Depreciation restricted to 15% on wind mills installed after 31-3-2012.

Income-tax (Fourth Amendment Rules, 2012 – Depreciation restricted to 15% on wind mills installed after 31-3-2012

Notification No. 15/2012 [F.No.149/21/2010-SO(TPL)] S.O.694(E), dated 30-3-2012

In exercise of the powers conferred by section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:-

1. (1) These rules may be called the Income-tax ( 4th Amendment) Rules, 2012.

(2) They shall come into force on the 1st day of April, 2012.

2. In the Income-tax Rules, 1962, in the Table, in the New Appendix I, in Part-A relating to Tangible Assets, under the heading “III. Machinery and Plant”, in item (8), in sub-item (xiii), -

(a) In clause (l), after the words, “which run on wind mills”, the words, figures and letters, “installed on or before 31st day of March, 2012”, shall be inserted ; and

(b) In clause (m), after the words, “running on wind energy”, the words figures and letters, “installed on or before 31st day of March, 2012”, shall be inserted.

Sd/-

( J. Saravanan )

Under Secretary (TPL-III)

Note.- The principal rules were published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section(ii), vide Notification number S.O.969(E), dated the 26th March, 1962 and last amended by Income-tax ( 3rd Amendment) Rules, 2012, vide Notification S.O. No. 626(E) dated the 28th March, 2012.

Income Tax office to remain open on March 31, 2012

New Income Tax Forms Notified

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

DEPARTMENT OF REVENUE

[CENTRAL BOARD OF DIRECT TAXES]

NOTIFICATION

New Delhi, the 28th day of March, 2012   

Income-tax

S.O. 626 (E). - In exercise of the powers conferred by section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:-

1. (1) These rules may be called the Income-tax (3rd Amendment) Rules, 2012.

(2) They shall come into force on the 1st day of April, 2012.

2. In the Income-tax Rules, 1962,-

(A) in rule 12,–

(i) in sub-rule (1),-

(a) for the figures "2011", the figures "2012" shall be substituted;

(b) after clause (a), the following proviso shall be inserted, namely:-

" Provided that the provisions of this clause shall not apply to a person being an individual, who is a resident and has

(i) assets (including financial interest in any entity) located outside India; or

(ii) signing authority in any account located outside India.";

(c) after clause (ca), the following proviso shall be inserted, namely:-

"Provided that the provisions of this clause shall not apply to a person being an individual or Hindu undivided family, who is a resident and has

(i) assets (including financial interest in any entity) located outside India; or

(ii) signing authority in any account located outside India."

(ii) in sub-rule(3), in the proviso, clause (a) shall be renumbered clause (aaa) and before clause (a), as so renumbered the following clauses shall be inserted, namely:-

" (a) an individual or a Hindu undivided family, if his or its total income, or the total income in respect of which he is or it is assessable under the Act during the previous year, exceeds ten lakh rupees, shall furnish the return for the assessment year 2012-13 and subsequent assessment years in the manner specified in clause(ii) or clause(iii);

(aa) an individual or a Hindu undivided family, being a resident, having assets (including financial interest in any entity) located outside India or signing authority in any account located outside India and required to furnish the return in Form ITR-2 or ITR-3 or ITR-4, as the case may be, shall furnish the return for assessment year 2012-13 and subsequent assessment years in the manner specified in clause (ii) or clause (iii);"

(iii) in sub-rule (5), for the figures "2010", the figures "2011" shall be substituted;

(B) in Appendix-II, for "Forms SAHAJ (ITR-1), ITR-2, ITR-3, SUGAM (ITR-4S), ITR-4 and ITR-V", the "Forms SAHAJ (ITR-1), ITR-2, ITR-3, SUGAM (ITR-4S), ITR-4 and ITR-V" shall be substituted.

_________________________________________

[Notification No.14 /2012/ F.No.142/31/2011 -TPL]

(Ashis Chandra Mohanty)

Under Secretary to the Government of India

Note.-

The principal rules were published in the Gazette of India, Extraordinary, Part-II, Section 3, Sub-section (ii) vide notification number.S.O.969(E), dated the 26th March, 1962 and last amended by Income-tax ( 2nd Amendment) Rules, 2012 vide notification S.O. No 227(E) dated 6/2/2012.

