Dear Readers,

We are delighted to share our 165^th E-Newsletter “Weekly Taxation Newsletter” dated 16^th December, 2024 from 02^nd Dec. 2024 to 15^th Dec.,  2024 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-IB in the month of November, 2024​​	30.12.2024
2	​​Due date for furnishing of challan-cum-statement in respect of tax deducted under section 194M in the month of November, 2024	30.12.2024
3	​​​Due date for furnishing of challan-cum-statement in respect of tax deducted under section 194-IA in the month of November, 2024	30.12.2024
4	​​Furnishing of report in Form No. 3CEAD for a reporting accounting year (assuming reporting accounting year is January 1, 2023 to December 31, 2023) 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 exchange of the report etc.​	30.12.2024
5	​​Due date for furnishing of challan-cum-statement in respect of tax deducted under section 194S (by specified person) in the month of November, 2024	30.12.2024
6	​Filing of belated/revised return of income for the assessment year 2024-25 for all assessee (provided assessment has not been completed before December 31, 2024)	30.12.2024

­

• 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
Nov., 2024	20th December, 2024	Due Date for filling GSTR – 3B return for the month of Nov., 2024 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		Particulars
Nov., 2024	22nd December, 2024		Due Date for filling GSTR – 3B return for the month of Nov., 2024 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
Nov., 2024	24th December, 2024		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	20.12.2024

• Weekly Departmental Updates: Income Tax

1. Income tax news: How the ESOPs are taxed in India?

My employer offered me an ESOP two years ago when I joined the company. I will receive these shares in January 2025. I work for an unlisted company, and a listed company promoted me. How much tax will I have to pay if I sell these shares? Do I get an examination benefit?

The shares concerning ESOP have tax incidence at two stages in India. First, tax incidence arises when you exercise the option to acquire the shares.

At this stage, the difference between the fair value of the shares and the price at which you get the shares is taxed as perquisites under the head salaries. Your employer will consider the value of such perquisite and deduct tax from your regular salary at the time or exercise of the option under ESOP.

The employer will deduct TDS even though you have not received any cash benefits when you receive the shares. The second stage tax will get triggered when you actually sell these shares. The difference between the sale value of the shares and the cost shall be taxed as capital gains. Cost for the purpose of ESOP share shall be aggregate of the values of perquisite value taken for TDS purpose and amount if any paid by you, Since the shares being acquired by you are unlisted the holding period requirement for it to qualify as long term is 24 months.

• To read more Click Here

2. 75% tax due by December 15: What happens if you miss Sunday’s Advance Tax deadline?

The clock is ticking for taxpayers. December 15, 2024, is the advance tax payment deadline for the financial year 2024-25. Salaried employees, freelancers, and businesses are expected to fulfill their obligations by this date to stay compliant with income tax regulations. But with the deadline landing on a Sunday, many are asking: what happens if it’s missed?

Here’s the complete lowdown.

What Is Advance Tax?

Advance tax, or “pay as you earn” tax, is income tax paid in installments throughout the year instead of at the end of the fiscal year. It applies to individuals and businesses with an annual tax liability of Rs 10,000 or more.

The payment schedule is divided into four installments:

• By June 15: 15% of the tax liability
• By September 15: 45% of the tax liability (adjusted for prior payments)
• By December 15: 75% of the tax liability
• By March 15: 100% of the tax liability

What If You Miss Dec. 15?

The good news: if December 15 falls on a Sunday, taxpayers get an automatic extension. Payments can be made the next working day — December 16, 2024 — without penalties or interest.

This relief stems from a longstanding rule clarified by the Income Tax Department:

If the last day for payment of any installment of advance tax is a day on which the receiving bank is closed, the payment can be made on the next working day without attracting interest under sections 234B or 234C of the Income Tax Act,” the department noted in a 1994 circular.

• To read more Click Here

3. Income tax rule: How much cash can you receive in your bank savings account in one financial year to avoid I-T notice?

Income tax rule: Have you ever considered how much cash you can deposit and withdraw in your bank savings account in a fiscal year to avoid being investigated by the income tax authorities? Personal finance experts say that as per income tax regulations, the total cash deposits or withdrawals in a savings account during a financial year should not exceed ₹10 lakh. However, one cannot receive an amount of ₹2 lakh or more in cash in aggregate from a person in a day in a single transaction or in respect of transactions relating to one event or occasion from a person in a single day.

Any cash deposit that exceeds ₹10 lakh across all of your savings accounts within a fiscal year (April 1–March 31) should be reported to the income tax department. Banks must disclose such transactions even if they are spread over several accounts.

