Rule 12 of Income Tax Rules 1962 vide Notification No. 24/2014 dated 01.04.2014

PART III

ASSESSMENT PROCEDURE ¹

²[Return of income and return of fringe benefits.

12. (1) The return of income required to be furnished under sub-section (1) or sub-section (3) or sub-section (4A) or sub-section (4B) or sub-section (4C) or sub-section (4D) of section 139 or clause (i) of sub-section (1) of section 142 or sub-section (1) of section 148 or section 153A ³[***] relating to the assessment year commencing ⁴[on the 1st day of April, ⁵[2014]] shall,—

6[(a)

in the case of a person being an individual where the total income includes income chargeable to income-tax, under the head,—

(i)		"Salaries" or income in the nature of family pension as defined in the Explanation to clause (iia) of section 57; or
(ii)		"Income from house property", where assessee does not own more than one house property and does not have any brought forward loss under the head; or
(iii)		"Income from other sources", except winnings from lottery or income from race horses, 7[and does not have any loss under the head]

		be in Form 8[SAHAJ] (ITR-1) and be verified in the manner indicated therein:]
		9 [Provided that the provisions of this clause shall not apply to a person who,—

(I)

is a resident, other than not ordinarily resident in India within the meaning of sub-section (6) of section 6 and has,—

(i)		assets (including financial interest in any entity) located outside India; or
(ii)		signing authority in any account located outside India;

(II)		has claimed any relief of tax under section 90 or 90A or deduction of tax under section 91; or
(III)		has income not chargeable to tax, exceeding five thousand rupees. ]

(b)		in the case of a person being an individual [not being an individual to whom clause (a) applies] or a Hindu undivided family where the total income does not include any income chargeable to income-tax under the head "Profits or gains of business or profession", be in Form No. ITR-2 and be verified in the manner indicated therein;
(c)		in the case of a person being an individual or a Hindu undivided family who is a partner in a firm and where income chargeable to income-tax under the head "Profits or gains of business or profession" does not include any income except the income by way of any interest, salary, bonus, commission or remuneration, by whatever name called, due to, or received by him from such firm, be in Form No. ITR-3 and be verified in the manner indicated therein;
10 [ (ca)		in the case of a person being an individual or a Hindu undivided family deriving business income and such income is computed in accordance with special provisions referred to in section 44AD and section 44AE of the Act for computation of business income, be in Form SUGAM (ITR-4S) and be verified in the manner indicated therein: ]
		11 [Provided that the provisions of this clause shall not apply to a person who,—

(I)

is a resident, other than not ordinarily resident in India within the meaning of sub-section (6) of section 6 and has,—

(i)		assets (including financial interest in any entity) located outside India; or
(ii)		signing authority in any account located outside India;

(II)		has claimed any relief of tax under section 90 or 90A or deduction of tax under section 91; or
(III)		has income not chargeable to tax, exceeding five thousand rupees. ]

(d)		in the case of a person being an individual or a Hindu undivided family other than the individual or Hindu undivided family referred to in clause (a) or clause (b) or clause (c) 12[or clause (ca)] and deriving income from a proprietory business or profession, be in Form No. ITR-4 and be verified in the manner indicated therein;
(e)		in the case of a person not being an individual or a Hindu undivided family or a company or a person to which clause (g) applies, be in Form No. ITR-5 and be verified in the manner indicated therein;
(f)		in the case of a company not being a company to which clause (g) applies, be in Form No. ITR-6 and be verified in the manner indicated therein;
(g)		in the case of a person including a company whether or not registered under section 25 of the Companies Act, 1956 (1 of 1956), required to file a return under sub-section (4A) or sub-section (4B) or sub-section (4C) or sub-section (4D) of section 139, be in Form No. ITR-7 and be verified in the manner indicated therein;
(h)		13 [***]

