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Friday 16 March 2012

Analysis of Direct Tax Under Union Budget 2012



                             FINANCE BILL 2012
                   DIRECT TAX PROVISIONS

Tax Rates for AY 2012-13 i.e. AY 2013-14
Individual/HUF/AOP,BOI, Artificial Juridical Person
Up to 200000
NIL
2000001 to 500000
10%
50000o1 to 1000000
20%
Above 1000000
30%
Exemption limit for senior citizen (age of sixty years or more but less than eighty years) Rs. 250000
Exemption limit for senior citizen (age of sixty years or more but less than eighty years) Rs. 500000
Rates of taxes for companies, firms, co operative societies, local authorities to continue

Surcharge NIL for all assesses except in respect of companies.
Surcharge for Companies having income exceeding 1 crore to continue as in last year subject to Marginal Relief  i.e.
Domestic Companies and MAT Companies
5%
Non Domestic Companies
2%

Education Cess: 3% for all assessees to continue

Widening of Tax Base
  1.  AMT (Alternate Minimum Tax) @ 18.5% introduced for all assesses claiming profit linked deduction under Chapter VI-A under heading “Deduction in respect of certain Incomes” from section 80HHto 80 RRB and SEZ units under section 10AA (total 27 deductions) whose total income before profit linked deductions exceeds 20 lacs. Earlier it was applicable to LLPs only and MAT was applicable to companies.
Tax credit allowed for 10 years (wef AY 2013-14)
  1. TDS on Sale of Immovable Property (other than agricultural land)
At present TDS is required to be deducted of sale of immovable
property by non resident u/s 195 and on compulsory acquisition
of immovable property (other than agricultural land) >Rs. 1 lakh
Now 1% TDS on sale of immovable property (other than agricultural land)introduced if consideration exceeds
i) Rs. 50 lacs in case of  property in specified areas(i.e.Delhi,Mumbai,KolkattaChennai,NCR, Ahmadabad,Gandhinagar, Hyderabad, Secundrabad)
ii)                Rs. 20 lacs in case of properties in other areas
-         Stamp duty value(assessed or assessable)to be considered if sale consideration lesser than stamp duty value
-                  simple one page challan for payment of TDS would be
prescribed containing details (including PAN) of transferor and
transferee and also certain details of the property. The
transferee would not be required to obtain any Tax Deduction
and Collection Account Number (TAN) or to furnish any TDS
statement as this would be mostly a one time transaction.  
The transferor would get credit of TDS like any other pre-
paid taxes on the basis of information furnished by the
transferee in the challan of payment of TDS.
(W.e.f. 1-10-2012)
Further u/s 194LA exemption limit of Rs. 1 lakh for compulsory acquisition enhanced to 2 lakhs
3.     TDS on Director Remuneration
          TDS u/s 194J @ 10% introduced form 1-7-2012 on remuneration to non
executive director
4.     TCS on Sale of bullion and Jewellery
          W.e.f 1-7-2012, TCS @1% on Cash Sale>2lacs of jewellery and bullion
irrespective of the fact whether buyer is a manufacturer, trader or
purchase is for personal use
5.     TCS on Sale of minerals (coal, lignite, iron ore)
        W.e.f. 1-7-2012 @ 1% except if purchased for personal purposes or if the
buyer declares that these minerals are to be utilized for the purposes of manufacturing, processing or producing articles or things .Hence TCS imposed on Trading activity
                  
                             Measures to curb circulation of unaccounted money
1. Onus to prove credits imposed upon private company

SC RULING IN LOVELY EXPORTS PVT LTD. 
216 CTR 195 : Whether share application 
money can be treated as undisclosed income 
of the assessee? If the share application 
money is received from alleged bogus 
shareholders, whose names are given to AO, 
then department is free to proceed to 
reopen their individual asst. in accordance 
with law, but it cannot be regarded as 
undisclosed income of the assessee.