What happens if you receive more than ₹10 lakh in your savings account in a fiscal year?

“Exceeding this threshold is considered a high-value transaction. Banks or financial institutions must report it to the Income Tax Department under Section 114B of the Income Tax Act, 1962. Deposits above ₹50,000 in a single day require you to provide your PAN. You must submit Form 60/61 as an alternative if you don’t have a PAN,” said Abhishek Soni, CEO and Co-founder of Tax2win.

How do you respond to I-T notice?

To respond to an income tax notice regarding high-value cash transactions, you must have adequate proof to support your claim regarding the funds’ origins. Bank statements, investment records, and inheritance documents are some of the documentation that needs to be produced. It is best to consult a knowledgeable tax advisor if you are unsure or have concerns about declaring the source of cash.

• To read more Click Here

4. Income tax relief in Budget 2025? Govt mulling relief for lower income tax bracket

The upcoming Budget that will be presented by Finance Minister Nirmala Sitharaman in February 2025 is likely to provide relief to the low-income group with tax reduction expected in the Rs 3 lakh – Rs 7 lakh tax slab under the new regime, reported ETNow quoting their sources.

As per the report, the government may increase the exemption limit beyond Rs 3 lakh under the new regime.

Tax cuts for higher slabs?

While big relief is being hoped for the lower-income group, as of now, there are no significant changes expected for higher tax slabs, reported ETNow quoting its sources.

Budget 2024: Changes proposed by Finance Minister

The finance minister Nirmala Sitharaman in Budget 2024 announced relaxation in the income tax slabs in the new tax regime for current FY 2024-25.

The changes proposed in the new tax regime are as follows:

1. Income tax slabs relaxed from incomes up to Rs 10 lakh
2. Standard deduction limit for salaried and pensioners hiked to Rs 75,000 from Rs 50,000
3. Standard deduction limit for family pensioners hiked to Rs 25,000 from Rs 15,000
4. Deduction on employer’s NPS contribution for private sector employees hiked to 14% from 10%.

Other suggestions for Sitharaman:

Industry body CII has suggested government to stick to the fiscal deficit target of 4.9% of GDP for 2024-25 and 4.5% for 2025-26, cautioning that “overly aggressive targets” beyond these could adversely affect India’s economic growth.

• To read more Click Here

• Important Circulars and Notifications:

Sl	Particulars of the Notification(s)	File No. / Circular No.	Notification Link(s)
1	The Income-tax (Tenth Amendment) Rules, 2024.	Notification No. 124/2024	Click Here
2	Extension of due date for furnishing return of income in the case of an assessee who is required to furnish a report referred to in section 92E for the AY 2024-25	Circular No. 18/2024	Click Here

Weekly Departmental updates:

• GST Updates

1. No plans of 35% GST slab yet: MoS Finance

There are no plans yet to have a 35 percent tax slab under the Goods and Services Tax (GST), and any decision on this would be taken together in consultation with GST Council, minister of state for finance, Pankaj Chaudhary told reporters in Delhi on Friday.

Chaudhary was responding to a question if the government is considering the recommendation made by the Group of Ministers (GoM) on rate rationalisation. The GoM has recommended a new tax slab of 35% for luxury and ‘sin’ goods like tobacco, cigarettes, aerated drinks, etc. The MoS finance told reporters that the GST Council would take the final decision and the same will be in consultation with the states, who are also members of the Council. 

The compensation cess levied under GST would cease to exist after March 2026, and the same will be merged with the 28 percent tax slab to arrive at a new tax rate that will be levied on demerit goods, which currently attracts compensation cess.  For example, Gutkha containing tobacco attracts the highest GST rate of 28 percent and a compensation cess of 204 percent, taking the effective tax rate to 252 percent. In some cases, the compensation cess is levied on the MRP (maximum retail price) of the product after including the 28 percent GST.

Currently, compensation cess is levied on luxury and sin goods like aerated drinks, tobacco and related products, motor vehicles, yacht and other vessels for pleasure or sports. Compensation Cess was levied to compensate the states for the losses incurred by the states due to implementation of GST.

• Read more at: Click Here

2. FCI allows millers to deliver custom-milled rice, but GST, godown issues remain

In a major relief to rice millers, the Food Corporation of India (FCI) has granted permission to deliver custom-milled rice (CMR), but still unresolved issues regarding the allocation of godowns for delivery and the Goods and Services Tax (GST) on fortified rice kernels (FRK) continue to be major hurdles, leaving millers hesitant to proceed.

