An income tax is a tax imposed on individuals or somebody that varies with particular income or profits. Income tax generally is computed as the product of a tax charge times taxable revenue. Taxation rates may vary by type or characteristics of the taxpayer. The tax rate may rise as taxable income increases. Professional tax can be defined as a tax that is levied by a state government on all individual Entities who earn a living through any factor.
1. No more ‘self-declaration’ from employees for TDS tax deductions:
2. Revised due dates for filing TDS Returns:
3. Mandatory quoting of PAN for Purchases or Sales of any goods or services exceeding Rs. 2 Lakhs per transaction w.e.f. 1st January, 2016
One of the recommendations of the Special Investigation Team (SIT) on Black Money was that quoting of PAN should be made mandatory for all sales and purchases of goods and services where the payment exceeds certain threshold. Accepting this recommendation, the Finance Minister made an announcement to this effect in his Budget speech. Hence, with effect from 1st January, 2016, quoting of PAN will be required for transactions of sales and purchases of goods and services of an amount exceeding Rs.2 Lakhs per transaction regardless of the mode of payment.
There are 3 basic duties cast upon the tax payer vide this change:
Table explaining new provision regarding Mandatory quoting of PAN:
|Sr. No.||Nature of Transaction||Requirement w.e.f.1st January, 2016|
|1||Purchases or sales of any goods or services||PAN or Form 60 alongwith proof of identity and address to be obtained from buyer/customer/seller/supplier if:Purchase/ sale of any goods or services exceeds Rs.2 Lakhs per transaction irrespective of mode of payment.|
|2||Purchase of jewellery/bullion||Same as above|
Rule 114 also provides for other situations where PAN is to be compulsorily quoted. These details are available in the copy of government notification which can be downloaded here
FAQs pertaining to the above rule:
|1||Whether PAN Card copy has to be obtained under the new rule?||It is strongly recommended to obtain PAN Card copy from the customer/supplier and preserve the same.|
|2||What if supplier or customer is not having PAN?|| In that case, one has to obtain declaration in Form 60 alongwith proof of identity and address from the supplier/customer.Where a person, entering into any transaction, is a minor and who does not have any income chargeable to income-tax, obtain the permanent account number of his father or mother or guardian.
Revised Form 60 can be download here.
Form 60 has to be preserved for a period of 6 years from the end of the financial year in which transaction has taken place.
There is provision of rigourous imprisonment with fine if any wrong declaration is made in Form 60.
|3|| We have entered into different transactions of sale with a customer as below:-
on 1-1-2016 - Rs. 1,60,000 on 5-1-2016
Whether PAN has to be obtained in above case?
|In our opinion, No, since the two transactions will be considered as separate.It is advisable to obtain two invoice wise separate payments in such case.|
|4||Whether PAN of supplier or customer has to be mentioned in the Sales Invoice or Bill?||It is mandatory to mention the same in the Invoice/Bill. Further, the exact name as appearing in PAN should be mentioned in the Invoice.|
|5||What if invoice/bill is prepared in trade name of proprietor and name on PAN Card is of individual?||In case the supplier/customer is proprietor, it is recommended to also mention the name of proprietor on Invoice/Bill/Debit Note etc., if the Invoice/Bill/Debit note carries the trade name of proprietor.e.g. M/s XYZ Enterprise (Prop: Mr. ABC)|
|6||Whether any persons are exempted from quoting PAN?|| - Central, State Governments
offices- Non-Residents as defined u/s 2(30)
|7||Whether any statement has to be filed with the Department furnishing the information of PANs or Form 60 collected from customers/suppliers?|| A return containing details of Form 60 collected from customers/suppliers has to be filed by a person to whom Tax Audit provisions are applicable.The return has to be filed in Form No. 61.The return has to be filed bi-annually as below:
- For Form 60 received from 1-10 to 31-3 – Form 61 has to be filed by 30-4
- For Form 60 received from 1-4 to 30-9 – Form 61 has to be filed by 31-10
Special registration number has to be obtained for filing of this Form. The procedure for the same has not yet been outlined.
|8||Whether any annual statement/return has to be filed?||A return containing details of cash receipts in aggregate exceeding Rs. 2 lakhs during the financial year collected from customers has to be filed by a person to whom Tax Audit provisions are applicable. This requirement is applicable from FY 2016-17 onwards.Such return has to be filed in Form 61A by 31st May after end of financial year. This requirement is applicable from FY 2016-17 onwards.Special registration number has to be obtained for filing of this Form. The procedure for the same has not yet been outlined.|
4. Big Relief to Indian businesses: CBDT has made changes in requirements of Form 15 CA/CB:
Bird’s eye view of changes in Requirements of Form 15 CA & 15 CB & Foreign remittances under Sec 195:
The amended Rules will become applicable from 01.04.2016.
Download the relevant notification here.
5. Cost Inflation Index is 1081 for FY 2015-16
Cost Inflation Index for FY 2015-16 for the purpose of Income Tax Act, 1961 notified. The index is “1081″.
6. Manner of Furnishing Return of Income for every Assessee w.e.f. 1.4.2015 – Notification No 41 of 2015/S.O. 1014(E), Date 15/04/2015:
|Sr No||Manner of furnishing ITR||Individual / HUF||Company||Person required to furnish ITR -7||Firm / LLP or any other person who is required to file ITR 5|
|1||Digitally||If Audited u/s 44AB||In all Cases||In case of Political Party||If Audited u/s 44AB.|
|2||Digitally or through EVC or Electronically and thereafter by submitting ITR V to Bangalore||1 If Return furnished in ITR 3 or 4.2 If Ordinary Resident assessee: - Having asset or financial interest outside India or - Signing Authority in any account outside India or - Earning income from outside India.3 Any relief claimed u/s 90,90A or deduction u/s 91.4 If any audit report furnished electronically under proviso to sub rule 2 of Rule 12.5 Whose Total Income exceeds Rs 5,00,000 or claims any refund. (Except Super Senior Citizen i.e 80 years or more furnishing return in ITR 1 or 2)||Not Applicable||In any other case other than above.||In any other case other than above.|
|3||Paper Form||In any other case than above||Not Applicable||Not Applicable||Not Applicable|
Important Notes for Paper Form :
Paper Form ITR is applicable in case of ITR 1 and ITR 2 only:-
7. New forms 3CA, 3CB & 3CD prescribed:
The Central Board of Direct Taxes (Income Tax Department) has prescribed new Form No. 3CA, Form No. 3CB and Form No. 3CD (These forms lay down the contents of Tax Audit Report to be certified by assessee’s tax auditor under the Income Tax Act, 1961) vide Notification dated 25th July, 2014:
- You may download the notification by clicking on the below hyperlink:http://law.incometaxindia.gov.in/DIT/File_opener.aspx?page=NOTF&schT=&csId=ef5161fa-4162-4f07-8cde-ed1d991313db&NtN=&yr=ALL&sec=&sch=&title=Taxmann%20-%20Direct%20Tax%20Laws
8. New procedure for E-filing Returns, Form No. 26AS and other work in respect of Income Tax Matters:
9. PAN Forms revised:
10. Cost Inflation Index is 1024 for FY 2014-15