FAQ on Income Tax Return filing

Posted on July 25, 2011 by Mukesh Goel

Q:           What is the purpose of Notification No. SO 1439(E), dated 23-6-2011 and who are proposed to be exempted from the requirement of filing of the return?

Ans:       The primary objective of this notification is to exempt those salaried taxpayers from the requirement of filing income-tax returns, who have (i) total income not exceeding Rs. 5,00,000, and (ii) the total income consists only of income chargeable to income-tax under the head ‘Salaries’ and interest income from savings bank account if such interest income does not exceed Rs. 10,000.

Further, such salaried taxpayer would be eligible for exemption from filing a return of income only if tax liability has been discharged by the employer by way of Tax Deducted at Source (TDS) and the deposit of the same to the credit of the Central Government. For this purpose, taxpayer has to intimate his interest income to the employer during the course of the year.

For Example –

(i) If an individual has salary income of Rs. 4,90,000 and interest income from savings bank account not exceeding Rs.10,000 (which has been reported to the employer and tax has been deducted thereon), then the taxpayer would be exempt from the requirement of filing income-tax returns since the total income from both the above sources does not exceed five lakh rupees.

(ii) A taxpayer having salary income of Rs. 4,98,000 and interest income from savings bank account of Rs. 2,000 (which has been reported to the employer and tax has been deducted thereon), would also be eligible under this Scheme.

(iii) A taxpayer having salary income up to Rs. 5,00,000 and nil interest income would also be eligible under this Scheme.

(iv) A taxpayer having salary income of Rs.5,50,000, interest income from savings bank account of Rs. 8,000(which has been reported to the employer and tax has been deducted thereon), and who has claimed deduction of Rs. 70,000 under section 80C (on account of certain payments / investments / savings) would also be eligible under the Scheme.

(v) A taxpayer having salary income of Rs. 6,10,000, interest income from savings bank account of Rs. 10,000 (which has been reported to the employer and tax has been deducted thereon), and who has claimed deduction of Rs. 1,00,000 under section 80C (on account of certain payments / investments / savings), a deduction of Rs. 20,000 under 80CCF (Infrastructure Bonds) and a further deduction of Rs. 15,000 under section 80D (Health Insurance Premium) would also be eligible under the Scheme.

Q.           Whether a salaried taxpayer having total income of less than Rs. 5,00,000 and claiming a refund of Rs. 3,000 would be eligible under this Scheme

 

Ans:        No. The taxpayer has to file a return of income for making a claim of refund.

Q:           Is having a valid PAN a precondition for being covered by the notification?

Ans:       Yes. The notification clearly specifies that the individual has to report his PAN to the employer.

Hence having a valid PAN is a precondition for falling within the ambit of the notification.

Q:           Can an individual who is getting income under the head “salaries” from more than one employer take benefit of the notification?

Ans:       No. A salaried taxpayer who has earned income from more than one employer during the financial year is not covered under this Scheme.

Q:           Whether this notification would also cover taxpayers having ‘loss from house property’, which are often reported by the employees to the employer.

Ans:       No. Under the existing procedure, DDO/employer can give credit to the employee for a claim for loss under the head “income from house property” under section 24 made by the employee. As a result, a salaried employee’s total income may reduce to less than Rs. 5,00,000 as loss from the head “income from house property” would have been set-off against salary income. Such a taxpayer is not exempted from filing his return of income as the notification exempts only cases where the total income is under the head “salary” and from savings bank account (income from other sources) not in excess of Rs. 10,000. If the taxpayer has any loss under the head “income from house property”, he will not be eligible for exemption from filing a return of income.

Q:           Does savings bank account include other banking accounts like fixed deposits or recurring deposits accounts?

Ans:       No. The benefit of the notification is available to taxpayers whose interest income comprises of interest earned on savings bank account ONLY.

Q:           Circular No. 8/2010, dated 13-12-2010 which is applicable for Assessment Year 2011-12 stipulates that the Drawing and Disbursing Officer (DDO)/Employer while deducting TDS from salary of an employee cannot allow deduction u/s 80G except donations made to the Prime Minister’s Relief Fund, the Chief Minister’s Relief Fund or the Lt. Governor’s Relief Fund. Whether the notification would cover only these cases?

