Revision as of 06:43, 3 April 2021

This is a collection of articles archived for the excellence of their content.

1 Basic tenets
- 1.1 Section 80C
- 1.2 Section 80 D
2 Rates of income tax in India
- 2.1 1995-2015
- 2.2 1949-2017: peak rate of Income Tax
- 2.3 1949, and since 1995: The number of tax slabs
3 Appeals
- 3.1 2015: Appeals only for Rs 10 lakh +
- 3.2 2017: ‘Higher appeals limit applies to pending cases,’ SC
4 Artists
- 4.1 Fashion designers
5 Capital gains
6 Corporates’ promotional activities
- 6.1 Pharmaceutical companies’ junkets for doctors
7 Donations to NGOs’ projects
- 7.1 Halved in 2017
8 Educational institutions
- 8.1 Profits not taxable: SC
9 Exemptions
- 9.1 1950: residential palace of erstwhile ruler exempted from IT
- 9.2 Scheduled tribes, Sikkimese, agriculture, institutions, hospitals, trusts
- 9.3 Yoga
  - 9.3.1 `Medical relief,' `imparting education' are charitable purposes
10 Expatriates
- 10.1 Salary paid in India won’t face tax, if Non-resident
11 Family trusts
- 11.1 No `gift' tax on property received from individual
12 Film actors
- 12.1 Promotion of film: actor not expected to incur expenditure
13 Foreign tax credit (FTC)
14 Gifts
- 14.1 Need not be camouflaged remuneration
15 Gratuity
- 15.1 Payment of Gratuity(Amendment) Bill 2017
16 House rent allowance
- 16.1 Proof needed of rent paid to kin
17 Income Tax returns
- 17.1 Who has to file income tax returns
- 17.2 Not filing I-T returns?Imprisonment,fine
- 17.3 2018: Changed format
- 17.4 'Returns can be filed after I-T notice is issued'
- 17.5 Wrong information in I-T returns
18 Joint I-T liability
- 18.1 Co-ownership of property
19 Notice pay deducted by employer
- 19.1 Cannot be taxed
20 Overseas income
- 20.1 Residential status determined by no. of days stayed
21 Permanent account number (PAN)
- 21.1 2016: PAN mandatory for…
- 21.2 2016: Required for transactions above Rs 2 lakh
22 Perquisites
- 22.1 Interest-free loan from employer is taxable
23 Pharmaceutical companies
- 23.1 Freebies for doctors deductible
24 Property (house): income from
- 24.1 2018: losses from house property for TDS capped at ₹2 lakh
- 24.2 2018: owner to decide which property is self-occupied
25 Property (immovable): owned abroad
- 25.1 Notional rent to be included in income tax return
26 Property (NRI): purchase of
- 26.1 Miscalculation risks
- 26.2 TDS risks: 1
- 26.3 TDS risks: 2
27 Property, purchase of
- 27.1 Buyers won't lose I-T exemptions by adding kin name
28 Property, immoveable, sale of
- 28.1 Tax benefits for investment in new house
29 Raids
- 29.1 In Tamil Nadu
30 Reliefs on tax
- 30.1 Education loans to study abroad
31 Rental income
- 31.1 No tax on rent if none received from 2nd home
32 ‘Salary’
- 32.1 2018: Non-compete fees, some compensations are taxable
33 Sexual harassment damages
- 33.1 Not taxable
34 Shares
- 34.1 Premium on shares not taxable: HC
35 Small businesses, professionals
- 35.1 Presumptive tax scheme
36 TDS (tax deducted at source)
- 36.1 Head of religious congregation to certify names
- 36.2 Online rectification in ITR simplified, 2015
- 36.3 Penal interest can be waived in some cases
37 YEAR-WISE CHANGES
- 37.1 2019: nine issues in interim budget
  - 37.1.1 The main changes
38 See also

Basic tenets

Adapted from EconomicTimes March 2014

1) The interest earned on a bank fixed deposit is...Interest on FDs is fully taxable as income at the rate applicable to the taxpayer.

2) Travel insurance policies are not tax deductible for salaried individuals.

3) An individual won't get tax deduction for... employer's contribution to PF.

4) Gifts worth over Rs 50,000 in a year are taxed as income of recipient.

5) Any income of a minor child will be clubbed with that of the parent. HRA is not tax-exempt if you pay rent to... Your minor child.

6) A disabled dependant gets you a deduction under Section 80DD. This is an additional tax benefit

7) f you have a second house lying vacant, you have to...

a. Pay tax on rent not received. b. Include in wealth tax. c. Pay property tax on it. All the three conditions apply on a second house lying vacant.

8) If one earns rent on property, how much of it is taxable? Rental income is eligible for 30% standard deduction.

9) Only those with income below the basic exemption are exempt from filing tax returns.

10) The RGESS deduction is available only to first-time investors in equities.

Section 80C

December 12, 2017: The Times of India

To boost the habit of savings and investments, the government has allowed every individual taxpayer to invest and buy certain financial products which will allow them to avail of tax deductions. Under section 80C of Income Tax Act 1961, a taxpayer could invest a total of Rs 1.5 lakh per annum in ELSS of mutual fund houses, EPF, PPF, tax-saving FDs, NPS, life insurance products and some other approved financial products, which will reduce the person’s total tax liability. Payment of home loan principal and tuition fee of children also come under this section for tax deductions.

Section 80 D

January 23, 2018: The Times of India

WHAT ARE SECTION 80D TAX BENEFITS?

Section 80D under the Income Tax Act provides for tax deductions for buying health insurance policies, popularly called mediclaim plans. In an era of increasing healthcare costs, the government, to encourage people to take mediclaim policies, allows taxpayers some sops for these policies. A taxpayer can get claim deductions of up to Rs 25,000 per year for payment towards premium for health insurance plans for the taxpayer, spouse and dependent children. The limit is enhanced up to Rs 30,000 even if either the taxpayer or the spouse is a senior citizen. Within these limits one can also claim deductions of up to Rs 5,000 per year as a cost for preventive health check up. The government also allows mediclaim premium of up to Rs 30,000 for policies taken for parents.

Rates of income tax in India

1995-2015

See the chart on this page

See graphic:

Income tax rates in India: 1995-2015

Income tax rates in India: 1995-2015 Source: The Times of India

1949-2017: peak rate of Income Tax

January 15, 2018: The Times of India

1949-2017: peak rate of Income Tax
From: January 15, 2018: The Times of India

See graphic:

1949-2017: peak rate of Income Tax

Highlights

We know you absolutely hate a part of your annual income going into to the government's kitty in the form of taxes. After all, you worked hard the whole year and wish the exemption limit would be set higher. Whether that would be done or not will be known till Budget 2018 is presented, but you should take heart from the fact that you pay much less tax than what your grandfather did during his time.

While exemption limit today stands at Rs 2.5 lakh annually, it was Rs 1,500 way back in 1949-50. Though this may seem a meagre amount to you, a back of the envelope calculation shows this works out to be Rs 80,000 in today's terms. So your grandfather started paying tax at annual income of Rs 80,000, while you enjoy tax-free income that is nearly three times more than it.

Tax rates are another reason for you to cheer about. The peak tax rate today stands at 30.9%. But during 1970-71 it was a staggering 93.5%, a massive increase from the 25% Indians paid in 1949-50.

You may find three tax slabs cumbersome for tax calculation, but thank your stars, your parents or grandparents had to deal with as many as 11 tax slabs.

1949, and since 1995: The number of tax slabs

The number of tax slabs in 1949, and since 1995
From January 15, 2018: The Times of India

See graphic:

The number of tax slabs in 1949, and since 1995

Appeals

2015: Appeals only for Rs 10 lakh +

Sources:

1. The Times of India, Dec 13 2015

2. The Times of India, Dec 13 2015, Rubna Kably

I-T appeals only for Rs 10L and above

In a bid to reduce litigation and spare taxpayers harassment, the Central Board of Direct Taxes has increased from Rs 4 lakh to Rs 10 lakh the threshold for filing an appeal before the Income Tax Appellate Tribunal, reports Rubna Kably.

The threshold limit for an appeal by the I-T department before the high courts has been doubled to Rs 20 lakh. The threshold for I-T department appeals before SC remains at Rs 25 lakh.

To rein in frivolous appeals, CBDT ties I-T hands by raising `tax effect' limit

The Central Board of Direct Taxes (CBDT) continues with its plan to reduce litigation and be more taxpayer-friendly. By significantly increasing the threshold limits for filing of appeals, at various judicial levels, by the Income-tax (I-T) department, the CBDT hopes to mitigate taxpayer harassment and create efficacy in the functioning of the I-T department. At times, the I-T department files appeals with higher courts, with an eye on revenue, when the decision in the lower court is in favour of the taxpayer. Such frivolous litigation adds to the costs for both parties and results in taxpayer harassment.

The threshold limit for filing an appeal before the Income-Tax Appellate Tribunal (ITAT) by the I-T department has now been raised from Rs 4 lakh to Rs 10 lakh. Similarly , the limit for an appeal before the high courts has been doubled to Rs 20 lakh. While such revisions are an annual affair, the recently announced upward revisions are significant.

However, no change has been made in the threshold for appeals filed before the Supreme Court, which remains at Rs 25 lakh. Appeals before the ITAT and courts can now be filed by the I-T department only if the `tax effect' exceeds the threshold limits (see table). This move will help not only corporates, but also high net-worth individuals who find themselves embroiled in I-T litigation.

The CBDT has also clarified, in its circular dated December 10, that the revised limits will apply retrospectively and pending appeals below the specified threshold limits should be withdrawn or not pressed.

The `tax effect', as defined in CBDT's circular, means the difference between the tax on the total income assessed by the I-T department and the tax that would have been charged if the total income of the taxpayer was reduced by the income relating to disputed issues.

The CBDT has also instructed that merit must be the guiding factor while filing an appeal with higher judicial bodies -both the ITATs and courts. “It is clarified that an appeal should not be filed merely because the tax effect in a case exceeds the monetary limits (ie: threshold limits for appeals) prescribed,“ states the circular.

Tax experts view that the increase in threshold limits and withdrawal of pending appeals falling below the revised thresholds will ease litigation. The impact will be more favourable at the ITAT level, which is the first level of appeal. It is learnt that pan-India, 1.06 lakh cases were pending across various ITAT benches as of June 1. The maximum pendency was in Mumbai and Delhi, with 25,039 and 20,499 pending cases. Howev er, the exact number of pend ng cases, which will now fall below the revised threshold imits and be withdrawn, was not available.

However, to safeguard the nterests of the I-T department, certain caveats have been built into the instruc ions. For instance, just because on a particular disputed ssue, the I-T department has not appealed as the tax effect is ow, it does not preclude it from iling an appeal on the same issue for another taxpayer where the tax effect is beyond he prescribed threshold).

Further, the instructions on not filing an appeal if the ax effect is below the prescribed monetary limit will not apply in certain instances. These instances include: where the constitutional val dity of a tax provision is challenged; where the CBDT's circular has been held illegal or even when the audit objection has been accepted by the I-T department.

2017: ‘Higher appeals limit applies to pending cases,’ SC

Higher I-T appeals limit also applies to pending cases, says SC, November 28, 2017: The Times of India

The honorable Supreme Court orders regarding CBDT's instruction revising monetary limits
From: Higher I-T appeals limit also applies to pending cases, says SC, November 28, 2017: The Times of India

The Supreme Court has held that the higher monetary threshold limits prescribed for filing of appeals by the income-tax authorities would apply both to appeals filed after the date of the instruction revising the limits and also to all pending matters. This brings respite to taxpayers who feared matters pending on the date of the instruction would be revived and lead to a tiring bout of litigation.

On November 23, the SC upheld the retrospective nature of the Central Board of Direct Taxes (CBDT) instruction setting down the thresholds for I-T appeals.

This order departs from an October order of the apex court which had taken a contrary view. After this decision, individual taxpayers and businessmen facing low denomination disputes had feared that I-T officials would rake up old matters discarded after upward revision of the threshold.

From time to time, CBDT, responsible for tax administration, enhances the monetary limits for filing of I-T appeals. Officials are not permitted to file appeals where the “tax effect” is low (as defined by the monetary limit), except for the few exceptions carved out. It helps cut down litigation, including pending litigation, and saves costs. “Tax effect” denotes the difference between the tax on income determined by I-T officials and the I-T chargeable on the income of the taxpayer after excluding the disputed income.

CBDT’s instruction, the subject matter of litigation before the SC, was dated February 9, 2011. It had provided that appeals cannot to be filed by I-T officials before high courts is the “tax effect” was less than Rs 10 lakh (the earlier circular on March 27, 2000, had pegged it at Rs 4 lakh). It did not change the monetary threshold for appeals before I-T tribunals and the SC, which remained at Rs 3 lakh and Rs 25 lakh, respectively.

Since then, another set of instructions have been issued, which provides that if the tax effect is Rs 10 lakh or less, an appeal cannot be filed even with the tax tribunals. For high courts, the limit is set at Rs 20 lakh and for the SC, it is Rs 25 lakh. Before the SC, the I-T department contended that the CBDT instruction had a prospective effect only. Thus cases pending in high courts on February 9, 2011, could not be dismissed merely based on the instruction. But the SC decided in favour of the taxpayer, SRMB Dairy Farming, a private limited company, by holding that CBDT’s instructions will also apply to all pending matters.

“The SC has rightly pointed out that the interpretation of CBDT’s instruction had to be done in the context of the purpose for which it was issued, which is to reduce litigation that had choked the legal system. Thus the apex court held that the instructions applied to pending matters also, as such an interpretation would facilitate achievement of the objectives of the National Litigation Policy aimed at bringing down the pendency of litigation cases,” said Gautam Nayak, tax partner, CNK & Associates, a firm of chartered accountants.

Interestingly, the latest instruction issued by the CBDT on December 11, 2015, not only significantly hiked the monetary threshold limits but categorically mentioned that: “This instruction will apply retrospectively to pending appeals and appeals to be filed henceforth in courts and tribunals. Pending appeals below the specified tax limits may be withdrawn.”

Nayak said: “This showcases the intent of the instructions and the SC has rightly acted on it.”

Artists

Fashion designers

Times of India

‘Fashion designers are artists, eligible for I-T exemption’ Shibu Thomas

Mumbai: A fashion designer is an artist, the Bombay High Court has said and ruled that they are eligible for incometax exemptions available under the category. Ten years after the income-tax department first objected to tax benefits claimed by one of India’s leading fashion designers, Tarun Tahiliani, a division bench of Justice Dhananjay Chandrachud and Justice J P Devadhar on Monday said the designer should get tax privileges extended to the artists.

Tahiliani opened the country’s first fashion boutique, Ensemble, and is credited with being one of the designers who have brought high couture to India. Tahiliani’s IT woes began in October 2000 when he sought tax exemption for his income of Rs 83.90 lakh. Under Section 80 RR of the Income-Tax Act, a resident of India, who is an an author, playwright, artist, musician, actor or sports person can claim exemption of 75% of his income earned from foreign assignments. Tahiliani said that applying the exemptions, his taxable income for that year would be Rs 53.24 lakh.

The tax department, however, refused to accept that the fashion designer was an artist. It also contested deductions sought by sought by Tahiliani on his taxable income for 1999-2000 and 2001-2002. The income-tax appellate tribunal ruled in Tahiliani’s favour, upholding his claim that he was a creative artist. The IT department challenged the order before the high court.

The department’s lawyer contended that a fashion designer didn’t belong to the creative profession as the vocation was classified under applied arts and not fine arts. The IT department said that the benefit of exemption was granted to aid the artists, who represent Indian culture abroad.

The HC dismissed the IT department’s petition and held that fashion designers were entitled to tax exemptions meant for artists.

Capital gains

See Capital gains: India

Corporates’ promotional activities

Pharmaceutical companies’ junkets for doctors

Lubna Kably, I-T trips pharma cos on doc junkets, Sep 20 2016 : The Times of India

Tribunal Disallows Expenses

The Mumbai bench of the Income-Tax Apellate Tribunal (ITAT) has nipped the `unholy' doctor-pharma nexus whereby medical practitioners are offered various incentives, like overseas trips, to encourage them to prescribe specific medicines or lines of treatment.

It has done so by upholding a disallowance of Rs 76.55 lakh, made by an I-T officer at the assessment stage. The expenditure was incurred by Liva Healthcare (a pharma company specialising in skincare formulations) to wards overseas trips for doctors and their spouses.

The immediate impact of the order is a higher I-T liability for the pharma company for financial year 2008-09, to which this case pertains, as the disallowed expenditure will be added back to the taxable component of income. In addition, the order will act as a reminder to pharma compa nies to adopt practices that are above board. The maximum rate of income tax on companies currently is 30% plus applicable surcharge and cess.

The ITAT's September 12 order observes, “The payment of overseas trips of doctors and their spouses for entertainment, by the pharma company , in lieu of expectation of getting patient re ferrals from doctors for its products so as to generate more business and profits, by any stretch of imagination cannot be accepted as legal.Undoubtedly it is not a fair practice and has to be termed as against the public policy.“

Section 37 of the I-T Act, which is a residual section, permits a business entity to claim as a deduction revenue expenditure incurred by it, `wholly and exclusively for the purpose of the business'.However, an explanation to this section provides that expenses incurred for any purpose which is an offence or is prohibited by law shall not be deemed to have incurred for the purpose of the business.Consequently , such expenditure cannot be allowed as a deduction from taxable income.

The code of conduct prescribed by the MCI debars doctors from receiving favours in return for referring, recommending or procuring of patients for medical, surgical or any other treatment.

Donations to NGOs’ projects

Halved in 2017

Share of donations to projects under Sec 35AC halved in FY16, March 4, 2017: The Times of India

Sec 35AC Sunset Clause Will Expire On March 31

Donations made to hundreds of projects carried out by NGOs across the country will no longer be eligible for a 100% income tax (I-T) deduction in the hands of the donor from April 1. While tax savings are not the main purpose, if donations are made in March towards eligible projects, then donors comprising salaried employees could reap an I-T benefit.

At present, donations made for specific projects run by NGOs that have been certified under section 35AC entitle the donor to a 100% I-T deduction under section 80GGA in respect of the donated amount.

However, section 35AC has a sunset clause which expires this March. Section 80GGA is not as widely known as section 80G, which permits a 100% I-T deduction in respect of certain donations (such as PM's National Relief Fund) and a 50% I-T deduction in most other cases (see table).

“Taxpayers who do not earn income under the head `profits and gains of business and profession', such as salaried employees, can claim the benefit of section 80GGA. While the employer cannot consider the donations made, while computing tax to be deducted at source against salary income, the employee can claim the benefit of the same in his I-T return and claim an I-T refund, if applicable,“ says Pradeep Mahtani, director, HelpYourNGO Foundation. A chartered accountant says, “In fact, if there has been a short deduction of tax at source and advance tax has not been paid by the salaried employee, by making donations eligible for I-T deduction up to March 31, the salaried taxpayer could mitigate his I-T penalty . Donors should ensure that they get the appropriate receipt.“

Notifications are issued by the finance ministry from time to time, certifying the projects that are eligible under section 35AC, the period of eligibility and also the total cost of the eligible project. For instance, as regards NGOs registered in Ma harashtra, these include projects by Magic Bus (skill development and livelihood programme), Association of Palliative Care (for a palliative care centre), Foundation of Promotion for Sports and Games (Olympic Gold Quest project) and Mesco (educational scholarships).

HelpYourNGO, an online donation platform, has on its portal 45 NGOs that run 90 projects eligible under section 35AC, These include some well known names such as Akshaya Patra's midday meals, projects by Childline and People for Animals.

In view of the sunset clause, a government-appointed national committee -which approves projects that would be eligible under section 35AC -had ceased to accept requests after December last year. “Donation stems from fundamental reasons, which are deep-rooted among each donor whether that's joy , guilt, remembrance or duty . However, everyone does think of saving I-T after having donated. Just like the insurance and the investment industry , which makes people aware of I-T savings available to them, for donations it is incumbent upon NGOs to make people aware of taxes they can save as a result of the donation they have made,“ says Dhaval Udani, founder of Danamojo, a payments platform for NGOs.

Perhaps awareness of a 100% I-T deduction for donations made to section 35AC-eligible projects has been low. HelpYourNGO did a dipstick sample survey of 12 NGOs, for which data was readily available. It showed that the percenta ge of donations towards 35ACeligible projects as compared to total donations received by NGOs has declined from 14.7% in fiscal 2014-15 to 7.9% in the next fiscal.

Deval Sanghavi, partner and co-founder at Dasra, a strategic philanthropy foundation, points out, “Our experience has shown that donors see the I-T deduction more as a government certification, which in essence states the organisation is compliant with laws and adheres to missiondriven principles vis-à-vis a giver donating more because of the I-T deduction.“

The number of individuals who donate money to charity has shown a rise in India.As many as 203 million Indians donated money during 2015, opposed to just 183 million in 2014, according to the World Giving Index 2016.

Educational institutions

Profits not taxable: SC

The Times of India

Mar 19 2015

Amit Choudhary

The Supreme Court has ruled that surplus income earned by educational institutions cannot be taxed, and imparting education not termed a for-profit activity simply because it yielded high returns. Dismissing the revenue department's submission that an educational institution ceased to be a solely scholastic endevaour if it generated high profits, the court noted that their income was exempt from tax under the Income Tax Act.

“Where an educational institution carries on the activity of education primarily for educating persons, the fact that it makes a surplus does not lead to the conclusion that it ceases to exist solely for educational purposes and becomes an institution for the purpose of making profit,“ a bench of Justice T S Thakur and Justice Rohinton F Nariman said.

“A distinction must be drawn between the making of a surplus and an institution being carried on `for profit'. If, after meeting expenditure, a surplus arises incidentally... it will not cease to be one existing solely for educational purposes,“ the bench added.

The court, however, said the government must examine activities of such institutions to ensure that the purpose of education is not taken over by a profit-making motive. “If they are not genuine, or are not being carried out in accordance with all or any of the conditions subject to which approval has been given, such exemption must be withdrawn,“ it said.

The court passed the order on a bunch of petitions filed by Queen Educational Society challenging an Uttarakhand High Court order allowing I-T authorities to tax its surplus income of around Rs 7 lakh for the assessment year 2000-01.

Exemptions

1950: residential palace of erstwhile ruler exempted from IT

AmitAnand Choudhary, Can't tax income from palace rent: SC, Dec 6, 2016: The Times of India

Court Raps I-T Dept For Pursuing Case Against Erstwhile Ruler Of Kota

The Supreme Court held that the income earned by erstwhile rulers of a princely state or their heirs by renting out a portion of the residential palace was not taxable and rapped the Income Tax department for pursuing a case despite their income being exempted under IT law.

A bench of Justices Ranjan Gogoi and Abhay Manohar Sapre allowed a plea of the ruler of the former princely state of Kota, now a part of Rajasthan, challenging the high court order for bringing his income from rent in the Income Tax net. The ruler owns extensive properties, including two residential pa laces known as Umed Bhawan Palace and the City Palace. The ruler is using Umed Bhawan Palace for his residence and a portion of it was rented out to the ministry of defence way back in 1976.

Although the Centre had in 1950 declared residential palace of an erstwhile ruler, situated within the state, as his inalienable ancestral property to be exempted from payment of income-tax, the I-T department had in 1984 initiated proceedings for assessment of income earned from renting out a portion of the palace. The Centre had incorporated Section 10(19A) in the IT Act to give exemption to former rulers.

The department contended that IT exemption was given for personal use and income earned from the rent was taxable. Commissioner of Income Tax and Income Tax Appellate Tribunal, however, turned down the plea of the IT department which had moved the Rajasthan HC.

The HC had ruled that as so long as the ruler continued to remain in occupation of his official palace for his own use, he would be entitled to claim exemption but if he let out any part of his palace, he became disentitled to claim benefit of exemption available under Section 10(19A) for the entire palace.

“In such circumstances, he is required to pay income-tax on the income derived by him from the portion let out in accordance with the provisions of the I T Act and the benefit of exemption remains available only to the extent of portion which is in his occupation as residence,“ the HC had said.

Quashing the HC order, the Supreme Court held that Section 10(19A) has used the term “palace“ for considering the grant of exemption to the ruler and income earned from renting out a portion of the palace was also exempted.

“We cannot ignore this distinction while interpreting Section 10(19A) which, in our view, is significant. In our considered opinion, if the Legislature intended to spilt the Palace in part(s), alike houses for taxing the subject, it would have said so by employing appropriate language in Section 10(19A) of the IT Act.We, however, do not find such language employed in the section,“ the bench said.. “Once the assessee is able to fulfil the conditions specified in section for claiming exemption under the Act then provisions dealing with grant of exemption should be construed liberally because the exemptions are for the benefit of the assessee,“ it said.

Scheduled tribes, Sikkimese, agriculture, institutions, hospitals, trusts

Here's why scrapped notes are flying off to the northeast, TNN | Updated: Nov 24, 2016, The Times of India

HIGHLIGHTS

I-T laws allow exemptions for various categories of incomes or individuals

Among those are members of ST communities in Nagaland, Manipur, Tripura, Arunachal and Mizoram

A similar exemption is available to all those defined as "Sikkimese"

Among those exempt from paying income tax are members of scheduled tribe communities in Nagaland, Manipur, Tripura, Arunachal Pradesh and Mizoram. Scheduled tribes in North Cachar Hills and Mikir Hills in Assam, the Khasi Hills, Garo Hills and Jaintia Hills in Meghalaya and Ladakh in Jammu & Kashmir also don't have to pay income tax. The exemption applies to income arising from any source in these areas or from dividends or interest on securities from anywhere.

A similar exemption is available to all those defined as "Sikkimese" in the I-T Act. This again is for any income generated from Sikkim itself and for income from dividend or interest on securities generated anywhere. The intent behind these exemptions is to provide fiscal concessions to backward areas and communities. In times like now, it becomes a useful route for people looking to turn undisclosed incomes legitimate.

Apart from these geographically restricted exemptions, there is of course the exemption for agricultural income. That includes any rent or revenue derived from agricultural land.

There are several institutions that are tax exempt under the IT Act. Again, it is not difficult to see why the lawmakers would have decided not to tax them. For instance, income of a public charitable trust or not for profit society established for development of khadi and village industries is exempt from tax. Educational institutions including universities existing solely for educational purposes and not for profit are exempt from paying tax on their incomes under various sub-sections of the IT Act.

Similarly, not for profit hospitals too are exempt, different kinds being covered by different sub-sections.

Income of a charitable institution or fund approved by the prescribed authority is not required to pay taxes on its income either. Nor are public religious or public charitable trusts approved by the prescribed authority. Political parties and electoral trusts are also exempt from tax on their incomes. It is another matter that a major chunk of the money flowing to parties never enters any books anyway.

Yoga

`Medical relief,' `imparting education' are charitable purposes

Lubna Kably, Ramdev trust wins I-T war on tax-exempt tag for yoga, Feb 18, 2017: The Times of India

Baba Ramdev's Patanjali Yogpeeth (a public charitable trust) has succeeded in its appeal before the Income-tax Appellate Tribunal (ITAT), which has accepted its tax exempt status.

The ITAT (Delhi bench) held that Yoga entails providing medical relief and camps also provide education, and that both `medical relief ' and `imparting education' fall within the meaning of charitable purpose, entitling the trust to claim I-T exempt status under sections 11 and 12 of the Income Tax Act.

“The finding of I-T authorities that propagation of yoga by Patanjali Yogpeeth does not qualify as medical relief or imparting of education is not justified,“ stated the ITAT in its order dated Feburary 9.Even as the litigation settled by the ITAT, relates to the 200809, the ITAT has also referred to subsequent amendment in the I-T Act, which came into effect from April 1, 2016. This amendment specifically inserted `yoga' within the definition of `charitable purpose'. If the exempt status not been upheld by the ITAT, Patanjali Yogpeeth would have been liable to pay income tax. The total income of this trust is not brought out in the ITAT order.

The ITAT also held that corpus donations aggregating to Rs 43.98 crore received by Patanjali Yogpeeth, predominantly for construction of cottages under its Vanprasth Ashram Scheme (which provides accommodation to those attending residential yoga courses), were capital receipts not liable to I-T. Such donations included land donated, whose market value was pegged by I-T authorities at Rs 65 lakh. In its order, the ITAT pointed out that “Corpus donations are not taxable, even in circumstances where the trust is not eligible for I-T exemption“.

Various additions to the trust's income made by the I-T authorities, including a Rs 96 lakh addition made for services made by the trust to Vedic Broadcasting in which Acharya Balkrishnan, a trustee and close aide of Baba Ramdev holds substantial interest were deleted by the ITAT, on the ground that the I-T authorities had not understood the facts.

The ITAT also agreed with the submissions made by the trust and observed that certain inferences by the I-T authorities such as provision of benefits to certain persons or receipt of anonymous donations were made without fully appreciating the facts.

Expatriates

Salary paid in India won’t face tax, if Non-resident

Lubna Kably, Non-resident expats’ salary paid in India won’t face tax, February 15, 2018: The Times of India

How tax residency in India is determined
From: Lubna Kably, Non-resident expats’ salary paid in India won’t face tax, February 15, 2018: The Times of India

The Authority of Advance Rulings (AAR) has held that the salary income of a nonresident individual for services rendered overseas cannot be taxed in India, even when such salary is paid into a bank account in India.

The ruling stands out because apart from providing relief from double taxation under the Indo-US tax treaty, the AAR additionally held that the sums received in India would not be taxable here under the domestic tax laws.

Unlike a tribunal or court order, a ruling by AAR, a quasi-judicial body, does not set a precedent. But it does have persuasive value and is well-considered. Thus, the ruling may benefit expat workers, in particular the over one lakh Indian workers who work in the US, largely on H1B visas.

Typically, when white-collared workers are ‘seconded’ on an overseas assignment by an Indian company, a split salary arrangement is worked out. Under ‘secondment’, the employee is transferred on the payroll of the overseas parent or group company, which pays the basic salary and certain allowances, in the overseas country. However, the Indian company deposits a part of the salary in the employee’s bank account in India. This enables the employee to meet certain obligations in India—such as repayment of housing loan or household expenses (as the family could be in India).

While an Indian residing abroad is popularly referred to as a non-resident Indian (NRI), the nomenclature is different under tax laws. It is not the country of origin, but the number of days’ stay in India, which determine whether a person will be a resident or non-resident for tax purposes.

Resident individuals are taxable in India on their global income, irrespective of where it was earned. In the case of non-residents, only income that accrues or arises in India (say, bank interest from a savings account in India or rental income from a house in Mumbai) is treated as taxable in India (see table). There is a third category, that is, resident but not ordinarily resident (RNOR), for whom the tax incidence is the same as for non-residents.

“Thus, salary received by non-residents in a bank account overseas for services performed outside India is not subject to tax in India. However, salary received in India is considered as taxable under the Indian domestic tax laws (along with being taxed in the country where they are working as most countries adopt the source method of taxation). Typically, a split salary mechanism results in litigation, as income-tax (I-T) authorities seek to bring to tax the income received in India. In such cases, employees claim relief under a tax treaty, which ensures that the same income is not taxed twice,” says Maulik Doshi, tax partner, SKP Group, a consultancy firm.

In this case, the employee, T N Santhosh Kumar, was seconded by Texas Instruments to Texas Inc, a US company, for a period of two years. As is typically the case, a split salary mechanism was adopted. Kumar was paid monthly a part of the salary and certain bonuses in India by Texas India.

A communique by EY India states: “Based on the India-US tax treaty, the AAR held that the place where the employee performs their duties is what is considered and not where the income is received or where the company providing the remuneration is based. As the salary is paid for work performed in the US, the income would be taxable in the US alone and no tax would be required to be withheld in India.”

“It is interesting to note that the AAR also held that such salary payments received in India by the non-resident would not be taxable in India even under its domestic tax laws,” says Doshi and adds, “in cases where there is no tax treaty (such as with Hong Kong) or in peculiar situations where the taxpayer is unable to access a tax treaty owing to lack of certain documents, this ruling will be very helpful.” In simple terms, the word accrue in India refers to something that is due in India.

Kumar was deputed for a two-year term. In the second year, in which he returned to India (that is, 2012-13) he was a resident of India and liable to tax on his global income. The US would also tax his US source salary income. Here, the AAR held he would be entitled to a tax credit in India for US taxes.

Family trusts

No `gift' tax on property received from individual

No levy on transfer of assets to family trust, March 24, 2017: The Times of India

`Gift' tax provisions will not apply to property received from an individual by a family trust, according to an amendment made in the Finance Bill passed by the Lok Sabha.

High net worth individuals (HNWI) commonly use family trusts as a tool for succession planning, as it provides an upfront solution to any possible future disputes that may arise, including any challenges to a will by relatives at a later date. Family trusts also ring fence assets from any future liabilities.Shares, immovable property et al are settled (transferred) to the trust for the benefit of spouse, children and other relatives. The trust dis tributes income to the beneficiaries.

The Finance Bill had introduced clause (x) in section 56(2). It provided that receipt of money or property by `any person' (which includes individuals and other entities such as private trusts and companies) without consideration or for inadequate consideration in excess of Rs 50,000 shall be subject to Income-tax (I-T) in the hands of the recipient, under the head `Income from other sources'.“The budget proposals had created uncertainty around family trusts receiving such gifts. The enacted change will bring relief to families intending to create trusts for legitimate succession planning,“ says Pranav Sayta, family business services leader at EY India.

Film actors

Promotion of film: actor not expected to incur expenditure

Money spent by Hrithik to promote film `taxable', Nov 30, 2016: The Times of India

It is not an actor's responsibility or obligation to incur expenditure on promotion of his film, the Mumbai bench of the Income Tax Appellate Tribunal (ITAT) ruled recently . It disallowed an expenditure of Rs 5.6 lakh, incurred for promotion of `Gujarish', which was claimed by the lead actor, Hrithik Roshan, as deduction from his income in 2010-11.

While verifying Hrithik's income-tax (I-T) returns, the officer noticed that Hrithik had shown an expenditure of Rs 7 lakh for promotion of his film.The actor said it was paid to seven contestants of `Saregama', a TV show, for promotion his brand image, as he was the lead actor in the film. `Guzaarish' was a 2010 release, composed and directed by Sanjay Leela Bhansali, which also had Aishwarya Rai in the lead role. The officer held that expenditure relating to the film's making, its promotion et all was the producer's responsibility . He disallowed the expenditure claimed by the actor in his I-T computation as a business deduction.

Foreign tax credit (FTC)

The Times of India, Jul 01, 2016

Lubna Kably

In a bid to reduce litigation, the Central Board of Direct Taxes (CBDT) has made it easier for Indian-resident taxpayers, including large Indian companies having overseas operations, to claim credit for the taxes borne by them abroad. Credit of foreign taxes (referred to as foreign tax credit, or FTC) were allowed under tax treaties with other countries and the Income Tax Act, but the absence of specific rules often led to litigation.Denial of FTC by tax authorities also resulted in double taxation on the same income in the hands of Indian-resident taxpayers.

FTC rules issued by the CBDT provide that credit for foreign taxes can be claimed against taxes paid in India, like income tax (be it personal or corporate), cess and surcharge. Further, Indian companies can also claim FTC against Minimum Alternate Tax (MAT). Taxpayers have to submit proof of the tax paid or deducted at source in the foreign country to claim FTC.

The earlier draft rules, issued in April, had excluded disputed foreign taxes from the ambit of FTC. Now credit can be claimed in respect of disputed foreign taxes, subject to meeting compliance requirements.

Indian-resident taxpayers pay taxes on their global income in India, including on foreign source income which has already been subject to tax overseas (see graphic). FTC eliminates double taxation on the same income. To illustrate: A parent company headquartered in India earns interest on debt given to its Sri Lankan (SL) subsidiary and is subject to a 10% withholding tax. The Indian company will pay tax in India on its global income (including the foreign source interest income). The new rules will make it easier for it to claim an FTC for the 10% tax with held in Sri Lanka.

According to RBI data, India Inc's overseas investments by way of debt and equity amounted to $750 million in May . FTC rules will help Indian companies with global operations get benefit of credits for foreign taxes. The rules will also help high net worth individuals who make overseas investments and bear foreign taxes on their dividend or interest income. “Clarity on grant of FTC against the MAT liability is a big positive as is the move to provide credit for `disputed foreign taxes' upon final settlement of dispute. However, the modus operandi for allowing such credit -especially when the assessments are time-barred -needs to be prescribed,“ says Girish Vanvari, tax leader at KPMG India.

Some hiccups remain.Gautam Nayak, tax partner, CNK & Associates, says, “The rules provide clarity about the extent of FTC available and documents to be submitted for that. However, difficulties faced by certain taxpayers have not been addressed.FTC would not be available for taxes not covered by the relevant tax treaty , such as state taxes paid in the US or branch profits' taxes paid overseas.Besides, the tax credit would be restricted to the rate of tax payable under the tax treaty , even if the actual tax paid as well as the Indian tax payable is higher. So, if excess taxes have been withheld by the foreign payer out of abundant precaution, or on account of their local laws, tax credit would be available only for tax payable under the treaty terms. For example, the US levies a higher rate of withholding of 30% if a foreign entity (say an Indian company) does not have a tax identification number. In such cases, credit in India would be available only to the extent of applicable rate prescribed under the tax treaty.“

Gifts

Need not be camouflaged remuneration

Lubna Kably, `SRK's RS15cr Dubai villa can't be taxed', August 24, 2017: The Times of India

The income-tax appellate tribunal (ITAT) has rejected the tax department's view that a villa in Dubai gifted to Bollywood actor Shah Rukh Khan a decade ago was a camouflage to evade income tax. The tribunal has held that the value of the villa cannot be treated as the actor's taxable income.

The villa had been gifted to Khan under a formal gift deed in 2007, after he obtained the RBI's approval.

I-T authorities were of the view that the donor, Nakheel PJSC, a Dubai-based company known for the famous Palm Projects, had gifted the villa as it was keen on using the actor's image and brand.The actor is a globally known figure and has endorsed various foreign brands for remuneration running into a few crores. Thus, the gift was seen as remuneration to Khan for utilising his brand image and in lieu of his stage performance at the company's annual day event. In light of this, the I-T authorities sought to tax the value of the villa as income in SRK's hands.

During the assessment for the financial year 200708, I-T officials added the value of the villa -Rs 17.85 crore -to the income of Rs 126.3 crore declared by Khan in his I-T return. The actor would have had to pay I-T on this additional sum. At the first stage of appeal, the commissioner (appeals), agreed with the I-T authorities. Based on a valuation report, though, he reduced the addition to Rs 14.7 crore.

Appealing before ITAT, Khan, through his counsel, said the chairman of the company, Sultan Ahmed Bin Sulayem, was his friend and thus wished to make the gift. He admitted to attending the annual day event, but said he merely addressed the employees and did not perform on stage, which would have amounted to brand endorsement. On taxation of a gift in kind, ITAT pointed out that for the relevant financial year, gifts of immovable property made without any consideration were out of the tax ambit.

Gratuity

Payment of Gratuity(Amendment) Bill 2017

March 22, 2018: The Times of India

HIGHLIGHTS

Parliament has passed Payment of Gratuity(Amendment) Bill 2017 paving the way for doubling the limit of tax free gratuity to Rs 20 lakh

The Bill also notifies period of maternity leave as part of continuous service

Parliament passed Payment of Gratuity(Amendment) Bill 2017 paving the way for doubling the limit of tax free gratuity to Rs 20 lakh and empowering the government to fix the ceiling of the retirement benefit through an executive order.

The Rajya Sabha passed the bill, which was approved by the Lok Sabha on March 15. Besides enabling the central government to fix the ceiling of tax free gratuity, the bill will also empower it to fix the period of maternity leave through executive order.

It also notifies the period of maternity leave as part of continuous service and proposes to empower the central government to notify the gratuity ceiling from time to time without amending the law.

Rajya Sabha Chairman M Venkaiah Naidu said in the Upper House that he had met leaders of various parties in the morning and it was decided that the House would take up the crucial Payment of Gratuity (Amendment) Bill as it was of importance to the employees.

Labour Minister Santosh Kumar Gangwar then moved the bill for consideration and passage. It was passed by a voice vote without a debate.

The labour ministry later said in a statement that the Bill also envisages amending the provisions relating to calculation of continuous service for the purpose of gratuity in case of female employees who are on maternity leave from "twelve weeks" to such period as may be notified by the central government from time to time.

Prime Minister Narendra Modi tweeted: "A significant pro-people measure passed in Parliament. Will benefit lakhs of Indians."

After implementation of the 7th Central Pay Commission, the ceiling of tax free gratuity amount for central government employees was increased from Rs 10 lakh to Rs 20 lakh. The unions have been demanding for inclusion of the change in the Act.

At present, formal sector workers with five or more years of service are eligible for Rs 10 lakh tax-free gratuity after leaving job or at time of superannuation. A senior government official had earlier said that the government wants to provide tax-free gratuity of Rs 20 lakh to organised sector workers at par with the central government.

The Payment of Gratuity Act, 1972, was enacted to provide for gratuity payment to employees engaged in factories, mines, oilfields, plantations, ports, railway companies, shops or other establishments. The law is applicable to employees, who have completed at least five years of continuous service in an establishment that has 10 or more persons.

The amendment will also allow the central government to notify the maternity leave period for "female employees as deemed to be in continuous service in place of existing twelve weeks". The proposal comes against the backdrop of the Maternity Benefit (Amendment) Act, 2017 enhancing the maximum maternity leave period to 26 weeks.

