presentation on msme - cash less economy - relevant to direct taxes
TRANSCRIPT
Presentation on MSME – Cash Less Economy -Relevant to Direct Taxes
by
CA Suresh Babu SManaging Partner
M/s SBS and Company [email protected]
9440883366
SBS EVENTS HALLOn 02nd June, 2017
At
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RATES OF INCOME TAX
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Individual(Less than 60 years of
age)/HUF/AOP/BOI/AJP)
Resident Individual (Age of 60 or more)
Resident Individual (Age of 80 or more)
Income Rates
Upto2,50,000 NIL
Rs2,50,000 –Rs5,00000
5% of(total income-2,50,000
Rs5,00,000 –Rs10,00,000
Rs12,500+20%of(total income-5,00,000)
Above10,00,000
Rs 1,12,500+30%of(total income-10,00,000)
Income Rates
Upto3,00,000 NIL
Rs3,00,000 –Rs5,00000
5% of (total income-3,00,000)
Rs5,00,000 –Rs10,00,000
Rs10,000+20%of(total income-5,00,000)
Above10,00,000
Rs 1,10,000+30%of(total income-10,00,000)
Income Rates
Upto5,00,000 NIL
Rs5,00,000 –Rs10,00,000
20% of (total income-5,00,000)
AboveRs10,00,000
1,00,000+30%of(totalincome-5,00,000)
Rebate U/s 87A has been reducedto Rs. 2500/- . It is available if totalincome of resident individual doesnot exceed Rs.3,50,000
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Companies with Annual Turnover up to Rs.50 Crore – 25% (Earlier 30%)
Firms (Partnership or LLP) – 30%
Surcharge:- In case of every INDIVIDUAL or HUF or AOP or BOI or AJP
having total income exceeding Rs. 50,00,000/- but not exceeding Rs. 1
Crore is liable to surcharge @10%. Surcharge @15% will apply if total
income exceeds Rs. 1 Crore.
Company & Firm Tax Rates
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No person shall receive an amount of Rs.2,00,000 or more, by cash
a) In aggregate from a person in a day; or
b) In respect of a single transaction; or
c) In respect of transitions relating one event or occasion
Applicable from 1 April 2017
The penalty for violation of above is to be a sum equal to the amount of such receipt.
Note – 1: The provisions of Sec 269 ST are not applicable in case of Cash withdrawal from Bank.
Note - 2: Hence Cash can be withdrawn from Bank without limit.
Cash Receipts(269ST)
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a) In aggregate from a person in a day:
Mr. A sells goods worth Rs.3,00,000 to Mr. B and generates 3 different bills of Rs.1,00,000 each andaccepts cash in a single day at different times then Mr. A shall be found guilty of violation ofSection 269ST(a) of Income Tax Act.
b) In respect of a single transaction:
Mr. A sells goods worth Rs.3,00,000 to Mr. B and generates one single bill for Rs.3,00,000. He thenreceives cash Rs.1,50,000 on Day 1 and Rs.1,50,000 on Day 2 then Mr. A shall be found guilty ofviolation of Section 269ST(b) of Income Tax Act.
c) In respect of transitions relating one event or occasion:
Mr. A books a wedding party at a Hotel & the Hotel makes a bill of Rs.1,50,000 for Food andRs.1,00,000 for Hall Charges and accepts cash Rs.2,50,000 from Mr. A then the hotel shall be foundguilty of violation of Section 269ST(c) of Income Tax Act.
Even if they are 2 different types of expense, but they are for the same wedding.
Cash Receipts(269ST)
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Applicable to all persons.
Mode of acceptance of Loans, Deposits or Specified sum should be through account payee cheque or account payee bank draft or use of electronic clearing system through a bank account if the amount is Rs. 20,000 or more in the following cases:
a) The amount or aggregate amount of such loan, deposit or specified sum; or
b) The amount or aggregate amount of loan, deposit or specified sum remaining unpaid; or
c) The amount specified in (a) and (b) above.
