CA Final Nov 2014 Indirect Tax (IDT) Amendments, syllabus

Show More

CA Final Nov 2016 || Direct Tax (DT) || Amendments, Syllabus

ICAI has released new Study Material for CA Final Direct Taxes, applicable from Nov 2015 Exams. The amendments made by the Finance Act are incorporated in the new study material and the compilation of such amendments and relevant notifications can be viewed from the file below

Show More

IPCC TAX Nov 2016 Syllabus, Amendments

IPCC Nov 2015 Exams: Tax Amendments, Income Tax slabs etc

*Manufacturing companies investing more than 100 crore in new plant and machinery during the period from 1.4.2013 to 31.3.2015 entitled to investment allowance@15% [Section 32AC] 

*From this year, A rebate of Rs.2,000 from tax calculated will be available for people having an annual income upto Rs.5 Lakh. Thus we can say that tax payable in 10% slab will be maximum Rs.28,000 (taking into account Rs.2,000 tax credit).

Surcharge of 10% will be payable if income is above Rs.1 Crore.

Income Tax Slabs for Nov 2015 Exams

Income Range	Men and Women (Below 60 Years of Age)	Senior Citizens (Men and Women above 60 years of age) but below 80 years	Super Senior Citizens ( Men and Women above 80 Years of Age
Upto Rs.2,00,000/-	Nil	Nil	Nil
2,00,000 to 2,50,000	10%	Nil	Nil
2,50,000 to 5,00,000	10%	10%	Nil
5,00,000 to 10,00,000	20%	20%	20%
Above Rs.10,00,000	30%	30%	30%

Taxation

Exam point of view, the first thing you need to start and finish is VAT, and then Service Tax and then move on to Income Tax.

There have been plenty of amendments in Service Tax and recent Practice Manual is well updated with all the changes and very good practical questions.

Most important point you should remember while preparing for Taxation is, NEVER READ A BULK OF SYLLABUS IN A SINGLE DAY. Taxation is a tricky subject who should be prepared over a period of time. Don’t finish topics in a single stretch. For that day you may feel like you got that but after a week, everything comes to the starting point. Slow and Steady.

Killer tip: Go though Amendments made in Finance Act, 2014. A minimum of 50-55 Marks will be covered from those topics only.
 Download these Amendments here

Important Chapters/Topics:

• Residential status, Clubbing, House Property
• ST: Valuation, POT, Returns
• VAT: Calculation  and procedures

Important Theory Questions:

• Service Tax @ Life Insurance business
• Benefits of Composition scheme under VAT
• Advance Payment of Tax on Capital Gains (5M)
• Deduction u/s 80CCG
• Section 197A (1F)
• Service Tax on Vocational Course offered by Govt Org

Show More

CA IPCC Nov 2015 Amendments, Syllabus, Topics Excluded

November 2015 Amendments in CA IPCC Subjects applicable for November 2015 exams:

IPCC Paper 1 - Accounting Amendments:

Electricity Companies Excluded from Syllabus applicable for Nov 2015 exams:

The topic of “Financial Reporting of Electricity Companies” would be excluded from the syllabus of Intermediate (IPC) Paper 5 : Advanced Accounting and the same would not be applicable from November, 2015 Examination.

It is further clarified that these topics were permenantly excluded from CA IPCC syllabus and will not be applicable for exam there after.

Additional Director

BOS, ICAI

Exclusion of Hire Purchase Trading A/c, Stock and Debtors Method from IPCC Syllabus:

In Accounting paper, ICAI has made it clear that, these topics are no longer relevant and 

they are in wrong motion. By this, it is quite clear that ICAI has decided to exclude these topics with immediate effect and so will not be applicable for the upcoming November 2015 exams.

Amendments in Acocunting for IPCC Nov 2015 Exams:

A. Pronouncements

Accounting Standards 1, 2, 3, 6, 7, 9, 10, 13 and 14 are covered in the syllabus.  (Text of all applicable Accounting Standards are available in the Appendix I of Volume I of  ‘Accounting’ Study Material revised in November, 2014.).

B. Announcement relevant for Nov 2015 examination

Criteria for Classification of Entities and Applicability of Accounting Standards

Due to recent changes in the enhancement of tax audit limit, the Council of the ICAI has  recently decided to change the 1st criteria i.e. determination of SME on turnover basis for  Level II entities from Rs. 40 lakhs to Rs. 1 Crore with effect from the accounting year  commencing on or after April 01, 2012.

Indian ASs Issued by The Ministry of Corporate Affairs: These ASs are not applicable for students appearing in Nov 2015 Exams.

New Balance Sheet Format: Students should note that Balance sheet now should be prepared as per Schedule-III (earlier it is Schedule VI)

Download Accounts Notes for Revision

Law Ethics and Communication Amendments: 

There are no topics excluded or New amendments applicable for IPCC Nov 2015, Law Ethics and Communication paper. However, Certain section of the Companies Act, 2013 has been changed since the previous act and these will be applicable for Nov 2015 exams. Students can download the amendments material of new companies act from below:

Companies Act, 2013 Amendments 

Download Law, Ethics Notes for Revision

Costing and FM Amendments:

There are no topics excluded or New amendments applicable for IPCC Nov 2015, Cost Accounting and Financial Management paper.

Costing and FM Important Theory Questions

Download Costing FM Notes for Revision

Taxation:

For November 2015 exams, no new topics have been excluded from the Taxation syllabus.

However, ICAI has released applicable amendments for Tax Nov 2015 Exam, see them below.

