F. No. 279/Misc./M-93/2018-ITJ(Pt.)

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

Dated:  16^th September, 2019

OFFICE MEMORANDUM

Subject: Special Order of Board exempting cases involving bogus Long Term Capital Gains (LTCG) / Short Term Capital Loss (STCL) through penny stocks from monetary limits specified in any Circular issued under Section 268A of the Income-tax Act, 1961-reg

The undersigned is directed to refer to Circular No. 23 of 2019 dated 6^th September, 2019 and to say that by virtue of powers of the Central Board of Direct Taxes u/s 268A of Income-tax Act,1961, the monetary limits fixed for filing appeals before ITAT/HC and SLPs /appeals before Supreme Court shall not apply in case of assesses claiming bogus LTCG/STCL through penny stocks and appeals/SLPs in such cases shall be filed on merits.

 (Abhishek Gautam)

DCIT(OSD)(ITJ-l),

CBDT, New Delhi.

 

Measures to Boost Economic Growth

4th September 2019

Ministry of Finance, Government of India 

 

 

 

 

Follow up on Announcements made 

1) Announcements were made on 23rd  August and 30th  August regarding a series of measures to enhance economic growth

2) I had reported implementation of 6 of the 32 announcements relating to banking made on 23.8.2019.

3) Partial credit guarantee scheme for banks to buy assets of NBFCs has been implemented.

4) Measures being taken to improve credit outflows from banks

5) Transmission of interest rate cuts are being effected by banks 

Follow up action: Faceless Assessment

1) The E-assessment Scheme under section 143(3A) of the IT Act notified on 12.09.2019 

2) Salient Features

a) Removal of existing human interface in the assessment procedure

b) Assessment to be handled by specific functional units on the basis of automated allocation system

c) Assessment unit will be anonymous

d) All communication to be made exclusively in electronic mode

f) No personal appearance of any assessee 

Follow up action : Document Identification Number (DIN) 

1) Circular No.19/2019 issued on 14.08.2019

2) Salient Features

a) All notices, summons, orders, communication to be issued only through systems

b) All documents to have unique DIN

c) Validation of Documents issued can be done on e-filing portal

d) Documents without DIN to be treated as non-est 

Follow up action : Compounding of Past Offences 

1) Circular No. 25/2019 issued on 09.09.2019

2) Salient Features

a) Compounding application can be filed upto 31.12.2019 which were not filed within prescribed time schedule earlier

b) This will reduce the existing pendency of prosecution cases before the courts 

Follow up action: Prosecution Easing Measures

1) Circular No. 24/2019 issued on 09.09.2019

2) Salient Features

a) Smaller taxpayers with minor procedural defaults will not be prosecuted

b) Prosecution to be launched only in deserving cases and to be commensurate to the degree of offence

c) For defaults below Rs. 25 lakhs, prosecution to be sanctioned only with the prior approval of Collegium of two CCIT/DGIT rank officers 

Measures to Boost Exports

Export promotion : Steps taken so far

Export promotion measures taken in last few years

• Interest Equalization Scheme (IES) on pre and post shipment rupee export credit introduced from 1.4.2015 providing interest equalisation at 3% to exporters on 416 lines and for all MSME exporters.   • The IES rate increased to 5% for MSME exporters with effect from 2.11.2018 and merchant exporters were covered under the scheme with effect from 2.1.2019. • India’s rank in World Bank ‘Ease of doing business’ ranking improved from 142 in 2014 to 77 in 2018, with the sub-rank in ‘ Trading across borders’ moving up from 122 to 80.   • “Trade Infrastructure for Export Scheme (TIES)” launched with effect from 1 to address the export infrastructure gaps in the country.  • Comprehensive “Agriculture Export Policy” launched on 6th D ecember, 2018 with an aim to double farmers’ income by 2022   • “Transport and Marketing Assistance” (TMA) scheme launched in 05 th March 2019 for mitigating disadvantage of higher cost of transportation for export of specified agriculture products. • Scheme for Rebate of State and Central Taxes and Levies (RoSCTL) covering export of garments and made-ups notified on 7.3.2019 providing refund of duties/taxes at higher rates.

