Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

                                                                                New Delhi, 18th August, 2018

 PRESS RELEASE

CBDT issues Circular on amendment of Tax Audit Report

Section 44AB of the Income-tax Act, 1961 (‘the Act’) read with rule 6G of the Income-tax Rules, 1962 (‘the Rules’) requires prescribed persons to furnish the Tax Audit Report alongwith the prescribed particulars in Form No. 3CD. The existing Form No. 3CD was amended vide notification no. GSR 666(E) dated 20^th July, 2018 with effect from 20^th August, 2018.

Representations have been received by the Central Board of Direct Taxes (CBDT) that the implementation of reporting requirements under the proposed clause 30C (pertaining to General Anti-Avoidance Rules (GAAR)) and proposed clause 44 (pertaining to Goods and Services Tax (GST) compliance) of the Form No. 3CD may be deferred. 

On consideration of the matter, the CBDT has decided, vide Circular No. 6/2018 dated 17^th August, 2018, that the reporting under the proposed clause 30C and proposed clause 44 of the Tax Audit Report shall be kept in abeyance till 31^st March, 2019. The Circular has been uploaded on the departmental website www.incometaxindia.gov.in

 

(Surabhi Ahluwalia)

Commissioner of Income Tax

(Media & Technical Policy)

Official Spokesperson, CBDT

 

Click here to read facts and download copy of ITAT reported in [TS-7665-ITAT-2018(Jaipur)-O]

 

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

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)

 

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)