SHARES HELD BY RELATIVES CAN’T BE CONSIDERED TO DETERMINE SUBSTANTIAL INTEREST OF SHAREHOLDER UNDER SEC. 2(22)(E) Section 2(22), read with section 2(32), of the Income-tax Act, 1961 – Deemed dividend -Loans or advances to shareholder/substantial interest In order to determine substantial interest of a shareholder for invoking provisions of section 2(22)(e), it is ownership of …
SERVICE TAX RATE CHANGES WITH EFFECT FROM 1st JUNE, 2015 The most awaited advancement in the Service Tax regime viz, change in rate of Service Tax is being brought to effect from today i.e. 1stJune, 2015. The change was initiated by the Central Government vide Notification No. 14/2015-ST dated 19th May, 2015. Following shall be the …
INSTRUCTIONS TO SUBORDINATE AUTHORITIES – CONDO NATION OF DELAY IN FILING REFUND CLAIM AND CLAIM OF CARRY FORWARD LOSSES UNDER SECTION 119(2)(B) In supersession of all earlier Instructions/Circulars/Guidelines issued by the Central Board of Direct Taxes (the Board) from time to time to deal with the applications for condonation of delay in filing returns claiming …
TRANSACTION OF REPLACEMENT OF DEFECTIVE SPARE PARTS DURING WARRANTY- AMOUNTS TO SALE OR NOT? In the case of Kataria Automobiles (P.) Ltd. Vs. State of Gujarat, {(2015) (Gujarat)} on 20th March 2015, the High Court of Gujarat held that the transaction of replacement of spare parts amounts to sale and levy of tax on said sale is justified. …
Amendment in Tatkal Scheme
Timings for Booking Staggered for AC and non AC Classes
At present, the booking under Tatkal scheme opens at 10.00 hrs on the previous day of journey from train originating station. It has been decided that w.e.f. 15.06.2015, timings for booking of Tatkal tickets will be staggered for AC & non-AC classes to 1000 hours onwards and 1100 hours onwards respectively. Hence, now the reservation under Tatkal scheme will open at 1000 hours on the previous day of journey from train originating station for AC classes whereas that for non-AC classes will start at 1100 hours on the previous day of journey from train originating station.
Moreover, all types of ticketing agents (YTSK, RTSAs, IRCTC agents, etc.) will now be debarred from booking tickets during the first thirty minutes of opening of booking i.e. from 08:00 to 08:30 hours for general bookings, and from 10:00 to 10:30 hours & 11:00 to 11:30 hours for Tatkal booking in AC & non-AC classes respectively.
Railways Decide to Run Suvidha Trains:-
These Trains will Run at Dynamic Fare System, Ministry of Railways has decided to run Suvidha trains on the following terms & conditions:
Three types of Suvidha Trains services are proposed:-
(1) Fully air-conditioned services with or without stoppages: Base Price: (Rajdhani base fare+Tatkal charges).
(2) Mixed services having no enroute commercial stoppages on mixed Duronto pattern: Base price: (Mixed Duronto base fare+ Tatkal charges).
(3) For mixed services having some stoppages enroute and running as Mail/Express: Base price: (Mail/Express base fare+Tatkal charges).
In addition to above, if demand arises zonal Railways may also plan for fully air-conditioned/Double decker type Suvidha Trains with fare of the respective categories of trains as per above.
Suvidha trains will run on dynamic fare system. The Permissible booking pattern and charges thereon of Suvidha Trains will be as under:-
For both AC classes and non AC- classes:-
Charges* (Base fare +Tatkal) ) % of seat/ berth
1.5 times of (base fare+tatkal) 20%
2 times of (base fare+tatkal) 20%
2.5 times of (base fare+tatkal) 20%
3 times of (base fare+tatkal 20%
(*Other charges like reservation charge, catering charge, S/F, service tax, etc. will be taken in full wherever applicable)
Vacant berths left at the time of charting will be offered for current booking counters. Tickets at current counters shall be sold at the last price sold for that class and other supplementary charges like reservation fee, super fast charges, catering charges, service tax applicable shall be levied in full.
The information would also be displayed to the passenger during the booking in case the fare of lower class becomes higher than the higher class to exercise option to travel by the higher class.
There shall be no downward movement in the fare.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; Hope the information will assist you in your Professional endeavors. For query or help, contact: info@caindelhiindia.com or call at 011-233 433 33 (more…)
Section 54F, of the Income-tax Act, 1961 – Capital gains – Exemption in case of investment in residential house:-
Where assessee had substantial rights over property which were almost identical to ownership of property, exemption under section 54F was to be allowed[2015] – ITAT MUMBAI -Archana Parasrampuria v. ITO Mumbai.
Facts:-
The assessee earned long-term capital gains on sale of shares. She claimed exemption from tax on the said amount under section 54F on the plea that she had purchased a residential flat.
The Assessing Officer noted from the transfer deed that the assessee had acquired “transferable tenancy rights” and not the “ownership” of the flat. He therefore disallowed the claim under section 54F.
On second appeal to ITAT, It was held that:-
The assessee has purchased rights in one of the flats from the developer, which under the agreement were allotted to him for selling to the intended purchasers. The assessee has paid a sum as consideration/premium to the developer for obtaining the tenancy rights in the flat in question.
Though under the agreement in question, the assessee has been made liable to pay a monthly rent of Rs. 4,000 to the owner, however, in view of the overall facts and circumstances of the case and the amount of rent being a meager amount when compared to the amount of rent otherwise payable on such a property in the area, it is apparent that the assessee is not the mere tenant in the house.