In order to over rule Lovely Exports Private limited,proposed to amend section 68 of the Act to provide that the nature and source of any sum credited, as share capital, share premium etc., in the books of a closely held company shall be treated as explained only if the source of funds is also explained by the assessee company in the hands of the resident shareholder. However, even in the case of closely held companies, it is proposed that this additional onus of satisfactorily explaining the source in the hands of the shareholder, would not apply if the shareholder is a well regulated entity, i.e. a Venture Capital Fund, Venture Capital Company registered with the Securities Exchange Board of India (SEBI).
(W.e.f.AY 2013-14)
But now one may imply except for cases where burden of proof specifically cast upon company, in other cases whether burden shall get discharged only by providing id proof of lender.
2. Taxation of unexplained cash credits, investments, expenditure etc.  @ 30% without allowing any exemption limit or deduction.(W.e.f. AY 2013-14)
3. Filing of return compulsory for resident having any foreign assets ((including financial interest in any entity) irrespective of exemption limit (W.e.f. AY 2012-13)
4. Reopening of assessment allowed up to 16 years if having foreign assets
 (W.e.f. 1-7-2012) However period of 16 years applicable to AY before 1-4-12 also.
5. Penalty on undisclosed income found during the course of search
New section 271AB for searches after 1-7-2012
(i  If undisclosed income is admitted during the course of search, the taxpayer will be liable for penalty at the rate of 10% of undisclosed income subject to the fulfillment of certain conditions.

(ii)  If undisclosed income is not admitted during the course of search but disclosed in the return of income filed after the search, the taxpayer will be liable for penalty at the rate of 20% of undisclosed income subject to the fulfillment of certain conditions.

(iii)  In a case not covered under (i) and (ii) above, the taxpayer will be liable for penalty at the rate ranging from 30% to 90% of  undisclosed income.

6. Prosecution Provisions rationalsied
a) Special Courts to be constitututed
b) On tax evasion up to 25 lacs, imprisonment from 3 months to 2years
c) On tax evasion above 25 lacs, imprisonment from 6M to 7 years.
(Earlier thresh hold limit was 1 lakh (fixed in 1976)and and minimum imprisonment was 3M to 3 years)
(Applicable w.e.f. 1-7-2012)

7. Share premium exceeding fair market value to be treated as income u/s 56(2).
8. In Glaxo Smith Kline Asia (P) Ltd, 2010 Taxmann 35(SC) it was held by SC that in order to reduce litigation, section 40A(2) and section 80-IA(10) need to be amended to empower Assessing Officer to make adjustments to income declared by assessee, having regard to fair market value of transactions between related parties by applying any of generally accepted methods of determination of arm’s length price, including methods provided under Transfer Pricing Regulations. Law should also be amended to make it compulsory for taxpayers to maintain books of account and other documents on lines prescribed under rule 10D in respect of such domestic transactions and taxpayers should obtain an audit report from their chartered accountants so that taxpayers maintain proper documents and requisite books of account reflecting transactions between related entities at arm’s length price, based on generally accepted methods specified under Transfer Pricing Regulations
However application of transfer pricing regulations to all cases shall increase compliance burden on assessees.
Hence Transfer Pricing regulations to be applied to domestic transactions between related parties u/s 40A, 10AA, 80A, sections where reference made to 80 IA, if aggregate amount of all such domestic transactions exceeds Rs. 5 crores.vide new section 92BA(W.e.f. AY 2013-14)
Note: As per section 40A amendmend, no disallowance to be made for transactions covered by 92BA.Doesn’t it take away benefit from transactions below 5 crores.

International Taxation
1. U/s 115A, interest income of non resident from infrastructure company
   reduced from 20% to 5%.
2. Also TDS rate in such cases reduced to 5% u/s 194LC
3. Foreign Dividend Income of Indian Company from foreign company shall continue to be taxed @ 15% for AY 2013-14
4. Income of foreign company supplying crude oil in India and taking payment in India shall not be taxed in India as Income received in India if operations confined to receiving payment in India u/s 10(48)(W.e.f. AY 2012-13)
5. Due to Vodafone Case amendmends made . through Clauses 3, 4, 62, 75 of Finance Bill 2012:

- Section 2(14) definition of capital assets amended retrospectively w.e.f. 1-4-1962 to include in property any rights in or in relation to to indian company, including rights of management or control or other rights
Note:  Property to include not only rights in Indian Company but also rights in relation to Indian Company
- Section 9 Expl. 4 inserted w.e.f.1-4-1962, to define throgugh shall include -by means of, in consequence of , by reason of
- Section 9 Expl. 5 inserted w.e.f. 1-4-1962, that asset or capital asset being any share or interest in a company or entity registered or incorporated outside India shall be deemed to be and shall always be deemed to have been situated in India, if share or interest derives, directly or indirectly, its value substantially from the assets located in India
- Now u/s s. 163 assessment on agent of non resident can be completed in six years. Eralier it was only 2 years
- Now u/s s. 195 obligation to deduct tax shall fall upon any person including non resident also, whether or not he has place of business or business connection in India or any other presence whatsoever in India
-Validation clause incorporated to protect notice issued in Vodafone case.
6. Samsung Electronics (Karnatka High Court) decision upheld on sale of computer software by amending definition of royalty and included in the definition of royalty.
7. Live telecast of programme included in definition of process w.e.f. 1-6-76
8. Time limit for issuing notice u/s 163 to treat a person as agent of non resident extended to 6 years w.e.f. 1-7-2012
9.. Non resident Non citizen sports person u/s 115BBA brought in parity with non resident non citizen entertainer under DTAA. Now both such sportsperson and entertainer shall be taxed @ wef AY 2013-14. TDS @ 20% imposed u/s 194E w.e.f. 1-7-2012.
10. Under section 90(3) government has power to define terms used in DTAA but not defined in DTAA. Now this power extended to agreements with specified association u/s 90A.
11. U/s 195, CBDT may specify class of persons who may apply to AO for deduction of TDS at proportion of amount. (w.e.f.1-7-2012)
12. Tax residency certificates to be submitted for claiming DTAA relief under s.90 and 90A
13. Period of exclusion for calculating time limit for assessment u/s 153 for seeking information from foreign country extended from 6 months to one year.(w.e.f.1-7-2012)
14. Advance Pricing Agreement:
a) CBDT can enter into APA with any person undertaking international transaction(IT)
b) APA shall give ALP or methodology of determining ALP
c) APA shall be valid for period specified in APA not exceeding 5 years
d) APA binding on person and Commissioner (including sub ordinate tax authorities)
e) APA not to apply if change in facts or law having bearing on APA
f) APA shall be void if obtained by fraud or misrepresentation
g) For period of limitation, time between entering of APA and declaring it void shall be excluded and if remaining period is lesser than 60 days, period shall be extended to 60 days.
h) Application for APA to be deemed proceedings u/s 133(6)
i) Modified ITR to be filed after entering APA with in 3 months.
15. In respect of first proviso to section 92C(2) tolerance band of 5% is not taken to be a standard deduction while computing Arm’s Length Price.
                                      EXEMPTIONS AND RELIEFS
DDT
Dividend received from any subsidiary in multi tier corporate structure to be reduced for paying DDT . Earlier this deduction was allowed only in two tier structure that is if company paying DDT has earned dividend from subsidiary but is itself not subsidiary of any other company.
Initial Depreciation
Benefit of Initial depreciation @ 20% of actual cost extended to power sector also w.e.f AY 2013-14.
Weighted Deduction
-         For In house R&D, weighted deduction @ 200% of R& D expenditure up to 31-3-2017 allowed
-         Weighted deduction of 150% of the expenditure incurred on agricultural extension project.
-         weighted deduction of 150% of expenses (not being expenditure in the nature of cost of any land or building) incurred on skill development project
Applicable from AY 2013-14
Audit Limit
w.ef. AY 2013-14
Threshold limit of total sales, turnover or gross receipts, specified under section 44AB for getting accounts audited, from sixty lakh rupees to one crore rupees in the case of persons carrying on business and from fifteen lakh rupees to twenty five lakh rupees in the case of persons carrying on profession.

