Legislation UpdatesNotifications

S.O. 3264(E).– In exercise of the powers conferred by sub-section (3A) of Section 143 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby makes the following Scheme, namely:

1. Short title and commencement.–– (1) This Scheme may be called the E-assessment Scheme, 2019.

(2) It shall come into force on the date of its publication in the Official Gazette.

2. Definitions .–– (1) In this Scheme, unless the context otherwise requires, ––

(i) “Act” means the Income-tax Act, 1961 (43 of 1961);

(ii) “addressee” shall have the same meaning as assigned to it in clause (b) of sub-section (1) of Section 2 of the Information Technology Act, 2000 (21 of 2000);

(iii) “assessment” means assessment of total income or loss of the assessee under sub-section (3) of Section 143 of the Act;

(iv) “authorised representative” shall have the same meaning as assigned to it in sub-section (2) of Section 288 of the Act;

(v) “automated allocation system” means an algorithm for randomised allocation of cases, by using suitable technological tools, including artificial intelligence and machine learning, with a view to optimise the use of resources;

*Please follow the link to read the detailed notification: NOTIFICATION


Ministry of Finance

[Notification dt. 12-09-2019]

Legislation UpdatesNotificationsTaxation

With a view to bringing greater transparency in the functioning of the tax-administration and improvement in service delivery, almost all notices and orders of Income Tax Department are being generated electronically on the Income Tax Business Application (ITBA) platform. However, it has been brought to the notice of the Central Board of Direct Taxes (CBDT) that there have been some instances in which the notice, order, summons, letter and any correspondence (hereinafter referred to as “communication”) were found to have been issued manually, without maintaining a proper audit trail of such communication.

In order to prevent such instances and to maintain proper audit trail of all communication, the CBDT has, vide Circular No.19/2019 dated 14.08.2019 laid down parameters specifying the manner in which any communication issued by any income-tax authority relating to assessment, appeals, orders, statutory or otherwise, exemptions, enquiry, investigation, verification of information, penalty, prosecution, rectification, approval etc. to the assessee or any other person will be dealt with. All such communication issued on or after the 1st of October, 2019 shall carry a computer-generated Document Identification Number (DIN) duly quoted in the body of such communication.

CBDT has also specified exceptional circumstances where the communication may be issued manually but only after recording reasons in writing and with the prior written approval of the Chief Commissioner / Director General of Income-Tax concerned. In cases where manual communication is required to be issued, the reason for the issue of manual communication without DIN has to be specified alongwith the date of obtaining written approval of the Chief Commissioner / Director General of Income-Tax in a particular format. Any communication which is not in conformity with the prescribed guidelines shall be treated as invalid and shall be deemed to have never been issued. Further, CBDT has also laid down the timelines and procedure by which such communication issued manually will have to be regularised and intimated to the Principal Director General of Income-tax (Systems).

            In addition to the above, in all pending assessment proceedings, where notices were issued manually, prior to issuance of the above referred Circular, all such cases would be identified and the notices so sent would be uploaded on ITBA by 31st October, 2019.


[Source: PIB]

Press Release dt. 14-08-2019

Ministry of Finance

Hot Off The PressNews

Central Board of Direct Taxes (CBDT) has said that no changes have been made in any of the Income-tax Return (ITR) forms including ITR-2 and ITR-3 since the notification made on 01-04-2019, i.e. on the 1st day of the Assessment Year 2019-20. There were reports in social media that the taxpayers were facing difficulties in filing return of income in ITR-2 & ITR-3 due to large scale changes in the ITR form on 11-07-2019.

It is stated that the software utility for e-filing of all the ITR forms has been released long back. The utility for e-filing ITR-2 and ITR-3 was released on 2nd May and on 10th  May 2019 respectively. However, the software utility update is a dynamic process and is continuously taken up as per the feedback received from the users/filers to ease their experience in electronic filing of returns.

It is further clarified that the updating of utility does not hamper filing of return as the taxpayers are allowed to file using the utility which is available at that point of time. For example, more than 85 lakh taxpayers have filed returns in ITR-1 till date by using the said utility, which has also undergone update later. Therefore, the impression that the taxpayers are not able to file a return due to changes in ITR form is also not correct as more than 1.38 crore taxpayers have already filed their returns by using the utility released till date. Even though the utility is being updated regularly to provide ease to taxpayers, the returns filed by using the previous version of utility will continue to be valid.

