P S P & Co

30/03/2017

Kindly make note of the following changes in IT law that come into effect from 1-4-2017 -
(1) Limit for payment of expenses by cash (both, capital and revenue expenditure) reduced from Rs.20000 to Rs.10000 per day in aggregate per person. Capital expenses paid in cash beyond the said limit will not be taken into account for depreciation purposes. However, the cash payment limit for lorry fright etc. remains the same at Rs.35000.
(2) No person shall receive an amount of two lakh rupees or more, by cash (Sec. 269ST) —
(a) in aggregate from a person in a day; or
(b) in respect of a single transaction; or
(c) in respect of transactions relating to one event or occasion.
The penalty for violation of above is to be a sum equal to the amount of such receipt.
Examples for above -
👉 i) If one sells goods worth Rs. 300000 through three different bills of Rs.100000 each to one person and accepts *cash in single day* at different times then section 269ST(a) will get violated.
👉 ii) If one sells goods worth Rs. 300000 through *single bill* to another person and receives cash of Rs.150000 on day 1 and another Rs.150000 on day 2 then section 269ST(b) will get violated, since it pertains to single transaction.
👉 iii) If one accepts cash of Rs.180000 for *sales* and Rs.20000 for *freight charges*, then section 269ST(c) will get violated even if cash is accepted on different dates, since they pertain to a single sales event.
👉 iv) If one sells his car for Rs.300000 and receives the amount in cash, then penalty levied on him will be Rs.300000.
(2A) In view of the newly introduced above said penal provisions relating to cash sales, the existing provisions (in vogue from 1.6.2016) relating to collection of TCS @ 1% on cash sales exceeding Rs.2 lakhs (Rs.5 lakhs, in the case of jewellery) are deleted. Consequently, there is no need to collect TCS on cash sales exceeding Rs.2 lakhs. Straight away it will attract equal amount penalty now.
(3) For below Rs.2 crores turnover cases -
👉 For Non Cash Sales (through Digital, Online, cheque, Bank etc.) : Net Profit will be taken as 6% of Turnover/Gross Receipt.
👉 For Cash Sales : Net Profit will be taken as 8% of Turnover/Gross Receipt.
(4) Tax Exemption limit is Rs.2,50,000/- (same as earlier) -
👉 After that, upto Rs.5 lakh, Tax Rate is 5% (earlier it was 10%). Tax rebate of maximum Rs.2500 will be allowed, for total income upto Rs.3.50 lakhs.
👉 Individuals having total income exceeding Rs.50 lakhs but below Rs.1 crore, are to pay surcharge @ 10% of the tax. Those having total income exceeding Rs. 1 crore shall continue to pay surcharge @ 15%.
(5) Payment of Rent - Rs.50,000 per month by any Individual or HUF (not subject to Tax Audit requirements) - deduct TDS @ 5%.
(6) Capital Gain in respect of Land & Buildings -
– Periodicity for long term Capital Gain is reduced from 3 years to 2 years.
– Base year shifted from 01.04.1981 to 01.04.2001 for all assets including Immovable property.
(7) Corporate tax rate for the account year 2017-18 for companies with annual turnover upto Rs. 50 crores (in the account year 2015-16) is reduced to 25%. No change in firm tax rate of 30%.
(8) Donations made exceeding Rs.2000 will be not be eligible for deduction under section 80G, unless these are made using modes other than cash. Consequently, trusts accepting 80G donations may advise their donors to give donations exceeding Rs.2000 vide cheque / RTGS / digital modes.
(9) Sale of unquoted shares to be taxed at (deemed) fair value.
(10) In absence of PAN of the buyer of specified goods, the rate of TCS will be twice of the extent rate or 5%, whichever is higher.
(11) From financial year 2017-18, if Return is not filed within due date, late fee of Rs.5000 for delay up to 31st December, and Rs. 10000 thereafter.
(12) Every person who is eligible to obtain AADHAR number, should quote such number, on or after 1 July 2017, in the Return of income. Furthermore, every person who has been allotted PAN as on 1st July 2017 must intimate the AADHAR number to the Tax Authority, failing which, PAN allotted to such person shall be deemed to be invalid. Kindly note that linking of AADHAR with PAN is not possible, unless name as per AADHAR and PAN match perfectly. Hence, please take steps to rectify your name as per AADHAR to match as per PAN.
(13) Where Sec.12AA registered trusts modify their objects clause, they need to apply within 30 days to CIT for approval of the modified clauses.