It is also proposed that for the purposes of presumptive taxation under section 44AD, the threshold limit of total turnover or gross receipts would be increased from sixty lakh rupees to one crore rupees.
Advance Tax for Senior Citizen Exempted
If senior citizen does not have business or professional income, he shall not be liable to pay advance tax. It means no advance tax required to be paid for income in nature of rent, interest, capital gains, salary
Applicable from financial year 2012-13.
Wealth Tax Exemption to residential house allotted by company
Earlier wealth tax exemption was available for residential house allotted by company to employee, officer, WTD having Gross Annual Salary<5 lacs. Now exemption enhanced to gross annual salary of 10 lacs.
(W.e.f. AY 2013-14)
Relief of Long Term Capital gain on transfer of residential house if invested in SME
If individual or HUF sells residential property and re invests the proceeds in equity of SME in manufacturing sector to be utilized by SME in plant and machinery subject to conditions:

(i  the amount of net consideration is used by the individual or HUF before the due date of furnishing of return of income under sub-section (1) of section 139, for subscription in equity shares in the SME company in which he holds more than 50% share capital or more  than 50% voting rights.

(ii)  The amount of subscription as share capital is to be utilized by the SME company for the purchase of new plant and machinery within a period of one year from the date of subscription in the equity shares.

(iii)  If the amount of net consideration subscribed as equity shares in the SME company is not utilized by the SME company for the purchase of plant and machinery before the due date of filing of return by the individual or HUF, the unutilised amount shall be deposited under a deposit scheme to be prescribed in this behalf.

(iv)  Suitable safeguards so as to restrict the transfer of the shares of the company, and of the plant and machinery for a period of 5 years are proposed to be provided to prevent diversion of these funds. Further, capital gains would be subject to taxation in case any of the conditions are violated.

(v)  The relief would be available in case of any transfer of residential property made on or before 31st  March, 2017.
        (Applicable from AY 2013-14)
Rajiv Gandhi Equity Scheme
50% deduction for Investment in Equity up to Rs. 50000 for retail investors having annual income less than 10 lacs
Finance Minister talked about scheme in budget but it does not find place in Finance Bill
STT
Rates on delivery based transactions reduced from .125% to 1%
Investment linked Deduction expanded and enhanced
Business already availing Investment linked deduction u/s 35AD


Nature of Business
Operations commenced before 1-4-2012
Operations commenced after 1-4-2012
setting up and operating a cold chain facility
100%
150%
setting up and operating a warehousing facility for storage of agricultural produce
100%
150%
laying and operating a cross-country natural gas or crudeor petroleum oil pipeline network for distribution, including storage facilities being an integral part of such network
100%
100%
building and operating, anywhere in India, a new hotel of two-star or above category as classified by  the   Central Government;

100%
100%
building and operating, anywhere in India, a new hospital with at least one hundred beds for patients;

100%
150%
developing and building a housing project under a scheme for slum redevelopment or rehabilitation, framed by the   Central Government or a State Government, as the case may be, and notified by the Board in this behalf in accordance with the guidelines as may be prescribed.

100%
100%
developing and building a housing project under a scheme for affordable housing framed by the Central Government or a State Government, as the case may be, and notified by the Board in this behalf in accordance with the guidelines as may be prescribed;
100%
150%
production of fertilizer in India.
100%
150%
New Businesses commencing after 1-4-2012 Added
setting up and operating an inland container depot or a container freight station notified or approved underthe Customs Act,  1962 (52 of 1962);

NIL
100%
  Bee-keeping and production of honey and beeswax
NIL
100%
  setting up and operating a warehousing facility for storage of sugar
NIL
100%
Further clarified w.e.f. 1-4-2011, even if owner of hotel of two star or above, transfers operations to some other person (i.e. enters into franchisee arrangement)still he shall continue to enjoy benefit of investment linked deduction.

Extension of sun set date for tax holiday for power sector enhanced by one year i.e.power sector undertaking is set up up to 31-3-2013, it can enjoy 10 year tax holiday u/s 80-IA
Reduction of eligible age for senior citizen
In finance act 2011, when exemption limit benefit was extended to persons of 60 years or more, the age limit in certain other sections was not lowered like:
80D: Medical Insurance for senior citizen at Rs. 20000 (Rs. 15000 for others)
80DDB: Medical treatment for specified disease Rs. 60000(Rs. 40000 for others)
197A: Form 15H for senior citizen (15G for others)
Now age limit lowered for 80D and 80DDB w.e.f AY 2013-14 and for 197A from 1-7-2012.
Preventive Health Check up (80D)
-         Rs. 15000 deduction was already allowed on medical insurance of self, spouse and children
-         Rs. 15000 further deduction was allowed on medical insurance of parents
-         Now Rs. 5000 further deduction allowed w.e.f. AY 2013-14for preventive health check up with in overall limits of 80D. Payment can be made by cash also.
Deduction for saving account Interest up to Rs. 10000(Sec 80TTA)
Deduction to Ind and HUF on saving a/c interest up to Rs. 10000
-         On saving a/c in bank
-         On saving a/c with co op bank
-         On saving a/c with post office
However no deduction for s/a/c held by firm, AOP, BOI, in name of Ind/HUF.
80 CCF not extended . Hence no further deduction of Rs. 20000 for AY 2013-14 and will remain confined to AY 2012-13.