Ans:       Yes. An individual cannot avail the exemption under this notification if the claim of deduction for donations under section 80G is for donations other than those mentioned in Circular No. 8/2010. A taxpayer has to file a return of income for making a claim in respect of claim of deduction under section 80G for such donations (not specified in Circular No. 8/2010).

Q:           Will a salaried individual having agricultural income, which is exempt from tax, be covered within the ambit of the notification?

Ans:       A salaried individual with agricultural income exceeding five thousand rupees shall be out of the ambit of the notification. A return will have to be filed in such a case, even if other conditions of the notification are satisfied as the agricultural income (of more than Rs. 5,000) has to be included, for rate purposes, in the total income.

 

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Delhi VAT Circular No. 9 Central Sales Tax Act 1956 – Framing of assessments

Posted on June 16, 2011 by Mukesh Goel

VAT, Indirect Tax, VAT – Delhi

Delhi VAT Circular No. 9 dated 9 June 2011 [No. F.6(85)-Policy-VAT-2011-147-154]

09 Jun 2011

Central Sales Tax Act 1956 – Framing of assessments

Section 9(2) of CST Act, 1956 empowers the assessing authorities to frame assessments in accordance with the provisions contained in general sales tax law of the appropriate state which is Delhi Value Added Tax act, 2004 in case of Delhi.

2. Circular for framing central assessments have been issued in the past also. Circular No. 13 of 2007-08 dt 30/01/08 and Circular No. 15 of 2006-07 dt. 30/03/07 may also be referred in this regard.

3. The time limit for furnishing statutory forms is three months after the end of each quarter to which the declarations or statutory forms relates. Second provision to Rule 12(1) of Central Sales Tax (Registration and Turnover) Rules, 1957 provides for covering all transaction of sale, which take place in a quarter of financial year between same two dealers. The prescribed time of three months is sometimes extended to a quarter or more than quarter at times centrally by Commissioner, VAT in exercise of the powers conferred under relevant provisions of Central Sales Tax (R and T) Rules, 1957 and DVAT Rules, 2005.

4. It has also come to notice that some assessing authorities are issuing manual assessment order in contravention of instructions contained in Circular No.15 of 2006/07.

 

 

5. In order to liquidate all pending assessments of deficient central statutory forms cases, it has been decided to adher to following time schedule:

S. No. Assessment Year Quarter Date by which assessments to be completed
1 2007-08 Qtr. II Qtr. III and Qtr. IV 30-06-2011

30-09-2011

 
2 2008-09 All Quarters 31-12-2011

 
3 2009-10 All Quarters 31-03-2012
4 2010-11 All Quarters 30-06-2012

 

6. If time permits, assessing authorities may take up the cases for assessment even before the dates indicated in Col. 4 above. However, no case pertaining to any year for deficiency of statutory forms should remain un-assessed beyond the dates indicated above, it shall be personal responsibility of each Assessing Authority in respect of their assigned work.

7. While taking up a case for assessment due to deficiency of statutory forms, other aspects like scrutiny of balance sheet (for dealer having GTO > Rs.40.00 lakh), timely filing of returns, timely payment of due tax under both the Acts, tax credit availed on purchased locally, adjustment of tax credit, reversal of tax credit on transfer of goods after local purchase, tally of return version with balance sheet etc., may also be looked into.

8. For dealers who are not engaged in central sale in particular period/year, no reconciliation is required.

9. This issues with the approval of Commissioner, VAT.

 

G.C. Tolani

VATO (Policy)

 

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Point of Taxation in Service Tax

Posted on June 14, 2011 by Mukesh Goel

One major change made in service tax effective from 01-04-2011 is the introduction of Point of Taxation Rules, 2011 to (a) introduce the provisions relating to payment of service tax on accrual basis instead of receipt basis and (b) to specify date relevant for determining rate of service tax.

So far the provision was that service tax was payable on receipt basis i.e. on receipt of payment of the invoice or bill from the customer or receipt of advance, whichever is earlier. Now w.e.f.  01-04-2011, service tax will be payable on billing basis and not on ‘receipt of payment’ basis i.e. on accrual basis and not cash basis (option has been granted to assessee to continue payment on receipt basis upto 30-06-2011, if they so desire).