She has purchased substantial rights in the flat in question. A perusal of clause-7 of the agreement reveals that the assessee is entitled to carry out repairs and renovation in the said flat except the changes which could be detrimental to the basic structure of the building.
The owner is not entitled to terminate the tenancy of the assessee in the said flat on any ground, whatsoever, except for non-payment of rent. In the event of destruction of the said building or construction of a new building, the assessee/tenant is entitled to obtain tenancy in respect of the new flat having the same carpet area on the same floor without any payment or consideration or premium to the owner under the agreement.
The assessee has absolute rights to transfer or assign the tenancy rights in respect of the said flat in favour of any person of her choice and to charge such consideration/premium for such transfer/assignment and the tenant/assessee will not be required to obtain any permission from the owner and will not be required to pay any premium for consideration to the owner for such transfer/assignment of the tenancy rights.
The tenant is also entitled to create mortgage in respect of the tenancy rights in the said flat and also bequeath the tenancy rights in respect of any person.
The rights of the assessee in the flat are not the mere tenancy rights but are substantial rights giving the assessee dominion, possession and control over the property in question with transferable rights, which are almost identical to that of an owner of the property. There is no denial that the assessee has purchased the rights in the said flat for residential purposes. (more…)
Background
Conditions and Limitations:-
Procedure:-
1) Filing of Declaration:-
The provider of service to be exported shall, prior to date of export of service, file a declaration with the jurisdictional Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise, as the case may be, specifying the service intended to be exported with:-
2) Verification of declaration:-
The Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, shall verify the correctness of the declaration filed prior to such export of service, if necessary, by calling for any relevant information or samples of inputs and if after such verification, the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise is satisfied that there is no likelihood of evasion of duty, or as the case may be, service tax and cess, he may accept the declaration.
3) Procurement of input materials and receipt of input services:-
The provider of service to be exported shall:-
4) Presentation of claim for rebate:-
Claim of rebate of the duty paid on the inputs or the service tax and cess paid on input services shall be filed with the jurisdictional Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise, as the case may be, after the service has been exported;
Such application shall be accompanied by:-
A declaration that such service, has been exported in terms of rule 6A of the said rules, along with documents evidencing such export.
The jurisdictional Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise, as the case may be, having regard to the declaration, if satisfied that the claim is in order, shall sanction the rebate either in whole or in part. (more…)
PPF SCHEME: INVESTMENT LIMIT, INCOME TAX BENEFIT, FEATURES The Public Provident Fund is the darling of all tax saving investments. No wonder! You invest in it and you get a deduction on your income. Besides, the interest you earn on it is tax-free. Since it is a scheme run by the Government of India, it is also totally safe. …
A capital asset may either be a short-term or long-term capital asset, depending on the period of holding. Gains from alienation thereof would be short-term capital gains or long-term capital gains.
Under section 2(42A) of the Income-tax Act, 1961 (Act), a short-term capital asset means a capital asset held for not more than 36 months immediately preceding the date of its transfer. However, in the following cases, an asset held for a period of 12 months or less was regarded as a short-term asset:-
Equity or preference share in an Indian company (whether listed or not)
Change in period of holding of share and securities section 2(42A)
Per the existing provisions, short-term capital asset means a capital asset held by tax payer for not more than 36 months immediately preceding the date of its transfer. However, in the case of a share held in a company or any other security listed in a recognised stock exchange in India or a unit of the Unit Trust of India or a unit of a Mutual Fund or a zero coupon bond, the period of holding for qualifying it as short-term capital asset is not more than 12 months. Budget proposes that securities (other than a listed security) and units of mutual funds (other than equity oriented funds) [hereinafter referred to as ‘Securities’] shall be regarded as short term capital asset where the same are held for a period of less than 36 months.
Consequently, capital gains earned by resident & non-resident tax payers on transfer of Securities held for a period of more than 12 months but less than 36 months would be chargeable to tax @30% & 40% respectively (instead of 20% if the shares are not freely marketable or 10%1 if the shares are freely marketable, as applicable under the existing income tax provisions).
The Memorandum to the Finance (No. 2) Bill, 2014 explained that shorter period of holding of not more than 12 months for consideration as short-term capital asset was introduced for encouraging investment on stock market where prices of the securities are market determined. Question therefore arises whether withdrawal of the benefit suggest that investment in stock markets is the only avenue of foreign investment being considered favorably.
The Finance Minister in his speech mentioned that Government will endeavor not to introduce retrospective taxes. As the Budget got presented in July 2014 and the amendment to section 2(42A) was proposed to take effect from assessment year 2015-16 (i.e. April 1, 2014 onwards), the amendment could have a colour of retrospectively. However, to provide relief for taxpayers, the LokSabha (while passing the Finance (No. 2) Bill, 2014) introduced a deeming provision that such Securities shall continue to be long-term capital assets if they have been transferred during the period from 1 April, 2014 to 10 July, 2014 after holding them for a period of more than 12 months (instead of more than 36 months).
Taxability of long term capital gain: Long term capital gain shall be taxable at 20% under section 112 of income tax act. Benefit of indexation shall be available to the assessee under section 48 of income tax act 1961.There is no change in finance act 2014 and 2015 regard to indexation.
Taxability of Short term capital gain: Short term capital gain shall be taxable at normal rate i.e. 30% for resident and 40% for non resident. (more…)