Income Tax Amendments (August & September 2019)
THE TAXATION LAWS (AMENDMENT) ORDINANCE, 2019
1. Tax on income of certain domestic companies – Option for Domestic Company for concessional tax rate of 22% (excluding surcharge & cess) subject to the condition that they will not avail any exemption/incentive.
Exemptions / benefits that cannot be availed are listed below :
1. Additional Depreciation on Plant & Machinery
2. Additional Allowance on Scientific Research
3. Section 32AD (investment in P&M in notified backward areas), 32AB (Investment Deposit Account), 35CCC (Expenditure on Agriculture Extension project), 35CCD (Expenditure on Skill Development project)
4. Chapter VI-A Deductions other than Section 80JJAA
5. Without set off of any loss carried forward from any earlier Assessment Year if such loss is attributable to any of the above deductions
6. Option needs to be exercised before filing of return. Once exercised, it cannot be revoked.
7. MAT will not be applicable to such Companies.
2. Concessional rate of tax of 15 per cent for new companies engaged in manufacturing and production
Rate of Tax will be 15% (excluding surcharge & cess) subject to the below conditions :
1. Company has been set up & registered on or after 1st October, 2019 and commenced manufacturing operations on or before 31st March, 2023.
2. This benefit is available to companies which do not avail any exemption/incentive and commences their production on or before 31st March, 2023
3. The Company is not formed by splitting up, reconstruction of a business already in existence.
4. The Company does not use any plant & machinery previously used for any purpose.
5. MAT will not be applicable to such Companies.
3. MAT rate has been reduced from 18.5% to 15% excluding surcharge & cess
This is applicable for companies who continue to avail exemptions and incentives (as mentioned above). However, these companies can opt for the concessional tax regime after expiry of their tax holiday/exemption period. After the exercise of the option they shall be liable to pay tax at the rate of 22 percent and option once exercised cannot be subsequently withdrawn.
4. Listed companies which have already made a public announcement of buy back of shares before 5 July 2019, should not be chargeable to income distribution tax on such buy back under section 115QA of the Act.
5. The enhanced surcharge introduced by Finance (No.2) Act, 2019 shall not apply on capital gains arising on sale of equity share in a company or unit of equity oriented fund or unit of business trust liable for STT, in the hands of individual, HUF, AOP, BOI, AJP. Further, the enhanced surcharge shall also not apply to capital gains arising on sale of any security including derivatives, in the hands of Foreign Portfolio Investors (FPIs).
6. In order to provide relief to listed companies which have already made a public announcement of buy-back before 5th July 2019, tax on buy-back of shares in case of such companies shall not be charged.
NOTIFICATIONS AND CIRCULARS
1. Notification No. 70/2019-Income Tax Dated 20th September, 2019
Exemption from TDS on cash withdrawal under section 194N (at the rate of 2%) for making payment to farmers ? Central Government specifies the commission agent or trader, operating under Agriculture Produce Market Committee (APMC). Shall be deemed to have come into force with effect from the 1st day of September, 2019.
2. Notification No. 68/2019 dated 18th September 19
Non applicability of provisions of Section 194N (i.e. TDS at rate 2% on cash withdrawals above Rs. 1 crore) in relation to Cash Replenishment Agencies (CRA?s) and franchise agents of White Label Automated Teller Machine Operators (WLATMO?s) maintaining a separate bank account from which withdrawal is made only for the purposes of replenishing cash in the Automated Teller Machines (ATM?s) and the WLATMO have furnished a certificate every month to the bank certifying that the bank account of the CRA?s and the franchise agents of the WLATMO?s have been examined and the amounts being withdrawn from their bank accounts has been reconciled with the amount of cash deposited in the ATM?s of the WLATMO?s.
3. Notification No. 72/2019 dated 23rd September 19
CBDT notified the Income-tax Authorities which shall exercise and perform, concurrently, the powers and functions of Assessing Officer, to facilitate the conduct of E-assessment proceeding in a centralised manner in respect of returns furnished under Section 139 or in response to notice under Section 142 (1) during any financial year commencing on or after 1st day of April, 2018.
4. Notification No. 69/2019-Income Tax dated 20th September 2019- Income-tax (9th Amendment) Rules, 2019
CBDT notifies Additional depreciation on motor Car and Motor vehicles i.e. 15% to 30% and 30% to 45% respectively, subject to other conditions.
5. Notification No. 64/2019, 13th September 2019
CBDT notifies tolerance range for wholesale trading & for other cases for AY 19-20 w.r.t. the calculation of arm length price related to International transaction determined as per section 92C i.e. 1% in case of wholesale trading and 3% in other cases.
6. Notification No. 63/2019, 12th September, 2019
CBDT notifies Cost Inflation Index for Financial Year 2019-20 at 289 (for the purpose of indexation of cost of acquisition and cost of improvement ?Capital Gains).
