On 02 nd June, 2017 suresh@sbsandco.com 9440883366 RATES OF INCOME - - PowerPoint PPT Presentation

Presentation on MSME – Cash Less Economy -Relevant to Direct Taxes

by

CA Suresh Babu S Managing Partner M/s SBS and Company LLP suresh@sbsandco.com 9440883366

SBS EVENTS HALL On 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) Above 10,00,000 Rs 1,12,500+30%

• f(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) Above 10,00,000 Rs 1,10,000+30%

• f(total income-

10,00,000) Income Rates Upto5,00,000 NIL Rs5,00,000 – Rs10,00,000 20% of (total income-5,00,000) Above Rs10,00,000 1,00,000+30%of (totalincome- 5,00,000)

Rebate U/s 87A has been reduced to Rs. 2500/- . It is available if total income of resident individual does not 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 Note - 2: Hence Cash can be withdrawn from Bank without limit.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 and

accepts cash in a single day at different times then Mr. A shall be found guilty of violation of Section 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 then

receives cash Rs.1,50,000 on Day 1 and Rs.1,50,000 on Day 2 then Mr. A shall be found guilty of violation 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 and

Rs.1,00,000 for Hall Charges and accepts cash Rs.2,50,000 from Mr. A then the hotel shall be found guilty 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 to

Rs.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(Sec

32/43(1))

 Revenues Expenses paid in cash beyond Rs.10,000 will not be allowed as business expense while

calculating 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

• ther 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 which

the Central Government may, for reasons to be recorded in writing, notify in this behalf in the Official Gazette.

Penalty:

Section 271E: In the case of failure to comply with the provisions of Section 269T, a penalty of 100% 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 accounts if income from business or profession, other than referred U/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 or

profession are

 required

to maintain regular books of account and

 get accounts audited

if their gross turnover or income exceeds the prescribed limit

Meaning of Presumptive Taxation:

Relief to small tax payers

PRESUMPTIVE TAXATION

 To get relief to from this tedious

work of maintenance of Books of accounts, a small taxpayer

 can opt for presumptive taxation

under section 44AD, 44AE or 44ADA Upon satisfaction of the prescribed conditions

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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 to

pay 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 as

advance 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 house property Any LTC asset Any LTC asset (other than a residential house property) provided* Type of asset should be acquire to get the benefit

• f exemption

Purchase within 1 year before transfer or 2 years after transfer. Construction within 3 years after the date of transfer. Within 6 months after transfer. Purchase within 1 year before transfer or 2 years after transfer Construction within 3 years after the date of transfer Amount Exempted Investment in new asset

• r capital gain which ever

is lower Investment in new asset

• r capital gain which ever

is 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 a subsequent year If the new asset is transferred within 3 years

• f its acquisition.

If the new asset is transferred

• r

it is converted in to money or a loan is taken on security

• f the new asset within 3

years of its acquisition. a) Within one year of transfer of original asset, there shall not be purchase of other residential house property other than new asset b) Within three years of transfer of original asset, assessee shall not constructs residential property

• ther than new asset

Exemption revoked- taxable as LTCG/STCG STCG LTCG LTCG Scheme of deposit is applicable 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 be

the 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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CHAPTER VI-A DEDUCTIONS

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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 loan principle repayment , Tuition fees (2 children), Infrastructure Bonds ,NABARD rural bonds PPF, NSC ,ULIP , Subscription to equity shares or debentures ,5-year bank fixed deposits, Post

• ffice saving scheme ,Any contribution to Senior citizen saving

scheme 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

• f

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

• f senior citizen)

Rs.30,000 Rs.5,000 (This is included in above 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

• f 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

• f 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-tax

Law has framed the concept of statement of financial transaction or reportable account [previously called as ‘Annual Information Return (AIR)’].

 With the help of the statement the tax authorities will collect information on certain

prescribed high value transactions undertaken by a person during the year.

 There could a amendment to IT Act to provide for taxation of past unaccounted cash

now 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 or pay orders or banker's cheque of an amount aggregating to Rs. 10 lakh or more in a financial year. (b) Payments made in cash aggregating to Rs. 10 lakh or more during the financial year for purchase of pre-paid instruments issued by Reserve Bank of India. (c) Cash deposits or cash withdrawals (including through bearer's cheque) aggregating to Rs. 50 lakh or more in a financial year, in or from one or more current account of a person A banking company

• r

a cooperative bank 2 Cash deposits aggregating to Rs. 10 lakh or more in a financial year, in one or more Savings accounts of a person. (i) A banking company or a cooperative bank (ii) Post Master General 3 One or more time deposits (other than a time deposit made through renewal of another time deposit) of a person aggregating to Rs. 10 lakh or more in a financial year of a person. (i) A banking company or a cooperative bank (ii) Post Master General (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 aggregating to— (i) Rs. 1 lakh or more in cash; or (ii) Rs. 10 lakh or more by any other mode, against bills raised in respect of one or more credit cards issued to that person, in a financial year A banking company

• r

a cooperative bank or any other company or institution issuing credit card. 5 Receipt from any person of an amount aggregating to Rs. 10 lakh or more in a financial year for acquiring bonds or debentures issued by the company or institution (other than the amount received on account of renewal of the bond or debenture issued by that company). A company or institution issuing bonds 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 shares bought in the open market) for an amount or value aggregating to Rs. 10 lakh or more in a financial year. A company listed on a recognised stock exchange purchasing its own securities under section 68 of the Companies Act, 2013 8 Receipt from any person of an amount aggregating to Rs. 10 lakh or more in a financial year for acquiring units of one or more schemes of a Mutual Fund (other than the amount received on account of transfer from one scheme to another scheme of that Mutual Fund) A trustee of a Mutual Fund or such

• ther person managing the affairs
• f the Mutual Fund

9 Receipt from any person for sale of foreign currency including any credit of such currency to foreign exchange card or expense in such currency through a debit or credit card or through issue of travellers cheque or draft or any

• ther instrument of an amount aggregating to Rs. 10 lakh
• r more during a financial year.

