Taxation & Accounting

Category: Income Tax (Page 1 of 7)

CBDT Notifies Rules for computing Short Term Capital Gains on Goodwill

8AC. Computation of short term capital gains and written down value under section 50 where
depreciation on goodwill has been obtained.

Finance Act 2021 has brought in major changes in treatment of goodwill under Income Tax Act 1961. As per the Finance Act, goodwill will not be treated as intangible asset which means depreciation is no longer available. The Income Tax 19th Amendment Rules announced on 7th July 2021 provides mechanism for removal of Goodwill and process of computation of short term capital gains if any.

This will have an impact on the valuations as well as all the eligible taxpayers have to compute the same and pay taxes for the financial year 2020-21 before filing of the Income Tax Returns.

The extract of the Notification is provided here

(1) For the purposes of proviso to section 50, the written down value of the block of the asset and short term capital
gains, if any, for the previous year relevant to the assessment year commencing on the 1st day of April, 2021
shall be determined in accordance with this rule.
(2) Where the goodwill of the business or profession was the only asset or one of the assets in the block of asset
“intangible†for which depreciation was obtained by the assessee in the assessment year beginning on the 1st day
of April, 2020, the written down value of this block of asset for the previous year relevant to the assessment year
commencing on the 1st day of April, 2021 shall be determined in accordance with the provisions of item (ii) of
sub-clause (c) of clause (6) of section 43.
(3) Where the reduction under sub-item (B) of item (ii) of sub-clause (c) of clause (6) of section 43, for the previous
year relevant to the assessment year commencing on the 1st day of April, 2021, exceeds the aggregate of the
following amounts, namely:-
(i) the written down value of the block of assets at the beginning of the previous year relevant to the
assessment year commencing on the 1st day of April, 2021 without giving effect to reduction under
sub-item (B) of item (ii) of sub-clause (c) of clause (6) of section 43; and
(ii) the actual cost of any asset falling within the block of assets “intangibleâ€, other than goodwill, acquired
during the previous year relevant to the assessment year commencing on the 1st day of April, 2021,
such excess shall be deemed to be the capital gains arising from the transfer of short-term capital assets.
(4) Without prejudice to the provisions of sub-rule (3) and section 55, where the goodwill of the business or
profession was the only asset in the block of asset “intangible†for which depreciation was obtained by the
assessee in the assessment year beginning on the 1st day of April, 2020, and the block of asset ceases to exist on
account of there being no further asset acquired during the previous year relevant to the assessment year
commencing on the 1st day of April, 2021 in that block, there will not be any capital gains or loss on account of
the block of asset having ceased to exist.
(5) The capital gains or loss on transfer of goodwill, during the previous years relevant to the assessment year
2021-22 or subsequent assessment years, shall be determined in accordance with the provisions of section 48,
section 49 and clause (a) of sub-section (2) of section 55.

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CBDT grants further relaxation in electronic filing of Income Tax Forms 15CA/15CB

CBDT grants further relaxation in electronic filing of Income Tax Forms 15CA/15CB

As per the Income-tax Act, 1961, there is a requirement to furnish Form 15CA/15CB electronically. Presently, taxpayers upload the Form 15CA, along with the Chartered Accountant Certificate in Form 15CB, wherever applicable, on the e-filing portal, before submitting the copy to the authorised dealer for any foreign remittance.

In view of the difficulties reported by taxpayers in electronic filing of Income Tax Forms 15CA/15CB on the portal www.incometax.gov.in , it had earlier been decided by CBDT that taxpayers could submit Forms 15CA/15CB in manual format to the authorized dealer till 30th June, 2021.

It has now been decided to extend the aforesaid date to 15th July, 2021. In view thereof, taxpayers can now submit the said Forms in manual format to the authorized dealers till 15th July, 2021. Authorized dealers are advised to accept such Forms till 15th July, 2021 for the purpose of foreign remittances. A facility will be provided on the new e-filing portal to upload these forms at a later date for the purpose of generation of the Document Identification Number.