Scenario Relevant Rule First event Subsequent event Point of Taxation
Normal Situation (not covered under rule 4 to 9) 3(a) Issue of invoice Completion of service or receipt of payment Time of invoice
3(a) Completion of service Issue invoice within 14 days Time of Invoice
Proviso to 3(a) Completion of service Invoice not issued within 14 days Date of completion of service
3(b) and explanation to rule 3 Receipt of payment or advance Invoice or completion of service Time of receipt of payment
Taxable Service provided before change in effective rate of service tax 4(a)(i) Invoice issued and payment received after the change in effective rate N.A. Date of receipt of payment or date of issuance of invoice, whichever is earlier
4(a)(ii) Invoice issued prior to change in effective rate Payment received after change in effective rate of tax Date of issue of invoice
4(a)(iii) Payment received before change in effective rate of tax Invoice issued after change in effective rate of tax Date of receipt of payment
Taxable Service provided after change in effective rate of service tax 4(b)(i) Invoice issued prior to change in effective rate Payment received after change in effective rate of tax Date of receipt of payment
4(b)(ii) Invoice issued and payment received prior to change in effective rate Taxable Service provided Date of receipt of payment or date of issuance of invoice, whichever is earlier  
4(b)(iii) Payment received before change in effective rate of tax Invoice issued after change in effective rate Date of issuing of Invoice  
New service brought under tax net 5(a) Invoice issued and payment received before service became taxable N.A. No Service tax payable  
5(b) Payment received before service became taxable Issue invoice within 14 days of provision of service No Service tax is payable  
3(a) Service provided before tax became effective Invoice within 14 days and payment received after tax became effective No service tax is payable  
Continuous supply of service (applicable separately to each event as specified in contract) 6(a) Issue of Invoice Completion of service or receipt of advance payment Time of Invoice  
6(a) Completion of service Invoice issued within 14 days Time of Invoice  
Proviso to 6(a) Completion of service Invoice not issued within 14 days Date of completion of service  
6(b) and explanation 2 to rule 6 Receipt of payment or advance Invoice or completion of service Time of receipt of payment  
Export of Service 7(a) Completion of service Payment received within the period specified by RBI Date of receipt of payment  
7 (a) and first proviso to rule 7 Completion of service Payment not received within the period specified by the RBI As per rule 3,4,5,6 or 8 (as applicable) Interest will be payable.  
Service where tax payable by recipient of service under reverse charge 7(b) Receipt of Service Payment made to service provider in advance or within six months of date of invoice or service provider Date of payment  
7 (b) and second proviso to rule 7 Receipt of Service Payment not made to service provider in advance or within six months of date of invoice or service provider As per rule 3,4,5,6 or 8 (as applicable) Interest will be payable.  
Professional and firms providing specified taxable service 7 (c) Invoice, completion of service or receipt of payment in any sequence   Date of receipt of payment  
Service Provided from associate enterprises when service provider outside India Third proviso to rule 7 Date of credit in books of account of person receiving service Date of making payment Date of credit in books of account of person receiving service  
Third proviso to rule 7 Date of making payment Date of credit in books of account of person receiving service Date of making payment  
Intellectual property service, where consideration not ascertainable at the time of service 8 Receipt of payment or benefit is received by service provider Invoice issued by the service provider Receipt of payment or benefit is received by service provider  
8 Invoice issued by the service provider Receipt of payment or benefit is received by service provider Invoice issued by the service provider  
Service completed on or before 30-06-2011 9 Issue of Invoice Receipt of payment Issue of invoice or date of receipt of payment  

 

 

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Issuance of TDS Certificates in Form No. 16A downloaded from TIN

Posted on May 30, 2011 by Mukesh Goel

As per CBDT circular no. 03/2011 dated May 13, 2011, TDSCertificates in Form No. 16A will be generated from Tax Information Network (TIN).It is mandatory for Companies and Banks to issue Form 16A from TIN to their deductees for deductions made from April 1, 2011 (F.Y.2011-12 onwards).

Deductors other than Company andBanks can also request Form 16A from TIN.

Form 16A is available for F.Y. 2010-11 also on the TINwebsite.

It is available to TANs registered at TIN website (www.tin-nsdl.com).

Register your TANonline at the TIN website now for Form 16A from TIN.

Brief procedure for receiving Form 16A from TIN website:

Login to TAN     Registration Account with user id, password and TAN.
Request Form 16A by carrying out verification by providing details of challan and deductees present in the TDS statement for     which Form 16A is requested.
Form 16A will be provided on successful verification.
Two attempts within a day for successful verification are provided.
On successful  verification, request number is generated and text file containing Form     16A details is e-mailed within 48 hours at the e-mail ID present in the  registered TAN account.
In case of large number of records multiple files of Form 16A are created and will be sent through     multiple emails.
Convert the text file to     Form 16A by passing the text file through the PDF Convertor Utility. The     utility is available to registered TAN post login.

