ITAT allows assessee's appeal, holds that " If the assessee is entitled to deduction while computing the long term capital gain, that cannot be denied on the ground that such a claim was not before the AO."; Explains that a lawful claim of deduction cannot be denied by the revenue authorities purely on technicalities, that tax is to be levied and collected in accordance with the law; Relies on Bombay HC decision in  [TS-463-HC-2012(BOM)-O], wherein it was held that even if a claim is not made before the AO, it can be made before the appellate authorities; On perusal of the JDA, notes that there was a building on the land and hence assessee was entitled to deduction u/s. 54, holds that " Even assuming that there was no building over the property that was subject matter of JDA, still the assessee would be entitled to deduction u/s. 54F of the Act"; Rejecting Revenue's stand that assessee is not entitled to deduction, ITAT holds that " deduction u/s. 54F of the Act cannot be denied on the ground that multiple flats are obtained by the assessee."; Follows jurisdictional HC decision in [TS-170-HC-2010(KAR)-O]  wherein it was held that the 4 flats received by the assessee in a JDA constituted 'a residential house' for purpose of deduction;

Click here to read facts and download copy of ITAT reported in [TS-7702-ITAT-2018(Bangalore)-O]

 

Ministry of Finance

Guidelines to Control Black Money in Share Market

Dated: 10th  AUG 2018

Securities and Exchange Board of India (SEBI), vide circular dated April 27, 2007, has mandated that PAN would be the sole identification number for all participants transacting in the securities market, irrespective of the amount of transaction.

Schedule VII of the SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015, inter alia, states that:

i. For registration of transfer of securities, the transferee(s) as well as transferor(s) shall furnish a copy of their PAN card to the listed entity.

ii. For securities market transactions and/or for off-market or private transactions involving transfer of shares in physical form, the transferee(s) as well as transferor(s) shall furnish copy of PAN card to the listed entity.

To regulate transactions between clients and brokers, SEBI, vide circulars dated August 27, 2003 and July 12, 2018, has, inter alia, mandated that:

i. Brokers and sub-brokers should not accept cash from the client for purchase of securities and / or give cash against sale of securities to the clients.

ii. Further, it has been mandated that all payments shall be received / made by the stock brokers from / to the clients strictly by account payee crossed cheques/ demand drafts or by way of direct credit into the bank account through electronic fund transfer, or any other mode permitted by the Reserve Bank of India.

iii. In the case of securities also, giving / taking delivery of securities in “demat mode” should be directly to / from the “beneficiary accounts” of the clients except delivery of securities to a recognized entity under the approved scheme of the stock exchange and / or SEBI.

Further, SEBI, vide circular dated June 6, 2018, SEBI, has, inter alia:

i. brought to the notice of SEBI registered market intermediaries the various notifications issued by the Government of India on Prevention of Money Laundering Rules, relating to making Aadhaar number issued by the Unique Identification Authority of India (UIDAI) and Permanent Account Number (PAN) or Form No. 60, as defined in Income Tax Rules, 1962 mandatory for both new and existing accounts with financial market intermediaries including securities market intermediaries.

ii. SEBI has further clarified in the above mentioned circular that in case PAN is not submitted by any client at the time of opening of account based relationship, one certified copy of an

“officially valid document” (OVD) shall be submitted. However, for securities market, in terms of SEBI circular dated April 27, 2007, the requirement of PAN would continue to be mandatory for completing the KYC process.

Moreover, SEBI registered intermediaries are required to follow stringent KYC norms on an ongoing basis and are also required to file Suspicious Transaction Reports (STRs) to the Financial Intelligence Unit (FIU) in case of suspicious activities of their clients.

      The annual turnover for cash market for BSE & NSE and market capitalization for BSE for the last 3 F.Y.s is given below:

 

				(Figures in Rs. Crore)
	Total	Total Turnover	Total Turnover	Total Market Cap
Year	Turnover			(as on 31st March of the F.Y.)
		(NSE)	(BSE+NSE)
	(BSE)			(BSE)
FY 2015-16	7,40,089	42,36,983	49,77,072	94,75,328
FY 2016-17	9,98,261	50,55,913	60,54,174	1,21,54,525
FY 2017-18	10,82,968	72,34,826	83,17,794	1,42,24,996

 

Appropriate action against evasion of taxes/black money, including against cases involving black money investments, is an on-going process. Such action under direct tax laws includes searches, surveys, enquiries, assessment of income, levy of taxes, penalties, etc. and filing of prosecution complaints in criminal courts, wherever applicable. The Income-tax Department does not maintain sector-wise details of the searches conducted.