¹⁴ [ (2) The return of income required to be furnished in Form SAHAJ (ITR-1) or Form No. ITR-2 or Form No. ITR-3 or Form SUGAM (ITR-4S) or Form No. ITR-4 or Form No. ITR-5 or Form No. ITR-6 ^14a[or Form No. ITR-7] shall not be accompanied by a statement showing the computation of the tax payable on the basis of the return, or proof of the tax, if any, claimed to have been deducted or collected at source or the advance tax or tax on self-assessment, if any, claimed to have been paid or any document or copy of any account or form or report of audit required to be attached with the return of income under any of the provisions of the Act: ]

¹⁵ [Provided that where an assessee is required to furnish a report of audit specified under sub-clause (iv), (v), (vi) or (via) of clause (23C) of section 10, section 10A, clause (b) of sub-section (1) of section 12A, section 44AB, section 80-IA, section 80-IB, section 80-IC, section 80-ID, section 80JJAA, section 80LA, section 92E or section 115JB or to give a notice under clause (a) of sub-section (2) of section 11 of the Act, he shall furnish the same electronically.]

(3) The return of income ¹⁶[***] referred to in sub-rule (1) may be furnished in any of the following manners, namely:—

(i)		furnishing the return in a paper form;
(ii)		furnishing the return electronically under digital signature;
(iii)		transmitting the data in the return electronically and thereafter submitting the verification of the return in Form ITR-V17;
(iv)		furnishing a bar-coded return in a paper form:

Provided that—

18 [ (a)		19 [ a person, other than a company and a person required to furnish the return in Form ITR-7 ] if his or its total income, or the total income in respect of which he is or it is assessable under the Act during the previous year, exceeds 20[five lakh rupees], shall furnish the return for the assessment year 21[2013-14] and subsequent assessment years in the manner specified in clause (ii) or clause (iii);
(aa)		an individual or a Hindu undivided family, being a resident, 22 [ other than not ordinarily resident in India within the meaning of sub-section (6) of section 6 ] having assets (including financial interest in any entity) located outside India or signing authority in any account located outside India and required to furnish the return in Form ITR-2 or ITR-3 or ITR-4, as the case may be, shall furnish the return for assessment year 2012-13 and subsequent assessment years in the manner specified in clause (ii) or clause (iii);]
23 [ 24 [ (aaa)]		a firm required to furnish the return in Form ITR-5 or an individual or Hindu Undivided Family (HUF) required to furnish the return in Form ITR-4 and to whom provisions of section 44AB are applicable, shall furnish the return for assessment year 2011-12 and subsequent assessment years in the manner specified in clause (ii);]
25		[ (aab) a person claiming any relief of tax under section 90 or 90A or deduction of tax under section 91 of the Act, other than a person to whom clause (aaa) or clause (ab) is applicable, shall furnish the return for assessment year 2013-14 and subsequent assessment years in the manner specified in clause (ii) or clause (iii);] “(aac) a person required to furnish the return in Form ITR-5, other than a firm to which clause (aaa) is applicable, shall furnish the return for the assessment year 2014-15 and subsequent assessment years in the manner specified in clause (ii) or clause (iii);”;
25a		[ Provided further that a person who is required to furnish any report of audit referred to in proviso to sub-rule (2) electronically, other than a person to whom clause (aaa) or clause (ab) of the first proviso is applicable, shall furnish the return, in Form as applicable to him, in the manner specified in clause (ii) or clause (iii). ]
26[(ab)		a company required to furnish the return in Form ITR-6 shall furnish the return for assessment year 2010-11 and subsequent assessment years in the manner specified in clause (ii);]
(b)		a person required to furnish the return in Form ITR-7 shall furnish the return for assessment year 2014-15 and subsequent assessment years,- (A) in case it is furnished under sub-section (4B) of section 139, in the manner specified in clause (ii); (B) in other cases, in the manner specified in clause (i) or clause (ii) or clause (iii):”;

(4) The Director-General of Income-tax (Systems) shall specify the procedures, formats and standards for ensuring secure capture and transmission of data and shall also be responsible for evolving and implementing appropriate security, archival and retrieval policies in relation to furnishing the returns in the manners specified in clauses (ii), (iii) and (iv) of sub-rule (3). ²⁸[and the report of audit or notice in the manner specified in proviso to sub-rule (2)]

(5) Where a return of income ²⁹[***] relates to the assessment year commencing on the 1st day of April, ³⁰[2013] or any earlier assessment year, it shall be furnished in the appropriate form as applicable in that assessment year.]