7. Notification No. 62/2019, 12th September 2019
CBDT notifies Income Tax E-assessment Scheme, 2019 with effect from 12th September, 2019 (Notification No. 61/2019- 12th September 2019). Further, CBDT notifies directions such as procedure of assessment and related procedures, for giving effect to Income Tax E-assessment Scheme, 2019.
8. Circular No. 26 of 2019, 26th September 2019
CBDT clarifies on certain issues relating to filing of Forms ITR-5, ITR-6 and ITR-7 which includes furnishing of details of shareholding in Schedule SH-1 / SH-2, details of assets and liabilities in Schedule AL-1 / AL-2. It also provide solutions to queries of Partnership firms and Trusts.
9. Tweeted on 26th September 2019
CBDT – ?On consideration of representations recd from across the country, CBDT has decided to extend the due date for filing of ITRs & Tax Audit Reports from 30th Sep, 2019 to 31st of Oct, 2019 in respect of persons whose accounts are required to be audited. Formal notification will follow?.
10. Circular No. 25/2019 dated 09.09.2019
CBDT as a one-time measure provides relaxation of time filling of compounding application, with a view to mitigate unintended hardship to taxpayers in deserving cases, and to reduce the pendency of existing prosecution cases before the courts.
11. Circular No. 24/2019, 09.09.2019
CBDT lays down the procedure to identify & process Income Tax cases for prosecution in respect of certain Income Tax related offences such as Failure to pay tax to the credit of Central Government, Failure to pay the tax collected at Source, Wilful attempt to evade tax, etc.
12. Circular No. 23 of 2019, 06th September 2019
Appeal filing limit not applies to cases of Bogus LTCG / STCG-Exception to monetary limits for filing appeals specified in any Circular issued under Section 268A. Similar instructions has been issued vide instructions no. F. No. 279/Misc./M-93/2018-ITJ(Pt.) dated 16th September 2019.
13. Instruction No. 1-CASS 2019 dated 24.09.2019
Computer Assisted Scrutiny Selection (CASS) Cycle for the current year (2019) has been finalized in Income Tax Business Application (ITBA). The Board has approved the parameters for selection of cases and cases are visible to the Assessing Officers.
14. Instruction no.? F. No. 173/149/2019-ITA-I dated 23.09.2019
CBDT prescribes the time frame for handling of grievances of startups.
15. F. No. Systems/ITBA/Common Module/160/2016-17,part file, Admn./ dated 17.09.2019
CBDT has issued instructions that Assessing officer should not share their RSA token and ITBA password with staff i.e. inspectors and other staff.
16. Instruction no. F.No. 500/163/2017/FT&TR-III dated 18.09.2019
CBDT instructs to IT officials that sharing of secret info (obtained from foreign jurisdictions under the Exchange of Information (EOI) process of Double Taxation Avoidance Agreements (DTAAs)/ Tax Information Exchange Agreements (TIEAs)/ Multilateral Convention on Mutual Administrative Assistance in Tax Matters (MAC)) about overseas black money with ED (Enforcement directorate), CBI only after obtaining consent from the Competent Authority of the sending jurisdiction.
17. ITBA – Common Functions Module/Instruction No.3 dated 17/09/2019
Roll out of facility for System generated Document (i.e. Intimation Letter) containing Document Identification Number (DIN) for documents issued outside the system but uploaded manually in Income Tax Business Application (ITBA).
18. System/ITBA/Instruction/ITR Processing/177/16-17 dated 12.09.2019
Functionality for processing of returns having refund claims which were not processed within the time allowed u/s 143(1) due to some technical or other reasons has been issued.
19. Instructions no. F.No. System/ITBA/Instruction/Assessment/177/2016-17/ dated 12.09.2019
Availability of Miscellaneous Functionalities related to ?Selection of Case of Search Year? and ?Relevant Search Years? in Assessment module of Income Tax Business Application (ITBA).
20. Instructions F.No.275/16/2019-IT(B) dated 2nd September 2019
Approval of CIT (Intl. Taxation) not required for certificates u/s 197 / 195 if revenue effect is less than Rs. 10 crores.
21. Notification no. F. No. 187/7/2019-ITA-I dated 20th September 2019
Central Board of Direct Taxes sets up National e-Assessment Centre (NeAC), which shall have its headquarters at Delhi and shall comprise of Income-tax authorities as per below office order.
22. Notification no. F.No. A-11011/2/2019-Ad-VI? dated 17.09.2019
Transfer/ posting in posts in the various grades of Indian Revenue Service to the newly created National e-Assessment Centre (NeAC), Delhi and its Regional Centres (ReACs).