House rent allowance

Proof needed of rent paid to kin

Lubna Kably, For tax relief, you need proof of rent paid to kin, April 11, 2017: The Times of India

The Mumbai income tax appellate tribunal (ITAT) denied a claim on house rent allowance (HRA) by a taxpayer.

She had paid rent in cash to her mother, but was unable to substantiate it. On the other hand, the Ahmedabad ITAT allowed the HRA exemption claimed by a taxpayer who had paid rent to his spouse.

Given that the avenues available to save tax are limited for the salaried class, some employees try and take the `fullest' advantage of the income tax exemption available for HRA by paying rent to a family member with whom they are residing. It is another matter if the rent is actually paid to the relative, or if the rent receipts are genuine.

Where do these seemingly contrary ITAT decisions leave the taxpayer? The bottom line is it isn't illegal to pay rent to a close relative, but it carries a risk of a deeper probe by I-T officials and if genuineness cannot be proved, the claim would be denied, with attendant consequences.

The bottom line is precautions are necessary when paying rent to a relative. For instance, it is better to enter into a leave and licence agreement and make payments via banking channels. Under section 10 (13A) of the I-T Act, a salaried taxpayer can claim exemption on HRA for an accommodation occupied by him, if the property is not owned by him and he has actually incurred rent expenditure on it.

Amarpal S Chadha, partner, people advisory services at EY-India, says: “Payment of rent to a parent or spouse will not impact the eligibility to claim HRA exemption as long as the above mentioned conditions are met and the transaction is genuine.“ “The transaction should not be a mechanism to avoid tax,“ he stresses.

So decisions by the Mumbai and Ahmedabad ITATs -one accepting the tax exemption claim on payment of rent to a relative and the other denying it -may seem contrary , but the orders were based on specific facts in each case.

Rent paid to spouse, HRA claim allowed: In 2013, the Ahmedabad ITAT bench in Bajrang Prasad Ramdharani's case, allowed an HRA exemption claim by the taxpayer, even though rent was paid by him to his spouse. He was living with his wife but paid her rent via bank transfers. The ITAT held that the taxpayer had fulfilled the twin requirement of occupying a house not owned by him and payment of rent.

Rent paid to mother, HRA claim disallowed: But more recently , the Mumbai bench disallowed the HRA claim by Meena Vaswani who had contended that she lived with her aging mother to take care of her and paid rent to her mother in cash. While rent receipts were obtained by her, as the transaction was with her mother, she had not entered into any formal contract. Vaswani was not able to produce proof of cash withdrawals from her bank to substantiate the rental payments. Moreover, the authorities were able to prove that she was not residing with her mother, but in another apart ment nearby with her husband and daughter. The ITAT agreed with I-T authorities that the transaction was a sham to obtain a tax benefit.

The fine print: “There is nothing in the I-T Act to prevent a salaried person from claiming exemption under section 10(13A) on the basis of rent paid to a close relative. However, section 143(2) empowers the I-T officer to examine the genuineness of such expense,“ says Ameet Patel, tax partner at Manohar Chowdhry & Associates, a CA firm. “In the normal course, a taxpayer would not pay rent to his spouse or parent. I personally would never advise any client to enter into such a transaction. It is but natural for the I-T officer to look upon such arrangements with suspicion,“ adds Patel.

The Mumbai ITAT placed reliance on the Indian Evidence Act, 1872, and took the position that the onus of proving that the rental transaction was real lay with the taxpayer.

Income Tax returns

Who has to file income tax returns

Declaring investments through Form 12BB, 2016 onwards; Graphic courtesy: The Times of India, May 8, 2016

Salaried persons earning up to Rs 5 lakh annually

Salaried persons earning up to Rs 5 lakh annually will have to file income tax returns: Central Board of Direct Taxes

PTI | Jul 22, 2013

The Times of India

The CBDT had exempted salaried employees having a total income of up to Rs 5 lakh including income from other sources up to Rs 10,000 from the requirement of filing income tax return for assessment year 2011-12 and 2012-13, respectively.

However, for the assessment year 2013-14 and thereafter, salaried persons earning up to Rs 5 lakh annually will have to file income tax returns, Central Board of Direct Taxes (CBDT) said on Monday.

Earlier in May 2013, the CBDT had made E-filing of income tax return compulsory for the assessment year 2013-14 for persons having total assessable income exceeding Rs 5 lakh.

The CBDT said that the exemption has been not been extended as the facility for online filing of returns has been made "user-friendly with the advantage of pre-filled return forms".

These e-filed forms also get electronically processed at the central processing centre in a speedy manner, it said.

For filing returns, an assessee can transmit the data in the return electronically by downloading ITRs, or by online filing.

Thereafter the assessee had to submit the verification of the return from ITR-V for acknowledgement after signature to Central Processing Centre.

Not filing I-T returns?Imprisonment,fine

Not filed I-T returns? You face jail & fine

TNN | Aug 17, 2013-

The Times of India

MUMBAI: Those defaulting in filing income tax returns are liable to prosecution, the I-T department has said.

If the tax evaded exceeds Rs 25 lakh, the defaulter can be sentenced to a minimum imprisonment of six months and maximum of seven years, besides being asked to pay a fine. If the tax evasion amount is less than Rs 25 lakh, the imprisonment could range between three months to two years in addition to fine.

Recently, the additional chief metropolitan magistrate, New Delhi, sentenced a taxpayer to six months' imprisonment in one assessment year and one year imprisonment in subsequent assessment year for repeating the offence of not filing income tax returns.

2018: Changed format

Changes you need to know for I-T returns, April 7, 2018: The Times of India

What’s different in the I-T return forms notified for the assessment year 2018-19
From: Changes you need to know for I-T returns, April 7, 2018: The Times of India

When you file your income tax (I-T) returns in July, you will have to fill details such as allowances that are not exempt, value of perks, and profits in lieu of salary in the new I-T return forms notified for the assessment year 2018-19.

A one-page simplified ITR Form-1 (Sahaj) can be filed by an individual who is a resident having income up to Rs 50 lakh and who is receiving income from salary, one house property and other income (interest, etc), the I-T department said. The detailed break-up of salary was not part of ITR forms last year but has been added this year.

Similar details have to provided for income from house property. Gender mention requirement has been removed from ITR-1. Non-resident individuals cannot use ITR-1 to file returns and will have to use ITR-2 or -3, depending on their nature of income in India. Tax experts said this could raise their compliance costs.

The ITR-1form is similar to the one for the previous assessment year, which had been used by 3 crore taxpayers who filed their returns using this form. You will also have to provide details of all bank accounts held in the country at any time during the previous year, except dormant accounts.

The requirement of furnishing details of cash deposit made during a specified period as provided in the ITR form for the assessment year 2017-18 has been done away. This provision was added in the aftermath of the demonetisation drive.

ITR Form-2 has also been rationalised by providing that Individuals and HUFs (Hindu Undivided Families), having income under any head other than business or profession, shall be eligible to file returns under this form. The Individuals and HUFs, having income under the head business or profession, shall file either ITR Form-3 or ITR Form-4, the department said.

“There are more than 25 key changes in current year ITR forms in comparison to last year. Some of these changes suggest that the focus of new ITR forms is to get more information from unlisted companies, trusts and taxpayers, who have opted for presumptive taxation scheme,” said Naveen Wadhwa, deputy general manager at Taxman.

“Further, the ITR forms also require the business entities to report the GST transaction, which would help the department to independently reconcile the transactions reported by them in income-tax returns and GST returns,” he said.

In case of non-residents, the requirement of furnishing details of any one foreign bank account has been provided for credit of refund. “There is no change in the manner of filing of ITR forms as compared to last year. All these ITR forms are to be filed electronically,” the department said.

Any individual who is 80-year-old or more has the option to file paper returns as well as an Individual or HUF whose income does not exceed Rs 5 lakh and who has not claimed any refund in the return of income.

Tax experts said additional fields for penalty due to delayed filing have been added in ITR-1 and ITR-2.

“The new Form ITR-1 (Sahaj) for assessment year 2018-19 does not request for the residential status of the individual and it is neither applicable to individuals qualifying as Not Ordinarily resident (NOR) nor to non-residents (NR). So Indian employees who have left India for overseas employment in the first half of the year and qualifying as non-resident would be required to file their India tax returns in ITR-2, even though they have annual taxable income up to Rs 50 lakh,” said Alok Agarwal, senior director at Deloitte.

'Returns can be filed after I-T notice is issued'

Lubna Kably, ITAT: Can file revised return after notice issued by I-T, June 22, 2018: The Times of India

ITAT- Can file revised return after notice issued by I-T; The details of the case
From: Lubna Kably, ITAT: Can file revised return after notice issued by I-T, June 22, 2018: The Times of India

HIGHLIGHTS

Tax benefit claimed by taxpayers in revised income-tax returns cannot be denied byI-T officers because the revised return has been filed after issue of notice

Currently, the time limit for filing a revised return is before the expiry of twelve months from the last day of the financial year or before the completion of I-T assessment, whichever is earlier

A tax benefit claimed by a taxpayer in his revised income-tax return cannot be denied outright by an income-tax (I-T) officer merely because the revised return has been filed after issue of notice, income-tax appellate tribunal (ITAT) has said.

However, the revised return needs to be filed within the time limits set out in the I-T Act. This order of the Mumbai bench of the ITAT, passed on June 20, will provide relief to several taxpayers. When a mistake is made in the original I-T return, such as not disclosing an income correctly or not claiming a tax deduction, section 139 (5) the I-T Act permits a revised return to be filed to correct the errors.

Currently, the time limit for filing a revised return is before the expiry of twelve months from the last day of the financial year or before the completion of I-T assessment, whichever is earlier.

In this case before the ITAT, Mahesh Hinduja had declared a total income of Rs 4.91 lakh in his original return for the financial year 2010-11. He later filed a revised return declaring a total income of Rs 6.24 lakh. In this revised return he also disclosed long-term capital gains (LTCG) of nearly Rs 50 lakh. However, as he had invested 1.15 crore in a new residential house, he claimed a deduction under Section 54 of the I-T Act. Thus, capital gains were not offered for tax.

Under the Act, if an investment is made in another house in India, within the stipulated period of time, then the 'cost of the new house' is deducted and only the balance component of the LTCG is taxable. Thus, if the amount of capital gains is equal to or less than the cost of the new house, the entire sum of LTCG is not taxable.

To ensure that the taxpayer has not underreported his income or paid less tax, the I-T Act empowers I-T officials to issue a notice asking for further evidence. As the revised return was filed by Hinduja after he had received a notice under section 143(2), the I-T official rejected his claim for deduction. The litigation finally reached the level of the ITAT.

The ITAT noted that the I-T official had rejected the revised return of income as invalid but at the same time had accepted the higher income offered in the revised return, including the LTCGs. Only the claim of deduction under Section 54 had been rejected. "The I-T official has adopted a very selective approach in respect of the revised return of income filed by the taxpayer," remarked the ITAT.

The ITAT held that the I-T Act does not bar a taxpayer from filing a revised I-T return after issue of notice under Section 143 (2). Hinduja's case was sent back to the I-T official for examining and allowing the deduction, subject to the fulfilment of conditions prescribed for such claim.

Wrong information in I-T returns

April 19, 2018: The Times of India

HIGHLIGHTS

I-T department has said those who file wrong ITR will be prosecuted and their employers will be intimated to take action

The advsiory comes in the backdrop of the investigation wing of the department, in January, unearthing a racket of extracting fraudulent tax refunds by employees

The Central Processing Centre (CPC) of the department in Bengaluru, that receives and processes the Income Tax Returns (ITRs), has issued an advisory specifying such taxpayers should not "fall prey" to unscrupulous tax advisors or planners who help them in preparing wrong claims to get tax benefits.

Calling it a "cautionary advisory" on reports of tax evasion by under-reporting of income or inflating deductions or exemptions by salaried taxpayers, the department said such attempts "aided and abetted by unscrupulous intermediaries have been noted with concern".

"Such offences are punishable under various penal and prosecution provisions of the Income Tax Act," it said.

The advsiory comes in the backdrop of the investigation wing of the department, in January, unearthing a racket of extracting fraudulent tax refunds by employees of bellwether information technology companies based in Bengaluru, in alleged connivance with a tax advisor.

The CBI recently registered a criminal case to probe this nexus.

The tax filing season for salaried class taxpayers has just begun with the Central Board of Direct Taxes (CBDT), that frames policy for the department, recently notifying the new ITRs.

The one-page advisory added that if the department notices any fraudulent claims in their ITRs, such claims "may be punishable under provisions of the IT Act and this may also delay issuance of their refunds."

"Taxpayers, are, therefore strictly advised not to fall prey to false promises or mis-advice by unscrupulous intermediaries and submit wrong claims in their ITRs, which would be treated as cases of tax evasion.

"In the cases of such wrong claims by the government/PSU employees, reference would be made to the concerned vigilance division for action under conduct rules," it added.

The advisory added that the department possesses an "extensive risk analysis system" that is aimed at identifying persons who are non-compliant and aim to subvert the trust based-system "envisioned" while processing of ITRs at the CPC, which it said is automated and devoid of any human interface.

"In all such cases of high risk , the department may examine and verify the details submitted by taxpayers in their ITR subsequent to the processing of returns," it said.

It also asked tax planners and advisors to "confine their advice to taxpayers within the four corners of the IT Act" and warned that the violators will be prosecuted and such instances will also be referred to enforcement agencies like the CBI and the Enforcement Directorate (ED) for criminal prosecution.

Joint I-T liability

Co-ownership of property

The Times of India, Aug 13 2016

Lubna Kably

If the spouse has not invested in a property and is merely a co-holder, then on sale of such property , she cannot be liable for tax on capital gains, the Mumbai IncomeTax Appellate Tribunal (ITAT) has recently ruled. The ITAT order will help many taxpayers as married couples are increasingly opting for property registration in joint names, even if only one of them is the investor.

Anil Harish, an advocate specializing in real estate, said: “Co-holding of property is popular. Often the name of a spouse (say wife) is added to provide a sense of comfort, to ensure ease of succession on death of the partner or other reasons such as facilitating voting in a general body meeting of the housing society .“

The ITAT gave the order on Wednesday while hearing a case of a medical professio nal, Vandana Bhulchandani.

An I-T officer, based on information in his possession, noted that Bhulchandani had not disclosed the capital gains arising from the Rs 2.12-crore sale of a property in Parel that she jointly held with her husband in her I-T return for the financial year 2008-09.

She informed the I-T officer that her husband had made the entire investment and the property was reflected in his books of accounts--from the date of purchase till the date of sale. The officer also observed that Bhulchandani's husband did not incur any I-T liability on the capital gains arising from the sale--the husband had set off the short-term capital gains arising from the Parel property sale against the short-term capital losses incurred by him on the sale of shares. Under the I-T Act, short-term capital losses can be set off against capital gains arising in the same financial year and only the surplus, if any , is taxable.

But the I-T officer claimed that the entire arrangement was done to avoid tax payment and held Bhulchandani liable for 50% of the total short-term capital gains arising from the property sale and added Rs 45.38 lakh to her taxable income. Short-term capital gains are taxed at the applicable I-T slab rates, which depending on an individual's income varies between 10% and 30% in addition to applicable surcharge and cess.

Bhulchandani approached the commissioner of income-tax (appeals) who directed deletion of the addition.The I-T officer then filed an appeal before the ITAT. But the tribunal took into cognizance that the husband had bought the property , which was duly reflected in his books of accounts, and had also disclosed the details of the sale in his I-T return and thus, dismissed the appeal.

“The ITAT order is clear and correct. It will provide clarity in cases of co-holding of property , where the spouse has not made any monetary investment,“ said Harish.

Notice pay deducted by employer

Cannot be taxed

Lubna Kably, `Notice pay deducted by employer cannot be taxed', April 21, 2017: The Times of India

The Income-tax Appellate Tribunal (ITAT), which adjudicates Incometax (I-T) disputes, has held that an amount deducted by an employer for not serving out a notice period cannot be brought to tax.

In this case, two companies while settling dues had deducted salary for the notice period which the person had not served, but this deduction was not taken into account during tax assessment.However, ITAT (Ahmedabad bench) in its order dated April 18, said only salary received would be taxable, and not portions which were deducted by a company for not serving out a notice period.

Under the I-T Act, salary income is taxable on a due basis, regardless of whether it has been actually paid to an employee or not. And typically, when an employee resigns but does not serve out the notice period (provided for in the employment agreement), the employer deducts salary attributed to this period. However, I-T authorities do not consider such deductions and seek to tax entire salary due (that is, salary before allowing for such deduction). Hence, the order acquires significance.

“The ITAT has recognised the concept of real income, which is well accepted under I-T laws. It held that the salary against which notice pay was adjusted had not become due, as the net amount was paid by the employer. The employee had no right to receive the portion of the salary that had been deducted, under the terms of employment. Thus, the deducted amount could not be held as taxable salary income,“ said Gautam Nayak, tax partner, CNK & Associates.

In this case, which pertains to financial year 2009-10, N Rebello, had resigned from two companies, viz: Reliance Communication and Sistema Shyam Teleservices. Both companies had deducted a notice pay of Rs 1.10 lakh and Rs 1.66 lakh respectively and handed balance salary dues to Rebello. Accordingly in his I-T return, Rebello claimed as a deduction Rs 2.76 lakh from gross salary income, as this amount was not received. I-T authorities, in the course of assessment, denied such deduction. Commissioner (Appeals), which is the first level of appeal for a taxpayer, also upheld the action of the I-T.

The Commissioner (Appeals) pointed out that under section 15 of the I-T Act, tax is triggered when the salary becomes due, irrespective of whether it is paid or not. Secondly , section 16 of the I-T Act does not provide for any deduction made by the employer for the notice period. Thus, the deduction of Rs 2.76 lakh claimed by Rebello was not upheld. This led to Rebello filing an appeal before the ITAT, which decided in his favour.

Overseas income

Residential status determined by no. of days stayed

See graphic. Earning abroad? Know the tax rules, August 1, 2017: The Times of India

Tax incidence in India; Earning abroad? Know the tax rules, August 1, 2017: The Times of India

Tax Residential Status In India Is Determined By No. Of Days Stayed Here

Indians who are on deputa tion overseas or have sett led overseas -whether by way of acquiring a permanent residency such as a green card in the US, or acquiring citizenship of a foreign country -need to be aware of their tax obligations in India.

A recent move seeking details from non-residents of foreign bank accounts in income tax (I-T) returns caused anxiety about whether India was taking steps to tax global income. The Central Board of Direct Taxes (CBDT) subsequently clarified that providing such details was optional and it was to facilitate refunds in those cases where individuals did not have a bank account in India.

Here is a primer explaining the tax incidence for Indians overseas:

1) What determines tax residential status and why is it important?

An Indian residing abroad is popularly referred to as a non-resident Indian (NRI).Under India's tax laws, the reference is to the term `tax resident' or `non-resident'. The country of origin does not determine the taxability . For instance, a UK citizen who is working in Mumbai in the subsidiary of a UK parent company could be a tax resident of India. An Indian who has migrated to Australia on March 20 may in common parlance be an NRI, but for tax purposes for the financial year 2016-17, he is likely to be tax resident of India.

The number of days stay in India, as provided for in the Income Tax (I-T) Act, determines the tax residential status of an individual in India.This status, in turn, determines which income can be taxed in India and what cannot be taxed. Thus, it is important to know which category you fall into.

An individual is considered to be a tax resident of India (also referred to as Indian tax resident) for a financial year (say FY 2016-17) if (i) he has been in India for 182 days or more during that FY, or (ii) he has been in India for 60 days or more during that particular FY and has lived in India for at least 365 days or more during the four years immediately preceding.

Indian citizens taking up employment abroad or crew members of an Indian ship who have left India during a FY or persons of Indian origin (PIOs) visiting India need to note that the period of 60 days mentioned in the above clause is replaced by 182 days. (In the non-tax realm, the PIO scheme has been merged with Overseas Citizen of India scheme and it provides for visa-related relaxations.) Thus, if an Indian citizen has left for overseas deputation during FY 2016-17, he will be considered as a tax resident of India for the year ended March 31, 2017, if he has been in India for 182 days or more during 2016-17. Only , tax residents of India (ROR) are subject to tax on their global income, which would include interest income on overseas bank accounts.

2) Apart from resident and non-resident, is there any other definition in the I-T Act which determines tax in India?

Yes, the I-T Act also defines a `Resident but not ordinarily resident' (RNOR). An RNOR qualifies as a tax resident of India during a particular FY, but satisfies the following criteria: (i) He has been a non-resident of India in nine out of 10 immediately preceding fi nancial years; or (ii) has during the last seven years immediately preceding that particular FY been in India for a period of 729 days or less.

To illustrate: A PIO visits India during 2016-17 and stays for more than 182 days.This would make him a tax resident of India. However, during the last seven years immediately preceding FY201617, he has been in India for 729 days or less, he will be regarded as an RNOR.

3) What is the tax incidence in India of a tax resident (ROR), RNOR and nonresident?

As mentioned earlier, an ROR is subject to tax on his global income in India. RNOR and non-residents are generally subject to tax in India only in respect of India source income (that is, income received, accruing or arising in India or deemed to be received, accrued or arisen in India).

Salary received in India or for services provided in India, ren tal income from a house property in India, capital gains on sale of assets in India -be it shares or house property , income from fixed deposits or savings bank account in India are instances of income which would be taxed in the hands of not just tax residents of India, but also RNORs and non-residents.

NRIs should also note an additional point. They are allowed to hold NRE and FCNR accounts (where foreign earnings are deposited) with banks in India. However, under the I-T Act, interest against such deposits is tax-free.However, interest earned on an NRO account (where Indian source income is deposited) will be taxable in India.

4) What is the role of tax treaties?

If an individual is a tax resident of one country but has a source of income from another country , complexities can arise. Tax treaties ensure that the same income is not taxed twice. Broadly , tax treaties provide that the country from which the income is generated has the right to tax it.

Double taxation is avoided in two ways -either the country of non-tax residence exempts the income earned in the foreign country , or the country of tax residence grants a foreign tax credit for the taxes paid in the other country . India has entered into tax treaties with a hundred-odd countries, including US, UK, Canada, Australia and Germany , which are popular destinations for the Indian diaspora.

For instance, if an expat is a US tax resident, he will pay tax on his global income in the US (this would include tax on India source income). However, for taxes paid in India -say tax withheld at source against fixed deposits in a bank in India -he will get a foreign tax credit (a tax credit for the taxes paid or withheld in India against the US taxes payable by him). This will lower the US tax outgo.

Permanent account number (PAN)

2016: PAN mandatory for…

The Times of India Jan 04 2016

Mandatory PAN requirements

1 With effect from January 1, 2016, it has become mandatory to quote the permanent account number (PAN) for all transactions above `2 lakh for all modes of payment.

2 Only bank accounts opened under the Pradhan Mantri Jan Dhan Yojana have been exempted. But all other bank accounts and all kinds of deposits will have to quote PAN.

3 PAN will be mandatory for purchase of prepaid cards worth `50,000 or more in a year. Pur chase of gold jewellery worth above `2 lakh (`5 lakh current limit) would also need PAN.

4 The limit for quoting PAN for sale or purchase of real estate property has been raised to `10 lakh from `5 lakh.

5 PAN needs to be quoted only for a cash payment for a hotel or restaurant bill and foreign travel or purchase of forex of `50,000 (current limit `25,000).

2016: Required for transactions above Rs 2 lakh

The Times of India, Jun 22 2016

John Sarkar

New PAN rule hurts sale of luxury goods

Mails are flying thick and fast at most luxury stores across the country as harried sales staff face a tough time trying to coax people to part with their permanent account number (PAN) details. By the looks of it, they are not accomplishing much, resulting in poor sales of luxury goods. Furnishing of PAN details has been made mandatory by the government for any transaction above Rs 2 lakh in a bid to weed out black money .

However, the move has deterred many wealthy shoppers from spending lakhs of rupees on luxury products such as handbags, watches and writing instruments. “Our bags start at Rs 2 lakh.Sales at our store have been hit badly because our regular customers have stopped coming,“ said a senior executive of a French luxury brand. Earlier, most of them would pay in cash. But now, instead of giving their PAN details, they are opting to shop abroad.“

Most people in the luxury industry TOI spoke to complained about similar issues.For instance, at a store selling high fashion French leather goods in the capital, executives are tearing their well-groomed hair out to convince customers to reveal their PAN card number.

“We have taken a hit of several lakhs of rupees over the last few days but have not been able to figure out a way around the problem,“ said an executive at the store.“The other day , a lady who had come to buy a bag said she wouldn't risk getting her husband into trouble by furnishing his PAN card details.Eventually , she walked out without buying anything.“

Nikhil Mehra, CEO of Genesis Group that has marketing and distribution arrangements for several luxury brands such as Jimmy Choo, Giorgio Armani, Em porio Armani and Tumi among others and is the JV partner for Canali, Burberry and Villeroy and Boch in India, said consumer sentiment here has been affected by this ruling. “However, for most of our brands it is not a challenge because prices are within the Rs 2 lakh limit,“ he said.

The Indian luxury market has been pegged at Rs 16,300 crore in 2015 by market research firm Euromonitor and is expected to touch Rs 39,000 crore by 2020, with an annual growth rate of 19%.

Perquisites

Interest-free loan from employer is taxable

Lubna Kably, Interest-free loan from employer taxable: ITAT, June 12, 2018: The Times of India

Interest-free loans extended by an employer are taxable in the hands of an employee as a perquisite, the Income Tax Appellate Tribunal (ITAT) has said. However, the valuation of the taxable benefit or perquisite, which forms part of the salary income of the employee, cannot be done in an ad-hoc manner and has to be computed as per the prescribed formula under the Income Tax Act, the tribunal said.

In this case, Neha Saraf had obtained an interest-free loan from her employer, Teej Impex, a private company. During the assessment for the financial year 2010-11, her argument that no employeremployee relationship existed fell through because the company had deducted tax at source, or TDS, on the salary of Rs 24 lakh paid to her.

Thus, the I-T officer assessing her case estimated 15% interest on the loan and added Rs 43.8 lakh to her income as a perquisite value of the interest-free loan.

In the next stage of appeal, the commissioner of I-T (appeals) held that the I-T officer had rightly treated the value of interest-free loan as a taxable perquisite in the hands of the employee. However, he noted that the valuation cannot be done in an ad-hoc manner.

According to I-T Act rules, a perquisite value is based on the rate charged by SBI on April 1 of the financial year in which the employee received the loan.

The commissioner (appeals) reworked the valuation and arrived at a lower perquisite value of Rs 20.65 lakh.

The commissioner (appeals) also rejected Saraf ’s contention that as interest on the loan given to her had already been disallowed in the hands of the company, it cannot be treated as a perquisite in her hands. Unhappy with the outcome, Saraf filed an appeal with the ITAT. However, in its order dated May 16, the ITAT upheld the order of the commissioner (appeals).

In the context of interestfree loans from employers, Puneet Gupta, director of people advisory services at Ernst and Young, says, “The employer is liable to treat an interest-free loan as a taxable perquisite and TDS is to be deducted from salary. An exemption is available if the loan is provided for medical treatment of specified diseases or where the loan amount is petty and does not exceed Rs 20,000.”

“Employees must ensure that the employer deducts TDS on the total salary income, which includes the perquisite value of interest-free loans. If TDS is not deducted, the employee faces several consequences. Not only does he or she have to pay income tax on the perquisite value of the loan, but interest will also be payable for late deposit of advance tax. Further, if such taxable perquisite value is not reported in the I-T returns, the I-T department may levy penalty ranging from 50% to 200% of the tax payable on the under-reported income,” Gupta adds.

Pharmaceutical companies

Freebies for doctors deductible

Pharma co’s expenses towards freebies for docs can be claimed as deductions: ITAT, August 3, 2020: The Times of India

Tax issues surrounding the ‘nexus’, between pharma companies and doctors, where the latter are sponsored for conferences, at times replete with sightseeing and gala dinners, or expensive gifts, refuse to die down. Judicial precedents, in several cases, have been in favour of pharma companies with the costs relating to such freebies being allowed as business deductions.

The Mumbai bench of the Income-tax Appellate Tribunal (ITAT) recently passed an order in favour of Medley Pharmaceuticals, an Andheri based company.

The crux of the tax issue dealt with re-opening of the assessment for the FY 2011-12, owing to a change of opinion by the succeeding I-T officer. Based on technicalities such as no fresh ground material available on record, the re-opening was quashed by the ITAT.

However, the ITAT also went on to analyse the allowability of sales promotion expenses aggregating to Rs 6.2 crore for the pharma company. A break-up showed that Rs 2.4 crore was towards product reminders; conference expenses and travel costs ran into Rs 2.7 crore and additional doctors’ expenses were of Rs 1.1 crore.

The ITAT made some pertinent observations regarding the code of conduct issued by the Medical Council of India (MCI) and a circular issued by the Central Board of Direct Taxes (CBDT).

It said that the MCI code of conduct, which debars freebies, is meant to be followed by the medical fraternity alone and does not apply to pharma companies. Amended on December 10, 2009, the code prohibits medical practitioners and their professional associations from taking any gift, travel facility, hospitality, cash or monetary grant from the pharmaceutical and allied health sector industries.

The CBDT circular dated August 1, 2012 says that any expense in providing freebies in violation of the Medical Council’s code shall not be allowed as a business deduction.

The ITAT said that the MCI code of conduct, which debars freebies, is meant to be followed by the medical fraternity alone and does not apply to pharma companies

Property (house): income from

2018: losses from house property for TDS capped at ₹2 lakh

CBDT caps losses from house property for TDS at ₹2 lakh, January 8, 2018: The Times of India

An employer can set off loss declared by an employee under the head ‘income from house property’ only up to Rs 2 lakh against such employee’s salary to arrive at the amount of tax to be deducted at source (TDS).

The amendment to section 71 of the Income-Tax (IT) Act applies for the first time from 2017-18. If an employee has declared a loss higher than Rs 2 lakh, the excess is to be ignored for calculating the amount of TDS, which is deducted monthly from salary income, the Central Board of Direct Taxes (CBDT) has said.

In a circular issued last month, the CBDT has pointed out key amendments to the I-T Act, which employers who are responsible for TDS against salary income should consider. Issue of such a circular is an annual feature.

An employee is permitted to provide details of other income (say, bank interest) that he or she has earned during a year, together with the tax that has already been deducted (say, TDS deducted by the bank). Similarly, losses can also be declared by the employee. However, only loss from house property can be considered by the employer, as this is allowed to be set off against salary income. The employer has to take into consideration the details of income and loss from house property declared by the employee for the purpose of computing TDS.

Making such a declaration is not mandatory. However, if an employee does so, he or she may not have to separately compute and pay advance taxes, as the employer will be deducting tax at source on the employee’s taxable income based on the details given (and not just salary income).

If an employee had let out his or her house (which typically was the case when a second house was owned), the corresponding interest on home loan is fully allowed as a deduction. This, in many cases, led to a significant loss under the head ‘income from house property’ (which is mainly the difference between the rental income and the interest on the home loan)

2018: owner to decide which property is self-occupied

Lubna Kably, Owners of more than one house get tax leeway, June 8, 2018: The Times of India

The Mumbai bench of the Income-tax Appellate Tribunal (ITAT) upheld the right of a taxpayer to change the selection of a house property that would be treated as self-occupied and having a ‘nil’ annual value. Consequently, the notional rent from such a house will not be taxable.

In other words, if the taxpayer has in his Income-tax return declared a particular house property to be self-occupied, he can at a later stage during actual tax assessment of his case substitute this with another house property owned by him, which perhaps is in a more posh location. By doing so, it may be possible for him to reduce the notional rent that has to be offered for tax and lower his I-T outgo.

Under the I-T Act, where an individual owns more than one house, he can only treat any one of his properties as ‘self-occupied and having a nil annual value’. Annual value, in general terms, is the notional rent that the property would ordinarily fetch.

The other house properties, even if they are not given out on rent, are assumed to have been let out and I-T is payable on the notional rent. Certain deductions such as municipal taxes are permitted. Further, a standard deduction of 30% is allowed and I-T is payable on the balance component.

To mitigate I-T liability, taxpayers opt to choose that house property as ‘self-occupied and having a nil annual value,’ which would otherwise have had the highest adjusted annual value and would entail a higher I-T outgo.

“Sometimes, in cases where a dispute arises with I-T authorities on the annual value of a property, the taxpayer, since he has the choice, may change his selection during assessment proceedings, if it is advantageous to do so,” says Gautam Nayak, tax partner at CNK & Associates.

“It’s high time the government reconsiders this taxation. With housing finance being so readily available now, it is not only the rich people who have more than one house,” adds Nayak.

In an ITAT case , Venkatavarthan N Iyengar had three properties at Juhu, Santacruz East and Vasai. In his I-T return, he had declared his Vasai property as ‘self-occupied and having a nil annual value’. Later during course of tax assessment, he opted to substitute the Vasai with Juhu.

The I-T officer held that making a change during tax assessment is not permissible and the dispute reached the ITAT. Iyengar submitted that the I-T Act gives an option to the taxpayer to determine which of his properties he should treat as self-occupied.

The ITAT, in its order of May 23, observed, “The I-T Act nowhere states that the option of selecting a self-occupied property, once exercised, cannot be changed.”

Property (immovable): owned abroad

Notional rent to be included in income tax return

Lubna Kably, SRK must pay tax on notional rent from Dubai villa, rules ITAT, Order Set To Affect People Who Own Second Homes Abroad, March 23, 2017: The Times of India

Actor Shah Rukh Khan has to include notional rent from his Dubai villa in his income tax return filed in India, the Income Tax Appellate Tribunal (ITAT) has ruled.

Khan had submitted to the ITAT that under the IndiaUAE tax treaty , income from immovable property in Dubai would be liable to tax in the UAE and, therefore, he had not offered it to be taxed in India.

The ITAT rejected his contention. However, the two member ITAT (Mumbai) bench of Amit Shukla and G S Pannu added: “Credit for taxes paid in the UAE, if any , would be allowed as per the law.“

The ITAT directed the I-T officer to rework the final liability, which would arise in the hands of the actor, under the head “income from house property“. This decision will have wide ramifications for taxpayers having a second home overseas, especially those who fall under the jurisdiction of the Mumbai bench of the ITAT.

“In many instances, I-T authorities have been holding that rental income from overseas residential property (or deemed rental income, if the house is not let out) would be taxable in India. This ITAT decision will strengthen their argument,“ said Shuddhasattwa Ghosh, partner, people advisory services, at EY India.

Under the I-T Act, if a person has two residential properties, only one can be treated as “self-occupied“ and exempt from I-T. The other is taxed under the head “income from house property“ based on the annual value (in general terms deemed rental value or notional rent). Certain deductions are allowed to arrive at the taxable income from the house property , such as a 30% standard deduction and also municipal taxes paid on such property .

The Bollywood actor had been gifted a villa in Dubai and he obtained possession of it on June 18, 2008. For the financial year 2008-09, the I-T officer estimated the deemed rental value to be Rs 96 lakh. After allowing for a 30% standard deduction, he sought to tax Rs 67.2 lakh in the hands of Khan.

According to Ghosh, tax treaties entered into with UK, US and Canada contain similar wordings as the India-UAE tax treaty . “So they should be doubly careful and must include the rental income in the I-T return they file in India. They can claim a credit for taxes paid in such other country , as per the provisions of the relevant tax treaty,“ Ghosh added.

Property (NRI): purchase of

Miscalculation risks

Lubna Kably, Buying non-resident’s flat involves TDS risks, August 8, 2018: The Times of India

Miscalculations May Land Purchaser In Jail

As income tax sleuths intend to keep a close eye on property purchases from non-residents to ensure buyers have correctly deducted tax at source, extra vigilance is required. If there’s no tax deducted at source (TDS), or wrongly deducted, the I-T department takes action against the buyer and not the nonresident seller. In addition to interest and penalties, the I-T Act prescribes imprisonment of 3 months to 7 years.

An issue that arises is whether the TDS is to be computed against the sale value or the income that is taxable in India in the non-resident’s hands. The latter is technically correct, but has its own challenges. This issue and solutions are analysed below.

TDS risks: 1

Lubna Kably, Buying non-resident’s flat involves TDS risks, August 8, 2018: The Times of India

How to deduct TDS?

Indore-based chartered accountant Shweta Ajmera says, “According to section 195, which relates to TDS in case of non-residents, tax is deductible on ‘any sum chargeable to tax’. Thus, in case of sale of immovable property by a nonresident, tax is to be deducted on the capital gain amount.”

Chartered accountant Pankaj Bhuta adds, “In the case of GE India Technology Centre, the Supreme Court held that the TDS obligation is limited to the appropriate proportion of income chargeable under the I-T Act, which forms part of the gross sum of money payable to the non-resident. This means that the tax deductible at source is not on the entire sale value but merely on the net income arising from the sale. However, for computing the capital gains against which TDS is to apply, the buyer will have to depend on details provided by the seller — say, the period of holding of the property — and this adds to the risk. Second, if the seller wishes to invest in specified assets, be it a residential property in India or bonds, and save tax on capital gains, it is difficult for the buyer to ascertain that the investment will be made and conditions specified met.”

Gains arising from sale of property held for more than two years (the period of holding was three years prior to the Finance Act 2017) are longterm capital gains subject to tax at the rate of 20% plus applicable surcharge and cess. Typically, non-residents sell their property after this holding period is completed.

But a reader got a notice for short deduction even as he had deducted TDS at 20% plus applicable surcharge and cess. The penalties cost him nearly Rs 2 lakh. The reason: The buyer has to deduct TDS at the slab rate where the property is sold by the non-resident within two years of its purchase. The slab rate of 30% applies for taxable income above Rs 10 lakh.

To do: The buyer or seller can approach the I-T department to obtain a withholding tax order (referred to as a certificate), which gives a finality on the TDS amount. KPMG India tax partner Parizad Sirwalla says, “But this is time-consuming and requires prior planning.” Bhuta adds, “If the application for a withholding order is submitted after payment of advance deposit, such application is rejected (according to CBDT’s circular 774 dated March 17, 1999). Thus, parties should be careful.”

In the absence of such a certificate, it is safer for the buyer to deduct TDS at 20% on the sale value and not the capital gains of the non-resident seller. Generally, this results in the non-resident seller having to seek a refund from the I-T department.

This is the concluding part of our series on purchasing property from non-residents

TDS risks: 2

Lubna Kably, August 8, 2018: The Times of India

Who is a non-resident Indian?
From: Lubna Kably, August 8, 2018: The Times of India

Individuals who have purchased property from non-residents find themselves grappling with several income tax-related challenges. To begin with, it’s difficult to determine the seller’s tax status (whether he is a resident or non-resident in India according to the I-T Act). This is crucial, as tax is required to be deducted at 20% (in come cases even higher) for property purchased from a non-resident, as opposed to 1% where the seller is a tax resident. In case of wrong deduction, penalties apply, and the buyer can face prosecution.

When property is purchased from a resident, according to section 194-IA, TDS obligations kick in only if the sale consideration is above Rs 50 lakh. In case the purchase is from a non-resident, according to section 195, TDS obligations apply in all cases irrespective of the quantum.

In its July 24 edition, TOI reported that the Central Board of Direct Taxes (CBDT) — in its action plan — asked I-T cadre to closely = : watch : property : purchases from non-residents.

Lay buyers get confused between residency as per tax laws, nationality

Following this, TOI received many emails from readers. The issues faced by them and action points are analysed in a twopart series.

How to identify if the seller is a non-resident?

Lay buyers often get confused between residency according to tax laws, and nationality. Pune-based advocate Harshal Jadhav says, “Typically, the non-resident seller does not reside in Pune, where the property is situated. Communication with the prospective buyers are largely via email or telephone. In some cases, the seller sends the property documents along with a PAN card or Aadhaar card and agrees to meet on a pre-fixed date to complete the sale. These cards mislead the buyer who is a layman. Even otherwise, unless clearly disclosed by the property seller, it becomes difficult to determine his residential status.”

To do: Anil Harish, an advocate specialising in real estate, says, “The first step is to directly ask the seller if he is a non-resident. One can also probe further and ask for his I-T returns or passport details to determine the number of days stayed in India during the relevant period. As sellers may be reluctant to share these documents, the prospective buyer could ask the seller to get a certificate from his chartered accountant of his being a tax resident in India. An undertaking in writing must also be obtained from the seller of his being a resident (this can be part of the sale deed or a separate document). But such declarations will not offer absolute protection.”

Typically, if the seller has given a power of attorney to someone else, it’s likely he is a non-resident, caution experts. KPMG India tax partner Parizad Sirwalla says, “Tax residency in India is determined based on the number of days the individual has spent in India in the relevant financial year as well as a look-back period of four financial years (see box). Stay details in India of the seller, such as copies of passport covering this period, should be obtained.

However, if the transaction is carried out in the earlier part of the financial year, it is slightly difficult to determine residential status conclusively — here, a more conservative approach may be adopted by the buyer.”

Jadhav adds, “Buyers should get the agreement or sale deed verified by an advocate to safeguard their interests from disputes arising out of arrears of income tax liabilities, if any.”

Property, purchase of

Buyers won't lose I-T exemptions by adding kin name

Lubna Kably, Flat buyers won't lose I-T sop by adding kin name, May 1, 2017: The Times of India

Purchaser Should Get Full Tax Benefits: Tribunal

The Income Tax Appellate Tribunal (Mumbai bench) has, in a recent order, held that if the entire investment for purchase of a new residential house, along with stamp duty and registration charges, has been made by an individual, he should get the full benefit of the relevant income tax (I-T) exemptions.

Merely because the name of a close relative has been added to the newly purchased property (or in other words the new property is jointly held), it should not result in dilution of the I-T exemption in the hands of the individual who has paid for it.