 

CIRCULAR NO. 03 /2011

F. No 275/34/2011-( IT-B)
Government of India
Ministry of Finance

Department of Revenue

Central Board of Direct Taxes
New Delhi,

dated the 13th May, 2011

Subject: Issuance of TDS Certificates in Form No. 16A downloaded from TIN Website and option to authenticate the same by way of digital signature – Circular under section 119 of the Income-tax Act 1961.
Section 203 of the Income-tax Act 1961 (‘the Act’) read
with the Rule 31 of the Income-tax Rules 1962 (‘the IT Rules’) provides for
furnishing of certificate of tax deduction at source (TDS) by the deductor to
the deductee specifying therein the prescribed particulars like amount of TDS,
permanent account number (PAN), tax deduction and collection account number
(TAN), etc. The relevant form for such TDS certificate is Form No.16 in case of
deduction under section 192 and Form No.16A for deduction under any other
provisions of Chapter XVII-B of the Act. TDS certificate in Form No.16 is to be
issued annually whereas TDS certificate in Form No.16A is to be issued
quarterly.

2. Currently, a deductor has an option to authenticate TDS
certificate in Form No.16 by using a digital signature. However, no such option
of using a digital signature is available to a deductor for issuing TDS
certificate in Form No.16A and it, therefore, needs to be authenticated by a
manual signature. The Central Board of Direct Taxes (the Board) has received
representations to allow the option of using digital signature for
authentication of TDS certificate in Form No.16A as issuance of TDS certificate
in Form No.16A by manual signature is very time consuming, specially for deductors
who are required to issue a large number of TDS certificates.

3. The Department has already enabled the online viewing
of Form No.26AS by deductees which contains TDS details of the deductee
based on the TDS statement (e-TDS statement)filed electronically by the
deductor. Ideally, there should not be any mismatch between the figures
reported in TDS certificate in Form No. 16A issued by the deductor and figures
contained in Form No.26AS which has been generated on the basis of e-TDS
statement filed by the deductor.
However, it has been found that in some cases the figures contained in Form No.26AS are different from the figures reported in Form No.16A. The gaps in Form No.26AS and TDS certificate in Form No. 16A arise mainly on account of wrong data entry by the deductor or non-filing of e-TDS statement by the deductor. As at present, the activity of issuance of Form No.16A is distinct and independent of filing of e-TDS statement, the chances of
mismatch between TDS certificate in Form No.16A and Form No.26AS cannot be
completely ruled out. To overcome the challenge of mismatch a common link has
now been created between the TDS certificate in Form No.16A and Form No.26AS
through a facility in the Tax Information Network website (TIN Website) which
will enable a deductor to download TDS certificate in Form No.16A from the TIN
Website based on the figures reported in e-TDS statement filed by him. As both
Form No.16A and Form No.26AS will be generated on the basis of figures reported
by the deductor in the e-TDS statement filed, the likelihood of mismatch
between Form No.16A and Form No.26AS will be completely eliminated.

4. In view of the above, for proper administration of the Act, the Board have,
in exercise of powers under section 119 of the Act, decided the following :-

4.1 ISSUE OF TDS CERTIFICATE IN FORM NO. 16A

(i) For deduction of tax at source made on or after 01/04/2011:

(a) The deductor, being a company including a banking
company to which the Banking Regulation Act,1949 applies and any bank or
banking institution, referred to in section 51 of that Act or a co-operative
society engaged in carrying the the business of banking, shall issue TDS
certificate in Form No.16A generated through TIN central system and which is
downloaded from the TIN Website with a unique TDS certificate number in respect
of all sums deducted on or after the 1st day of April, 2011 under any of the provisions
of Chapter-XVII-B other than section 192.
(b) The deductor, being a person other than the person referred
to in item (a)above, may, at his option, issue TDS Certificate in Form
No.16A generated through TIN central system and which is downloaded from the
TIN Website with a unique TDS certificate number in respect of all sums
deducted on or after the 1st day of April, 2011 under any provisions of
Chapter-XVII-B other than section 192.