Specified Sum- Any sum of money, whether advance or otherwise in relation to transfer of immovable property whether or not transfer takes place.- W E F 01-06-2015
Cash Receipts(269SS)
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The provisions of this Section shall not be applicable if loan, deposit or specified sum is accepted from or accepted by:
The Government;
Any banking company, post office savings bank or co-operative bank;
Any corporation established by a Central, State or Provincial Act;
Any Government Company (as defined under the Companies Act);
Such other institutions as may be notified by Central Government in this behalf.
Penalty:
Section 271D: In the case of failure to comply with the provisions of Section 269SS, a penalty of 100% of the amount of loan, deposit or specified sum is levied.
Cash Receipts(269SS)
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Limits for expenses paid in cash (both capital and revenue) has been reduced from Rs.20,000 toRs.10,000 per day in aggregate per person(Sec 40A(3))
Capital Expenses paid in cash beyond Rs.10,000 will not be allowed for Depreciation purposes(Sec32/43(1))
Revenues Expenses paid in cash beyond Rs.10,000 will not be allowed as business expense whilecalculating profit
Cash payment limit for LORRY FREIGHT remains same at Rs.35,000
Salary or Bonus payments exceeding Rs.10,000 have to be done by Cheque Compulsorily.
Limits for Expenses Paid in Cash
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Mode of repayment of Loans, Deposits or Specified advance should be through account payee cheque or account payee bank draft or use of electronic clearing system through a bank account if the amount is Rs. 20,000 or more in the following cases:
a) The amount of loan, deposit or specified advance, along with interest payable (if any); or
b) The aggregate amount of the loans or deposits, either in his own name or jointly with any other person on the date of such repayment together with the interest, if any, payable on such loans or deposits; or
c) The aggregate amount of specified advances received by such person either in his own name or jointly with any other person on the date of such repayment together with the interest, if any, payable on such specified advances.
Cash Payments(269T)
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Exceptions:
Government;
Any banking company, post office savings bank or co-operative bank;
Any corporation established by a Central, State or Provincial Act;
Any Government Company 11 as defined in section 617 of the Companies Act, 1956 (1 of 1956);
Such other institution, association or body or class of institutions, associations or bodies whichthe Central Government may, for reasons to be recorded in writing, notify in this behalf in theOfficial Gazette.
Penalty:
Section 271E: In the case of failure to comply with the provisions of Section 269T, a penalty of100% of the amount of loan, deposit or specified advance is levied.
Cash Payments(269T)
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Earlier – 1 % TCS on cash sales exceeding Rs.2 Lakhs (Rs.5 Lakhs in case of jewellery)
Now – No need to collect TCS.
Cash Sales exceeding Rs.2 Lakhs will Straightaway attract Penalty of Equivalent amount as
previously explained.
TCS Abolished
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Earlier: No TDS on Rent Payments by Individuals or HUFs
Now: Individuals & HUFs paying Rent more than Rs.50,000 per month have to deduct TDS @ 5%
TDS on Rent Payments
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Cash Donations exceeding Rs.2,000 – Not Eligible for deduction U/s 80G
Bank/Digital or any mode other than cash – No limit
Trusts accepting 80G donations Have To Advise their donors to give donations
exceeding Rs.2,000 vide cheque / RTGS / digital modes.
Donations – 80G
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IT Return not filed within Due Date (31st July for Individuals & 30th September for Non-
Individual Assessee’s)
Up To 31st December – Rs.5,000/-
After 31st December – Rs.10,000/-
Note:- 1. If the total income of the person does not exceed Rs. 5 Lakhs, the fee payable
under this section shall not exceed Rs. 1,000/-
Note:- 2. Self-assessment tax to include the fees for delay in filing the return of income.
Note:- 3. Revised return can be filed before the end of the relevant assessment year or
before the completion of assessment, whichever is earlier.
Fee For Late Return Filing
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Every person eligible to obtain Aadhar has to quote Aadhar number in IT Return.