Exemption to specified persons from requirement of furnishing a return of income under section 139(1) for assessment year 2012-13

Section 139 of the Income-tax Act, 1961 - Return of Income - Exemption to specified persons from requirement of furnishing a return of income under section 139(1) for assessment year 2012-13

NOTIFICATION NO. 9/2012 [F. No.225/283/2011-ITA(II)], dated 17-2-2012

S.O........... (E). - In exercise of the powers conferred by sub-section (IC) of section 139 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby exempts the following class of persons, subject to the conditions specified hereinafter, from the requirement of furnishing a return of income under sub-section (1) of section 139 for the assessment year 2012-13, namely:-

1. Class of persons. -An individual whose total income for the relevant assessment year does not exceed five lakh rupees and consists of only income chargeable to income-tax under the following head,-

(A) "Salaries";

(B) "Income from other sources", by way of interest from a saving account in a bank, not exceeding ten thousand rupees.

2. Conditions,- The individual referred to in para 1,-

(i) has reported to his employer his Permanent Account Number (PAN);

(ii) has reported to his employer, the incomes mentioned in sub-para (B) of para 1 and the employer has deducted the tax thereon;

(iii) has received a certificate of tax deduction in Form 16 from his employer which mentions the PAN, details of income and the tax deducted at source and deposited to the credit of the Central Government;

(iv) has discharged his total tax liability for the assessment year through tax deduction at source and its deposit by the employer to the Central Government;

(v) has no claim of refund of taxes due to him for the income of the assessment year, and

(vi) has received salary from only one employer for the assessment year.

3. The exemption from the requirement of furnishing a return of income tax shall not be available where a notice under section 142(1) or section 148 or section 153A or section 153C of the Income-tax Act has been issued for filing a return of income for the relevant assessment year.

4. This notification shall come into force from the date of its publication in the Official Gazette.

■■

Notified Bonds and debentures of public sector companies under section 10 (15) (iv) (h)

Section 10(15), item (h) of sub-clause (iv) of the Income-tax Act, 1961 - Exemptions - Interest on bonds/debentures - Notified bonds/debentures of Public Sector Companies

Notification No. 7/2012 [F.No.178/56/2011-(ITA.I)], dated 14-2-2012

S.O. (E).- In exercise of the powers conferred by item (h) of sub-clause (iv) of clause (15) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby authorises the Rural Electrification Corporation (hereinafter referred to as the entity), to issue, through a public issue, during the financial year 2011-12, tax free, secured, redeemable, non-convertible bonds of rupees 1,000 each, aggregating to rupees three thousand crores subject to the conditions specified namely:-

(a) Tenure of Bonds: The tenure of the bonds shall be ten years or fifteen years;

(b) Permanent Account Number (PAN): It shall be mandatory for the subscribers to furnish their PAN to the issuer;

(c) Rate of Interest: The interest on the bonds shall be not less than fifty basis points lower than the yield on the Government Securities of equivalent residual maturity as reported by the Fixed Income Money Market and Derivative Association of India, as on the last working day of the month immediately preceding the month of the issue of the bonds:

Provided that a higher coupon rate of up to 20 basis points may be offered to Retail Individual Investor vis-a-vis the rate offered to Qualified Institutional Buyers (QIBs), corporate and High Networth Individuals (HNIs):

Provided further that higher rate of interest shall not be available in case the bonds are transferred, except in case of transfer to legal heir in the event of death of the original investor:

(d) Commission on sale.- (i) the commission on sale shall be capped at a maximum of a flat fee of 1.25% of the issue size;

(ii) The flat fee shall include the total expense for the issue of bonds, including the expenses for advertisement, brokerage, printing, collection, canvassing charges, road shows and all other charges spent for this process.

(iii) Provided that the brokerage shall not exceed 0.15 per cent in the case of Qualified Institutional Buyers and corporate and 0.35 per cent in the case of High Networth Individuals.

(e) The benefit under the said section shall be admissible only if the holder of such bonds registers his, her or its name and the holding with the entity.

(f) The entity shall issue the bonds only by way of public issue, and not by way of private placement.

■■

Processing of returns of assessment year 2011-12 - Steps to clear backlog

Section 143 of the Income-tax Act, 1961 - Assessment - General - Processing of returns of assessment year 2011-12 - Steps to clear backlog

Instruction No. 01/2012 [F.NO.225/34/2011-ITA.II], dated 2-2-2012

The issue of processing of returns for the Asst. Year 2011-12 and giving credit for TDS has been considered by the Board. In order to clear backlog of returns, the following decisions have been taken:

(i) In all returns (ITR-1 to ITR-6), where the difference between the TDS claim and matching TDS amount reported in AS-26 data does not exceed Rs. One lac, the TDS claim may be accepted without verification.

