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

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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.

 

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.