New Income Tax Return Forms ITR 1, 2 and 4S Simplified and Due Date Extended to 31-08-2015

The Ministry of Finance has issued a press release dated 31.05.2015 stating that Income Tax Return Forms ITR 1, 2 and 4S have been simplified for convenience of the tax payers. It is also stated that as the software for these forms is under preparation and are likely to be available for e-filing by 3rd week of June 2015, the time limit for filing these returns is also proposed to be extended up to 31st August, 2015 (31.08.2015). A separate notification will be issued in this regard.

A New Form ITR 2A Proposed which can be Filed by an Individual or HUF who does not have Capital Gains, Income from Business/Profession or Foreign 

Asset/Foreign Income; In Form ITR 2 and the New Form ITR 2A, the Main Form 

will not Contain more than 3 Pages, and other Information will be Captured in the Schedules which will be Required to be filled only if applicable;

As the Software for these Forms is under Preparation, they are likely to be available for e-filing by 3^rdweek of june 2015;Time Limit for Filing these Returns is also Proposed to be Extended up to;

Only  Passport Number, if available, would be required to be given in forms Itr-2 and itr-2A. Details of Foreign Trips or Expenditure thereon are not required to be Furnished

Forms ITR 1, 2 and 4S for Assessment Year 2015-16 were notified on 15^th April 2015 (15.04.2015). In view of various representations, it was announced that these ITR forms will be reviewed. Having considered the responses received from various stakeholders, these forms are proposed to be simplified in the following manner for the convenience of the taxpayers:-

1) Individuals having exempt income without any ceiling (other than agricultural income exceeding Rs. 5,000) can now file Form ITR 1 (Sahaj). Similar simplification is also proposed for individuals/HUF in respect of Form ITR 4S (Sugam).

2) At present individuals/HUFs having income from more than one house property and capital gains are required to file Form ITR-2. It is, however, noticed that majority of individuals/HUFs who file Form ITR-2 do not have capital gains. With a view to provide for a simplified form for these individuals/HUFs, a new Form ITR 2A is proposed which can be filed by an individual or HUF who does not have capital gains, income from business/profession or foreign asset/foreign income.

3) In lieu of foreign travel details, it is now proposed that only Passport Number, if available, would be required to be given in Forms ITR-2 and ITR-2A. Details of foreign trips or expenditure thereon are not required to be furnished.

4) As regards bank account details in all these forms, only the IFS code, account number of all the current/savings account which are held at any time during the previous year will be required to be filled-up. The balance in accounts will not be required to be furnished. Details of dormant accounts which are not operational during the last three years are not required to be furnished.

5) An individual who is not an Indian citizen and is in India on a business, employment or student visa (expatriate), would not mandatorily be required to report the foreign assets acquired by him during the previous years in which he was non-resident if no income is derived from such assets during the relevant previous year.

6) As a measure of simplification, it has been endeavoured to ensure that in Form ITR 2 and the new Form ITR 2A, the main form will not contain more than 3 pages, and other information will be captured in the Schedules which will be required to be filled only if applicable.

As the software for these forms is under preparation, they are likely to be available for e-filing by 3^rd week of June 2015. Accordingly, the time limit for filing these returns is also proposed to be extended up to 31^st August, 2015. A separate notification will be issued in this regard.



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Income tax returns filed after due date cannot be revised

What happens if a tax return is filed late?

A belated tax return for a particular financial year (FY) can be filed within two years from the end of the relevant FY under section 139(4) of the Income-tax Act, 1961. However, a belated tax return has the below outlined shortcomings:

Revision of tax return is not allowed: A belated tax return cannot be revised. The option of revising a tax return is available if the original tax return is filed with the tax department within the specified due date. In a situation where you intend to claim a foreign tax credit/relief under the double tax avoidance agreement based on a foreign tax return subsequent to filing the India tax return or identify any omission or misstatement in the original tax return filed, you can revise the tax return. This revision is possible only if the original tax return is filed within the due date.

