Direct recovery of GST in case of discrepancies between GSTR-1 and GSTR-3B

Jan 18, 2023

As an outcome of the recent 48th GST council meeting, the manner of dealing with difference in liability reported in statement of outward supplies (GSTR-1) and that reported in return (GSTR-3B) has been codified in the form of Rule 88C of the CGST Rules. This rule is likely to affect the taxpayers in case of any discrepancies between the supplies reported in GSTR-1 and GSTR-3B. The onus will be on the taxpayers to ensure compliance.

The first question that arises in mind is whether this rule has got a statutory backing. The answer to this question apparently seems to be a yes. Section 75(12) of the CGST Act provides for direct recovery of unpaid or short-paid self-assessed tax as per GSTR-3B without following the demand procedures laid down under the CGST Act.

GST

New Income Tax Return Forms for AY 2023-24 notified by CBDT: ITR 1-6, ITR-V details here

Feb 15, 2023

New ITR forms for AY 2023-24: New Income Tax Return (ITR) filing forms for individuals and businesses for Assessment Year 2023-24 (FY 2022-23) have been notified by the Income Tax Department. Through a notification dated February 10, the Central Board of Direct Taxes (CBDT) notified ITR forms 1-6, ITR-V (verification form) and ITR acknowledgement form. (Read: What’s new in New ITR forms)

Income Tax

Changes in New ITR forms for AY 2023-24: Crypto Tax, minor tweaks for ITR filing – Key points

Feb 15, 2023

New UTR (Unique Transaction Reference) forms for AY 2023-24: The Income Tax Department has notified Income Tax Return forms (ITR 1-6) and Income Tax verification form (ITR V) for the assessment year 2023-24. These forms will be used for return filing for income made in FY 2022-23.

The last date for ITR filing for AY 2023-24 is July 31. The tax department has notified the ITR forms for AY 2023-24 early compared to previous years. Last year, the CBDT notified the forms for AY 2022-23 on March 30.

Income Tax

Budget 2023 proposal for Angel tax on non-resident investments is problematic

Feb 14, 2023

If we ran a poll on the most oft-quoted reactions by tax professionals to the Finance Minister’s Union Budget Speech each year, the adage ‘the devil is in the detail’ is likely to figure high. While this year’s budget overall appears to be well-balanced though walking a tight rope between continuing an economic stimulus through capital expenditure spends and fiscal prudence, after going through the fine print of the tax proposals, we found the inevitable devil in the proposed amendment to the so-called ‘Angel tax’ provisions.

The deemed income provisions (under Section 56(2)(viib) of the Income-tax Act, 1961) require Indian companies to offer to tax, any consideration received on allotment of shares with share premium in excess of the fair value of the shares (as per prescribed tax rules). As they currently stand, the provisions can apply to Indian companies raising funds only from resident investors, but the budget proposes that their application should be tested irrespective of whether the investor is a resident or a non-resident. The provisions were introduced as anti-abuse rules that were meant to curb money laundering arrangements

Income Tax

IT dept to come out with modified valuation norms for taxing foreign investments in unlisted companies

Feb 13, 2023

The Income Tax Department is likely to come out with modified valuation rules under the IT Act for ascertaining the fair market value (FMV) of shares of unlisted companies for the purpose of levying tax on non-resident investments, an official said.

The Finance Bill, 2023 has proposed amending Section 56(2)(viib) of the IT Act, thereby bringing overseas investment in unlisted closely held companies, excepting DPIIT-recognised startups, under the tax net.

The official said that amendments are needed as IT Act and FEMA provide different methodologies for calculating the FMV of shares of unlisted companies.

"Rule 11UA of IT rules will be re-prescribed taking into account the concerns expressed by stakeholders to harmonise it with the FEMA regulations," the official told PTI.

Income Tax

New tax regime may impact charity donations owing to higher exemption limit

Feb 11, 2023

The announcement of higher exemptions under the new tax regime in Budget 2023 is likely to reduce retail donations to charities.

Based on the government’s expectations, nearly two-thirds of taxpayers are expected to opt for the new tax regime, which has now become the default option. The increased rebate limit could discourage people from making charitable donations, said organisations working closely with NGOs.

Many young people joining the workforce are informed about various instruments as a result of tax exemptions — like ELSS, life insurance and health insurance. Charitable donations are similar in nature. The youth become aware of charitable donations not only as a way to save tax but also impact society and make a difference and thus, over a period of time, become more engaged with causes. By making the new tax regime (without exemptions) the default one, the government will snatch these valuable learnings from those just entering the workforce  

Income Tax

ITR filing rules for children 2023: When is it mandatory to pay taxes and file returns?

Feb 10, 2023

Age is not an excuse when it comes to Income Tax Return (ITR) filing. Not many taxpayers are aware that children/minors are also required to pay taxes and file returns if they are making some income. But there are some conditions and exceptions. More than 4800 minors aged below 18 years filed their ITR in FY 2022-23 till 31st January 2023. This article looks at the ITR filing and taxation rules for children/minors aged below 18 years.

Tax experts say that young individuals with a source of income, including kid influencers, in India are expected to pay taxes on their earnings, just like any working individual.

Income Tax

CBDT revises norms for processing of equalisation levy

Feb 09, 2023 

The Central Board of Direct Taxes has introduced fresh norms for filing of statements for equalisation levy by companies that would allow the tax commissioner to reject returns that they deem to be invalid and has said that personal appearance of assessees for clarifications is not needed. The provisions are part of the Centralised Processing of Equalisation Levy Statement Scheme, 2023 notified by the CBDT recently.

Equalisation levy or Google tax, as it is often called, was introduced in 2016 to tax the digital economy. While it was initially levied at 6% of the gross consideration on online advertisements and digital advertising space, its scope was widened in 2020. It is levied at 2% on the consideration amount paid to non-residents who own, operate or manage an e-commerce facility or platform. Companies have to file the equalisation levy statement by June 30 of a financial year. 

Income Tax