(ii) Where there is zero TDS matching, TDS credit shall be allowed only after due verification. However, in case of returns of ITR-1 and ITR-2, credit may be allowed in full, even if there is zero matching, if the total TDS claimed is Rs. Five thousand or lower.

(iii) Where there are TDS claims with invalid TAN, TDS credit for such claims are not to be allowed.

(iv) In all other cases, TDS credit shall be allowed after due verification.

Specified provisions of the Act which shall apply to Centralised Processing of Returns Scheme, 2011

Section 143 of the Income-tax Act, 1961 - Assessment - General - Specified provisions of the Act which shall apply to Centralised Processing of Returns Scheme, 2011

Notification No. 3/2012 [F. No. 142/27/2011-SO (TPL)] SO 17(E), dated 4-1-2012

In exercise of powers conferred by sub-section (1B) of section 143 of Income Tax Act, 1961 (43 of 1961), for the purpose of giving effect to the Centralised Processing of Returns Scheme, 2011 made under sub-section (IA) of section 143 of the said Act, the Central Government hereby directs that, the following provisions of the Act relating to processing of returns shall not apply or shall apply with such exceptions, modifications and adaptations as specified hereunder, namely: -

1. This notification shall come into force on the date of its publication in the Official Gazette.

2. The provisions of section 139 of the Act shall apply to returns received under Centralised Processing of Returns Scheme, 2011 subject to the following, namely :-

A. (i) All ITR-V (acknowledgement) forms duly verified shall be sent to the Centralised Processing Centre, either through ordinary or speed post, within such period of uploading the electronically filed return as may be specified by the Director General in this behalf.

(ii) The date of transmitting the data electronically shall be the date of furnishing the return if the Form ITR-V is furnished in the prescribed manner and within the specified period.

(iii) In case Form ITR-V furnished after the prescribed time is rejected on account of it being unsigned, illegible, mutilated, bad quality or not as per specification, it shall be deemed that the return in respect of which the Form ITR-V has been filed was never furnished and it shall be incumbent on the person to electronically file the return of income again and follow it up by submitting the new Form ITR-V.

(iv) The Form ITR-V shall be submitted at the address, in the mode and within the period or extended period specified in this behalf.

(v) The Commissioner Centre may, in order to avoid hardship in a case or class of cases, condone the delay in receipt of Form ITR-V.

(vi) The Centre may call for fresh Form ITR-V in special circumstances, where the Form ITR-V submitted earlier cannot be considered for technical reasons.

B. (i) If the original return of income is an electronically filed return, the revised return shall be filed through electronic mode only.

(ii) The Centre shall process only the revised return and no further action shall be taken on original return if it has not already been processed.

(iii) The Commissioner may declare-

(a) a return invalid for non-compliance of procedure for using any software not validated and approved by the Director General;

(b) a return defective under sub-section (9) of section 139 of the Act on account of incomplete or inconsistent information in the return or in the schedules or for any other reason.

C. (i) In case of a defective return, the Commissioner shall intimate this to the person through e-mail or by placing a suitable communication on the e-filing website.

(ii) A person shall comply with the notice regarding defective return by uploading the rectified return within the period of time mentioned in the notice.

(iii) The Commissioner may, in order to avoid hardship to the person, condone the delay in uploading of rectified return.

(iv) In case no response is received from the person in reply to the notice of defective return, the Commissioner may declare a return as not having been uploaded at all or process the return on the basis of information available.

D. (i) A person shall not be required to appear either personally or through authorised representative before the authorities at the Centre in connection with any proceedings.

(ii) Written or electronic communication from such person or authorised representative in the format specified by the Centre in this respect shall be sufficient compliance of the query or clarification received from the Centre.