                                        TDS PROVISIONS
Assessee in default
U/s 201(1) an assessee is deemed to be in default if fails to deduct tax .However u/s 191 payer is to be deemed as assessee in default only if payee does not deposits the tax directly.
However in such cases tax is deposited by payee later. Hence payer continues to be assessee in default in intervening period.
In Eli Lily & Co. (P) Ltd, 312 ITR 225, SC held that for computation of interest under section 201(1A), period of default starts from date of deductibility of tax till date of its actual payment by concerned employee and, therefore, levy of interest has to be restricted to such period only 
Further held by SC in Hindustan Coca Cola Beverages Pvt Ltd. 293 ITR226 where deductee, recipient of income, has already paid taxes on amount received from deductor, department once again cannot recover tax from deductor on same income by treating deductor to be assessee-in-default for shortfall in its amount of tax deducted at source
Hence section 201 being amended to provide that payer shall not be assessee in default if:
-         payee has filed return u/s 139
-         payee has taken such sum in computation of income
-         has paid tax due on income declared in return
and certificate form chartered accountant is furnished by payer

Interest shall be payable from date on which tax is deductible till date of furnishing of return.
It is applicable from 01-07-2012

Effect of amending s. 201 incorporated in  disallowance u/s 40(a)
(ia) where an assessee makes payment of the nature specified in the said section to a resident payee without deduction of tax and is not deemed to be an assessee in default under section 201(1) On account of payment of taxes by the payee, then, for the purpose of allowing deduction of such sum, it shall be deemed that the assessee  has deducted and paid the tax on such sum on the date of furnishing of return of income by the resident payee.
These beneficial provisions are proposed to be applicable only in the case of resident payee.
(Applicable from AY 2013-14)

Note: It means if return is filed by non resident payee still disallowance shall be made.

Deterrent against late/ wrong TDS/TCS  return
-         Levy of fee to Rs. 200 per day for late furnishing of return Max up to TDS amount
-         In addition penalty from Rs. 10000 to Rs. 100000. However no penalty if return furnished with in one year
-         Penalty from Rs. 10000 to Rs. 100000 for furnishing wrong PAN in TDS return by deductor subject to pleading reasonable cause u/s 273B
Applicable from 1-7-2011

Processing of TDS return
Intimation generated from processing of TDS return shall be:
-         subject to rectification u/s 154
-         appealble u/s 246A
-         deemed as notice of demand u/s 156
Person responsible for making payment in case of Central/ State Government defined
It shall be DDO i.e. Drawing and disbursing officer (w.e.f.1-7-2012)

Time limit for passing order u/s 201
Time limit for passing order u/s 201 enhanced from 4 years to six years where TDS return is not filed u/s 2001
Limit for TDS on Debentures Interest
Enhanced from Rs. 2500 to Rs. 5000 u/s 193

Other Amendmends
1.     Time Limits for assessments increased by 3 months
2. If receipts from commercial activity in case of advancement  of any other object of general public utility exceeds Rs. 25 lacs, the exemption u/s 11 or 10(23C) shall be lost even though income exemption of trust is not withdrawn or cancelled.
3. 44AD not applicable to (i) a person carrying on profession as referred to in sub-section (1) of section 44AA; (ii) persons earning income in the nature of commission or brokerage income; or (iii) a or a person carrying on any agency business.(Applicable from AY 2011-12)
4. 115JB to apply to companies not covered  by Sch VI as per regulatory requirements of those companies e.g. u/s 211, Sch VI is not applicable to banking, insurance, electricity companies. Book profit for the purpose of section 115JB shall be increased by the amount standing in the revaluation reserve relating to the revalued asset which has been retired or disposed, if the same is not credited to the profit and loss account.