                    IPCC Nov 2016 Tax Amendments

Also Read - IPCC Important questions, topics

Show More

IPCC Hire Purchase Trading, Stock & Debtors May 2014

Also Read: Companies bill Applicability to CA IPCC and Final exams

Query: Whether 'Hire Purchase Trading Account, Stock and Debtors method' is applicable/relevant for IPCC November 2013 exams or not?

Board of Studies has decided to exclude the Hire Purchase Trading Account (Debtors) Method and Stock and Debtors Method in the Paper 1: Accounting Study Material at Intermediate (IPC) level. The new books to be released in this July will not have these topics. 

ICAI has also made it clear that, these topics are no longer relevant and they are in wrong motion. By this, it is quite clear that ICAI has decided to exclude these topics with immediate effect and so will not be applicable for the upcoming November 2013 exams.

The same has been confirmed to a query in e-sahaayata.

You can view the original announcement by ICAI below:

Board of Studies has decided to exclude the Hire Purchase Trading Account (Debtors) Method and Stock and Debtors Method in the Paper 1: Accounting Study Material at Intermediate (IPC) level. 

Accordingly, students of Intermediate (IPC) Course Paper 1: Accounting are advised not to read the said methods given in Chapter 11 of the Study Material. The details of the relevant page nos. and questions in the Study Material and Practice Manual of July, 2013(Revised edition) respectively, are given hereunder:

Volume I Study Material Para 9 to 13 and Illustrations 13 to 19 in Page nos. 11.32 to 11.50

Volume II Practice Manual Questions 1, 2, 4, 5, 6, 7, 8 and 10 in Page nos. 11.1 to 11.20

Show More

CA IPCC, Final Tax Amendments May 2014

These files contain various Amendments in Taxation, Service Tax and VAT applicable for CA IPCC and Final Students released by ICAI:

Download For IPCC

Download for CA Final:

Direct Taxes: DT

Indirect Taxes: IDT

   

Show More

New procedure and criteria for selection of Scrutiny Cases

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

Subject: Procedure and criteria for selection of scrutiny cases under compulsory manual during the financial-year 2013-2014 -regd:

The following categories of cases /returns shall be compulsorily scrutinized:

a) Cases where value of international transaction as defined u/s 92B of IT Act exceeds Rs.15 crores.

b)Cases involving addition in an earlier assessment year on the issue of transfer pricing in excess of Rs.10 Crores or more which is confirmed in appeal or is pending before an appellate authority.

c) Cases involving addition in an earlier assessment year in excess of Rs.10 lacs on a substantial and recurring question of law or fact which is confirmed in appeal or is pending before an appellate authority.

d) All assessments pertaining to Survey under section 133A of the IT Act excluding the cases where there are no impounded books of accounts/documents and returned income excluding any disclosure made during the Survey is not less than returned income of preceding assessment year. However, where assessee retracts the disclosure made during the Survey will not be covered by this exclusion.

e) Assessment in Search and seizure cases to be made under sections 158B, 158BC, 158BD 153A  and 153C read with 143(3) of the IT Act.

f) All returns filed in response to notice u/s 147/148 of the IT Act.

g) Cases claiming exemption of income u/s  11 or u/s 10(23C) which are hit by provisio(s) to Section 2(15) of IT Act.

h) Entities which received donations from countries abroad in excess of Rs. One Crore during the Financial Year 2011-2012 (relevant for the A.Y 2012-2013) under the provisions of Foreign Contribution Regulation Act (FCRA). Such information is maintained by Ministry of Home Affairs and is available on its website (www. Mha.nic.in). Respective cadre controlling Chief-Commissioners /Directors-General of Income Tax may identify the cases pertaining to their respective jurisdiction after downloading from the website and disseminate the information to various field offices.

i) Cases in respect of which information is received from other Government Department(s) or other authorities pointing out tax-evasion. The Assessing Officer shall record reasons in such cases and take approval from jurisdictional CCIT/DGIT before selecting such case for scrutiny.

In order to ensure quality of assessment orders, CCsIT/DGsIT would evolve suitable monitoring mechanism. They shall analyse atleast 50 quality assessments of their respective charges and send the report to respective Zonal Member with copy to Member (IT) with suggestions for improvement by 30^th April, 2014. CCsIT/DGsIT would further ensure that cases selected for publication in ‘let us share’ are picked up quality assessments as reported.

Show More

Tax Amedments for AY 2014-15 [PY 2013-14]

Highlights of Change in Direct Taxes in the Union Budget 2013, Tax Amedments for AY 2014-15

1. Rate of Income Tax for Individual

a) Slab Rate

Assessment Year 2014-15 (Financial Year 2013-14)		Assessment Year 2013-14 (Financial Year 2012-13)
Threshold Limit	Rates	Threshold Limit	Rates
Individual(Man or Woman) Age : 59 Years		Individual(Man or Woman) Age : 59 Years
0 - 200,0000	Nil	0 - 200,0000	Nil
200,010  to 500,000	10%	200,010  to 500,000	10%
500,010 to 1,000,000	20%	500,010 to 1,000,000	20%
Above 1,000,000	30%	Above 1,000,000	30%
Individual(Man or Woman: Resident) Age : 60 Years or above – 79 Years		Individual(Man or Woman: Resident) Age : 60 years or above -79 Years
0 - 250,0000	Nil	0 - 250,0000	Nil
250,010  to 500,000	10%	250,010  to 500,000	10%
500,010 to 1,000,000	20%	500,010 to 1,000,000	20%
Above 1,000,000	30%	Above 1,000,000	30%
Individual(Man or Woman: Resident) Age : 80 Years or Above		Individual(Man or Woman: Resident) Age : 80 Years or Above
0 - 500,000	Nil	0 - 500,000	Nil
500,010 to 1,000,000	20%	500,010 to 1,000,000	20%
Above 1,000,000	30%	Above 1,000,000	30%

