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Direct Taxes
Statutes, Circulars and Notifications
Rajan Vora and Rajesh Kothari
Chartered Accountants
1. Allowances – Section 10(14) – Rule 2BB
Rule 2BB(2)
prescribes allowance for the purpose of section 10(14)(ii) of the Income-tax
Act, 1961. Item 9 to Table given under Rule 2BB(2) relates to “ any special
allowance in the nature of counter insurgency allowance granted to the members
of armed forces operating in areas away from their permanent locations for a
period of more than 30 days”. The words “for a period of more than 30 days” are
now omitted.
{Notification No. 197/2005 dated 8th
September, 2005 (147 Taxman (St.) 64) (277 ITR (St.) 53)}
2. Extension of due date for filing of
Quarterly Return of Payment of Interest to Residents without Deduction of Tax at
Source
The CBDT has
extended the due date for filing of quarterly return of Payment of Interest to
Residents without Deduction of Tax at Source under section 206A(1) for the
quarter ending 30-6-2005 to 30th of September, 2005.
{Order F.No. 385/35/2005-IT(B) dated August
25, 2005 (277 ITR (St) 51) (147 Taxman (St) 28)} 197 CTR 116
This date along
with 30-9-2005 has been further extended to 31-12-2005
(Order F. No. 385/35/2005-IT(B) dated 19-9-2005
(147 Taxman 67)
3. Extension of Due Date for filing of
Annual Return and quarterly statement of TDS
The CBDT has
extended the due date for filing of annual return of TDS for the financial year
2004-05 and filing of quarterly statement of TDS for the quarter ending
30-6-2005 by the offices of the Government to 30th September, 2005.
{Order F. No.
385/35/2005 – IT(B) II dated 30th August, 2005 (147 Taxman (St.) 56) (277 ITR
(St.) 53) (197 CTR (St.) 116)}
4. Furnishing of Annual Information Return
– Section 285BA
Section 285BA of
the Income-tax Act, 1961 requires certain specified persons (filers) to file an
Annual Information Return (AIR) in respect of specified financial transactions
registered or recorded by him during a financial year. The CBDT has clarified
with regard to filing of annual information return as under:
i) The
CBDT has authorized M/s National Securities Depositories Ltd. (NSDL), Trade
World, 4th Floor, Kamala Mills Compound, Lower Parel, Mumbai 400 013 as the
agency authorized to receive AIRs.
ii)
The filers can furnish the AIR with the facilitation centres of NSDL located in
different parts of the country.
iii) The
filer is required to quote his Folio number in Form 61A for filing of AIR. This
folio number will be the unique identity of the filer for all purposes of AIR.
iv) The
folio number will be, in the case of government filers, the TAN of the filer,
and in the case of non-government filers the TAN of the principal office of the
person filing the AIR.
v) Persons
filing annual information return should furnish only one return even if they may
have more than one branch.
vi) With
regard to reporting of transactions involving aggregate cash deposits of ten
lakh rupees or more in a savings account of a person, it is clarified that only
the aggregate of all the cash deposits in the savings account of a person is
required to be reported as one transaction and the date for the transaction is
to be mentioned as the last date of the financial year, i.e 31-3-2005 in respect
of transactions for the financial year 2004-05.
vii)
With regard to reporting of transactions involving aggregate payments of two
lakh rupees or more in respect of credit card, it is clarified that only the
aggregate of all the payments by a person to the credit card company is required
to be reported as one transaction and the date for the transaction is to be
mentioned as the last date of the financial year.
viii) With
regard to reporting of receipt from any person of any amount of rupees or more
for acquiring units of mutual funds/bonds/debentures/shares, where the filer
receives from a transacting party an amount higher than the threshold limit for
allotment of units, bonds, debentures or shares but the actual allotment may
have been made of an amount lower than the threshold value, it is clarified that
all such transactions where the receipt is more than the threshold limit
specified are to be reported in the AIR. It is further clarified that the amount
actually received from a transacting party, and not the amount relating to the
allotment, is to be reported in the AIR.
ix) With
regard to transactions of purchase or sale by any person of immovable property
valued at thirty lakh rupees or more, it is clarified that even if the
transaction is in respect of a property valued at more than rupees thirty lakhs
involving joint parties and the value for one or more party is less than rupees
thirty lakhs, such transactions are to be reported in the AIR, giving requisite
details in respect of all the joint parties, even though the value of the
transaction in the hands of one or more of the joint parties is less than the
threshold limit.
x)
With regard to transactions involving aggregate Receipt from any person of an
amount or amounts aggregating to five lakh rupees or more in a year for bonds
issued by the Reserve Bank of India, it is clarified that only the aggregate of
all the receipts from a person is required to be reported as one transaction and
the date for the transaction is to be mentioned as the last date of the
financial year.
xi)
All persons furnishing AIR should ensure, after verification that the PAN quoted
by the transacting party has been duly and correctly quoted in the document.
{Circular No. 07/2005 dated August 24, 2005 (147
Taxman (St.) 25) (277 ITR (St.) 17) (197 CTR (St.) 81)}
5.
Amendment to restrict the investment under all Small Savings Scheme to
Individual only
As a result of amendment dt. 13-5-2005, the
investment under all Small Savings Scheme including Kisan Vikas Patra, PPF etc.
have been restricted to individuals only. Thereby treating the
accounts/certificates if any opened/issued to juristic person (HUF, Trust, PF
etc.) on or after 13-5-2005 as void ab initio.
However the above amendments shall not be
applicable to the existing account/certificates opened/issued in accordance with
the rules in operation prior to the date of amendment.
Notification F.
No.2/8/2005-NS-II, dated 20-5-2005 147 Taxman 68 (St)
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