The I-T Act, under various sections, offers tax benefits where sale proceeds (such as sale of residential house) are reinvested in certain assets (such as another residential house or eligible investments).

For instance, under section 54, if on sale of a residential house, the sale proceeds are reinvested in another house in India, within the stipulated period of time, to the extent of such reinvestment an exemption is available in computing capital gains. The taxable component of capital gains is reduced to the extent of the reinvestment, which results in a lower capital gains tax outgo.

If you look up the name plates in your housing society, you may find that several flats are jointly held.

The flat may be in the joint name of a couple, or owned with a parent or a sibling. The co-owner may or may not have contributed towards this purchase and the name of such a relative may have been added for the sake of convenience, such as to prevent family disputes arising in the future.

“The ITAT has upheld the well-established criteria that ownership for I-T purposes is determinant upon who has made the payment and to what extent. Very often, the name of a non-earning spouse, or parent or even sibling is added when a new property is purchased to offer a security net to them.

In those cases, where they have not contributed towards the purchase, the I-T benefit, such as on re-invest ment should flow entirely to the buyer who had made the purchase. This aspect has been reiterated by the ITAT,“ explains Gautam Nayak, tax partner, CNK & Associates.

In this case, decided by the ITAT on April 27, the taxpayer, Jitendra V Faria, had on sale of a residential house incurred capital gains of Rs.43.01 lakh. He reinvested Rs 42.66 lakh in a new residential house and claimed this amount as exempt under section 54 of the I-T Act. On the deficit balance, of Rs 35,000 odd, he paid capital gains tax amounting to Rs 7,376.

However, in the course of assessment, the I-T official noted that the new house that had been purchased was held in the name of two persons -Jitendra Faria with his brother Kunal Faria.Thus, the I-T official held that the exemption claimed by Jitendra Faria should be restricted to Rs 21.33 lakh (which is 50% of the amount claimed as exempt by him under section 54).

When the matter reached the ITAT, the tribunal noted that the name of brother was included only for the sake of convenience. It observed that even the I-T official had confirmed that the entire cost of the new house was borne only by Jitendra Faria. Thus, the ITAT set aside the decision of the I-T authorities and decided in favour of the taxpayer.

Property, immoveable, sale of

Tax benefits for investment in new house

November 24, 2020: The Times of India

Sold 2 houses to invest in new one? You can get tax benefits

Mumbai:

The Mumbai bench of the Income Tax Appellate Tribunal (ITAT), in its recent order, has clarified that when a taxpayer sells two residential properties and re-invests in one residential house, he or she is entitled to tax benefit under section 54. This ruling will be very helpful to several individuals. With work from home here to stay for longer than initially anticipated, several families are in search of larger flats. Investment professionals explain that several salaried employees had invested in a second house. Many are now selling the flat in which they currently reside and their second house, to finance a larger apartment.

In this case heard by ITAT, Sabir Mazhar Ali had sold two flats in Mumbai’s Bandra area (one of which was jointly owned with his wife) and purchased another residential flat in Bandra. During the financial year 2010-11, he had claimed deduction under section 54 of the Income Tax (I-T) Act, as he had purchased a new house, within the time period specified.

Under this section, if the longterm capital gains arising on sale of a house are reinvested in another house in India, within the stipulated period of time, then to the extent of such investment, the taxable component of capital gains is reduced. This results in a lower tax outgo. Thus, if the entire amount of long-term capital gains is reinvested, there is no tax payable. This section requires that within a period of one year before or two years after the date of transfer of the old house, the taxpayer should acquire another residential house. Or the taxpayer should construct a residential house within a period of three years from the date of transfer of the old house. However, as Ali had sold two residential properties and reinvested in one residential house, the Income Tax officer had concluded that he was not eligible for claiming the benefit under section 54. In the course of litigation, as the Commissioner (Appeals) ruled in favour of the taxpayer, the I-T department filed an appeal with the ITAT.

In its order, the ITAT states that the provisions of section 54 do not prohibit the taxpayer from selling more than one residential house and reinvesting in a residential property. Thus, it set aside the grounds of appeal raised by the tax department and ruled in favour of the taxpayer.

Raids

In Tamil Nadu

A Subramani, Why I-T raids are dubbed as tools of political vendetta, Nov 13, 2017: The Times of India

Income Tax, search- facts and definitions
From: A Subramani, Why I-T raids are dubbed as tools of political vendetta, Nov 13, 2017: The Times of India

HIGHLIGHTS

Income tax is a central agency reporting to the present government.

After search and seizure, comes inquiry when I-T dept's investigation wing sends an appraisal report to an assessing officer who sends a notice to the assesse asking him to file returns for the past six years.

Uniformity in post-search formalities, apolitical body to give directions, say experts.

It needed some grit for beleaguered AIADMK leader TTV Dhinakaran to cry 'tax politics'+ while he was still in the eye of an income tax storm. He did it nevertheless, repeating terms such as 'vendetta' and 'witch-hunting' by the Centre.

But, when DMK's working boss M K Stalin sought to know the fate of earlier high-voltage income tax searches in Tamil Nadu, one sat up and took note, because each such case had travelled a distinctly different path, showing inconsistency in approach.

On April 22, 2016, Karur-based contractor C P Anbunathan's houses and godowns were searched by income tax officials, and among the seized materials were about Rs5 crore in cash and currency-counting machines.

Three trucks found carrying Rs570 crore were intercepted by election commission officials near Tirupur in poll-bound Tamil Nadu in mid-May 2016. The trucks remained parked in an open ground for days before being taken to RBI vaults, but income tax officials did not show even an academic interest in the drama.

In July-August 2016, I-T officials searched gutka godowns and fished out a diary containing names of officials and politicians on the payrolls of gutka wholesalers. A chief commissioner of income tax personally met the then TN chief secretary and handed over details. Though nothing came of it, the fact remains that the I-T department took pains to ensure action against suspects.

In December 2016, the office of the then TN chief secretary was searched by I-T officials, with armed men from central police organisation standing guard outside. The prime target was sand mining baron Sekhar Reddy. Sensational searches at a minister's house and recovery of 'proof' of distribution of Rs89 crore as bribe to voters of R K Nagar constituency took place on April 7, 2017. On the basis of IT report, the election commission cancelled the bypoll.

R K Nagar election-time search was huge, till more than 1,500 taxmen swooped on about 180 premises related to V K Sasikala+ , the jailed aide of former chief minister Jayalalithaa.

The inconsistent nature of the raids raises the question — can I-T searches and allegations of political vendetta be separated at all? No, if the target is a politician from an opposition camp. "Income tax is a central agency reporting to the present government. So, whenever it touches an opposition party member, the bogey of political vendetta is raised," says Rabu Manohar, central government standing counsel and counsel for GST and customs.

As for timing of raids, he says untaxed money surfaces mostly on two occasions — during political instability and during price swings of essential commodities, when they could be hoarded. "TN's political scene now is unstable and the agency has chosen the right time to strike," he adds.

But, senior advocate P Wilson, a DMK office-bearer and former additional solicitor-general of India says, "I-T searches have to be taken to a logical conclusion. But, unfortunately, in all recent cases, the proceedings had been abandoned midway. In Anbunathan's case, though the agency had proof of doubtful investments, the information were not forwarded to other agencies for follow up. In gutka case, they took extraordinary interest to ensure action against some officials. In R K Nagar bypoll case they merely sent a report to the election commission, which sent it to city police as complaint."

So, what really happens after 'searches'? After search and seizure, comes inquiry when the investigation wing of I-T department sends an appraisal report to an assessing officer who sends a notice to the assesse asking him to file returns for the past six years. "It is an opportunity for the assesse to amend their earlier returns, and declare undeclared assets," says a senior tax official. "They can also approach the settlement commission to escape penalty and prosecution. An opportunity to compound the offence is then offered after both sides are heard," he adds.

All the post-search processes are strictly between the assesse and income tax official, and so nothing is heard about it, says Manohar. "If Stalin wants to know the fate of such searches, he can utilise judicial forums seeking specific directions or even invoke RTI Act."

Referring to allegations of political vendetta behind raids, advocate V Lakshminarayanan says that to eliminate subjectivity, decisions to search premises must be routed through an apolitical body. Searches could be cleared by an entity to which members are nominated on the lines of chief vigilance commissioner and DGPs, he says. "I-T department should first offer a final self-declaration option, ushering in a measure of transparency besides offering the target a last chance to come clean," he adds.

Reliefs on tax

Education loans to study abroad

The Times of India, Dec 02 2015

Lubna Kably

Tax relief valid on edu loans to study abroad

In good news for parents whose children study overseas or plan to do so, the Pune income-tax appellate tribunal has held that higher education abroad is no bar for claiming tax relief on educational loans. A deduction for interest paid on such loans will be allowed from the taxable income of a parent, who has taken the loan and is paying interest, even if the child is studying overseas.

However, such a loan must be taken from either financial institutions, banks or from government-approved charitable institutions. Though Section 80E of the I-T Act states a parent is eligible for claiming tax relief on such loans, it has often been a ground for dispute during tax assessment. The term `higher education' has been defined in Section 80E of the I-T Act as: “Any course of study pursued after passing the senior secondary examination (SSE) or its equivalent from any school, board or university recognised by the central government, state government, local authority or any recognised authority .“

“This section does not specify that higher education must be undertaken by the student in India or that the overseas course must be approved by authorities in India. The only requirement is that such higher education should be undertaken by the student after passing SSE or its equivalent from a recognised institution in India,“ says Parizad Sirwalla, tax partner, KPMG.

Even in this case of Nitin Shantilal Muthiyan, which came for hearing before the Pune tribunal, the tax officer had held that deduction under Section 80E is allowable only in cases of higher education pursued in India. He, thus, disallowed the claim of interest of Rs 73,125 made by the taxpayer whose son, who had completed his BE in Electronics from Pune University, was pursuing a course at George Washington University , US. At the first stage of appeal, the commissioner of I-T (appeals) also upheld the action of the tax officer.

The taxpayer then filed an appeal with the income-tax appellate tribunal (ITAT) and obtained a favourable order. The ITAT in its order observed: “Provisions of Section 80E do not contain any stipulation that the higher education should be pursued only in India. If the intent of the legislation was that education should be pursued in India, in order to avail of the interest deduction, it would have stated so. Further, the taxpayer's son had completed SSE or its equivalent, as is required by this section, before pursuing studies overseas.“ Thus, the ITAT allowed the interest deduction claim made by the father during financial year 2008-09.

“The ITAT's decision is welcome, particularly in light of the spiralling cost of overseas education, and more and more Indian students opting for higher studies overseas. In terms of applicability of the decision, an ITAT's decision is binding within its jurisdiction, but carries precedent value in similar disputes for other jurisdictions, which are outside its purview,“ adds Sirwalla.

Rental income

No tax on rent if none received from 2nd home

February 2, 2019: The Times of India

National rent explained
From: February 2, 2019: The Times of India

India’s second-home market has been quite hot for some time, with some buyers seeking to get away from the crowded city and the stresses of work with a vacation home while others view it as a good real estate investment. However, the negative was that even if the property was empty, one had to fork out tax on notional rent.

No longer. The interim Budget has given relief to second home-owners by exempting the second property from tax on notional rent. Currently, if a taxpayer owns more than one house property, one property at the taxpayer’s choice is treated as selfoccupied and the other is considered as ‘deemed to be let out’. This is taxed at market rental value even if the taxpayer does not earn any income from it.

“Considering the difficulty of the middle class having to maintain families at two locations on account of their job, children’s education, care of parents, etc., I am proposing to exempt levy of income tax on notional rent on a second self-occupied house,” interim Finance Minister Piyush Goyal announced on Friday.

Industry trackers believe the move of exempting tax on notional rent on the second house property will help increase demand for affordable and mid-income housing segment as taxpayers will be encouraged to invest in a second home.

“With improved liquidity, demand across the affordable and mid-income housing segment will rise,” Ramesh Nair, CEO and Country Head, JLL India, said. However, the maximum deduction for interest on housing loans shall continue to remain capped, in the aggregate, at Rs 2 lakh.

While the FM in his speech alluded to the difficulties faced by those who are forced to maintain families at two locations, given the specific provisions of the I-T Act, it appears that no tax on notional rent will be payable if the second house is overseas.

There is one downside. “Taxpayers who had housing loans on their second property were earlier able to claim deduction for full interest on housing loan, against the notional rental income, which could result in a loss. This loss could be set off against rental income from other properties without any limit or could be carried forward for eight years. Now such setoff is limited to Rs 2 lakh,” says Puneet Gupta, director, People Advisory Services at EY India.

‘Salary’

2018: Non-compete fees, some compensations are taxable

Lubna Kably, Employment-related payments get taxable, February 5, 2018: The Times of India

Staff May Have To Pay Tax On Non-Compete Fees

The Income-tax Act is intricate — sometimes income received by an individual even if it relates to employment, does not fit within the technical definitions of ‘salary’ or ‘profits received in lieu of salary’. Thus, very often, such income could not be taxed.

Budget 2018-19 proposes to change this scenario. A wide range of income received — say non-compete payments (which sometimes did not fit the above definitions of salary or profits in lieu of salary); or compensation when a job offer went awry will now be taxable.

“The proposal perhaps also intends to bring within ambit of tax, payments received in connection with employment but not from the employer. In other words, it covers cases where an employer-employee relationship does not exist between the payer and the receiver. For example, in case of termination of employment with an Indian subsidiary company, any severance pay received from a foreign holding company may be covered under this amendment. It may also cover situations of merger and acquisition where payments are received by employees from the acquiring company or from the investors,” said Puneet Gupta, director, people advisory services at EY India, a business consultancy firm.

The explanatory memorandum to the Finance Bill says: “A large segment of compensation receipts in connection with employment are out of the purview of taxation leading to base erosion and revenue loss”. It therefore

proposes to amend section 56 of the I-T Act. “Any compensation or other payment due or received in connection with the termination of employment or the modification of the terms and conditions relating thereto”, will now be treated as ‘Income from other sources’. Such sums received by individuals will be taxed in their hands at the applicable slab rate. As per the budget proposals, the highest tax rate for an individual (who has a taxable income of more than Rs one crore) is nearly 36%.

This amendment does not cover money received from an employer when handed a pink slip or in cases of VRS, which will continue to be treated as salary income under existing I-T provisions and taxed accordingly.

Gautam Nayak, tax partner at CNK Associates, a firm of chartered accountants, explains: “In various decisions, courts and tax tribunals have held certain receipts to be not taxable, even as they related to employment. This is because such receipts did not fall under the definition of salaries or profits in lieu of salary or because the employer-employee relationship was not in existence. Money received in such instances is now proposed to be taxed.”

In simple terms, receipts are classified into revenue receipts (which are items of recurring nature, such as salary, business profits, interest to name a few) and capital receipts (which are of an isolated nature). “A capital receipt is not income and hence I-T is not levied on it,” states Nayak.

“There are instances, where compensation related to employment, has fallen within the cracks and escaped I-T. Each such case, typically involves compensation of at least Rs. one crore. . Hence, budget amendment is critical,” said a senior I-T officer.

Sexual harassment damages

Not taxable

Sushmita’s #MeToo payout not taxable, rules tribunal |18 11 2018| The Times of India

The city bench of the income-tax appellate tribunal (ITAT), which adjudicates income-tax disputes, has recently passed an order in favour of actress and model Sushmita Sen. A settlement compensation, in lieu of a sexual harassment complaint made by her, which runs into several lakh, has been held as non-taxable.

She had got Rs 95 lakh during financial year 2003-04 as a settlement compensation from Coca-Cola India, following her complaint of being subjected to sexual harassment by an employee of the company.

The ITAT, in its order dated November 14, held this sum was not ‘income’ that could be taxed but was in the nature of a ‘capital receipt’. Further, the penalty of Rs 35 lakh which was imposed on her for concealment of income (as she had not offered Rs 95 lakh to I-T) was ordered to be set aside.

Sushmita’s contract ended prematurely

Sushmita Sen had entered into a commercial contract aggregating to Rs 1.5 crore with Coca-Cola India to endorse its products; however, this contract was terminated prematurely by the company. The actress had disputed this termination as being mala fide and dishonest. She asserted that the termination of the commercial contract was meant to punish her as she had rightly resisted sexual harassment by an employee of the company. She had held Coca-Cola India, and its US-based parent, liable for all consequences flowing from such sexual harassment and for failing to discharge its statutory duty of providing her with a safe workplace environment. Subsequently, a settlement was reached between her and the company.

As per the terms of the commercial contract, in case of termination only a sum of Rs 50 lakh was due to her from Coca-Cola India. As against this, under the terms of the settlement, she received Rs 1.45 crore, of which she had offered Rs 50 lakh to income-tax. She had held that the balance of Rs 95 lakh was in the nature of compensation, which was not taxable.

Shares

Premium on shares not taxable: HC

In a relief to global energy and petrochemical giant Shell, the Bombay high court on Tuesday ruled that the firm is not liable to pay tax in a transfer pricing case of 2009-10. The potential tax demand on Shell by the I-T authorities was $240 million. The ruling comes after Vodafone’s recent win in the HC in a similar case. The I-T authorities in Mumbai had alleged that there was underpricing of shares which the company had issued to an overseas group entity Shell Gas BV in March 2009.

The company said it had issued 87 crore shares at Rs 10 per share, but the I-T department assessed the value at Rs 180 per share and said there was thus a Rs 15,000-crore under pricing in the transaction, an amount on which tax could be levied. The Bombay HC has now held that these share premiums are not taxable. In case of Vodafone, the HC had then held that issuance of shares in a capital financial transaction did not amount to taxable income. The cellular service major had challenged an order of Income Tax authority in a transfer pricing case.

Several global giants are involved in transfer pricing litigation with the government, whose stand has been criticized.

Investors have been critical of the way the tax department went about slapping notices over the past few years.

“We welcome the High Court decision. Shell has always maintained that equity infusion by a foreign parent company into an Indian subsidiary cannot be taxed as income,’’ said a Shell spokesperson after the verdict was pronounced. “ This is a positive outcome which should provide a further boost to the Indian government’s initiatives to improve the country’s investment climate”.

Small businesses, professionals

Presumptive tax scheme

The Times of India, Mar 02 2016

Surya Bhatia

For small biz & professionals, a way to save money, and a tax headache

The Budget presented for 2016-17 has come under fire for the move to tax EPF but there's one proposal that is sure to bring cheer to small businesses and professionals, and that's the presumptive tax scheme. This scheme covers small businesses with gross turnover up to Rs 2 crore -up from the existing ceiling of Rs 1 crore. It has also been extended to professionals with gross income up to Rs 50 lakh.

So what exactly is presumptive taxation?

As per Section 44AA of the Income-tax Act, 1961, a person engaged in business is required to maintain regular books of account. However, a person adopting the presumptive taxation scheme can declare income at a prescribed rate of 8% and, in turn, is relieved from the tedious job of maintaining books of account.

However, in case income earned is at a rate higher than 8%, then the higher rate can be declared.

And with the inclusion of professionals, a new Section 44ADA is proposed to be inserted in the Act to provide for estimating the income of an assessed who is engaged in any profession referred to in sub-section (1) of Section 44AA such as legal, medical, engineering, architecture, accountancy, technical consultancy, interior decoration or any other profession as is notified by the board in the official gazette and whose total gross receipts does not exceed Rs 50 lakh in the previous year. For the purpose, 50% of the total receipts of the professional during the financial year will be considered as profit and get taxed under the income-tax head “profits and gains of business or profession“.

If you look at the table, it's clear that the assessee not only saves on record-keeping headaches, he also saves a considerable amount in taxes. Yes, there can be a few counters to this -mainly that the taxable income could be much below the presumptive taxation rate of 8% and 50% of receipts respectively . And if that is the case then the individual has no option but to maintain the books of accounts.

To further keep the compliance burden minimum, those using presumptive taxation scheme are also allowed to pay advance tax by March 15 of the financial year, as against the normal practice of paying the advance tax in four installments.

However, the taxpayer needs to be careful when opting for this as he or she has to remain in that scheme for 5 years to avail the benefits.

TDS (tax deducted at source)

Head of religious congregation to certify names

No TDS for nuns, priests, monks, rules Madras HC, Dec 24, 2016: The Times of India

In an important ruling, the Madras HC has said no tax could be deducted at source from the salaries and other monetary benefits of persons who are members of religious congregation such as nuns, monks and priests.

Justice T S Sivagnanam, passing orders on a batch of 74 writ petitions, further said it would be sufficient if the head of the institution concerned certifies the names of staff members.

The order has offered immediate relief to nunsfatherspriests working in various teaching institutions, established and administered by religious congregation such as Institute of the Fransican Missionaries of Mary , which was one of the 74 petitioners.

They had moved the court after the I-T department passed an order on October 7, 2015 saying catholic nuns among teaching and non-teaching staff in these institutions were liable for TDS.

Online rectification in ITR simplified, 2015

The Times of India, Dec 10, 2015

I-T Dept simplifies online rectification of TDS in ITR

The finance ministry said a new facility has been provided for pre-filling of TDS schedule

Aimed at making life easier for tax payers, the I-T department today said it has simplified the process of online rectification of incorrect details of tax deducted at source (TDS) filed in the income tax return (ITR). Earlier, taxpayers were required to fill in complete details of the entire TDS schedule while applying for rectification on the e-filing portal of the I-T Department.

To avoid this, the finance ministry said a new facility has been provided for pre-filling of TDS schedule while submitting online rectification request on the e-filing portal to facilitate easy correction or updating of TDS details. "This is expected to considerably ease the burden of compliance on the taxpayers seeking rectification due to TDS mismatch," an official statement said. Errors due to incomplete TDS details in rectification applications were leading to delays in processing of such applications, thereby causing hardships to taxpayers, it added.

Penal interest can be waived in some cases

Taxmen can waive TDS-related penal interest in some cases, March 27, 2017: The Times of India

The Central Board of Direct Taxes (CBDT) in its circular issued on March 24 has empowered tax authorities to reduce or waive penal interest for non-deduction of tax at source (TDS) in certain circumstances, including owing to a retrospective amendment in law.

Interest can also be reduced or waived where tax could not be deducted as the books of a taxpayer were seized in a search operation.

CBDT's circular will also apply where tax was not deducted or deducted at a lower rate on payments made to non residents, and the matter was settled under the mutual agreement procedure between the authorities of the two countries, under the relevant tax treaty . To avail of this benefit, the taxpayer would be required to pay the principal tax sum demanded or make arrangements to pay the same. However, restrictive conditions in this order are unlikely to benefit taxpayers in indirect transfer cases, say experts. Vodafone International Holdings, for instance, faces a demand of Rs 14,200 crore, which, according to the income-tax department, is due to the $ 11-billion acquisition of Hutchison's India telecom business. Tax authorities had held that Vodafone ought to have deducted tax in India, even if the sale carried outside India was of shares of a non-resident company , as it related to an asset in India (telecom business in India).

To avail of the benefit of a waiver on interest (either partial or full), the condition imposed by CBDT is that the taxpayer did not deduct tax at source owing to a favourable high court order. Subsequently owing to an SC order on a retrospective amendment, it became liable to deduct tax at source. “The circular will have very limited applicability and usefulness in an indirect transfer tax kind of situ ation (where retrospective amendment was made in the I-T Act) as no positive jurisdictional high court decision on the subject as such is available on which reliance could have been placed by taxpayers,“ says Punit Shah, partner, Dhruva Advisors.

The reasoning is simple.Vodafone won a favourable decision from the Supreme Court on January 20, 2012. A month later, the Finance Bill, 2012, through a retrospective amendment made indirect transfers taxable in India. Thus, there is only a window of approximately one month available to taxpayers to have relied on a favourable decision of the Supreme Court and not deducted tax at source.This limits applicability of the CBDT circular, says a corporate counsel.

YEAR-WISE CHANGES

2019: nine issues in interim budget

NINE THINGS YOU NEED TO KNOW ABOUT PERSONAL TAX, February 2, 2019: The Times of India

Interim Budget Decoded

• Standard deduction for salaried taxpayers raised from Rs 40,000 to Rs 50,000. This will result in a maximum tax saving of Rs 3,588, if you apply the maximum marginal tax rate of 35.88%.

• If you are a resident taxpayer earning taxable income (after all applicable deductions) up to Rs 5 lakh, you will get full tax rebate. Earlier, the tax liability was of up to Rs 13,000, inclusive of health and education cess. If your gross income is up to Rs 6.5 lakh, you may not be required to pay any tax if you make investments in Provident Fund, specified savings, insurance, etc, which are eligible for deduction under Section 80C.

• No notional rental income will be added to the taxable income for a second house property owned that is not let out. This will allow you to own up to two houses without notional rent on the second property being added to the taxable income.

• Tax exemption on long-term capital gain on sale of a residential house will be available for investment in up to two residential house properties located in India against one earlier. The option is available only once in a lifetime for individuals or HUFs where capital gains on sale of house property is up to Rs 2 crore. This will allow individuals or HUFs to sell one house property and make investment in two without paying any capital gains tax.

• Threshold for TDS on interest income from deposits with banks and post offices increased from Rs 10,000 to Rs 40,000. The limit for a senior citizen payee continues to be Rs 50,000. In some cases, individuals earning interest income from fixed deposit exceeding Rs 10,000 were filing income-tax return to claim tax refund for TDS even when their net taxable income was lower than the exemption limit (Rs 2.5 lakh). Now, such individuals will not be required to file return if interest income from such deposits does not exceed Rs 40,000.

• Threshold for TDS on rent paid by any person (other than individual or HUF not subject to tax audit) to a resident increased from Rs 1.8 lakh per year to Rs 2.4 lakh per year. This will provide administrative relief to small taxpayers (landlords), if they have let out their flats to companies. However, if a tenant is a small individual taxpayer, then the TDS will apply only if the rent payout is more than Rs 50,000 per month.

• The I-T department plans to be more taxpayer-friendly by processing income-tax returns within 24 hours and issuing refunds simultaneously.

• It plans to conduct all verification and scrutiny assessment of returns electronically. This will be done by an anonymous back office, manned by tax experts and officials, eliminating personal interface between taxpayers and officials.

Googly To Watch Out For

• On December 10, 2018, the finance ministry announced a proposal to increase the tax exemption limit for lump-sum withdrawal from the National Pension System to 60% of the total amount. With this, the entire lump sum withdrawal from NPS, which is limited to 60% of the accumulated corpus, would have been exempt from tax. However, this proposal has not been notified in the Finance Bill, 2019, and, hence, the current tax exemption limit of 40% of the total amount remains unchanged.

(Note: The full-fledged Budget could revise the tax rates and provisions)

The main changes

The main changes in IT laws, wef Sept 2019
From: August 31, 2019: The Times of India

See graphic:

9 things that will change from tomorrow, wef Sept 2019

@@ Line 5: / Line 5: @@
 |}
-[[Category:India|P]]
+[[Category:India|I]]
-[[Category:Government|P]]
+[[Category: Economy-Industry-Resources |I]]
-[[Category:Crime|P]]
+[[Category: Law,Constitution,Judiciary|I]]
-=Attitude towards work=
-== Non-registration of crime/ 2017==
-[http://epaperbeta.timesofindia.com/Article.aspx?eid=31808&articlexml=75-of-people-do-not-report-crimes-as-09112017010024  Neeraj Chauhan, `75% of people do not report crimes as cops are unfriendly', November 9, 2017: The Times of India]
-[[File: Reported and registered complaints by the police, India and the world, 2012.jpg|Reported and registered complaints by the police, India and the world, 2012 <br/> From: [http://epaperbeta.timesofindia.com/Article.aspx?eid=31808&articlexml=75-of-people-do-not-report-crimes-as-09112017010024  Neeraj Chauhan, `75% of people do not report crimes as cops are unfriendly', November 9, 2017: The Times of India]|frame|500px]]
+=Basic tenets=
+Adapted from [http://economictimes.indiatimes.com/personal-finance/et-wealth/how-well-do-you-know-the-tax-rules/articleshow/31671843.cms EconomicTimes] March 2014
-'''Police Biased Against Women, The Illiterate & Poor, Finds Govt Study'''
+) The interest earned on a bank fixed deposit is...Interest on FDs is fully taxable as income at the rate applicable to the taxpayer.
-A 19-year-old allegedly abducted and raped by four men in Bhopal is not the only woman to have been turned away by police instead of registering a case immediately .
+) Travel insurance policies are not tax deductible for salaried individuals.
-Around 75% of the population avoids reporting a crime as they feel unhappy with the way cops behave with complainants, especially women and marginalised sections, a study on “Non-registration of crimes: Problems and solutions“ has stated.
-The study conducted by a team led by Dr Arvind Tiwari of Tata Institute of Social Sciences (TISS), Mumbai, for the Bureau of Police Research and Development (BPR&D), concludes that treatment of women complainants needs considerable improvement and that the poor do not get a fair shake.
+) An individual won't get tax deduction for...
+employer's contribution to PF.
-Police seems to be “overlooking“ illiterate and poor people and 33% of their complaints were either registered as non-cognisable offences and 25% as daily diary (DD) entries.They were not apprised of fate of their complaints either.
+) Gifts worth over Rs 50,000 in a year are taxed as income of recipient.
-The study says management of crime statistics by police functionaries is linked to performance appraisals and this was an important reason for non-registration of crimes.“Burking (smothering) of crime is rampant all over,“ it says, adding that if non-registration of crimes is computed, it may mean that less than 10% crimes are being registered.
+) Any income of a minor child will be clubbed with that of the parent. HRA is not tax-exempt if you pay rent to... Your minor child.
-About political influence as a reason for the reluctance of the police to register cases, the study says, “The crime graphs have had negative impact on the performance of not only the police but also governments in power. In certain states, the political executives openly insisted on burking of crime in order to show lowering of crime.“ The research cites the example of BSP leader Mayawati stating that as chief minister of Uttar Pradesh, she suspended senior officers for inability to control crime.
+) A disabled dependant gets you a deduction under Section 80DD. This is an additional tax benefit
-The study particularly comments on Uttar Pradesh that there is a lot of interference from local-level politicians and duty officers (in police stations) are vocal about their discontent. It adds that “there was a tradition to touch feet of a person in authority or senior in rank (in UP police). In police stations also, generally complainants as well as accused were found touching feet of sub-inspector and SHO“.
+) f you have a second house lying vacant, you have to...
-Another major problem highlighted in the study is dilemma of cognisable and non-cognisable nature of offences and general public's ignorance about the difference between them.
+a. Pay tax on rent not received. b. Include in wealth tax. c. Pay property tax on it. All the three conditions apply on a second house lying vacant.
-After talking to several police officers, general public, lawyers, judges, NGOs and media persons, researchers found that “victims usually nurse a grudge against the police that gravity of their cases were either reduced or made into non-cognisable, in a bid to control the crime graph“.
+) If one earns rent on property, how much of it is taxable?
+Rental income is eligible for 30% standard deduction.
-The non-cognisable and cognisable offences are classified separately according to Criminal Procedure Code (CrPC). The study says the nicety of this classification is not known to an average citizen and sometimes even educated ones, leading to police minimising the complaint.
+) Only those with income below the basic exemption are exempt from filing tax returns.
-Another major problem cited for non-registration of crimes is lack of adequate manpower and heavy workload in police stations, which prompted the cops to avoid more work by registering all the crimes.
+) The RGESS deduction is available only to first-time investors in equities.
-“Strangely , but as a matter of fact, police continue to be under `non-plan' budget and governments are always less inclined to spend more money on police,“ the study says.Shortages of staff, infrastructure and transport impact crime registration, investigation and filing of charge-sheets resulting in almost 50% cases ending in acquittals.
+== Section 80C==
+[http://epaper.timesgroup.com/Olive/ODN/TimesOfIndia/shared/ShowArticle.aspx?doc=TOIDEL%2F2017%2F12%2F12&entity=Ar01506&sk=A2A88911&mode=text  December 12, 2017: ''The Times of India'']
-=Complaints=
+To boost the habit of savings and investments, the government has allowed every individual taxpayer to invest and buy certain financial products which will allow them to avail of tax deductions. Under section 80C of Income Tax Act 1961, a taxpayer could invest a total of Rs 1.5 lakh per annum in ELSS of mutual fund houses, EPF, PPF, tax-saving FDs, NPS, life insurance products and some other approved financial products, which will reduce the person’s total tax liability. Payment of home loan principal and tuition fee of children also come under this section for tax deductions.
-== Number of complaints: 2013==
-[[File: Number of complaints and states.jpg| Number and rate of complaints, state-wise; Graphic courtesy: [http://epaperbeta.timesofindia.com//Article.aspx?eid=31808&articlexml=Not-with-you-for-you-always-12052015004022 ''The Times of India''] |frame|500px]]
-[http://epaperbeta.timesofindia.com//Article.aspx?eid=31808&articlexml=Not-with-you-for-you-always-12052015004022 ''The Times of India'']
+==Section 80 D==
+[https://epaper.timesgroup.com/Olive/ODN/TimesOfIndia/shared/ShowArticle.aspx?doc=TOIDEL%2F2018%2F01%2F23&entity=Ar01911&sk=D6250823&mode=text January 23, 2018: ''The Times of India'']
-May 12 2015
-Deeptiman Tiwary
+''WHAT ARE SECTION 80D TAX BENEFITS?''
-Visuals of a Delhi traffic cop hitting a woman with a brick may have shocked the city , but Delhi Police has for long carried the `bad boy' image, going by the government records.
+Section 80D under the Income Tax Act provides for tax deductions for buying health insurance policies, popularly called mediclaim plans. In an era of increasing healthcare costs, the government, to encourage people to take mediclaim policies, allows taxpayers some sops for these policies. A taxpayer can get claim deductions of up to Rs 25,000 per year for payment towards premium for health insurance plans for the taxpayer, spouse and dependent children. The limit is enhanced up to Rs 30,000 even if either the taxpayer or the spouse is a senior citizen. Within these limits one can also claim deductions of up to Rs 5,000 per year as a cost for preventive health check up. The government also allows mediclaim premium of up to Rs 30,000 for policies taken for parents.
-According to data compiled by National Crime Records Bureau (NCRB) for 2013, Delhi Police topped the charts in “complaints against police“, accounting for 24.3% of all complaints across the country . It also has the highest rate of such complaints with every sixth policeman in the city having some complaint against him.
+=Rates of income tax in India=
+==1995-2015==
+'''See the chart on this page'''
-Delhi Police also have maximum human rights violations FIRs against them with 141 cases ( 79% of all such cases in the country).And as amplified by Monday's incident, maximum cases (23) are registered against the city police under the charge of “indignity to women“.
+'''See graphic''':
+''Income tax rates in India: 1995-2015''
+[[File: Income tax rates 1995-2015.jpg|Income tax rates in India: 1995-2015 Source: [http://epaperbeta.timesofindia.com//Gallery.aspx?id=11_07_2014_003_028_002&type=P&artUrl=YOUR-TAX-BURDEN-OVER-THE-YEARS-11072014003028&eid=31808 The Times of India ]|frame|500px]]
+==1949-2017: peak rate of Income Tax==
+[https://timesofindia.indiatimes.com/business/india-business/toi-budget-special-how-you-pay-less-tax-than-your-grandpa/articleshow/62458093.cms  January 15, 2018: ''The Times of India'']
+[[File: 1949-2017- peak rate of Income Tax.jpg|1949-2017: peak rate of Income Tax <br/> From: [https://timesofindia.indiatimes.com/business/india-business/toi-budget-special-how-you-pay-less-tax-than-your-grandpa/articleshow/62458093.cms  January 15, 2018: ''The Times of India'']|frame|500px]]
+'''See graphic''':
+''1949-2017: peak rate of Income Tax''
-However, in a reflection of how seriously the police brass takes these complaints, Delhi also recorded the highest number of dismissals (103) of police personnel, accounting for over 18% of all dismissals in the country in 2013, followed by Jharkhand with 57 dismissals.
-According to the data, total number of complaints, both non-cognizable and cognizable, reported to the au thorities against police personnel from various states and Union Territories in 2013 stood at 51,120. Of these, 12,427 (24.3%) were against Delhi Police personnel alone.This was followed by Madhya Pradesh which accounted for 18.1% (9,297) and Maharashtra with 14.2% (7,280).Curiously , Uttar Pradesh accounted for only 7.9%(4,086) of the total complaints.
+'''Highlights'''
-The highest number of complaints per 100 policemen was also reported from Delhi (16.4) followed by Chandigarh (12.9) and Madhya Pradesh (11.1) against the national average of 3.0 during in 2013.
+We know you absolutely hate a part of your annual income going into to the government's kitty in the form of taxes. After all, you worked hard the whole year and wish the exemption limit would be set higher. Whether that would be done or not will be known till Budget 2018 is presented, but you should take heart from the fact that you pay much less tax than what your grandfather did during his time.
-It must be noted though that over 52% of the complaints against police personnel across the country were found to be false.
+While exemption limit today stands at Rs 2.5 lakh annually, it was Rs 1,500 way back in 1949-50. Though this may seem a meagre amount to you, a back of the envelope calculation shows this works out to be Rs 80,000 in today's terms. So your grandfather started paying tax at annual income of Rs 80,000, while you enjoy tax-free income that is nearly three times more than it.
-In the case of more serious allegations such as extortion, false implication, indignity to women etc--which NCRB clubs under human rights violations and counts only FIRs-Delhi cuts a rather sorry figure. Of 178 such FIRs across the country , Delhi accounted for 141 (79.2%). As many as 23 of such FIRs are under the category of “indignity to women“ while nine are for “extortion“.
+Tax rates are another reason for you to cheer about. The peak tax rate today stands at 30.9%. But during 1970-71 it was a staggering 93.5%, a massive increase from the 25% Indians paid in 1949-50.
-However, an NCRB official said that Delhi had high figures also because it is difficult to brush complaints under the carpet in the national capital and police brass ensures that genuine complaints are registered.
+You may find three tax slabs cumbersome for tax calculation, but thank your stars, your parents or grandparents had to deal with as many as 11 tax slabs.
-=Death/ injuries on duty=
+==1949, and since 1995: The number of tax slabs==
-==2014: Police personnel killed on duty in 2014, state-wise==
+[[File: The number of tax slabs in 1949, and since 1995.jpg| The number of tax slabs in 1949, and since 1995 <br/> From [https://timesofindia.indiatimes.com/business/india-business/toi-budget-special-how-you-pay-less-tax-than-your-grandpa/articleshow/62458093.cms  January 15, 2018: ''The Times of India ''] |frame|500px]]
-[[File: Police personnel killed on duty in 2014, state-wise.jpg|Police personnel killed on duty in 2014, state-wise; Graphic courtesy: [http://epaperbeta.timesofindia.com/Article.aspx?eid=31808&articlexml=STATOISTICS-NEARLY-TWO-POLICEMEN-DIE-EVERY-DAY-ON-05042016008030 ''The Times of India''], April 5, 2016|frame|500px]]
 '''See graphic''':
-''Police personnel killed on duty in 2014, state-wise''
+''The number of tax slabs  in 1949, and since 1995''
+=Appeals=
+==2015: Appeals only for Rs 10 lakh +==
+'''Sources:'''
-==2011-15: mobs harmed policemen more than criminals, terrorists==
+. [http://epaperbeta.timesofindia.com/Article.aspx?eid=31808&articlexml=I-T-appeals-only-for-Rs-10L-and-13122015001059 ''The Times of India''], Dec 13 2015
-[https://timesofindia.indiatimes.com/india/bulandshahr-violence-why-cops-should-fear-mobs-more-than-criminals/articleshow/66982652.cms  December 7, 2018: ''The Times of India'']
+. [http://epaperbeta.timesofindia.com/Article.aspx?eid=31808&articlexml=To-rein-in-frivolous-appeals-CBDT-ties-I-13122015012026 ''The Times of India''], Dec 13 2015, Rubna Kably
-[[File: Police personnel killed or injured on duty by riotous mobs, criminals- 2011-15.jpg|Police personnel killed or injured on duty by riotous mobs, criminals- 2011-15 <br/> From: [https://timesofindia.indiatimes.com/india/bulandshahr-violence-why-cops-should-fear-mobs-more-than-criminals/articleshow/66982652.cms  December 7, 2018: ''The Times of India'']|frame|500px]]
+'''I-T appeals only for Rs 10L and above'''
-'''WHAT'S NEW?''' Riotous mobs are behind most of the injuries to policemen (43% of 3,486 in 2015). The other big reasons are ‘attacks by other criminals' (33%), accidents (17%) and ‘terrorist/extremists operation’ (4%).
-'''COMPENSATION:''' On death, the compensation paid to the family of a policeman depends on which state he dies in (Delhi gives Rs 1 crore, UP Rs 50 lakh) or how charged the political atmosphere is. When the family of Subodh Kumar Singh met UP chief minister Yogi Adityanath, apart from the Rs 50 lakh compensation (paid to every UP cop killed on duty), it was told it will have its Rs 25-30 lakh loans paid off, it was promised a road and (possibly) a college named after the slain cop. That doesn’t happen to all policemen killed in the line of duty.
+In a bid to reduce litigation and spare taxpayers harassment, the Central Board of Direct Taxes has increased from Rs 4 lakh to Rs 10 lakh the threshold for filing an appeal before the Income Tax Appellate Tribunal, reports Rubna Kably.
-=Deployment=
+The threshold limit for an appeal by the I-T department before the high courts has been doubled to Rs 20 lakh. The threshold for I-T department appeals before SC remains at Rs 25 lakh.
-==VIP duties, as in 2017==
-[http://epaperbeta.timesofindia.com/Article.aspx?eid=31808&articlexml=3-cops-for-each-VIP-but-just-1-18092017001037  Neeraj Chauhan, 3 cops for each VIP, but just 1 for every 663 aam aadmi, Sep 18, 2017: The Times of India]
-'''India Short Of 5 Lakh Police, Says Govt Data'''
+'''To rein in frivolous appeals, CBDT ties I-T hands by raising `tax effect' limit'''
-Despite promises by politicians year after year, VIP culture continues to thrive in India. The latest data reveals some 20,000 VIPs have on an average three cops to protect each of them while there is a huge shortage of police personnel for ordinary citizens.
-Data compiled by the Bureau of Police Research and Development (BPR&D) under the home ministry shows that out of a total 19.26 lakh police officers in the country , 56,944 are deployed just for the safety of 20,828 VIPs across 29 states and six Union territories.
+The Central Board of Direct Taxes (CBDT) continues with its plan to reduce litigation and be more taxpayer-friendly. By significantly increasing the threshold limits for filing of appeals, at various judicial levels, by the Income-tax (I-T) department, the CBDT hopes to mitigate taxpayer harassment and create efficacy in the functioning of the I-T department.
+At times, the I-T department files appeals with higher courts, with an eye on revenue, when the decision in the lower court is in favour of the taxpayer. Such frivolous litigation adds to the costs for both parties and results in taxpayer harassment.
-That makes an average of 2.73 cops for every VIP in the country . Lakshadweep is the only stateUT where no one has been given dedicated police protection.
+The threshold limit for filing an appeal before the Income-Tax Appellate Tribunal (ITAT) by the I-T department has now been raised from Rs 4 lakh to Rs 10 lakh. Similarly , the limit for an appeal before the high courts has been doubled to Rs 20 lakh. While such revisions are an annual affair, the recently announced upward revisions are significant.
-For ordinary citizens, however, India remains among the least policed countries in the world, with one cop looking after every 663 Indians.
+However, no change has been made in the threshold for appeals filed before the Supreme Court, which remains at Rs 25 lakh. Appeals before the ITAT and courts can now be filed by the I-T department only if the `tax effect' exceeds the threshold limits (see table). This move will help not only corporates, but also high net-worth individuals who find themselves embroiled in I-T litigation.
-More than threat perception, having a police officer around for security has become a status symbol for many .Although the Centre has taken steps such as banning red beacons, states make their own rules and use police to provide personal security to many , often citing `threat to life' as the reason. The BPR&D data shows that VIP culture is more prevalent in north and east India. Bihar, which has one of the poorest police-to-population ratios, has the maximum number of 3,200 `VIPs' being given protection by 6,248 cops.
+The CBDT has also clarified, in its circular dated December 10, that the revised limits will apply retrospectively and pending appeals below the specified threshold limits should be withdrawn or not pressed.
-West Bengal is another state that makes full use of police for such privileges. The state has 2,207 `VIPs' protected by 4,233 cops, while only 501 cops were originally sanctioned for such duties. Bengal is followed by J&K, which has 2,075 `VIPs' getting security from 4,499 policemen.
+The `tax effect', as defined in CBDT's circular, means the difference between the tax on the total income assessed by the I-T department and the tax that would have been charged if the total income of the taxpayer was reduced by the income relating to disputed issues.
-Uttar Pradesh, whose CM Yogi Aditya Nath has vowed to prune VIP culture, is not far behind. There are 1,901 protectees in the state with 4,681 cops at their service.
+The CBDT has also instructed that merit must be the guiding factor while filing an appeal with higher judicial bodies -both the ITATs and courts. “It is clarified that an appeal should not be filed merely because the tax effect in a case exceeds the monetary limits (ie: threshold limits for appeals) prescribed,“ states the circular.
-Punjab has 1,852 VIPs protected by as many as 5,315 cops. Delhi, home to dignitar ies such as the PM and President has only 489 protected persons but has the maximum number of cops, 7,420, deputed to secure them.
+Tax experts view that the increase in threshold limits and withdrawal of pending appeals falling below the revised thresholds will ease litigation. The impact will be more favourable at the ITAT level, which is the first level of appeal. It is learnt that pan-India, 1.06 lakh cases were pending across various ITAT benches as of June 1. The maximum pendency was in Mumbai and Delhi, with 25,039 and 20,499 pending cases. Howev er, the exact number of pend ng cases, which will now fall below the revised threshold imits and be withdrawn, was not available.
-Official say the number of cops on VIP duties in Delhi is justified because all important movements and highprofile institutions such as Parliament, Supreme Court, ministries etc run from here.
+However, to safeguard the nterests of the I-T department, certain caveats have been built into the instruc ions. For instance, just because on a particular disputed ssue, the I-T department has not appealed as the tax effect is ow, it does not preclude it from iling an appeal on the same issue for another taxpayer where the tax effect is beyond he prescribed threshold).
-The BPR&D data shows that southern states fare better when it comes to saying no to VIP culture. Maharashtra has only 74 protected persons secured by 961cops, while Kerala has only 57 VIPs and 214 policemen deployed for them.
+Further, the instructions on not filing an appeal if the ax effect is below the prescribed monetary limit will not apply in certain instances. These instances include: where the constitutional val dity of a tax provision is challenged; where the CBDT's circular has been held illegal or even when the audit objection has been accepted by the I-T department.
-Officials TOI spoke to said problems arise when MLAs, local politicians and bureaucratsjudges in states are provided police protection. “In states such as Bihar, UP, West Bengal and Punjab, it is seen as a status symbol and is encouraged by the administrations,“ said an officer.
+==2017: ‘Higher appeals limit applies to pending cases,’ SC==
+[http://epaper.timesgroup.com/Olive/ODN/TimesOfIndia/shared/ShowArticle.aspx?doc=TOIDEL%2F2017%2F11%2F28&entity=Ar01514&sk=7C5C11DB&mode=text  Higher I-T appeals limit also applies to pending cases, says SC, November 28, 2017: ''The Times of India'']
-=Directors General of Police=
+[[File: The honorable Supreme Court orders regarding CBDT's instruction revising monetary limits.jpg|The honorable Supreme Court orders regarding CBDT's instruction revising monetary limits <br/> From: [http://epaper.timesgroup.com/Olive/ODN/TimesOfIndia/shared/ShowArticle.aspx?doc=TOIDEL%2F2017%2F11%2F28&entity=Ar01514&sk=7C5C11DB&mode=text  Higher I-T appeals limit also applies to pending cases, says SC, November 28, 2017: ''The Times of India'']|frame|500px]]
-==SC’s 2006 judgment in Prakash Singh case being misused==
-[https://epaper.timesgroup.com/Olive/ODN/TimesOfIndia/shared/ShowArticle.aspx?doc=TOIDEL%2F2018%2F02%2F20&entity=Ar01905&sk=552BAD3B&mode=text  Centre: States misusing order on DGP appointment, February 20, 2018: ''The Times of India'']
+The Supreme Court has held that the higher monetary threshold limits prescribed for filing of appeals by the income-tax authorities would apply both to appeals filed after the date of the instruction revising the limits and also to all pending matters. This brings respite to taxpayers who feared matters pending on the date of the instruction would be revived and lead to a tiring bout of litigation.
-Seeking modification of an 11-year-old judgment on police reforms, the Centre told the Supreme Court on Monday that states were misusing the SC direction to give two-year tenures to directors general of police and were appointing officers nearing retirement to the posts to give them two additional years in service.
+On November 23, the SC upheld the retrospective nature of the Central Board of Direct Taxes (CBDT) instruction setting down the thresholds for I-T appeals.
-The SC, in its 2006 judgment in Prakash Singh case, had ordered the Centre and states to implement reforms in the police structure, including fixed tenure to police chiefs and separation of investigating wing from those tasked with maintaining law and order. However, most states have not implemented the reforms as directed by the SC, leading to filing of three contempt petitions by Singh’s counsel Prashant Bhushan.
+This order departs from an October order of the apex court which had taken a contrary view. After this decision, individual taxpayers and businessmen facing low denomination disputes had feared that I-T officials would rake up old matters discarded after upward revision of the threshold.
-Attorney general K K Venugopal told a bench of Chief Justice Dipak Misra and Justices A M Khanwilkar and D Y Chandrachud that the modus operandi adopted by states on the basis of the Prakash Singh judgment was interfering with the directive issued in another case relating to police reforms.
+From time to time, CBDT, responsible for tax administration, enhances the monetary limits for filing of I-T appeals. Officials are not permitted to file appeals where the “tax effect” is low (as defined by the monetary limit), except for the few exceptions carved out. It helps cut down litigation, including pending litigation, and saves costs. “Tax effect” denotes the difference between the tax on income determined by I-T officials and the I-T chargeable on the income of the taxpayer after excluding the disputed income.
-Bhushan objected to it and said the other judgment in T S R Subramaniam’s case did not deal with police reforms at all and that it was a ploy by the Centre to stall police reforms as the SC had already dismissed petitions seeking review of the 2006 judgment.
+CBDT’s instruction, the subject matter of litigation before the SC, was dated February 9, 2011. It had provided that appeals cannot to be filed by I-T officials before high courts is the “tax effect” was less than Rs 10 lakh (the earlier circular on March 27, 2000, had pegged it at Rs 4 lakh). It did not change the monetary threshold for appeals before I-T tribunals and the SC, which remained at Rs 3 lakh and Rs 25 lakh, respectively.
-The bench told the AG that if the SC had already dismissed the Centre’s review petition, the court could not entertain a modification application. The AG said the court should consider directing states not to appoint officers on the verge of retirement as head of the police department to give them an additional two years.
+Since then, another set of instructions have been issued, which provides that if the tax effect is Rs 10 lakh or less, an appeal cannot be filed even with the tax tribunals. For high courts, the limit is set at Rs 20 lakh and for the SC, it is Rs 25 lakh. Before the SC, the I-T department contended that the CBDT instruction had a prospective effect only. Thus cases pending in high courts on February 9, 2011, could not be dismissed merely based on the instruction. But the SC decided in favour of the taxpayer, SRMB Dairy Farming, a private limited company, by holding that CBDT’s instructions will also apply to all pending matters.
-The SC postponed hearing on the matter to April 2.
+“The SC has rightly pointed out that the interpretation of CBDT’s instruction had to be done in the context of the purpose for which it was issued, which is to reduce litigation that had choked the legal system. Thus the apex court held that the instructions applied to pending matters also, as such an interpretation would facilitate achievement of the objectives of the National Litigation Policy aimed at bringing down the pendency of litigation cases,” said Gautam Nayak, tax partner, CNK & Associates, a firm of chartered accountants.
-==SC bans ‘acting’ DGPs to end misuse of fixed-tenure rule==
+Interestingly, the latest instruction issued by the CBDT on December 11, 2015, not only significantly hiked the monetary threshold limits but categorically mentioned that: “This instruction will apply retrospectively to pending appeals and appeals to be filed henceforth in courts and tribunals. Pending appeals below the specified tax limits may be withdrawn.”
-[https://epaper.timesgroup.com/Olive/ODN/TimesOfIndia/shared/ShowArticle.aspx?doc=TOIDEL%2F2018%2F07%2F04&entity=Ar01307&sk=86AFED7E&mode=text  Dhananjay Mahapatra, SC bans ‘acting’ DGPs to end misuse of fixed-tenure rule, July 4, 2018: ''The Times of India'']
+Nayak said: “This showcases the intent of the instructions and the SC has rightly acted on it.”
-''You Are Trying To Destroy Prakash Singh Judgment, States Told''
+=Artists=
+==Fashion designers==
+[http://epaper.timesofindia.com/Default/Client.asp?Daily=CAP&showST=true&login=default&pub=TOI&Enter=true&Skin=TOINEW&AW=1393708348876  Times of  India]
-The Supreme Court banned the appointment of acting director general of police (DGP) by state governments, insisting that state police chiefs must be chosen from a panel of three officers prepared by the Union Public Service Commission (UPSC).
+‘Fashion designers are artists, eligible for I-T exemption’
+Shibu Thomas
-Referring to the scheme for appointment of DGPs outlined in its 2006 judgment in Prakash Singh case, a bench of CJI Dipak Misra and Justices A M Khanwilkar and D Y Chandrachud took exception to certain states saying they had already enacted laws for a different scheme for DGP appointments. It said, “You (states) are trying to destroy the Prakash Singh judgment.”
+Mumbai: A fashion designer is an artist, the Bombay High Court has said and ruled that they are eligible for incometax exemptions available under the category. Ten years after the income-tax department first objected to tax benefits claimed by one of India’s leading fashion designers, Tarun Tahiliani, a division bench of Justice Dhananjay Chandrachud and Justice J P Devadhar on Monday said the designer should get tax privileges extended to the artists.
-In 2006, the SC had said states must give a fixed tenure of at least two years to DGPs after selecting them from a panel prepared by the
+Tahiliani opened the country’s first fashion boutique, Ensemble, and is credited with being one of the designers who have brought high couture to India. Tahiliani’s IT woes began in October 2000 when he sought tax exemption for his income of Rs 83.90 lakh. Under Section 80 RR of the Income-Tax Act, a resident of India, who is an an author, playwright, artist, musician, actor or sports person can claim exemption of 75% of his income earned from foreign assignments. Tahiliani said that applying the exemptions, his taxable income for that year would be Rs 53.24 lakh.
-UPSC. Attorney general K K Venugopal said majority of states had devised a system by which they appointed a senior police officer as acting DGP and confirmed him just before his retirement — a device to enable the officer to function as head of the police for two more years under the SC’s fixed tenure mandate.
+The tax department, however, refused to accept that the fashion designer was an artist. It also contested deductions sought by sought by Tahiliani on his taxable income for 1999-2000 and 2001-2002. The income-tax appellate tribunal ruled in Tahiliani’s favour, upholding his claim that he was a creative artist. The IT department challenged the order before the high court.
+The department’s lawyer contended that a fashion designer didn’t belong to the creative profession as the vocation was classified under applied arts and not fine arts. The IT department said that the benefit of exemption was granted to aid the artists, who represent Indian culture abroad.
+The HC dismissed the IT department’s petition and held that fashion designers were entitled to tax exemptions meant for artists.
-He said Tamil Nadu, Karnataka, Telangana and Rajasthan had approached UPSC for preparation of a panel of police officers suitable for appointment as DGP.
+= Capital gains=
+See [[Capital gains: India]]
-The bench said “no state shall appoint anyone as acting DGP” and ordered that the panel of officers prepared by UPSC should have a reasonable tenure left for superannuation so that they benefit from a fixed tenure of two more years. Persons on the verge of retirement should generally not be appointed as DGP, the bench observed.
+=Corporates’ promotional activities=
+== Pharmaceutical companies’ junkets for doctors==
+[http://epaperbeta.timesofindia.com/Article.aspx?eid=31808&articlexml=I-T-trips-pharma-cos-on-doc-junkets-20092016010015  Lubna Kably, I-T trips pharma cos on doc junkets, Sep 20 2016 : The Times of India]
-In the Prakash Singh case, a bench headed by then CJI Y K Sabharwal had ordered, “The DGP of the state shall be selected by state government from among the three senior-most officers of the department who have been empanelled for promotion to that rank by the UPSC on the basis of their length of service, very good record and range of experience for heading the police force. And once selected, he should have a minimum tenure of at least two years irrespective of his date of superannuation.
+Tribunal Disallows Expenses
-“The DGP may be relieved of his responsibilities by state government acting in consultation with State Security Commission consequent upon any action taken against him under the All India Services (Discipline and Appeal) Rules or following his conviction in a court of law in a criminal offence or if he is incapacitated from discharging his duties.”
+The Mumbai bench of the Income-Tax Apellate Tribunal (ITAT) has nipped the `unholy' doctor-pharma nexus whereby medical practitioners are offered various incentives, like overseas trips, to encourage them to prescribe specific medicines or lines of treatment.
-==2019/ SC disagrees with states on DGP selection==
+It has done so by upholding a disallowance of Rs 76.55 lakh, made by an I-T officer at the assessment stage. The expenditure was incurred by Liva Healthcare (a pharma company specialising in skincare formulations) to wards overseas trips for doctors and their spouses.
-[https://epaper.timesgroup.com/Olive/ODN/TimesOfIndia/shared/ShowArticle.aspx?doc=TOIDEL%2F2019%2F01%2F17&entity=Ar00328&sk=93EE0CC9&mode=text&fbclid=IwAR04ku_v8boJaQBGizaNMuG4LQH07WrBnj9UbkjHKNYjrJB4g782ByU7IgM  Dhananjay Mahapatra, SC junks plea of states to take control of DGP selection, January 17, 2019: ''The Times of India'']
-[https://epaper.timesgroup.com/Olive/ODN/TimesOfIndia/shared/ShowArticle.aspx?doc=TOIDEL%2F2019%2F01%2F17&entity=Ar01202&sk=7136B21E&mode=text&fbclid=IwAR2XTZtH7DTkSZ345sbkTXMSAucEroaSrjTSD4xZzDIMRQKtd45tVGTMBFo   Dhananjay Mahapatra, ‘Action of some states contrary to SC judgment’, January 17, 2019: ''The Times of India'']
+The immediate impact of the order is a higher I-T liability for the pharma company for financial year 2008-09, to which this case pertains, as the disallowed expenditure will be added back to the taxable component of income. In addition, the order will act as a reminder to pharma compa nies to adopt practices that are above board. The maximum rate of income tax on companies currently is 30% plus applicable surcharge and cess.
+The ITAT's September 12 order observes, “The payment of overseas trips of doctors and their spouses for entertainment, by the pharma company , in lieu of expectation of getting patient re ferrals from doctors for its products so as to generate more business and profits, by any stretch of imagination cannot be accepted as legal.Undoubtedly it is not a fair practice and has to be termed as against the public policy.“
-In a jolt to states like West Bengal, Punjab, Kerala, Bihar and Haryana, the Supreme Court rejected their attempt to wrest control over selection of the state police chief and ordered that directors general of police must continue to be selected from among senior officers empanelled by the Union Public Service Commission (UPSC).
+Section 37 of the I-T Act, which is a residual section, permits a business entity to claim as a deduction revenue expenditure incurred by it, `wholly and exclusively for the purpose of the business'.However, an explanation to this section provides that expenses incurred for any purpose which is an offence or is prohibited by law shall not be deemed to have incurred for the purpose of the business.Consequently , such expenditure cannot be allowed as a deduction from taxable income.
-To step around the apex court’s 2006 judgment in the Prakash Singh case — it mandated selection of DGPs from a panel of IPS officers drawn up by the UPSC — some states had enacted laws allowing setting up of an internal committee headed by the chief secretary to empanel senior cops, from whom the state could select one.
+The code of conduct prescribed by the MCI debars doctors from receiving favours in return for referring, recommending or procuring of patients for medical, surgical or any other treatment.
-The Supreme Court said attempts of some states to usurp the process of empanelling police officers for the post of DGPs ran counter to the Prakash Singh judgment, which wanted to ensure that “commitment, devotion and accountability of the police have to be only to rule of law”.
+= Donations to NGOs’ projects=
+==Halved in 2017==
+[http://epaperbeta.timesofindia.com/Article.aspx?eid=31808&articlexml=Share-of-donations-to-projects-under-Sec-35AC-04032017026075  Share of donations to projects under Sec 35AC halved in FY16, March 4, 2017: The Times of India]
-A bench of Chief Justice Ranjan Gogoi and Justices L N Rao and S K Kaul said given the spirit behind the directions issued by the SC in the Prakash Singh case in 2006, which were “wholesome”, it would serve public interest “if the same are implemented until such time that the matter (challenge to state police Acts) is heard finally”. Attempting to free police force from noxious political-bureaucratic influences, an SC bench headed by then CJI Y K Sabharwal had said, “Supervision and control has to be such that it ensures that police serves people without any regard, whatsoever, to the status and position of any person while investigating a crime or taking preventive measures. Its approach has to be service oriented, its role has to be defined so that in appropriate cases, where on account of acts of omission and commission of police, the rule of law becomes a casualty, the guilty cops are brought to book and appropriate action taken without any delay.”
-The SC had also stipulated a fixed tenure of two years for the DGP irrespective of his date of retirement. “The DGP may, however, be relieved of his responsibilities by the state government, acting in consultation with the State Security Commission, consequent upon any action taken against him under All India Services Rules or following his conviction in a court of law in a criminal offence or in a graft case, or if he is otherwise incapacitated from discharging his duties,” it had said.
+'''Sec 35AC Sunset Clause Will Expire On March 31'''
-The states, represented by counsel P Chidambaram, Ranjit Kumar, Vijay Hansaria, Anand Grover and Ajay Bansal, argued that the 2006 judgment had mandated that the guidelines laid down in Prakash Singh case would operate till states enacted laws in this regard.
+Donations made to hundreds of projects carried out by NGOs across the country will no longer be eligible for a 100% income tax (I-T) deduction in the hands of the donor from April 1. While tax savings are not the main purpose, if donations are made in March towards eligible projects, then donors comprising salaried employees could reap an I-T benefit.
-== Officers with 6 months’ tenure left can be made DGP: SC/ 2019==
+At present, donations made for specific projects run by NGOs that have been certified under section 35AC entitle the donor to a 100% I-T deduction under section 80GGA in respect of the donated amount.
-[https://timesofindia.indiatimes.com/india/police-officers-having-minimum-of-6-months-tenure-left-should-be-considered-for-dgp-post-sc/articleshow/68387471.cms  Police officers having minimum of 6 months tenure left should be considered for DGP post: SC, March 13, 2019: ''The Times of India'']
+However, section 35AC has a sunset clause which expires this March. Section 80GGA is not as widely known as section 80G, which permits a 100% I-T deduction in respect of certain donations (such as PM's National Relief Fund) and a 50% I-T deduction in most other cases (see table).
-The Supreme Court clarified its last year order on police reforms and said officers who have a minimum of six months tenure left in service can be considered for the post of director general of police (DGP).
+“Taxpayers who do not earn income under the head `profits and gains of business and profession', such as salaried employees, can claim the benefit of section 80GGA. While the employer cannot consider the donations made, while computing tax to be deducted at source against salary income, the employee can claim the benefit of the same in his I-T return and claim an I-T refund, if applicable,“ says Pradeep Mahtani, director, HelpYourNGO Foundation. A chartered accountant says, “In fact, if there has been a short deduction of tax at source and advance tax has not been paid by the salaried employee, by making donations eligible for I-T deduction up to March 31, the salaried taxpayer could mitigate his I-T penalty . Donors should ensure that they get the appropriate receipt.“
-A bench headed by Chief Justice Ranjan Gogoi said the recommendation for post of DGP by the Union Public Service Commission (UPSC) and preparation of the appointment panel should be purely on the basis of merit.
-The apex court passed the verdict on a modification plea filed by former Uttar Pradesh DGP Prakash Singh.
+Notifications are issued by the finance ministry from time to time, certifying the projects that are eligible under section 35AC, the period of eligibility and also the total cost of the eligible project. For instance, as regards NGOs registered in Ma harashtra, these include projects by Magic Bus (skill development and livelihood programme), Association of Palliative Care (for a palliative care centre), Foundation of Promotion for Sports and Games (Olympic Gold Quest project) and Mesco (educational scholarships).
-Singh had alleged that the July 3, 2018, directive, asking the UPSC to consider only those IPS officers for appointing as DGP who have two years of service left, was being misused by state governments who were ignoring competent senior officers for appointment as DGPs.
+HelpYourNGO, an online donation platform, has on its portal 45 NGOs that run 90 projects eligible under section 35AC, These include some well known names such as Akshaya Patra's midday meals, projects by Childline and People for Animals.
-The court had in July last year passed a slew of directions on police reforms and restrained all states and Union territories from appointing any police officer as acting DGPs to avoid favouritism and nepotism in such high-level appointments.
+In view of the sunset clause, a government-appointed national committee -which approves projects that would be eligible under section 35AC -had ceased to accept requests after December last year. “Donation stems from fundamental reasons, which are deep-rooted among each donor whether that's joy , guilt, remembrance or duty . However, everyone does think of saving I-T after having donated. Just like the insurance and the investment industry , which makes people aware of I-T savings available to them, for donations it is incumbent upon NGOs to make people aware of taxes they can save as a result of the donation they have made,“ says Dhaval Udani, founder of Danamojo, a payments platform for NGOs.
-It had taken note of the Centre's submission that some states have adopted a practice to appoint DGPs on the last date of retirement as a consequence of which the person continues for two years after his date of superannuation.
+Perhaps awareness of a 100% I-T deduction for donations made to section 35AC-eligible projects has been low. HelpYourNGO did a dipstick sample survey of 12 NGOs, for which data was readily available. It showed that the percenta ge of donations towards 35ACeligible projects as compared to total donations received by NGOs has declined from 14.7% in fiscal 2014-15 to 7.9% in the next fiscal.
-Besides giving due weightage to "merit and seniority", it had directed the UPSC to consider those IPS officers "who have got clear two years of service" for appointment as DGPs.
+Deval Sanghavi, partner and co-founder at Dasra, a strategic philanthropy foundation, points out, “Our experience has shown that donors see the I-T deduction more as a government certification, which in essence states the organisation is compliant with laws and adheres to missiondriven principles vis-à-vis a giver donating more because of the I-T deduction.“
-Singh, on whose PIL the directions on police reforms were passed, had filed a fresh plea before a bench headed by Gogoi alleging that the specific direction that IPS officers should have minimum two years of services left for being considered for the post of DGPs was being used to deny the promotion to "competent" and "honest" officers by states for their vested interest.
+The number of individuals who donate money to charity has shown a rise in India.As many as 203 million Indians donated money during 2015, opposed to just 183 million in 2014, according to the World Giving Index 2016.
-"Due to this, brilliant police officers have been overlooked just because they do not have two years of services left. The UPSC says that it will not consider these officers," lawyer Prashant Bhushan, appearing for the former DGP, had said.
+=Educational institutions=
+==Profits not taxable: SC==
-The consequences of the direction were coming to the fore now, Bhushan had said.
+[http://epaperbeta.timesofindia.com//Article.aspx?eid=31808&articlexml=Educational-institutions-profits-not-taxable-SC-19032015015012 ''The Times of India'']
-=Dogs=
+Mar 19 2015
-== K9 test==
-[https://epaper.timesgroup.com/Olive/ODN/TimesOfIndia/shared/ShowArticle.aspx?doc=TOIDEL%2F2021%2F02%2F25&entity=Ar01807&sk=BCBD067A&mode=text  Bharti Jain, February 25, 2021: ''The Times of India'']
-For promotion, police dogs will have to take K9 test
+Amit Choudhary
-New Delhi:
+The Supreme Court has ruled that surplus income earned by educational institutions cannot be taxed, and imparting education not termed a for-profit activity simply because it yielded high returns.
+Dismissing the revenue department's submission that an educational institution ceased to be a solely scholastic endevaour if it generated high profits, the court noted that their income was exempt from tax under the Income Tax Act.
-Police dogs that are part of canine squads of Central para-military forces shall now be evaluated annually based on ‘K9 proficiency evaluation test’ developed by the home ministry in line with global performance standards. All young dogs will be put through ‘K9 behaviour assessment test’ at the entry level to evaluate their suitability for detection purpose or patrol work or for both, and get trained accordingly, a top official in the home ministry told TOI.
+“Where an educational institution carries on the activity of education primarily for educating persons, the fact that it makes a surplus does not lead to the conclusion that it ceases to exist solely for educational purposes and becomes an institution for the purpose of making profit,“ a bench of Justice T S Thakur and Justice Rohinton F Nariman said.
-The K9 proficiency evaluation test (PET) and K9 behaviour assessment test (BAT) have been devised by the MHA Police K9 cell, a dedicated wing established last year under the police modernisation division of the home ministry with the mandate of mainstreaming and augmentation of police K9s.
-“With BAT it would be easy to screen the most suitable pups or young adults and PET would help in evaluating serving police dogs. These test models were shared with central para-military forces in September for implementation,” Col P K Chug, consulting director of the MHA Police K9 cell, told TOI.
+“A distinction must be drawn between the making of a surplus and an institution being carried on `for profit'. If, after meeting expenditure, a surplus arises incidentally... it will not cease to be one existing solely for educational purposes,“ the bench added.
-BAT consists of 12 subtests that evaluate the behaviour/reaction of a dog on counts such as affability, handling, visual startle, acoustic startle and gunshot reaction, etc. “A dog displays less or no reaction to these sub-tests. Based on results, one can determine if the dog is suited to and has a flair for detection or patrol work, or both,” said Chug.
+The court, however, said the government must examine activities of such institutions to ensure that the purpose of education is not taken over by a profit-making motive. “If they are not genuine, or are not being carried out in accordance with all or any of the conditions subject to which approval has been given, such exemption must be withdrawn,“ it said.
-Regarding PET, he said the MHA has given the central forces two years for compliance. “This means that dogs who fail to clear the test can be put through refresher courses to enhance their proficiency to the level demanded by the test, which they must clear,” he said.
+The court passed the order on a bunch of petitions filed by Queen Educational Society challenging an Uttarakhand High Court order allowing I-T authorities to tax its surplus income of around Rs 7 lakh for the assessment year 2000-01.
-An advantage of the yearly evaluations is that testimony of the dogs shall be admissible in the court. This means that the evidence gathered by the canines in the form of narcotics, explosives, etc. shall be admissible in a court of law since their proficiency would have been certified within a legally accepted timeframe.
+=Exemptions=
+==1950: residential palace of erstwhile ruler exempted from IT==
+[http://epaperbeta.timesofindia.com/Article.aspx?eid=31808&articlexml=Cant-tax-income-from-palace-rent-SC-06122016019026  AmitAnand Choudhary, Can't tax income from palace rent: SC, Dec 6, 2016: The Times of India]
-[[Category:Crime|PPOLICE: INDIAPOLICE: INDIAPOLICE: INDIAPOLICE: INDIAPOLICE: INDIA
+'''Court Raps I-T Dept For Pursuing Case Against Erstwhile Ruler Of Kota'''
-POLICE: INDIA]]
-[[Category:Government|PPOLICE: INDIAPOLICE: INDIAPOLICE: INDIAPOLICE: INDIAPOLICE: INDIA
-POLICE: INDIA]]
-[[Category:India|PPOLICE: INDIAPOLICE: INDIAPOLICE: INDIAPOLICE: INDIAPOLICE: INDIA
-POLICE: INDIA]]
-[[Category:Pages with broken file links|POLICE: INDIA]]
-=[[Extra-judicial killings/ ‘Encounters’]]=
-See [[Extra-judicial killings/ ‘Encounters’ ]]
-= Infrastructure=
+The Supreme Court held that the income earned by erstwhile rulers of a princely state or their heirs by renting out a portion of the residential palace was not taxable and rapped the Income Tax department for pursuing a case despite their income being exempted under IT law.
-==2017: BPR&D survey findings==
-[https://timesofindia.indiatimes.com/india/not-even-a-phone-in-over-400-police-stations-in-india/articleshow/56546175.cms  Neeraj Chauhan, Not even a phone in over 400 police stations in India: Bureau of Police Research and Development, January 15, 2017: ''The Times of India'']
+A bench of Justices Ranjan Gogoi and Abhay Manohar Sapre allowed a plea of the ruler of the former princely state of Kota, now a part of Rajasthan, challenging the high court order for bringing his income from rent in the Income Tax net. The ruler owns extensive properties, including two residential pa laces known as Umed Bhawan Palace and the City Palace. The ruler is using Umed Bhawan Palace for his residence and a portion of it was rented out to the ministry of defence way back in 1976.
+Although the Centre had in 1950 declared residential palace of an erstwhile ruler, situated within the state, as his inalienable ancestral property to be exempted from payment of income-tax, the I-T department had in 1984 initiated proceedings for assessment of income earned from renting out a portion of the palace. The Centre had incorporated Section 10(19A) in the IT Act to give exemption to former rulers.
+The department contended that IT exemption was given for personal use and income earned from the rent was taxable. Commissioner of Income Tax and Income Tax Appellate Tribunal, however, turned down the plea of the IT department which had moved the Rajasthan HC.
+The HC had ruled that as so long as the ruler continued to remain in occupation of his official palace for his own use, he would be entitled to claim exemption but if he let out any part of his palace, he became disentitled to claim benefit of exemption available under Section 10(19A) for the entire palace.
+“In such circumstances, he is required to pay income-tax on the income derived by him from the portion let out in accordance with the provisions of the I T Act and the benefit of exemption remains available only to the extent of portion which is in his occupation as residence,“ the HC had said.
+Quashing the HC order, the Supreme Court held that Section 10(19A) has used the term “palace“ for considering the grant of exemption to the ruler and income earned from renting out a portion of the palace was also exempted.
+“We cannot ignore this distinction while interpreting Section 10(19A) which, in our view, is significant. In our considered opinion, if the Legislature intended to spilt the Palace in part(s), alike houses for taxing the subject, it would have said so by employing appropriate language in Section 10(19A) of the IT Act.We, however, do not find such language employed in the section,“ the bench said.. “Once the assessee is able to fulfil the conditions specified in section for claiming exemption under the Act then provisions dealing with grant of exemption should be construed liberally because the exemptions are for the benefit of the assessee,“ it said.
+== Scheduled tribes, Sikkimese, agriculture, institutions, hospitals, trusts==
+[http://timesofindia.indiatimes.com/india/Heres-why-scrapped-notes-are-flying-off-to-the-northeast/articleshow/55590761.cms    Here's why scrapped notes are flying off to the northeast, TNN | Updated: Nov 24, 2016, The Times of India]
+HIGHLIGHTS
+I-T laws allow exemptions for various categories of incomes or individuals
+Among those are members of ST communities in Nagaland, Manipur, Tripura, Arunachal and Mizoram
+A similar exemption is available to all those defined as "Sikkimese"
+Among those exempt from paying income tax are members of scheduled tribe communities in Nagaland, Manipur, Tripura, Arunachal Pradesh and Mizoram. Scheduled tribes in North Cachar Hills and Mikir Hills in Assam, the Khasi Hills, Garo Hills and Jaintia Hills in Meghalaya and Ladakh in Jammu & Kashmir also don't have to pay income tax. The exemption applies to income arising from any source in these areas or from dividends or interest on securities from anywhere.
+A similar exemption is available to all those defined as "Sikkimese" in the I-T Act. This again is for any income generated from Sikkim itself and for income from dividend or interest on securities generated anywhere. The intent behind these exemptions is to provide fiscal concessions to backward areas and communities. In times like now, it becomes a useful route for people looking to turn undisclosed incomes legitimate.
+Apart from these geographically restricted exemptions, there is of course the exemption for agricultural income. That includes any rent or revenue derived from agricultural land.
+There are several ''' institutions ''' that are tax exempt under the IT Act. Again, it is not difficult to see why the lawmakers would have decided not to tax them. For instance, income of a public charitable trust or not for profit society established for development of khadi and village industries is exempt from tax. Educational institutions including universities existing solely for educational purposes and not for profit are exempt from paying tax on their incomes under various sub-sections of the IT Act.
+Similarly, not for profit hospitals too are exempt, different kinds being covered by different sub-sections.
+Income of a charitable institution or fund approved by the prescribed authority is not required to pay taxes on its income either. Nor are public religious or public charitable trusts approved by the prescribed authority. Political parties and electoral trusts are also exempt from tax on their incomes. It is another matter that a major chunk of the money flowing to parties never enters any books anyway.
+==Yoga ==
+===`Medical relief,' `imparting education' are charitable purposes===
+[http://epaperbeta.timesofindia.com//Article.aspx?eid=31808&articlexml=Ramdev-trust-wins-I-T-war-on-tax-18022017013006  Lubna Kably, Ramdev trust wins I-T war on tax-exempt tag for yoga, Feb 18, 2017: The Times of India]
+Baba Ramdev's Patanjali Yogpeeth (a public charitable trust) has succeeded in its appeal before the Income-tax Appellate Tribunal (ITAT), which has accepted its tax exempt status.
+The ITAT (Delhi bench) held that Yoga entails providing medical relief and camps also provide education, and that both `medical relief ' and `imparting education' fall within the meaning of charitable purpose, entitling the trust to claim I-T exempt status under sections 11 and 12 of the Income Tax Act.
+“The finding of I-T authorities that propagation of yoga by Patanjali Yogpeeth does not qualify as medical relief or imparting of education is not justified,“ stated the ITAT in its order dated Feburary 9.Even as the litigation settled by the ITAT, relates to the 200809, the ITAT has also referred to subsequent amendment in the I-T Act, which came into effect from April 1, 2016. This amendment specifically inserted `yoga' within the definition of `charitable purpose'. If the exempt status not been upheld by the ITAT, Patanjali Yogpeeth would have been liable to pay income tax. The total income of this trust is not brought out in the ITAT order.
+The ITAT also held that corpus donations aggregating to Rs 43.98 crore received by Patanjali Yogpeeth, predominantly for construction of cottages under its Vanprasth Ashram Scheme (which provides accommodation to those attending residential yoga courses), were capital receipts not liable to I-T. Such donations included land donated, whose market value was pegged by I-T authorities at Rs 65 lakh. In its order, the ITAT pointed out that “Corpus donations are not taxable, even in circumstances where the trust is not eligible for I-T exemption“.
+Various additions to the trust's income made by the I-T authorities, including a Rs 96 lakh addition made for services made by the trust to Vedic Broadcasting in which Acharya Balkrishnan, a trustee and close aide of Baba Ramdev holds substantial interest were deleted by the ITAT, on the ground that the I-T authorities had not understood the facts.
+The ITAT also agreed with the submissions made by the trust and observed that certain inferences by the I-T authorities such as provision of benefits to certain persons or receipt of anonymous donations were made without fully appreciating the facts.
+=Expatriates=
+== Salary paid in India won’t face tax, if Non-resident==
+[https://epaper.timesgroup.com/Olive/ODN/TimesOfIndia/shared/ShowArticle.aspx?doc=TOIDEL%2F2018%2F02%2F15&entity=Ar02416&sk=1A619CBE&mode=text  Lubna Kably, Non-resident expats’ salary paid in India won’t face tax, February 15, 2018: ''The Times of India'']
+[[File: How tax residency in India is determined.jpg|How tax residency in India is determined <br/> From: [https://epaper.timesgroup.com/Olive/ODN/TimesOfIndia/shared/ShowArticle.aspx?doc=TOIDEL%2F2018%2F02%2F15&entity=Ar02416&sk=1A619CBE&mode=text  Lubna Kably, Non-resident expats’ salary paid in India won’t face tax, February 15, 2018: ''The Times of India'']|frame|500px]]
+The Authority of Advance Rulings (AAR) has held that the salary income of a nonresident individual for services rendered overseas cannot be taxed in India, even when such salary is paid into a bank account in India.
+The ruling stands out because apart from providing relief from double taxation under the Indo-US tax treaty, the AAR additionally held that the sums received in India would not be taxable here under the domestic tax laws.
+Unlike a tribunal or court order, a ruling by AAR, a quasi-judicial body, does not set a precedent. But it does have persuasive value and is well-considered. Thus, the ruling may benefit expat workers, in particular the over one lakh Indian workers who work in the US, largely on H1B visas.
+Typically, when white-collared workers are ‘seconded’ on an overseas assignment by an Indian company, a split salary arrangement is worked out. Under ‘secondment’, the employee is transferred on the payroll of the overseas parent or group company, which pays the basic salary and certain allowances, in the overseas country. However, the Indian company deposits a part of the salary in the employee’s bank account in India. This enables the employee to meet certain obligations in India—such as repayment of housing loan or household expenses (as the family could be in India).
+While an Indian residing abroad is popularly referred to as a non-resident Indian (NRI), the nomenclature is different under tax laws. It is not the country of origin, but the number of days’ stay in India, which determine whether a person will be a resident or non-resident for tax purposes.
+Resident individuals are taxable in India on their global income, irrespective of where it was earned. In the case of non-residents, only income that accrues or arises in India (say, bank interest from a savings account in India or rental income from a house in Mumbai) is treated as taxable in India (see table). There is a third category, that is, resident but not ordinarily resident (RNOR), for whom the tax incidence is the same as for non-residents.