Waive the right to carry forward losses incurred during the FY: If the tax return is not filed by the due date, the losses (except for specified losses) incurred in an FY cannot be carried forward to subsequent FYs to be offset against the corresponding income streams.

Interest: In case taxes have not been paid entirely before the due date, there will be an additional interest on account of delay in payment of taxes and subsequent delay in filing the tax return.

Penalty: Please note that for not filing tax return, in addition to the above limitations, a penalty of Rs.5,000 may be levied at the discretion of the tax officer.

How much house rent allowance (HRA) is exempt from income tax?

An employee can claim an exemption as per the provisions of the section 10(13A) read with rule 2A in respect of the HRA received from her employer. The exemption can be claimed only if an employee receives the HRA and stays in a rented house, which is not owned by her and actually pays rent for such a house.

The quantum of HRA exemption shall be restricted to the minimum of the following:

• Actual HRA received for the period the house was occupied, or

• Actual rent exceeds 10% of salary for the relevant period, or

• 50% of salary if you live in a metro city (i.e., Delhi, Mumbai, Chennai and Kolkata), or 40% of your salary if you live in a non-metro city.

Salary for above purpose means basic salary, which includes dearness allowance, if the terms of employment so provide, but excludes all other allowances.

An individual who does not receive HRA as part of salary and is staying in a rented apartment can claim the deduction in respect of rental payments as per the specified formula of section 80GG and subject to the conditions specified therein.

Source :Mint

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Modification in the Syllabus of Intermediate (IPC) Paper 5: Advanced Accounting and applicability of the same for November, 2015 Examination and onwards

The topic of “Financial Reporting of Electricity Companies” would be excluded from the syllabus of Intermediate (IPC) Paper 5 : Advanced Accounting and the same would not be applicable from November, 2015 Examination and onwards.

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Modification in the Syllabus of Final Paper 1: Financial Reporting and applicability of the same for the forthcoming CA Examinations

The topic of “Overview of International Accounting Standards (IAS) / International Financial Reporting Standards (IFRS), Interpretations by International Financial Reporting Interpretation Committee (IFRIC), Significant differences vis-a-vis Indian Accounting Standards; Understanding of US GAAPs, Applications of IFRS and US” would be excluded from the syllabus of Final Paper 1 : Financial Reporting and the same would not be applicable from November, 2015 Examination.

Further, the topic of “Introduction of Indian Accounting Standards (Ind AS); Comparative study of ASs vis-a-vis Ind ASs; Carve outs/ins in Ind ASs vis-à-vis International Financial Reporting Standards (IFRSs)” would be included in the syllabus of Final Paper 1 : Financial Reporting and the same would be applicable from May, 2016 Examination.

ICAI.


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CA IPCC MAy 2015 Question Paper

• Paper – 1 : Accounting
• Paper – 2 : Business Laws, Ethics and Communication
• Paper – 3 : Cost Accounting and Financial Management
• Paper – 4 : Taxation
• Paper – 5 : Advanced Accounting
• Paper – 6 : Auditing and Assurance
• Paper – 7 : Information Technology and Strategic Management

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Job vacancy for Fresher in A leading Private Sector Bank.

We are currently looking for individuals to join a A leading Private Sector Bank.

1) Credit Analyst - Wholesale Business Banking SME

Desired Candidate should have 1 to 2 years / CA Fresher can also apply.

Location: Hyderabad / Bubaneshwar / Chennai

Salary: As per the industry Standard.

Required Qualification : CA

2) Credit Analyst - Wholesale Business Banking SME

Desired Candidate should have 1 to 2 years / CA Fresher can also apply.

Location: Hyderabad

Salary: As per the industry Standard.

Required Qualification : CA

Interested candidates can send across their resumes on cachantelle@gmail.com 
and connect with us on 9833356586

Please give the studycafe reference while sending CV or Calling.