New Measures to Boost Export Incentives and Taxation
1. Extend the scheme of Reimbursement of Taxes & Duties for Export promotion	• Scheme for Remission of Duties or Taxes on Export Product (RoDTEP) will replace MEIS. • Existing dispensation in textiles of MEIS + old ROSL will continue up to 31.12.2019  • Textiles and all other sectors which currently enjoy incentives upto 2% over MEIS will transit into RODTEP from 1.1.2020  • In effect, RODTEP will more than adequately incentivize exporters than existing schemes put together.  • Revenue foregone projected at up to Rs. 50,000 crores
2. Fully automated electronic refund route for Input Tax Credits (ITC) in GST	• Fully electronic refund module (FORM GSAT RFD-01) for quick and automated refund of ITC nearing completion and will be implemented by end September 2019. • This is expected to monitor and speed up ITC refunds.
New Measures to Boost Export Incentives and Taxation 3. Expanding scope of Export Credit Insurance Scheme (ECIS) by ECGC	• Export Credit Guarantee Corporation (ECGC) will expand the scope of ECIS   • Will offer higher insurance cover to banks lending working capital for exports.   • Premium incidence for MSMEs will be moderated suitably.  • It is expected that the initiative will cost about Rs 1700 cr per annum. • This will enable reduction in overall cost of export credit including interest rates, especially to MSMEs
4. Revised Priority Sector Lending (PSL) norms for Export Credit	• Priority Sector Lending (PSL) norms for Export credit have been examined and enabling guidelines are under consideration of RBI   • This will release an additional Rs. 36,000 crs. to Rs 68,000 crores as export credit under priority sector.
5. Effective monitoring of Export Financing by Department of Commerce	• Data on Export Finance is regularly published by RBI  • Export Finance will be actively monitored by an Inter Ministerial Working Group in Department of Commerce, tracked through a dashboard, reviewed with institutions and active intervention carried out.
New Measures to Boost Exports Export Facilitation 6. Leverage technology to reduce “Time to Export or Turn-around time”	• Technology will be further leveraged by timely completion of ongoing initiatives to further reduce "Time to export" - though seamless process digitization of all export clearances (port/airport/customs, etc) and elimination of offline/manual services   • An action plan to reduce Time to export/turn-around time in airports and ports benchmarked to international standards will be implemented by Dec 2019. • Actual turnaround times will be published in real time for each port and airport to push them to improve performance  • An Inter-Ministerial Group will be made accountable for this.
7. Annual mega shopping festivals.	• Annual mega shopping festivals in India will be organized in 4 places across 2020 March in 4 themes (G&J, Handicrafts/Yoga/Tourism, Textiles and Leather)
New Measures to Boost Exports  Free Trade Agreements
8. Special FTA Utilisation Mission	• FTA Utilisation Mission, headed by a Senior officer in Department of Commerce, will be set up • To work exclusively with FIEO and export houses to utilise concessional tariffs in each FTA,   • Enhance awareness of preferential duty benefits among MSMEs, disseminate and facilitate compliance requirements (Rules of Origin/ Certificate of Origin, etc.) under FTAs for importers and exporters, • Set goals for FTA utilization and put in place an effective FTA monitoring system.
9.Online “Origin New Measures to Boost Exports Management System”	• An Online “Origin Management System” for exporters to enable them to obtain Certificates of Origin – CoO (under Rules of Origin) will be launched in the next few weeks by DGFT in collaboration with Exports Inspection Council.  • This is expected to significantly improve ease of doing business for exporters.
New Measures to Boost Exports Engineering
10. Time bound adoption of mandatory Technical Standards	• Time bound adoption by Industry of all necessary mandatory technical standards and their effective enforcement to elevate the quality and performance ecosystem, enhance competitiveness and address the issue of sub-standard imports. • A Working Group on Standards will be set up in D/o Commerce to work with industry to lay down a roadmap for adoption of Standards, time lines and enforcement.  • This is expected to be a big boost in enabling Indian products overcome Non-tariff barriers in exports.
11. Affordable testing and certification infrastructure	• Special dispensation for facilitating and on-boarding handicrafts artisans and handicraft cooperatives directly on e-commerce portals and enable seamless exports. •Mass enrolment of artisans across India with help of M/o Textile and organisations like TRIFED, CIE, etc.

Measures to Boost Housing Sector

Steps taken so far 

1) Affordable  Housing  -  Additional deduction up to Rs. 1.5 lakhs for interest paid on loans borrowed up to 31 st March, 2020 for purchase of house valued up to Rs. 45 lakh.