+“Thus, salary received by non-residents in a bank account overseas for services performed outside India is not subject to tax in India. However, salary received in India is considered as taxable under the Indian domestic tax laws (along with being taxed in the country where they are working as most countries adopt the source method of taxation). Typically, a split salary mechanism results in litigation, as income-tax (I-T) authorities seek to bring to tax the income received in India. In such cases, employees claim relief under a tax treaty, which ensures that the same income is not taxed twice,” says Maulik Doshi, tax partner, SKP Group, a consultancy firm.
+In this case, the employee, T N Santhosh Kumar, was seconded by Texas Instruments to Texas Inc, a US company, for a period of two years. As is typically the case, a split salary mechanism was adopted. Kumar was paid monthly a part of the salary and certain bonuses in India by Texas India.
+A communique by EY India states: “Based on the India-US tax treaty, the AAR held that the place where the employee performs their duties is what is considered and not where the income is received or where the company providing the remuneration is based. As the salary is paid for work performed in the US, the income would be taxable in the US alone and no tax would be required to be withheld in India.”
+“It is interesting to note that the AAR also held that such salary payments received in India by the non-resident would not be taxable in India even under its domestic tax laws,” says Doshi and adds, “in cases where there is no tax treaty (such as with Hong Kong) or in peculiar situations where the taxpayer is unable to access a tax treaty owing to lack of certain documents, this ruling will be very helpful.” In simple terms, the word accrue in India refers to something that is due in India.
+Kumar was deputed for a two-year term. In the second year, in which he returned to India (that is, 2012-13) he was a resident of India and liable to tax on his global income. The US would also tax his US source salary income. Here, the AAR held he would be entitled to a tax credit in India for US taxes.
+=Family trusts=
+==No `gift' tax on property received from individual==
+[http://epaperbeta.timesofindia.com/Article.aspx?eid=31808&articlexml=No-levy-on-transfer-of-assets-to-family-24032017026045  No levy on transfer of assets to family trust, March 24, 2017: ''The Times of India'']
+`Gift' tax provisions will not apply to property received from an individual by a family trust, according to an amendment made in the Finance Bill passed by the Lok Sabha.
+High net worth individuals (HNWI) commonly use family trusts as a tool for succession planning, as it provides an upfront solution to any possible future disputes that may arise, including any challenges to a will by relatives at a later date. Family trusts also ring fence assets from any future liabilities.Shares, immovable property et al are settled (transferred) to the trust for the benefit of spouse, children and other relatives. The trust dis tributes income to the beneficiaries.
+The Finance Bill had introduced clause (x) in section 56(2). It provided that receipt of money or property by `any person' (which includes individuals and other entities such as private trusts and companies) without consideration or for inadequate consideration in excess of Rs 50,000 shall be subject to Income-tax (I-T) in the hands of the recipient, under the head `Income from other sources'.“The budget proposals had created uncertainty around family trusts receiving such gifts. The enacted change will bring relief to families intending to create trusts for legitimate succession planning,“ says Pranav Sayta, family business services leader at EY India.
+=Film actors=
+==Promotion of film: actor not expected to incur expenditure==
+[http://epaperbeta.timesofindia.com/Article.aspx?eid=31808&articlexml=Money-spent-by-Hrithik-to-promote-film-taxable-30112016021038  Money spent by Hrithik to promote film `taxable', Nov 30, 2016: The Times of India]
+It is not an actor's responsibility or obligation to incur expenditure on promotion of his film, the Mumbai bench of the Income Tax Appellate Tribunal (ITAT) ruled recently . It disallowed an expenditure of Rs 5.6 lakh, incurred for promotion of `Gujarish', which was claimed by the lead actor, Hrithik Roshan, as deduction from his income in 2010-11.
+While verifying Hrithik's income-tax (I-T) returns, the officer noticed that Hrithik had shown an expenditure of Rs 7 lakh for promotion of his film.The actor said it was paid to seven contestants of `Saregama', a TV show, for promotion his brand image, as he was the lead actor in the film. `Guzaarish' was a 2010 release, composed and directed by Sanjay Leela Bhansali, which also had Aishwarya Rai in the lead role. The officer held that expenditure relating to the film's making, its promotion et all was the producer's responsibility . He disallowed the expenditure claimed by the actor in his I-T computation as a business deduction.
+=Foreign tax credit (FTC)=
+[http://epaperbeta.timesofindia.com/Article.aspx?eid=31808&articlexml=Claiming-credit-in-India-for-taxes-paid-overseas-01072016025026 The Times of India], Jul 01, 2016
+Lubna Kably
+In a bid to reduce litigation, the Central Board of Direct Taxes (CBDT) has made it easier for Indian-resident taxpayers, including large Indian companies having overseas operations, to claim credit for the taxes borne by them abroad.
+Credit of foreign taxes (referred to as foreign tax credit, or FTC) were allowed under tax treaties with other countries and the Income Tax Act, but the absence of specific rules often led to litigation.Denial of FTC by tax authorities also resulted in double taxation on the same income in the hands of Indian-resident taxpayers.
+FTC rules issued by the CBDT provide that credit for foreign taxes can be claimed against taxes paid in India, like income tax (be it personal or corporate), cess and surcharge. Further, Indian companies can also claim FTC against Minimum Alternate Tax (MAT). Taxpayers have to submit proof of the tax paid or deducted at source in the foreign country to claim FTC.
+The earlier draft rules, issued in April, had excluded disputed foreign taxes from the ambit of FTC. Now credit can be claimed in respect of disputed foreign taxes, subject to meeting compliance requirements.
+Indian-resident taxpayers pay taxes on their global income in India, including on foreign source income which has already been subject to tax overseas (see graphic). FTC eliminates double taxation on the same income. To illustrate: A parent company headquartered in India earns interest on debt given to its Sri Lankan (SL) subsidiary and is subject to a 10% withholding tax. The Indian company will pay tax in India on its global income (including the foreign source interest income). The new rules will make it easier for it to claim an FTC for the 10% tax with held in Sri Lanka.
+According to RBI data, India Inc's overseas investments by way of debt and equity amounted to $750 million in May . FTC rules will help Indian companies with global operations get benefit of credits for foreign taxes. The rules will also help high net worth individuals who make overseas investments and bear foreign taxes on their dividend or interest income. “Clarity on grant of FTC against the MAT liability is a big positive as is the move to provide credit for `disputed foreign taxes' upon final settlement of dispute. However, the modus operandi for allowing such credit -especially when the assessments are time-barred -needs to be prescribed,“ says Girish Vanvari, tax leader at KPMG India.
+Some hiccups remain.Gautam Nayak, tax partner, CNK & Associates, says, “The rules provide clarity about the extent of FTC available and documents to be submitted for that. However, difficulties faced by certain taxpayers have not been addressed.FTC would not be available for taxes not covered by the relevant tax treaty , such as state taxes paid in the US or branch profits' taxes paid overseas.Besides, the tax credit would be restricted to the rate of tax payable under the tax treaty , even if the actual tax paid as well as the Indian tax payable is higher. So, if excess taxes have been withheld by the foreign payer out of abundant precaution, or on account of their local laws, tax credit would be available only for tax payable under the treaty terms. For example, the US levies a higher rate of withholding of 30% if a foreign entity (say an Indian company) does not have a tax identification number. In such cases, credit in India would be available only to the extent of applicable rate prescribed under the tax treaty.“
+=Gifts=
+==Need not be camouflaged remuneration==
+[http://epaperbeta.timesofindia.com/Article.aspx?eid=31808&articlexml=SRKs-RS15cr-Dubai-villa-cant-be-taxed-24082017009040  Lubna Kably, `SRK's RS15cr Dubai villa can't be taxed', August 24, 2017: The Times of India]
+The income-tax appellate tribunal (ITAT) has rejected the tax department's view that a villa in Dubai gifted to Bollywood actor Shah Rukh Khan a decade ago was a camouflage to evade income tax. The tribunal has held that the value of the villa cannot be treated as the actor's taxable income.
+The villa had been gifted to Khan under a formal gift deed in 2007, after he obtained the RBI's approval.
+I-T authorities were of the view that the donor, Nakheel PJSC, a Dubai-based company known for the famous Palm Projects, had gifted the villa as it was keen on using the actor's image and brand.The actor is a globally known figure and has endorsed various foreign brands for remuneration running into a few crores. Thus, the gift was seen as remuneration to Khan for utilising his brand image and in lieu of his stage performance at the company's annual day event. In light of this, the I-T authorities sought to tax the value of the villa as income in SRK's hands.
+During the assessment for the financial year 200708, I-T officials added the value of the villa -Rs 17.85 crore -to the income of Rs 126.3 crore declared by Khan in his I-T return. The actor would have had to pay I-T on this additional sum. At the first stage of appeal, the commissioner (appeals), agreed with the I-T authorities. Based on a valuation report, though, he reduced the addition to Rs 14.7 crore.
+Appealing before ITAT, Khan, through his counsel, said the chairman of the company, Sultan Ahmed Bin Sulayem, was his friend and thus wished to make the gift. He admitted to attending the annual day event, but said he merely addressed the employees and did not perform on stage, which would have amounted to brand endorsement. On taxation of a gift in kind, ITAT pointed out that for the relevant financial year, gifts of immovable property made without any consideration were out of the tax ambit.
+=Gratuity=
+==Payment of Gratuity(Amendment) Bill 2017==
+[https://timesofindia.indiatimes.com/business/india-business/tax-free-gratuity-limit-doubled-parliament-passes-bill/articleshow/63411961.cms  March 22, 2018: ''The Times of India'']
 '''HIGHLIGHTS'''
-There are 15,555 police stations in the country
+Parliament has passed Payment of Gratuity(Amendment) Bill 2017 paving the way for doubling the limit of tax free gratuity to Rs 20 lakh
-Madhya Pradesh has 111 police stations without any telephone line, followed by Meghalaya and Manipur at 67 police stations each
+The Bill also notifies period of maternity leave as part of continuous service
-As on January 2016, there were 22,80,691 police officers across all states and Union territories
+Parliament passed Payment of Gratuity(Amendment) Bill 2017 paving the way for doubling the limit of tax free gratuity to Rs 20 lakh and empowering the government to fix the ceiling of the retirement benefit through an executive order.
+The Rajya Sabha passed the bill, which was approved by the Lok Sabha on March 15. Besides enabling the central government to fix the ceiling of tax free gratuity, the bill will also empower it to fix the period of maternity leave through executive order.
-Rising crime in the country gets extensive coverage, but what gets overlooked is the state of police forces, who have to cope without even basic infrastructure to fulfill their duties.
+It also notifies the period of maternity leave as part of continuous service and proposes to empower the central government to notify the gratuity ceiling from time to time without amending the law.
-Many police stations lack vehicles, phones and wireless. There are 188 police stations without a single vehicle, 402 lack telephone lines, 134 don't have wireless sets and there are 65 which neither have a telephone line nor wireless sets, as per data compiled by the Bureau of Police Research and Development (BPR&D). There are 15,555 police stations in the country.
+Rajya Sabha Chairman M Venkaiah Naidu said in the Upper House that he had met leaders of various parties in the morning and it was decided that the House would take up the crucial Payment of Gratuity (Amendment) Bill as it was of importance to the employees.
-Manipur has 43 police stations without phones or wireless sets, the maximum for any state, while Chhattisgarh has 161 police stations without vehicles.
+Labour Minister Santosh Kumar Gangwar then moved the bill for consideration and passage. It was passed by a voice vote without a debate.
-Madhya Pradesh  has 111 police stations without any telephone line, followed by Meghalaya and Manipur at 67 police stations each. Uttar Pradesh also has 51 police stations without a telephone line and 17 without wireless.
+The labour ministry later said in a statement that the Bill also envisages amending the provisions relating to calculation of continuous service for the purpose of gratuity in case of female employees who are on maternity leave from "twelve weeks" to such period as may be notified by the central government from time to time.
-Of the total number of police stations in India, 10,014 are rural and 5,025 urban. The rest are railway police stations.
+Prime Minister Narendra Modi tweeted: "A significant pro-people measure passed in Parliament. Will benefit lakhs of Indians."
-BPRD figures reveal there are only 10.13 vehicles for 100 policemen at the national level, with 1,75,358 vehicles in all available for law enforcement. Maharashtra has the maximum number of vehicles (17,131), followed by Tamil Nadu (15,926) and UP (13,452). Home ministry officials admit that insurgency-struck Manipur has police stations with inadequate facilities in remote areas which are an urgent reminder that the Centre and the states should work to create infrastructure. "In the case of Chhattisgarh and MP, most police stations are in Maoist-affected areas where wireless sets or vehicles are often snatched by Naxalites. This cannot be an excuse as police need at least phones, vehicles and wireless sets for communication and mobility," said an official.
-As on January 2016, there were 22,80,691 police officers across all states and Union territories. In a reflection of how successive administrations failed to provide housing to police personnel, only 5,56,539 cops have family quarters.
+After implementation of the 7th Central Pay Commission, the ceiling of tax free gratuity amount for central government employees was increased from Rs 10 lakh to Rs 20 lakh. The unions have been demanding for inclusion of the change in the Act.
-The problem doesn't end with the lack of facilities. Most police officers are overworked. According to the data, there is only one cop for every 729 people, despite multiple challenges, such as cyber crime and the significant threats of terrorism, communal violence and Naxalism.
+At present, formal sector workers with five or more years of service are eligible for Rs 10 lakh tax-free gratuity after leaving job or at time of superannuation.
+A senior government official had earlier said that the government wants to provide tax-free gratuity of Rs 20 lakh to organised sector workers at par with the central government.
-The problem is particularly acute in Andhra Pradesh, Bihar, Uttar Pradesh, West Bengal, Dadar & Nagar Haveli and Delhi where there is one policeman for 1,100 people.
+The Payment of Gratuity Act, 1972, was enacted to provide for gratuity payment to employees engaged in factories, mines, oilfields, plantations, ports, railway companies, shops or other establishments.
-Senior officers say the central paramilitary forces are better off than the civil police in terms of facilities and daily routines if the diversity of workload is compared.
+The law is applicable to employees, who have completed at least five years of continuous service in an establishment that has 10 or more persons.
-=Moustaches=
+The amendment will also allow the central government to notify the maternity leave period for "female employees as deemed to be in continuous service in place of existing twelve weeks".
-==Incentives in UP==
+The proposal comes against the backdrop of the Maternity Benefit (Amendment) Act, 2017 enhancing the maximum maternity leave period to 26 weeks.
-[https://epaper.timesgroup.com/Olive/ODN/TimesOfIndia/shared/ShowArticle.aspx?doc=TOIDEL%2F2019%2F01%2F18&entity=Ar01616&sk=19988AB8&mode=text&fbclid=IwAR3UvnrhK7ixGRKFZway-zgqncS-tGd5Brkz3NYpMZ2SB2eVx9NjkX0XWU4  Piyush Rai, Growing moustache to be more rewarding for UP cops, January 18, 2019: ''The Times of India'']
-What’s common among Chulbul Pandey, Singham and Simba? Apart from being no-nonsense cops, they all sported trademark moustaches. Now, in a bid to encourage policemen in Uttar Pradesh to grow and ‘maintain’ moustache ‘which adds gravitas to their personality’, the police department has floated a proposal to raise the ‘mooch allowance’ given to PAC personnel. Sources claimed that a proposal has been sent to increase the monthly allowances for the upkeep of the facial crops from Rs 50 to Rs 250. ADG, PAC, Binod Kumar Singh, who has sent the proposal, confirmed his recommendation about the hike, but was non-committal on the quantum.
+=House rent allowance=
+== Proof needed of rent paid to kin==
+[http://epaperbeta.timesofindia.com/Article.aspx?eid=31808&articlexml=For-tax-relief-you-need-proof-of-rent-11042017001063  Lubna Kably, For tax relief, you need proof of rent paid to kin, April 11, 2017: The Times of India]
-The move is being dubbed as an attempt to revive the old tradition of cops sporting robust moustache, that is supposed to add a dash of machismo to a policeman’s personality. “I have asked all the unit commanders to take stock of their men and highlight the fact that the ones with moustaches will be rewarded. The idea has been accepted in principle but the financial modalities are yet to be finalised,” he said.
-=Museum and memorial=
+The Mumbai income tax appellate tribunal (ITAT) denied a claim on house rent allowance (HRA) by a taxpayer.
-==2018: establishment==
-[https://epaper.timesgroup.com/Olive/ODN/TimesOfIndia/shared/ShowArticle.aspx?doc=TOIDEL%2F2018%2F10%2F22&entity=Ar01010&sk=C0E96EF2&mode=text  October 22, 2018: ''The Times of India'']
-[[File: The National Police Memorial and museum was established in Delhi in 2018.jpg|The National Police Memorial and museum was established in Delhi in 2018 <br/> From: [https://epaper.timesgroup.com/Olive/ODN/TimesOfIndia/shared/ShowArticle.aspx?doc=TOIDEL%2F2018%2F10%2F22&entity=Ar01010&sk=C0E96EF2&mode=text  Richi Verma, First police museum: An ode to fallen heroes, 2,000 yrs of policing, October 22, 2018: ''The Times of India'']|frame|500px]]
+She had paid rent in cash to her mother, but was unable to substantiate it. On the other hand, the Ahmedabad ITAT allowed the HRA exemption claimed by a taxpayer who had paid rent to his spouse.
+Given that the avenues available to save tax are limited for the salaried class, some employees try and take the `fullest' advantage of the income tax exemption available for HRA by paying rent to a family member with whom they are residing. It is another matter if the rent is actually paid to the relative, or if the rent receipts are genuine.
-''Day 1: Scores Turn Up At Memorial In Chanakyapuri''
+Where do these seemingly contrary ITAT decisions leave the taxpayer? The bottom line is it isn't illegal to pay rent to a close relative, but it carries a risk of a deeper probe by I-T officials and if genuineness cannot be proved, the claim would be denied, with attendant consequences.
-A large number of visitors thronged the National Police Memorial museum, the first one in the country dedicated to police officers, on the first day after its inauguration by Prime Minister Narendra Modi.
+The bottom line is precautions are necessary when paying rent to a relative. For instance, it is better to enter into a leave and licence agreement and make payments via banking channels. Under section 10 (13A) of the I-T Act, a salaried taxpayer can claim exemption on HRA for an accommodation occupied by him, if the property is not owned by him and he has actually incurred rent expenditure on it.
-As soon as you enter the corridor of the museum, which has five galleries focussing on different segments, you will be able to see examples of over 2,000 years of policing from the ancient till the recent times. These include the Kautilya system of law and order in 310BC, southern literature on policing and constables of Lanka.
+Amarpal S Chadha, partner, people advisory services at EY-India, says: “Payment of rent to a parent or spouse will not impact the eligibility to claim HRA exemption as long as the above mentioned conditions are met and the transaction is genuine.“ “The transaction should not be a mechanism to avoid tax,“ he stresses.
-The first thing inside the museum is the rank structure, starting with constable, head constable, leading up to director general of police and director of intelligence bureau.
+So decisions by the Mumbai and Ahmedabad ITATs -one accepting the tax exemption claim on payment of rent to a relative and the other denying it -may seem contrary , but the orders were based on specific facts in each case.
-The next installations are dedicated to the forces guarding the border and Indo-Tibetan Border Police. The central protection forces make up most of the next segment, with installations focusing on CISF, SPG, NSG, RPF, Bureau of Civil Aviation Security, CPRF and IB.
+Rent paid to spouse, HRA claim allowed: In 2013, the Ahmedabad ITAT bench in Bajrang Prasad Ramdharani's case, allowed an HRA exemption claim by the taxpayer, even though rent was paid by him to his spouse. He was living with his wife but paid her rent via bank transfers. The ITAT held that the taxpayer had fulfilled the twin requirement of occupying a house not owned by him and payment of rent.
-The displays of weapons like 5.56mm and 7.62mm rifles, .455 bore revolver and 9mm carbine are expected to be huge hit among youngsters. There are other installations about police bands and buglers and Indian police in postal stamps/philately.
+Rent paid to mother, HRA claim disallowed: But more recently , the Mumbai bench disallowed the HRA claim by Meena Vaswani who had contended that she lived with her aging mother to take care of her and paid rent to her mother in cash. While rent receipts were obtained by her, as the transaction was with her mother, she had not entered into any formal contract. Vaswani was not able to produce proof of cash withdrawals from her bank to substantiate the rental payments. Moreover, the authorities were able to prove that she was not residing with her mother, but in another apart ment nearby with her husband and daughter. The ITAT agreed with I-T authorities that the transaction was a sham to obtain a tax benefit.
-The 1,600 sq m museum takes visitors on a walkthrough describing police forces in each of the 30 states and six Union territories. There are special sections dedicated to role of women in police and the animal squads — dog squad, camel squad, mounted police (horses) and pigeon post.
+The fine print: “There is nothing in the I-T Act to prevent a salaried person from claiming exemption under section 10(13A) on the basis of rent paid to a close relative. However, section 143(2) empowers the I-T officer to examine the genuineness of such expense,“ says Ameet Patel, tax partner at Manohar Chowdhry & Associates, a CA firm. “In the normal course, a taxpayer would not pay rent to his spouse or parent. I personally would never advise any client to enter into such a transaction. It is but natural for the I-T officer to look upon such arrangements with suspicion,“ adds Patel.
-For those inclined towards research-oriented work, there is a section highlighting the role of Bureau of Police Research and Development, LNJN National Institute of Criminology and Forensic Science and National Technical Research Organisation.
+The Mumbai ITAT placed reliance on the Indian Evidence Act, 1872, and took the position that the onus of proving that the rental transaction was real lay with the taxpayer.
-The most interesting segment is the one dedicated to martyrs and outstanding police operations. Sources said this is an evolving section and more stories would be added over time.
+= Income Tax returns=
+==Who has to file income tax returns==
+[[File: Declaring investments through Form 12BB, 2016 onwards.jpg| Declaring investments through Form 12BB, 2016 onwards; Graphic courtesy: [http://epaperbeta.timesofindia.com/Gallery.aspx?id=08_05_2016_035_016_002&type=P&artUrl=3-CHANGES-IN-THE-WAY-YOU-DECLARE-INVESTMENTS-08052016035016&eid=31808 ''The Times of India''], May 8, 2016|frame|500px]]
-Currently, there are about nine stories laid out in the martyrdom section, including Hot Springs Ladakh in 1959 where three police officers were killed, Akshardham attack in 2002 (Operation Vajra Shakti), Maoists attack Dantewada in 2010, and martyrs of Uttarakhand floods in 2013. A special film on 26/11 and an installation on Vandana Malik, the first woman IPS officer martyred in 1989, are also displayed in this section.
+''Salaried persons earning up to Rs 5 lakh annually''
-Other police operations include Operation Puttur (2013), Noorbagh encounter (2003), and killing of forest brigand Veerappan. A section is also dedicated to gallantry awards and police contribution in international operations.
+'''Salaried persons earning up to Rs 5 lakh annually will have to file income tax returns: Central Board of Direct Taxes'''
-=Orderly system=
+PTI | Jul 22, 2013
-==2017: abolished in Karnataka==
-[http://epaperbeta.timesofindia.com/Article.aspx?eid=31808&articlexml=Orderly-system-finally-out-in-Karnataka-police-11032017015038  Orderly system finally out in Karnataka police, March 11, 2017: The Times of India]
+[http://timesofindia.indiatimes.com/business/india-business/Salary-earners-up-to-Rs-5-lakh-need-to-file-I-T-return-CBDT/articleshow/21248270.cms The Times of India]
-Trained constables serving as cooks, gardeners and manual workers at the homes of senior officers of Karnataka police will now be a thing of the past.The state government, through a formal notification on March 9, has finally decided to do away with the system introduced by the British in the late 19th century. “We have formally issued a government order to end the orderly system and replace it with followers,“ said P K Garg, principal secretary , home department.
-The government has authorised different arms of the state home department to directly appoint 50% of the `followers' for their eligible officials. Over 3,000 personnel work as orderlies for senior police officers.
+The CBDT had exempted salaried employees having a total income of up to Rs 5 lakh including income from other sources up to Rs 10,000 from the requirement of filing income tax return for assessment year 2011-12 and 2012-13, respectively.
+However, for the assessment year 2013-14 and thereafter, salaried persons earning up to Rs 5 lakh annually will have to file income tax returns, Central Board of Direct Taxes (CBDT) said on Monday.
-==Beards for Muslims==
-===SC’s compromise formula declined===
-[http://epaperbeta.timesofindia.com/Article.aspx?eid=31808&articlexml=Muslim-cop-refuses-to-shave-to-get-job-14042017013045  Dhananjay Mahapatra, Muslim cop refuses to shave to get job back, April 14, 2017: The Times of India]
-''' Constable Says No To SC's Compromise Formula '''
+Earlier in May 2013, the CBDT had made E-filing of income tax return compulsory for the assessment year 2013-14 for persons having total assessable income exceeding Rs 5 lakh.
-A Muslim police constable, under suspension for the last five years pending disciplinary action for not adhering to Maharashtra State Reserve Police Force's no-beard policy , on Thursday rejected the Supreme Court's offer for his reinstatement if he agreed to keep his beard only during religious periods.
+The CBDT said that the exemption has been not been extended as the facility for online filing of returns has been made "user-friendly with the advantage of pre-filled return forms".
-Zahiroddin Shamsoddin Bedade was appointed as a constable in State Reserve Police Force on January 16, 2008.While posted in Jalna in February 2012, he applied to the commandant to keep a beard.In May 2012, he was permitted to do so. But five months later, the permission was withdrawn in view of the amended guidelines on beard issued by the Maharashtra home department. Challenging the withdrawal of permission, Bedade moved the Aurangabad bench of Bombay HC. The state responded to the petition and said he could keep a beard for a temporary period as per religious requirements. Accepting the state's stand, the HC dismissed Bedade's petition in December 2012. He filed an appeal against the HC judgment in the SC in January 2013.
+These e-filed forms also get electronically processed at the central processing centre in a speedy manner, it said.
-Bedade's counsel on Thursday requested a bench of Chief Justice J S Khehar and Justices D Y Chandrachud and Sanjay Kishan Kaul to list the petition, pending for the last four years, for early hearing. After consulting his colleagues on the bench, the CJI said, “We re ally feel bad for you. You should not remain out of work. If you wish, what we can do is to allow you to join back as constable if you undertake to keep a beard only during religious periods and not otherwise. It is your choice.“ Bedade's counsel said the constable was not fine withshaving off his beard.The bench said, “Then we cannot help you.“ It also refused early hearing of the petition.Bedade had said in his petition, “ ...a citizen is free to practice his religion and the commandant of Reserve Police Force cannot interfere or violate his fundamental right.“
+For filing returns, an assessee can transmit the data in the return electronically by downloading ITRs, or by online filing.
-In a December 15, 2016 judgment on a petition filed by IAF corporal Mohammad Zubair, the SC had said, “No material has been produced before this court to indicate that the appellant professes a religious belief that would bring him within the ambit of Regulation 425(b) which applies to `personnel whose religion prohibits the cutting of hair or shaving of the face of its members'.
+Thereafter the assessee had to submit the verification of the return from ITR-V for acknowledgement after signature to Central Processing Centre.
-=Personnel issues=
+==Not filing I-T returns?Imprisonment,fine==
-==Transfers==
+''' Not filed I-T returns? You face jail & fine '''
-===Caste-based police postings are anti-secular: HC===
-[http://www.thehindu.com/todays-paper/tp-national/tp-tamilnadu/caste-based-police-postings-are-anti-secular-says-court/article19367671.ece  Mohamed Imranullah, Caste-based police postings are ‘anti secular’, says High Court, July 27, 2017: The Hindu]
+TNN | Aug 17, 2013-
-''' Refuses to enforce 1992 G.O.; fresh ruling in two days '''
+[http://timesofindia.indiatimes.com/city/mumbai/Not-filed-I-T-returns-You-face-jail-fine/articleshow/21871680.cms The Times of India]
-The Madras High Court Bench termed as “anti-secular” a Government Order issued by the Home Department on August 18, 1992 stating that police officers should not be posted in places predominantly populated by a particular caste or community to which the officers belong to.
+MUMBAI: Those defaulting in filing income tax returns are liable to prosecution, the I-T department has said.
-A Division Bench of Justices K.K. Sasidharan and G.R. Swaminathan made the observation and refused to issue a direction to the government to implement the G.O. The judges dismissed a public interest litigation petition filed in this regard and said they shall pass detailed orders on the issue in a couple of days.
+If the tax evaded exceeds Rs 25 lakh, the defaulter can be sentenced to a minimum imprisonment of six months and maximum of seven years, besides being asked to pay a fine. If the tax evasion amount is less than Rs 25 lakh, the imprisonment could range between three months to two years in addition to fine.
-Wondering if any Census had been conducted so far on caste or community-wise demographics of people living within the limits of every police station in the State, Mr. Justice Sasidharan wondered on what basis could a decision be taken by the authorities that a particular locality was dominated by people belonging to a specific caste or community.
+Recently, the additional chief metropolitan magistrate, New Delhi, sentenced a taxpayer to six months' imprisonment in one assessment year and one year imprisonment in subsequent assessment year for repeating the offence of not filing income tax returns.
-''' ‘Absurd move’ '''
+==2018: Changed format==
+[https://epaper.timesgroup.com/Olive/ODN/TimesOfIndia/shared/ShowArticle.aspx?doc=TOIDEL%2F2018%2F04%2F07&entity=Ar02812&sk=8B686481&mode=text  Changes you need to know for I-T returns, April 7, 2018: ''The Times of India'']
-Concurring with the senior judge, Mr. Justice Swaminathan said: “We claim to be a secular country and if we begin taking caste as a basis even for transfers and postings, where are we heading towards? Once a person becomes a public servant, he cannot be discriminated against on the basis of caste. It is absurd.”
+[[File: What’s different in the I-T return forms notified for the assessment year 2018-19.jpg|What’s different in the I-T return forms notified for the assessment year 2018-19 <br/> From: [https://epaper.timesgroup.com/Olive/ODN/TimesOfIndia/shared/ShowArticle.aspx?doc=TOIDEL%2F2018%2F04%2F07&entity=Ar02812&sk=8B686481&mode=text  Changes you need to know for I-T returns, April 7, 2018: ''The Times of India'']|frame|500px]]
-The G.O. issued by the then Chief Secretary T.V. Venkataraman stated that the decision on posting of police officers on caste and communal basis had been taken in order “to arrest the unhealthy trend of police officers predominantly working in their native districts leading to development of vested interests and favouritism based on caste and community considerations.”
+When you file your income tax (I-T) returns in July, you will have to fill details such as allowances that are not exempt, value of perks, and profits in lieu of salary in the new I-T return forms notified for the assessment year 2018-19.
-It went on to state: “Police officers from the rank of Inspectors and above should not be posted in their native districts. Police officers in the rank of sub-inspectors and above should not be posted in a station which is predominantly populated by a particular caste /community or a majority caste to which the officers belong.
+A one-page simplified ITR Form-1 (Sahaj) can be filed by an individual who is a resident having income up to Rs 50 lakh and who is receiving income from salary, one house property and other income (interest, etc), the I-T department said. The detailed break-up of salary was not part of ITR forms last year but has been added this year.
-== Vacancies==
+Similar details have to provided for income from house property. Gender mention requirement has been removed from ITR-1. Non-resident individuals cannot use ITR-1 to file returns and will have to use ITR-2 or -3, depending on their nature of income in India. Tax experts said this could raise their compliance costs.
-===2017/ almost ¼th of all posts===
-[[File: Vacancy in police forces, state-wise, 2013.jpg|Vacancies in police forces, state-wise: 2013; Graphic courtesy: [http://epaperbeta.timesofindia.com/Gallery.aspx?id=29_07_2015_026_028_003&type=P&artUrl=STATOISTICS-WEAKENED-FORCE-29072015026028&eid=31808 ''The Times of India''], July 30, 2015|frame|500px]]
-[[File: police vacancies.jpg| police vacancies |frame|500px]]
+The ITR-1form is similar to the one for the previous assessment year, which had been used by 3 crore taxpayers who filed their returns using this form. You will also have to provide details of all bank accounts held in the country at any time during the previous year, except dormant accounts.
-[[File: Police vacancies, statewise, in 2017.jpg| Police vacancies, statewise, in 2017; [http://epaperbeta.timesofindia.com/Gallery.aspx?id=25_01_2017_021_011_010&type=P&artUrl=SC-focus-on-police-vacancies-25012017021011&eid=31808 The Times of India], Jan 25, 2017|frame|500px]]
+The requirement of furnishing details of cash deposit made during a specified period as provided in the ITR form for the assessment year 2017-18 has been done away. This provision was added in the aftermath of the demonetisation drive.
-[[File: Total no. of policemen per one lakh of population as on Jan 1, 2016.jpg|Total no. of policemen per one lakh of population as on Jan 1, 2016; [http://epaperbeta.timesofindia.com/Article.aspx?eid=31808&articlexml=Fighting-crime-will-be-a-challenge-for-UP-13032017008039 The Times of India], March 13, 2017, Pradeep Thakur|frame|500px]]
+ITR Form-2 has also been rationalised by providing that Individuals and HUFs (Hindu Undivided Families), having income under any head other than business or profession, shall be eligible to file returns under this form. The Individuals and HUFs, having income under the head business or profession, shall file either ITR Form-3 or ITR Form-4, the department said.
-[[File: Sanctioned strengthened and vacancies, as in 2016.jpg|Sanctioned strengthened and vacancies, as in 2016; [http://epaperbeta.timesofindia.com/Gallery.aspx?id=01_05_2017_008_049_009&type=P&artUrl=States-fall-in-line-promise-SC-to-fill-01052017008049&eid=31808 The Times of India], August 8, 2017 |frame|500px]]
+“There are more than 25 key changes in current year ITR forms in comparison to last year. Some of these changes suggest that the focus of new ITR forms is to get more information from unlisted companies, trusts and taxpayers, who have opted for presumptive taxation scheme,” said Naveen Wadhwa, deputy general manager at Taxman.
-''' Nearly 1/4th of 22L police posts vacant '''
+“Further, the ITR forms also require the business entities to report the GST transaction, which would help the department to independently reconcile the transactions reported by them in income-tax returns and GST returns,” he said.
-Deeptiman.Tiwary @timesgroup.com
+In case of non-residents, the requirement of furnishing details of any one foreign bank account has been provided for credit of refund. “There is no change in the manner of filing of ITR forms as compared to last year. All these ITR forms are to be filed electronically,” the department said.
-New Delhi:
-[http://epaperbeta.timesofindia.com/Article.aspx?eid=31808&articlexml=Nearly-14th-of-22L-police-posts-vacant-18082014001038  The Times of India ] Aug 18 2014
+Any individual who is 80-year-old or more has the option to file paper returns as well as an Individual or HUF whose income does not exceed Rs 5 lakh and who has not claimed any refund in the return of income.
-Battling crime, terrorism, communal violence and internal security threats, the country's police force is grappling with as many as 5.5 lakh vacancies in a total strength of around 22 lakh. Worst still, most of these vacancies are in areas plagued by insurgency or communal tension.
+Tax experts said additional fields for penalty due to delayed filing have been added in ITR-1 and ITR-2.
-Gujarat has 40% vacancies in its police force while UP , which has been reeling under communal clashes in recent months, has more than 1 lakh vacancies, over 27% posts of its force. Chhattisgarh, racked by Maoist violence, has 30% vacancies.
+“The new Form ITR-1 (Sahaj) for assessment year 2018-19 does not request for the residential status of the individual and it is neither applicable to individuals qualifying as Not Ordinarily resident (NOR) nor to non-residents (NR). So Indian employees who have left India for overseas employment in the first half of the year and qualifying as non-resident would be required to file their India tax returns in ITR-2, even though they have annual taxable income up to Rs 50 lakh,” said Alok Agarwal, senior director at Deloitte.
-''' States Facing Insurgency Or Communal Strife Worst Affected By Staff Crunch '''
+=='Returns can be filed after I-T notice is issued'==
+[https://timesofindia.indiatimes.com/business/india-business/itat-can-file-revised-return-after-notice-issued-by-i-t/articleshow/64689438.cms  Lubna Kably, ITAT: Can file revised return after notice issued by I-T, June 22, 2018: ''The Times of India'']
-Before the budget session drew to a close, Parliament discussed ways to stem communal violence in India. Leaders of various parties threw barbs at each other, but no one talked about one issue which is critical to tackle such situations -the strength of police force.
+[[File: ITAT- Can file revised return after notice issued by I-T; The details of the case.jpg|ITAT- Can file revised return after notice issued by I-T; The details of the case <br/> From: [https://timesofindia.indiatimes.com/business/india-business/itat-can-file-revised-return-after-notice-issued-by-i-t/articleshow/64689438.cms Lubna Kably, ITAT: Can file revised return after notice issued by I-T, June 22, 2018: ''The Times of India'']|frame|500px]]
-At a time when rising crime, terrorism and communal violence call for strengthening of security , government data pointed to a large number of posts lying vacant in police forces across the country . The vacancies account for nearly one-fourth (5.5 lakh) of the total sanctioned strength of over 22 lakh. Representation of minorities in the forces has been raised repeatedly . The home ministry's data show except BSF and Assam Rifles, all paramilitary forces such as CRPF, ITBP and CISF have less than 10% representation from the minorities.
-Surprisingly, among the states with huge vacancies in police forces are those faced with insurgency or having a history of communal strife.
+'''HIGHLIGHTS'''
-Gujarat, which is hailed as a model of development but has had a history of communal violence, is the worst performer with close to 40% vacancies in its police force. Uttar Pradesh, which has been reeling under communal clashes in recent months, has the highest number of vacancies at over 1 lakh, accounting for almost 20% of all vacancies in the country .
+Tax benefit claimed by taxpayers in revised income-tax returns cannot be denied byI-T officers because the revised return has been filed after issue of notice
-It has also the ''' largest police force ''' with a sanctioned strength of over 3.6 lakh. Chhattisgarh, which sees the highest incidence of Naxal violence, is also among the worst with 30% vacancies.
+Currently, the time limit for filing a revised return is before the expiry of twelve months from the last day of the financial year or before the completion of I-T assessment, whichever is earlier
-West Bengal is another laggard with 35% vacancies.
-The ''' best performer,'''  on the basis of sheer scale of operation, is Maharashtra, another communally sensitive state. With a sanctioned strength of over 2 lakh (next only to UP), it has only 7% vacancies. Assam also has done well with only 695 vacancies, accounting for barely 1% of the sanctioned strength.
+A tax benefit claimed by a taxpayer in his revised income-tax return cannot be denied outright by an income-tax (I-T) officer merely because the revised return has been filed after issue of notice, income-tax appellate tribunal (ITAT) has said.
+However, the revised return needs to be filed within the time limits set out in the I-T Act. This order of the Mumbai bench of the ITAT, passed on June 20, will provide relief to several taxpayers. When a mistake is made in the original I-T return, such as not disclosing an income correctly or not claiming a tax deduction, section 139 (5) the I-T Act permits a revised return to be filed to correct the errors.
-===2018/ 5.4L posts vacant in India, 1.3L in UP===
+Currently, the time limit for filing a revised return is before the expiry of twelve months from the last day of the financial year or before the completion of I-T assessment, whichever is earlier.
-[https://epaper.timesgroup.com/olive/ODN/TimesOfIndia/shared/ShowArticle.aspx?doc=TOIDEL%2F2019%2F07%2F08&entity=Ar00910&sk=88091DDA&mode=text  Bharti Jain, July 8, 2019: ''The Times of India'']
-[[File: All-India police vacancies, 2016-18.jpg| All-India police vacancies, 2016-18 <br/> From: [https://epaper.timesgroup.com/olive/ODN/TimesOfIndia/shared/ShowArticle.aspx?doc=TOIDEL%2F2019%2F07%2F08&entity=Ar00910&sk=88091DDA&mode=text  Bharti Jain, July 8, 2019: ''The Times of India'']|frame|500px]]
+In this case before the ITAT, Mahesh Hinduja had declared a total income of Rs 4.91 lakh in his original return for the financial year 2010-11. He later filed a revised return declaring a total income of Rs 6.24 lakh. In this revised return he also disclosed long-term capital gains (LTCG) of nearly Rs 50 lakh. However, as he had invested 1.15 crore in a new residential house, he claimed a deduction under Section 54 of the I-T Act. Thus, capital gains were not offered for tax.
-As many as 5.43 lakh police posts were vacant across the country as on January 1, 2018, with Uttar Pradesh accounting for the highest number of vacancies at nearly 1.3 lakh and Nagaland being the only state where actual strength of police personnel exceeded the sanctioned strength.
+Under the Act, if an investment is made in another house in India, within the stipulated period of time, then the 'cost of the new house' is deducted and only the balance component of the LTCG is taxable. Thus, if the amount of capital gains is equal to or less than the cost of the new house, the entire sum of LTCG is not taxable.
-As per latest data compiled by the Bureau of Police Research and Development on vacancies in police organisations, of the sanctioned strength of 24,84,170 police personnel across all states and Union territories as on January 1, 2018, only 19,41,473 posts were occupied.
+To ensure that the taxpayer has not underreported his income or paid less tax, the I-T Act empowers I-T officials to issue a notice asking for further evidence. As the revised return was filed by Hinduja after he had received a notice under section 143(2), the I-T official rejected his claim for deduction. The litigation finally reached the level of the ITAT.
-The 5.43 lakh vacancies all over India at the start of 2018 were higher than the 5.38 lakh vacancies on January 1, 2017, but lower than the 5.49 lakh vacancies on January 1, 2016. The all-India sanctioned strength of police personnel has steadily gone up from 22,80,691 in 2016 to 24,64,484 in 2017 and 24,84,170 in 2018, as has the actual strength from 17,31,666 in 2016 to 19,26,247 in 2017 and 19,41,473 in 2018 (all figures as on January 1).
+The ITAT noted that the I-T official had rejected the revised return of income as invalid but at the same time had accepted the higher income offered in the revised return, including the LTCGs. Only the claim of deduction under Section 54 had been rejected. "The I-T official has adopted a very selective approach in respect of the revised return of income filed by the taxpayer," remarked the ITAT.
-As per the latest BPRD report regarding data on police organisations, the states with a high shortage of police personnel included UP, Bihar (50,291 vacancies as on 1.1.2018), Bengal (48,981), Telangana (30,345) and Maharashtra (26,195). Interestingly, Delhi had 11,819 posts vacant in its police force on January 1, 2018. The sanctioned strength of Delhi Police is higher than that of police in states such as Andhra, Haryana, Jharkhand, Kerala, Odisha and Telangana. UP, despite having a sanctioned 4,14,492 posts in its police, only had 2,85,540 personnel in service, leaving 1,28,952 posts vacant.
+The ITAT held that the I-T Act does not bar a taxpayer from filing a revised I-T return after issue of notice under Section 143 (2). Hinduja's case was sent back to the I-T official for examining and allowing the deduction, subject to the fulfilment of conditions prescribed for such claim.
-==Weekly holiday==
+==Wrong information in I-T returns==
-===Haryana/ 2016===
+[https://timesofindia.indiatimes.com/business/india-business/filing-wrong-itrs-by-salaried-class-will-lead-to-complaint-to-employers/articleshow/63816022.cms  April 19, 2018: ''The Times of India'']
-[http://epaperbeta.timesofindia.com/Article.aspx?eid=31808&articlexml=CM-Haryana-cops-to-get-a-weekly-off-02052016009050 ''The Times of India''], May 02 2016
-''' CM: Haryana cops to get a weekly off '''
-Chetna Choudhry
+'''HIGHLIGHTS'''
-Policemen in Haryana can now take a weekly off, a basic entitlement in any job in India except a cop's.
+I-T department has said those who file wrong ITR will be prosecuted and their employers will be intimated to take action
-Chief minister Manohar Lal Khattar made this announcement on Sunday while inaugurating the new police commissioner's office in Gurgaon, also promising that his government will fill half of the 12,000 vacancies in the state police to ease pressure and make taking a weekly break possible.
-Various states have been trying to reduce stress through a system of off days but systemic change has eluded police forces. “Research shows the lifespan of a policeman is five years shorter than an average person,“ said Haryana DGP K P Singh.“They often get into depression due to stress from work.The weekly offs will help them relax, spend time with famil,“ he added.
+The advsiory comes in the backdrop of the investigation wing of the department, in January, unearthing a racket of extracting fraudulent tax refunds by employees
-[[Category:Crime|PPOLICE: INDIAPOLICE: INDIAPOLICE: INDIAPOLICE: INDIAPOLICE: INDIA
-POLICE: INDIA]]
-[[Category:Government|PPOLICE: INDIAPOLICE: INDIAPOLICE: INDIAPOLICE: INDIAPOLICE: INDIA
-POLICE: INDIA]]
-[[Category:India|PPOLICE: INDIAPOLICE: INDIAPOLICE: INDIAPOLICE: INDIAPOLICE: INDIA
-POLICE: INDIA]]
-[[Category:Pages with broken file links|POLICE: INDIAPOLICE: INDIAPOLICE: INDIA
-POLICE: INDIA]]
-==Working hours/ days==
+The Central Processing Centre (CPC) of the department in Bengaluru, that receives and processes the Income Tax Returns (ITRs), has issued an advisory specifying such taxpayers should not "fall prey" to unscrupulous tax advisors or planners who help them in preparing wrong claims to get tax benefits.
-===2019: MP gives a weekly break===
-[https://epaper.timesgroup.com/Olive/ODN/TimesOfIndia/shared/ShowArticle.aspx?doc=TOIDEL%2F2019%2F01%2F04&entity=Ar00109&sk=415745C3&mode=text  Amarjeet Singh & Arun Singh, MP cops catch a weekly break, for some a first in 38 years, January 4, 2019: ''The Times of India'']
+Calling it a "cautionary advisory" on reports of tax evasion by under-reporting of income or inflating deductions or exemptions by salaried taxpayers, the department said such attempts "aided and abetted by unscrupulous intermediaries have been noted with concern".
-For the first time in 38 years as a police officer, sub-inspector Uma Shankar Mishra got a weekly off on Thursday and spent some quality time with his family. For hundreds of police personnel in Madhya Pradesh, it was their first compulsory weekly off — a manifesto promise that the Congress government implemented within three weeks of taking over.
+"Such offences are punishable under various penal and prosecution provisions of the Income Tax Act," it said.
-Thus far, duty was seven days a week, all year round for MP cops. They could avail of casual leaves and earned leaves, but no weekly off. The government rolled out the poll promise on Thursday, two days after its notification on New Year’s Day.
+The advsiory comes in the backdrop of the investigation wing of the department, in January, unearthing a racket of extracting fraudulent tax refunds by employees of bellwether information technology companies based in Bengaluru, in alleged connivance with a tax advisor.
-Most cops who caught the first break went on picnics and outings with children — some were so elated that they even had their kids skip school.
+The CBI recently registered a criminal case to probe this nexus.
-“It feels awesome. I stayed with my family and even tried to finish as much pending work as I could. It’s the same feeling you get when you take a first vacation. I joined the force in 1981 and this is the first time that I got a weekly off,” Mishra, 56, who is posted at Habibganj police station, told TOI. “It helps relieve stress. I have my entire family with me today. My sons have grown up and there are daughters-in-law. Today, it really felt like family.”
+The tax filing season for salaried class taxpayers has just begun with the Central Board of Direct Taxes (CBDT), that frames policy for the department, recently notifying the new ITRs.
+The one-page advisory added that if the department notices any fraudulent claims in their ITRs, such claims "may be punishable under provisions of the IT Act and this may also delay issuance of their refunds."
-'''SI Manoj Dave with his family at Sanchi on Thursday, his first off'''
+"Taxpayers, are, therefore strictly advised not to fall prey to false promises or mis-advice by unscrupulous intermediaries and submit wrong claims in their ITRs, which would be treated as cases of tax evasion.
-''One of the happiest days in my 33-year career: MP cop''
+"In the cases of such wrong claims by the government/PSU employees, reference would be made to the concerned vigilance division for action under conduct rules," it added.
-Mishra wasn’t the only one rejoicing. ASI Rakesh Sharma, who is posted at Bairagarh, said he felt relaxed after years. “I have two children and we went to our ancestral home in Narsinghgarh. We will be returning early on Friday. This was the first off day, so the children also took an off from school. It was a nice outing and it feels great,” he said, adding that all this wasn’t possible earlier as cops were required to reach their police station by 10am and on most days returned home only around midnight.
+The advisory added that the department possesses an "extensive risk analysis system" that is aimed at identifying persons who are non-compliant and aim to subvert the trust based-system "envisioned" while processing of ITRs at the CPC, which it said is automated and devoid of any human interface.
-SI Manoj Dave, who is posted at TT Nagar police station, said, “I joined police after retiring from the Army, and the conditions were nearly the same. It is after so many years of work that today I got an opportunity to relax with my family. We went to Sanchi with the children and some guests.”
+"In all such cases of high risk , the department may examine and verify the details submitted by taxpayers in their ITR subsequent to the processing of returns," it said.
-Some police personnel in the last few years of their service see the new rule as a boon. “This was one of the happiest days in my 33-year career as a policeman. I joined police when I was just 18 years old. Till now, I never got a weekly off,” said 51-year-old head constable Harish Chandra Kaurav, who is posted at Hanumanganj police station.
+It also asked tax planners and advisors to "confine their advice to taxpayers within the four corners of the IT Act" and warned that the violators will be prosecuted and such instances will also be referred to enforcement agencies like the CBI and the Enforcement Directorate (ED) for criminal prosecution.
-DIG Bhopal Dharmendra Choudhary told TOI that 425 cops posted at different police stations were given weekly offs.
+=Joint I-T liability=
+==Co-ownership of property==
+[http://epaperbeta.timesofindia.com//Article.aspx?eid=31808&articlexml=Co-ownership-of-property-doesnt-mean-joint-I-13082016021026 ''The Times of India''], Aug 13 2016
-===2019: Working hours, state-wise; working conditions===
+Lubna Kably
-[[File: Police- Working hours, state-wise; working conditions, 2019.jpg|Police- Working hours, state-wise; working conditions, 2019 <br/> From: [https://epaper.timesgroup.com/Olive/ODN/TimesOfIndia/shared/ShowArticle.aspx?doc=TOIDEL%2F2019%2F08%2F31&entity=Ar00602&sk=8CB793A4&mode=image  August 31, 2019: ''The Times of India'']|frame|500px]]
-'''See graphic''':
+If the spouse has not invested in a property and is merely a co-holder, then on sale of such property , she cannot be liable for tax on capital gains, the Mumbai IncomeTax Appellate Tribunal (ITAT) has recently ruled.
+The ITAT order will help many taxpayers as married couples are increasingly opting for property registration in joint names, even if only one of them is the investor.
-'' Police: Working hours, state-wise; working conditions, 2019 ''
+Anil Harish, an advocate specializing in real estate, said: “Co-holding of property is popular. Often the name of a spouse (say wife) is added to provide a sense of comfort, to ensure ease of succession on death of the partner or other reasons such as facilitating voting in a general body meeting of the housing society .“
-[[Category:Crime|PPOLICE: INDIAPOLICE: INDIAPOLICE: INDIAPOLICE: INDIAPOLICE: INDIA
+The ITAT gave the order on Wednesday while hearing a case of a medical professio nal, Vandana Bhulchandani.
-POLICE: INDIA]]
-[[Category:Government|PPOLICE: INDIAPOLICE: INDIAPOLICE: INDIAPOLICE: INDIAPOLICE: INDIA
-POLICE: INDIA]]
-[[Category:India|PPOLICE: INDIAPOLICE: INDIAPOLICE: INDIAPOLICE: INDIAPOLICE: INDIA
-POLICE: INDIA]]
-[[Category:Pages with broken file links|POLICE: INDIA
-POLICE: INDIA]]
-=Police stations=
+An I-T officer, based on information in his possession, noted that Bhulchandani had not disclosed the capital gains arising from the Rs 2.12-crore sale of a property in Parel that she jointly held with her husband in her I-T return for the financial year 2008-09.
-==2018: India’s ten best==
-[http://ddinews.gov.in/national/home-minister-award-countrys-best-police  January 7, 2018: ''D D News'']
+She informed the I-T officer that her husband had made the entire investment and the property was reflected in his books of accounts--from the date of purchase till the date of sale. The officer also observed that Bhulchandani's husband did not incur any I-T liability on the capital gains arising from the sale--the husband had set off the short-term capital gains arising from the Parel property sale against the short-term capital losses incurred by him on the sale of shares. Under the I-T Act, short-term capital losses can be set off against capital gains arising in the same financial year and only the surplus, if any , is taxable.
-. R.S.Puram, Coimbatore
+But the I-T officer claimed that the entire arrangement was done to avoid tax payment and held Bhulchandani liable for 50% of the total short-term capital gains arising from the property sale and added Rs 45.38 lakh to her taxable income. Short-term capital gains are taxed at the applicable I-T slab rates, which depending on an individual's income varies between 10% and 30% in addition to applicable surcharge and cess.
-. Panjagutta, Hyderabad
+Bhulchandani approached the commissioner of income-tax (appeals) who directed deletion of the addition.The I-T officer then filed an appeal before the ITAT. But the tribunal took into cognizance that the husband had bought the property , which was duly reflected in his books of accounts, and had also disclosed the details of the sale in his I-T return and thus, dismissed the appeal.
-. Gudamba, Lucknow
+“The ITAT order is clear and correct. It will provide clarity in cases of co-holding of property , where the spouse has not made any monetary investment,“ said Harish.
-. Dhupguri, Jalpaiguri
+=Notice pay deducted by employer =
+==Cannot be taxed==
+[http://epaperbeta.timesofindia.com/Article.aspx?eid=31808&articlexml=Notice-pay-deducted-by-employer-cannot-be-taxed-21042017013042  Lubna Kably, `Notice pay deducted by employer cannot be taxed', April 21, 2017: The Times of India]
-. K4, Anna Nagar, Chennai
-. Banbhoolpara, Nainital
+The Income-tax Appellate Tribunal (ITAT), which adjudicates Incometax (I-T) disputes, has held that an amount deducted by an employer for not serving out a notice period cannot be brought to tax.
-. Ghiror, Mainpuri
+In this case, two companies while settling dues had deducted salary for the notice period which the person had not served, but this deduction was not taken into account during tax assessment.However, ITAT (Ahmedabad bench) in its order dated April 18, said only salary received would be taxable, and not portions which were deducted by a company for not serving out a notice period.
-. Rishikesh, Dehradun
+Under the I-T Act, salary income is taxable on a due basis, regardless of whether it has been actually paid to an employee or not. And typically, when an employee resigns but does not serve out the notice period (provided for in the employment agreement), the employer deducts salary attributed to this period. However, I-T authorities do not consider such deductions and seek to tax entire salary due (that is, salary before allowing for such deduction). Hence, the order acquires significance.
-. Valapattanam, Kannur
+“The ITAT has recognised the concept of real income, which is well accepted under I-T laws. It held that the salary against which notice pay was adjusted had not become due, as the net amount was paid by the employer. The employee had no right to receive the portion of the salary that had been deducted, under the terms of employment. Thus, the deducted amount could not be held as taxable salary income,“ said Gautam Nayak, tax partner, CNK & Associates.
-. Kirti Nagar, Delhi