3. The provisions of section 143 of the Act shall apply to all returns received under the Centralised Processing of Returns Scheme, 2011 subject to the following, namely:-

(i) the sum payable to, or the amount of refund due to, the person shall be determined after credit of such Tax collected at Source (TCS), Tax Deducted at Source (TDS) and tax payment claims which can be automatically validated with reference to data uploaded through TDS and TCS statements by the deductors or the collectors, as the case may be, and tax payment challans reported through authorised banks in accordance with business rules laid out by the Centre in this regard;

(ii) an intimation shall be generated electronically and sent to the person by e-mail specifying the sum determined to be payable by, or the amount of the refund due to, the person;

(iii) any intimation to the person to pay any sum determined to be payable shall be deemed to be a notice of demand as per the provisions of section 156 of the Act and all other provisions of the Act shall be accordingly applicable.

(iv) The Commissioner may,-

(a) adopt appropriate procedures for processing of returns; and

(b) decide the order of priority for processing of returns of income based on administrative requirements.

(v) Wherever a return cannot be processed in the Centre for any reason, the Commissioner shall arrange to transmit such return to the Assessing Officer having jurisdiction for processing.

(vi) The Centre may call for such clarification, evidence or document as may be required for the purpose of facilitating the processing of return and all such clarification, evidence or document shall be furnished electronically.

4. The provisions of section 154 of the Act shall apply to all the returns received under the Centralised Processing of Returns Scheme, 2011 subject to the following, namely:-

(i) An application for rectification shall be filed electronically to the Centre in the format prescribed and shall be processed in the same manner as an Income-tax return.

(ii) In case of error in processing due to an error in data entry or a software error or otherwise, resulting in excess refund being computed or reduction in demand of tax, the same will be corrected on its own by the Centre by passing a rectification order and the excess amount shall be recovered as per the provisions of the Act.

(iii) Where a rectification has the effect of enhancing an assessment or reducing the refund or otherwise increasing the liability of the person, an intimation to this effect shall be sent to the person electronically by the Centre and reply of the person shall be furnished through electronic mode only.

(iv) Where the rectification order results in a demand of tax, the order under section 154 of the Act passed by the Centre shall be deemed to be a notice of demand under section 156 of the Income-tax Act.

5. The provisions of section 245 of the Act shall apply to the returns covered under the Centralised Processing of Returns Scheme, 2011 subject to the following, namely:-

The set-off of refund, if any, arising from the processing of a return, against tax remaining payable shall be done by using the details of outstanding tax demand in respect of the person as uploaded onto the system of the Centre by the Assessing Officer.

6. (i) Where a return is processed at the Centre, the appeal proceedings relating to the processing of the return shall lie with Commissioner of Income-tax (Appeals) having jurisdiction over the Assessing Officer and any reference to the Commissioner of Income-tax (Appeals) in any communication from the Centre shall mean such jurisdiction of the said Commissioner.

(ii) Remand reports, giving effect to appellate order and any other reports to be furnished before the Commissioner of Income-tax (Appeals) shall be submitted by the Assessing Officer having jurisdiction as regards the person.

7. The provisions of section 282 of the Act shall apply to all returns received under the Centralised Processing of Returns Scheme, 2011 subject to the following, namely : -

(i) The service of a notice or order or any other communication by the Centre may be made by :

(a) sending it by post;

(b) delivering or transmitting its copy thereof, to the person's e-mail address by the Centre's e-mail;

(c) placing its copy in the my account menu of the person on the official website for e-filing of returns; or

(d) any of the modes mentioned in section 282(1) of the Income-tax Act.

(ii) The date of posting of any such communication on the website, e-mail or other electronic medium shall be deemed to be the date of service.

(iii) The intimation, orders and notices shall be computer generated and need not carry physical signature of the person signing it.

8. The Director General may specify procedures and processes from time to time for effective functioning of the Centre in an automated and mechanised environment, including specifying the procedure and processes in respect of the following :-

(a) receipt and processing of electronic rectification applications in the Centre;

(b) the address or place, the mode and the period or the extended period within which the acknowledgement in Form ITR-V shall be accepted;

(c) validating any software used for e-filing the return;

(d) call centers to answer queries and provide taxpayer services which may include outbound calls to persons requesting for clarification to assist in the processing of their returns of income; and

(e) managing tax administration functions such as receipt, scanning, data entry, processing, issue of refunds, storage and retrieval of income-tax returns and documents in a centralized manner or receipt of paper documents through authorised intermediaries.

Centralised Processing of Returns Scheme, 2011

Centralised Processing of Returns Scheme, 2011

Notification No.2/2012[F.No.142/27/2011-SO(TPL)] SO 16(E), dated 4-1-2012

In exercise of the powers conferred by sub-section (1A) of section 143 of Income Tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby specifies the following scheme for processing of returns of income, namely:-

1. Short title and commencement.—

(1). This Scheme may be called the Centralised Processing of Returns Scheme, 2011.