This was stated by Shri Shiv Pratap Shukla, Minister of State for Finance in a Written reply to a question in Lok Sabha today. 

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DSM/KA

(Release ID: 1542748)

 

Ministry of Finance

New Pension Scheme (NPS)

Dated: 10 AUG 2018

 

National Pension System (NPS) has been designed giving utmost importance to the welfare of the subscribers. Government has made a conscious move to shift from the defined benefit Pension Scheme to defined contribution pension scheme i.e. NPS, due to rising and unsustainable pension bill. There are a number of benefits available to the employees under NPS. Some of the benefits are enlisted below:

i) NPS is a well designed pension system managed through an unbundled architecture involving intermediaries appointed by the Pension Fund Regulatory and Development Authority (PFRDA) viz. pension funds, custodian, central record keeping and accounting agency, National Pension System Trust, trustee bank, points of presence and Annuity service providers. It is prudently regulated by PFRDA which is a statutory regulatory body established to promote old age income security and to protect the interest of subscribers of NPS.

ii) The pension wealth which accumulates over a period of time till retirement grows with a compounding effect. The all-in-costs of the institutional architecture of NPS are among the lowest in the world.

iii) Contribution made to the NPS Tier-I account is eligible for tax deduction under the Income Tax Act, 1961. An additional tax rebate of Rs.50000 is also allowed for contributions made to NPS Tier-I under Section 80CCD (1B) of the Income Tax Act, 1961.

iv) Subscribers can withdraw up to 25% of their own contributions before attaining age of superannuation, subject to certain conditions. Further, PFRDA vide “PFRDA (Exits and Withdrawals under the NPS) (First Amendment) Regulations, 2017” dated 10.08.2017 has liberalized norms for partial withdrawals which also include reduction of requirement of minimum years of being enrolled under NPS from 10 years to 3 years from the date of joining.

v) PFRDA has increased the maximum age limit from 60 years to 65 years for joining NPS-All Citizen Model and Corporate Sector Model, vide “PFRDA (Exits and Withdrawals under the NPS) (Second Amendment) Regulations, 2017” dated 06.10.2017.

vi) PFRDA vide “PFRDA (Exits and Withdrawals under the NPS) (Third Amendment) Regulations, 2018” dated 02.02.2018 has facilitated easy exit & withdrawal in case of disability and incapacitation of the subscriber covered under NPS.

vii) Transparency and Portability is ensured through online access of the pension account by the NPS subscribers, across all geographical locations and portability of employments.

     Representations have been received which inter alia also include the demand that the Government may revert to old defined benefit pension system. However, due to rising and unsustainable pension bill and competing claims on the fiscal, there is no proposal to replace the NPS with old pension scheme in respect of Central Government employees recruited on or after 01.01.2004.

This was stated by Shri Shiv Pratap Shukla, Minister of State for Finance in a Written reply to a question in Lok Sabha today.

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DSM/KA

(Release ID: 1542753)

 

Press Information Bureau 
Government of India
Ministry of Women and Child Development
02 AUG 2018

The WCD Ministry has requested Ministry of Finance for amendment to section 64 of the Income Tax Act,1961: WCD Minister

The Ministry of Women and Child Development has also requested Ministry of Finance for amendment to section 64 of the Income Tax Act,1961 for not including income arising from the asset transferred for inadequate consideration by an individual to his wife or son’s wife.

