MINISTRY OF FINANCE

(Department of Revenue)

(CENTRAL BOARD OF DIRECT TAXES)

NOTIFICATION No. 75 /2019

Dated: 28th September, 2019

S.O. 3539(E).— In exercise of the powers conferred under sub-section (2) of section 139AA of the Income-tax Act, 1961 (‘Act’)(43 of 1961), the Central Government hereby amends the notification of the Ministry of Finance (Department of Revenue) dated 31st  March, 2019, published in the Gazette of India, Extraordinary, Part-II, Section 3, sub-section (ii) vide S.O. number 1495(E) dated 01st April, 2019.

2. In the said notification: -

(i) in paragraph 1, 30th September, 2019 shall be substituted by 31st December, 2019;

(ii) in paragraph 3, 30.09.2019 shall be substituted by 31st December, 2019.

[F. No. 225/75/2019-ITA.II]

RAJARAJESWARI R., Under Secy.

Note : The principal notification no. 31/2019 dated 31st March, 2019 was published in the Gazette of India, Extraordinary, Part-II, Section 3, sub-section (ii) vide S.O. number 1495(E) dated 1st April, 2019.

 

MINISTRY OF FINANCE

(Department of Revenue)

(CENTRAL BOARD OF DIRECT TAXES)

NOTIFICATION

Dated: 27th September, 2019

INCOME-TAX

G.S.R. 694(E). In exercise of the powers conferred by section 199 read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes, hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:—

1. Short title and commencement.-

(1) These rules may be called the Income-tax (10th Amendment) Rules, 2019.

(2) They shall be deemed to have come into force with effect from the 1st day of September, 2019.

2. In the Income-tax Rules, 1962, in rule 37BA, after sub-rule (3), the following sub-rule shall be inserted, namely:-

“(3A) Notwithstanding anything contained in sub-rule (1), sub-rule (2) or sub-rule (3), for the purposes of section 194N, credit for tax deducted at source shall be given to the person from whose account tax is deducted and paid to the Central Government account for the assessment year relevant to the previous year in which such tax deduction is made”

[Notification No. 74/F. No. 370142/18/2019-TPL]

SAURABH GUPTA, Under Secy.

(Tax Policy and Legislation Division)

Explanatory Memorandum : It is certified that no person is being adversely affected by giving retrospective effect to the present rules.

Note : The principal rules were published in the Gazette of India, Extraordinary, Part II, Section 3, Subsection (ii) vide notification number S.O. 969(E), dated the 26th March, 1962 and last amended vide notification number G.S.R. 679(E), dated 20.09.2019.

 

Circular No. 26 of 2019

F. No. 370142/1/2019-TPL (Pt.-l)

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

(TPL Division)

************

Dated: 26th September, 2019

Clarifications in respect of filling-up of return forms for the Assessment Year 2019-20

The Income-tax Return (ITR) forms for the Assessment Year (A.Y.) 2019-20 were notified vide notification bearing G.S.R. 279(E) dated the 01st day of April, 2019. Subsequently, instructions for filing ITR forms were issued and the software utility for e-filing of all the ITR forms was also released. After notification of the ITR forms, various queries were raised by the stakeholders in respect of filling-up of the ITR forms. The queries were examined in the Board and clarifications were issued to address the concerns raised therein, vide Circular No. 18 of 2019 dated 08.08.2019 and Circular No 21 of 2019 dated 27.08.2019.

2. Subsequently, further representations have been received on certain issues relating to filing of Forms ITR-5, ITR-6 and ITR-7. Accordingly, following clarifications are issued in continuation to the aforementioned Board Circulars.

Question 1: In the Form rfR-6, an unlisted company, other than a start-up, is required to furnish details of shareholding in Schedule SH-1. In a case where shares have been acquired by way of transfer, please clarify how the columns on "Date of allotment", "Issue price" and "Amount received" should be filled up?

Answer: In case shares have been acquired by the shareholder by way of transfer, and not by way of allotment made by the company, the details of shareholding should be entered in the respective columns of the Table in Schedule SH-1, as under-

(i)     Name of Shareholder: - Enter name of the person holding shares as on end of the previous year (current shareholder).

(ii)     Date of allotment-Enter date on which shares were transferred to the current shareholder as per companies register.

(iii)     Face value per share: - Enter the face value per share at which the shares had been originally allotted by the company.

(iv) Issue price per share: - Enter the price at which shares were issued by the company to the original shareholder to whom the company had allotted the shares.

(v) Amount received: - Enter the total amount received by the company from the original shareholder to whom the allotment of shares had been made, upto the end of the previous year.

In case of start-ups, the details of shareholding are required to be furnished in Schedule SH-2 .In cases where shares of a start-up company have been acquired by the shareholder by way of transfer, the details of shareholding should be entered in the respective column of the table in Schedule SH-2, as under-

(i)  Name of Shareholder: - Enter name of the person holding shares as on end of the previous year (current shareholder).