(2). It shall come into force on the date of its publication in the Official Gazette.

2. Definition. - In this scheme, unless the context otherwise requires -

(a) 'Act' means the Income Tax Act, 1961 (43 of 1961).

(b) 'Board' means Central Board of Direct Taxes constituted under the Central Board of Revenues Act, 1963 (54 of 1963).

(c) 'Centre' means the Centralised Processing Centre having jurisdiction over such return of income as may be specified by the Board.

(d) 'Commissioner' means the Commissioner of Income-tax, Centralised Processing Centre.

(e) 'Director General' means the Director General of Income-tax (Systems).

(f) words and expressions used herein but not defined and defined in the Act shall have the meaning respectively assigned to them in the Act.

3. Scope of the Scheme.—This scheme shall be applicable in cases where return of income has been furnished in,-

(i) electronic form; or

(ii) paper form, in case of a class or classes of persons, as notified by the Board in this behalf.

4. Receipt and Acknowledgment of Return of Income.—

(1) Where a return of income is filed electronically with digital signature, on successful transmission of the data, an acknowledgment as generated by the server of the Central Government shall be available to the person in printable format.

(2) The acknowledgment shall contain the acknowledgment number of the electronic transmission and the date of transmission as an evidence of filing of the return.

(3) A copy of the electronic transmission of filing the return of income shall be downloaded and kept by the person.

(4) Where a return of income is filed electronically without digital signature, on successful transmission of the data, an acknowledgment in Form ITR-V as provided in rule 12 of the Income Tax Rules, 1962 shall be generated by the server of the Central Government and available to the person.

(5) The Form ITR-V shall also contain the acknowledgment number of the electronic transmission and the date of transmission as an evidence of filing of the return.

(6) A copy of ITR-V shall be downloaded and after taking a printout of such a form, it shall be physically verified under the signature of the person and forwarded to the Centre.

(7) The Form ITR-V duly verified shall be sent to the Centre, either through ordinary or speed post, within such period of uploading the electronically filed return as may be specified by the Director General in this behalf.

(8) The date of transmitting the data electronically shall be the date of furnishing the return if the Form ITR-V is furnished in the prescribed manner and within the period specified.

(9) In case Form ITR-V furnished after the prescribed time is rejected on account of it being unsigned, illegible, mutilated, bad quality or not as per specification, it shall be deemed that the return in respect of which the Form ITR-V has been filed was never furnished and it shall be incumbent on the person to electronically file the return of income again followed by submission of the new Form ITR-V.

(10) The Form ITR-V shall be submitted at the address, in the mode and within the period or extended period specified by the Commissioner in this behalf.

(11) The Commissioner may, in order to avoid hardship in a case or class of cases, condone the delay in receipt of Form ITR-V.

(12) The Commissioner may call for fresh Form ITR-V in special circumstances, where the Form ITR-V earlier submitted cannot be considered for technical reasons.

5. Revised return of income.—

(1) If the original return of income is an electronically filed return, the revised return shall be filed through electronic mode only.

(2) The Centre will process only the revised return and no further action will be taken on the original return if it has not already been processed.

6. Invalid or defective return.

(i) The Commissioner may declare-

(a) a return invalid for non-compliance of procedure for using any software not validated and approved by the Director General.

(b) a return defective under sub-section (9) of section 139 of the Act on account of incomplete or inconsistent information in the return or in the schedules or for any other reason.

(ii) In case of a defective return, the Centre shall intimate this to the person through e-mail or by placing a suitable communication on the e-filing website.

(iii) A person may comply with the notice regarding defective return by uploading the rectified return within the period of time mentioned in the notice.

(iv) The Commissioner may, in order to avoid hardship to the person, condone the delay in uploading of rectified return.

(v) In case no response is received from the person in reply to the notice of defective return, the Commissioner may declare a return as not having been uploaded at all or process the return on the basis of information available.

7. Centralised Processing Centres.—

(1) The Board may set up as many Centralised Processing Centres as it may deem necessary and specify their respective jurisdictions.

(2) The processing of the returns shall be undertaken at the Centralised Processing Centre.