b) Surcharge and Cess

Assessment Year 2014-15 (Financial Year 2013-14)		Assessment Year 2013-14 (Financial Year 2012-13)
Particulars	Rate	Particulars	Rate
Surcharge* -If Total Income of Individual ≤ 1 Cr. -If Total Income of Individual > 1 Cr.	Nil 10%	Surcharge -If Total Income of Individual ≤ 1 Cr. -If Total Income of Individual > 1 Cr.	Nil Nil
Education Cess	1%	Education Cess	1%
Secondary and Higher Education Cess	2%	Secondary and Higher Education Cess	2%

c) Alternative Minimum Tax (i.e. AMT)

Assessment Year 2014-15 (Financial Year 2013-14)		Assessment Year 2013-14 (Financial Year 2012-13)
Particulars	Rate	Particulars	Rate
Alternative Minimum Tax (AMT) Adjusted total income  ≤ 20 L Adjusted total income  > 20 L	Nil 18.50%	Alternative Minimum Tax (AMT) Adjusted total income  ≤ 20 L Adjusted total income  > 20 L	Nil 18.50%
Surcharge* -If Total Income of Individual ≤ 1 Cr. -If Total Income of Individual > 1 Cr.	Nil 10%	Surcharge -If Total Income of Individual ≤ 1 Cr. -If Total Income of Individual > 1 Cr.	Nil Nil
Education Cess	1%	Education Cess	1%
Secondary and Higher Education Cess	2%	Secondary and Higher Education Cess	2%

*Marginal Relief:

Total amount payable as Income tax and Surcharge on total income exceeding Rs. 1 Cr. shall not exceed the total amount payable as income on a total income of Rs. 1 Cr. by more than the amount of income that exceeds Rs. 1 Cr.

Author’s Comment: In simple words, we can say, there is no any change in rate of income tax in the individual. Surcharge @ 10% is levied on the rich persons. Due to again introduction of surcharge, Marginal relief is revived in the case of individual. From assessment year 2013-14, Alternative Minimum Tax (AMT) is also applicable on the individual.

d) Rebate of Rs. 2000 for the individual having total income up to 5 lakhs (Section 87A)

An Assessee, being an individual resident in India, his/her total income does not exceed Rs. 5 Lakhs then he/she shall claim rebate equal to the amount of income tax payable on the total income for the any assessment year or an amount of Rs. 2000, whichever is less.

Author’s Comment: It is a rebate which shall be reduced from the Tax Liability. This benefit is restricted to individual who is of the age less than 60 years. Rebate benefit is not available to Super Senior Citizens.

2. Rate of Income Tax other than Individual

a) Hindu Undivided Family (HUF) or AOP/BOI

(Other than a Cooperative Society) whether incorporated or not, or every Artificial Judicial Person

Assessment Year 2014-15 (Financial Year 2013-14)		Assessment Year 2013-14 (Financial Year 2012-13)
Threshold Limit	Rates	Threshold Limit	Rates
0 - 200,0000	Nil	0 - 200,0000	Nil
200,010  to 500,000	10%	200,010  to 500,000	10%
500,010 to 1,000,000	20%	500,010 to 1,000,000	20%
Above 1,000,000	30%	Above 1,000,000	30%

Surcharge and Cess

Assessment Year 2014-15 (Financial Year 2013-14)		Assessment Year 2013-14 (Financial Year 2012-13)
Particulars	Rate	Particulars	Rate
Surcharge * -If Total Income of Individual ≤ 1 Cr. -If Total Income of Individual > 1 Cr.	Nil 10%	Surcharge -If Total Income of Individual ≤ 1 Cr. -If Total Income of Individual > 1 Cr.	Nil Nil
Education Cess	1%	Education Cess	1%
Secondary and Higher Education Cess	2%	Secondary and Higher Education Cess	2%

Alternative Minimum Tax (i.e. AMT)

Assessment Year 2014-15 (Financial Year 2013-14)		Assessment Year 2013-14 (Financial Year 2012-13)
Particulars	Rate	Particulars	Rate
Alternative Minimum Tax (AMT) Adjusted total income  ≤ 20 L Adjusted total income  > 20 L	Nil 18.50%	Alternative Minimum Tax (AMT) Adjusted total income  ≤ 20 L Adjusted total income  > 20 L	Nil 18.50%
Surcharge* -If Total Income of Individual ≤ 1 Cr. -If Total Income of Individual > 1 Cr.	Nil 10%	Surcharge -If Total Income of Individual ≤ 1 Cr. -If Total Income of Individual > 1 Cr.	Nil Nil
Education Cess	1%	Education Cess	1%
Secondary and Higher Education Cess	2%	Secondary and Higher Education Cess	2%

*Marginal Relief:

Total amount payable as Income tax and Surcharge on total income exceeding Rs. 1 Cr. shall not exceed the total amount payable as income on a total income of Rs. 1 Cr. by more than the amount of income that exceeds Rs. 1 Cr.