3.  In the said rules, in Appendix-II, for “Forms SAHAJ (ITR-1), ITR-2, SUGAM (ITR-4S) and ITR-V” the “Forms SAHAJ (ITR-1), ITR-2, SUGAM (ITR-4S) and  ITR-V” shall be respectively substituted as follows:

[Notification No.  24/2014/ F.No.142/2/2014-TPL]

(Gaurav Kanaujia) Director to the Government of India

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All Partnership Firms to file ITR 5 Form Electronically w.e.f. A.Y. 2014-15 as per rule 12

Partnership Firms to whom provisions of section 44AB are applicable were required to furnish the return of income for assessment year 2011-12 and subsequent assessment years electronically under digital signature but the Partnership  firms to whom Provisions of section 44AB were not applicable they were allowed to furnish the ITR-5 in any of the following mode :-

(i)           Furnishing the return in a paper form;

(ii)          Furnishing the return electronically under digital signature;

(iii)         Transmitting the data in the return electronically and thereafter submitting the verification of the return in Form ITR-V;

 Rule 12 of Income Tax Rules1962 vide Notification No. 24/2014 dated01.04.2014 has been amended and therefore Return Filing Provisions as applicable from A.Y. 2014-15 in respect of ITR-5  are as follows :-

1.      Partnership Firm who are required to get Audited Under Section 44AB can file ITR 5:-

(i) return only electronically under digital signature.

2.      Partnership Firm who are not required to get Audited Under Section 44AB can sumit the return in any of the following mode :-

(i)          furnishing the return electronically under digital signature;

(ii)         transmitting the data in the return electronically and thereafter submitting theverification of the return in Form ITR-V;

Revised Rule 12 is as follows :-

(3) The return of income referred to in sub-rule (1) may be furnished in any of the following manners, namely:—

(i)           furnishing the return in a paper form;

(ii)          furnishing the return electronically under digital signature;

(iii)         transmitting the data in the return electronically and thereafter submitting theverification of the return in Form ITR-V;

(iv)         furnishing a bar-coded return in a paper form:

Provided that—

 (aaa)      a firm required to furnish the return in Form ITR-5 or an individual or Hindu Undivided Family (HUF) required to furnish the return in Form ITR-4 and to whom provisions of section 44AB are applicable, shall furnish the return for assessment year 2011-12 and subsequentassessment years in the manner specified in clause (ii);

 (aab) ………….

(aac) a person required to furnish the return in Form ITR-5, other than a firm to which clause (aaa) is applicable, shall furnish the return for the assessment year 2014-15 and subsequent assessment years in the manner specified in clause (ii) or clause (iii);

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Partners aren’t liable to pay tax on income which is exempt in hands of firm; CBDT clarifies

SECTION 10(2A) OF THE INCOME-TAX ACT, 1961 - FIRM - SHARE OF PROFITS TO PARTNER OF FIRM - CLARIFICATION ON INTERPRETATION OF PROVISIONS OF SECTION 10(2A) IN CASES WHERE INCOME OF FIRM IS EXEMPT

CIRCULAR NO. 8/2014 [F.NO.173/99/2013-ITA-I], DATED 31-3-2014

1. A reference has been received in the Board in connection with the interpretation of provisions of section 10(2A) of the Income tax Act, 1961 ('Act') seeking clarification as to what will be the amount exempt in the hands of the partners of a partnership firm in cases where the firm has claimed exemption/deduction under Chapter III or VI A of tire Act.