“The FCI has allowed the millers to deliver the CMR. All the procurement agencies have almost completed the physical verification and the team members are likely to submit a report by Monday to DC for starting the delivery,” said Anil Kumar, DFSC, Karnal.

Reduce GST from 18% to 5%

We purchase fortified rice kernels at Rs 5,000 per quintal plus 18 per cent GST, but only 5 per cent of the total GST is reimbursed. The government should fix charging of 5 per cent GST, as was done last year. — Saurabh Gupta, president, Karnal Rice Millers and Dealers’ Association.

Rice millers welcomed the permission given by the FCI, but stressed that deliveries could not begin until two major issues are addressed — disparity in GST charges on FRK and non-allocation of godowns for delivery of rice. They alleged that manufacturers charge 18 per cent GST on FRK, while the government reimburses only 5 per cent to millers, creating a financial burden.

As per the CMR policy, the millers have to deliver 25 per cent of the total rice to FCI by the end of December, further 20 per cent by the end of January, 15 per cent in February, and further 25 per cent in March and the remaining by April-end. The paddy procurement was completed by November 15, but after one month, millers are not able to deliver the rice, said Gupta.

• (Read more at: Click Here)

3. GST Council Meeting: Industry eyes tax relief on health insurance premiums, higher levies on luxury items

Industry experts expect a reduction in GST rates on health insurance at the forthcoming GST Council meeting on December 21, 2024. This could expand health insurance coverage; however, it may also raise concerns for insurance companies.

“The reduction in GST rates of health insurance would lead to a reduction in costs for the common man, helping to promote the coverage of health insurance. However, if health insurance is exempted from GST for all or specified persons, the insurance companies would lose out on input tax credits to that extent and accordingly, the reduction in costs can be less than the amount of GST previously charged,” Karthik Mani, Partner, Indirect Tax, BDO India, said.

The GST Council is a constitutional body that makes recommendations on goods and services taxes to the Centre and the States.

The GoM has proposed a GST exemption for health insurance policies up to ₹5 lakhs for senior citizens.

“The proposed changes by the Group of Ministers are seen as a positive move, especially the proposed exemptions for senior citizens’ health insurance and term life insurance policies. If this proposal gets approved, it will ease financial burdens on the elderly people and families seeking greater financial security,” Shivashish Karnani, GST Division, DPNC Global, said.

GST on other goods

Apart from exempting GST on health insurance, the GoM proposed increasing the GST rate on luxury goods such as watches costing above ₹25,000 from 18 per cent to 28 per cent and shoes over ₹15,000 from 18 per cent to 28 per cent.

“The proposal to levy tax on some of the luxury items, such as watches or shoes costing above the specified value, would help increase tax collection. However, it is hoped that similar to the practice followed for hotels, such tax rates would be linked to the actual sale price and not MRP to avoid complications in the cases where the products are sold at a price lower than the MRP,” BDO India’s Mani said..

• (Read more at: 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	Advisory on mandatory Sequential Filing of GSTR-7 Returns as per Notification No. 17/2024	GSTN 555	Click Here
2	Advisory for Biometric-Based Aadhaar Authentication and Document Verification for GST Registration Applicants of Haryana, Manipur, Meghalaya and Tripura	GSTN 556	Click Here
3	Advisory on difference in value of Table 8A and 8C of Annual Returns FY 23-24	GSTN 557	Click Here
4	Seeks to extend the due date for furnishing FORM GSTR-3B for the month of October, 2024 for registered persons whose principal place of business is in the district of Murshidabad in the state of West Bengal.	30/2024-Central Tax	Click Here
5	Seeks to appoint common adjudicating authority for Show cause notices issued by officers of DGGI	31/2024-Central Tax	Click Here
6	Amendment to Circular No. 31/05/2018-GST, dated 9th February, 2018 on ‘Proper officer under sections 73 and 74 of the Central Goods and Services Tax Act, 2017 and under the Integrated Goods and Services Tax Act, 2017’–reg.	239/33/2024–GST	Click Here

Custom / Excise Updates

Links	Notification Particulars
Click Here	Seeks to rescind Notification No. 32/2022-Customs dated 30th June, 2022.
Click Here	Fixation of Tariff Value of Edible Oils, Brass Scrap, Areca Nut, Gold and Silver- Reg
Click Here	Seeks to impose Anti-Dumping Duty on imports of “Textured Tempered Coated and Uncoated Glass ” falling under Tariff headings 7003, 7005, 7007, 7016, 7020 and 8541 originating in or exported from China PR or Vietnam for a period of 6 Months.
Click Here	Seeks to amend Rule 18 and Rule 19 of the Central Excise Rules, 2017

• Important Case-laws

• Income Tax

• ITAT upholds taxpayer’s right to legitimate tax planning

In a significant ruling, the income tax appellate tribunal (ITAT), Mumbai bench, has upheld a taxpayer’s right to engage in legitimate tax planning. It allowed the set-off of short-term capital losses (STCLs) incurred on the sale of shares against long-term capital gains (LTCGs), effectively reducing the taxpayer’s overall tax liability.