Author’s Comment: In simple words, we can say, there is no any change in rate of income tax in the Hindu Undivided Family (HUF). Surcharge @ 10% is levied on the HUF. Due to again introduction of surcharge, Marginal relief is revived in the case of HUF. From assessment year 2013-14, Alternative Minimum Tax (AMT) is also applicable on the HUF.

b) Cooperative Societies

Assessment Year 2014-15 (Financial Year 2013-14)		Assessment Year 2013-14 (Financial Year 2012-13)
Threshold Limit	Rates	Threshold Limit	Rates
0 - 10,000	10%	0 - 10,000	10%
10,001 - 20,000	20%	10,001 - 20,000	20%
Above 20,000	30%	Above 20,000	30%

Surcharge and Cess

Assessment Year 2014-15 (Financial Year 2013-14)		Assessment Year 2013-14 (Financial Year 2012-13)
Particulars	Rate	Particulars	Rate
Surcharge* -If Total Income of Individual ≤ 1 Cr. -If Total Income of Individual > 1 Cr.	Nil 10%	Surcharge -If Total Income of Individual ≤ 1 Cr. -If Total Income of Individual > 1 Cr.	Nil Nil
Education Cess	1%	Education Cess	1%
Secondary and Higher Education Cess	2%	Secondary and Higher Education Cess	2%

Alternative Minimum Tax (i.e. AMT)

Assessment Year 2014-15 (Financial Year 2013-14)		Assessment Year 2013-14 (Financial Year 2012-13)
Particulars	Rate	Particulars	Rate
Alternative Minimum Tax (AMT)	18.50%	Alternative Minimum Tax (AMT)	18.50%
Surcharge* -If Total Income of Individual ≤ 1 Cr. -If Total Income of Individual > 1 Cr.	Nil 10%	Surcharge -If Total Income of Individual ≤ 1 Cr. -If Total Income of Individual > 1 Cr.	Nil Nil
Education Cess	1%	Education Cess	1%
Secondary and Higher Education Cess	2%	Secondary and Higher Education Cess	2%

*Marginal Relief:

Total amount payable as Income tax and Surcharge on total income exceeding Rs. 1 Cr. shall not exceed the total amount payable as income on a total income of Rs. 1 Cr. by more than the amount of income that exceeds Rs. 1 Cr.

Author’s Comment: Now, Surcharge @ 10% is levied on the Cooperative Societies. Due to introduction of surcharge, Marginal relief is applicable here. From assessment year 2013-14, Alternative Minimum Tax (AMT) is also applicable on the Cooperative Societies.

c) Rates For Firm (including LLP), Indian Company & Foreign Company

Particulars	Firm (including LLP)		Domestic Company (i.e. Indian Company)		Foreign Company
	AY 14-15 (FY 13-14)	AY 13-14 (FY 12-13)	AY 14-15 (FY 13-14)	AY 13-14 (FY 12-13)	AY 14-15 (FY 13-14)	AY 13-14 (FY 12-13)
RATES OF INCOME TAX
Income Tax	30%	30%	30%	30%	40%	40%
Surcharge* -Total Income ≥ 1Cr. -1Cr. < Total Income ≥ 10 Cr. - Total income < 10 Cr.	Nil 10% 10%	Nil Nil Nil	Nil 5% 10%	Nil 5% 5%	Nil 2% 5%	Nil 2% 2%
Education Cess	1%	1%	1%	1%	1%	1%
Secondary and Higher Education Cess	2%	2%	2%	2%	2%	2%
MINIMUM ALTERNATIVE TAX/ALTERNATE MINIMUM TAX
MAT/AMT	18.50%	18.50%	18.50%	18.50%	18.50%	18.50%
Surcharge* -Total Income ≥ 1Cr. -1Cr. < Total Income ≥ 10 Cr. - Total income < 10 Cr.	Nil 10% 10%	Nil Nil Nil	Nil 5% 10%	Nil 5% 5%	Nil 2% 5%	Nil 2% 2%
Education Cess	1%	1%	1%	1%	1%	1%
Secondary and Higher Education Cess	2%	2%	2%	2%	2%	2%

*Marginal Relief:

Total amount payable as Income tax and Surcharge on total income exceeding Rs. 1 Cr. but not exceeding Rs. 10 Cr. shall not exceed the total amount payable as income on a total income of Rs. 1 Cr. by more than the amount of income that exceeds Rs. 1 Cr. The total amount payable as income tax and surcharge on total income exceeding Rs. 10 Cr. shall not exceed the total amount payable as income and surcharge on total income of Rs. 10 Cr., by more than the amount of income that exceeds Rs. 10 Cr.

Author’s Comment: Now, there is new Surcharge Slabs are inserted in the case of foreign company and domestic company. If total income exceeding Rs. 1 Cr. but less than Rs. 10 Crs. then in such case Indian company shall pay surcharge @ 5% or Firm (including LLP) shall pay surcharge @ 10%. It is totally injustice in the case of Firm (including LLP).  Due to introduction of surcharge, Marginal relief is applicable here. From assessment year 2013-14, Alternative Minimum Tax (AMT) is applicable on the Firm also.

3.  Return of Income filed without payment of Self- assessment tax to be treated as Defective return (w.e.f 1st June, 2013)

Return of Income shall be regarded as defective unless the tax together with interest, if any, payable in accordance with the provisions of section 140A has been paid on or before the date of furnishing of the return.