+In this case, which pertains to financial year 2009-10, N Rebello, had resigned from two companies, viz: Reliance Communication and Sistema Shyam Teleservices. Both companies had deducted a notice pay of Rs 1.10 lakh and Rs 1.66 lakh respectively and handed balance salary dues to Rebello. Accordingly in his I-T return, Rebello claimed as a deduction Rs 2.76 lakh from gross salary income, as this amount was not received. I-T authorities, in the course of assessment, denied such deduction. Commissioner (Appeals), which is the first level of appeal for a taxpayer, also upheld the action of the I-T.
-==2019: Kalu police station in Rajasthan’s Bikaner district==
+The Commissioner (Appeals) pointed out that under section 15 of the I-T Act, tax is triggered when the salary becomes due, irrespective of whether it is paid or not. Secondly , section 16 of the I-T Act does not provide for any deduction made by the employer for the notice period. Thus, the deduction of Rs 2.76 lakh claimed by Rebello was not upheld. This led to Rebello filing an appeal before the ITAT, which decided in his favour.
-[https://epaper.timesgroup.com/olive/ODN/TimesOfIndia/shared/ShowArticle.aspx?doc=TOIDEL%2F2019%2F06%2F26&entity=Ar00512&sk=3679B74C&mode=text  Bharti Jain & Dipak Dash, June 26, 2019: ''The Times of India'']
+=Overseas income=
+==Residential status determined by no. of days stayed ==
+'''See graphic.'''
+[http://epaperbeta.timesofindia.com/Article.aspx?eid=31808&articlexml=LEARNING-WITH-THE-TIMES-Earning-abroad-Know-the-01082017020021  Earning abroad? Know the tax rules, August 1, 2017: The Times of India]
-Kalu police station in Rajasthan’s Bikaner district has been ranked the best in the country on its performance in crime prevention, investigation and disposal of cases, detection, community policing and maintenance of law & order.
+[[File: Tax incidence in India.jpg|Tax incidence in India; [http://epaperbeta.timesofindia.com/Article.aspx?eid=31808&articlexml=LEARNING-WITH-THE-TIMES-Earning-abroad-Know-the-01082017020021  Earning abroad? Know the tax rules, August 1, 2017: The Times of India]|frame|500px]]
-Around 20% weightage was also given to the police station’s infrastructure and citizen feedback on performance of personnel posted, in the rankings for 2018, released by the MHA.
+''Tax Residential Status In India Is Determined By No. Of Days Stayed Here''
-The No. 2 rank goes to Campbell Bay police station in Nicobar district of Andaman & Nicobar Islands, while Farakka police station in Murshidabad, West Bengal, is third. The others in the top 10 are Nettapakkam in Puducherry; Gudageri in Dharwad, Karnataka; Chopal in Shimla; Lakheri in Bundi, Rajasthan; Periyakulam in Theni, Tamil Nadu; Munsyari in Pithoragarh, Uttarakhand and Curchorem in South Goa.
+Indians who are on deputa tion overseas or have sett led overseas -whether by way of acquiring a permanent residency such as a green card in the US, or acquiring citizenship of a foreign country -need to be aware of their tax obligations in India.
-''' Over 15k police stations covered in ’18 rankings '''
+A recent move seeking details from non-residents of foreign bank accounts in income tax (I-T) returns caused anxiety about whether India was taking steps to tax global income. The Central Board of Direct Taxes (CBDT) subsequently clarified that providing such details was optional and it was to facilitate refunds in those cases where individuals did not have a bank account in India.
-The 2018 rankings cover 15,666 police stations. Rajasthan’s Kalu police station possesses all necessary facilities for personnel, a women help desk, drinking water facilities and is equipped with wi-fi servers. Campbell Bay, too, boasts of a separate women help desk, a child-friendly room, an IT room and a proper waiting area for complainants and visitors.
+''' ''Here is a primer explaining the tax incidence for Indians overseas:'' '''
-Bengal’s Farakka police station has facilities like airconditioners, besides a gymnasium and playground that provide a comfortable environment for public-police interaction. It has CCTV cameras, fire safety facilities and oxygen cylinders.
+'''1) What determines tax residential status and why is it important?'''
-While Kirti Nagar police station in Delhi was ranked 10th best police station in the country in 2017, Kashmiri Gate — the only police station in Delhi to find a place in top 50 — in 2018 was ranked 39th in a list of 87 police stations. The 2018 survey covered of a set of police stations short listed from across India and these were evaluated on the basis of how they dealt with crime against women, crime against SC/ST and property offences. The score were calculated depending on the number of FIRs chargesheeted within 60 days.
-====Details====
+An Indian residing abroad is popularly referred to as a non-resident Indian (NRI).Under India's tax laws, the reference is to the term `tax resident' or `non-resident'. The country of origin does not determine the taxability . For instance, a UK citizen who is working in Mumbai in the subsidiary of a UK parent company could be a tax resident of India. An Indian who has migrated to Australia on March 20 may in common parlance be an NRI, but for tax purposes for the financial year 2016-17, he is likely to be tax resident of India.
-[https://timesofindia.indiatimes.com/india/at-indias-thana-no-1-chai-charcha-safai/articleshow/70019885.cms Dishank Purohit and Sukumar Mahato, February 12, 2020: ''The Times of India'']
+The number of days stay in India, as provided for in the Income Tax (I-T) Act, determines the tax residential status of an individual in India.This status, in turn, determines which income can be taxed in India and what cannot be taxed. Thus, it is important to know which category you fall into.
-It’s quarter to noon and very hot in Rajasthan’s Bikaner district. A young man, hassled and profusely sweating, enters a police station with an urgent plea. The duty officer gives him a glass of water and as he jots down Shravan Kumar’s complaint, chai is served.
+An individual is considered to be a tax resident of India (also referred to as Indian tax resident) for a financial year (say FY 2016-17) if (i) he has been in India for 182 days or more during that FY, or (ii) he has been in India for 60 days or more during that particular FY and has lived in India for at least 365 days or more during the four years immediately preceding.
-Most police stations in India are notorious for their indifference and chronic reluctance to register complaints. But things are different at Kalu police station, recently adjudged the best after a survey of 15,666 thanas across the country by the Union home ministry. A visit to the station, 90km from the district headquarters, makes it obvious why Kalu is so special.
+Indian citizens taking up employment abroad or crew members of an Indian ship who have left India during a FY or persons of Indian origin (PIOs) visiting India need to note that the period of 60 days mentioned in the above clause is replaced by 182 days. (In the non-tax realm, the PIO scheme has been merged with Overseas Citizen of India scheme and it provides for visa-related relaxations.) Thus, if an Indian citizen has left for overseas deputation during FY 2016-17, he will be considered as a tax resident of India for the year ended March 31, 2017, if he has been in India for 182 days or more during 2016-17. Only , tax residents of India (ROR) are subject to tax on their global income, which would include interest income on overseas bank accounts.
-The premises are squeaky clean and there is no stench or paan stains. The complex itself includes a badminton court, a separate help desk for women and a tastefully done waiting space — carved entirely from wood to resemble a hut — which is used by warring families to mediate in private.
+'''2) Apart from resident and non-resident, is there any other definition in the I-T Act which determines tax in India?'''
-Inside, tech-savvy cops look at footage from eight CCTVs installed at key points in the area. “If a suspicious vehicle catches my attention, I check its details on the Raj Cop app on my mobile phone. The entire staff has this app on their phones. We are a digitised police station, be it E-FIR or updating chargesheets online,” SHO Devi Lal told TOI.
+Yes, the I-T Act also defines a `Resident but not ordinarily resident' (RNOR). An RNOR qualifies as a tax resident of India during a particular FY, but satisfies the following criteria: (i) He has been a non-resident of India in nine out of 10 immediately preceding fi nancial years; or (ii) has during the last seven years immediately preceding that particular FY been in India for a period of 729 days or less.
-To put complainants at ease, officers have been told to offer tea and water to them. ASI Girdhari Lal said sometimes food is also provided to people who come from afar. Infrastructure and citizen feedback were important parameters in the home ministry study to rank police stations. Kalu topped this. Other criteria included performance metrics such as crime prevention, law and order, community policing and disposal of cases.
+To illustrate: A PIO visits India during 2016-17 and stays for more than 182 days.This would make him a tax resident of India. However, during the last seven years immediately preceding FY201617, he has been in India for 729 days or less, he will be regarded as an RNOR.
-Kalu police is swift to act. But this cuts both ways. Sometimes phoney callers send cops on a wild-goose chase. Pointing to a heavily drunk man sitting in a corner, duty officer Ghanshyam said, “He called the control room last night and said somebody was plotting to kill him. A PCR van was sent to his house. When we asked him who was threatening him, he laughed.” Another constable recalled a call from an angry farmer a few weeks ago who wanted them to register a missing complaint since his axe had gone missing.
+'''3) What is the tax incidence in India of a tax resident (ROR), RNOR and nonresident?'''
-As dusk falls and a storm covers everything in a thin layer of dust, Devi Lal reminds his staff of the morning drill. “We will be here at 6.30 am to pick up garbage from the compound and wipe the furniture. We take turns to mop the floor. This is also why everyone here is in good shape,” Devi Lal chuckled. Indeed, none of the 25 cops present at the station has a protruding belly.
+As mentioned earlier, an ROR is subject to tax on his global income in India. RNOR and non-residents are generally subject to tax in India only in respect of India source income (that is, income received, accruing or arising in India or deemed to be received, accrued or arisen in India).
-The transformation of Kalu has its roots in an incident in 2018. Former SHO Parmeshwar Suthar, then 25, was invited as a guest to a sports tournament where he spotted a contestant bleeding from his foot. He found that glass from a liquor bottle dumped in the ground had injured the player. That disturbed Suthar. “The next day there was a police patrol van near the ground driving away those drinking in public,” said Jagdish, a local resident. Several other reforms followed. CCTVs were put up and many booked under Section 510 (misconduct in public by a drunken person) of the CrPC.
+Salary received in India or for services provided in India, ren tal income from a house property in India, capital gains on sale of assets in India -be it shares or house property , income from fixed deposits or savings bank account in India are instances of income which would be taxed in the hands of not just tax residents of India, but also RNORs and non-residents.
-Community policing is Kalu station's strong suit as cops regularly attend weddings and ceremonies in the area. Major tip-offs now come straight from locals who alert their beat constables; cops rarely have to depend on informers. To handle family discords, 28 community liaison groups (CLG), with elderly citizens and local teachers as members, have been set up.
+NRIs should also note an additional point. They are allowed to hold NRE and FCNR accounts (where foreign earnings are deposited) with banks in India. However, under the I-T Act, interest against such deposits is tax-free.However, interest earned on an NRO account (where Indian source income is deposited) will be taxable in India.
-Another police station that featured among top ones in the country was Farakka in Murshidabad, West Bengal. About 290 km from Kolkata, Farakka station is air conditioned, Wi-Fi-equipped and has a gymnasium and playground which are open to the public. Three months ago, free computer coaching was started. Around 102 students were enrolled in the first batch and the second batch that starts in July will have 93 students. Happy at the success of the initiative, the state government has now decided to pay for trainers.
+'''4) What is the role of tax treaties?'''
-Uday Shankar Ghosh, inspector-in-charge, Farakka police station, said, “A direct benefit has been the flow of information from common people. This has helped us stop nearly 80 child marriages. We have also received vital information on Fake Indian Currency Note (FICN) racketeers and arms and ammunition smugglers.” Cops have clamped down on crime with an iron fist.
+If an individual is a tax resident of one country but has a source of income from another country , complexities can arise. Tax treaties ensure that the same income is not taxed twice. Broadly , tax treaties provide that the country from which the income is generated has the right to tax it.
-In 2018, FICN seizures increased to Rs 52.7 lakh from Rs 5.4 lakh in 2017. While nine arms and 13 rounds of ammunition were seized in 2017, it increased to 32 illegal firearms and 100 rounds of ammunition in 2018.
+Double taxation is avoided in two ways -either the country of non-tax residence exempts the income earned in the foreign country , or the country of tax residence grants a foreign tax credit for the taxes paid in the other country . India has entered into tax treaties with a hundred-odd countries, including US, UK, Canada, Australia and Germany , which are popular destinations for the Indian diaspora.
-===How police stations were shortlisted===
+For instance, if an expat is a US tax resident, he will pay tax on his global income in the US (this would include tax on India source income). However, for taxes paid in India -say tax withheld at source against fixed deposits in a bank in India -he will get a foreign tax credit (a tax credit for the taxes paid or withheld in India against the US taxes payable by him). This will lower the US tax outgo.
-The survey was carried out in 15,666 thanas across the country
+=Permanent account number (PAN)=
-Initial part of the survey included measures adopted by the police station to control crime
+==2016: PAN mandatory for…==
+[http://epaperbeta.timesofindia.com/Article.aspx?eid=31808&articlexml=SMART-THINGS-TO-KNOW-04012016022029 ''The Times of India''] Jan 04 2016
-Detection and disposal of cases, action against anti-social elements and community policing among others featured on the list
+''' Mandatory PAN requirements '''
-Infrastructure of the station and approachability of personnel deployed were considered
+With effect from January 1, 2016, it has become mandatory to quote the permanent account number (PAN) for all transactions above `2 lakh for all modes of payment.
-Feedback was taken from complainants on services provided along with shopkeepers and pedestrians
+Only bank accounts opened under the Pradhan Mantri Jan Dhan Yojana have been exempted. But all other bank accounts and all kinds of deposits will have to quote PAN.
-How police officials tackled law and order situation in the area was considered
+PAN will be mandatory for purchase of prepaid cards worth `50,000 or more in a year. Pur chase of gold jewellery worth above `2 lakh (`5 lakh current limit) would also need PAN.
-[[Category:Crime|PPOLICE: INDIA
+The limit for quoting PAN for sale or purchase of real estate property has been raised to `10 lakh from `5 lakh.
-POLICE: INDIA]]
-[[Category:Government|PPOLICE: INDIA
-POLICE: INDIA]]
-[[Category:India|PPOLICE: INDIA
-POLICE: INDIA]]
-==2020: Nongpok Sekmai no.1==
+PAN needs to be quoted only for a cash payment for a hotel or restaurant bill and foreign travel or purchase of forex of `50,000 (current limit `25,000).
-[https://epaper.timesgroup.com/Olive/ODN/TimesOfIndia/shared/ShowArticle.aspx?doc=TOIDEL%2F2020%2F12%2F04&entity=Ar00505&sk=BD192716&mode=text  December 4, 2020: ''The Times of India'']
+==2016: Required for transactions above Rs 2 lakh==
+[http://epaperbeta.timesofindia.com/Article.aspx?eid=31808&articlexml=New-PAN-rule-hurts-sale-of-luxury-goods-22062016001073 ''The Times of India''], Jun 22 2016
+John Sarkar
-Manipur dist police station rated India’s best
+'''New PAN rule hurts sale of luxury goods'''
-New Delhi:
+Mails are flying thick and fast at most luxury stores across the country as harried sales staff face a tough time trying to coax people to part with their permanent account number (PAN) details. By the looks of it, they are not accomplishing much, resulting in poor sales of luxury goods.
+Furnishing of PAN details has been made mandatory by the government for any transaction above Rs 2 lakh in a bid to weed out black money .
-Nongpok Sekmai police station in Thoubal district of Manipur has been rated as the best-performing one in the country for 2020. The all-women police station Suramangalam in Tamil Nadu’s Salem occupies the second slot and Kharsang police station in insurgency-hit Changlang district of Manipur is third.
+However, the move has deterred many wealthy shoppers from spending lakhs of rupees on luxury products such as handbags, watches and writing instruments. “Our bags start at Rs 2 lakh.Sales at our store have been hit badly because our regular customers have stopped coming,“ said a senior executive of a French luxury brand. Earlier, most of them would pay in cash. But now, instead of giving their PAN details, they are opting to shop abroad.“
-Others in the list of top 10 among the country’s total 16,671 police stations are Jhimil (Bhaiya Thana) in Surajpur, Chhattisgarh; Sanguem in South Goa; Kalighat in Andaman & Nicobar Islands; Pakyong in East District of Sikkim; Kanth in Moradabad in UP; Khanvel in Dadra & Nagar Havel; and Jammikunta Town in Karimnagar, Telangana, in that order.
+Most people in the luxury industry TOI spoke to complained about similar issues.For instance, at a store selling high fashion French leather goods in the capital, executives are tearing their well-groomed hair out to convince customers to reveal their PAN card number.
-Home minister Amit Shah said a vast majority of the shortlisted police stations are located in small towns and rural areas.
+“We have taken a hit of several lakhs of rupees over the last few days but have not been able to figure out a way around the problem,“ said an executive at the store.“The other day , a lady who had come to buy a bag said she wouldn't risk getting her husband into trouble by furnishing his PAN card details.Eventually , she walked out without buying anything.“
-''' Most thanas that made the cut from rural areas: Shah '''
+Nikhil Mehra, CEO of Genesis Group that has marketing and distribution arrangements for several luxury brands such as Jimmy Choo, Giorgio Armani, Em porio Armani and Tumi among others and is the JV partner for Canali, Burberry and Villeroy and Boch in India, said consumer sentiment here has been affected by this ruling. “However, for most of our brands it is not a challenge because prices are within the Rs 2 lakh limit,“ he said.
-Home minister Amit Shah said a vast majority of the shortlisted police stations are located in small towns and rural areas. This is also true for police stations that have been ranked among the top 10. “This indicates that while availability of resources is important, what matters more is the dedication and sincerity of our police personnel to prevent and control crime and serve the nation.”
+The Indian luxury market has been pegged at Rs 16,300 crore in 2015 by market research firm Euromonitor and is expected to touch Rs 39,000 crore by 2020, with an annual growth rate of 19%.
-This year’s survey, a home ministry spokesperson said, was challenging as it was difficult to access police stations located in remote areas due to various restrictions on movement imposed in view of the Covid-19.
-The rating of police stations was done on the basis of data analysis, direct observation and public feedback. The parameters for short-listing the police stations in the initial stage of the survey included property offences; crimes against women; crimes against weaker sections; and missing persons, unidentified found persons and unidentified bodies. The last parameter was introduced this year.
+=Perquisites=
-As a result, 75 police stations were short-listed and then the top 10 among them picked, based on 19 parameters. While this process was given 80% weightage, 20% weightage was given to infrastructure of the police station, approachability of police personnel and feedback of citizens.
+==Interest-free loan from employer is taxable==
+[https://epaper.timesgroup.com/Olive/ODN/TimesOfIndia/shared/ShowArticle.aspx?doc=TOIDEL%2F2018%2F06%2F12&entity=Ar01311&sk=78264D41&mode=text  Lubna Kably, Interest-free loan from employer taxable: ITAT, June 12, 2018: ''The Times of India'']
-[[Category:Crime|P
-POLICE: INDIA]]
-[[Category:Government|P
-POLICE: INDIA]]
-[[Category:India|P
-POLICE: INDIA]]
-=Punishment for wrongdoings=
+Interest-free loans extended by an employer are taxable in the hands of an employee as a perquisite, the Income Tax Appellate Tribunal (ITAT) has said. However, the valuation of the taxable benefit or perquisite, which forms part of the salary income of the employee, cannot be done in an ad-hoc manner and has to be computed as per the prescribed formula under the Income Tax Act, the tribunal said.
-==2014, 2015: erring Delhi policemen seldom face penal action==
-[http://epaper.timesgroup.com/Olive/ODN/TimesOfIndia/shared/ShowArticle.aspx?doc=TOIDEL%2F2017%2F11%2F24&entity=Ar00818&sk=FBF09BE2&mode=text  Sidharth Bhardwaj, ‘Errant cops seldom face penal action’, November 24, 2017: ''The Times of India'']
+In this case, Neha Saraf had obtained an interest-free loan from her employer, Teej Impex, a private company. During the assessment for the financial year 2010-11, her argument that no employeremployee relationship existed fell through because the company had deducted tax at source, or TDS, on the salary of Rs 24 lakh paid to her.
-Litigation came to a conclusion in just 16% of the cases that came up for trial in 2014 and in 11% in 2015. Even among the 1,73,847 cases heard in 2014, 37,534 were those that had been sent up that year from the 1,36,313 pending from earlier years, while of the 1,90,66 cases heard in 2015, 44,079 were from among the 1,46,587 pending cases.
+Thus, the I-T officer assessing her case estimated 15% interest on the loan and added Rs 43.8 lakh to her income as a perquisite value of the interest-free loan.
-Data accessed via RTI by NGO Praja showed that the conviction rate of the courts in crime cases across the country underwent a marginal rise between 2014 and 2015, with 47% of the cases ending in a judgment in 2015 against 42% in 2014 across the country. The number of acquittals in the country’s courts saw a steep drop, with 10,146 people being acquitted in 2015 compared with 14,671 in 2014. The data suggested that 84% of the cases in 2014 and 89% of cases in 2015 that were sent for trial are awaiting a verdict.
+In the next stage of appeal, the commissioner of I-T (appeals) held that the I-T officer had rightly treated the value of interest-free loan as a taxable perquisite in the hands of the employee. However, he noted that the valuation cannot be done in an ad-hoc manner.
-Praja’s data also revealed that erring police personnel in Delhi seldom faced serious penal action. “There were 12,913 complaints received against police officers in 2015 in Delhi, out of which 346 were declared false. Only 145 criminal cases were registered against police officers, but nobody got arrested,” the report said. However, 292 cops were given “major punishment” as part of the departmental action initiated against them in 2015.
+According to I-T Act rules, a perquisite value is based on the rate charged by SBI on April 1 of the financial year in which the employee received the loan.
-The report suggested that there was a 10% shortfall in the available workforce of the police, with 8,091 positions of the sanctioned 84,685 lying vacant in 2017. The biggest deficit was in the rank of additional commissioner of police, with 58% of the posts unfilled. There were significant shortages also at the level of police Inspectors (2%) and police constable (10%), important because such shortages at these levels directly affected investigation of cases and law and order in Delhi, the report said.
+The commissioner (appeals) reworked the valuation and arrived at a lower perquisite value of Rs 20.65 lakh.
-The data also highlighted the fact that despite the Supreme Court passing an order and recommending the formation of a state security commissioner in September 2006, this had not been carried out. “What is more of concern is that instead of accepting that there is a problem in the city administration and governance mechanism, only promises are being made. An example of this is that since the formation of the AAP government, the proposed state security commission has not been formed,” Anjali Srivastava, assistant manager of Praja Foundation, said.
+The commissioner (appeals) also rejected Saraf ’s contention that as interest on the loan given to her had already been disallowed in the hands of the company, it cannot be treated as a perquisite in her hands. Unhappy with the outcome, Saraf filed an appeal with the ITAT. However, in its order dated May 16, the ITAT upheld the order of the commissioner (appeals).
-Praja’s report said that there was a 10% shortfall in the available workforce of Delhi Police, with 8,091 positions of the sanctioned 84,685 lying vacant in 2017
+In the context of interestfree loans from employers, Puneet Gupta, director of people advisory services at Ernst and Young, says, “The employer is liable to treat an interest-free loan as a taxable perquisite and TDS is to be deducted from salary. An exemption is available if the loan is provided for medical treatment of specified diseases or where the loan amount is petty and does not exceed Rs 20,000.”
-=Recruitment=
+“Employees must ensure that the employer deducts TDS on the total salary income, which includes the perquisite value of interest-free loans. If TDS is not deducted, the employee faces several consequences. Not only does he or she have to pay income tax on the perquisite value of the loan, but interest will also be payable for late deposit of advance tax. Further, if such taxable perquisite value is not reported in the I-T returns, the I-T department may levy penalty ranging from 50% to 200% of the tax payable on the under-reported income,” Gupta adds.
-== Undertrial can be MP, but not policeman: SC==
-[http://epaper.timesofindia.com/Default/Scripting/ArticleWin.asp?From=Archive&Source=Page&Skin=TOINEW&BaseHref=CAP/2013/07/04&PageLabel=15&EntityId=Ar01500&ViewMode=HTML The Times of India] 2013/07/04
-Undertrial can be MP, but not cop: SC
+=Pharmaceutical companies=
+== Freebies for doctors deductible==
+[https://epaper.timesgroup.com/Olive/ODN/TimesOfIndia/shared/ShowArticle.aspx?doc=TOIDEL%2F2020%2F08%2F03&entity=Ar00807&sk=1485E10E&mode=text  Pharma co’s expenses towards freebies for docs can be claimed as deductions: ITAT, August 3, 2020: ''The Times of India'']
-‘A Candidate Wishing To Join The Police Force Must Be Of Utmost Rectitude’
+Tax issues surrounding the ‘nexus’, between pharma companies and doctors, where the latter are sponsored for conferences, at times replete with sightseeing and gala dinners, or expensive gifts, refuse to die down. Judicial precedents, in several cases, have been in favour of pharma companies with the costs relating to such freebies being allowed as business deductions.
-Dhananjay Mahapatra TNN
+The Mumbai bench of the Income-tax Appellate Tribunal (ITAT) recently passed an order in favour of Medley Pharmaceuticals, an Andheri based company.
-New Delhi: A person facing murder trial can contest elections, become an MP and even a minister in the Union government, but pendency of a criminal case will not entitle him to a job in the lowest rung of a police force.
+The crux of the tax issue dealt with re-opening of the assessment for the FY 2011-12, owing to a change of opinion by the succeeding I-T officer. Based on technicalities such as no fresh ground material available on record, the re-opening was quashed by the ITAT.
-This is the gist of the Supreme Court’s ruling, which set aside concurrent judgments of the Central Administrative Tribunal and the Delhi HC allowing a person, who was booked for rioting and assaulting but was acquitted after reaching a compromise with the victims, to join Delhi Police as constable.
+However, the ITAT also went on to analyse the allowability of sales promotion expenses aggregating to Rs 6.2 crore for the pharma company. A break-up showed that Rs 2.4 crore was towards product reminders; conference expenses and travel costs ran into Rs 2.7 crore and additional doctors’ expenses were of Rs 1.1 crore.
-A bench of Justice G S Singhvi and Justice Ranjana P Desai on Tuesday said, “A candidate wishing to join the police force must be a person of utmost rectitude. He must have impeccable character and integrity. A person having criminal antecedents will not fit in this category.”
+The ITAT made some pertinent observations regarding the code of conduct issued by the Medical Council of India (MCI) and a circular issued by the Central Board of Direct Taxes (CBDT).
-Justice Desai added, “Even if he is acquitted or discharged in the criminal case, that acquittal or discharge order will have to be examined to see whether he has been completely exonerated in the case because even a possibility of his taking to a life of crime poses a threat to the discipline of the police force.”
+It said that the MCI code of conduct, which debars freebies, is meant to be followed by the medical fraternity alone and does not apply to pharma companies. Amended on December 10, 2009, the code prohibits medical practitioners and their professional associations from taking any gift, travel facility, hospitality, cash or monetary grant from the pharmaceutical and allied health sector industries.
-Mehar Singh and his aides had assaulted a bus conductor in 2004 on being asked to purchase tickets. They also broke window panes and assaulted passengers who came to the conductor’s rescue. But the aggressors reached a compromise with the victims and were acquitted by a trial court in 2009, the year in which Delhi Police advertised for recruitment of constables.
+The CBDT circular dated August 1, 2012 says that any expense in providing freebies in violation of the Medical Council’s code shall not be allowed as a business deduction.
-Mehar Singh cleared the physical test, written exam and interview. But the screening committee, which examined his antecedents, did not recommend his appointment as constable.
+The ITAT said that the MCI code of conduct, which debars freebies, is meant to be followed by the medical fraternity alone and does not apply to pharma companies
-Singh challenged it successfully before CAT after which Delhi Police’s appeal was rejected by the high court. But additional solicitor general Rakesh Khanna argued before the SC that the acquittal was not as honourable as was being projected. Accepting his argument, the bench said, “The police force is a disciplined force. It shoulders the great responsibility of maintaining law and order in society. People repose great faith and confidence in it. It must be worthy of that confidence.”
+[[Category:Economy-Industry-Resources|I
+INCOME TAX INDIA: LAWS]]
+[[Category:India|I
+INCOME TAX INDIA: LAWS]]
+[[Category:Law,Constitution,Judiciary|I
+INCOME TAX INDIA: LAWS]]
-==SC: Crime case acquittal no clean chit for recruitment==
+= Property (house): income from=
-[https://epaper.timesgroup.com/Olive/ODN/TimesOfIndia/shared/ShowArticle.aspx?doc=TOIDEL%2F2018%2F01%2F10&entity=Ar01509&sk=2F6942FF&mode=text  Dhananjay Mahapatra, January 10, 2018: ''The Times of India'']
+==2018: losses from house property for TDS capped at ₹2 lakh==
+[https://epaper.timesgroup.com/Olive/ODN/TimesOfIndia/shared/ShowArticle.aspx?doc=TOIDEL%2F2018%2F01%2F08&entity=Ar01917&sk=334D3C1E&mode=text  CBDT caps losses from house property for TDS at ₹2 lakh, January 8, 2018: ''The Times of India'']
-''Upholds Chandigarh Police Move Against 5 Who Passed Tests''
+An employer can set off loss declared by an employee under the head ‘income from house property’ only up to Rs 2 lakh against such employee’s salary to arrive at the amount of tax to be deducted at source (TDS).
-Acquittal in a criminal case is no guarantee for getting into the police force despite clearing all tests prescribed for the post, the Supreme Court said while upholding the Chandigarh administration’s decision to slam the door on five people on this ground.
+The amendment to section 71 of the Income-Tax (IT) Act applies for the first time from 2017-18. If an employee has declared a loss higher than Rs 2 lakh, the excess is to be ignored for calculating the amount of TDS, which is deducted monthly from salary income, the Central Board of Direct Taxes (CBDT) has said.
-The five had cleared tests involving physical efficiency, physical measurement, written and interview and were looking forward to a career in Chandigarh Police as constables. They had voluntarily declared that they had been acquitted from charges involving Section 323 (causing physical hurt to others) and Section 506 (criminal intimidation) of IPC by a trial court that gave them the benefit of doubt.
+In a circular issued last month, the CBDT has pointed out key amendments to the I-T Act, which employers who are responsible for TDS against salary income should consider. Issue of such a circular is an annual feature.
-However, the screening committee headed by a senior superintendent of police found them unsuitable for police job because of their involvement in criminal cases. The five moved the Central Administrative Tribunal (CAT), which ordered the Chandigarh administration to employ them in its police force. The Punjab and Haryana HC upheld the CAT decision and said there was no concealment of criminal antecedents. The Chandigarh administration appealed against the HC decision in the SC.
+An employee is permitted to provide details of other income (say, bank interest) that he or she has earned during a year, together with the tax that has already been deducted (say, TDS deducted by the bank). Similarly, losses can also be declared by the employee. However, only loss from house property can be considered by the employer, as this is allowed to be set off against salary income. The employer has to take into consideration the details of income and loss from house property declared by the employee for the purpose of computing TDS.
-A bench of Justices R Banumathi and U U Lalit said, “Acquittal in a criminal case is not conclusive of the suitability of the candidates for the concerned post. If a person is acquitted or discharged, it cannot always be inferred that he was falsely involved or he had no criminal antecedents. Unless it is an honourable acquittal, the candidate cannot claim the benefit of the case.”
+Making such a declaration is not mandatory. However, if an employee does so, he or she may not have to separately compute and pay advance taxes, as the employer will be deducting tax at source on the employee’s taxable income based on the details given (and not just salary income).
-Writing the judgment for the bench, Justice Banumathi said entering the police service required a candidate to be of good character and integrity and have clean antecedents.
+If an employee had let out his or her house (which typically was the case when a second house was owned), the corresponding interest on home loan is fully allowed as a deduction. This, in many cases, led to a significant loss under the head ‘income from house property’ (which is mainly the difference between the rental income and the interest on the home loan)
-“While deciding whether a person involved in a criminal case has been acquitted or discharged should be appointed to a post in a police force, nature of offence in which he is involved, whether it was an honourable acquittal or only an extension of benefit of doubt because of witnesses turned hostile and flaws in the prosecution are all aspects to be considered by the screening committee for taking the decision whether the candidate is suitable for the post.”
+==2018: owner to decide which property is self-occupied==
+[https://epaper.timesgroup.com/Olive/ODN/TimesOfIndia/shared/ShowArticle.aspx?doc=TOIDEL%2F2018%2F06%2F08&entity=Ar01511&sk=5EB565B9&mode=text  Lubna Kably, Owners of more than one house get tax leeway, June 8, 2018: ''The Times of India'']
-The bench said the procedure followed by the screening committee could not be faulted as it was with the object of ensuring that only persons of impeccable character entered the police force. Moreover, there was no allegation of mala fide against the committee’s decision, it added, and set aside the decisions of the high court and CAT.
-=Resignation/ abandoning of duties=
+The Mumbai bench of the Income-tax Appellate Tribunal (ITAT) upheld the right of a taxpayer to change the selection of a house property that would be treated as self-occupied and having a ‘nil’ annual value. Consequently, the notional rent from such a house will not be taxable.
-==Personnel can’t leave forces at will: SC==
-[https://epaper.timesgroup.com/olive/ODN/TimesOfIndia/shared/ShowArticle.aspx?doc=TOIDEL%2F2019%2F07%2F04&entity=Ar01208&sk=1C0E225D&mode=text  AmitAnand Choudhary, July 4, 2019: ''The Times of India'']
+In other words, if the taxpayer has in his Income-tax return declared a particular house property to be self-occupied, he can at a later stage during actual tax assessment of his case substitute this with another house property owned by him, which perhaps is in a more posh location. By doing so, it may be possible for him to reduce the notional rent that has to be offered for tax and lower his I-T outgo.
-The Supreme Court said defence force personnel cannot be allowed to quit job at will in the middle of service, saying it will adversely impact operational preparedness of the armed forces and held an airman in IAF guilty of breaking rules by applying for a bank job without informing the authorities.
+Under the I-T Act, where an individual owns more than one house, he can only treat any one of his properties as ‘self-occupied and having a nil annual value’. Annual value, in general terms, is the notional rent that the property would ordinarily fetch.
-A bench of Justices D Y Chandrachud and Hemant Gupta rejected the plea of the IAF personnel who contended that the Constitution has given him a fundamental right to practise any profession and his right cannot be infringed upon by Air Force rules.
+The other house properties, even if they are not given out on rent, are assumed to have been let out and I-T is payable on the notional rent. Certain deductions such as municipal taxes are permitted. Further, a standard deduction of 30% is allowed and I-T is payable on the balance component.
-“A person who has been enrolled as a member of the Air Force does not have an unqualified right to depart from service at his or her will during the term of engagement. Such a construction, as urged on behalf of the appellant, will seriously impinge upon manning levels and operational preparedness of the armed forces. With the rapid advancement of technology, particularly in its application to military operations, there has been a reconfiguration of human and technological requirements of a fighting force. The interests of the service are of paramount importance,” the bench said.
+To mitigate I-T liability, taxpayers opt to choose that house property as ‘self-occupied and having a nil annual value,’ which would otherwise have had the highest adjusted annual value and would entail a higher I-T outgo.
-The court passed the order on an appeal filed by Amit Kumar Roy challenging IAF’s decision not to issue ‘No Objection’ certificate to him to join as probationary officer in a bank. He joined the force in 2004 and applied for the bank job in 2010 and appeared for written exam and interview without taking mandatory permission from IAF. After selection for the job, he approached Armed Force Tribunal which directed IAF to issue provisional NOC and subsequently he joined the bank.
+“Sometimes, in cases where a dispute arises with I-T authorities on the annual value of a property, the taxpayer, since he has the choice, may change his selection during assessment proceedings, if it is advantageous to do so,” says Gautam Nayak, tax partner at CNK & Associates.
-In 2012 Air Headquarters cancelled the provisional NOC and he was directed to join the force after which he approached the apex court. The court came to the conclusion that there was no illegality in cancellation of NOC as he violated Air Force rules but said that no purpose would be solved to direct him to join the force after eight years and asked him to pay Rs 3 lakh to the government within two months for violating the rules.
+“It’s high time the government reconsiders this taxation. With housing finance being so readily available now, it is not only the rich people who have more than one house,” adds Nayak.
+In an ITAT case , Venkatavarthan N Iyengar had three properties at Juhu, Santacruz East and Vasai. In his I-T return, he had declared his Vasai property as ‘self-occupied and having a nil annual value’. Later during course of tax assessment, he opted to substitute the Vasai with Juhu.
-=Social media outreach=
+The I-T officer held that making a change during tax assessment is not permissible and the dispute reached the ITAT. Iyengar submitted that the I-T Act gives an option to the taxpayer to determine which of his properties he should treat as self-occupied.
-==Bangalore, Kolkata, Mumbai==
-[https://epaper.timesgroup.com/Olive/ODN/TimesOfIndia/shared/ShowArticle.aspx?doc=TOIDEL%2F2018%2F01%2F07&entity=Ar01902&sk=B03C0B31&mode=text  Sharmila Ganesan, Khaki’s killing it on social media, January 7, 2018: ''The Times of India'']
+The ITAT, in its order of May 23, observed, “The I-T Act nowhere states that the option of selecting a self-occupied property, once exercised, cannot be changed.”
-''Mumbai police has wit, Kolkata woos with lit, while Bengaluru’s mastered the meme. Sunday Times takes a look at how police departments across the country are notching up followers''
+= Property (immovable): owned abroad=
+== Notional rent to be included in income tax return==
+[http://epaperbeta.timesofindia.com/Article.aspx?eid=31808&articlexml=SRK-must-pay-tax-on-notional-rent-from-23032017011046  Lubna Kably, SRK must pay tax on notional rent from Dubai villa, rules ITAT, Order Set To Affect People Who Own Second Homes Abroad, March 23, 2017: The Times of India]
-Actor Varun Dhawan made the Mumbai police use a word that belongs in Star Wars. Soon after their official Twitter account reprimanded Dhawan for leaning out of his car to take a selfie with a fan, it went on to describe the coincidence of a photographer being present at the same signal to capture the act as ‘galactic’. Now we don’t know about Shashi Tharoor but the word did give former crime journalist Sunchika Pandey a complex. “It came from the department,” says the sari-clad content consultant for Mumbai police about the word that popped up during her customary weekly meeting with the city police commissioner DD Padsalgikar and joint commissioner (law and order) Deven Bharti. “They’re both such good writers, I’ve told them I will hire them when they retire,” says Pandey whose unofficial department alias is ‘Twitter madam’.
-Two years after Twitter madam helped Mumbai police launch its official handle, @Mumbaipolice has crossed a fan base of 4 million, higher than that of any other police department in the world including the NYPD. Its 20-odd-strong social media team has reeled in the youth by using witty pop culture references from movies like Sholay, Netflix shows like Narcos, and trending topics from Justin Beiber to iPhone X. In their recent hashtag #ifvillainswereinMumbai, a rather despondent-looking Joker from Batman answers the question ‘Why so serious?’ with two words: “Mumbai police”. Memes apart, the most significant impact of Mumbai cops’ digital footprint, according to Pandey — who is also churning out Marathi memes for Thane and Pune and Hindi messages for the massive UP police force now — is the way “it is changing how city police departments interact with citizens.”
+Actor Shah Rukh Khan has to include notional rent from his Dubai villa in his income tax return filed in India, the Income Tax Appellate Tribunal (ITAT) has ruled.
-'''KOLKATA SERIAL HIT'''
+Khan had submitted to the ITAT that under the IndiaUAE tax treaty , income from immovable property in Dubai would be liable to tax in the UAE and, therefore, he had not offered it to be taxed in India.
-That Rabindranath Tagore is the name of perhaps the best ice-breaker in Kolkata is a cliche that now comes with police verification. As part of their official bid to appeal to bookish Bengalis, Kolkata’s Additional Commissioner of Police (III) Supratim Sarkar recently handpicked and wrote a set of weekly special stories — both in Bengali and English — detailing how some sensational cases were cracked on the city police’s Facebook page. By the time the dozen stories were wound up, the online audience pestered the admin for more, forcing Sarkar to dig into the archives and publish the exploits of Bengali revolutionaries. One week, cops posted the story of how the great poet Rabindranath Tagore lost his favourite pen, and was asked to appear as a witness in a court to reclaim it. Finally, a magistrate had to intervene and revoke the order. The series became so popular that several online readers have asked the cops to do a book. “We wanted everyone to know that we have a literary side and a compassionate side,” says Sarkar.
+The ITAT rejected his contention. However, the two member ITAT (Mumbai) bench of Amit Shukla and G S Pannu added: “Credit for taxes paid in the UAE, if any , would be allowed as per the law.“
-'''BENGALURU TRAFFIC GETS INTERNET TRAFFIC'''
+The ITAT directed the I-T officer to rework the final liability, which would arise in the hands of the actor, under the head “income from house property“. This decision will have wide ramifications for taxpayers having a second home overseas, especially those who fall under the jurisdiction of the Mumbai bench of the ITAT.
-Predictably, each city’s timeline lays bare its unique warts. Bengaluru’s chronic traffic problem, for instance, is hard to miss on its Twitter handles (@BlrCityPolice and @blrcitytraffic). In fact, at least 25,000 of 1.5 lakh vehicles that Abhishek Goyal, deputy commissioner of police (traffic), Bengaluru East, has towed this year were thanks to photos shared on Twitter. The official handles are now the preferred place for people to point out traffic violations. Not too long ago, a mother who discovered that the driver of her son’s school bus was inebriated, tweeted about it. Within an hour, the traffic police detained him.
+“In many instances, I-T authorities have been holding that rental income from overseas residential property (or deemed rental income, if the house is not let out) would be taxable in India. This ITAT decision will strengthen their argument,“ said Shuddhasattwa Ghosh, partner, people advisory services, at EY India.
-The spike in online traffic is caused by some well-intentioned wordplay. For instance, this New Year’s Eve, @BlrCity-Police posted this tweet: ‘Drink and drive, and we’ll show you a few new bars.’
+Under the I-T Act, if a person has two residential properties, only one can be treated as “self-occupied“ and exempt from I-T. The other is taxed under the head “income from house property“ based on the annual value (in general terms deemed rental value or notional rent). Certain deductions are allowed to arrive at the taxable income from the house property , such as a 30% standard deduction and also municipal taxes paid on such property .
-'''HYDERABAD WOMEN FIRST'''
+The Bollywood actor had been gifted a villa in Dubai and he obtained possession of it on June 18, 2008. For the financial year 2008-09, the I-T officer estimated the deemed rental value to be Rs 96 lakh. After allowing for a 30% standard deduction, he sought to tax Rs 67.2 lakh in the hands of Khan.
-On these platforms, women’s safety appears high on the priority list. The twoyear-old social media unit of the Hyderabad police — which is active on Facebook, Twitter (@hyderabadpolice), Instagram, its own YouTube channel and public interface apps such as Hawk Eye and Lost Report — uses its Twitter handle to educate women about SHE teams: a dedicated wing for sexual harassment complaints. On various occasions, investigations have been ordered into social media complaints by women about harassment by cab drivers, fellow motorists or co-passengers. Arrests have also been made in some cases.
+According to Ghosh, tax treaties entered into with UK, US and Canada contain similar wordings as the India-UAE tax treaty . “So they should be doubly careful and must include the rental income in the I-T return they file in India. They can claim a credit for taxes paid in such other country , as per the provisions of the relevant tax treaty,“ Ghosh added.
+= Property (NRI): purchase of=
+==Miscalculation risks==
+[https://epaper.timesgroup.com/Olive/ODN/TimesOfIndia/shared/ShowArticle.aspx?doc=TOIDEL%2F2018%2F08%2F08&entity=Ar03014&sk=D6AFA64F&mode=text  Lubna Kably, Buying non-resident’s flat involves TDS risks, August 8, 2018: ''The Times of India'']
-'''UP 360-DEGREE MAKEOVER''
-Uttar Pradesh has 131 official Twitter handles, including one for each of its 75 districts. Of these, @Uppolice gets nearly 2,000 complaints, ranging from land revenue disputes to sexual harassment, daily. In fact, the state’s large-scale grievance redressal efforts recently prompted a visit from UK’s Scotland Yard to the Noida police social media cell.
+''Miscalculations May Land Purchaser In Jail''
-Then there’s the instance — UP is the only state where the railway police also has a Twitter handle — where on receiving a molestation complaint from a train, cops immediately arrested all 50 hoodlums at the next station, says Rahul Srivastav, additional SP and public relations officer to DGP.
+As income tax sleuths intend to keep a close eye on property purchases from non-residents to ensure buyers have correctly deducted tax at source, extra vigilance is required. If there’s no tax deducted at source (TDS), or wrongly deducted, the I-T department takes action against the buyer and not the nonresident seller. In addition to interest and penalties, the I-T Act prescribes imprisonment of 3 months to 7 years.
-Last year, gauging the volume of complaints, Twitter offered UP police a software called Twitter Seva —which assigns a unique ID to each complaint, prioritizes tweets and lets the department know when a complaint has been resolved. The efforts have paid off.
+An issue that arises is whether the TDS is to be computed against the sale value or the income that is taxable in India in the non-resident’s hands. The latter is technically correct, but has its own challenges. This issue and solutions are analysed below.
-“There has been a 360-degree turnaround in our image,” says Srivastav (@UPcoprahul), adding that UP police have not only won four awards for its Twitter Seva but also been invited to train other government departments.
+== TDS risks: 1==
+[https://epaper.timesgroup.com/Olive/ODN/TimesOfIndia/shared/ShowArticle.aspx?doc=TOIDEL%2F2018%2F08%2F08&entity=Ar03014&sk=D6AFA64F&mode=text  Lubna Kably, Buying non-resident’s flat involves TDS risks, August 8, 2018: ''The Times of India'']
-Curiously, the UP police also boasts a handle called @UPPviralcheck where any fake news attributed to @Uppolice is demolished. It was here that people discovered that the cop who was thrashed by a couple for fining a politician’s relative earlier this year wasn’t from UP as videos allegedly suggested, but, in fact, from MP.
-For all their efforts to connect, though, the cops must face their share of trolls. While in Mumbai, the focus on women’s issues sometimes makes “unhappy men write to us asking why we don’t address their complaints,” says Pandey. In Hyderabad, a politician named Amjed Ullah Khan famously ran an online campaign titled ‘Teach what you preach’ in which he tagged the city police in a series of posts showing photos of cops riding bikes without helmets. That action was subsequently taken against the defaulting police personnel was no galactic coincidence.
+'''How to deduct TDS?'''
-Additional reporting by Dwaipayan Ghosh in Kolkata, Rajiv Kalkod in Bengaluru and Mahesh Buddi in Hyderabad
+Indore-based chartered accountant Shweta Ajmera says, “According to section 195, which relates to TDS in case of non-residents, tax is deductible on ‘any sum chargeable to tax’. Thus, in case of sale of immovable property by a nonresident, tax is to be deducted on the capital gain amount.”
-'''MUMBAI POLICE'''
+Chartered accountant Pankaj Bhuta adds, “In the case of GE India Technology Centre, the Supreme Court held that the TDS obligation is limited to the appropriate proportion of income chargeable under the I-T Act, which forms part of the gross sum of money payable to the non-resident. This means that the tax deductible at source is not on the entire sale value but merely on the net income arising from the sale. However, for computing the capital gains against which TDS is to apply, the buyer will have to depend on details provided by the seller — say, the period of holding of the property — and this adds to the risk. Second, if the seller wishes to invest in specified assets, be it a residential property in India or bonds, and save tax on capital gains, it is difficult for the buyer to ascertain that the investment will be made and conditions specified met.”
-Satire Meets Sensitivity @MumbaiPolice — which boasts 4.1m followers — rains puns and pop culture jokes to disseminate social messages. Besides satire, its social media cell is also lauded for its sensitive and efficient handling of complaints and timely quelling of rumours
+Gains arising from sale of property held for more than two years (the period of holding was three years prior to the Finance Act 2017) are longterm capital gains subject to tax at the rate of 20% plus applicable surcharge and cess. Typically, non-residents sell their property after this holding period is completed.
-'''BENGALURU CITY POLICE'''
+But a reader got a notice for short deduction even as he had deducted TDS at 20% plus applicable surcharge and cess. The penalties cost him nearly Rs 2 lakh. The reason: The buyer has to deduct TDS at the slab rate where the property is sold by the non-resident within two years of its purchase. The slab rate of 30% applies for taxable income above Rs 10 lakh.
-Traffic-stopping Pop Culture Memes
+To do: The buyer or seller can approach the I-T department to obtain a withholding tax order (referred to as a certificate), which gives a finality on the TDS amount. KPMG India tax partner Parizad Sirwalla says, “But this is time-consuming and requires prior planning.” Bhuta adds, “If the application for a withholding order is submitted after payment of advance deposit, such application is rejected (according to CBDT’s circular 774 dated March 17, 1999). Thus, parties should be careful.”
-Receives and resolves a daily ambush of traffic complaints on both @BlrCityPolice and @blrcitytraffic while simultaneously drawing social media traffic by mining popular TV shows and movies for public service punchlines
+In the absence of such a certificate, it is safer for the buyer to deduct TDS at 20% on the sale value and not the capital gains of the non-resident seller. Generally, this results in the non-resident seller having to seek a refund from the I-T department.
-'''KOLKATA POLICE'''
+This is the concluding part of our series on purchasing property from non-residents
-Bengali X-Files
+== TDS risks: 2==
+[https://epaper.timesgroup.com/Olive/ODN/TimesOfIndia/shared/ShowArticle.aspx?doc=TOIDEL%2F2018%2F08%2F07&entity=Ar02904&sk=58B3493A&mode=text  Lubna Kably, August 8, 2018: ''The Times of India'']
-‘Kolkata Police’ and ‘Kolkata Traffic police’ which were launched on Facebook last year — appeal to the city’s literati by detailing sensational police cases from the past
+[[File: Who is a non-resident Indian?.jpg|Who is a non-resident Indian? <br/> From: [https://epaper.timesgroup.com/Olive/ODN/TimesOfIndia/shared/ShowArticle.aspx?doc=TOIDEL%2F2018%2F08%2F07&entity=Ar02904&sk=58B3493A&mode=text  Lubna Kably, August 8, 2018: ''The Times of India'']|frame|500px]]
-'''HYDERABAD POLICE'''
+Individuals who have purchased property from non-residents find themselves grappling with several income tax-related challenges. To begin with, it’s difficult to determine the seller’s tax status (whether he is a resident or non-resident in India according to the I-T Act). This is crucial, as tax is required to be deducted at 20% (in come cases even higher) for property purchased from a non-resident, as opposed to 1% where the seller is a tax resident. In case of wrong deduction, penalties apply, and the buyer can face prosecution.
-Multiple Avatars
+When property is purchased from a resident, according to section 194-IA, TDS obligations kick in only if the sale consideration is above Rs 50 lakh. In case the purchase is from a non-resident, according to section 195, TDS obligations apply in all cases irrespective of the quantum.
-Not only is the Hyderabad police active on Facebook, Twitter (@hyderabadpolice) and Instagram but it also has its own YouTube channel, not to mention public interface apps such as Hawk Eye and Lost Report
+In its July 24 edition, TOI reported that the Central Board of Direct Taxes (CBDT) — in its action plan — asked I-T cadre to closely = : watch : property : purchases from non-residents.
-'''UP POLICE'''
-Post-Truth World
+'''Lay buyers get confused between residency as per tax laws, nationality'''
-Rebuts fake news attributed to @Uppolice through a separate handle called @UPPviralcheck
+Following this, TOI received many emails from readers. The issues faced by them and action points are analysed in a twopart series.
-[[Category:Crime|PPOLICE: INDIA
+How to identify if the seller is a non-resident?
-POLICE: INDIA]]
-[[Category:Government|PPOLICE: INDIA
-POLICE: INDIA]]
-[[Category:India|PPOLICE: INDIA
-POLICE: INDIA]]
-=Staffing pattern=
+Lay buyers often get confused between residency according to tax laws, and nationality. Pune-based advocate Harshal Jadhav says, “Typically, the non-resident seller does not reside in Pune, where the property is situated. Communication with the prospective buyers are largely via email or telephone. In some cases, the seller sends the property documents along with a PAN card or Aadhaar card and agrees to meet on a pre-fixed date to complete the sale. These cards mislead the buyer who is a layman. Even otherwise, unless clearly disclosed by the property seller, it becomes difficult to determine his residential status.”
-==Minority representation==
-Among paramilitary forces, while Assam Rifles has the highest representation of minorities at 16.16%, ITBP has the lowest at 6.18%. CRPF , deployed for controlling communal clashes, has 9.24% representation from minorities.
-==Women in police, national average 6%/ 2014==
+To do: Anil Harish, an advocate specialising in real estate, says, “The first step is to directly ask the seller if he is a non-resident. One can also probe further and ask for his I-T returns or passport details to determine the number of days stayed in India during the relevant period. As sellers may be reluctant to share these documents, the prospective buyer could ask the seller to get a certificate from his chartered accountant of his being a tax resident in India. An undertaking in writing must also be obtained from the seller of his being a resident (this can be part of the sale deed or a separate document). But such declarations will not offer absolute protection.”
-[[File: Police personnel per lakh of population in 2014.jpg|Police personnel per lakh of population in 2014; Graphic courtesy: [http://epaperbeta.timesofindia.com/Gallery.aspx?id=13_08_2015_009_029_002&type=P&artUrl=STATOISTICS-13082015009029&eid=31808 ''The Times of India''], August 13, 2015|frame|500px]]
-[[File: Women in the Police forces of Indian states, presumably in 2014-15.jpg| Women in the Police forces of Indian states, presumably in 2014-15; Graphic courtesy: [http://epaperbeta.timesofindia.com/Gallery.aspx?id=07_12_2015_010_011_002&type=P&artUrl=STATOISTICS-FORCE-MULTIPLIERS-07122015010011&eid=31808 ''The Times of India''], December 7, 2015|frame|500px]]
-[http://epaperbeta.timesofindia.com/Article.aspx?eid=31808&articlexml=Dire-lack-of-women-in-police-national-average-30082015024045 ''The Times of India''], Aug 30 2015
+Typically, if the seller has given a power of attorney to someone else, it’s likely he is a non-resident, caution experts. KPMG India tax partner Parizad Sirwalla says, “Tax residency in India is determined based on the number of days the individual has spent in India in the relevant financial year as well as a look-back period of four financial years (see box). Stay details in India of the seller, such as copies of passport covering this period, should be obtained.
-[[File: Percentage of women in police force, top 5 states.jpg|Percentage of women in police force, top 5 states; Graphic courtesy: [http://epaperbeta.timesofindia.com/Article.aspx?eid=31808&articlexml=Dire-lack-of-women-in-police-national-average-30082015024045 ''The Times of India''], Aug 30 2015|frame|500px]]
-Anahita Mukherji
-'''Dire lack of women in police, national average a mere 6%'''
+However, if the transaction is carried out in the earlier part of the financial year, it is slightly difficult to determine residential status conclusively — here, a more conservative approach may be adopted by the buyer.”
