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
- 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)
- TDS on
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
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
W.e.f 1-7-2012, TCS @1% on Cash Sale
irrespective of the fact whether buyer is a manufacturer, trader or
purchase is for personal use
5. TCS on Sale
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
(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.
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
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
|
100%
|
100%
|
building and operating, anywhere in
|
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
|
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
- 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.
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)
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
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
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.
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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