30/05/2016

NEW TDS RATES APPLICABLE FROM 1st JUNE 2016

22/03/2016

19/03/2016

Issue of deduction of Housing Loan Interest in case of co-owners decided by Punjab and Haryana High Court in Priya Mahajan [ITA 384/2015 dtd 26-11-2015]
Facts:
Plot purchased in the name of four cowners. Also they were co-borrowers of housing loan for construction of house. The assessee solely repaid entire interest and principal since the date of borrowing. While assessee claimed 100% deduction on housing loan interest, the AO restricted it to 25% having regard to assessee’s share of ownership
Section 45 of Transfer of Property Act 1882 on Joint transfer for consideration.—
Where immoveable property is transferred for consideration to two or more persons and such consideration is paid out of a fund belonging to them in common, they are, in the absence of a contract to the contrary, respectively entitled to interests in such property identical, as nearly as may be, with the interests to which they were respectively entitled in the fund;
and, where such consideration is paid out of separate funds belonging to them respectively, they are, in the absence of a contract to the contrary, respectively entitled to interests in such property in proportion to the shares of the consideration which they respectively advanced.
In the absence of evidence as to the interests in the fund to which they were respectively entitled, or as to the shares which they respectively advanced, such persons shall be presumed to be equally interested in the property.
Held that :
In present case though assessee has claimed to have paid entire consideration for purchase of plot/construction, no evidence has been produced. In the sale deed since shares of individuals are not specified. Section 45 of Transfer of Property Act shall apply.
In the case of Saiyed Abdullah v. Ahmad AIR 1929 All. 817, the Hon'ble Allahabad High Court held that 'in the absence of specification of the shares purchased by two persons in the sale deed, it must be held that both purchased equal shares.
In present case, since the individual shares were not specified in the sale deed, the logical conclusion is that everyone had equal share in the property.
Hence allowance of 25% of Housing Loan to assessee borrower is correct even if the assessee solely repaid entire interest and principal since the date of borrowing.

28/02/2015

No tax on An income of Rs 694200/-P.A if planned in following way
• Basic Tax Exemption 2,50000
• Deduction u/s 80C `1,50,000
• Deduction u/s 80CCD `50,000
• Deduction on account of interest
on house property loan
(Self occupied property) `2,00,000
• Deduction u/s 80D on health
insurance premium `25,000
• Exemption of transport allowance `19,200
Total `6,94,,200

23/10/2014

HAPPY DIWALI TO ALL :) :)

27/09/2014

CBDT extended due date of filing ITR (which requires TAR) to 30th Nov, but interest u/s 234A is leviable.

14/03/2014

http://www.thehindu.com/business/last-date-for-advance-tax-payments-extended-to-march-18/article5785235.ece

The government on Friday extended the last date for payment of final instalment of advance tax for financial year 2013-14 to March 18 from March 15 earlier.

31/08/2013

The last date of e-filing of ST 3 for the period October, 2012 to March, 2013 has been extended from 31st August, 2013 till 10th September, 2013.

Assessees can file their Central Excise and Service Tax Returns using following offline Excel Utilities/XML Schema by downloading the same from this page.

19/07/2013

http://www.cityairnews.com/content/dealers-follow-e-trip-system

From 17th of July 2013, dealers in cotton, sarson (mustard), plywood, iron & steel (excluding scrap), yarn and vegetable oil (edible and non-edible) shall be liable to follow E-Trip System.In this system, before sending these goods to any place within the state of Punjab for sale or for transfer of…