(ii) For deduction of tax at source made during financial year 2010-11:

The deductor, may, at his option, issue the TDS
certificate in Form No.16A generated through TIN central system which is
downloaded from the TIN Website with a unique TDS certificate number in respect
of all sums deducted during the financial year 2010-11 under any of the
provisions of Chapter-XVII-B other than section 192.
4.2 AUTHENTICATION OF TDS CERTIFICATE IN FORM NO.16A

(i) The deductor, issuing the TDS certificate in Form No.16A by downloading from the TIN Website shall authenticate such TDS certificate by either using digital signature or manual signature

(ii) The deductor being a person other than a person referred to in item 4.1(i)(a) above and who do not issue the TDS Certificate in Form No.16A by downloading from the TIN Website shall continue to authenticate TDS certificate in From No.16A by manual signature only.

5. The Director General of Income-tax (Systems) shall specify the procedure, formats and standards for the purpose of issuance of TDS certificate in Form No.16A which is downloaded from the TIN Website and shall be responsible for the day-to-day administration in relation to the procedure, formats and standards for issuance of TDS certificate in Form No.16A in electronic form.

6. It is further clarified that TDS certificate issued in Form No. 16A by the deductors covered by para 4.1(1)(a) in accordance with this circular and procedure, format and standards specified by the Director General of Income-tax (Systems) shall only be treated as a vilid TDS certificate in Form No. 16A for the purpose of section 203 of the Act read with Rule 31 of the IT Rules,1962.

7. Hindi version shall follow.

(AJAY KUMAR)

Director (Budget)

Tel.No.2309-2641

Copy to all CCsIT/ DsGIT for circulation

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Process of incorporation of Companies and establishment of principal place of business in India by Foreign Companies – Procedure simplified

Posted on March 11, 2011 by Mukesh Goel

The Ministry has got the issue examined by Business Process Re-engineering Group under MCA-21 and in order to speed up and simplify the process of incorporation of Companies and establishment of principal place of business in India by Foreign Companies for reduction in time taken by Registrar of Companies, the below mentioned procedure have been recommended :

1.Only Form-1 shall be approved by the RoC Office. Form 18 and 32 shall be processed by the system online.

2.There shall be one more category, i.e., Incorporation Forms ( Form 1A, Form 37, 39, 44 and 68) which will have the highest priority for approval.

3.Average time taken for incorporation of company should be reduced to one (1) day only.

4.A Notification to notify minor changes in e-forms 18 and 32 to enable them to be taken on record through STP mode for aforesaid procedure is being issued separately.

 

 

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HIGHLIGHTS OF UNION BUDGET – 2011-12

Posted on March 1, 2011 by Mukesh Goel
  1. The basic exemption limit in the case of individuals increased from Rs.1.60 lacs to Rs.1.80 lacs. However, there is no increase in basic exemption limit in the case of Resident Women who is below 60 years at any time during the previous year.
  2. The qualifying age limit for senior citizens has been lowered from 65 years to 60 years and  increased the current exemption limit under two categories
  3. Category -1 – Age of Individual – 60 years or more but less than 80 years at any time during the previous year. The basic exemption limit is increased from Rs.2.40 lacs to Rs.2.50 lacs
  4. Category – 2 –   Age of Individual beyond 80 years or more at any time during the previous year. The basic exemption limit is Rs.5.00 lacs.
  5. In the case of domestic companies the surcharge has been reduced from Rs.7.5% to 5%
  6. In the companies other than domestic companies the surcharge has been reduced from 2.5% to 2%
  7. The definition of charitable purpose u/s 2 (15) includes “the advancement of any other object of general public utility”. The monetary limit in respect of such activities has been enhanced from Rs.10.00 lacs Rs.25.00 lacs.
  8. The amount paid by an assessee as an employer by way of contribution towards pension scheme, as referred to in sec 80CCD(2) on account of an employee to the extent it doesn’t exceed 10% of the salary of employee in the previous year, shall be allowed as a deduction u/s 36 in computing the income under the head profit and gains of business or profession.
  9. The Indian company which receives foreign dividend from foreign subsidiary company such dividend is taxable at the 15% as against 30% plus applicable surcharge.
  10. The rate of MAT is increased to 18.5% from the existing rate of 18% of such book profit.
  11. Minimum Alternative Tax has been introduced for Limited Liability Partnership (LLP) in line with MAT on companies with effect from the Assessment Year 2012 – 2013.
  12. The Government  exempts assessees having no other income other than salary from furnishing the return of income by notification. The proposed amendment shall be effective from 1st June, 2011.
  13. It is proposed to omit the requirement of quoting of Documentary Identification Number in notices / order / correspondences issued by Income tax department.
  14. The SEZ developers are required to pay dividend distribution tax on dividends declared / distributed on or after 1st June, 2011.
  15. The deduction u/s 80CCF to investment in notified long term infrastructure bonds extended for the A.Y. 2012-13 also.
  16. Liaison offices of a company will be required to file Annual Information in the prescribed form with in the 60 days from the end of the financial year.
  17. The tax holiday for power sector has been extended for further period of one year i.e. upto 31.03.2012.