8. Processing of Returns.—

(i) The Centre shall process a valid return of income in the following manner, namely:-

(a) the sum payable to, or the amount of refund due to, the person shall be determined after credit of such Tax collected at Source (TCS), Tax Deducted at Source (TDS) and tax payment claims which can be automatically validated with reference to data uploaded through TDS and TCS statements by the deductors or the collectors, as the case may be, and tax payment challans reported through authorised banks in accordance with the procedures adopted by the Centre in this regard.

(b) an intimation shall be generated electronically and sent to the person by e-mail specifying the sum determined to be payable by, or the amount of the refund due to, the person; and

(c) any intimation to the person to pay any sum determined to be payable shall be deemed to be a notice of demand as per the provisions of section 156 of the Act and all other provisions of the Act shall be applicable accordingly.

(ii) The Commissioner may, -

(a) adopt appropriate procedure for processing of returns; or

(b) decide the order of priority for processing of returns of income based on administrative requirements.

(iii) Wherever a return cannot be processed in the Centre for any reasons, the Commissioner shall arrange to transmit such return to the Assessing Officer having jurisdiction for processing.

9. Rectification of mistake.—

(i) With a view to rectifying any mistake apparent from the record under section 154 of the Act, the Centre, on its own or on receiving an application from the person, may amend any order or intimation passed or sent by it under the provisions of the Act.

(ii) An application for rectification shall be filed electronically to the Centre in the format prescribed and will be processed in the same manner as a return of income-tax.

(iii) Where the rectification order results in a demand of tax, the order under section 154 of the Act passed by the Centre shall be deemed to be a notice of demand under section 156 of the Income-tax Act.

(iv) In case of error in processing due to an error in data entry or a software error or otherwise, resulting in excess refund being computed or reduction in demand of tax, the same will be corrected on its own by the Centre by passing a rectification order and the excess amount shall be recovered as per the provisions of the Act.

(v) Where a rectification has the effect of enhancing an assessment or reducing the refund or otherwise increasing the liability of the person, an intimation to this effect shall be sent to the person electronically by the Centre and the reply of the person has to be furnished through electronic mode only.

10. Adjustment against outstanding tax demand.—The set-off of refund, if any, arising from the processing of a return, against tax remaining payable will be done by using the details of outstanding tax demand lying against the person as uploaded onto the system of the Centre by the Assessing Officer.

11. Appellate Proceedings.—

(i) Where a return is processed at the Centre, the appeal proceedings relating to the processing of the return shall lie with Commissioner of Income-tax (Appeals) [CIT(A)] having jurisdiction over the jurisdictional Assessing Officer and any reference to Commissioner (Appeals) in any communication from the Centre shall mean such jurisdictional CIT (Appeals).

(ii) Remand reports, giving effect to appellate order and any other reports to be furnished before the CIT (Appeals) shall be submitted by the Assessing Officer having jurisdiction as regards the person.

12. No personal appearance in the Centre.—

(i) A person shall not be required to appear either personally or through authorised representative before the authorities at the Centre in connection with any proceedings.

(ii) Written or electronic communication from such person or authorized representative in the format specified by the Centre in this respect shall be sufficient compliance of the query or clarification received from the Centre.

(iii) The Centre may call for such clarification, evidence or document as may be required for the purpose of facilitating the processing of return and all such clarification, evidence or document shall be furnished electronically.

13. Service of notice or communication.—

(i) The service of a notice or order or any other communication by the Centre may be made by-

a. sending it by post;

b. delivering or transmitting its copy thereof, electronically to the person sent by the Centre's e-mail;

c. placing its copy in the registered electronic account of the person on the official website ; or

d. any of the modes mentioned in sub-section (1) of section 282 of the Act.

(ii) The date of posting of any such communication on official website, e-mail or other electronic medium shall be deemed to be the date of service.

(iii) The intimation, orders and notices shall be computer generated and need not carry physical signature of the person signing it.

14. Power to specify procedure and processes.—The Director General may specify procedures and processes from time to time for effective functioning of the Centre in an automated and mechanised environment, including specifying the procedure and processes in respect of the following :-

(i) receipt and processing of electronic rectification applications in the Centre.

(ii) the address or place, the mode and the period or the extended period within which the acknowledgment in Form ITR-V shall be accepted.

(iii) validating any software used for e-filing the return.

(iv) call centres to answer queries and provide taxpayer services which may include outbound calls to persons requesting for clarification to assist in the processing of their returns of income.