2) Banks to launch Repo rate /external benchmark linked loan products 

3) Reduced EMI for housing loans by directly linking Repo rate to interest rates 

4) Support to NBFCs/HFCs 

a)  More credit support for purchase of houses, vehicles, consumption goods.  

b) Additional liquidity support to HFCs Rs. 20,000 Cr by NHB thereby increasing it to Rs. 30,000 Cr. Steps taken so far  

c) Partial Credit Guarantee scheme for purchase of pooled assets of NBFCs/ HFCs upto Rs 1 lakh Cr - to be monitored at highest level in each bank  

5) Establish an organisation to provide Credit Enhancement for infrastructure and housing projects

6) Requirement for creation of a Debenture Redemption Reserve (DRR) of outstanding debentures in respect of listed companies, NBFCs and for HFCs removed.

7)  Pradhan Mantri Awas Yojana – Gramin (PMAY-G) aims to achieve "Housing for All" by 2022:Eligible beneficiaries to be provided 1.95 crore houses with amenities like toilets, electricity and LPG connections during its second phase (2019-20 to 2021-22). 

New Measures to Boost Housing Sector
1. Relaxation of ECB guidelines for Affordable Housing.	• ECB guidelines will be relaxed to facilitate financing of home buyers who are eligible under the PMAY, in consultation with RBI. • This is in addition to the existing norms for ECB for affordable housing.
2. House Building Advance	• The interest rate on House Building Advance shall be lowered and linked with the 10 Year G Sec Yields. • Government servants contribute to a major component of demand for houses. This will encourage more government servants to buy new houses.
3. Special Window for affordable and middle income Housing	• A Special Window to provide last mile funding for housing projects which are non- NPA and non-NCLT Projects and are  Net worth positive in affordable and middle income category to be set up. • The objective is to focus on construction of unfinished units.  • GOI  on the lines of  NIIF, can contribute to the fund while rest of the investors would be LIC and other institutions and  Private capital from banks / sovereign funds / DFIs etc.   • The Fund shall be set up as  a Category - II AIF trust and would be professionally run with experts from Housing and Banking Sector.  • Fund size : 10,000 crore to  be contributed by GOI and roughly same amount from outside investors.

 

 

MINISTRY OF FINANCE

(Department of Revenue)

(CENTRAL BOARD OF DIRECT TAXES)

NOTIFICATION

New Delhi, the 12th September, 2019

(INCOME-TAX)

S.O. 3266(E).—In exercise of the powers conferred by clause (v) of the Explanation to section 48 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby makes the following further amendments in the notification of the Government of India, Ministry of Finance (Department of Revenue), Central Board of Direct Taxes, published in the Official Gazette, vide number S.O. 2413(E), dated the 13th June, 2018, namely:—

2. In the said notification, in the Table, after serial number 18 and the entries relating thereto, the

following serial number and entries, shall be inserted, namely:—

 

Sl. No.	Financial Year	Cost Inflation Index
(1)	(2)	(3)
“19	2019-20	289”.

3. This notification shall come into force with effect from the 1st day of April, 2020 and shall accordingly apply to the Assessment Year 2020-2021 and subsequent years.

[Notification No. 63/2019/F. No. 370142/11/2019-TPL]

PRAVIN RAWAL, Director (Tax Policy and Legislation)

Note : The principal notification was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (ii), vide number S.O. 2413(E), dated the 13th June, 2018.

______________________________________________________________________________________________________

NOTIFIED COST INFLATION INDEX UNDER SECTION 48, EXPLANATION (V) - FINANCIAL YEAR 2018-19

As per Notification no. So 1790(e)[no. 44/2017 (f. No. 370142/11/2017-tpl)], dated 5-6-2017, following table should be used for the Cost Inflation Index :-

 

Sl. No.	Financial Year	Cost Inflation Index
(1)	(2)	(3)
1	2001-02	100
2	2002-03	105
3	2003-04	109
4	2004-05	113
5	2005-06	117
6	2006-07	122
7	2007-08	129
8	2008-09	137
9	2009-10	148
10	2010-11	167
11	2011-12	184
12	2012-13	200
13	2013-14	220
14	2014-15	240
15	2015-16	254
16	2016-17	264
17	2017-18	272
18	2018-19	280

 

CII upto Financial Year 2016-17

Financial Year	CII
Before 1/4/1981	100
1981-82	100
1982-83	109
1983-84	116
1984-85	125
1985-86	133
1986-87	140
1987-88	150
1988-89	161
1989-90	172
1990-91	182
1991-92	199
1992-93	223
1993-94	244
1994-95	259
1995-96	281
1996-97	305
1997-98	331
1998-99	351
1999-00	389
2000-01	406
2001-02	426
2002-03	447
2003-04	463
2004-05	480
2005-06	497
2006-07	519
2007-08	551
2008-09	582
2009-10	632
2010-11	711
2011-12	785
2012-13	852
2013-14	939
2014-15	1024
2015-16	1081
2016-17	1125