Every person who has PAN Card must intimate Aadhar number to IT Dept. failing which
pan shall be deemed invalid.
Aadhar – PAN cannot be linked if name doesn’t match perfectly in both the documents.
New facility introduced in profile tab to link Aadhar on efiling site
Aadhaar to be linked with PAN
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Individual or HUF is required to maintain books of accountsif income from business or profession, other than referredU/s 44AA(1), exceeds Rs. 2,50,000/- or total sales, turnover,gross receipts exceeds Rs. 25,00,000/-.
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NORMAL PROVISIONS
Person engaged in business orprofession are
required to maintain regularbooks of account and
get accounts audited
if their gross turnover or incomeexceeds the prescribed limit
Meaning of Presumptive Taxation:
Relief to small tax payers
PRESUMPTIVE TAXATION
To get relief to from this tediouswork of maintenance of Books ofaccounts, a small taxpayer
can opt for presumptive taxationunder section 44AD, 44AE or44ADA
Upon satisfaction of the prescribedconditions
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In case of Assessee being an Individual, or an HUF or a Partnership Firm (other than LLP and
Company) carrying on any business having a turnover of Rs 2 Crore or less.
May not maintain any Books of Accounts.
Earlier Deemed Net Profit was 8 % of Total Turnover as per section 44AD of IT Act
Now Deemed net profit will be as under:
Non Cash Sales (Receipts through Online Transfer, Account Payee Cheque/ Draft, NEFT, RTGS)
– Deemed Net Profit shall be 6% of Total Turnover or Gross Receipts.
Cash Sales – Deemed Profit shall be 8% of Total Turnover or Gross Receipts.
To encourage non-cash payments through bank or digital channels.
Deemed Profit for Small Business(Sec 44AD)
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Consequences if assessee opt 44AD:
If an assessee opts for presumptive taxation under this section, then he is require to follow the same scheme for next 5 years
If assessee failed to do so, then presumptive taxation scheme will not be available for next 5 years
Presumptive taxation scheme under Sec 44AD shall not apply to the following business:
person carrying on profession as referred in section 44AA(1)
a person earning income in the nature of commission or brokerage or
a person carrying on any agency business.
Consequences if assessee opt 44AD
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Any person opting for presumptive taxation scheme under section 44AD or 44ADA is liable topay whole amount of advance tax on or before 15th March of the previous year
Failure to pay the advance tax attracts interest as per section 234B & 234C
Any amount paid by way of advance tax on or before 31st day of March shall also be treated asadvance tax paid during the financial year.
Consequences if assessee opt 44AD
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PARTICULARS SEC 54 SEC 54EC SEC 54F
Exemption Claimed Individual/ HUF Any Person Individual/ HUF
POH of Capital asset Long Term Long Term Long Term
Eligible Specific asset A residential houseproperty
Any LTC asset Any LTC asset (other thana residential houseproperty) provided*
Type of asset should beacquire to get the benefitof exemption
Purchase within 1 yearbefore transfer or 2 yearsafter transfer.Construction within 3years after the date oftransfer.
Within 6 months aftertransfer.
Purchase within 1 yearbefore transfer or 2 yearsafter transferConstruction within 3years after the date oftransfer
Amount Exempted Investment in new assetor capital gain which everis lower
Investment in new assetor capital gain which everis lower
Capital Gain*Amount invested/ Net sale consideration
TRANSFER OF RESIDENTIAL PROPERTY (SEC 54)
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PARTICULARS SEC 54 SEC 54EC SEC 54F
Exemption revoke in asubsequent year
If the new asset istransferred within 3 yearsof its acquisition.
