LATEST IN INCOME TAX. LUNAWAT & CO. Chartered Accountants CA. PRAMOD JAIN. (From Businessmen s Point of View) 3 rd June, Phagwara

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1 LATEST IN INCOME TAX (From Businessmen s Point of View) LUNAWAT & CO. Chartered Accountants 3 rd June, Phagwara CA. PRAMOD JAIN FCA, FCS, FCMA, LL.B, MIMA, DISA

2 AGENDA Lunawat & Co. PAN Quoting AIR Reporting TCS under Finance Act 2016 Reporting of Foreign Income / Assets in ITR Others

3 PAN QUOTING

4 Lunawat & Co. MANDATORY TO APPLY PAN Total Income exceeds maximum amount not chargeable to tax Carrying business / profession turnover exceeds Rs. 5 Lacs Required to furnish return u/s 139 (4A)

5 PAN Lunawat & Co. PAN Requirement PAN Available NO PAN Form 60 No Reporting Report half yearly in Form 61

6 PAN QUOTING Lunawat & Co. Applicable from 1 st January 2016 on 18 transactions. Important include: Sale / Purchase of Motor Vehicle or Vehicle other than 2 Wheeler Payment to Hotel / Restaurant at any one time for cash > 50K (earlier 25K) Payment for Foreign Travel or foreign currency at 1 time for cash > 50K (earlier 25K) Cash Deposit with Bank in any 1 day > 50K Bank Draft / Pay Order / Banker Cheque during one day for cash > 50K

7 PAN QUOTING Lunawat & Co. Time Deposit with Bank, Post Office, Nidhi Co., NBFC for 50000/- each transaction or 5 Lacs in aggregate during FY Sale / Purchase of unlisted shares per transaction (verification by Co) > Rs. 1 L [E - 50k for issue of shares all Cos] Sale / Purchase of Immovable Property > 10 Lacs Tran. value or 50C value (earlier 5 L) Sale / purchase of goods / services > 2 Lacs per transaction (earlier 5 L for bullion or jewellery dealer only)

8 PAN QUOTING Lunawat & Co. Concerned person to verify PAN & mention in all documents /invoice/applications If no PAN take Form 60 If Minor PAN of Father/Mother/Guardian

9 Lunawat & Co. PAN QUOTING NOT REQUIRED CG / SG / Consular Offices Non-Residents required for all except: Application for Debit and Credit Card Payment to a hotel or restaurant against a bill Payment for foreign travel or foreign currency Payment to RBI for acquiring bonds Purchase of DD / PO / Bankers cheque Payment for prepaid instruments Sale/purchase of goods/services exceeding Rs. 2L

10 Lunawat & Co. IMPORTANT FEATURES OF FORM 60 Applicable to all except companies & firm If PAN applied, then application no. to be filled If PAN not applied as income is below taxable limits give estimate of total income If estimated total income > taxable limits - Form 60 cannot be accepted unless PAN applied for acknowledgement no. is mentioned.

11 Lunawat & Co. IMPORTANT FEATURES OF FORM 60 Amount & mode of transaction also to be given Proof of Identity and address to be furnished along with Form 60 In case transaction is by HUF, then proof of Karta In case transaction is by more than 1 persons, number of persons to be mentioned. Wrong verification prosecution u/s months to 2 yrs & Fine; If amount > 25 Lacs 6 months 7 yrs & Fine

12 Lunawat & Co. FILING DETAIL OF FORM 60 FORM 61 Everyone not to file statement in Form 61 with department for PAN collection Only persons who does not take PAN, but take Form 60 have to file half yearly: Received upto 30 th September 31 st October Received upto 31 st March 30 th April Retain Form 60 for 6 years from end of the FY in which the transaction was undertaken. (earlier Form 60 were also to be filed)

13 FORM 61 FILING Lunawat & Co. To be filed by all verifiers except in case of: S. Nature of Transaction No. (Where verifier is required to get tax audit u/s 44AB) 5 Payment to Hotel / Restaurant at any one time 6 Payment for Foreign Travel or purchase of foreign currency at 1 time 18 Sale / purchase of goods / services Value of Transaction Cash > 50000/- Cash > 50000/- > 2 Lacs per transaction

14 AIR REPORTING

15 Lunawat & Co. STATEMENT OF FINANCIAL TRANSACTIONS Normally known as AIR. Applicable from 1 st April Transactions to be reported. Important: Cash for purchase of bank drafts / pay orders / banker s cheque of aggregate > Rs. 10 Lacs in a FY. Cash deposits / withdrawals (including bearer s cheque) aggregating > Rs. 50 Lacs in a FY from 1 or more current account of a person. Cash deposits agg. > Rs. 10 Lacs in a FY, in 1 or more a/cs (other than current a/c & time deposit) [E- saving A/c]

16 Lunawat & Co. STATEMENT OF FINANCIAL TRANSACTIONS Payments aggregating to one or more credit cards in a FY [E 2L] (i) ) > Rs. 1 Lac in cash; or (ii) > Rs. 10 Lacs by any other mode. Receipt from a person aggregating > Rs. 10 Lacs in a FY for acquiring shares (including share application money) issued by co. [E- Pub / Rght 1L] Sale of foreign currency including through debit /credit card or traveller chq. or draft etc agg. > Rs. 10 L in a FY