23. Notification no. F. No.A-35015/7/2012-Ad.VI dated 11th September 2019
Re-designation of nomenclature of posts of Member CBDT and revision in their jurisdiction.
24. Press release dated 4th September 2019
The Central Board of Direct Taxes (CBDT) has entered into 26 APAs in the first 5 months of the current financial year (April to August, 2019).
25. Clarification dated 22.08.2019
CBDT has clarified that small start-ups with turnover up to Rs. 25 crore will continue to get the promised tax holiday as specified in Section 80-IAC of the Income Tax Act, 1961, which provides deduction for 100 per cent of income of an eligible start-up for 3 years out of 7 years from the year of its incorporation- Seeking to dispel confusion over the eligible turnover limit, the CBDT said there was no contradiction in DPIIT’s February 19 notification (mentioning turnover of Rs. 100 crore) and the income tax provisions, as the notification clearly mentioned that a start-up shall be eligible to apply for the certificate from the Inter-Ministerial Board of Certification for claiming deduction only if they fulfill the conditions specified in Section 80-IAC.
26. Order u/s 119 dated 23rd July 2019
The due date of filling of Income Tax Return for the assessment year 2019-20 has been extended to 31st August 2019 from 31st July 2019 for certain categories of Tax payers.
27. Notification no. F. No.279/Misc/M-93/2018-ITJ dated 20.08.2019
CBDT increases income tax appeal limit before Tribunal, High court and Supreme Court to 50 lacs, 1 crore and 2 crores respectively (Circular no. 17/2019 dated 8th August 2019).Further, revised monetary limits is applicable to all pending SLPs/ Appeals.
28. Circular No 19/2019 Dt 14.08.2019
CBDT takes steps to ensure Transparency in Tax Administration by bringing in concept of DIN (Document Identification Number) in Notice/ Order/ Summons/ letter/ correspondence issued by the Income-tax Department, It will be Effective from 1st Oct 2019
29. CBDT has issued Circular No. 18/2019 dated 8.8.2019 to clarify certain issues relating to ITRs of AY 2019 such as non-allotment of TIN (Taxpayer identification number) in case of NRI, Pan related issues in case of director in foreign company etc (Circular No. 18/2019 dated 8.8.2019). Consequently, further circular no. 21 of 2019 dated 27th August 2019 has been released, issuing clarifications in respect of ITR forms for the Assessment Year 2019-20
30. Order u/s 119 dated 5th August 2019
CBDT has directed that, all validly filed returns up to Assessment Year 2017-18 with refund claims, which could not be processed under sub-section (1) of section 143 of the Act due to certain technical issues or for other reasons not attributable to the assessees concerned and have become time-barred, can be processed with prior approval of Pr. CCIT / CCIT by 31-12-2019. This relaxation is not applicable in case where ITR is selected for scrutiny or there is demand payable or likely to arise after processing it.
31. Notification no. ITBA- Refund Banker Instruction No.1 dated 07/08/2019
Launch of Income Tax Business Application (ITBA), wherein the functionalities for Refund Blocking/Unblocking, Refund Revalidation and Refund Status in Refund Banker Module are available.
32. Notification no. 59/2012 dated 30th August 2019
CBDT notifies the interchangeability of PAN with Aadhaar.?
33. Notification no 58/2009 dated 27th August 2019
CBDT notifies protocol amending India- Spain DTTA
34. CBDT issues a clarification w.r.t. TDS on cash withdrawal above 1 crore from 1st September 2019- TDS @2% (Section 194N) to be deducted over cash withdrawals of Rs. 1 crore from Banks & post offices. Cash withdrawals before 1st September during FY 19-20, shall be considered counted for the limit of Rs. 1 crore, but would not be subject to TDS @2%
35. CBDT constitutes a cell for redressal of grievances related to Startups
Finance Minister press conference dated 23rd August 2019
1. In order to encourage investment in the capital market, enhanced surcharge levied on long/short term capital gains arising from transfer of equity shares/units u/s 111A & 112A has been withdrawn
2. All tax notices will be issued from a centralised system. All old tax notices will be taken up by October 1 or will be uploaded again through a centralised system.
3. Startups registered with commerce ministry get relief as angel tax provisions i.e. Section 56 (2)(viib) of the Income Tax Act shall not apply to startups registered with the commerce ministry.
4. Additional 15 per cent depreciation on vehicles acquired from 23rd August 2019 till March 2020, taking the total to 30 %.
5. All I-T notices will be cleared within three months of response.
This Article is shared by CA Rubneet Anand.?She can be reached at [email protected].
CA Rubneet Anand
B.Com, M.Com(Finance& Taxation), MBA(Finance & International Business- IMT Ghaziabad).
Deputy Manager (Internal Audit & Indirect Taxation)-M/s SML Isuzu Ltd.
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