If the new asset istransferred or it isconverted in to money ora loan is taken on securityof the new asset within 3years of its acquisition.
a) Within one year oftransfer of originalasset, there shall notbe purchase of otherresidential houseproperty other thannew asset
b) Within three years oftransfer of originalasset, assessee shallnot constructsresidential propertyother than new asset
Exemption revoked-taxable as LTCG/STCG
STCG LTCG LTCG
Scheme of deposit isapplicable
Yes No Yes
TRANSFER OF RESIDENTIAL PROPERTY (SEC 54)
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Gift in cash exceeding Rs.50,000/- is taxable. However there are exceptions u/s 56 of the act,where if gift is received from following persons shall not be taxable. They are
Relative
On occasion of marriage of individual
Under will
In contemplation of death of payer or donor
Local Authority
Trust or Institution registered U/s12AA
Dividend income is exclusively chargeable under Income from other sources
The cost of acquisition of immovable property received as gift and subject to tax U/S 56 will bethe stamp duty value which has been taken into consideration for sec 56.
INCOME FROM OTHER SOURCES:
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Sec 115BB:
Section 115BB covers winnings from lotteries, crossword puzzles, horse races, card games, betting, gambling and other games of this nature;
The incomes under this section is chargeable to flat tax rate of 30% including Education cess
The expenditure incurred while engaging in the above activities will be disallowed
Deduction under Chapter VI A (i.e., From 80C to 80U) cannot be claimed under this section
Adjustment of unexhausted basic exemption limit is also not permitted.
INCOME FROM OTHER SOURCES:
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S.NO SECTION NATURE OF DEDUCTION AMOUNT ELIGIBLE FOR
DEDUCTION
1. 80C Life insurance policy (10% 0f Capital sum assured),House loanprinciple repayment , Tuition fees (2 children), InfrastructureBonds ,NABARD rural bonds PPF, NSC ,ULIP , Subscription toequity shares or debentures ,5-year bank fixed deposits, Postoffice saving scheme ,Any contribution to Senior citizen savingscheme AND
Sukanya Samriddhi Yojana : Documents required are
Birth documents of girl child
Address proof and identity proof of guardian
3 photos of Guardian and 3 photos of the child
PAN card and Aadhar card of guardian
Maximum deduction
available (under this
section) is Rs.1,50,000
CHAPTER VI-A DEDUCTIONS (1/7)
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S.NO SECTION NATURE OF DEDUCTION AMOUNT ELIGIBLE FOR DEDUCTION
2.
3.
80CCD
80CCE
Contribution to pension
schemes of Central
Government
Additional Benefit towards
contribution to NPS.
Limit on deductions u/s
80C, 80CCC, 80CCD
`
Rs.50,000 (over and above all the limits)
Rs.1,50,000
In case of employee
• 10 % 0f his salary or
• 20 % of GTI- FA 17
In case employer
• 10 % of salary of employee
CHAPTER VI-A DEDUCTIONS (2/7)
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S.NO SECTION NATURE OF DEDUCTION AMOUNT ELIGIBLE FOR DEDUCTION
4. 80D Any amount paid towards health insurance
premia,CGHS in any made other than cash to effect or
keep in force insurance on health of
Assesse or his family (Spouse , dependent children)
and
Parents of the assesse
In respect of medical expenditure for very senior
citizens(provided no health insurance is paid).
Preventive health checkup : Can be paid even in cash.
(sub limit under Sec 80D)
Rs.25,000
(Rs.30,000 in case
of senior citizen)
Rs.30,000
Rs.5,000 (This is included inabove said limits)
CHAPTER VI-A DEDUCTIONS (3/7)
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S.NO SECTION NATURE OF DEDUCTION AMOUNT ELIGIBLE FOR
DEDUCTION
5.
6.
80 DD
80DDB
• Any expenditure for Medical, Nursing & Rehabilitation
incurred on dependent suffering from permanent disability
OR Amount paid or deposited under LIC policy or any other
insurer
• Disability or Severe disability : Persons with Autism, Cerebral
Palsy, Mental Retardation and Multiple Disabilities
Amount paid for the medical treatment for such disease for
himself or a dependant
Rs.75,000
(Rs.1,25,000 in case
of severe disability)
Rs.40,000
Rs.60,000(> 60 years)
Rs.80,000(>80 years)
CHAPTER VI-A DEDUCTIONS (4/7)
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S.NO SECTION NATURE OF DEDUCTION AMOUNT ELIGIBLE FOR DEDUCTION
7.