(ii) Date of allotment-Enter date on which shares were transferred to the current  shareholder as per companies register.

(iii) Face value per share: - Enter the face value per share at which the shares had been originally allotted by the company.

(iv)  Issue price per share: - Enter the price at which shares were issued by the company to the original shareholder to whom the company had allotted the shares.

(v) Paid up value per share: - Enter the amount received by the company for each share, from the original shareholder to whom the allotment of shares had been made, upto the end of the previous year.

(vi) Share premium: - Enter the amount of premium per share at which shares were allotted by the company to the original shareholder.

Question 2 : Please clarify whether it is mandatory to mention PAN number of shareholder in Schedule SH-1. In a case where shareholder is resident of a foreign country having no PAN, or in case where PAN of shareholder is not available for other practical reasons, it is not possible to fill up PAN of all shareholders in the Schedule SH-1.

Answer: PAN of shareholder should be furnished in Schedule SH-1, if available. However, in case the shareholder is a non-resident, having no PAN, a default value can be entered in place of PAN such as "NORES9999N". Similarly, in case PAN of the shareholder is not available due to any other reason, a default value can be entered in place of PAN such as "NOAVL9999N"

Question 3: An unlisted company registered under section 8 of Companies Act 2013 or Section 25 of the Companies Act 1956 does not have share capital. In such case, how the details required in Schedule-SH-1 are required to be filled up?

Answer: In the departmental utility ofITR-6, at the beginning of Schedule SH-1, the taxpayer is required to answer the question - "Are you a company registered under Section 8 of Companies Act 2013 or Section 25 of Companies Act 1956?". In case the taxpayer selects "Yes" in the dropdown provided against the question, the details in Schedule SH-1 are not required to be filled up.

Question 4: An unlisted company, other than a start-up, is required to furnish details of assets and liabilities in Schedule AL-1, which is mandatory. A start-up is required to furnish details of assets and liabilities in Schedule AL-2. In a case where the unlisted company/ start-up does not hold any of the assets specified therein as at the end of the previous year, please clarify how the details in Schedule AL-1/ Schedule AL-2 should be filled up?

Answer: In the departmental utility ofITR-6, at the beginning of Schedule AL-1/ Schedule AL-2, the taxpayer is required to answer the question -"Do you have assets and liabilities as at the end of the year as mentioned in Schedule AL-1/Schedule AL-2?". In case the taxpayer selects "No" in the drop-down provided against the question, the details in Schedule AL-1 / Schedule AL-2 are not required to be filled up. In case the taxpayer selects "Yes" in the drop-down provided against the question, it is mandatory to furnish the requisite details in at least one of the Tables given in Schedule AL-1 / Schedule AL-2.

Question 5: An AOP/BOI is chargeable to tax at slab rate. However, while filing return of income in ITR-5, the departmental utility is charging tax at maximum marginal rate?

Answer: In Part A - General of the ITR-5, the particulars of members of the AOP/BOI are required to be furnished alongwith their respective shares. In case these particulars are not provided, or incorrectly provided (e.g. total of shares of the members does not add up to 100%), the tax is being charged at maximum marginal rate.

Question 6: I am a private trust and am trying to file return of income in Form ITR-2. However, I am unable to file ITR-2 for A.Y. 2019-20. ?

Answer: As per rule 12 of the Income-tax Rules, only individuals and HUFs, not having any income under the head business or profession, are eligible to file ITR-2. A private trust is required to furnish return of income in ITR-5.

Question 7: An investment fund or a business trust is required to file return of income in ITR-5. Please clarify how their income should be shown in Schedule SI etc.?

Answer: An investment fund claiming exemption under section 10(23FB) or 10(23FBA), or a business trust claiming exemption under section 10(23FC) or 10(23FCA), have to enter the amount of exempt income directly in column 12(b) or column 12(c), respectively, of the Part B -TI (computation of income) in the YFR-5. Such entities are not required to fill up the headwise details in Schedule BP, Schedule HP, Schedule CG, Schedule OS, and Schedule SI etc.

Question 8: I am a trust registered under section 12A/12AA filing return of income in ITR-7. The amount received as corpus donation should be treated as exempt. However the departmental utility is including this amount as part of total income?

Answer: In Part A General, in the table "Details of registration or approval under the Income-tax Act", please enter 'section 12A/12AA' under the column "section under which registered or approved". Further, in the column on filing status, please choose "section 11" in the drop-down provided against the field "please specify the section under which the exemption is claimed". If these details are furnished correctly in Part A-General, the amount of corpus donation would not be included in total income.

Question 9: I am a trust/society/company claiming exemption under section 10 or section 13A or section 13B and filing return of income in ITR-7. However the departmental utility is charging tax even on the amount shown as exempt income?