Author’s Comment: Revenue has been noticed that a large number of assessees are filing their returns of income without payment of self-assessment tax. Now, Revenue has power to issue Notice under section 144 of Best Judgment Assessment and Levy penalty for non filing return of income under section 271F upto Rs. 5000/-

4.  Deductions and Exemptions

Assessment Year 2014-15 (Financial Year 2013-14)		Assessment Year 2013-14 (Financial Year 2012-13)
Particulars	Threshold Limit	Particulars	Threshold Limit
Life Insurance Policy		Life Insurance Policy
Section 80C (Deduction of premium amount of life Insurance under section 80C shall be claimed to the extent of 15 % of Actual capital sum assured.)	100,000	Section 80C (Deduction of premium amount of life Insurance under section 80C shall be claimed to the extent of 10 % of Actual capital sum assured.)	100,000
Exemption under section 10(10D) (if Premium amount of life Insurance ≤ 15 % of Actual capital sum assured) Note: Key man Insurance Policy which has been assigned to any person during its term, with or without consideration, shall continue to be treated as a key man insurance policy. Therefore it is taxable.	Any Sum Received (including Bonus) under Life Insurance Policy	Exemption under section 10(10D) (if Premium amount of life Insurance ≤ 10 % of Actual capital sum assured) Note: Key man Insurance Policy which has been assigned to any person during its term, with or without consideration, shall be treated as a Life Insurance Policy. Therefore it is exempt.	Any Sum Received (including Bonus) under Life Insurance Policy
Medical Claim Policy		Medical Claim Policy
Section 80D (Individual or HUF) Insurance & Preventive health check up n  assessee or his family n  Parents  (Senior Citizen- Age: above 60 Years) Note: Benefit of Deduction under this section is available, in respect of any payment or contribution made by the assessee to Central Government Health Scheme (CGHS) as well as such other health scheme as may be notified by the Central Government.	15000 15000 20000	Section 80D (Individual or HUF) Insurance & Preventive health check up n  assessee or his family n  Parents  (Senior Citizen- Age: above 60 Years) Note: Benefit of Deduction under this section is available, in respect of any payment or contribution made by the assessee to Central Government Health scheme.	15000 15000                          20000
Investment made under an equity saving scheme u/s 80CCG		Investment made under an equity saving scheme u/s 80CCG
Assessee: New Retail Investors having Gross Total Income ≤ 20L Lock in Period: 3 Years Investment: -Rajiv Gandhi Equity Saving Scheme -Listed units of equity oriented fund Deduction shall be allowed for three consecutive assessment years, beginning with assessment year relevant to the previous year in which listed equity shares or listed units were first acquired by the new retail investor.	25000 or 50% of Investment, whichever is lower. (Maximum Amount of Investment Rs. 50000)	Assessee: New Retail Investors having Gross Total Income ≤ 10L Lock in Period: 3 Years Investment: Rajiv Gandhi Equity Saving Scheme It is a onetime deduction and is available only for one assessment year.		25000 or 50% of Investment, whichever is lower. (Maximum Amount of Investment Rs. 50000)
Deduction for Donation u/s 80G		Deduction for Donation u/s 80G
National Children’s Fund	100%	National Children’s Fund New Provision: Any payment exceeding a sum of 10,000 shall only be allowed as deduction if such sum is paid by any mode other than cash	50%
Deduction in respect of Contributions to Political Parties u/s 80GGB  & 80GGC)		Deduction in respect of Contributions to Political Parties u/s 80GGB  & 80GGC)
Section 80GGB For Indian Company Section 80GGC Any person other than Local Authority or Artificial Juridical Person Any sum Contributed by way of Cash	No deduction	Section 80GGB For Indian Company Section 80GGC Any person other than Local Authority or Artificial Juridical Person Any sum Contributed by way of Cash	Deduction allowed

Deduction in respect of interest loan sanctioned during the year 2013-14 for acquiring residential house property under section 80EE

An assessee, being an Individual, shall claim deduction in respect of interest on loan sanctioned during the year 2013-14 for acquiring residential house property to the extent of Rs 100,000 for the Assessment Year 2014-15 and 2015-16 only. Deduction shall be subject to following conditions:

a) The loan sanctioned by the financial institution during the period from 1st April, 2013 to 31st March, 2014;
b) Amount loan sanctioned does not exceed Rs. 25 Lakhs
c)  Value of the Residential Property does not exceed Rs. 40 Lakhs
d) The assessee does not own any residential house property on the date of sanction of the loan. (i.e. First Residential House)

Author’s Comment: This benefit is available for first home buyers only. It is a deduction which shall be reduced from the Gross Total income and shall not be treated as Loss under the head house property. Total Deduction amount of Assessment Year 2014-15 and 2015-16 shall be Rs. 100,000.  We can say that it is an amount based deduction and total deduction should not be more than Rs. 100,000.

Deduction under section 80-IA for Power Sector: It is extended in up to 31st March, 2014.

Deduction for Additional Wages in certain cases (Section 80JJA)

This deduction shall be available to an Indian Company deriving profits from manufacture of goods in its factory. The deduction shall be of an amount equal to 30% of additional wages paid to the new regular workmen employed by the assessee in such factory, in the previous year, for 3 assessment years including the assessment year relevant to the previous year in which such employment is provided.

The deduction under this section shall not be available if the factory is hived off or transferred from another existing entity or acquired by the assessee company as a result of amalgamation with another company.

Author’s Comment: Amendment in this deduction is inserted because many companies claimed benefit of deduction in case of employees as well as workmen. Now, deduction is available only in respect of new regular workmen employed in the factory.