SERVICE TAX

 

  1. The following two new services have been proposed
    1. Services by air conditioned restaurants having licence to serve liquor; and
    2. short term accommodation hotels / inns / clubs / guest houses etc.

 

  1. The monetary limit for adjustment of excess service tax paid is increased from Rs. 1.00 lacs to Rs.2.00 lacs.
  2. The penalty for delayed payment of service tax u/s 76 has been reduced from 2% to 1% per month or Rs.100 per day whichever is higher.
  3. The maximum penalty reduced to 50% of the tax.
  4. The rate of interest is reduced by 3% for assesses with turnover of upto 60 lacs.
  5. The maximum penalty for delay in filing of return increased from Rs.2,000 to Rs.20,000

Courtesy: CA. Naveen ND Gupta

 

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FAQ for Income Tax Refund

Posted on January 3, 2011 by Mukesh Goel

I have received the physical ECS refund advice and status of refund is “paid” on website of refund status track but my account has not been credited. Whom do I contact?

In case credit is not effected in the taxpayer account through ECS but the refund advice has been received by the taxpayer AND the status shown is “paid”- in that case, the tax payer should contact his bank or SBI. You should contact SBI at the following address.
Cash Management Product (CMP)
State Bank of India
SBIFAST
31, Mahal Industrial Estate
Off Mahakali Caves Road
Andheri (East)
Mumbai – 400 093.
Phone Number: 18004259760 or email at itro@sbi.co.in

I have neither received the physical ECS refund advice and status of refund is “unpaid” on website track. Whom do I contact?

The tax payer should provide the correct account number and MICR code to concerned Assessing officer, where credit is to be effected. The Assessing Officer will inform SBI to send a fresh refund cheque to the taxpayer.

If the date of encashing the refund cheque expires, whom should I contact?

The tax payer should contact their Assessing Officer as well as CMP SBI at the below address:
Cash Management Product (CMP)
State Bank of India
SBIFAST
31, Mahal Industrial Estate
Off Mahakali Caves Road
Andheri (East)
Mumbai – 400 093.
Phone Number: 18004259760 or email at itro@sbi.co.in

How do I rectify any mistakes in the name, assessment year, PAN, account number printed on the refund cheque delivered to me?

In case of any mistakes on the refund cheque delivered to you, the following should be done:

i) Send the original refund cheque to CMP, State Bank of India at SBIFAST 31, Mahal Industrial Estate, Off Mahakali Caves Road, Andheri East, Mumbai – 400 093, Phone Number: 18004259760, along with a letter informing the mistakes on the refund cheque.

ii) Send a copy of the letter along with a copy of the refund cheque to your Assessing Officer.

iii) Retain a copy of the letter and refund cheque with you.

Is there any method available to know whether the refund record has been generated for the taxpayer?

The taxpayer can track the status of its refund from the NSDL-TIN website www.tin-nsdl.com by clicking on “Status of Tax Refunds”.

Refund status can be tracked by entering the PAN and Assessment Year for which refund is to be tracked.

Status of the refund can also be tracked by contacting the help desk of SBI at 080-26599760.

Whom do I contact for queries related to payment of refund which has been processed by ITD?

For any payment related query the taxpayer should contact SBI at 18004259760 or email at itro@sbi.co.in.

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ROC EASY EXIT SCHEME, 2011

Posted on December 18, 2010 by Mukesh Goel

The Ministry of Corporate Affairs, Government of India, has re-launched “Easy Exit Scheme-2011 (herein after called EES)” giving an opportunity to “Defunct Companies” to get their name strike off from the register of Companies. The said scheme has been notified vide circular No.6/2010. Further, the said scheme will be effective from 1st January, 2011 to 31st January, 2011.