8.
80 E
80EE
Any Interest on loan taken from Financial/Charitable
Institutions for Self/Spouse/Children for pursuing Higher
Education (for a max. period of 8 years)
Any Interest on loan taken from any financial institution for
the purpose of acquisition of a residential property.
Conditions:
• Loan sanctioned during 1.04.2016 – 31.03.2017
• Amount of loan should not exceed Rs35,00,000;
• Value of house property does not exceed Rs 50,00,000
• Assessee does not own any residential house property on
the date of sanction of loan.
Actual
Interest repaid
Rs.50,000 for
A.Y beginning on
1.04.2017 and
subsequent assessment
years
CHAPTER VI-A DEDUCTIONS (5/7)
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S.NO SECTION NATURE OF DEDUCTION AMOUNT ELIGIBLE FOR DEDUCTION
9. 80 G Any amount donated towards :
a) Swachh Bharat Kosh, Clean Ganga Fund ,
National Trust for welfare of Persons suffering
from Multiple Disabilities etc.
b) Jawaharlal Nehru Memorial Fund ,P.MDrought
Relief Fund etc.
c) For promotion of family planning , Indian Olympic
Association
d) For repair or renovation of any temple, mosque,
church, gurudwara or other place of historic or
national Importance.
Prohibition of cash donations in excess of two thousand rupees. (W.E.F A.Y. 2018-19 onwards)
CHAPTER VI-A DEDUCTIONS (6/7)
100 % of donation
50 % of donation
100% of donation with qualifying limit
50%of donation with qualifying limit
b
c
d
a
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S.NO SECTION NATURE OF DEDUCTION AMOUNT ELIGIBLE FOR
DEDUCTION
10.
11.
12.
80GGC
80TTA
80U
• Amount contributed to any political party or an electoral
trust. However no CASH deduction shall be allowed .
Any interest on deposits (not being time deposits) in a savings
account with a banking company, a co-operative society, a Post
Office
• Amount paid towards person suffering from disability
• Disability or Severe disability : Persons with Autism, Cerebral
Palsy, Mental Retardation and Multiple Disabilities
100 % of deduction
Rs.10,000
Rs.75,000
(Rs.1,25,000 in case
of severe disability)
CHAPTER VI-A DEDUCTIONS (7/7)
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To keep a watch on high value transactions undertaken by the taxpayer, the Income-taxLaw has framed the concept of statement of financial transaction or reportableaccount [previously called as ‘Annual Information Return (AIR)’].
With the help of the statement the tax authorities will collect information on certainprescribed high value transactions undertaken by a person during the year.
There could a amendment to IT Act to provide for taxation of past unaccounted cashnow deposited. (May be around 60% of the amount)
Section 285BA of IT Act, 1961
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S.No Nature and value of transaction Reporting person
1 (a) Payment made in cash for purchase of bank drafts orpay orders or banker's cheque of an amount aggregatingto Rs. 10 lakh or more in a financial year.
(b) Payments made in cash aggregating to Rs. 10 lakh ormore during the financial year for purchase of pre-paidinstruments issued by Reserve Bank of India.
(c) Cash deposits or cash withdrawals (including throughbearer's cheque) aggregating to Rs. 50 lakh or more in afinancial year, in or from one or more current account ofa person
A banking company or acooperative bank
2 Cash deposits aggregating to Rs. 10 lakh or more in afinancial year, in one or more Savings accounts of a person.
(i) A banking company or acooperative bank
(ii) Post Master General
3 One or more time deposits (other than a time deposit madethrough renewal of another time deposit) of a personaggregating to Rs. 10 lakh or more in a financial year of aperson.
