Ministry of Finance

News report of Merger of two Boards of Revenue factually incorrect

Government has no proposal to merge two Boards created under the Central Boards of Revenue Act, 1963

Dated: 06 JUL 2020

A news item has been published today in a leading newspaper that the Government is considering proposal to merge the Central Board of Direct Taxes and Central Board of Indirect Taxes and Customs. This news item is factually incorrect as the Government has no proposal to merge the two Boards created under the Central Boards of Revenue Act, 1963. It has been published without due verification of facts from the competent authorities of Ministry of Finance and only creates a policy distraction when the Ministry is amidst implementation of a large number of taxpayers’ friendly reforms like transition from manual assessment based on territorial jurisdiction to a completely randomized electronic faceless assessment, electronic verification or transactions and faceless appeals.

As pointed out in the report, the said merger was one of the recommendations of the Tax Administrative Reforms Commission (TARC). The report of TARC was examined in detail by the Government and this recommendation of TARC was not accepted by the Government. As a part on an assurance made by the Government in the Parliament in response to a Parliament question, the Government has also placed this fact in 2018 before the Committee on Government Assurances. The action taken report on the recommendations of the TARC is placed even on the website of Department of Revenue, which clearly shows that this recommendation was not accepted.

It is evident that this misleading article has been published with no due diligence of even checking official records placed in the public domain or checking the latest status with relevant competent authorities in the Ministry of Finance. It not only reflects poorly on the quality of journalism but also shows a complete disregard for due diligence. If such an unverified story is given a front-page lead story position, it should be a concern for all news reading public. This news item is completely rejected as baseless and unverified.

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RM/KMN

(Release ID: 1636793)

 

Government of India

Department of Revenue

Ministry of Finance

Central Board of Direct Taxes

New Delhi, 3rd July, 2020

PRESS RELEASE

Income Tax Department Refunded Rs. 62,361 crore to more than 20 lakh taxpayers during Covid days

In pursuance to the Government’s decision vide Press Note dated April 8th, 2020 to issue pending income tax refunds in order to help taxpayers in a Covid-19 pandemic situation, the Income Tax Department has issued tax refunds at a speed of 76 cases per minute from 8th April to 30th June, 2020. During this period of just 56 weekdays, the Central Board of Direct taxes (CBDT) has issued refunds in more than 20.44 lakh cases amounting to more than Rs. 62,361 crore.

It is stated that taxpayers are experiencing this facet of the I-T Department which is not only taxpayer-friendly, but also that of a facilitator providing liquidity in this hard time of Covid-19 pandemic. Income tax refunds amounting to Rs. 23,453.57 crore have been issued in 19,07,853 cases to taxpayers and corporate tax refunds amounting to Rs. 38,908.37 crore have been issued in 1,36,744 cases to taxpayers during this period.

Refunds of this magnitude and numbers have been issued completely electronically and have been directly deposited into the bank accounts of the taxpayers. Unlike what used to happen some years ago, in these refund cases, no taxpayer had to approach the Department to request for release of refund. They got refunds directly into their bank accounts.

CBDT reiterated that taxpayers should provide immediate response to emails of the Department so that refunds in their cases too could be processed and issued right away. Such emails of I-T Department seek taxpayers to confirm their outstanding demand, their bank account number and reconciliation of defect/mismatch prior to issue of refund. In all such cases, quick responses from the taxpayers would enable the I-T Department to process their refunds expeditiously.

(Surabhi Ahluwalia)

Commissioner of Income Tax

(Media & Technical Policy)

Official Spokesperson, CBDT

Press Information Bureau
Government of India
Ministry of Finance

Dated: 26 JUN 2020

Introduction of Floating Rate Savings Bonds, 2020 (Taxable)

The Government has notified the new Floating Rate Savings Bonds, 2020 (Taxable)Scheme in place of 7.75 percent Savings (Taxable) Bonds, 2018Scheme which ceased for subscription from the close of banking business on May 28, 2020. The broad features of thenew Floating Rate Savings Bonds, 2020 (Taxable) scheme are given below: 