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TDS on premature PF withdrawal may go

The Finance Ministry is reconsidering its Budget provision to tax premature provident fund (PF) withdrawals of Rs. 30,000 or more, even as the Finance Act of 2015 has been notified and deduction of tax at source from PF accounts settled before five years of service comes into force on JUNE 1. 

"The government is mulling two options to hold back the implementation of this tax, after it was pointed out that it would be unfair to tax retirement savings of people whose income is less than Rs. 2.5 Lakh, " said a senior official. The finance ministry may issu a directive to put the implementation of this clause in the Finance Act in abeyance or raise the Rs. 30,000 trigger for tax deductions from PF accounts. (HT Mint)

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CPC (TDS)'s provision for "Correction of Potential Errors" in Original TDS statements before Computation of Final Defaults

Date of communication : 24/05/2015 

Dear Deductor (TAN - XXXXXXXXXX), 

As you may be aware, Centralized Processing Cell (TDS) intimates you of possible PAN Errors and Short Payment Defaults, through an Intermediate Communication, during processing of Original Quarterly TDS Statements. This change was incorporated in processing of TDS Statements, in view of feedbacks received from deductors, to avoid defaults that may arise due to inadvertent data entry errors.The central point in the new process is identifying errors in challan/ PANs and facilitating their corrections before CPC (TDS) computes defaults in TDS statements. Following are the salient features of Intermediate Communication:

What is new?

• Step 1: CPC (TDS) will first process Original TDS Statements till the stage of 26AS generation for deductees reported.
  
• Step 2: Short Payments and PAN Errors will be identified in the preliminary check of the Original statements.
  
• Step 3: The statements will be placed "On Hold" for further processing and an opportunity will be provided to correct potential defaults of Short Payment and PAN Error
  
• When the statement is placed on Hold, CPC (TDS) will intimate you through following means:
  
  
  • e-mail at the Registered e-mail address at TRACES
  • SMS at Registered Mobile Number with TRACES
  • Message will be delivered to the Deductor's Inbox in TRACES
  
  
• The above correction needs to be carried out by using Online Correction feature at TRACES after 24 hours of the receipt of the Intermediate Communication and must be availed within 7 days of receipt of such communication.
  

What are the advantages:

• You would have preliminary information of potential Short Payments and PAN Errors, before the Original Statement is completely processed for Defaults and Intimations are generated.
  
• Correction of above defaults using Online Correction can be submitted before final processing of statements.
  
• Above action will facilitate avoidance of multiple Correction Statement filing later, after the defaults are identified CPC (TDS) and Intimations have been sent.
  

What actions to be taken:

• Please take note of the Intermediate communication from CPC (TDS) and submit Online Correction for potential defaults in TDS statement within the stipulated time frame.
  
• Only "Online Correction" facility can be used for correction of above Short Payments and PANs.
  
  To avail the facility, you are requested to Login to TRACES and navigate to Defaults tab to locate Request for Correction from the drop-down menu. For any assistance, please refer to the e-Tutorial available on TRACES.
  
  Please note that Digital Signature will be required to avail the benefit of complete correction features, including PAN Corrections.
  
• PAN Verification facility on TRACES can be used for verifying the deductees. You are requested to navigate to Statement/ Payment to locate PAN Verification in the menu to download the file.
  
• You can make use of the "Consolidated TAN - PAN File" that includes all the valid PANs attached with the respective TANs. To avail the facility, please navigate to Dashboard to locate Consolidated TAN - PAN File.
  
• The action requires to be completed after 24 hours and within 7 days of Intermediate communication from CPC (TDS).
  

It is hoped that the deductors will avail of the time window to correct errors, if any. CPC (TDS) is committed to provide best possible services to you.


CPC (TDS) TEAM Notes:

• - Please maintain updated email address and Contact Number on TRACES to receive regular periodic updates and guidelines from TRACES.
• - Please refer to our FAQs and e-tutorials for detailed screen-driven assistance, before seeking further help.