 

 

Ministry of Finance

Clarification on applicability of Tax Deduction at Source on cash withdrawals

Dated: 30 AUG 2019

In order to discourage cash transactions and move towards less cash economy, the Finance (No. 2) Act, 2019 has inserted a new section 194N in the Income-tax Act,1961 (the ‘Act’), to provide for levy of tax deduction at source (TDS) @2% on cash payments in excess of one crore rupees in aggregate made during the year, by a banking company or cooperative bank or post office, to any person from one or more accounts maintained with it by the recipient. The above section shall come into effect from 1st September, 2019.

Since the section provided that the person responsible for paying any sum, or, as the case may be, aggregate of sums, in cash, in excess of one crore rupees during the previous year to deduct income tax @2% on cash payment in excess of rupees one crore,queries were received from the general public through social media on the applicability of this section on withdrawal of cash from 01.04.2019 to 31.08.2019.

The CBDT, having considered the concerns of the people, hereby clarifies that section 194N inserted in the Act, is to come into effect from 1st September, 2019. Hence, any cash withdrawal prior to 1st September, 2019 will not be subjected to the TDS under section 194N of the Act. However, since the threshold of Rs. 1 crore is with respect to the previous year, calculation of amount of cash withdrawal for triggering deduction under section 194N of the Act shall be counted from 1st April, 2019. Hence, if a person has already withdrawn Rs. 1 crore or more in cash upto 31st August, 2019 from one or more accounts maintained with a banking company or a cooperative bank or a post office, the two per cent TDS shall apply on all subsequent cash withdrawals.

***

RM/KN
(Release ID: 1583707)

 

Ministry of Finance

CBDT consolidates Circulars for ease of compliance of Start-ups

Dated: 02 SEP 2019

In order to provide hassle-free tax environment to the Start-ups, a series of announcements have been made by Union Finance & Corporate Affairs Minister Smt. Nirmala Sitharaman in her General Budget Speech, 2019, and also on 23rd August 2019. To give effect to these announcements, the Central Board of Direct Taxes (CBDT) issued various circulars/clarifications in the matter from time to time. Vide Circular No.22/2019 dated 30.08.2019, CBDT has consolidated all the circulars/clarifications issued on this subject for the ease of compliance of Start-up entities. The present circular inter alia highlights the following:-

i) Simplification of process of assessment of Start-ups: Circular No. 16/2019 dated 7th of August, 2019 provided for the simplified procedure of assessment of Start-ups recognized by DPIIT. The circular covered cases under “limited scrutiny”, cases where multiple issues including issue of section 56(2)(viib) were involved or cases where Form No.2 was not filed by the Start-up entity. Detailed process of obtaining mandatory approval of the supervisory authorities for conducting enquiry was also laid down by this circular.

ii) Time limit for Completion of pending assessments of Start-ups: The time limit for completion of pending assessments was also specified by CBDT. All cases involving “limited scrutiny” were to be completed preferably by 30th September, 2019 and the other cases of Start-ups were to be disposed off on priority, preferably by 31st October, 2019.

iii) Procedure for addition made u/s 56(2)(viib) in the past assessment: Vide clarification issued on 9th August,2019 it was provided that the provisions of section 56(2)(viib) of the Act would also not be applicable in respect of assessment made before 19th February, 2019 if a recognised Start-up had filed declaration in Form No. 2. The timelines for disposal of appeals before CsIT(Appeals) was also specified. Further, the addition made under section 56(2)(viib) would also not be pressed in further appeal.

iv) Income-tax demand: It has been reiterated time and again by CBDT that outstanding income-tax demand relating to additions made under section 56(2)(viib) would not be pursued and no communication in respect of outstanding demand would be made with the Start-up entity. Other income-tax demand of the Start-ups would not be pursued unless the demand was confirmed by ITAT.

v) Constitution of Start-up Cell: Vide order dated 30.08.2019, CBDT has constituted a Start-up Cell under the aegis of Member(IT&C), CBDT to redress grievances and to address various tax related issues in the cases of Start-ups. Grievances can also be filed online at startupcell.cbdt@gov.in.

The Circular No.22/2019 dated 30.08.2019 is available on www.incometaxindia.gov.in.

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RM/KMN

(Release ID: 1583888)