Sl. No.	Item	Details
1.	Scheme name	Floating Rate Savings Bonds, 2020 (Taxable)
2.	Issuance	To be issued by Reserve Bank India on behalf of the Government of India.
3.	Eligibility	The Bonds may be held by - (i)   a person resident in India,- (a)          in his individual capacity, or (b)          in individual capacity on joint basis, or (c)          in individual capacity on any one or survivor basis, or (d)          on behalf of a minor as father/mother/legal guardian (ii)      a Hindu Undivided Family. Explanation: For the purpose of this paragraph, the “person resident in India” shall have the same meaning as defined in clause (v) of Section 2 of the Foreign Exchange Management Act 1999(42 of 1999)
4.	Issue price/ Denomination/ Minimum Subscription	The Bonds will be issued at parat Rs.100/-for a minimum amount of Rs.1000/- (nominal value) and in multiples thereof.
5.	Date of Issue	The Bonds, in the form of Bonds Ledger Account, will be opened (issued) from the date of tender of cash (up to Rs.20,000/- only), or date of realization of cheque/draft/funds.
6.	Maximum limit	There will be no maximum limit for investment in the Bonds.
7.	Forms/Certificate	The Bonds will be issued only in the form of Bond Ledger Account and may be held at the credit of the holder in an account called Bond Ledger Account (BLA). The investors will be issued a Certificate of Holding for the same.
8.	Payment option	Subscription to the Bonds will be in the form of Cash(uptoRs.20,000 only)/drafts/cheques or any electronic mode acceptable to the Receiving Office.Cheques or drafts should be drawn in favour of the Receiving Office and payable at the place where the applications are tendered.
9.	Repayment/Tenor	The Bonds shall be repayable on the expiration of 7 (Seven) years from the date of issue. Premature redemption shall be allowed for specified categories of senior citizens.
10.	Receiving Offices	Applications will be received at the branches of SBI, Nationalised banks and specifiedprivate sector banks, either directly or through their agents.
11.	Interest Rate(Floating)	The interest on the bonds is payable semi-annually on 1st Jan and 1st July every year.The coupon on 1st January 2021 shall be paid at 7.15%. The Interest rate for next half-year will be reset every six months, the first reset being on January 01, 2021. There is no option to pay interest on cumulative basis.
12.	Tax treatment	Interest on the Bonds will be taxable under the Income-tax Act, 1961as amended from time to time and as applicable according to the relevant tax status of the Bonds holder.
13.	Transferability	The Bonds in the form of Bond Ledger Account shall not be transferableexcept transfer to a nominee(s)/legal heir in case of death of the holder of the bonds
14.	Nomination	A sole holder or all the joint holders of Bonds, being individual/s, may nominate in Form C or as near thereto as may be, one or more persons who shall beentitled to the Bonds and the payment there on, in the event of his/their death.
15.	Tradability /Advances	The Bonds shall not be tradable in the secondary market and shall not be eligible as collateral for loans from banks, financial Institutions and Non-Banking Financial Company (NBFC) etc.
16.	Brokerage/Commission	Brokerage at the rate of 0.5% of the amount mobilized will be paid to the Receiving Offices and they shall share at least 50% of the brokerage so received with brokers/sub brokers registered with them.

 

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Press Information Bureau
Government of India
Ministry of Finance

Dated: 24 JUN 2020

Extension of various time limits under Direct Tax & Benami laws

In view of the challenges faced by taxpayers in meeting the statutory and regulatory compliance requirements across sectors due to the outbreak of Novel Corona Virus (COVID-19), the Government brought the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 [the Ordinance] on 31st March, 2020 which, inter alia, extended various time limits.  In order to provide further relief to the taxpayers for making various compliances, the Government has issued a Notification on 24th June, 2020, the salient features of which are as under:

I. The time for filing of original as well as revised income-tax returns for the FY 2018-19 (AY 2019-20) has been extended to 31st July, 2020.

II. Due date for income tax return for the FY 2019-20 (AY 2020-21) has been extended to 30th November, 2020. Hence, the returns of income which are required to be filed by 31st July, 2020 and 31st October, 2020 can be filed upto 30th November, 2020. Consequently, the date for furnishing tax audit report has also been extended to 31st October, 2020.