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Analysing the Judgement of Hon’ble Bombay HC holding meal vouchers as ‘Goods’ & Implications

Recently the Hon’ble High Court of Bombay have pronounced an order which is a land mark judgment for Indian E-commerce Industry specifically and including Coupon / voucher sub-industry considering the vacuum of judicial pronouncements on this aspect. The matter relates to CWP No. 5653 of 2010 & 7503 of 2013 decided on 20^th March, 2015 in case of M/s Sodexo SVC India Private Limited vs. The State of Maharasthra & others in Hon’ble Bombay HC where the basic issue required to be addressed by the court was,  

Facts of the Case – The Arrangement

·         M/s Sodexo SVC India Private Limited (hereinafter referred to as ‘Petitioner’ / ‘Sodexo’) is engaged in conducting a business of providing pre­printed Sodexo Meal   Vouchers (“Vouchers"). Sodexo  enters  into  a  contract  with  its  customers  for  issuing  the  said vouchers (Say Rs 100/- face value). The  customers  in  turn  distribute  the  said vouchers  to  their  employees  who  are  the  actual  users  of  the  said vouchers. It  is  stated  that  Sodexo has  contracts  with various  affiliates  such  as  restaurants,  departmental  stores,  shops,  etc. Under  the  affiliate  contracts,  the  affiliates  are  required  to  provide  food and  other  items  on  presentation  of  the  said  vouchers  by  the  users. The affiliates  are  bound  to  honour  vouchers  once  presented  by  the  users. The  affiliates  after  receiving  the  said  vouchers,  present  the  same  to  Sodexo. On   receipt   of   the   vouchers,   Sodexo reimburses the affiliates after deducting service charges (say Rs 15/-). 

·         To operate such a model of paper based voucher, Sodexo had obtained  certificate  of  authorization  from  the  Reserve Bank  of  India  under  Section  7  of  the  Payment  and  Settlement  Systems Act, 2007 to  operate  a  payment system  for  issue  of  meal  and  gift  vouchers  in  the  form  of  'paper  based vouchers'  and  'smart  meal  cards'  with  effect  from  25th  June  2009.

The Issues

·         Whether  the  Sodexo  Meal  Vouchers  are  ‘goods’  for  the purposes  of  levy  of  Octroi  and  LBT  ?

·         Whether  a  Municipal  Corporation constituted  under the  Maharashtra  Municipal  Corporations  Act,  1949  is entitled  to  levy  and/or  collect  Octroi  or  Local  Body Tax  (LBT)  on  Sodexo  Meal  Vouchers  in  accordance with  the  provisions  of  the  Maharashtra  Municipal Corporations   Act,1949 and the Rules framed thereunder?

Petitioner’s Contention

·         The said vouchers  are nothing but  payment  instructions  or  payment  instruments  issued  under a  payment  system  operated  under  the  said  Act  of  2007  as  per  the authorization  received  from  the  Reserve  Bank  of  India.

·         Under  both  the  Octroi  Rules  and  the  LBT  Rules,  the  taxes  can  be collected  on  the  goods. Incidentally, since the octroi and LBT legislation does not throw light on definition of ‘Goods’ inference can be drawn on the other provisions of the Act i.e. Octroi  or  LBT  can  be  levied  on  the  consumption, use  or  sale  of  goods  within  the  limits  of  Municipal  Corporations. The  said  vouchers  are  a  medium  to  acquire  any  article  for consumption,  use  or  sale  and  the  said  vouchers  are  not  capable  of consumption,  use  or  sale  by  themselves. Simply to say that the said vouchers are only medium of payment.

·         Vouchers are similar to ‘Lottery tickets’ which held not be ‘goods’ by relying on Sunrise Associates  v.  NCT  of  Delhi (2006)5 SCC 603

·         Vouchers are similar to ‘papers and files in possession of a legal practioner’ by relying on R.D.Saxena  v.  Balram  Prasad  Sharma (2000)7 SCC 264

·         He placed reliance on State Bank  of  India v.  Neela  Ashok  Naik  and  Another AIR 2000 Bom. (151) wherein fixed deposit receipts were held to be goods on their characteristic of being capable to be sold, purchased or consumed, but the said vouchers do not possess any such charactersictic.