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Compliance Check Functionality for Section 206AB & 206CCA of Income-tax Act 1961

Compliance Check Functionality for Section 206AB & 206CCA of Income-tax Act 1961

Section 206AB and 206CCA inserted in the Income-tax Act,1961 (effective from 1st July
2021), imposed higher TDSITCS rate on the “Specified Persons’ defined as under,

  1. For the purposes of this section ‘ specified person” means a person who has not filed
    the retums of income for both of the two assessment years relevant to the two previous
    years immediately prior to the previous year in which tax is required to be collected,
    for which the time limit of filing retum of income under sub-section (1) of section 139
    has expired; and the aggregate of tax deducted at source and tax collected at source
    in his case is rupees fifty thousand or more in each of these two previous years.

Provided that the specified person shall not include a non-resident who does not have
a permanent establishment in India.

Explanation.-For the purposes of this sub-section, the expression ‘permanent
establishment” includes a fixed place of business through which the business of the
enterprise is wholly or partly carried on.”

2. To facilitate Tax Deductors and Collectors in identification of Specified Persons as
defined in sections 206AB and 206CCA, the Central Board of Direct Taxes (“CBDT”), in
exercise of powers conferred under section 138(1 )(a)(i) of Income-tax Act, 1961 (Act), has
issued Order via F.No. 225/671202111TA.1I dated 21 .06.2021 , directing that Director General
of Income-tax (Systems), New Delhi shall be the specified income-tax authority for furnishing
information to the “Tax DeductorlTax Collector”, having registered in the reporting portal of
the Project Insight through valid TAN, to identify the ‘Specified Persons’ for the purposes of
section 206AB and 206CCA of the Act through the functionality “Compliance Check for
Section 206AB& 206CCA”.

3. Income Tax Department has released a new functionality ·Compliance Check for
Section 206AB & 206CCAn to facilitate tax deductors/collectors to verify if a person is a
“Specified Person” as per section 206AB & 206CCA. This functionality is made available
through (https:llreport.insight.gov.in) of Income-tax Department. Kindly refer to CBDT Circular

4. The following procedure is laid down for sharing of information with tax
deductors/collectors:

a ) Registration: Tax Deductors and Collectors can register on the Reporting
Portal by logging in to e-filing portal (http://www.incometax.gov.inl ) using e-filing
login credential of TAN and clicking on the link “Reporting Portal” which is available
under “Pending Actions” Tab of the e-filing Portal. After being redirected to the
Reporting Portal, the tax deductor/collector needs to select Compliance Check (Tax
Deductor & Collector) under Form Type. The details of the principal officer also need
to be provided by clicking on “Add Principal Officer” button. The principal officer is
the authorized person of the tax deductor/collector to use the Compliance Check
functionality on reporting portal. After submission of registration request, email
notification will be shared with the Principal Officer along with ITDREIN details and
login credentials

b) Accessing the Compliance Check functionality: Principal OffICers of the
entities (Tax Deductors & Collectors) which are registered with the Reporting Portal
through TAN shall be able to use the functionality after login into the Reporting Portal
using their credentials. After successfully logging in, link to the functionality
“Compliance Check for Section 206AB & 206CCA” will appear on the home page of
the Reporting Portal

c) Using “PAN Search” mode: Under the “Compliance Check for Section
206AB & 206CCA” page, “PAN Search” tab may be selected to access the
functionality in PAN Search mode. In this mode single valid PAN along with captcha
can be entered at a time and output will be available with following fields,

• Financial Year: Current Financial Year
• PAN: As provided in the input.
• Name: Masked name of the Person (as per PAN).
• PAN Allotment date: Date of allotment of PAN.
• PAN-Aadhaar Link Status: Status of PAN-Aadhaar linking for individual
PAN holders as on date. The response options are Linked (PAN and Aadhaar
are linked), Not Linked (PAN & Aadhaar are not linked), Exempt (PAN is
exempted from PAN-Aadhaar linking requirements as per Department of
Revenue Notification No. 37/2017 dated 11th May 2017) or Not-Applicable
(PAN belongs to non-individual person).
• Specified Person uts 206AB & 206CCA: The response options are Yes
(PAN is a specified person as per section 206ABI206CCA as on date) or No
(PAN is not a specified person as per section 206AB/206CCA as on date).