2. The matter has been examined. Sub section (2A) of section 10 was inserted by the Finance Act, 1992 w.e.f. 1-4-1993 due to a change in the scheme of taxation of partnership firms. Since assessment year 1993-94, a firm is assessed as such and is liable to pay tax on its total income. A partner is not liable to tax once again on his share in the said total income.

3. It is clarified that 'total income' of the firm for sub section (2A) of section 10 of the Act, as interpreted contextually, includes income which is exempt or deductible under various provisions of the Act. It is, therefore, further clarified that the income of a firm is to be taxed in the hands of the firm only and the same can under no circumstances be taxed in the hands of its partners. Accordingly, the entire profit credited to the partners' accounts in the firm would be exempt from tax in the hands of such partners, even if the income chargeable to tax becomes NIL in the hands of the firm on account of any exemption or deduction as per the provisions of the Act.

4. This may be brought to the notice of all concerned.

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Forms SAHAJ (ITR-1), ITR-2, SUGAM (ITR-4S) and ITR-V Released for A.Y 2014-15

Income tax department released Forms SAHAJ (ITR-1), ITR-2, SUGAM (ITR-4S) and  ITR-V for A.Y 2014-15 vide Notification No. 24/2014 dated 01.04.2014

To Download the Forms click on below mentioned link:- 

SAHAJ (ITR-1)
ITR-2
SUGAM (ITR-4S)
ITR-V

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Proposed DTC allows tax Audit by Company Secretaries and Cost Accountants also

Tax Audit under the Income Tax Act is currently allowed to be conducted only by the chartered accountant within the meaning of  the Chartered Accountants Act, 1949 and who holds a valid certificate of practice under sub-section (1) of section 6 of that Act but Proposed Direct Tax Code 2013 allows Tax Audit to be conducted not only by Chartered Accountants but also by Company Secretaries and Cost Accountants.

Clause 88 of the Proposed Direct Tax code prescribes who needs to get the book audited under the direct tax code 2013 and it further says that the same needs to be audited by an accountant. The Term accountant is been defined in Clause 320(2).

Lets read the provisions as per Clause 88 and Clause 320(2)

Direct Tax Code 2013

Audit of accounts and reporting of international transaction

88. (1) Every person, who is required to keep and maintain books of account under section 87 shall get his accounts for the financial year audited—

(a) where the person is carrying on one or more professions , the aggregate gross receipts of such profession or professions exceed twenty-five lakh rupees in the financial year;

(b) where the person is carrying on one or more businesses , the aggregate total turnover or gross receipts, as the case may be, of such business or businesses exceed one crore rupees in the financial year.

(2) The audit of the accounts referred to in sub-section (1) shall be carried out by anaccountant and the report of audit be obtained in the prescribed form duly signed and verified by such accountant and setting forth such particulars as may be prescribed.

(3) The person referred to in sub-section (1) shall furnish the report of audit referred to in subsection (2) to the assessing officer on or before the due date, in the manner as may be prescribed.

(4) The provisions of sub-section (1) shall not apply to the business where the income therefrom is determined under paragraph 1 of the Eleventh Schedule.

(5) A person shall be deemed to have complied with the provisions of sub-section (1), if the person—

(a) gets the accounts of his business audited as required by, or under, any other law for the time being in force, before the due date; and

(b) obtains by the due date the report of the audit as required under such other law and a further report by an accountant in the form prescribed under sub-section (2).

(6) A person referred to in sub-section (2) of section 87 shall furnish a report of the international transaction or the specified domestic transaction entered into during the financial year to the Transfer Pricing Officer and the Assessing Officer on or before the due date, in the manner as may be prescribed.

(7) The report referred in sub-section (6) shall be obtained from an accountant in such form duly signed and verified in such manner, as may be prescribed.

Meaning of Accountant as per Clause 320 (2) 

320. In this Code, unless the context otherwise requires —

(1) *******

(2) “accountant”means a chartered accountant within the meaning of the Chartered Accountants Act, 1949 and who holds a valid certificate of practice under sub-section (1) of section 6 of that Act, and shall include-

(i) a company secretary within the meaning of the Company Secretaries Act, 1980 ;

(ii) a cost accountant within the meaning of the Cost and Works Accountants Act, 1959 ; or

(iii) any person having such qualifications as the Board may prescribe, for the purposes specified in this behalf.