It is pertinent to state that the updation in utility of ITR forms is based on feedback and mainly aimed at easing the compliance burden of the taxpayers by facilitating easier e-filing. For instance, this year, the facility of pre-filling of return forms has been provided based on the information furnished in the TDS statements. This facility has been updated in the utility subsequently. This would substantially reduce the efforts of taxpayers in filling of return forms.

It is reiterated that there are no changes in the notified ITR forms; only the utility has been updated to facilitate the taxpayers. Therefore, the assertion that numerous changes have been made in ITR-2 and ITR-3 on 11-07-2019, does not give a correct picture.


[Press Release dt. 16-07-2019]

Ministry of Finance

NewsTreaties/Conventions/International Agreements

The Central Board of Direct Taxes (CBDT) entered into 14 Unilateral Advance Pricing Agreements (UAPA) and 2 Bilateral Advance Pricing Agreements (BAPA). The 2 bilateral APAs have been entered into with the United States of America. With the signing of these, the total number of APAs entered into by the CBDT has gone up to 219. This includes 199 Unilateral APAs and 20 Bilateral APAs. A total of 67 APAs (9 Bilateral and 58 Unilateral) have been signed in the F.Y.2017-18.

These 16 APAs entered into during March, 2018 pertain to various sectors of the economy like Telecommunication, Information Technology, Automobile, Pharmaceutical, Beverage, Trading, Manufacturing and Banking, Finance & Insurance. The international transactions covered in these agreements include payment of royalty fee, provision of business support services, provision of corporate guarantee, contract manufacturing, provision of marketing support services, provision of engineering design services, provision of engineering support services, merchanting trade of agro commodity, import/export of components, provision of IT services, provision of IT enabled services, provision of investment advisory services, availing of technical services, etc.

The progress of the APA scheme strengthens the Government’s resolve of fostering a non-adversarial tax regime. The Indian APA programme has been appreciated nationally and internationally for being able to address complex transfer pricing issues in a fair and transparent manner.

[Press Release no. 1527436]

Ministry of Finance

Business NewsNews

Seeking to crackdown on shell companies, the government has proposed to remove exemption available to firms with tax liability of up to Rs 3,000 from filing IT returns beginning next fiscal. The Union Budget 2018–19 has rationalised the IT Act provision relating to prosecution for failure to furnish returns. Thus, a managing director or a director in charge of the company during a particular financial year could be liable for prosecution in case of any lapse in filing IT returns for any financial year beginning 01-04-2018. The income tax departments would now track investments by these companies. Also, the focus will be on those firms that show less profit and also those who file IT returns for the first time. There are around 12 lakh active companies in the country, out of which about 7 lakh are filing their returns, including annual audited report, with the Ministry of corporate affairs. Of this, about 3 lakh companies show ‘nil’ income.

The Section 276CC of the Income Tax Act, 1961 provided that if a person wilfully fails to furnish in due time the return of income, he shall be punishable with imprisonment and fine. However, no prosecution could be initiated if the tax liability of an assessee does not exceed Rs 3,000. The government has amended the provision with effect from 01-04-2018 and removed the exemption available to companies. In order to prevent abuse of the said proviso by shell companies or by companies holding benami properties, it is proposed to amend the provisions so as to provide that the said sub-clause shall not apply in respect of a company. The Budget announcement follows the recommendation of the task force on shell companies, which was set up in February, 2017. In the government’s fight against black money, shell companies have come to the fore as they are seen as a potential for money laundering. Till the end of December 2017, over 2.26 lakh companies were deregistered by the MCA for various non compliances and being inactive for long. Since 2017, the apex policy making body of the IT department — the Central Board of Direct Taxes (CBDT), has been sharing with the MCA specific information like PAN data of corporates, Income Tax returns (ITRs), audit reports and statement of financial transactions (SFT) received from banks.

[Source: The BusinessLine]

Hot Off The PressNews

The Central Board of Direct Taxes (CBDT) has notified Income Tax Return Forms (ITR Forms) for Assessment Year 2018-19. For Assessment Year 2017-18, a one page simplified ITR Form-1 (Sahaj) was notified. This initiative benefited around 3 crore taxpayers, who have filed their return in this simplified Form. For Assessment Year 2018-19 also, a one page simplified ITR Form-1 (Sahaj) has been notified. This ITR Form-1 (Sahaj) can be filed by an individual who is resident other than not ordinarily resident, having income up to Rs. 50 lakh and who is receiving income from salary, one house property/other income (interest etc.). Further, the parts relating to salary and house property have been rationalised and furnishing of basic details of salary (as available in Form 16) and income from house property have been mandated.