Pursuant to EES, Companies which are inoperative since incorporation or commenced business after incorporation but later on became inoperative are eligible for said scheme. Such Companies will be termed as “Defunct Companies”. As per definition of EES, Defunct Companies are Companies, which has an active status at MCA portal and:-

1. Which are not carrying on any business or not in operation on or after 1st April, 2008; or

2. Which did not raise their minimum paid up Capital i.e. Rs. 1,00,000/- or Rs. 5,00,000/-.

Non-applicability of said Scheme: – The Scheme does not cover the following companies:-

  • Listed companies;
  • Companies that have been de-listed,
  • Companies registered under section 25 of the Companies Act,1956;
  • Vanishing companies;
  • Companies where inspection or investigation is ordered and being carried out or yet to be taken up or where completed prosecutions arising out of such inspection or investigation are pending in the court;
  • Companies where order under section 234 of the Companies Act, 1956 has been issued by the Registrar and reply thereto is pending or where prosecution if any, is pending in the court;
  • Companies against which prosecution for a non-compoundable offence is pending in court;
  • Companies accepted public deposits which are either outstanding or the company is in default in repayment of the same;
  • Company having secured loan ;
  • Company having management dispute;
  • Company in respect of which filing of documents have been stayed by court or Company Law Board (CLB) or Central Government or any other competent authority;
  • Company having dues towards income tax or sales tax or central excise or banks and financial institutions or any other Central Government or State Government Departments or authorities or any local authorities.

Documents required for submission of an application: – To submit an application with Registrar of Companies, Ministry of Corporate Affairs, Government of India, following documents are required:

  • A certified true copy of Board Resolution
  • A declaration from Directors about pending litigation, involving Company
  • An affidavit, each form existing Directors, duly notarized
  • An indemnity bond, each from existing Directors
  • A Statement of Accounts as on date, duly certified by Chartered Accountants in Practice;
  • A Form EES, 2011, duly signed, manually, by Director (If there is no Digital Signature of Director)

Note: – The aforesaid documents are compulsory and other documents may be required on case to case basis.

Fee payable to Ministry of Corporate Affairs:-

A fee of Rs. 3,000/- (Rupees Three Thousand) is to be paid to Registrar of Companies, Ministry of Corporate Affairs, Government of India. The same could be paid though Cash/ Credit Card/Net Banking/ Cheque/ Bank Draft.

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Clarification regarding processing of ITR-1 and ITR-2 returns

Posted on December 14, 2010 by Mukesh Goel

Section 143 of the Income-tax Act, 1961 – Assessment – General – Clarification regarding processing of ITR-1 and ITR-2 returns – Credit for tax deducted at source for A.Y. 2009-10

INSTRUCTION NO. 9/2010 [F. NO. 225/25/2010/IT (A-II)], DATED 9-12-2010

1. Reference may be made to Board’s Instruction No. 7, dated 16-8-2010 in which it has been stated, inter alia, that in cases where the return is filed in ITR-1 and ITR-2 for the A.Y. 2009-10, and where the TDS claim does not exceed Rs. three lakh and where the refund computed does not exceed Rs. Twenty five thousand, the TDS claim of the taxpayer shall be accepted at the time of processing of the returns provided the TDS payment reported in AS-26 is more than Rs. zero.

2. Board has reconsidered the above instruction and it has been decided to increase the limit of TDS claim from Rs. three lakh to Rs. four lakh as was applicable for the A.Y. 2008-09. It is further clarified that if the limit of Rs. four lakh, or Rs.25,000 is exceeded in case of a return filed in ITR-1 and ITR-2 or there is nil matching with AS-26 statement, the credit should be allowed by the Assessing Officer after make ‘due verification’. This verification may be done in the same manner as was being done in the earlier years.

3. This may be brought to the notice of all the Assessing Officers in your region for immediate compliance.

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Announcement of New USA Branch of MRC

Posted on December 13, 2010 by Mukesh Goel

We are delighted to inform you that Mukesh Raj & Co. (MRC) has inagurated its first foreign branch office at New Jersey, United States Of America. The new foreign office address is:

MRC (Chartered Accountants) 85, Forest Drive, Apartment C Springfield,

New Jersey – 07081, United States of America (USA)

We would concentrate to provide services in relation to US taxation and Accounting. We would be happy to assist you and your team members to provide our professional and IRS services from our USA office.

Warm Regards MRC Team

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