III. In order to provide relief to small and middle class taxpayers, the date for payment of self-assessment tax in the case of a taxpayer whose self-assessment tax liability is upto Rs. 1 lakh has also been extended to 30th November, 2020. However, it is clarified that there will be no extension of date for the payment of self-assessment tax for the taxpayers having self-assessment tax liability exceeding Rs. 1 lakh. In this case, the whole of the self-assessment tax shall be payable by the due dates specified in the Income-tax Act, 1961 (IT Act) and delayed payment would attract interest under section 234A of the IT Act.

IV. The date for making various investment/ payment for claiming deduction under Chapter-VIA-B of the IT Act which includes section 80C (LIC, PPF, NSC etc.), 80D (Mediclaim), 80G (Donations) etc. has also been further extended to 31st July, 2020. Hence the investment/ payment can be made upto 31st July, 2020 for claiming the deduction under these sections for FY 2019-20.

V. The date for making investment/ construction/ purchase for claiming roll over benefit/ deduction in respect of capital gains under sections 54 to 54GB of the IT Act has also been further extended to 30th September, 2020. Therefore, the investment/ construction/ purchase made up to 30th September, 2020 shall be eligible for claiming deduction from capital gains.

VI. The date for commencement of operation for the SEZ units for claiming deduction under section 10AA of the IT Act has also been further extended to 30th September, 2020 for the units which received necessary approval by 31st March, 2020.

VII. The furnishing of the TDS/ TCS statements and issuance of TDS/ TCS certificates being the prerequisite for enabling the taxpayers to prepare their return of income for FY 2019-20, the date for furnishing of TDS/ TCS statements and issuance of TDS/ TCS certificates pertaining to the FY 2019-20 has been extended to 31st July, 2020 and 15th August, 2020 respectively.

VIII. The date for passing of order or issuance of notice by the authorities and various compliances under various Direct Taxes & Benami Law which are required to be passed/ issued/ made by 31st December, 2020 has been extended to 31st March, 2021. Consequently, the date for linking of Aadhaar with PAN would also be extended to 31st March, 2021.

IX. The reduced rate of interest of 9% for delayed payments of taxes, levies etc. specified in the Ordinance shall not be applicable for the payments made after 30th June, 2020.

The Finance Minister has already announced extension of date for making payment without additional amount under the “Vivad Se Vishwas” Scheme to 31st December 2020, necessary legislative amendments for which shall be moved in due course of time. The said Notification has extended the date for the completion or compliance of the actions which are required to be completed under the Scheme by 30th December, 2020 to 31st December, 2020. Therefore, the date of furnishing of declaration, passing of order etc under the Scheme stand extended to 31st December, 2020.

Deferment of the implementation of new procedure for approval / registration / notification of certain entities u/s 10(23C), 12AA, 35 and 80G of the IT Act has already been announced vide Press Release dated 8th May, 2020 from 1st June, 2020 to 1st October, 2020. It is clarified that the old procedure i.e. pre-amended procedure shall continue to apply during the period from 1st June, 2020 to 30th September, 2020. Necessary legislative amendments in this regard shall be moved in due course of time.

The Finance Minister has already announced reduced rate of TDS for specified non-salaried payments to residents and specified TCS rates by 25% for the period from 14th May, 2020 to 31st March, 2021. The announcement was also followed by the Press Release dated 13th May, 2020. The necessary legislative amendments in this regard shall be moved in due course of time.

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Government of India

Department of Revenue

Ministry of Finance

Central Board of Direct Taxes

New Delhi, 07th June, 2020

PRESS RELEASE

Growth Trajectory of Direct Tax Collection & Recent Direct Tax Reforms

There are reports in a certain section of media that the growth of direct taxes collection for the FY 2019-20 has fallen drastically and buoyancy of the direct tax collection as compared to the GDP growth has reached negative. These reports do not portray the correct picture regarding the growth of direct taxes. It is a fact that the net direct tax collection for the FY 2019-20 was less than the net direct tax collection for the FY 2018-19. But this fall in the collection of direct taxes is on expected lines and is temporary in nature due to the historic tax reforms undertaken and much higher refunds issued during the FY 2019-20.