-In 2014, Maharashtra had more women in its police force than any other state or Union territory in India.But its 17,957 policewomen formed a minuscule 10.48% of the state's total police force.Delhi ranks 12th in the list, at 7.15%, well below Chandigarh's top tally of 14.16%.
+Jadhav adds, “Buyers should get the agreement or sale deed verified by an advocate to safeguard their interests from disputes arising out of arrears of income tax liabilities, if any.”
-The Maharashtra numbers are particularly depressing because the state was the first to introduce 30% reservation for women in police 44 years ago. Compared to the national average of 6%, Maharashtra's numbers are good and it is far ahead of neighbour Gujarat, where women make up only 3.64% of the police force.
+= Property, purchase of =
+==Buyers won't lose I-T exemptions by adding kin name==
+[http://epaperbeta.timesofindia.com/Article.aspx?eid=31808&articlexml=Flat-buyers-wont-lose-I-T-sop-by-01052017013019  Lubna Kably, Flat buyers won't lose I-T sop by adding kin name, May 1, 2017: The Times of India]
-The data forms part of a study by Commonwealth Human Rights Initiative. Among the top four are Chandigarh, Tamil Nadu, Andaman and Nicobar Islands and Himachal. Assam is at the bottom of the list, preceded by Tripura, J&K, Meghalaya and Nagaland. When analysing quotas for women in the police force, it's important to remember that they can only be filled based on attrition and are dependent on retirements.Otherwise recruitments would be more than the posts sanctioned. For the time being, as a stop-gap arrangement in order to achieve its goal of 30% women in the police force, Maharashtra could recruit only women to fill vacant posts,“ says Devika Prasad of the Commonwealth Human Rights Initiative, who co-edited the report on policewomen in South Asia, released earlier this month.
-Despite the reservations, Maharashtra is likely to take many more decades to achieve the 30% target, she estimates. Prasad points out that the reserved positions are largely at the lowest level in the force's hierarchy and it takes women a long time to rise up the ranks.
+'''Purchaser Should Get Full Tax Benefits: Tribunal'''
-The officers, officers belonging to the Indian Police Service, are largely men. Prasad feels more women should be encouraged to join the police force at all levels. “Currently , they're con centrated in the lower ranks,“ she adds.
+The Income Tax Appellate Tribunal (Mumbai bench) has, in a recent order, held that if the entire investment for purchase of a new residential house, along with stamp duty and registration charges, has been made by an individual, he should get the full benefit of the relevant income tax (I-T) exemptions.
-Mumbai-based Dolphy D'Souza, convenor, Police Reforms Watch, believes there is no political will in Maharashtra to achieve the state's target for women in the police forces. Policewomen are expected to visit the homes of those who call on 103, the state helpline for women. “How is this physically possible when the number of women in the force is so limited?“ he asks.
+Merely because the name of a close relative has been added to the newly purchased property (or in other words the new property is jointly held), it should not result in dilution of the I-T exemption in the hands of the individual who has paid for it.
-He believes that in the wake of growing crimes against women and children, there is a dire need for more women in the police force. He points to the recent case of a woman domestic help from Mumbai who alleged torture at the hands of policemen last week.
+The I-T Act, under various sections, offers tax benefits where sale proceeds (such as sale of residential house) are reinvested in certain assets (such as another residential house or eligible investments).
-“Numerous studies have shown that the presence of policewomen in large numbers exerts a general psychological pressure on policemen to behave better with citizens. This is a point that even the former DGP of Kerala, Jacob Punnoose, mentioned at the release of the CHRI report this week: he said custodial deaths in Kerala decreased with the increase of women in the police force“ says D'Souza.
+For instance, under section 54, if on sale of a residential house, the sale proceeds are reinvested in another house in India, within the stipulated period of time, to the extent of such reinvestment an exemption is available in computing capital gains. The taxable component of capital gains is reduced to the extent of the reinvestment, which results in a lower capital gains tax outgo.
-==Tooth-to-tail (officers: constables) ratio==
+If you look up the name plates in your housing society, you may find that several flats are jointly held.
-===As in 2015===
-[http://epaperbeta.timesofindia.com/Article.aspx?eid=31808&articlexml=STA-TOI-STICS-INDIAS-MOST-TOPAND-BOTTOM-HEAVY-11102016009034   INDIA'S MOST TOP- AND BOTTOM-HEAVY POLICE FORCES Oct 11 2016, The Times of India]
-[[File: Tooth-to-tail ratio (officers constables) in state police forces.jpg| Tooth-to-tail ratio (officers: constables) in state police forces |frame|500px]]
+The flat may be in the joint name of a couple, or owned with a parent or a sibling. The co-owner may or may not have contributed towards this purchase and the name of such a relative may have been added for the sake of convenience, such as to prevent family disputes arising in the future.
-Various commissions/ committees for police reforms have suggested that the tooth-to-tail ratio of the police force (ratio of officers ranked assistant sub-inspector and above to constables & head constables) should be 1:4 for better policing. Data on the actual strength of police shows that out of 36 states and UTs, only five have this ratio under the recommended level
+“The ITAT has upheld the well-established criteria that ownership for I-T purposes is determinant upon who has made the payment and to what extent. Very often, the name of a non-earning spouse, or parent or even sibling is added when a new property is purchased to offer a security net to them.
-See graphic.
+In those cases, where they have not contributed towards the purchase, the I-T benefit, such as on re-invest ment should flow entirely to the buyer who had made the purchase. This aspect has been reiterated by the ITAT,“ explains Gautam Nayak, tax partner, CNK & Associates.
-==Transgender as SI: Madras HC approves recruitment/ 2015==
+In this case, decided by the ITAT on April 27, the taxpayer, Jitendra V Faria, had on sale of a residential house incurred capital gains of Rs.43.01 lakh. He reinvested Rs 42.66 lakh in a new residential house and claimed this amount as exempt under section 54 of the I-T Act. On the deficit balance, of Rs 35,000 odd, he paid capital gains tax amounting to Rs 7,376.
-[http://epaperbeta.timesofindia.com/Article.aspx?eid=31808&articlexml=Transgender-overcomes-all-odds-to-be-cop-06112015013014 ''The Times of India''], Nov 06 2015
-A Subramani
+However, in the course of assessment, the I-T official noted that the new house that had been purchased was held in the name of two persons -Jitendra Faria with his brother Kunal Faria.Thus, the I-T official held that the exemption claimed by Jitendra Faria should be restricted to Rs 21.33 lakh (which is 50% of the amount claimed as exempt by him under section 54).
-Blazing a trail through intricate governmental and judicial processes, the gritty transgender K Prithika Yashini has finally realised her dream of donning the uniform of sub-inspector of police in the Tamil Nadu police department. The Madras high court on Thursday declared that she is entitled to be appointed subinspector of police. Calling for creation of separate category to accommodate transgenders in employments, the judges further said: “We are sure that by the time the next recruitment process is carried out, TNUSRB would have taken corrective measures for including the third gender as a category .“
+When the matter reached the ITAT, the tribunal noted that the name of brother was included only for the sake of convenience. It observed that even the I-T official had confirmed that the entire cost of the new house was borne only by Jitendra Faria. Thus, the ITAT set aside the decision of the I-T authorities and decided in favour of the taxpayer.
-Though Tamil Nadu police already has three transgenders on its rolls as constables, Yashini will be the first transgender-officer in the force.
+=Property, immoveable, sale of=
+== Tax benefits for investment in new house==
+[https://epaper.timesgroup.com/Olive/ODN/TimesOfIndia/shared/ShowArticle.aspx?doc=TOIDEL%2F2020%2F11%2F24&entity=Ar01020&sk=42DA49D5&mode=text  November 24, 2020: ''The Times of India'']
-Commending additional advocate-general of Tamil Nadu P H Arvindh Pandian for his fair stand on the issue and Yashini's counsel Bhavani Subbarayan, the first bench comprising Chief Justice Sanjay Kishan Kaul and Justice Pushpa Sathyanarayana hoped that Yashini would carry out the duties of a police officer with “dedication and commitment to advance the cause of other transgenders“.
+Sold 2 houses to invest in new one? You can get tax benefits
-The judges, who helped her clear all hurdles along the way , said: “The social impact of such recruitment cannot be lost sight of, as it would give strength to the case of transgenders. Yashini must reach the finish line, and not be stopped and disqualified in the middle.“
+Mumbai:
-Yashini was born K Pradeep Kumar and remained a male till she completed her post-graduate diploma in computer application from the Bharathiar University in Coimbatore. Though she had felt sweeping changes in her gait and body even during her school days, Yashini said that she could gather courage to meet a doctor only after joining a college.
+The Mumbai bench of the Income Tax Appellate Tribunal (ITAT), in its recent order, has clarified that when a taxpayer sells two residential properties and re-invests in one residential house, he or she is entitled to tax benefit under section 54.
+This ruling will be very helpful to several individuals. With work from home here to stay for longer than initially anticipated, several families are in search of larger flats. Investment professionals explain that several salaried employees had invested in a second house. Many are now selling the flat in which they currently reside and their second house, to finance a larger apartment.
-=Temples, police inside=
+In this case heard by ITAT, Sabir Mazhar Ali had sold two flats in Mumbai’s Bandra area (one of which was jointly owned with his wife) and purchased another residential flat in Bandra. During the financial year 2010-11, he had claimed deduction under section 54 of the Income Tax (I-T) Act, as he had purchased a new house, within the time period specified.
-== Kashi Vishwanath Temple: dhoti kurta instead of khaki uniform==
-[https://epaper.timesgroup.com/Olive/ODN/TimesOfIndia/shared/ShowArticle.aspx?doc=TOIDEL%2F2018%2F03%2F28&entity=Ar01716&sk=BBFAD0B1&mode=text  Rajeev Dikshit, Cops inside Kashi temple dump khaki for dhoti kurta, March 28, 2018: ''The Times of India'']
+Under this section, if the longterm capital gains arising on sale of a house are reinvested in another house in India, within the stipulated period of time, then to the extent of such investment, the taxable component of capital gains is reduced. This results in a lower tax outgo. Thus, if the entire amount of long-term capital gains is reinvested, there is no tax payable. This section requires that within a period of one year before or two years after the date of transfer of the old house, the taxpayer should acquire another residential house. Or the taxpayer should construct a residential house within a period of three years from the date of transfer of the old house.
+However, as Ali had sold two residential properties and reinvested in one residential house, the Income Tax officer had concluded that he was not eligible for claiming the benefit under section
+. In the course of litigation, as the Commissioner (Appeals) ruled in favour of the taxpayer, the I-T department filed an appeal with the ITAT.
-For eight constables deployed inside Kashi Vishwanath Temple (KVT) for crowd management, there was a slight change in the work protocol on Monday evening. Before reporting for duty at the sanctum sanctorum, they all went to the nearby police control room, shed their khaki attire and put on dhoti kurta to get ready for their four-hour shift.
+In its order, the ITAT states that the provisions of section 54 do not prohibit the taxpayer from selling more than one residential house and reinvesting in a residential property. Thus, it set aside the grounds of appeal raised by the tax department and ruled in favour of the taxpayer.
-In a bid to project a ‘friendlier image’, Varanasi police have made the innermost part of the famous temple ‘khakifree’. The need was felt by senior officers as ‘men in uniform’ have often been criticised for ‘pushing’ devotees while managing crowds inside the temple. A change in attire, it is believed, would give the cops a ‘volunteer look’ and save them from criticism, said a police officer.
+[[Category:Economy-Industry-Resources|IINCOME TAX INDIA: LAWS
+INCOME TAX INDIA: LAWS]]
+[[Category:India|IINCOME TAX INDIA: LAWS
+INCOME TAX INDIA: LAWS]]
+[[Category:Law,Constitution,Judiciary|IINCOME TAX INDIA: LAWS
+INCOME TAX INDIA: LAWS]]
-One of the constables said: “Devotees thought we were pandas (priests).” Deployment of police to manage crowd in the sanctum sanctorum is a must as most devotees tend to stay inside for a long time despite long queues outside. Police are often criticised for ‘using force’ to keep devotees moving, an act which has drawn attention ever since some TV channels started telecasting the darshan live some time ago.
+=Raids=
+==In Tamil Nadu==
+[https://timesofindia.indiatimes.com/city/chennai/why-i-t-raids-are-dubbed-as-tools-of-political-vendetta/articleshow/61620536.cms  A Subramani, Why I-T raids are dubbed as tools of political vendetta, Nov 13, 2017: ''The Times of India'']
-SSP R K Bhardwaj told TOI, “We tried to explore options for changing the image of the police among Lord Vishwanath’s devotees, before deciding to change the attire of policemen deployed at KVT. It was decided that the constables on temple duty would wear kurta with dhoti or pyjama, while women constables have been asked to turn out in traditional dress like salwar-kurta. There are about 24 constables in the list of sanctum sanctorum duty. A separate fund has been released for each constable to buy the new attire.”
+[[File: Income Tax, search- facts and definitions.jpg|Income Tax, search- facts and definitions <br/> From: [https://timesofindia.indiatimes.com/city/chennai/why-i-t-raids-are-dubbed-as-tools-of-political-vendetta/articleshow/61620536.cms  A Subramani, Why I-T raids are dubbed as tools of political vendetta, Nov 13, 2017: ''The Times of India'']|frame|500px]]
-=Traffic police=
+'''HIGHLIGHTS'''
-== State-wise strength of traffic police/ 2015 ==
-[http://epaperbeta.timesofindia.com/Article.aspx?eid=31808&articlexml=For-20-crore-population-UP-has-only-3656-28092015008040 ''The Times of India''], Sep 28 2015
-[[File: Traffic police, State-wise strength.jpg|Traffic police, State-wise strength; Graphic courtesy: [http://epaperbeta.timesofindia.com/Article.aspx?eid=31808&articlexml=For-20-crore-population-UP-has-only-3656-28092015008040 ''The Times of India''], Sep 28 2015|frame|500px]]
-Dipak Dash
+Income tax is a central agency reporting to the present government.
-'''For 20 crore population, UP has only 3,656 traffic cops'''
+After search and seizure, comes inquiry when I-T dept's investigation wing sends an appraisal report to an assessing officer who sends a notice to the assesse asking him to file returns for the past six years.
-With around 20 crore people, Uttar Pradesh is the most populous state in the country . It also has the highest number of registered vehicles, but it only has 3,656 policemen to deal with traffic management. It's not much different in other states since the focus of police departments is on “body-related crime“ rather than violation of traffic norms, which claim more lives.
+Uniformity in post-search formalities, apolitical body to give directions, say experts.
-Admitting that the number of traffic policemen was way too less for UP's size, additional director general (traffic) Anil Agrawal said it was much lower than what big cities like Delhi or Mumbai have today .“We have started the process to increase this strength to 16,000. You need to have adequate manpower to meet the requirement,“ he added. Many states including Andhra Pradesh, Telangana Karnataka, Haryana, Hima chal Pradesh, Odisha and Pun jab have submitted details of the number of traffic police men to a Supreme Court-ap pointed committee on road safety . “Most traffic policemen are deployed in the main cities and particularly to manage VIP routes. So, you hardly find traffic policemen in small cities or towns and other roads.Lack of policemen and no fear of getting caught encourage traffic violators,“ said a road transport ministry official.
+It needed some grit for beleaguered AIADMK leader TTV Dhinakaran to cry 'tax politics'+ while he was still in the eye of an income tax storm. He did it nevertheless, repeating terms such as 'vendetta' and 'witch-hunting' by the Centre.
-Sources said the SC-appointed panel has asked the home ministry to set norms for sanction and deployment of traffic policemen in states  either proportionate to population or to the number of registered vehicles. TOI has learnt that the Bureau of Police Research and Development (BPRD) has recommended a formula for deployment of traffic policemen. This will be placed before the SC panel so that the proposal can be pursued.
+But, when DMK's working boss M K Stalin sought to know the fate of earlier high-voltage income tax searches in Tamil Nadu, one sat up and took note, because each such case had travelled a distinctly different path, showing inconsistency in approach.
-==Shortage of staff in the states/ 2017==
+On April 22, 2016, Karur-based contractor C P Anbunathan's houses and godowns were searched by income tax officials, and among the seized materials were about Rs5 crore in cash and currency-counting machines.
-[https://epaper.timesgroup.com/Olive/ODN/TimesOfIndia/shared/ShowArticle.aspx?doc=TOIDEL%2F2018%2F10%2F16&entity=Ar01806&sk=1FF5229C&mode=text  Dipak Dash, October 16, 2018: ''The Times of India'']
+Three trucks found carrying Rs570 crore were intercepted by election commission officials near Tirupur in poll-bound Tamil Nadu in mid-May 2016. The trucks remained parked in an open ground for days before being taken to RBI vaults, but income tax officials did not show even an academic interest in the drama.
-Uttar Pradesh requires an additional 45,000 traffic policemen, while Rajasthan needs 13,277 more and Maharashtra needs to add 3,000 men in uniform to its present strength to deal with the growing number of vehicles, according to an assessment done for the Supreme Court Committee on Road Safety.
+In July-August 2016, I-T officials searched gutka godowns and fished out a diary containing names of officials and politicians on the payrolls of gutka wholesalers. A chief commissioner of income tax personally met the then TN chief secretary and handed over details. Though nothing came of it, the fact remains that the I-T department took pains to ensure action against suspects.
-Teams of IIT-Delhi, DIMTS and TERI carried out the assessment based on the norms set by the Bureau of Police Research and Development. The report mentions UP has the maximum shortfall among the eight states that were covered in this assessment. The largest state has about 3,248 traffic cops and needs to increase the strength by at least 10 times.
+In December 2016, the office of the then TN chief secretary was searched by I-T officials, with armed men from central police organisation standing guard outside. The prime target was sand mining baron Sekhar Reddy. Sensational searches at a minister's house and recovery of 'proof' of distribution of Rs89 crore as bribe to voters of R K Nagar constituency took place on April 7, 2017. On the basis of IT report, the election commission cancelled the bypoll.
-According to the findings, Karnataka needs about 2,700 additional traffic policemen and Kerala has a shortage of about 1,300 traffic cops.
+R K Nagar election-time search was huge, till more than 1,500 taxmen swooped on about 180 premises related to V K Sasikala+ , the jailed aide of former chief minister Jayalalithaa.
-Road transport ministry officials said while increasing the strength of traffic police for visible enforcement is a necessity, but the focus should be on IT-based traffic enforcement. “Across the world we see how technologies including intelligent traffic system are used extensively to manage traffic and to catch the violators. The proposed amendments to the Motor Vehicles Act has adequate provision for more use of technology,” one of the officials said.
+The inconsistent nature of the raids raises the question — can I-T searches and allegations of political vendetta be separated at all? No, if the target is a politician from an opposition camp. "Income tax is a central agency reporting to the present government. So, whenever it touches an opposition party member, the bogey of political vendetta is raised," says Rabu Manohar, central government standing counsel and counsel for GST and customs.
-=Use of force against unlawful activities=
+As for timing of raids, he says untaxed money surfaces mostly on two occasions — during political instability and during price swings of essential commodities, when they could be hoarded. "TN's political scene now is unstable and the agency has chosen the right time to strike," he adds.
-==Police ‘firings,’ 2016, 2018==
-[https://epaper.timesgroup.com/Olive/ODN/TimesOfIndia/shared/ShowArticle.aspx?doc=TOIDEL%2F2018%2F05%2F24&entity=Ar01722&sk=5A737737&mode=text  May 24, 2018: ''The Times of India'']
-[[File: Police ‘firings’ in 2016, May 2018; The Law and use of force against unlawful activities.jpg|Police ‘firings’ in 2016, May 2018 <br/> The Law and use of force against unlawful activities <br/> From: [https://epaper.timesgroup.com/Olive/ODN/TimesOfIndia/shared/ShowArticle.aspx?doc=TOIDEL%2F2018%2F05%2F24&entity=Ar01722&sk=5A737737&mode=text  May 24, 2018: ''The Times of India'']|frame|500px]]
+But, senior advocate P Wilson, a DMK office-bearer and former additional solicitor-general of India says, "I-T searches have to be taken to a logical conclusion. But, unfortunately, in all recent cases, the proceedings had been abandoned midway. In Anbunathan's case, though the agency had proof of doubtful investments, the information were not forwarded to other agencies for follow up. In gutka case, they took extraordinary interest to ensure action against some officials. In R K Nagar bypoll case they merely sent a report to the election commission, which sent it to city police as complaint."
-'''See graphic''':
+So, what really happens after 'searches'? After search and seizure, comes inquiry when the investigation wing of I-T department sends an appraisal report to an assessing officer who sends a notice to the assesse asking him to file returns for the past six years. "It is an opportunity for the assesse to amend their earlier returns, and declare undeclared assets," says a senior tax official. "They can also approach the settlement commission to escape penalty and prosecution. An opportunity to compound the offence is then offered after both sides are heard," he adds.
-''Police ‘firings’ in 2016, May 2018 <br/> The Law and use of force against unlawful activities''
+All the post-search processes are strictly between the assesse and income tax official, and so nothing is heard about it, says Manohar. "If Stalin wants to know the fate of such searches, he can utilise judicial forums seeking specific directions or even invoke RTI Act."
+Referring to allegations of political vendetta behind raids, advocate V Lakshminarayanan says that to eliminate subjectivity, decisions to search premises must be routed through an apolitical body. Searches could be cleared by an entity to which members are nominated on the lines of chief vigilance commissioner and DGPs, he says. "I-T department should first offer a final self-declaration option, ushering in a measure of transparency besides offering the target a last chance to come clean," he adds.
+=Reliefs on tax=
+==Education loans to study abroad==
+[http://epaperbeta.timesofindia.com/Article.aspx?eid=31808&articlexml=Tax-relief-valid-on-edu-loans-to-study-02122015001062 ''The Times of India''], Dec 02 2015
-[[Category:Crime|PPOLICE: INDIAPOLICE: INDIAPOLICE: INDIAPOLICE: INDIAPOLICE: INDIA
+Lubna Kably
-POLICE: INDIA]]
-[[Category:Government|PPOLICE: INDIAPOLICE: INDIAPOLICE: INDIAPOLICE: INDIAPOLICE: INDIA
-POLICE: INDIA]]
-[[Category:India|PPOLICE: INDIAPOLICE: INDIAPOLICE: INDIAPOLICE: INDIAPOLICE: INDIA
-POLICE: INDIA]]
-[[Category:Pages with broken file links|POLICE: INDIAPOLICE: INDIA
-POLICE: INDIA]]
-=Women in the police=
+'''Tax relief valid on edu loans to study abroad'''
-==Share in the police force==
-===1939-2017 ===
-[[File: Women in police stations, 1939-2017.jpg|Women in police stations, 1939-2017 <br/> From: [https://epaper.timesgroup.com/Olive/ODN/TimesOfIndia/shared/ShowArticle.aspx?doc=TOIDEL%2F2018%2F11%2F22&entity=Ar00401&sk=5F312208&mode=text  Ishita Mishra, Mahila thanas a big relief, but there’s too few of them, November 22, 2018: ''The Times of India'']|frame|500px]]
-'''See graphic''':
+In good news for parents whose children study overseas or plan to do so, the Pune income-tax appellate tribunal has held that higher education abroad is no bar for claiming tax relief on educational loans.
+A deduction for interest paid on such loans will be allowed from the taxable income of a parent, who has taken the loan and is paying interest, even if the child is studying overseas.
-''Women in police stations, 1939-2017''
+However, such a loan must be taken from either financial institutions, banks or from government-approved charitable institutions. Though Section 80E of the I-T Act states a parent is eligible for claiming tax relief on such loans, it has often been a ground for dispute during tax assessment. The term `higher education' has been defined in Section 80E of the I-T Act as: “Any course of study pursued after passing the senior secondary examination (SSE) or its equivalent from any school, board or university recognised by the central government, state government, local authority or any recognised authority .“
-===2019===
+“This section does not specify that higher education must be undertaken by the student in India or that the overseas course must be approved by authorities in India. The only requirement is that such higher education should be undertaken by the student after passing SSE or its equivalent from a recognised institution in India,“ says Parizad Sirwalla, tax partner, KPMG.
-[https://epaper.timesgroup.com/Olive/ODN/TimesOfIndia/shared/ShowArticle.aspx?doc=TOIDEL%2F2020%2F12%2F30&entity=Ar00321&sk=0CE28955&mode=text  Bharti Jain, December 30, 2020: ''The Times of India'']
-[[File: Police-population ratio, as in 2019.jpg|Police-population ratio, as in 2019 <br/> From: [https://epaper.timesgroup.com/Olive/ODN/TimesOfIndia/shared/ShowArticle.aspx?doc=TOIDEL%2F2020%2F12%2F30&entity=Ar00321&sk=0CE28955&mode=text  Bharti Jain, December 30, 2020: ''The Times of India'']|frame|500px]]
+Even in this case of Nitin Shantilal Muthiyan, which came for hearing before the Pune tribunal, the tax officer had held that deduction under Section 80E is allowable only in cases of higher education pursued in India. He, thus, disallowed the claim of interest of Rs 73,125 made by the taxpayer whose son, who had completed his BE in Electronics from Pune University, was pursuing a course at George Washington University , US. At the first stage of appeal, the commissioner of I-T (appeals) also upheld the action of the tax officer.
-The strength of women personnel in state and Union Territory police forces registered a significant 16% jump last year, with their share rising to 10.3% as on January 1 this year (reflecting 2019 data) from 8.9% on January 1, 2019. Though the improvement is welcome, the cumulative percentage and numbers continue to reflect the male domination of police forces.
+The taxpayer then filed an appeal with the income-tax appellate tribunal (ITAT) and obtained a favourable order. The ITAT in its order observed: “Provisions of Section 80E do not contain any stipulation that the higher education should be pursued only in India. If the intent of the legislation was that education should be pursued in India, in order to avail of the interest deduction, it would have stated so. Further, the taxpayer's son had completed SSE or its equivalent, as is required by this section, before pursuing studies overseas.“ Thus, the ITAT allowed the interest deduction claim made by the father during financial year 2008-09.
-Among the states, Bihar police had the highest share of women personnel at 25.3%.
+“The ITAT's decision is welcome, particularly in light of the spiralling cost of overseas education, and more and more Indian students opting for higher studies overseas. In terms of applicability of the decision, an ITAT's decision is binding within its jurisdiction, but carries precedent value in similar disputes for other jurisdictions, which are outside its purview,“ adds Sirwalla.
+=Rental income=
+==No tax on rent if none received from 2nd home==
+[https://epaper.timesgroup.com/Olive/ODN/TimesOfIndia/shared/ShowArticle.aspx?doc=TOIDEL%2F2019%2F02%2F02&entity=Ar00606&sk=899BC15F&mode=text  February 2, 2019: ''The Times of India'']
-''' Bihar has highest share of women cops at 25% '''
+[[File: National rent explained.jpg|National rent explained <br/> From: [https://epaper.timesgroup.com/Olive/ODN/TimesOfIndia/shared/ShowArticle.aspx?doc=TOIDEL%2F2019%2F02%2F02&entity=Ar00606&sk=899BC15F&mode=text  February 2, 2019: ''The Times of India'']|frame|500px]]
-Among the states, Bihar police — covering civil police, district armed reserve, special armed police and India Reserve Battalions — had the highest share of women personnel at 25.3%, followed by Himachal with 19.15%, Chandigarh with 18.78% and Tamil Nadu police with 18.5% women personnel. Overall, almost one-fifth of sanctioned positions for personnel in police forces across the country remain vacant.
+India’s second-home market has been quite hot for some time, with some buyers seeking to get away from the crowded city and the stresses of work with a vacation home while others view it as a good real estate investment. However, the negative was that even if the property was empty, one had to fork out tax on notional rent.
-On the other hand, data on police organisations released by the Bureau of Police Research and Development (BPR&D) on Tuesday shows the police-population ratio or the actual strength of police personnel per lakh population has fallen to 155.7 from 158.2. Sanctioned police personnel per lakh population, however, were at 195.4 as compared to corresponding figure of 198.4 as on January 1, 2019.
+No longer. The interim Budget has given relief to second home-owners by exempting the second property from tax on notional rent. Currently, if a taxpayer owns more than one house property, one property at the taxpayer’s choice is treated as selfoccupied and the other is considered as ‘deemed to be let out’. This is taxed at market rental value even if the taxpayer does not earn any income from it.
-Statewise data on policepopulation ratio (per lakh population) — calculation based on the actual strength of police — saw Nagaland doing the best with 1,301 police personnel per lakh population, followed by Andaman and Nicobar Islands, Manipur, Sikkim and Arunachal Pradesh. The states and UTs with the lowest police-population ratio were Bihar (76.2 police personnel per lakh population), Daman & Diu, West Bengal, Andhra Pradesh and MP.
+“Considering the difficulty of the middle class having to maintain families at two locations on account of their job, children’s education, care of parents, etc., I am proposing to exempt levy of income tax on notional rent on a second self-occupied house,” interim Finance Minister Piyush Goyal announced on Friday.
-Another significant parameter for police coverage — police-area ratio or personnel (sanctioned) per 100 sq km — was recorded at 79.8, slightly up from 78.9 as on 01.01.2019.
+Industry trackers believe the move of exempting tax on notional rent on the second house property will help increase demand for affordable and mid-income housing segment as taxpayers will be encouraged to invest in a second home.
-[[Category:Crime|PPOLICE: INDIAPOLICE: INDIAPOLICE: INDIAPOLICE: INDIAPOLICE: INDIA
+“With improved liquidity, demand across the affordable and mid-income housing segment will rise,” Ramesh Nair, CEO and Country Head, JLL India, said. However, the maximum deduction for interest on housing loans shall continue to remain capped, in the aggregate, at Rs 2 lakh.
-POLICE: INDIA]]
-[[Category:Government|PPOLICE: INDIAPOLICE: INDIAPOLICE: INDIAPOLICE: INDIAPOLICE: INDIA
-POLICE: INDIA]]
-[[Category:India|PPOLICE: INDIAPOLICE: INDIAPOLICE: INDIAPOLICE: INDIAPOLICE: INDIA
-POLICE: INDIA]]
-[[Category:Crime|PPOLICE: INDIAPOLICE: INDIAPOLICE: INDIAPOLICE: INDIAPOLICE: INDIA
+While the FM in his speech alluded to the difficulties faced by those who are forced to maintain families at two locations, given the specific provisions of the I-T Act, it appears that no tax on notional rent will be payable if the second house is overseas.
-POLICE: INDIA]]
-[[Category:Government|PPOLICE: INDIAPOLICE: INDIAPOLICE: INDIAPOLICE: INDIAPOLICE: INDIA
-POLICE: INDIA]]
-[[Category:India|PPOLICE: INDIAPOLICE: INDIAPOLICE: INDIAPOLICE: INDIAPOLICE: INDIA
-POLICE: INDIA]]
-== WPS (women’s police stations)==
+There is one downside. “Taxpayers who had housing loans on their second property were earlier able to claim deduction for full interest on housing loan, against the notional rental income, which could result in a loss. This loss could be set off against rental income from other properties without any limit or could be carried forward for eight years. Now such setoff is limited to Rs 2 lakh,” says Puneet Gupta, director, People Advisory Services at EY India.
-=== 2017: a success===
-[https://epaper.timesgroup.com/Olive/ODN/TimesOfIndia/shared/ShowArticle.aspx?doc=TOIDEL%2F2018%2F11%2F22&entity=Ar00401&sk=5F312208&mode=text  Ishita Mishra, Mahila thanas a big relief, but there’s too few of them, November 22, 2018: ''The Times of India'']
+=‘Salary’=
+==2018: Non-compete fees, some compensations are taxable==
+[https://epaper.timesgroup.com/Olive/ODN/TimesOfIndia/shared/ShowArticle.aspx?doc=TOIDEL%2F2018%2F02%2F05&entity=Ar00905&sk=4D3A4971&mode=text  Lubna Kably, Employment-related payments get taxable, February 5, 2018: ''The Times of India'']
-The ease of filing cases is one of the reasons why women police stations have gained traction in the country. Researchers Sofia Amaral and Sonia Bhalotra of the University of Essex in UK, and Nishith Prakash from University of Connecticut in US, who recently conducted a joint study on all-female police stations in the country, told TOI in an email that India’s mahila thanas are encouraging women to report crimes. The result is that there has been an almost a 22% rise in the filing of women-related cases at WPS since the time all-female police stations were set up in the early 2000s.
+''Staff May Have To Pay Tax On Non-Compete Fees''
-The study, which focuses on Rajasthan and Jharkhand but includes mahila thanas across India, said that personnel posted at WPS “are more gender-sensitive than other cops”, making women feel more comfortable to approach them. A look at mahila thanas in UP, Rajasthan, Jharkhand, Chhattisgarh and Uttarakhand by TOI teams showed that reporting of crimes by women has indeed gone up. But also that a lot still needs to be done.
+The Income-tax Act is intricate — sometimes income received by an individual even if it relates to employment, does not fit within the technical definitions of ‘salary’ or ‘profits received in lieu of salary’. Thus, very often, such income could not be taxed.
-First, the good news. The number of women police personnel, which was approximately 5% of the police force in 2013, has risen to 7.56% (as of 2017). This means there are more feet on the ground to look at women-related cases.
+Budget 2018-19 proposes to change this scenario. A wide range of income received — say non-compete payments (which sometimes did not fit the above definitions of salary or profits in lieu of salary); or compensation when a job offer went awry will now be taxable.
-The flip side, though, is that the quality of policing in most WPSs still has some way to go. Amaral said she found that while women’s police stations did a good job in getting women to report crime, they weren’t so effective as far as policing was concerned — arrests and chargesheets were problem areas. Prakash, coauthor of the study, said that when he visited a few mahila thanas, he found that “access to resources was a binding constraint”. “Starting from limited training of officers handling violence against women cases to ill-equipped stations, there is no doubt that women’s police stations in India need attention.”
+“The proposal perhaps also intends to bring within ambit of tax, payments received in connection with employment but not from the employer. In other words, it covers cases where an employer-employee relationship does not exist between the payer and the receiver. For example, in case of termination of employment with an Indian subsidiary company, any severance pay received from a foreign holding company may be covered under this amendment. It may also cover situations of merger and acquisition where payments are received by employees from the acquiring company or from the investors,” said Puneet Gupta, director, people advisory services at EY India, a business consultancy firm.
-Observers say that most mahila thanas quite often turn into “counselling centres”. This is acknowledged by personnel at these police stations. “The image of mahila thanas has become like that of a mediation centre. Women come here with their husbands and ask us to resolve their domestic quarrels,” said Madhuri Nayak, in-charge of the WPS at Jagdalpur in Chhattisgarh. Sapna Kumari, who heads the mahila thana in Jaipur, agreed. “We register only family-related disputes in mahila thanas across Rajasthan. Sometimes, we take cases of rape but only after special orders of the SP or SSP concerned.” But “disputes” can also mean domestic violence, harassment for dowry, marital rape.
+The explanatory memorandum to the Finance Bill says: “A large segment of compensation receipts in connection with employment are out of the purview of taxation leading to base erosion and revenue loss”. It therefore
-If investigations by women cops are a problem, sub-inspector at Saharanpur, Suman Pawar, said it was obvious as to why. “Who said women police stations can handle everything? We need men’s support if we want to investigate the accused, who are mostly men. In case we want to go outstation for a probe, we still need men to accompany us,” she said.
+proposes to amend section 56 of the I-T Act. “Any compensation or other payment due or received in connection with the termination of employment or the modification of the terms and conditions relating thereto”, will now be treated as ‘Income from other sources’. Such sums received by individuals will be taxed in their hands at the applicable slab rate. As per the budget proposals, the highest tax rate for an individual (who has a taxable income of more than Rs one crore) is nearly 36%.
-A police officer who did not wish to be named said that the reason why mahila thanas “lack teeth” is “poor guidelines from the government and acute staff crunch in the police department”.
+This amendment does not cover money received from an employer when handed a pink slip or in cases of VRS, which will continue to be treated as salary income under existing I-T provisions and taxed accordingly.
-Mishra, the Saharanpur SP, said lack of staff was a major reason why mahila thanas were not able to function to their optimum capacity. “Every city has just one mahila thana and hence is unable to handle investigations of heinous crimes,” he said.
+Gautam Nayak, tax partner at CNK Associates, a firm of chartered accountants, explains: “In various decisions, courts and tax tribunals have held certain receipts to be not taxable, even as they related to employment. This is because such receipts did not fall under the definition of salaries or profits in lieu of salary or because the employer-employee relationship was not in existence. Money received in such instances is now proposed to be taxed.”
-Considering that womenrelated crimes are on the rise — the study found that there has been a marked increase in acts of violence against women in the past few years — mahila thanas would need to mould themselves accordingly to meet the challenge. For starters, police officers said, they need many more.
+In simple terms, receipts are classified into revenue receipts (which are items of recurring nature, such as salary, business profits, interest to name a few) and capital receipts (which are of an isolated nature). “A capital receipt is not income and hence I-T is not levied on it,” states Nayak.
-The ease of filing cases is one of the reasons why women’s police stations have gained traction. A study found that personnel posted at these police stations ‘are more gendersensitive than other cops’, making women feel more comfortable to approach them
+“There are instances, where compensation related to employment, has fallen within the cracks and escaped I-T. Each such case, typically involves compensation of at least Rs. one crore. . Hence, budget amendment is critical,” said a senior I-T officer.
+=Sexual harassment damages=
+==Not taxable==
+See also [[Sexual harassment in India's media, entertainment, advertising industries; academics ]]
+[https://epaper.timesgroup.com/Olive/ODN/TimesOfIndia/shared/ShowArticle.aspx?doc=TOIDEL%2F2018%2F11%2F19&entity=Ar00516&sk=3BA14BC1&mode=text    Sushmita’s #MeToo payout not taxable, rules tribunal    |18 11 2018| ''The Times of India'']
-[[Category:Crime|PPOLICE: INDIAPOLICE: INDIAPOLICE: INDIAPOLICE: INDIA
-POLICE: INDIA]]
-[[Category:Government|PPOLICE: INDIAPOLICE: INDIAPOLICE: INDIAPOLICE: INDIA
-POLICE: INDIA]]
-[[Category:India|PPOLICE: INDIAPOLICE: INDIAPOLICE: INDIAPOLICE: INDIA
-POLICE: INDIA]]
-=Work load=
+The city bench of the income-tax appellate tribunal (ITAT), which adjudicates income-tax disputes, has recently passed an order in favour of actress and model Sushmita Sen. A settlement compensation, in lieu of a sexual harassment complaint made by her, which runs into several lakh, has been held as non-taxable.
-==Work overload: 2013==
-[http://epaperbeta.timesofindia.com//Article.aspx?eid=31808&articlexml=73-of-Indian-cops-dont-get-a-weekly-01062015001020 ''The Times of India''], Jun 01 2015
-''' `73% of Indian cops don't get a weekly off' '''
+She had got Rs 95 lakh during financial year 2003-04 as a settlement compensation from Coca-Cola India, following her complaint of being subjected to sexual harassment by an employee of the company.
-Police personnel are often inefficient and offensive because they are overworked, a study said. It found 90% of police officers worked for more than eight hours a day and 73% didn't get a weekly off even once a month. Cops were called in for emergency duties during their rare off days as well, reports Neeraj Chauhan. Long duty hours were the reason why many cops were not physically fit.
+The ITAT, in its order dated November 14, held this sum was not ‘income’ that could be taxed but was in the nature of a ‘capital receipt’. Further, the penalty of Rs 35 lakh which was imposed on her for concealment of income (as she had not offered Rs 95 lakh to I-T) was ordered to be set aside.
-''' Offensive behaviour of cops due to trying work hrs: Study '''
+Sushmita’s contract ended prematurely
-[http://epaperbeta.timesofindia.com//Article.aspx?eid=31808&articlexml=Offensive-behaviour-of-cops-due-to-trying-work-01062015009005 ''The Times of India''], Jun 01 2015
+Sushmita Sen had entered into a commercial contract aggregating to Rs 1.5 crore with Coca-Cola India to endorse its products; however, this contract was terminated prematurely by the company. The actress had disputed this termination as being mala fide and dishonest. She asserted that the termination of the commercial contract was meant to punish her as she had rightly resisted sexual harassment by an employee of the company. She had held Coca-Cola India, and its US-based parent, liable for all consequences flowing from such sexual harassment and for failing to discharge its statutory duty of providing her with a safe workplace environment. Subsequently, a settlement was reached between her and the company.
-Neeraj Chauhan
+As per the terms of the commercial contract, in case of termination only a sum of Rs 50 lakh was due to her from Coca-Cola India. As against this, under the terms of the settlement, she received Rs 1.45 crore, of which she had offered Rs 50 lakh to income-tax. She had held that the balance of Rs 95 lakh was in the nature of compensation, which was not taxable.
-If a police officer in your area doesn't work efficiently and has an offensive attitude, it is because he is overworked, a new study has said.
+= Shares=
-The study , National Requirement of Manpower for 8hour Shift in Police Stations, carried out by Bureau of Police Research and Development and Administrative Staff College of India has found that 90% of police officers work for more than eight hours a day and 73% don't get a weekly off even once a month and are called for emergency duties from their rare off days as well. The research was conducted on 12,156 police station staff, 1,003 SHOs and 962 supervisory officers, from ranks ranging from con stables to IGPs, in 319 districts in 23 states and two UTs.
+==Premium on shares not taxable: HC==
-“ More than 68% of SHOs and over 76% of supervisory officers stated that staff members were on duty for 11 hours or more per day . 27.7% SHOs and 30.4% supervisory officers reported that their staff worked for more than 14 hours a day ,“ the study said.
+In a relief to global energy and petrochemical giant Shell, the Bombay high court on Tuesday ruled that the firm is not liable to pay tax in a transfer pricing case of 2009-10. The potential tax demand on Shell by the I-T authorities was $240 million. The ruling comes after Vodafone’s recent win in the HC in a similar case. The I-T authorities in Mumbai had alleged that there was underpricing of shares which the company had issued to an overseas group entity Shell Gas BV in March 2009.
-The study said the cur rent working hours were not in consonance with Indian labour laws nor in compliance with provisions of Article 42 of the Constitution. Besides, it also violated international norms as well.
+The company said it had issued 87 crore shares at Rs 10 per share, but the I-T department assessed the value at Rs 180 per share and said there was thus a Rs 15,000-crore under pricing in the transaction, an amount on which tax could be levied. The Bombay HC has now held that these share premiums are not taxable. In case of Vodafone, the HC had then held that issuance of shares in a capital financial transaction did not amount to taxable income. The cellular service major had challenged an order of Income Tax authority in a transfer pricing case.
-Talking about impacts, the study said, “Nearly 74% of respondents have reported health problems of different kinds . It could as well be true that government expenses to treat these health consequences, along with the quality man-hours lost due to their adverse effects, would cost the police organization more than operating in shifts.“
+Several global giants are involved in transfer pricing litigation with the government, whose stand has been criticized.
-The study said introduction of shift system would mean rationalizing the work hour norms for police station staff to more acceptable limits. According to the SHOs, there was a need of 1.68 times strength of the present sanctioned strength for the shift system. According to 2013 figures, the total manpower strength of all police stations in India was 675,115. Given that the total manpower of state police forces as on January 1, 2013 was 22, 09,027, the manpower sanctioned for police stations would represent only about 30% of the total police strength. The 8-hour shift system in Kerala has found improved performance of the police in terms of law and order, investigation, behavior and even conviction rate.
+Investors have been critical of the way the tax department went about slapping notices over the past few years.
+“We welcome the High Court decision. Shell has always maintained that equity infusion by a foreign parent company into an Indian subsidiary cannot be taxed as income,’’ said a Shell spokesperson after the verdict was pronounced. “ This is a positive outcome which should provide a further boost to the Indian government’s initiatives to improve the country’s investment climate”.
+=Small businesses, professionals=
+==Presumptive tax scheme==
+[http://epaperbeta.timesofindia.com//Article.aspx?eid=31808&articlexml=For-small-biz-professionals-a-way-to-save-02032016017025 ''The Times of India''], Mar 02 2016
+Surya Bhatia
+''' For small biz & professionals, a way to save money, and a tax headache '''
+The Budget presented for 2016-17 has come under fire for the move to tax EPF but there's one proposal that is sure to bring cheer to small businesses and professionals, and that's the presumptive tax scheme.
+This scheme covers small businesses with gross turnover up to Rs 2 crore -up from the existing ceiling of Rs 1 crore. It has also been extended to professionals with gross income up to Rs 50 lakh.
+''' So what exactly is presumptive taxation? '''
+As per Section 44AA of the Income-tax Act, 1961, a person engaged in business is required to maintain regular books of account. However, a person adopting the presumptive taxation scheme can declare income at a prescribed rate of 8% and, in turn, is relieved from the tedious job of maintaining books of account.
+However, in case income earned is at a rate higher than 8%, then the higher rate can be declared.
+And with the inclusion of professionals, a new Section 44ADA is proposed to be inserted in the Act to provide for estimating the income of an assessed who is engaged in any profession referred to in sub-section (1) of Section 44AA such as legal, medical, engineering, architecture, accountancy, technical consultancy, interior decoration or any other profession as is notified by the board in the official gazette and whose total gross receipts does not exceed Rs 50 lakh in the previous year. For the purpose, 50% of the total receipts of the professional during the financial year will be considered as profit and get taxed under the income-tax head “profits and gains of business or profession“.
+If you look at the table, it's clear that the assessee not only saves on record-keeping headaches, he also saves a considerable amount in taxes. Yes, there can be a few counters to this -mainly that the taxable income could be much below the presumptive taxation rate of 8% and 50% of receipts respectively . And if that is the case then the individual has no option but to maintain the books of accounts.
+To further keep the compliance burden minimum, those using presumptive taxation scheme are also allowed to pay advance tax by March 15 of the financial year, as against the normal practice of paying the advance tax in four installments.
+However, the taxpayer needs to be careful when opting for this as he or she has to remain in that scheme for 5 years to avail the benefits.
+=TDS (tax deducted at source)=
+==Head of religious congregation to certify names==
+[http://epaperbeta.timesofindia.com/Article.aspx?eid=31808&articlexml=No-TDS-for-nuns-priests-monks-rules-Madras-24122016015032  No TDS for nuns, priests, monks, rules Madras HC, Dec 24, 2016: ''The Times of India'']
+In an important ruling, the Madras HC has said no tax could be deducted at source from the salaries and other monetary benefits of persons who are members of religious congregation  such as nuns, monks and priests.
+Justice T S Sivagnanam, passing orders on a batch of 74 writ petitions, further said it would be sufficient if the head of the institution concerned certifies the names of staff members.
+The order has offered immediate relief to nunsfatherspriests working in various teaching institutions, established and administered by religious congregation such as Institute of the Fransican Missionaries of Mary , which was one of the 74 petitioners.
+They had moved the court after the I-T department passed an order on October 7, 2015 saying catholic nuns among teaching and non-teaching staff in these institutions were liable for TDS.
+==Online rectification in ITR simplified, 2015==
+[http://timesofindia.indiatimes.com/tech/tech-news/I-T-Dept-simplifies-online-rectification-of-TDS-in-ITR/articleshow/50123897.cms ''The Times of India''], Dec 10, 2015
+'''I-T Dept simplifies online rectification of TDS in ITR'''
+''The finance ministry said a new facility has been provided for pre-filling of TDS schedule''
+Aimed at making life easier for tax payers, the I-T department today said it has simplified the process of online rectification of incorrect details of tax deducted at source (TDS) filed in the income tax return (ITR).
+Earlier, taxpayers were required to fill in complete details of the entire TDS schedule while applying for rectification on the e-filing portal of the I-T Department.
+To avoid this, the finance ministry said a new facility has been provided for pre-filling of TDS schedule while submitting online rectification request on the e-filing portal to facilitate easy correction or updating of TDS details.
+"This is expected to considerably ease the burden of compliance on the taxpayers seeking rectification due to TDS mismatch," an official statement said.
+Errors due to incomplete TDS details in rectification applications were leading to delays in processing of such applications, thereby causing hardships to taxpayers, it added.
+==Penal interest can be waived in some cases==
+[http://epaperbeta.timesofindia.com/Article.aspx?eid=31808&articlexml=Taxmen-can-waive-TDS-related-penal-interest-in-27032017017010  Taxmen can waive TDS-related penal interest in some cases, March 27, 2017: The Times of India]
+The Central Board of Direct Taxes (CBDT) in its circular issued on March 24 has empowered tax authorities to reduce or waive penal interest for non-deduction of tax at source (TDS) in certain circumstances, including owing to a retrospective amendment in law.
+Interest can also be reduced or waived where tax could not be deducted as the books of a taxpayer were seized in a search operation.
+CBDT's circular will also apply where tax was not deducted or deducted at a lower rate on payments made to non residents, and the matter was settled under the mutual agreement procedure between the authorities of the two countries, under the relevant tax treaty . To avail of this benefit, the taxpayer would be required to pay the principal tax sum demanded or make arrangements to pay the same. However, restrictive conditions in this order are unlikely to benefit taxpayers in indirect transfer cases, say experts.
+Vodafone International Holdings, for instance, faces a demand of Rs 14,200 crore, which, according to the income-tax department, is due to the $ 11-billion acquisition of Hutchison's India telecom business. Tax authorities had held that Vodafone ought to have deducted tax in India, even if the sale carried outside India was of shares of a non-resident company , as it related to an asset in India (telecom business in India).
+To avail of the benefit of a waiver on interest (either partial or full), the condition imposed by CBDT is that the taxpayer did not deduct tax at source owing to a favourable high court order. Subsequently owing to an SC order on a retrospective amendment, it became liable to deduct tax at source. “The circular will have very limited applicability and usefulness in an indirect transfer tax kind of situ ation (where retrospective amendment was made in the I-T Act) as no positive jurisdictional high court decision on the subject as such is available on which reliance could have been placed by taxpayers,“ says Punit Shah, partner, Dhruva Advisors.
+The reasoning is simple.Vodafone won a favourable decision from the Supreme Court on January 20, 2012. A month later, the Finance Bill, 2012, through a retrospective amendment made indirect transfers taxable in India.
+Thus, there is only a window of approximately one month available to taxpayers to have relied on a favourable decision of the Supreme Court and not deducted tax at source.This limits applicability of the CBDT circular, says a corporate counsel.
+= YEAR-WISE CHANGES=
+==2019: nine issues in interim budget==
+[https://epaper.timesgroup.com/Olive/ODN/TimesOfIndia/shared/ShowArticle.aspx?doc=TOIDEL%2F2019%2F02%2F02&entity=Ar00600&sk=89D73EDC&mode=text  NINE THINGS YOU NEED TO KNOW ABOUT PERSONAL TAX, February 2, 2019: ''The Times of India'']
+'''Interim Budget Decoded'''
+• Standard deduction for salaried taxpayers raised from Rs 40,000 to Rs 50,000. This will result in a maximum tax saving of Rs 3,588, if you apply the maximum marginal tax rate of 35.88%.
+• If you are a resident taxpayer earning taxable income (after all applicable deductions) up to Rs 5 lakh, you will get full tax rebate. Earlier, the tax liability was of up to Rs 13,000, inclusive of health and education cess. If your gross income is up to Rs 6.5 lakh, you may not be required to pay any tax if you make investments in Provident Fund, specified savings, insurance, etc, which are eligible for deduction under Section 80C.
+• No notional rental income will be added to the taxable income for a second house property owned that is not let out. This will allow you to own up to two houses without notional rent on the second property being added to the taxable income.
+• Tax exemption on long-term capital gain on sale of a residential house will be available for investment in up to two residential house properties located in India against one earlier. The option is available only once in a lifetime for individuals or HUFs where capital gains on sale of house property is up to Rs 2 crore. This will allow individuals or HUFs to sell one house property and make investment in two without paying any capital gains tax.
+• Threshold for TDS on interest income from deposits with banks and post offices increased from Rs 10,000 to Rs 40,000. The limit for a senior citizen payee continues to be Rs 50,000. In some cases, individuals earning interest income from fixed deposit exceeding Rs 10,000 were filing income-tax return to claim tax refund for TDS even when their net taxable income was lower than the exemption limit (Rs 2.5 lakh). Now, such individuals will not be required to file return if interest income from such deposits does not exceed Rs 40,000.
+• Threshold for TDS on rent paid by any person (other than individual or HUF not subject to tax audit) to a resident increased from Rs 1.8 lakh per year to Rs 2.4 lakh per year. This will provide administrative relief to small taxpayers (landlords), if they have let out their flats to companies. However, if a tenant is a small individual taxpayer, then the TDS will apply only if the rent payout is more than Rs 50,000 per month.
+• The I-T department plans to be more taxpayer-friendly by processing income-tax returns within 24 hours and issuing refunds simultaneously.
+• It plans to conduct all verification and scrutiny assessment of returns electronically. This will be done by an anonymous back office, manned by tax experts and officials, eliminating personal interface between taxpayers and officials.
+'''Googly To Watch Out For'''
+• On December 10, 2018, the finance ministry announced a proposal to increase the tax exemption limit for lump-sum withdrawal from the National Pension System to 60% of the total amount. With this, the entire lump sum withdrawal from NPS, which is limited to 60% of the accumulated corpus, would have been exempt from tax. However, this proposal has not been notified in the Finance Bill, 2019, and, hence, the current tax exemption limit of 40% of the total amount remains unchanged.
+(Note: The full-fledged Budget could revise the tax rates and provisions)
+===The main changes===
+[[File: The main changes in IT laws, wef Sept 2019.jpg|The main changes in IT laws, wef Sept 2019 <br/> From: [https://epaper.timesgroup.com/Olive/ODN/TimesOfIndia/shared/ShowArticle.aspx?doc=TOIDEL%2F2019%2F08%2F31&entity=Ar00601&sk=3EA016AA&mode=image  August 31, 2019: ''The Times of India'']|frame|500px]]
+'''See graphic''':
+'' 9 things that will change from tomorrow, wef Sept 2019  ''
+[[Category:Economy-Industry-Resources|IINCOME TAX INDIA: LAWSINCOME TAX INDIA: LAWSINCOME TAX INDIA: LAWS
+INCOME TAX INDIA: LAWS]]
+[[Category:India|IINCOME TAX INDIA: LAWSINCOME TAX INDIA: LAWSINCOME TAX INDIA: LAWS
+INCOME TAX INDIA: LAWS]]
+[[Category:Law,Constitution,Judiciary|IINCOME TAX INDIA: LAWSINCOME TAX INDIA: LAWSINCOME TAX INDIA: LAWS
+INCOME TAX INDIA: LAWS]]
+[[Category:Pages with broken file links|INCOME TAX INDIA: LAWS]]
 =See also=
-[[Police and the law: India]]
+[[Direct taxes: India]]
+[[Income Tax India: Expert advice ]]
+[[Income Tax India: Laws ]]
+[[Income Tax India: NRIs ]]
+[[Income Tax India: Statistics]]: this page includes historical details of income tax '''rates''' and '''tax exemption limits''' over the years; how many Indians pay I Tax; how the income of women has risen over the years; the extent of tax arrears...
+[[Wealth tax: India ]]
+[[Yog(a): history; legal and administrative issues]]