17 Lunawat & Co. STATEMENT OF FINANCIAL TRANSACTIONS Purchase or sale of immovable property value > Rs. 30 L or valued u/s 50C Receipt of cash payment Rs. 2 Lacs for sale, by any person, of goods or services of any nature (other than above mentioned items), if liable for tax audit Annual AIR statement to be filed by 31 st May

18 TCS

19 TCS Lunawat & Co. Section 206C (TCS) to provide that the seller shall collect the 1%: Who receives any consideration for sale of motor vehicle of the value exceeding Rs. 10 Lacs from buyer Who receives any amount in cash for any goods (other than bullion & jewellery) or providing of any services (other than payments on which TDS is made) exceeding Rs. 2 Lacs w.e.f 1 st June Trigger comes at the time of receipt of cash

20 TCS??? Lunawat & Co. Mr. A an agriculturist purchases Innova Car for Rs. 14 Lacs on Payment made by NEFT. TCS? Would it be different if purchase made on ? Mr. B buys material for shop, covered u/s 44AD from D Ltd on vide B. No Rs /- & on vide B. No Rs /- All payment in cash. TCS? Mr. C buys furniture for his home Bill Rs /- pays Rs /- by NEFT and Rs /- in cash. TCS? Mr. D issues invoice of Rs. 3 Lacs for interior decoration. TDS u/s 194J deducted of Rs /- payment received Rs L by cheque & Rs in cash. TCS?

21 TCS??? Lunawat & Co. Mr. A in business of selling LEDs., covered u/s 44AD for AY annual turnover Rs. 80 Lacs, sells LED to Mr. X for Rs. 3 lacs in cash. TCS?? Mr. X a salaried person sells his Mercedes Car to Mr. Y for Rs. 25 Lacs in cash. TCS?? Mr. A dealer of maruti sells car to Mr. B for Rs. 12 Lacs? Mr. B in business of selling LEDs., covered u/s 44AD for AY annual turnover Rs. 160 Lacs, sells LED to Mr. Y for Rs. 3 lacs in cash. TCS?? ABC Trust running a hospital issues a bill of Rs. 3 Lacs for heart operation to Mr. A, which is paid fully in Cash. TCS??

22 Lunawat & Co. SALE / PURCHASE TRANSACTIONS Single Bill > 2 Lacs, No cash Obtain PAN, nothing further If not, file Form 60 / 61 Single Bill > 2 Lacs, some cash Single Bill < 2 L but cash received in year > 2 Lacs Obtain PAN, nothing further If not, file Form 60 / 61 Collect 1%, file return No TCS File AIR

23 FOREIGN ASSETS & LIABILITIES DETAILS IN ITR

24 Lunawat & Co. FOREIGN ASSETS / LIABILITIES IN ITR Income earned from outside India will be shown under the respective heads of Income but additional detail required to fill in schedule FSI of the ITR. Would include: Head of Income under which income is earned Income from Outside India Tax Payable outside India Tax Payable on such income under the normal provision in India Tax relief available in India Relevant article of DTAA if relief claimed u/s 90/90A

25 Lunawat & Co. FOREIGN ASSETS / LIABILITIES IN ITR Schedule FA to include: Foreign Bank accounts held (including any beneficial interest) at any time during PY Account No. Account Opening date Peak balance during the year (in Rs.) Interest accrued in the account Interest taxable and offered in the return Financial Interest in any entity held (including any beneficial interest) at any time during PY Nature of Interest- Direct/ Beneficial owner/ Beneficiary Date since held Total Investment (at cost in Rs.) Income accrued from such interest Nature of Income Income taxable and offered in the return

26 Lunawat & Co. FOREIGN ASSETS / LIABILITIES IN ITR Immovable Property held (including any beneficial interest) at any time during PY Ownership- Direct/ Beneficial owner/ Beneficiary Date of acquisition Total Investment (at cost in Rs.) Income derived from the property Nature of Income Income taxable and offered in the return Other Capital Assets held (including any beneficial interest) at any time during the PY Ownership- Direct/ Beneficial owner/ Beneficiary Date of acquisition Total Investment (at cost in Rs.) Income derived from the property Nature of Income Income taxable and offered in the return

27 Lunawat & Co. FOREIGN ASSETS / LIABILITIES IN ITR Accounts in which assessee have signing authority held (including any beneficial interest) at any time during the PY and which has not been included in above clauses Trusts created under the laws of a country outside India, in which assessee is trustee, beneficiary or settlor Any other income derived from any source outside India which is not included

28 OTHERS Lunawat & Co. Presumptive Taxation 8% income limit increased to Rs. 2 Crores Equalization Levy on online 6% w.e.f.. 1 st June 2016 Income Declaration Scheme 2016 from 1 st June 2016 to 30 th September 45% Direct Tax Dispute Resolution Scheme 2016 from 1 st June 2016 to 31 st December 2016

29 CA. Pramod Jain CA. Pramod Jain, Lunawat & Co