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Foreign Exchange Market

Meaning

The foreign exchange market (forex) is a global decentralized market for the trading of currencies. The main participants in this market are the larger international banks. Financial centres around the world function as anchors of trading between a wide range of multiple types of buyers and sellers around the clock, with the exception of weekends. The foreign exchange market determines the relative values of different currencies.

The spot foreign exchange (forex) market is the world's largest market, with over US$1 trillion traded per day. One derivative of this market is the forex futures market, which is only one one-hundredth the size. 

Hedging and Speculating

Hedging and speculating are the two primary ways in which forex derivatives are used. Hedgers use forex futures to reduce or eliminate risk by insulating themselves against any future price movements. Speculators, on the other hand, want to incur risk in order to make a profit.

All foreign exchange transaction made in India is being regulated either by RBI (Reserve Bank of India) or FEDAI (Foreign Exchange Dealers Association of India).

There are two types of Market

Inter bank / Wholesale Market: One bank deals with another bank. Exchange rate of inter- bank market is known as Inter- Bank Rate. Only banks can deals at interbank rate.

Retail Market: Bank deals with Customer.  Exchange rate of retail market is known as Merchant Rate. Customers can buy or sell currency only at merchant rate.

Bid rate and Ask Rate:

Bid rate is the rate at which bank buys left hand currency.

Ask Rate is the rate at which bank sells left hand currency.

Let’s have an Example

£1= $1.50/1.55

So, $1.50 is bid rate which is called buying rate.

$1.55 is ask rate which is called selling rate.

    We have to know that Bid rate is always smaller than Ask rate.

           

Advantages of Forex markets:

1. Minimal or no commissions - There are no clearing fees, no exchange fees, no government fees and no brokerage fees. 

2. Easy access – if you compare the money you need on the market in comparison with the amount needed for entering the stock, options or futures market, it’s a huge difference. The amount of capital is very low and it allows numerous types of people to easily enter the foreign exchange market. 

3. No middlemen – spot currency trading is decentralized and eliminates middlemen, allowing you to trade directly. 

4. Time and location flexibility – the market is open 24 hours each day, so you don’t have to match your schedule with the one of the market. It doesn’t require a full-time engagement and you can choose the hours that suit your best. Also, you can operate from any corner of the world, as long as you have an Internet connection.

5. Low transaction costs – the transaction cost, determined by the bid/ask spread, is usually less than 0.1%, and it can go even lower in the case of large dealers. 

6. A high liquidity market – the market is huge, so is extremely liquid. Around 1 trillion dollars are exchanged every day, according to the latest figures released by the Bank of International Settlements (BIS). That becomes an advantage, as you don’t have to struggle so much until you will find someone who wants to buy your currency or sell you one. You can’t get stuck and, by using features like stop lose, you will close your position automatically, while not even being in front of the computer. 

7. Leverage – with a little investment you can move large amounts of money. Leverage gives the trader the ability to make nice profits and keep risk capital to a minimum. 

8. No forced deadlines – no one and no rule is forcing you to close a position. You can stay open as long as you consider necessary. 

9. No fixed lot size requirements – your contract size it’s your decision and you are the only one who determines your own lot. 

10. Transparency - due to multi-day market movement, its size and the high number of participants, it is virtually impossible to market manipulation. 

Disadvantages of Forex Markets

1. Differences between retail and wholesale pricing – around two-thirds of the trades are made between dealers and large organizations such as hedge funds and banks. They trade at wholesale prices, while the investor trades at a retail price. Like this it can become a challenge to compete against bigger organization that start with a lower entry point and sell more profitably.

2. Risk of choosing an inexperienced broker – you can find on the internet many people who are targeting fraud so be careful when choosing the broker. 