(v) managing tax administration functions such as receipt, scanning, data entry, processing, issue of refunds, storage and retrieval of income-tax returns and documents in a centralised manner or receipt of paper documents through authorized intermediaries.

Notification for PAN application- New form 49A and 49AA

The Income Tax Department has released a Notification for PAN application.

• Notification
• Form 49A
• Form 49AA
• Form 49A instruction
• Form 49AA instruction

Long Term Infrastructure bonds u/s 80CCF

Procedure for regulating refund of excess amount of TDS - Modification of Circular No. 2/2011, dated 27-4-2011

SECTION 200A OF THE INCOME-TAX ACT, 1961 - DEDUCTION OF TAX AT SOURCE - PROCESSING OF STATEMENT OF TAX DEDUCTED AT SOURCE - PROCEDURE FOR REGULATING REFUND OF EXCESS AMOUNT OF TDS DEDUCTED AND/OR PAID - MODIFICATION OF CIRCULAR NO. 2/2011, DATED 27-4-2011

CIRCULAR NO. 6/2011, DATED 24-8-2011

1.In partial modification of Circular No. 2/2011, dated 27-4-2011, the following words are added at the end of paragraph 4.2 of the said circular.

"However, the refund claims pertaining to the period upto March 31, 2009 may be submitted to the Assessing Officer (TDS) upto 31-12-2012."

2. This issues with the approval of competent authority.

DEDUCTION OF TAX AT SOURCE FROM SALARIES U/S 192

DEDUCTION OF TAX AT SOURCE — INCOME–TAX DEDUCTION FROM SALARIES UNDER SECTION 192 OF THE INCOME–TAX ACT, 1961 DURING THE FINANCIAL YEAR 2011-2012.

CIRCULAR NO. 05/2011 dated 16.08.2011.

FAQs- EXEMPTION FROM FILING OF INCOME TAX RETURN

1. What is the purpose of this notification and who are proposed to be exempted from the requirement of filing of the return?

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 upto 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.

2. 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

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

3. Is having a valid PAN number a precondition for being covered by the notification?

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.

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

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

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

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” u/s 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.

6. Does savings bank account include other banking accounts like fixed deposits or recurring deposits accounts?

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

7. 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?

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).

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

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.

******

Firm or individual/HUF covered under section 44AB are mandatorily required to file ITR-5 or ITR-4 electronically using digital signature

INCOME-TAX (SIXTH AMENDMENT) RULES, 2011 - AMENDMENT IN RULE 12

NOTIFICATION NO. 37/2011 [F. NO. 149/68/2011-SO (TPL)], DATED 1-7-2011

In exercise of the powers conferred by section 295, read with section 139 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely :—

1. (1) These rules may be called the Income-tax (Sixth Amendment) Rules, 2011.

(2) They shall come into force from the date of its publication in the Official Gazette.

2. In the Income-tax Rules, 1962 in rule 12, in sub-rule (3), in the proviso, for clauses (a) and (aa) the following clause shall be substituted, namely :—

"(a) a firm required to furnish the return in Form ITR-5 or an individual or Hindu Undivided Family (HUF) required to furnish the return in Form ITR-4 and to whom provisions of section 44AB are applicable, shall furnish the return for assessment year 2011-12 and subsequent assessment years in the manner specified in clause (ii);"

Exemption from the requirement of furnishing a return of income under sub-section (1) of section 139 for the assessment year 2011-12 to certain persons

NOTIFICATION NO. 36/2011 [F. NO. 142/09/2011 (TPL)], DATED 23-6-2011

In exercise of the powers conferred by sub-section (1C) of section 139 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby exempts the following class of persons, subject to the conditions specified hereinafter, from the requirement of furnishing a return of income under sub-section (1) of section 139 for the assessment year 2011-12, namely :—

Class of Persons

1. An Individual whose total income for the relevant assessment year does not exceed five lakh rupees and consists of only income chargeable to income-tax under the following head,—

(A) "Salaries";

(B) "Income from other sources", by way of interest from a savings account in a bank, not exceeding ten thousand rupees.

Conditions

2. The individual referred to in para 1,—

(i) has reported to his employer his Permanent Account Number (PAN);

(ii) has reported to his employer, the incomes mentioned in sub-para (B) of para 1 and the employer has deducted the tax thereon;

(iii) has received a certificate of tax deduction in Form 16 from his employer which mentions the PAN, details of income and the tax deducted at source and deposited to the credit of the Central Government;

(iv) has discharged his total tax liability for the assessment year through tax deduction at source and its deposit by the employer to the Central Government;

(v) has no claim of refund of taxes due to him for the income of the assessment year; and

(vi) has received salary from only one employer for the assessment year.