5. Change in Provisions of Income from Business and Profession

a) Incentive for acquisition and installation of new Plant or machinery by manufacturing company (Section 32AC)

Eligible Assessee: A company (domestic or foreign) is engaged in the business of manufacture of an article or thing and invests a sum of more than Rs.100 Crs. in new assets (plant or machinery) during the period from 1st April, 2013 to 31st March, 2015, then, the assessee shall be allowed—

(i) for assessment year 2014-15, a deduction of 15% of aggregate amount of actual cost of new assets acquired and installed during the financial year 2013-14, if the cost of such assets exceeds Rs.100 crs.;

(ii) for assessment year 2015-16, a deduction of 15% of aggregate amount of actual cost of new assets, acquired and installed during the period from 1st April, 2013 to 31st March, 2015, as reduced by the deduction allowed, if any, for assessment year 2014-15.

Lock in period of investment: 5 years

The phrase “new asset” has been defined as new plant or machinery but does not include—

(i) any plant or machinery which before its installation by the assessee was used either within or outside India by any other person; (i.e. Second Hand Machinery)
(ii) any plant or machinery installed in any office premises or any residential accommodation, including accommodation in the nature of a guest house; (Incentive is for Factory Only)
(iii)any office appliances including computers or computer software;
(iv) any vehicle;
(v) ship or aircraft; or
(vi) Any plant or machinery, the whole of the actual cost of which is allowed as deduction (whether by way of depreciation or otherwise) in computing the income chargeable under the head “Profits and gains of business or profession” of any previous year.

In the case of amalgamation or demerger, amalgamated company or resulting company shall continue to claim benefit of this section.

Author’s Comment: This incentive is for the company which shall acquire and install new plant & machinery for manufacturing purpose only. It is in addition to Additional Depreciation and Depreciation. It shall not be reduced from the Value of Plant & Machinery. To get benefit of this incentive, the Company will have to acquire and install plant & machinery more than 100 Crs.  in the Assessment Year 2014-15 & 2015-16.  We can say that it is an investment linked incentive and there is no limit of maximum incentive amount but minimum incentive amount is Rs 15 Crs. (i.e. 15% of Value of Plant & Machinery Rs. 100 Crs.)

b) Commodities Transaction Tax

A new tax called Commodities Transaction Tax (CTT) is proposed to be levied on taxable commodities transactions entered into in a recognized association.
&bbsp;

S.No	Taxable commodities transaction	Rate	Payable by
1.	Taxable Commodities Transaction’ means a transaction of sale of commodity derivatives in respect of commodities, other than agricultural commodities, traded in recognized associations.	0.01 per cent	Seller

The provisions with regard to collection and recovery of CTT, furnishing of returns, assessment procedure, power of assessing officer, chargeability of interest, levy of penalty, institution of prosecution, filing of appeal, power to the Central Government, etc. have also been provided.

Deduction of Commodities Transaction Tax (CTT) (Section 36 (xvi))

It is proposed to insert Clause (xvi) in section 36 of the Income-tax Act to provide that an amount equal to the commodities transaction tax paid by the assessee in respect of the taxable commodities transactions entered into in the course of his business during the previous year shall be allowable as deduction, if the income arising from such taxable commodities transactions is included in the income computed under the head “Profits and gains of business or profession”.

Author’s Comment: Commodities Transaction Tax is inserted through the Budget, 2013 and it is applicable on trading of commodities derivatives of in respect of commodities, other than agricultural commodities, traded in recognized associations.

c) Disallowance of certain fee, charge, etc. in the case of State Government Undertakings (Section 40 (a)(iib)) {w.e.f. A. Y. 2014-15}

Any amount paid by way of fee, charge, etc., which is levied exclusively on, or any amount appropriated, directly or indirectly, from a State Government undertaking, by the State Government, shall not be allowed as deduction for the purposes of computation of income of such undertakings under the head “Profits and gains of business or profession”

Author’s Comment: Any sum paid by State Government Undertaking to State Government by way of Licence fee, charge etc shall not be allowed to State Government Undertaking as an Expenses under the income tax Act, 1961.

d) Computation of income under the head “Profits and gains of business or profession” for transfer of immovable property in certain cases (Section 43CA)(w.e.f. 1st April, 2014)

Currently, when a capital asset, being immovable property, is transferred for a consideration which is less than the value adopted, assessed or assessable by any authority of a State Government for the purpose of payment of stamp duty in respect of such transfer, then such value (stamp duty value) is taken as full value of consideration under section 50C of the Income-tax Act. These provisions do not apply to transfer of immovable property, held by the transferor as stock-in-trade.

It is proposed to provide by inserting a new section 43CA that where the consideration for the transfer of an asset (other than capital asset), being land or building or both, is less than the stamp duty value, the value so adopted or assessed or assessable shall be deemed to be the full value of the consideration for the purposes of computing income under the head “Profits and gains of business of profession”.

It is also proposed to provide that where the date of an agreement fixing the value of consideration for the transfer of the asset and the date of registration of the transfer of the asset are not same, the stamp duty value may be taken as on the date of the agreement for transfer and not as on the date of registration for such transfer. However, this exception shall apply only in those cases where amount of consideration or a part thereof for the transfer has been received by any mode other than cash on or before the date of the agreement.

Author Comments: Section 50C is applicable only in case of transfer of immovable properties if it is held as a capital and not applicable in case of stock in trade, now new section 43CA is inserted where transfer of land or building or both whether held as a stock in trade or Capital asset is covered. Stamp Value on the date of agreement is considered if the date of transfer and date of registration are not same.