Output will also provide the date on which the “Specified Person” status as per
section 206AB and 206CCA is determined.

d) Using “Bulk Search” mode: Under the “Compliance Check for Section
206AB & 206CCA” functionality page, “Bulk Search” tab may be aeIected to access
the functionality in Bulk Search mode. This mode involves following steps:
i) Preparing request (Input) file containing PANs: Under the “Bulk Search”
page, CSV Template to enter PANs details may be downloaded by clicking on
“Download CSV template” button. PANs for which “Specified Person” status
is required may be entered in the downloaded CSV template. The current limit
in the number of PANs in a single file is 10,000.
ii) Uploading the input CSV file: Input CSV file may be uploaded by clicking on
Upload CSV button. Uploaded file will start reflecting with Uploaded status.
iii) Downloading the output CSV file: After processing, CSV file containing
“Specified Person” status as per section 20SAB & 206CCA of the entered PANs
will be available for download and “Status’ will change to Available. Output
CSV file will contain PAN, Masked Name, Specified Person Status as per
section 20SAS & 206CCA, PAN-Aadhar Link status and other details as
mentioned in paragraph c) above. After downloading of the file, the status will
change to Downloaded. The download link will expire and status will change to
Expired after specified time (presently 24 hours of availability of the file).

5. For any further assistance, Tax Deductors & Collectors can refer to Quick Reference
Guide on Compliance Check for Section 206AS & 206CCA and Frequently Asked Questions
(FAQ) available under “Resources’ section of Reporting Portal. They can also navigate to the
“Help” section of Reporting Portal for submitting query or to get a call back from Customer
Care Team of Income-tax Department. Customer Care Team of Income-tax Department can
also be reached by calling on its Toll Free number 1800 1034215 for any assistance.

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NEW DISCLOSURE SCHEME @ 50 % EXPECTED ?

Govt has announced demonetisation of Rs 500 and Rs 1000 notes wef  09/11/2016 and asked the all the persons holding these notes to either exchange from Bank/post/RBI or deposit it Bank/Post office.Later govt has also announce exemption for few places where you can use old notes. 
After the announcement , people has started queuing in front of Bank branches/ATM to deposit the cash &…

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Revised Draft Model GST Law, Draft IGST Law and Draft Compensation Law

With step-by-step progress towards Goods and Services Tax (“GSTâ€), the Country is all set to witness the biggest indirect tax reform of unmatched importance in independent India. GST is a biggest game changing indirect tax reform for Indian economy, aimed at undoing Inter-State barriers to trade in goods and services by subsuming around 17 indirect taxes, viz. Excise Duty, Service Tax, VAT, CST,…

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HOW TO REDUCE QUEUEs IN FRONT OF ATMs

After demonetisation of Rs 500 and Rs 1000 Notes ,long queues has been seen in front of all Bank ATMs.Many persons are facing problems to withdraw money from ATMs as well as Bank Braches .Banks are not in position to serve the customers to their satsfaction . Further the problem takes a ugly turn on weekends when All the ATM goes “CASH LESS” Now ATM full form has been changed to “Ayega To Milega…

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New VDS for unaccounted money Pradhan Mantri Garib Kalyan Yojana, 2016 Proposed

As reported by us that Govt is planning a new disclosure scheme to regularise the cash deposited in view of demonetisation of Rs 500 -1000 notes. On similar lines Government has proposed new amendment bill THE TAXATION LAWS (SECOND AMENDMENT) BILL, 2016 under which undisclosed income can be offered for Tax @ 50 % (including penalty & surcharge) .Further 25% of undisclosed income has…

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The Taxation Laws (Second Amendment) Bill, 2016

AS INTRODUCED IN LOK SABHABill No. 299 of 2016THE TAXATION LAWS (SECOND AMENDMENT) BILL, 2016ABILL
further to amend the Income-tax Act, 1961 and the Finance Act, 2016.BE it enacted by Parliament in the Sixty-seventh Year of the Republic of India as follows:—CHAPTER IPRELIMINARYShort title and commencement.5 1. (1) This Act may be called the Taxation Laws (Second…

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NEW DISCLOSURE SCHEME & OTHER INCOME TAX AMENDMENT AT GLANCE

Taxation Laws (Second Amendment) Bill, 2016 introduced in Lok Sabha;
A scheme namely, ‘Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana, 2016’ (PMGKY) proposed in the Bill.
Evasion of taxes deprives the nation of critical resources which could enable the Government to undertake anti-poverty and development programmes. It also puts a disproportionate burden on the honest…

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