(i) A banking company or acooperative bank (ii) Post MasterGeneral (iii) Nidhi Company (iv)Non-banking financial company
Transactions to be reported (1/4)
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S.No Nature and value of transaction Class of person (reporting person)
4 Payments made by any person of an amount aggregatingto—(i) Rs. 1 lakh or more in cash; or(ii) Rs. 10 lakh or more by any other mode, against billsraised in respect of one or more credit cards issued to thatperson, in a financial year
A banking company or acooperative bank or any othercompany or institution issuingcredit card.
5 Receipt from any person of an amount aggregating to Rs.10 lakh or more in a financial year for acquiring bonds ordebentures issued by the company or institution (otherthan the amount received on account of renewal of thebond or debenture issued by that company).
A company or institution issuingbonds or debentures.
6 Receipt from any person of an amount aggregating to Rs.10 lakh or more in a financial year for acquiring shares(including share application money) issued by the company.
A company issuing shares.
Transactions to be reported (2/4)
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S.No Nature and value of transaction Class of person (reporting person)
7 Buy back of shares from any person (other than the sharesbought in the open market) for an amount or valueaggregating to Rs. 10 lakh or more in a financial year.
A company listed on a recognisedstock exchange purchasing its ownsecurities under section 68 of theCompanies Act, 2013
8 Receipt from any person of an amount aggregating to Rs. 10lakh or more in a financial year for acquiring units of one ormore schemes of a Mutual Fund (other than the amountreceived on account of transfer from one scheme toanother scheme of that Mutual Fund)
A trustee of a Mutual Fund or suchother person managing the affairsof the Mutual Fund
9 Receipt from any person for sale of foreign currencyincluding any credit of such currency to foreign exchangecard or expense in such currency through a debit or creditcard or through issue of travellers cheque or draft or anyother instrument of an amount aggregating to Rs. 10 lakhor more during a financial year.
Authorised person under ForeignExchange Management Act, 1999
Transactions to be reported (3/4)
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S.No Nature and value of transaction Class of person (reporting person)
10 Purchase or sale by any person of immovable property foran amount of Rs. 10 lakh or more or valued by the stampvaluation authority referred to in section 50C of the Act atRs. 30 lakh or more
Inspector-General or Registrar orSub-Registrar appointed under theRegistration Act, 1908
11 Receipt of cash payment exceeding Rs. 2 lakh for sale, byany person, of goods or services of any nature (other thanthose specified at Sl. Nos. 1 to 10 of this rule, if any.)
Any person who is liable for auditunder section 44AB of the Act.
12 Cash deposits during the period 09th November, 2016 to30th December, 2016 aggregating to—(i) Rs 12,50,000 or more in one or more current account
of a person; or(ii) Rs 2,50,000 or more, in one or more accounts (other
than a current account)
(i) A banking company or a co-operative bank to which theBanking Regulation Act, 1949(10 of 1949) applies
(ii) Post Master General asreferred to in clause (j) ofsection 2 of the Indian PostOffice Act, 1898 (6 of 1898).
Transactions to be reported (4/4)
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Furnishing of statement of financial transaction [Rule 114E]
• With effect from 1 April 2016, every person who has undertaken the specified transaction will file the statement for detail of such transaction in Form 61 annually.
Form 61A shall be furnished to department on or before 31st May, immediately following the financial year in which the transaction is registered or recorded.
Further, we have identified some transactions given under Rule 114E, which generally impacts the Company and person other than company who are subject to audit under section 44AB of the Act. The following class of persons is required to furnish a statement of financial transactions under Form 61A for the transactions given below (Applicable for transactions entered on or after 01 April 2016):
Here is the list of transactions where quoting of PAN will be mandatory from Jan 1, 2016:
PAN
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S.No NATURE OF TRANSACTION MANDATORY QUOTING OF PAN (RULE 114B)Existing requirement New requirement
1. Immovable property Sale/ purchase valued at Rs.5 lakh or more i. Sale/ purchase exceeding Rs.10 lakh;ii. Properties valued by Stamp Valuation authority at
amount exceeding Rs.10 lakh will also need PAN.2 Motor vehicle (other than two wheeler) All sales/purchases No change
3. Time deposit Time deposit exceeding Rs.50,000/- with abanking company
i. Deposits with Co-op banks, Post Office, Nidhi,NBFC companies will also need PAN;
ii. Deposits aggregating to more than Rs.5lakh during the year will also need PAN