Taxability of immovable property received for inadequate consideration (section 56(2)(vii)) [w.e.f 1st April, 2014)

The existing provisions of sub clause (b) of clause (vii) of sub-section (2) of section 56 of the Income-tax Act, inter alia, provide that where any immovable property is received by an individual or HUF without consideration, the stamp duty value of which exceeds fifty thousand rupees, the stamp duty value of such property would be charged to tax in the hands of the individual or HUF as income from other sources.

The existing provision does not cover a situation where the immovable property has been received by an individual or HUF for inadequate consideration. It is proposed to amend the provisions of clause (vii) of sub-section (2) of section 56 so as to provide that where any immovable property is received for a consideration which is less than the stamp duty value of the property by an amount exceeding fifty thousand rupees, the stamp duty value of such property as exceeds such consideration, shall be chargeable to tax in the hands of the individual or HUF as income from other sources.

It is proposed to provide that where the date of an agreement fixing the value of consideration for the transfer of the asset and the date of registration of the transfer of the asset are not same, the stamp duty value may be taken as on the date of the agreement for transfer and not as on the date of registration for such transfer. However, this exception shall apply only in those cases where amount of consideration or a part thereof for the transfer has been received by any mode other than cash on or before the date of the agreement.

Author Comments: Before this amendment of Section 56 (2) (vii), stamp value of such property shall be chargeable to tax as income from other sources. It shall create double taxation in the hand of transferor and transferee. But, now differential amount (stamp value minus consideration) shall be chargeable to tax in the hand of receiver. Stamp Value on the date of agreement is considered if the date of transfer and date of registration are not same.

Amendment in the definition of Capital Asset

It is proposed to amend item (b) of sub-clause (iii) of clause (14) of section 2 so as to provide that the land situated.

In any area within the distance, measured aerially (shortest aerial distance),

(I) not being more than 2 kilometers, from the local limits of any municipality or cantonment board referred to in item (a) and which has a population of more than 10,000 but not exceeding 100,000; or
(II) not being more than 6 kilometers, from the local limits of any municipality or cantonment board referred to in item (a) and which has a population of more than 100,000 but not exceeding 10,00,000; or
(III) not being more than 8 kilometers, from the local limits of any municipality or cantonment board referred to in item (a) and which has a population of more than 10,00,000 shall form part of capital asset.

Author Comments: Now, Revenue increases the range the capital assets for the purpose of taxation of capital gain. If assessee satisfying any one out of three aforesaid conditions for any asset, then that asset is treated as capital assets and assessee shall have to tax thereon.

Additional Income-tax on distributed income by company for buy-back of unlisted shares (Section 115QA to 115QC) (w.e.f 1st June, 2013)

The consideration paid by the company for purchase of its own unlisted shares which is in excess of the sum received by the company at the time of issue of such shares (distributed income) will be charged to tax and the company would be liable to pay additional income-tax @ 20% of the distributed income paid to the shareholder. The additional income-tax payable by the company shall be the final tax on similar lines as dividend distribution tax. The income arising to the shareholders in respect of such buy back by the company would be exempt under section 10(34A) where the company is liable to pay the additional income-tax on the buy-back of shares.

Author Comment: from this amendment, Revenue curbs the practice of unlisted company to distribute the reserve & surplus of the company through the buyback of shares without payment dividend distribution tax under section 115-O.

Direction for special audit under sub-section (2A) of section 142 

It is proposed to amend the under section 142 (2A) so as to provide that if at any stage of the proceedings before him, the Assessing Officer, having regard to the nature and complexity of the accounts, volume of the accounts, doubts about the correctness of the accounts, multiplicity of transactions in the accounts or specialized nature of business activity of the assessee, and the interests of the revenue, is of the opinion that it is necessary so to do, he may, with the previous approval of the Chief Commissioner or the Commissioner, direct the assessee to get his accounts audited by an accountant and to furnish a report of such audit.

Author Comments: Now, Revenue has increased the area of special audit of assessees through the proposed amendment in aforesaid section.

Tax Deducted at Source

TDS on transfer of certain immovable properties (other than agricultural land):  Every transferee, at the time of making payment or crediting any sum by way of consideration for transfer of immovable property (other than agricultural land), shall deduct tax, at the rate of 1% of such sum, if the consideration paid or payable for the transfer of such property exceeds or equal to 5,000,000 rupees (under section 194-IA) (w.e.f. 1st June, 2013)

Author Comments: TDS on immovable property issue was also raised by Finance Minister in the Union Budget, 2012. Now, Revenue intends to track middle class assessees who are not filing return of income properly and evade the income tax.  Revenue curbs the evasion of income tax and restriction on injection of black money in the real estate sector and also control real estate property price which is beyond reach of middle class.

Concessional rate of withholding tax on interest in case of certain rupee denominated long-term infrastructure bonds

Where a non-resident deposits foreign currency in a designated bank account and such money as converted in rupees is utilized for subscription to a long-term infrastructure bond issue of an Indian company, then, for the purpose of this section, the borrowing by the company shall be deemed to be in foreign currency. In this case, interest payment to a non-resident person would be subject to a concessional rate of tax @ 5%.

Author Comments: The proposed amendment is made for attract Non Resident funds in India and it is beneficial for Non Resident to invest in the long-term infrastructure bond issue of an Indian company.