Police: India, Income Tax India: Laws

Revision as of 06:43, 3 April 2021

Contents

Basic tenets

Section 80C

Section 80 D

Rates of income tax in India

1995-2015

1949-2017: peak rate of Income Tax

1949, and since 1995: The number of tax slabs

Appeals

2015: Appeals only for Rs 10 lakh +

2017: ‘Higher appeals limit applies to pending cases,’ SC

Artists

Fashion designers

Capital gains

Corporates’ promotional activities

Pharmaceutical companies’ junkets for doctors

Donations to NGOs’ projects

Halved in 2017

Educational institutions

Profits not taxable: SC

Exemptions

1950: residential palace of erstwhile ruler exempted from IT

Scheduled tribes, Sikkimese, agriculture, institutions, hospitals, trusts

Yoga

`Medical relief,' `imparting education' are charitable purposes

Expatriates

Salary paid in India won’t face tax, if Non-resident

Family trusts

No `gift' tax on property received from individual

Film actors

Promotion of film: actor not expected to incur expenditure

Foreign tax credit (FTC)

Gifts

Need not be camouflaged remuneration

Gratuity

Payment of Gratuity(Amendment) Bill 2017

House rent allowance

Proof needed of rent paid to kin

Income Tax returns

Who has to file income tax returns

Not filing I-T returns?Imprisonment,fine

2018: Changed format

'Returns can be filed after I-T notice is issued'

Wrong information in I-T returns

Joint I-T liability

Co-ownership of property

Notice pay deducted by employer

Cannot be taxed

Overseas income

Residential status determined by no. of days stayed

Permanent account number (PAN)

2016: PAN mandatory for…

2016: Required for transactions above Rs 2 lakh

Perquisites

Interest-free loan from employer is taxable

Pharmaceutical companies

Freebies for doctors deductible

Property (house): income from

2018: losses from house property for TDS capped at ₹2 lakh

2018: owner to decide which property is self-occupied

Property (immovable): owned abroad

Notional rent to be included in income tax return

Property (NRI): purchase of

Miscalculation risks

TDS risks: 1

TDS risks: 2

Property, purchase of

Buyers won't lose I-T exemptions by adding kin name

Property, immoveable, sale of

Tax benefits for investment in new house

Raids

In Tamil Nadu

Reliefs on tax

Education loans to study abroad

Rental income

No tax on rent if none received from 2nd home

‘Salary’

2018: Non-compete fees, some compensations are taxable