4. Deposit with Post Office Savings Bank Exceeding Rs.50,000/- Discontinued
5. Sale or purchase of securities Contract for sale/purchase of a valueexceeding Rs.1 lakh
No change
6. Opening an account (other than timedeposit) with a banking company.
All new accounts. i. Basic Savings Bank Deposit Account excluded (noPAN requirement for opening these accounts);
ii. Co-operative banks also to comply
7. Installation of telephone/ cellphoneconnections
All instances Discontinued
8. Hotel/restaurant bill(s) Exceeding Rs.25,000/- at any one time (by anymode of payment)
Cash payment exceeding Rs.50,000/-.
9. Cash purchase of bank drafts/ payorders/ banker's cheques
Amount aggregating to Rs.50,000/- or moreduring any one day
Exceeding Rs.50,000/- on any one day.
10. Cash deposit with banking company Cash aggregating to Rs.50,000/- or moreduring any one day
Cash deposit exceeding Rs.50,000/- in a day.
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11. Foreign travel Cash payment in connection with foreigntravel of an amount exceeding Rs.25,000/- at anyone time (including fare, payment to travel agent,purchase of forex)
Cash payment in connection with foreign travelor purchase of foreign currency of an amountexceeding Rs.50,000/- at any one time(including fare, payment to travel agent)
12. Credit card Application to banking company/ any othercompany/institution for credit card
No change.Co-operative banks also to comply.
13. Mutual fund units Payment of Rs.50,000/- or more for purchase Payment exceeding Rs.50,000/- for purchase.
14. Shares of company Payment of Rs.50,000/- or more to a company foracquiring its shares
i. Opening a demat account;ii. Purchase or sale of shares of an unlisted
company for an amount exceeding Rs.1 lakhper transaction.
15. Debentures/ bonds Payment of Rs.50,000/- or more to a company/institution for acquiring its debentures/ bonds
Payment exceeding Rs.50,000/-.
16. RBI bonds Payment of Rs.50,000/-or more to RBI foracquiring its bonds
Payment exceeding Rs.50,000/-.
17. Life insurance premium Payment of Rs.50,000/- or more in a year aspremium to an insurer
Payment exceeding Rs.50,000/- in a year.
18. Purchase of jewellery/bullion Payment of Rs.5 lakh or more at any one time oragainst a bill
Deleted and merged with next item in thistable
19. Purchases or sales of goods orservices
No requirement Purchase/ sale of any goods or servicesexceeding Rs.2 lakh per transaction.
20. Cash cards/ prepaid instrumentsissued under Payment & SettlementAct
No requirement Cash payment aggregating to more thanRs.50,000 in a year.
S. No. NATURE OF TRANSACTION MANDATORY QUOTING OF PAN (RULE 114B)
Existing requirement New requirement
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Minor: Where a person, entering into any transaction referred above, is a minor and who does not have any income chargeable to income-tax, he shall quote the permanent account number (PAN) of his father or mother or guardian, as the case may be, in the document pertaining to the said transaction.
No PAN: Further, where any person who does not have a PAN and who enters into any transaction specified above, he shall make a declaration in Form 60 giving therein the particulars of such transaction.
Form 15G/15H should invariably contain PAN of the declarant.
Penalty for non-quoting of PAN (Section 272B) – If a person fails to comply with the requirement of quoting the PAN or furnish incorrect PAN then Assessing Officer may levy the penalty of Rs. 10,000.
PAN
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Any person who sells an immovable property exceeding Rs. 10L or motor vehicle of any valueshall either obtain and verify the PAN of the buyer at the time of sale or shall obtain Form 60 incase buyer does not have PAN.
