COMPLIATION OF FAQS INCOME TAX SERIES 1

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1 COMPLIATION OF FAQS INCOME TAX SERIES 1 Below is a compilation of selective questions asked by different persons on and answered by various Experts empanelled thereon. The same is being shared as a knowledge sharing process for the benefit of all. Complied by Shreya 29 th April 2018 Below is the List of top 5 Experts who have answered most Queries in this category as on the date of this Compilation S. No. Name 1, Delhi 2 CA. Prakhar Bansal, Bilaspur, Chhattisgarh 3 CA. Rekha Vivek Dhamankar, Pune, Maharashtra 4 CA. Pahwa, Delhi 5 CA. Sachin, Delhi S. Query asked No. by 1 CA Sushil Question Answered by Answer This is a case of an individual for the AY whose case was reopened on the 'Reasons' of cash deposit in his bank account. The Individual does not have a PAN nor did he file the return for AY No return was filed in response to notice u/s 148. No notice was received by him and assessment proceedings were not attended and assessment was completed exparte by the AO u/s 144 rws 147 and cash deposited was treated as his income. While efforts are A good issue... In such a case, appeal may be filed manually but the issue would be how to deposit appeal fee... practical approach could be file a letter with relevant CIT(A) with the said fact.have evidence of the same. Apply for PAN, file the appeal with condonation of delay with evidence for the delay

2 being made to obtain Adhaar/PAN by him, the assessee wants to file an Appeal before CIT? Since time is running out and has already run out, is it possible to file an appeal without PAN? Or PAN 2 CA Sushil should first be obtained? Where the alimony was decided through an agreement during the subsistence of marriage and is paid after divorce in monthly instalments, would section 56(2)(x) be attracted? Significantly, section 56(2)(x) starts with "where any person receives, in any previous year,..." So, even if alimony is decided during marriage and is paid after divorce in monthly instalments (say for 10 years), I feel it shall be difficult to avoid rigors of section 56(2)(x) because AO is likely to tax it in the year of receipt. Alimony can be a one-time receipt or a periodic receipt or a combination of both. It is not specifically covered in 'income' as defined under the Income Tax Act, 1961 ('the Act') and there is no specific provision which governs its taxability. As a general principle, a capital receipt is non-taxable while a revenue receipt is taxable. In an old Mumbai High Court ruling, it was held that monthly alimony, being a regular and periodic return from a decree, would constitute taxable income. In contrast, the lump sum payment received was held to be a capital receipt and, hence, not taxable for the former spouse. This decision was in the context of cash payments and does not deal with assets transferred as a part of the separation. For the spouse

3 paying the alimony, there is no provision under the tax laws enabling him to claim a deduction towards such payment 3 CA Atul 4 CA Shivaramia h 5 CA Sushil Anonymous donation received by charitable cum religious trust is taxable or not? If yes, at which rate & whether any exemption allowed? How to file income tax returns for the FY now After divorce, a husband pays monthly maintenance to his minor child directly in to child's bank account. The CA Divey Pahwa CA from his income. Section 115BBC of the Income Tax Act, 1961 provides for the taxability of Anonymous Donation by any university or other educational institution at the rate of 30%. However, there would be not taxability if Anonymous Donation does not exceed the limit being higher of 5% of total donation or Rs. 1, 00,000. If the recipient is wholly and exclusively created for Religious Purpose, then anonymous donation is taxable as like other donation. In our case, the institute is not for wholly or exclusively for Religious Purpose, hence the donation so received would be taxable at 30% and only allowance of higher of Rs or 5% of Total Donation would be allowed from such donation. It may please be noted that such allowance would be taxable as like other donation. It cannot be filed now. Only if a notice is received u/s 142(1) or 148, it can be filed. Though taxability of the alimony after divorce is controversial, yet the relationship of father and child remains even after the

4 6 CA Sushil 7 CA Kamal Bajaj minor child is in the custody of mother and child being minor, the child's bank account is operated by mother. As per divorce settlement with wife, husband shall also pay to child for her higher education and marriage expenses directly in child's bank account. Whether amount paid by father to child for maintenance/education/marriag e etc can be taxed u/s 56(2)(x) in the hands of divorced mother or child? Whether Adhaar is required in case of non- resident income tax assesse? Cash received from Partner as capital more than 2 lacs, whether attracts Sec 269ST Divey Pahwa Divey divorce. hence would be exempt from the vigours of s. 56(2)(x), not to be taxed Yes, Non-Resident are exempt from quoting Aadhar Number. Notification No. 37/2017 exempts NRI in this regard Yes would attract Sec 269ST.

5 8 CA Kamal Bajaj 9 Naveen Bansal, CA Student 10 CA Saubhagya Rout 11 CA Nagesh Hegde As Unexplained Credit, Unexplained Money, Investments (Stock) etc. would attract Sec. 68, 69/A/B/C/D and thus consequence of Section 115BBE and 271AAC. Now If Survey being conducted at any Assessee and he is agreed to offer some Undisclosed Income, then how such Income should be offered to avoid consequence of Section 115BBE and 271AAC? If a person doing F&O trading for investment purpose only, whether his income is CG or Business Income and is Audit required One Salaried employee has filed income tax for the FY after claiming relief U/s 89. Intimation U/s 143(1) for the said AY was computed before claiming relief U/s 89. As per provisions of Income Tax computation is correct. Being the case is a 'Question of Law', in which forum i should appeal and what will be status of the case. A person buys property from a person of Indian origin now American citizen. Is TDS u/s 195 required? CA Rekha Vivek Dhaman kar CA If it is surrender; it means that source is not from explained fund or investment. Then section 115BBE will be applicable If the income surrendered is declared in the return then penalty u/s 271AAC will not be applicable F&O is not investment but business only, please see section 43(5), would be under head business only. Audit would depend on turnover and applicability of section 44AD read with section 44AB Whether you have filed form 10E for claiming deduction u/s 89, if yes, then file rectification under 154 and appeal simultaneously The requirement of TDS is not dependent on citizenship, but on residence. If the seller is nonresident then buyer need to deduct tax u/s 195.