Authorised person under Foreign Exchange 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 for an amount of Rs. 10 lakh or more or valued by the stamp valuation authority referred to in section 50C of the Act at

• Rs. 30 lakh or more

Inspector-General or Registrar or Sub-Registrar appointed under the Registration Act, 1908 11 Receipt of cash payment exceeding Rs. 2 lakh for sale, by any person, of goods or services of any nature (other than those specified at Sl. Nos. 1 to 10 of this rule, if any.) Any person who is liable for audit under section 44AB of the Act. 12 Cash deposits during the period 09th November, 2016 to 30th December, 2016 aggregating to— (i) Rs 12,50,000 or more in one or more current account

• f 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-

• perative bank to which the

Banking Regulation Act, 1949 (10 of 1949) applies (ii) Post Master General as referred to in clause (j) of section 2 of the Indian Post Office 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 a banking company

• i. Deposits with Co-op banks, Post Office, Nidhi,

NBFC companies will also need PAN;

• ii. Deposits aggregating to more than Rs.5

lakh 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 value exceeding Rs.1 lakh No change 6. Opening an account (other than time deposit) with a banking company. All new accounts.

• i. Basic Savings Bank Deposit Account excluded (no

PAN requirement for opening these accounts);

• ii. Co-operative banks also to comply

7. Installation of telephone/ cellphone connections All instances Discontinued 8. Hotel/restaurant bill(s) Exceeding Rs.25,000/- at any one time (by any mode of payment) Cash payment exceeding Rs.50,000/-. 9. Cash purchase of bank drafts/ pay

• rders/ banker's cheques

Amount aggregating to Rs.50,000/- or more during any one day Exceeding Rs.50,000/- on any one day. 10. Cash deposit with banking company Cash aggregating to Rs.50,000/- or more during any one day Cash deposit exceeding Rs.50,000/- in a day.

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11. Foreign travel Cash payment in connection with foreign travel of an amount exceeding Rs.25,000/- at any

• ne time (including fare, payment to travel agent,

purchase of forex) Cash payment in connection with foreign travel

• r purchase of foreign currency of an amount

exceeding Rs.50,000/- at any one time (including fare, payment to travel agent) 12. Credit card Application to banking company/ any other company/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 for acquiring its shares

• i. Opening a demat account;
• ii. Purchase or sale of shares of an unlisted

company for an amount exceeding Rs.1 lakh per 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 for acquiring its bonds Payment exceeding Rs.50,000/-. 17. Life insurance premium Payment of Rs.50,000/- or more in a year as premium 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 or against a bill Deleted and merged with next item in this table 19. Purchases or sales of goods or services No requirement Purchase/ sale of any goods or services exceeding Rs.2 lakh per transaction. 20. Cash cards/ prepaid instruments issued under Payment & Settlement Act No requirement Cash payment aggregating to more than Rs.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 value

shall either obtain and verify the PAN of the buyer at the time of sale or shall obtain Form 60 in case buyer does not have PAN.

 Any person, being a person raising bills referred to at S. No. 5 (hotel or restaurant) or 6 (foreign

travel) or 18 (sale of goods or services exceeding Rs. 2,00,000) of rule 114B, who, in relation to a transaction specified in the said S. No., has issued any document shall ensure after verification that permanent account number has been correctly furnished and the same shall be mentioned in such document, or as the case may be, a declaration in Form 60 has been duly furnished with complete particulars.

 Therefore a person who is raising invoices in the above said transactions S. No. 5 (hotel or

restaurant) or 6 (foreign travel) or 18 (sale of goods or services exceeding Rs. 2,00,000) shall mention 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 transaction specified in rule 114B (mentioned in above table),

 It requires the estimated total income (including income of spouse, minor child etc. as per

section 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 of

income of the nature [estimated total income (other than agricultural income)] exceeds the maximum amount which is not chargeable to tax, unless PAN is applied for and its acknowledgement number is duly filled.

Form 60

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 Before signing the declaration, the declarant should satisfy himself that the information

furnished in this form is true, correct and complete in all respects. Any person making a false statement in the declaration shall be liable to prosecution under section 277 of the Income‐tax Act, 1961 and on conviction be punishable. 1. in a case where tax sought to be evaded exceeds 25 lakh rupees, with rigorous imprisonment which shall not be less than six months but which may extend to seven years and with fine; 2. in any other case, with rigorous imprisonment which 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 transactions

specified 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 and Criminal Investigation) through online transmission of electronic data to a server designated for this purpose and obtain an acknowledgement number and retain Form No. 60 for a period of six years 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 the

whole of or any part of previous year for a period up to one year from the end of financial year in 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 any
• ther 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 Development

Agreement of an individual or HUF be taxable in the year in which certificate of completion for the whole of project or part of project is issued by the competent authority and the stamp duty value of his share on the date of issue of said certificate and any amount received in cash shall deemed to be full value consideration;

 Any person responsible for paying to a resident any sum by way of monetary consideration

under 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 project

before issue of completion certificate by competent authority;

 Cost of acquisition of capital asset being share in the project shall be the amount of deemed full

value consideration;

Capital Gains

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 Period of holding is reduced from 36 months to 24 months in case of immovable property, being

land 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 credit

becomes 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 S Managing Partner M/s SBS and Company LLP suresh@sbsandco.com 9440883366

SBS EVENTS HALL On 02nd June, 2017

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