3. Where there is a winner, there is also a looser – don’t expect necessarily to win lots of money. Remember that for someone to get rich, another has to lose money on the Forex market. 

4. Requires knowledge and time – Without completely knowing the market’s rules and without having patience, your investment might very well soon vanish. 

When you enter Forex market, you have to be fully aware of its advantages, but also disadvantages. Don’t count only on the benefits of this investment to think that you will succeed. Study, practice, improve your skills, keep an eye on all the news and factors that influence the market, and always stick to your established system.

This artice has been shared by Keshav Kumar. He can be reached at Keshabkc6@gmail.com

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Announcement reg. abstaining from sharing of Firm details intended for comparison of Firms. - (30-03-2014)

No. ICAI/ESB/2014/01

It has been brought to the notice of some members that certain entities are seeking details of the Chartered Accountants firms, for the purpose of making ranking of the various Firms through comparison of different parameters.

In this regard, Members are hereby informed that sharing of details of their Chartered Accountants firms in the aforesaid manner does not fall within the permitted categories , and would therefore be violative of Item 6 of Part-I of First Schedule to The Chartered Accountants Act, 1949 . Further, as it is known beforehand that the information regarding firms would be used for ranking purposes, the sharing of such details would tacitly result in claiming superiority of one firm over other, which is prohibited in terms of the Advertisement Guidelines of the ICAI under Item 7 of Part –I of First Schedule to The Chartered Accountants Act, 1949. Members are therefore advised to abstain from such sharing of details of their Chartered Accountants Firms. 

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Download TDS Justification Report Excel Generation Utility v2.0

Recently TRACES has updated Justification Report text file format and also Excel Generation Utility (v2.0) also to convert the same into readable Excel format. To Download the v2.0 Utility Click here.

Steps to Downlaod the Justification report and convert the Justification Report text file into excel:

• Loging to https://www.tdscpc.gov.in from your User id and password.

• Then Download the zip file from 'Requested Downloads' screen and save to your Computer or Laptop.

• Unzip the file using Winzip. Password to unzip is 'JR_<TAN>_<Form Type>_<Quarter>_<FY>', e.g., JR_DELAA1235A_24Q_Q3_2012-13. This will save the Justification Report as a text file.

• Download the macro utility for Justification Report from the above mentinoed link.

• Double-click the utility, excel sheet will open

• Click on 'Enable Content' in the warning message to enable macros

• Select the Justification Report text file and the folder to save the output excel file and click on button 'Generate TDS CPC Justification Report'

• The text file will be converted into excel spreadsheet and saved in the selected folder

• Open the Justification Report excel file from the folder in which it has been saved

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Service Tax Return for Oct-13 to March 14 is Available for Filing as well as Download.

Service Tax Return (ST-3) excel utility for the period of October 2013 to March 2014, i.e. second half of the financial year 2013-14 is now available in ACES for e-filing by the assesses in both offline and online version. 

The assesses can file return either online or use the offline utility by downloading the latest version.

Online filing of Service Tax return is mandatory for all registered service tax assesses. 

Service Tax
Excel Utilities	Last Updated	XML Schema	Last Updated
Download ST3 Return Excel Utility (For Filing ST-3 returns for the period upto Oct-Mar 2012)	18-01-2013	Download XML Schema for ST3 Return	06-04-2012
Download ST3 Return Excel Utility (For Filing ST-3 returns for the Quarter April-June 2012)	18-01-2013	Download XML Schema for ST3 Return	22-10-2012
Download ST3 Return Excel Utility (For Filing ST-3 returns for the Quarter Jul-Sep 2012)	29-04-2013	Download XML Schema for ST3 Return	29-04-2013
Download ST3 Return Excel Utility (V1.1) (For Filing ST-3 returns for Half Year Oct-Mar 2013 onwards)	31-03-2014	Download XML Schema for ST3 Return	26-08-2013

The Due date of filing the ST-3 return for the period 10/2013 to 03.2014 is 25th April, 2014. 

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