Any person, being a person raising bills referred to at S. No. 5 (hotel or restaurant) or 6 (foreigntravel) or 18 (sale of goods or services exceeding Rs. 2,00,000) of rule 114B, who, in relation to atransaction specified in the said S. No., has issued any document shall ensure after verificationthat permanent account number has been correctly furnished and the same shall be mentionedin such document, or as the case may be, a declaration in Form 60 has been duly furnished withcomplete particulars.
Therefore a person who is raising invoices in the above said transactions S. No. 5 (hotel orrestaurant) or 6 (foreign travel) or 18 (sale of goods or services exceeding Rs. 2,00,000) shallmention the PAN of buyer/service receiver on the invoice or document issued.
Verification of PAN
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It is a Form for declaration to be filed by an individual or a person (not being a company or firm)who does not have a permanent account number (PAN) and who enters into any transactionspecified in rule 114B (mentioned in above table),
It requires the estimated total income (including income of spouse, minor child etc. as persection 64 of Income-tax Act, 1961) for the financial year in which the said transaction is held,
The person accepting the declaration shall not accept the declaration where the amount ofincome of the nature [estimated total income (other than agricultural income)] exceeds themaximum amount which is not chargeable to tax, unless PAN is applied for and itsacknowledgement number is duly filled.
Form 60
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Before signing the declaration, the declarant should satisfy himself that the informationfurnished in this form is true, correct and complete in all respects. Any person making a falsestatement in the declaration shall be liable to prosecution under section 277 of the Income‐taxAct, 1961 and on conviction be punishable. 1. in a case where tax sought to be evaded exceeds25 lakh rupees, with rigorous imprisonment which shall not be less than six months but whichmay extend to seven years and with fine; 2. in any other case, with rigorous imprisonmentwhich shall not be less than three months but which may extend to two years and with fine.
Reporting requirements of Form 60 details received: [Rule 114D]
Every person who have received Form 60 on or after 01 January 2016 in relation to transactionsspecified in above table, shall be required to file Form 61 to the Director of Income-tax(Intelligence and Criminal Investigation) or the Joint Director of Income-tax (Intelligence andCriminal Investigation) through online transmission of electronic data to a server designated forthis purpose and obtain an acknowledgement number and retain Form No. 60 for a period of sixyears from the end of the financial year in which the transaction was undertaken.
Form 60
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Any building or land appurtenant thereto is held as stock in trade which is not let during thewhole of or any part of previous year for a period up to one year from the end of financial yearin which certificate of completion of construction is obtained shall be nil.
Loss Provisions:-
Loss under the head house property can be set off against income of the assesse under anyother head of income to the extent of Rs. 2,00,000/-. Unabsorbed loss can be carried forward;
House Property
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Income from transfer of a capital asset being land or building or both under Joint DevelopmentAgreement of an individual or HUF be taxable in the year in which certificate of completion forthe whole of project or part of project is issued by the competent authority and the stamp dutyvalue of his share on the date of issue of said certificate and any amount received in cash shalldeemed to be full value consideration;
Any person responsible for paying to a resident any sum by way of monetary considerationunder JDA shall deduct tax @10 %;( W E F 01-06-2017)- Sec 194-IC
Normal provisions will apply in case where individual or HUF transfer his share in the projectbefore issue of completion certificate by competent authority;
Cost of acquisition of capital asset being share in the project shall be the amount of deemed fullvalue consideration;
Capital Gains
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Period of holding is reduced from 36 months to 24 months in case of immovable property, beingland or building or both to treat it as short term capital asset;
MAT/AMT credit carry forward up to 15 AY immediately succeeding the AY in which such creditbecomes allowable;
Periodicity for LTCG reduced from 3 years to 2 years.
Base Year shifted from 1st April 1981 to 1st April 2001 for all assets including immovable
property.
Base Year Shift helps the investor as now prices are more realistically calculated accounting for
inflation.
Capital Gains
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Thank you!!!
CA Suresh Babu SManaging Partner
M/s SBS and Company [email protected]
9440883366
SBS EVENTS HALLOn 02nd June, 2017
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