·         He also relied on other judgements viz Bharat  Sanchar  Nigam  Ltd.  and  Another  v.  Union  of  India  and  Others (2006)3 SCC 1 & TATA  Consultancy  Services  v. State  of  Andhra  Pradesh (2005)1 SCC 308 for laying down the characteristics of ‘goods’ and justifying as to said vouchers do not stand as ‘goods’ within the prescribed characteristics.

Revenue’s Contention

·         Revenue simply relied upon on the thesis that said vouchers were capable  of  use and/or  consumption  as  well  as  sale  within  the  limits  of  the  Municipal Corporations.

·         In support of above, revenue  relied  upon  a  decision  of  the  Division  Bench  in  the  case of  Maharashtra  Chamber  of  Commerce  Industries  &  Agriculture  &  Others v.  State  of  Maharashtra ,  through  its  Secretary  &  Others 2004(1) Bom.C.R. 137  and  Small  Scale Interpreneurs  Association  and  Others  v.  State  of  Maharashtra  and  Others 2007(3) Bom.C.R. 496.

Key Judicial Lay-downs

·         The   said   vouchers   are   capable   of   being   sold   by   the Petitioner  after  they  are  brought  into  the  limits  of  the  City. In  fact, going  by  the  scheme  narrated  above,  the  said  vouchers  are  sold  by  the petitioner  to  its  customers  for  value.

·         Relying on Tata Consultancy services (supra), court pointed that  (Para 81)

'Goods'  may  be  a  tangible  property  or  an intangible  one.  It  would  become  goods  provided  it has  the  attributes  thereof  having  regard  to  (a)  its utility;  (b)  capable  of  being  bought  and  sold;  and (c)  capable  of  transmitted,  transferred,  delivered, stored   and   possessed.

Going  by  the  test  laid  down  in  Paragraph  81  of  the  said decision  of  the  Apex  Court  in  the  case  of  TATA  Consultancy  Services,  the said  vouchers  have  its  utility,  the  same  are  capable  of  being  bought  or sold  and  the  same  are  capable  of  being  delivered,  stored  and  possessed. Hence said vouchers are in the nature of ‘goods’.

·         Citing the examples of several instances viz lottery tickets, Fixed deposit receipts and electromagnetic waves held that such printed paper vouchers are in the nature of ‘goods’ and are not in the nature of actionable claim. The said voucher cannot be equated with lottery ticket or electromagnetic waves.

How this Judgement opens up Pandora Box?

·         The judgment was limited only to determine the applicability of LBT and/or Octroi in respect of sale of Sodexo Meal Vouchers within the local municipality. Such judgment, though has left open the issue of whether such meal vouchers would qualify as 'goods' for other Acts as well.

·         Is it that the test laid out in TCS’s (Supra) and other cases referred to above conclusive to identify whether a particular item to be goods?

·         If such vouchers are held to be goods, will the redemption of such voucher tantamount to barter transaction?

·         Can this judgement have implications on coupons, gift cards and gift vouchers remains a point to ponder?

·         A lot many issues which arise because of this judgment remains unanswered and requires due consideration

·         Paper based voucher is similar to cases of cash cards used by several malls and retail outlets which create virtual currency on the card against which items can be purchased from retail outlets, does this sought of virtual currency also qualify to be ‘goods’?.

Before Parting..

The decision of Hon’ble HC in the above case can lead to wide implications and the ones which might to un conductive to the trade and potentially lead to double taxation with ancillary implications. Industry though shall push the caution button to ensure that the mitigation strategy shall be duly implemented. Further, one may absurdly even see advance payment (as similar to said voucher) as ‘Goods’ by applying this ratio laid down! 