As informed by the Central Board of Direct Tax (CBDT), Department of Revenue, under the existing provisions of the Income Tax Act,1961, any sum of money received by a person without consideration is liable for taxation if the aggregate value of such sum exceeds Rs.50,000. Similar provisions exist for taxation of receipt of an immovable property or specified property without consideration or inadequate consideration. However, these provisions are not applicable to receipts of any sum/ immovable property/specified property by an individual from following relatives:-

(i)            spouse of the individual;

(ii)           brother or sister of the individual;

(iii)           brother or sister of the spouse of the individual;

(iv)          brother or sister of either of the parents of the individual;

(v)           any lineal ascendant or descendant of the individual;

(vi)          any lineal ascendant or descendant of the spouse of the individual;

(vii)         spouse of the person referred to in (ii) to (vi) above.

Therefore, receipt by women of any sum/immovable property/specified property without/inadequate consideration from the relatives under the existing provisions of the Income tax Act, 1961 are not taxable.

The above Information was given by Minister of State for Women and Child Development, Smt. Maneka Sanjay Gandhi in reply to an Starred Question in the Rajya Sabha, today.

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NB/PS

 

Ministry of Finance

Notices for assessment/reassessment of income of old cases

Dated: 03 AUG 2018

Under the provisions of Income-tax Act, 1961 (‘Act’), notices for assessment/reassessment of income of old cases of more than six years from the end of the relevant assessment year can be issued only in the following exceptional situations:

i. Under clause (c) of sub-section (1) of section 149 of the Act, in cases where income in relation to any asset (including financial interest in any entity) located outside India, chargeable to tax, has escaped assessment, such cases can be reopened up to sixteen years from end of the relevant assessment year. Information regarding number of cases in which notices were issued under the said provision six years from the end of the relevant assessment year, as provided by the Directorate of System, is as under:

During Financial Years	No. of cases in which notices were issued beyond six years
2014-15	82
2015-16	17
2016-17	5
2017-18	7

ii. In cases where tangible evidences are found during a search or seizure operation revealing that income exceeding rupees fifty lakh has escaped assessment, then assessment can be framed for an assessment year falling between the seventh upto the tenth assessment year. This provision was introduced vide Finance Act, 2017 and applies where search under section 132 of the Act is initiated or requisition under section 132A of the Act is made on or after 1st April, 2017.

Further, Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, which taxes the undisclosed foreign income and assets of earlier years in the year of issuing notice has been made applicable from 1st April, 2016.

If any specific instance of causing undue harassment to the assessee while invoking the above provisions is detected, the same is dealt with strictly by the Department.

The Act contains a specific chapter XIX-A consisting of section 245A to 245M, inserted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 01.04.1976 for ‘SETTLEMENT OF CASES’. In this regard, Settlement Commission which is a quasi-judicial body, was set up under section 245B of the Act. The objective of setting up of Settlement Commission is to settle tax liabilities in complicated cases avoiding endless and prolonged litigation and consequential strain on investigational resources of Income-tax Department, subject to fulfilment of conditions prescribed therein.

Further, in recent years, Government had introduced following laws/schemes to deal with undisclosed income/asset:

(i) A one-time compliance window between the period 1st July, 2015 to 30th September, 2015, for disclosing any undeclared foreign asset acquired from income chargeable to tax under Income tax Act for any assessment year prior to 2016-17 was provided;

(ii) The Income Declaration Scheme, 2016 provided an opportunity to any person to make a declaration between the period 1st June, 2016 to 30th September, 2016, in respect of any income chargeable to tax under the Income tax Act for any assessment year prior to 2017-18;

(iii) Under Pradhan Mantri Garib Kalyan Yojana, 2016, between 17th December, 2016 till 31st March, 2016, a declarant could make a declaration in respect of any income, in the form of cash or deposit in an account maintained by the person with a specified entity, chargeable to tax under the Income tax Act for any assessment year prior to 2017-18.

(iv) Section 270AA of the Act, inserted by the Finance Act, 2016 w.e.f. 1st April, 2017, provides immunity from penalty under section 270A and initiation of prosecution proceedings under section 276C or 276CC, subject to fulfilment of conditions prescribed therein.

No instructions have been issued to the IT Department to open special counters to settle their cases by imposing minor penalties.

This was stated by Shri Shiv Pratap Shukla, Minister of State for Finance in a written reply to a question in Lok Sabha today.

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DSM/RM/KA

(Release ID: 1541579)