This fact becomes more apparent if we compare the gross collection (which removes anomalies created by the variation in the amount of refund given in a year) after taking into account the revenue foregone estimated for the bold tax reforms undertaken, discussed below, which have a direct impact on the direct taxes collection for FY 2019-20. It may also be noted that in FY 2019-20, amount of total refunds given was Rs. 1.84 lakh crore as compared to Rs. 1.61 lakh crore in FY 2018-19 which is a 14% increase year-on-year.

             I. Reduction in corporate tax rate for all existing domestic companies:

In order to promote growth and investment, the Government has brought in a historic tax reform through the Taxation Laws (Amendment) Ordinance 2019 which provided a concessional tax regime of 22% for all existing domestic companies from FY 2019-20 if they do not avail any specified exemption or incentive. Further, such companies have also been exempted from payment of Minimum Alternate Tax (MAT).

II. Incentive for new manufacturing domestic companies: In order to attract investment in manufacturing sector, the Taxation Laws (Amendment) Ordinance 2019 has drastically reduced the tax rate to 15% for new manufacturing domestic company if such company does not avail any specified exemption or incentive. These companies have also been exempted from payment of Minimum Alternate Tax (MAT).

iii. Reduction in MAT rate: In order to provide relief to the companies which continue to avail exemption/deduction and pay tax under MAT, the rate of MAT has also been reduced from 18.5% to 15%.

iv. Exemption from income-tax to individuals earning income up to Rs. 5 lakh and increase in standard deduction: Further, to provide complete relief from payment of income-tax to individuals earning taxable income up to Rs. 5 lakh, the Finance Act, 2019 exempted an individual taxpayer with taxable income up to Rs. 5 lakh by providing 100% tax rebate. Also, to provide relief to the salaried taxpayers, the Finance Act, 2019 enhanced the standard deduction from Rs. 40,000 to Rs. 50,000.

2. The revenue impact of these reforms have been estimated at Rs. 1.45 lakh crore for Corporate Tax and at Rs.23,200 crore for the Personal Income Tax (PIT). Tax buoyancy on gross direct tax collection after adjusting the revenue foregone for the above mentioned tax reforms is as under:

(Rs. in crore)

	Gross Direct Tax Collection for FY 2018-19 (A)	Actual Gross Direct Tax Collection for FY 2019-20 (B)	Adjustment due revenue foregone for Tax Reforms undertaken during FY 2019-20 (C)	Adjusted Gross Direct Tax Collection for FY 2019-20 (D)=(B+C)	Growth rate in Gross collection for FY 2019-20 (E) (i.e., D over A)	Nominal GDP Growth rate FY 2019-20 (F)	Tax buoyancy FY 2019-20 (G)=(E/F)
Corporate Tax	7,69,301	6,78,398	1,45,000	8,23,398	7.03	7.20	0.98
Personal Income Tax (PIT)	5,28,373	5,55,322	23,200	5,78,522	9.49	7.20	1.32

Total            12,97,674        12,33,720       1,68,200         14,01,920        8.03              7.20          1.12

3.  Therefore,   by   removing   the   effect   of   the   extraordinary   and   historic   tax   reform measures and higher issuance of refunds during the FY 2019-20, the buoyancy of total gross direct tax collection comes to 1.12 and almost 1 for Corporate Tax and 1.32 for Personal Income Tax. These buoyancies indicate that the growth trajectories of both the arms of direct taxes, i.e., Corporate Tax and PIT are intact and are rising steadily. Further,  the  higher  growth  rate  in direct taxes  as compared  to  growth  rate  in the GDP even in these challenging times proves that recent efforts for the widening of the tax base undertaken by the Government are yielding results.

4. Furthermore, the assertion that inspite of the tax reforms, the investment has not been picking up is not correct and is without appreciation of the reality of the business world. The setting up of new manufacturing facilities requires various preliminary steps like acquisition of land, construction of factory sheds, setting up of offices and other infrastructures, etc. These activities cannot be completed in just a few months and the manufacturing plants cannot start manufacturing goods from the next day of the announcement of reforms. The tax reforms were announced in September, 2019 and the results are expected to be visible in the next few months and in years to come. The outbreak of COVID-19, may further delay this process but the growth in production due to these tax reforms is bound to happen and cannot be stopped.