This decision comes as a relief for stock market investors, who often face scrutiny of set-off transactions during income tax assessments. Tax experts highlight that the crux of this ITAT order is the clear distinction between legitimate tax planning and tax evasion.

At the heart of the case during 2015-16 was the disallowance of an STCL of Rs 9.1 crore arising from the sale of Mindtree shares. This loss had been set off against an LTCG of Rs 16.8 crore derived from the sale of Avendus Capital shares. During the assessment, the I-T officer rejected the STCL claim, reclassified it as LTCG and added it back to the taxpayer’s income.

The taxpayer appealed successfully to the commissioner (appeals), prompting the I-T department to escalate the matter to the ITAT. The tribunal, however, dismissed the department’s appeal, ruling that the taxpayer had not employed any unfair means to reduce her tax liability.

Under tax laws, a capital loss arises when shares are sold at a price lower than their purchase price. If shares are held for less than 12 months, the resulting loss is classified as a short-term capital loss, which can be set off against any capital gain —short term or long term. In contrast, long-term capital losses (arising from shares held for more than 12 months) can only be offset against long-term gains.

However, the ITAT bench, composed of vice-president Saktijit Dey and accountant member Amarjit Singh, dismissed the appeal filed by the I-T department. It observed that transactions were genuine and conducted within the legal framework. It emphasised that there was no evidence to classify the transactions as sham or dubious. “There is no requirement under the law that the taxpayer has to pay more tax. If the taxpayer arranges her affairs within the legal framework and through legitimate means to reduce tax liability, the I-T officer cannot prevent her from doing so.” Source: Click Here

• Important Case-laws

• GST Cases:

 

1. Uber liable for GST as e-commerce operator, rules Karnataka AAR

Uber, as an e-commerce operator, is required to collect and pay GST on passenger transportation services provided by cab drivers using its proposed new platform, Karnataka’s Authority for Advance Ruling (KAAR) has said. It also said that the cab aggregator will be liable for GST even if its application (APP) only connects the driver and passenger with the driver supplying the service.

In its ruling, pronounced on November 4, the AAR held that the applicant satisfies the definition of an e-commerce operator and the nature of supply as conceptualized in the GST Act. “The Applicant is liable to collect and pay GST on the supply of services supplied by the drivers/ service provider (person who has subscribed to online Uber platform in relation to proposed business model) to their customers (person who has subscribed to online Uber platform/identified on the Uber’s platform) under the proposed business model,” AAR said in its ruling.

This ruling assumes significance for two reasons. First, On September 26, the Karnataka High Court asked the AAR to dispose of the matter within six weeks, and accordingly, the AAR gave its ruling. Second, the High Court will take up the matter on November 12. Earlier, the High Court had given an interim stay on the matter.  Uber and other ride-booking apps also made representation to the Central Board of Indirect Taxes and Customs (CBIC) on the applicability of GST. Now, it is expected that the matter could be discussed in the next GST Council meeting, which is likely to occur next month.

Here, the supply of such service refers to the supply of services for transportation of passengers by radio taxi, motor cab, maxi cab, and motorcycle, supplied through the electronic commerce operator.

Accordingly, “we find that the applicant is squarely covered in the definition of electronic commerce operator and the supply of services by way of transportation of passengers in the proposed commission free monetization model by an auto-rickshaw, radio-taxi, motor-cab, maxi-cab and motor cycle is supplied through them,” AAR said. Source: Click Here

• International Taxation   Corner (ITC)

1. Switzerland suspends ‘most favoured nation’ status to India, cites SC’s Nestle case ruling

This means that from January 1, dividends of Indian entities will be taxed at 10% in Switzerland. Dividends of Indian entities will be taxed at 10% in Switzerland from January 1 as the European nation has suspended the most favoured nation (MFN) clause in its Double Taxation Avoidance Agreement (DTAA) with India.