It is also proposed to omit the reference of Part III of the Schedule VI of the Companies Act, 1956 from section 115JB in view of omission of Part III in the revised Schedule VI under the Companies Act, 1956.
        (W.e.f. AY 2013-14)
5.  Advance tax on amount on which tax is deductible but not deducted: Some Courts have have held that advance tax is not payable on such amount. 
E.g. Sumit Bhatta Charya 2008 113 TTJ, Jagdish Gagual Rangwani ITA 2214/Mads/205 . 209 being amended to provide that advance tax is payable on such amount.(W.e.f. AY 2012-13)
6. 54B benefit of reinvestment into agricultural land with in 2 years from date of transfer of agriculture land (used for agriculture purposes b aseessee or parent for 2 years) now extended to HUF also.
7. Refrence to valuation officer can now be made even where excess FMV applied on value of asset at 1-4-81(w.e.f. AY 2009-10)
8. 80-G Benefit to be applicable for donation exceeding Rs. 10000 only if payment not made in cash w.e.f. AY 2013-14
9. Life Insurance Policies where premium exceeds 10% of capital sum assured (minimum of sum assured during term of policy), no deduction for amount exceeding 10% u/s 80C and no exemption of sum received under policy. Earlier limit of  20% lowered to 10% w.e.f. AY 2013-14.
10. Search can be made on basis of joint authorization and assessment can be made individually.
11. Fee for AAR increased from Rs. 2500 to Rs. 10000
12. W.e.f. 1-7-12, processing of return not required where notice u/s 143(2) for scrutiny issued.
13. Sum received by HUF from members to be treated as received from relative u/s 56 w.e.f. 1-10-2009. It was Held by ITAT Rajkot in Vineetkumar Raghavjibhai Bhalodia (17-5-2011) 11 taxmann.com 384 also, that gift received by HUF from  an individual member is gift to relative because HUF itself is group of relatives,   hence exempt u/s 56(2)(vi).
Further if gift is received by member from HUF, it shall be exempt u/s 10(2), so far as gift has been made out of income of HUF. Further held by ITAT Rajkot that even gift made out of income of eralier years still it shall be covered u/s 10(2). Rather unless gift is proved to be made out of assets of HUF , it shall be presumed to be made out of income of HUF
14. Fair market value of the asset shall be deemed to be the full value of consideration if actual consideration is not attributable or determinable(W.e.f. AY 2013-14) u/s 50D.
15. Anomoly u/s 111A, where 10% rate was mentioned inspite of increasing rate to 15% on STCG corrected.
16. Commissioner to Include Director w.e.f. AY 1988-89
17. Under section 47 there is exemption from capital gain on transfer of shares in case of amalgamation or demerger subject to condition that transfer of shares in amalgamating or demerged company is made in consideration of issuing shares in amalgamated company or resulting company and amalgamated or resulting company is Indian company. However if amalgamated or resulting company is itself shareholder in amalgamating or demerged company, it is not possible to issue shares to oneself. Hence requirements to issue shares in such cases dispensed with.


GAAR made applicable w.e.f. AY 2013-14
General Anti Avoidance Rule made applicable to Impermissible avoidance arrangements where purpose is to obtain tax benefit.
Onus to prove that IAA doesn’t intend obtaining tax benefir shall lie on taxpayer




Comments on Finance Bill 2012
1.      No disallowance of expenditure u/s 40A is to be made for specified domestic transactions u/s 92BA. S. 92BA is applicable only to transactions above 5 crores, where CA report is required to be furnished for transfer pricing having regard to decision of Glaxo SmithKline as well as transfer pricing provisions. It means the privilege available to high value transactions above 5 crores during financial year shall not be available for lesser amount transactions which does not apparently appears to be justified.Further if buyer is covered under 40A and seller is covered by 80IA for two legs of same transaction, CA report shall be required by buyer as well as seller.
2.      54GB is applicable to sale of residential property being building or plot of land. However, similar other sections e.g. 54,54F are applicable to residential house or land appartent. Hence there appears to be anomaly because plot of land can not be chracterised as residential or commercial before construction.
3.      54GB entails benefit of SME company if shareholding is more than 50%. Whether in cases where co-owned residential property is sold, whether each of co owner to form separate company to avail the benefit or co owners can jointly hold more than 50% shares.
4.      As per 54GB(4), if equity shares are sold or otherwise transferred with in 5 years from date of acquisition, capital gain not charged earlier shall be taxable in the year of transfer.
a)Whether it will apply even in case shares are partly sold.
b)What if shares are partly sold but sharehilding remains more than 50% visa vis situation shareholding gets reduced below 50%
c)What if shares are not sold but share capital of the company is so increased to bring the share holding of owner of residential property below 50%.
                These issues do not appear to be addressed by Finance Bill 2012