Answer: The claim of exemption under section 10 or section 13A or section 13B by such entities should be entered directly in the relevant column of the Part B-TI (computation of income) in ITR-7. The income and expenditure statement should be furnished in the applicable Schedule i.e. Schedule IE-1 or 1E-2 or IE-3 or IE-4. Such entities are not required to fill up the headwise details in Schedule BP, Schedule HP, Schedule CG, Schedule OS, and Schedule SI etc

(Ankur Goyal)

Under Secretary to the Govt. of India

 

F. No. 225/157/2019/ITA.II

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

*****

Dated: 27th September, 2019

Order under Section 119 of the Income-tax Act, 1961

The 'due-date' for filing income-tax returns for Assessment-Year 2019-20 is 30.09.2019 for assessees covered under clause(a) of Explanation 2 to sub-section (l) of section 139 of the Income-tax Act,1961('Act'). It has been represented that some of the taxpayers are facing difficulties in filing their reports of audit and income-tax returns.due to various reasons including availability of limited time with tax professionals for completion of audits, floods in certain parts of the country etc.

2. On due consideration of representations from various stakeholders for extending the due date, being 30^th September,2019, for filing of income-tax returns and various reports of audit pertaining to assessment year 2019-20 for assessees' covered under clause (a) of Explanation 2 to section 139(1) of the Act read with relevant provisions of the Act and Income-tax Rules, the Central Board of Direct Taxes, in exercise of its powers conferred under section 119 of the Act, hereby extends the 'due-date', for filing income-tax returns as well as all reports of audit (which are required to be filed by the said specified due date), from 30^th September, 2019 to 31^st October, 2019 . However, there shall be no extension of the due date for purpose of Explanation 1 to section 234A (interest for defaults in furnishing return) of the Act and the assessee shall remain liable for payment of interest as per provisions of section 234A of the Act.

Under Secretary to the Government of India

 

Press Information Bureau

Government of India

Ministry of Finance

Dated: 20 SEP 2019

Corporate tax rates slashed to 22% for domestic companies and 15% for new domestic manufacturing companies and other fiscal reliefs

The Government has brought in the Taxation Laws (Amendment) Ordinance 2019 to make certain amendments in the Income-tax Act 1961 and the Finance (No. 2) Act 2019. This was announced by the Union Minister for Finance & Corporate Affairs Smt Nirmala Sitaraman during the Press Conference in Goa today. The Finance Minister elaborated  further , the salient features of these amendments , which are as under:-

a) In order to promote growth and investment, a new provision has been inserted in the Income-tax Act with effect from FY 2019-20 which allows any domestic company an option to pay income-tax at the rate of 22% subject to condition that they will not avail any exemption/incentive. The effective tax rate for these companies shall be 25.17% inclusive of surcharge & cess. Also, such companies shall not be required to pay Minimum Alternate Tax.

b) In order to attract fresh investment in manufacturing and thereby provide boost to ‘Make-in-India’ initiative of the Government, another new provision has been inserted in the Income-tax Act with effect from FY 2019-20 which allows any new domestic company incorporated on or after 1st October 2019 making fresh investment in manufacturing, an option to pay income-tax at the rate of 15%. This benefit is available to companies which do not avail any exemption/incentive and commences their production on or before 31st March, 2023. The effective tax rate for these companies shall be 17.01% inclusive of surcharge & cess.  Also, such companies shall not be required to pay Minimum Alternate Tax.

c) A company which does not opt for the concessional tax regime and avails the tax exemption / incentive shall continue to pay tax at the pre-amended rate. However, these companies can opt for the concessional tax regime after expiry of their tax holiday/exemption period. After the exercise of the option they shall be liable to pay tax at the rate of 22% and option once exercised cannot be subsequently withdrawn. Further, in order to provide relief to companies which continue to avail exemptions/incentives, the rate of Minimum Alternate Tax has been reduced from existing 18.5% to 15%.

d) In order to stabilise the flow of funds into the capital market, it is provided that enhanced surcharge introduced by the Finance (No.2) Act, 2019 shall not apply on capital gains arising on sale of equity share in a company or a unit of an equity oriented fund or a unit of a business trust liable for securities transaction tax, in the hands of an individual, HUF, AOP, BOI and AJP.

e) The enhanced surcharge shall also not apply to capital gains arising on sale of any security including derivatives, in the hands of Foreign Portfolio Investors (FPIs).

f) In order to provide relief to listed companies which have already made a public announcement of buy-back before 5th July 2019, it is provided that tax on buy-back of shares in case of such companies shall not be charged.

g) The Government has also decided to expand the scope of CSR 2 percent spending. Now CSR 2% fund can be spent on incubators funded by Central or State Government or any agency or Public Sector Undertaking of Central or State Government, and, making contributions to public funded Universities, IITs, National Laboratories and Autonomous Bodies (established under the auspices  of ICAR, ICMR, CSIR, DAE, DRDO, DST, Ministry of Electronics and Information Technology) engaged in conducting research in science, technology, engineering and medicine aimed at promoting SDGs.

The total revenue foregone for the reduction in corporate tax rate and other relief estimated at Rs. 1,45,000 crore.