In a December 11 statement, the Swiss finance department said the move follows a ruling by Supreme Court of India last year that the MFN clause doesn’t trigger if a country joins the OECD (Organisation for Economic Cooperation and Development) and India signed a treaty with the country before that country became an OECD member.

India signed tax treaties with Colombia and Lithuania for tax rates on certain types of income which were lower than the rates it provided to OECD nations. Colombia and Lithuania later joined the grouping.

In 2021, Switzerland interpreted that Colombia and Lithuania’s OECD membership meant a 5% rate for dividends would apply to its tax treaty with India under the MFN clause, rather than the 10% outlined in the agreement.

Meanwhile, the Ministry of External Affairs (MEA) said the double taxation treaty may require a “renegotiation” with Switzerland in view of India’s trade pact with the member states of the European Free Trade Association (EFTA).

India and the EFTA member states of Norway, Switzerland, Iceland and Liechtenstein sealed a free trade deal in March. Under it, the four European countries are looking to invest $100 billion in India over the next 15 years. Read more at: Click Here

2. UAE to impose 15% minimum top-up tax on large multinationals from January

• DMTT is part of the OECD’s global minimum corporate tax agreement which has 136 signatories
• UAE’s finance ministry said it is also considering introducing several corporate tax incentives

The UAE will impose a 15 percent minimum top-up tax on large multinational companies starting in January, according to the country’s Finance Ministry.

This move is part of the UAE’s strategy to increase non-oil revenue and align with global tax reforms.

The Domestic Minimum Top-up Tax is part of the OECD’s global minimum corporate tax agreement, which has been signed by 136 countries, including the UAE.

The initiative aims to ensure that large corporations pay a minimum tax rate of 15 percent and address tax avoidance practices.

Under amendments to the corporate tax law, the DMTT will apply to companies with consolidated global revenues of €750 million ($793.5 million) or more in at least two out of the four financial years leading up to the tax’s implementation.

The UAE’s Finance Ministry also revealed that it is considering additional corporate tax incentives, including one focused on research and development that would apply to tax periods starting in 2026. This expenditure-based incentive could provide a refundable tax credit of 30 percent to 50 percent, depending on the size and revenue of the company.

The ministry is also exploring a refundable tax credit for high-value employment activities, which would be offered to companies based on eligible employee income costs. This incentive could come into effect as early as Jan. 1, 2025.

• Read more at: Click Here

• Knowledge Bucket for NRI’s

1. The Mumbai ITAT ruled in favor of a taxpayer who received a ₹3 crore gift from her NRI son. The I-T department questioned the gift’s legitimacy, alleging a circular trading transaction, but the tribunal upheld the gift’s validity due to the son’s proven financial capacity and dismissed the circular trading claim.

• NRIs can invest in Indian stocks through portfolio investment scheme and non-PIS accounts.

• NRIs must open a designated PIS account with a bank approved by the Reserve Bank of India. The account needs to be linked to a demat account where shares are held electronically. NRIs can invest on a repatriation basis that allows funds to be transferred abroad or on a non-repatriation basis where they remain within India.

• NRIs can opt for a Non-PIS NRO trading account, which offers more flexibility as it does not require adherence to the same reporting rules as PIS accounts. This option allows NRIs to trade without needing portfolio management services (PMS), making it easier for those who wish to manage their investments independently.

• Do you know ??

1. Form 3CEFA (Application for Opting for Safe Harbour) are now available for filing on the e-filing portal. Please refer notification by CBDT vide notification no 124/2024

• The due date for filing returns under section 139(1) of the Income Tax Act, 1961 has been extended from 30th November 2024 to 15th December 2024 for below classes of taxpayers referred to in clause (aa) of Explanation 2 to sub-section (1) of section 139 of the Act. As per clause (aa) Explanation 2 to Section 139(1) of Income Tax Act, 1961:

(aa) In the case of an assessee, including the partners of the firm or the spouse of such partner (if the provisions of Section 5A applies to such spouse), being such assessee, who is required to furnish a report referred to in Section 92E, the 30th day of November of the assessment year; Refer CBDT Circular No. 18/2024 dated 30th November 2024.

• Advance tax is income tax paid in instalments rather than a lump sum. Taxpayers with liabilities over ₹10,000 must pay by deadlines to avoid penalties.

•    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.)

To subscribe us / Feedback: Email us cslalitrajput@gmail.com  & caheergajjar@gmail.com Contact numbers: +91 9625483520

Newsletter

Weekly Taxation

16.12.2024 – Vol. 165*

  _______________________Thank You_____________________