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Circular with regard to malicious mails. - (23-05-2015)

Circular No. 1-CA (7)/165/2015

Dated 23rd May,2015

The Council of the Institute of Chartered Accountants of India (ICAI) at its 342nd meeting held on 5th and 6th May, 2015 noted the judgment dated 24th March, 2015 delivered by the Hon’ble Supreme Court of India in case of Shreya Singhal vs Union of India, whereby Section 66 A of the Information Technology Act, 2000 has been struck down.

The Council at its above meeting further noted that recently certain emails having false and misleading contents with a malicious intent are being circulated in a derogatory manner for bringing down the image of the Institute.

In the light of the above judgment of the Hon’ble Supreme Court and the facts of circulation of malicious emails, the Council in its above meeting decided as under:

• That the Circular No. 1-CA (7)/165/2014 dated 17th April, 2014 published in May 2014 issue of the Chartered Accountant Journal and hosted on the website of the Institute containing the provisions of section 66 A of the Information Technology Act, 2000 stands withdrawn.
• That while the members of the Institute are free to express their views in respect of the affairs of the Institute by any means but while doing so members are advised to exercise reasonable restraint so as to avoid defamation of any person or the Institute in order to maintain decency and morality in the interest of the profession or the Institute.
• That the members are accordingly hereby advised to desist in engaging themselves from sending malicious emails against the Institute or its members, which may bring disrepute to the profession or the Institute.
• That in case any member is found engaged in sending malicious emails against the Institute, its members or otherwise spreading false, misleading or defamatory statements, may invite action under the applicable provisions of the Chartered Accountants Act, 1949 and the rules framed there under.
• That besides above, in case any member is found engaged in sending such malicious emails, the action may also be initiated under any other law of the land as applicable.

All the members of the ICAI are hereby advised to take note of the above decision of the Council.

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Announcement - Zone Shifting of Candidates for 14th June - 2015 CPT. - (21-05-2015)

IMPORTANT ANNOUNCEMENT

May 21, 2015


Subject: Zone-shifting of candidates for 14th June - 2015 CPT


Due to paucity of accommodation in certain Zones opted by the candidates in the city of Chennai and Hyderabad some of the candidates have been allotted examinations centres in the zone other than the zone opted by them. In view of this, it is not possible to accede to the requests of the candidates for transfer to an examination centre in a particular zone of the city opted by them. 

While inconvenience caused in the matter is deeply regretted, we seek the cooperation from the examinees and other stakeholders in this regard. 

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Determination of point of taxation rule because of increase in service tax rate from 12.36% to 14%

On 19^th May 2015 Central Government has issued most awaited notification for change in effective rate of Service Tax from 12.36% to 14%. New rates will be applicable from 1st June, 2015 (Notification No. 14/2015-ST dated 19th May, 2015). 

Point of taxation involving change in effective rate of tax is governed by Rule 4 of the POT Rules, which provides for determination of Point of taxation when there is change in effective rate of tax as mentioned in the table below:

S. No.	In case a taxable service has been provided	Invoice has been issued	Payment received for the invoice	Point of taxation shall be	Applicable Rate
1.	BEFORE the change in effective rate of tax	AFTER the change in effective rate of tax	AFTER the change in effective rate of tax	Date of issuance of invoice or Date of receipt of payment, whichever is earlier	New Rate
2.		BEFORE the change in effective rate of tax	AFTER the change in effective rate of tax	Date of issuance of invoice	Old Rate
3.		AFTER the change in effective rate of tax	BEFORE the change in effective rate of tax	Date of receipt of payment	Old Rate
4.	AFTER the change in effective rate of tax	BEFORE the change in effective rate of tax	AFTER the change in effective rate of tax	Date of receipt of payment	New Rate
5.		BEFORE the change in effective rate of tax	BEFORE the change in effective rate of tax	Date of issuance of invoice or Date of receipt of payment, whichever is earlier	Old Rate
6.		AFTER the change in effective rate of tax	BEFORE the change in effective rate of tax	Date of issuance of invoice	New Rate

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