ITR Form-2 has also been rationalised by providing that Individuals and HUFs having income under any head other than business or profession shall be eligible to file ITR Form-2.  The Individuals and HUFs having income under the head business or profession shall file either ITR Form-3 or ITR Form-4 (in presumptive income cases).

In case of non-residents, the requirement of furnishing details of any one foreign Bank Account has been provided for the purpose of credit of refund. Further, the requirement of furnishing details of cash deposit made during a specified period as provided in ITR Form for the Assessment Year 2017-18 has been done away with from Assessment Year 2018-19.

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. However, where return is furnished in ITR Form-1 (Sahaj) or ITR-4 (Sugam), the following persons have an option to file return in paper form:

(i)  an Individual of the age of 80 years or more at any time during the previous year; or

(ii) an Individual or HUF whose income does not exceed five lakh rupees and who has not claimed any refund in the Return of Income.

The notified ITR Forms are available on the official website of the Department www.incometaxindia.gov.in.

Ministry of Finance

Business NewsNews

The Central Board of Direct Taxes (CBDT) has clarified that the pension received by a taxpayer from his former employer is taxable under the head “Salaries”. The Finance Act, 2018 has amended Section 16 of the Income–tax Act, 1961(“the Act”) to provide that a taxpayer having income chargeable under the head “Salaries” shall be allowed a deduction of Rs 40,000 or the amount of salary, whichever is less, for computing his taxable income. Accordingly, any taxpayer who is in receipt of pension from his former employer shall be entitled to claim a deduction of Rs 40,000 or the amount of pension, whichever is less, under Section 16 of the Act.

Earlier pensioners were not able to enjoy any allowance on account of transport and medical expenses, but after this provision they will also get the benefit of this deduction. Consequently the present exemption in respect of these two allowances stands withdrawn from FY18-19. However, in case of differently-abled persons, the transport allowance at enhanced rate shall continue to be available.

Pension received by dependent family members (as legal heirs) of the retired individual is known as family pension and is considered as ‘income from other sources’. So, in case an employee passes away, then after his death the for the family pension, a standard deduction under Section 57 (iia) is available under which an amount of Rs 15,000 or 1/3rd of the uncommuted pension received, whichever is less, shall be exempt. Spouse, children below the age of 25 years, unmarried daughter and dependent parents in certain cases shall come under the definition of dependent family members.

[Press Release no. 1527822, dt. 05-04-2018]

Ministry of Finance

Business NewsNews

The Central Board of Direct Taxes (CBDT) entered into seven more Advance Pricing Agreements (APAs) during the month of February, 2018. All the seven are Unilateral APAs. With the signing of these Agreements, CBDT has crossed an important milestone of having signed 200 APAs.

The total number of APAs entered into by the CBDT till date has gone up to 203. This includes 185 Unilateral APAs and 18 Bilateral APAs. In the current financial year, the CBDT has entered into 51 APAs so far (44 Unilateral APAs and 7 Bilateral APAs).

The seven APAs signed in February pertain to the Pharmaceuticals, Automobiles, Financial and Food & Beverages sectors of the economy. The international transactions covered in these agreements include Manufacturing, Provision of Software Development Services, Provision of IT enabled Services, Payment of Royalty, Provision of Contract R&D Services, Provision of Marketing Support Services, Distribution, AMP Expenses, Provision of Engineering Design Support Services, Provision of Sourcing Support Services, Payment of Interest, etc.

The APA provisions were introduced in the Income-tax Act, 1961 in 2012 and the “Rollback” provisions were introduced in 2014. The APA scheme endeavours to provide certainty to taxpayers in the domain of transfer pricing by specifying the methods of pricing and setting the prices of international transactions in advance.

The progress of the APA scheme strengthens the Government’s resolve of fostering a non-adversarial tax regime. The Indian APA programme has been appreciated nationally and internationally for being able to address complex transfer pricing issues in a fair and transparent manner. It has contributed significantly towards improving the ease of doing business in India.

Ministry of Finance