance ruling (AAR), Karnataka has ruled that eggs are agricultural produce and transporting them from one place to another would not draw any goods and services tax (GST), despite the tax authorities arguing for its taxability.

The ruling was pronounced on an application submitted by SAS Cargo, which is engaged in the business of transportation of eggs and hatcheries by rail.

The AAR sought to know the government’s position from the office of the commissioner of central tax, Bengaluru South gst commissionerate, Bengaluru.

The assistant commissioner replied that according to the GST laws, agricultural produce is any produce out of cultivation of plants and rearing of all forms of animals, except the rearing of horses, on which either no processing is done or such processing is done which does not alter its essential characteristics. To read more: Click Here

  • International Taxation Corner (ITC)

1. Germany to slash tax on household energy bills as winter crisis looms

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German Chancellor Olaf Scholz is slashing tax on household energy bills as Europe’s largest

economy braces for a winter crisis.

The sales tax on gas will be lowered to 7pc from 19pc in an effort to cushion the blow of additional charges being placed on consumers to help prevent suppliers from collapsing. The reduced rate will apply as long as the levy is charged. Under current plans, it will run until the end of March 2024.

The move will pile more pressure on the UK to do more to support families in the face of surging energy bills. The price cap is now expected to top £4,200 in January, adding to the strain on household budgets.

Germany had been in talks with the EU to find a way to reduce the cost burden on consumers after the bloc rejected its request for an exemption to VAT.

 2. Global Tax Deal: India won’t make sovereign commitments on future digital tax, says report

India and other developing countries in the G24 group have strongly contested the proposal of making sovereign commitments to not introduce any future digital services tax like an equalisation levy. The developing nations want any commitment to not enact future measures should be tied only to political commitment.

Commenting on the Pillar One progress report released last month by the Organisation for Economic Co-operation and Development (OECD) Secretariat, the G24 members said: “We should be conscious that any commitment beyond a political commitment will effectively constrain,” according to a report in Business Standard, “future law-making powers of sovereign jurisdictions. Setting such a high legal bar runs the risk of undermining the consensus solution that the current work aims to achieve and will raise constitutional concerns in various jurisdictions.”

Last year, the global tax deal was agreed by 137 countries, and it gives rights to countries, including India, to tax tech behemoths such as Google, Netflix, and Facebook, besides a minimum corporation tax of 15 per cent. It is likely to be implemented from 2024 under a revised timeline.

As per the Pillar One criterion, all signing countries are needed to abandon their prevailing digital services taxes and other unilateral measures with respect to all entities and also pledge not to introduce any new unilateral measures in the interim period.

   Knowledge Bucket for NRI’s              

 NRIs are subject to a 20% income tax when they invest in specific Indian assets. If the NRI’s special investment income is their only source of income for the whole fiscal year and TDS has been withheld, they are exempt from filing an income tax return.

For NRIs, income from a property located in India is taxable. Income from real estate is taxed at the appropriate slab rates. The method used to determine this income must be the same as that used for residents, no matter if the property is unoccupied or rented When paying rent to an NRI in India, you must deduct TDS at a rate of 30%.

Fixed deposit and savings account interest is taxed in India if it is held in Indian bank Tax-free interest accrues on NRE and FCNR accounts.

DO YOU KNOW ??

  1. Under Section 80GG of the Income Tax Act, you may deduct rent if you are self- employed and reside with your parents.
  2. TDS is typically applied at a rate of 10% on dividend income received from a firm or mutual fund above 5,000.
  3. The income from the house or building is taxed under the heading “Income from House Property”. It will be regarded as rental income and assessed as income from other sources if you have rented out a property to someone and received rent from
  4. It is mandatory for taxpayers to verify their returns. However, it is not mandatory to verify the original returns of the taxpayer who wants to file a revised return. In such a situation, the taxpayer can verify the revised return.
  5. Individuals having income under the head ‘capital gains’, cannot file ITR-1 and must report particulars of income in ITR-2.
  6. The Income Tax Department has said that the provision related with Tax Collected at Source (TCS) will not be applicable on buyers who are non-resident Indians (NRI) and not having permanent establishment (PE) in India. This will also help tour operators selling overseas tour packages to such non resident

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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