Misc. Amendments

1. Sections 139C and 139D of the Income-tax Act contain provisions for facilitating filing of annexure-less return of income in electronic form by certain class of income-tax assessees. In order to facilitate electronic filing of annexure-less return of net wealth, it is proposed to insert new sections 14A and 14B in the Wealth-tax Act on similar lines. Now, Wealth tax return shall be filed online. (w.e.f 1st June, 2013)

Author Comments: with help of proposed amendment, Revenue wants to track the person whose shall liable to pay wealth tax, but they are not doing so.

2. For the purpose of Application of Seized Assets under section 132B, Existing liability does not include advance tax payable in accordance with the provisions of Part C of Chapter XVII of the Act. [w.e.f 1st June, 2013]

3. For the purpose of section 179 and 167C of income tax Act, 1961, “Tax Due” includes penalty, interest or any other sum payable under the Act.

4. Submission of a tax residency certificate is a necessary but not a sufficient condition for claiming benefits under the agreements referred to in sections 90 and 90A. (Section 90 & 90A) [w.e.f 1st April, 2013]

5. Penalty under section 271FA for non-filing of Annual Information Return

a) If a person who is required to furnish an annual information return, as required under sub-section (1) of section 285BA, fails to furnish such return within the time prescribed under sub-section (2) thereof, the income-tax authority prescribed under sub-section (1) of the said section may direct that such person shall pay, by way of penalty, a sum of Rs. 100 for every day during which the failure continues.

b)It is further proposed to provide that where such person fails to furnish the return within the period specified in the notice under sub-section (5) of section 285BA, he shall pay, by way of penalty, a sum of Rs. 500 for every day during which the failure continues, beginning from the day immediately following the day on which the time specified in such notice for furnishing the return expires.

6. General Anti Avoidance Rule provisions shall apply from the assessment year 2016-17.

7.Tax rate in case of non-resident taxpayer, in respect of income by way of royalty and fees for technical services as provided under section 115A, is proposed to be increased from 10% to 25%. [w.e.f. 1st April, 2014]

8. Gross Dividends received by an Indian company from a specified foreign company (in which it has shareholding of 26% or more) at the rate of 15% if such dividend is included in the total income for the Financial Year 2012-13 i.e. Assessment Year 2013-14. (w.e.f. 1st April, 2014)

9. Where the tax on dividends received from the foreign subsidiary is payable under section 115BBD by the holding domestic company then, any dividend distributed by the holding company in the same year, to the extent of such dividends, shall not be subject to Dividend Distribution Tax under section 115-O of the Income-tax Act. (w.e.f. 1st June, 2013)

10. In order to provide uniform taxation for all types of funds, other than equity oriented fund, it is proposed to increase the rate of tax on distributed income from 12.5% to 25% in all cases where distribution is made to an individual or a HUF.

Further in case of an Infrastructure debt fund (IDF) set up as a Non-Banking Finance Company (NBFC) the interest payment made by the fund to a non-resident investor is taxable at a concessional rate of 5%. However in case of distribution of income by an IDF set up as a Mutual Fund the distribution tax is levied at the rates described above in the case of a Mutual Fund.

In order to bring parity in taxation of income from investment made by a non-resident Investor in an IDF whether set up as a IDF-NBFC or IDF-MF, it is proposed to amend section 115R to provide that tax @ 5% on income distributed shall be payable in respect of income distributed by a Mutual Fund under an IDF scheme to a non-resident Investor. (Section 115R)  (w.e.f. 1st June, 2013)

11.Reduced Securities Transaction tax (STT) (w.e.f 1st June, 2013)

S.NO	Nature of taxable securities transaction	Payable by	Existing Rates (in per cent	Proposed Rates (in per cent)
1	Delivery based purchase of units of an equity oriented fund entered into in a recognized stock exchange	Purchaser	0.1	Nil
2	Delivery based sale of units of an equity oriented fund entered into in a recognized stock exchange	Seller	0.1	0.001
3	Sale of a futures in securities	Seller	0.017	0.01
4	Sale of a unit of an equity oriented fund to the mutual fund	Seller	0.25	0.001

Author Comments: It is good step of Government to promote the trading of Shares & Securities in the recognized stock. Now, Government also provoke to small & middle class person of society to invest in shares and securities of recognized stock exchange.

Show More

IPCC November 2013 amendments by ICAI

Amendments for IPCC Nov 2013 Exams:

The following file contains the amendments applicable for November 2013 CA IPCC Examinations. Contents: Tax, Law, Accouns, Audit, Costing, FM, Service Tax and VAT

Show More

ICAI: IPCC Final amendments applicable for November 2013 exams

Show More

ICAI: IPCC Final amendments applicable for November 2013 exams

Also Read: Tax Amendments applicable for Nov 2013 CA IPCC and Final Exams

The following file contains various amendments released by ICAI, applicable for November 2013 CA IPCC and Final Exams. Amendments include, recent pronouncements in Accounting Standards, Auditing Standards.

Download for IPCC

Download for Final

Show More

Tax amendments for CWA/CMA June 2013 exams

Download

.

Show More

IPCC Tax amendments for May 2013 exams

Download 

Show More

CA IPCC Final Tax amendments for applicable for Nov 2013 exams

These files contain various Amendments in Taxation, Service Tax and VAT applicable for CA IPCC and Final Students released by ICAI:

Download For IPCC

Download for CA Final:

Direct Taxes: DT

Indirect Taxes: IDT

Show More

Amendments for November 2011 Exams

CA Final Indirect Taxes

Amendments relevant for November 2011 Exams

                                     Link- Click Here

Important Decisions in Indirect Tax for November 2011 Exams

Link-  Click Here

Show More