5. The Government is committed to provide a hassle free direct tax environment with moderate tax rate and ease of compliance to the taxpayers and also to stimulate the growth by reforming the direct taxes system. Some of the recent steps taken in this direction, apart from those discussed above, are as under:

1. Personal Income Tax - In order to reform Personal Income Tax, the Finance Act, 2020 has provided an option to individuals and co-operatives for paying income-tax at concessional rates if they do not avail specified exemption and incentive.

2. Abolition of Dividend Distribution Tax (DDT) - In order to increase the attractiveness of the Indian Equity Market and to provide relief to a large class of investors in whose case dividend income is taxable at the rate lower than the rate of DDT, the Finance Act, 2020 removed the Dividend Distribution Tax under which the companies are not required to pay DDT with effect from 01.04.2020. The dividend income shall be taxed only in the hands of the recipients at their applicable rate.

3. Vivad   se   Vishwas    -   In   the   current   times,   a   large   number   of   disputes related to direct taxes are pending at various levels of adjudication from Commissioner (Appeals) level to Supreme Court. These tax disputes consume a large part of resources both on the part of the Government as well as taxpayers and also deprive the Government of the timely collection of revenue. With these facts in mind, an urgent need was felt to provide for resolution of pending tax disputes which will not only benefit the Government by generating timely revenue but also the taxpayers as it will bring down mounting litigation costs and efforts can be better utilized for expanding business activities. Direct Tax Vivad se Vishwas Act, 2020 was enacted   on   17^th   March,   2020   under   which   the   declarations   for   settling disputes are currently being filed.

4. Faceless E-assessment Scheme - The E-assessment Scheme, 2019 has been notified on 12^th September, 2019 which provides for a new scheme for making assessment by eliminating the interface between the Assessing Officer and the assessee, optimizing use of resources through functional specialization and introducing the team-based assessment.

5. Faceless appeals - In order to take the reforms to the next level and to eliminate human interface, the Finance Act, 2020 empowered the Central Government to notify Faceless Appeal Scheme in the appellate function of the department between the appellant and the Commissioner of Income-tax (Appeals).

6. Document Identification Number (DIN) - In order to bring efficiency and transparency in the functioning of the Income Tax Department, every communication of the Department whether it is related to assessment, appeals, investigation, penalty and rectification, among other things, issued from 1st October, 2019 onwards are mandatorily having a computer-generated unique document identification number (DIN).

7. Pre-filling of Income-tax Returns - In order to make tax compliance more convenient, pre-filled Income Tax Returns (ITR) have been provided to individual taxpayers. The ITR form now contains pre-filled details of certain incomes such as salary income. The scope of information for pre-filling is being continuously expanded by pre-filling more transactions in the ITR.

8. Encouraging digital transactions - In order to facilitate the digitalisation of the economy and reduce unaccounted transactions, various measures have been taken which include reduction in rate of presumptive profit on digital turnover, removal of MDR charges on prescribed modes of transactions, reducing the threshold for cash transactions, prohibition of certain cash transactions, etc.

9. Simplification of compliance norms for Start-ups - Start-ups have been provided hassle-free tax environment which includes simplification of assessment procedure, exemptions from Angel-tax, constitution of dedicated start-up cell etc.

10. Relaxation in the norms for Prosecution: The threshold for launching prosecution   has   been   substantially   increased.   A   system   of   collegium   of senior officers for sanction of prosecution has been introduced. The norms for compounding have also been relaxed.

11. Raising of monetary limit for filing of appeal - To effectively reduce taxpayer grievances/ litigation and help the Income Tax Department focus on litigation involving complex legal issues and high tax effect, the monetary thresholds for filing of departmental appeals have been raised from Rs. 20 lakh to Rs. 50 lakh for appeal before ITAT, from Rs. 50 lakh to Rs. 1 crore for appeal before the High Court and from Rs. 1 crore to Rs. 2 crore for appeal before the Supreme Court.

12. Expansion of scope of TDS/TCS - For widening the tax base, several new transactions were brought into the ambit of Tax Deduction at Source (TDS) and Tax Collection at Source (TCS). These transactions include huge cash withdrawal, foreign remittance, purchase of luxury car, e-commerce participants, sale of goods, acquisition of immovable property, etc.

 

(Surabhi Ahluwalia)

Commissioner of Income Tax

(Media & Technical Policy)

Official Spokesperson, CBDT