5.      In Vodafone case, SC had held that s.9 does not cover indirect transfers of capital asset. And amendmends brought in Finance Bill 2012 do not cover the issue. Hence amendmends may not overrule Vodafone case.
6.      Benefit of introducing first proviso to s.201(1) regarding not deeming assessing in default as applicable u/s 40(a)(ia) for allowing deduction is available only where payee is resident.Hence benefit is not available if non resident payee files return u/s 139 in India
7.      first proviso to s.201(1) regarding not deeming assessing in default has been incorporated in 40(a)ia) but not s. 271H for levy of penalty from 10000 to 100000. Further whether filing of ITR by deductee and payment of tax by him along with CA certificate can be pleaded as reasonable cause u/s 273B.
8.      Since by under s.9, sale of computer software has been included in definition of royalty, what shall be fate of supreme court decision in TCS case which says that shelf sale of computer software is to be treated as sale of goods.
9.      Section 44AD held as not applicable in agency business. The term not defined under law and may cover distributors. Misuse of this provision can be made by stretching the meaning of word agency business.
10. As per new section 50D, where consideration received or accruing as a result of transfer of capital asset is not ascertainable , fair market value on date of transfer to be taken. Whether it shall apply in cases where building and land appurtent is sold ? If yes, whether stamp duty value can be taken as FMV.
11. As per amended definition of relative under 56(2), gift received by HUF from member gets covered and hence made non taxable although income arising from asset may get clubbed by virtue of 64(2) in the hands of member but it does not still cover a situation where Huf gives any sum with consideration to its member. As per 10(2), any such amount received by member out of income of HUF  shall be exempt  subject to 64(2)(i.e. where asset is gifted by member to HUF and HUF gives back income arising from gift to member , income shall be taxable in the hands of member by virtue of 64(2) and 10(2) shall not apply)but 10(2) applies to income part only . What if corpus of HUF is gifted to member of HUF. Whether it shall be taxable as gift in the hand of member of HUF.
12. Whether s. 56 shall apply in case of forfeiture of shares in wake of share premium becoming taxable in case of private company
13. Whether 80-G shall still be available for multiple receipts less than equal to Rs. 10000.
14. Whether if concessional rate of TDS under DTAA is applied to foreign company , tax residence certificate to be obtained in each case.Should there fore issuing certificate in F. 15CA, tax residence certificate is required to be obtained in such cases
15. Whether it is possible to issue any notification u/s 90(3)by ulilateral act of government to define the terms not defined under DTAA. Now Finance Bill 2012 has taken a step ahead saying that definition so provided shall apply from date of entering into DTAA
16. No disallowance u/s 40(a)(ia) in case of property dealer for non compliance of newly inserted section 194LAA.(providing 1% TDS on sale of Immovable property above 20L/50L)
17. Whether 194LAA applicable to rights in immovable property e.g. FSI, tenancy rights, right to sell immovable property.
18. Whether because of amendmend under s.9, already concluded/decided cases can be re opened, rectified or reviewed 2.  
19.If I offer my entire undisclosed income u/s 68 @ 30%(for say last 30 years e.g. Mr. Hasan Ali), I shall be absolved from penalty, interest and prosecution.Further in case of income from other sources, assessee shall try to cover it under s.68 and if assessee can not show its relation with his business. Income shall get taxed @ 30%.
20. 44AD shall apply to non notified professions because only notified professions u/s 44AA(1) e.g. legal, accountancy, medicine, architecture have been excluded from scope of 44AD

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