3. The exemption from the requirement of furnishing a return of income-tax shall not be available where a notice under section 142(1) or section 148 or section 153A or section 153C of the Income-tax Act has been issued for filing a return of income for the relevant assessment year.

4. This notification shall come into force from the date of its publication in the Official Gazette.

COST INFLATION INDEX FOR FINANCIAL YEAR 2011-12

NOTIFICATION NO. 35/2011 [F. NO. 142/5/2011-TPL], DATED 23-6-2011

In exercise of the powers conferred by clause (v) of the Explanation to section 48 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby makes the following amendment in the notification of the Government of India in the Ministry of Finance (Department of Revenue), Central Board of Direct Taxes number S.O. 709(E), dated the 20th August, 1998, namely :—

In the said notification in the Table, after serial number 30 and the entries relating thereto, the following serial number and entries shall be inserted, namely :—

"31                          2011-12                       785"

Press Release on DTAA with Government of Mozambique

No.402/92/2006-MC (12 of 2011)

Government of India / Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

***

New Delhi dated the 1st June, 2011

PRESS RELEASE

The Government of India notified the Double Taxation Avoidance Agreement (DTAA) with the Government of Mozambique for the avoidance of double taxation and for the prevention of fiscal evasion with respect to taxes on income on 31st May, 2011.

The DTAA provides that business profits will be taxable in the source state if the activities of an enterprise constitute a permanent establishment in the source state. Examples of permanent establishment include a branch, factory, office, place of management, etc. Profits of a construction, assembly or installation projects will be taxed in the state of source if the project continues in that state for more than 12 months.

Profits derived by an enterprise from the operation of ships or aircraft in international traffic shall be taxable in the country of residence of the enterprise. Dividends, interest and royalties income will be taxed both in the country of residence and in the country of source. However, the maximum rate of tax to be charged in the country of source will not exceed 7.5% in the case of dividends and 10% in the case of interest and royalties. Capital gains from the sale of shares will be taxable in the country of source.

The Agreement further incorporates provisions for effective exchange of information and assistance in collection of taxes between tax authorities of the two countries in line with internationally accepted standards including exchange of banking information and incorporates anti-abuse provisions to ensure that the benefits of the Agreement are availed of by the genuine residents of the two countries.

The Agreement will provide tax stability to the residents of India and Mozambique and facilitate mutual economic cooperation as well as stimulate the flow of investment, technology and services between India and Mozambique.

***

Form No. 16A now generated from Tax Information Network (TIN)

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.

1.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

Amendment in Rule 114B relating to furnishing of PAN for certain transactions

NOTIFICATION NO. 27/2011 [F. NO. 149/122/2010-SO(TPL)], DATED 26-5-2011

In exercise of the powers conferred by section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely :—

1. (1) These rules may be called the Income-tax (Fifth Amendment) Rules, 2011.

(2) They shall come into force on the 1st day of July, 2011.

2. In the Income-tax Rules, 1962, in rule 114B,—

(i) in the Explanation (a), in clause (k), for the words "tour operator" the words "tour operator, or to an authorized person as defined in clause (c) of section 2 of the Foreign Exchange Management Act, 1999 (42 of 1999)" shall be substituted.

(ii) in clause (l) for the words "for issue of a credit card" the words "for issue of a credit or debit card" shall be substituted.

(iii) after clause (p) and before the first proviso, the following clauses shall be inserted, namely :—

"(q) payment of an amount aggregating fifty thousand rupees or more in a year as life insurance premium to an insurer as defined in clause (9) of section 2 of the Insurance Act, 1938 (4 of 1938);

(r) payment to a dealer,—

(i) of an amount of five lakh rupees or more at any one time; or

(ii) against a bill for an amount of five lakh rupees or more,

for purchase of bullion or jewellery;".

Procedure for regulating refund of excess amount of TDS deducted and/or paid

CIRCULAR NO. 2/2011 [F.NO. 385/25/2010-IT(B)], DATED 27-4-2011

1.The procedure for regulating refund of amount paid by the deductor in excess of the tax deducted at source (TDS) and/or deductible is governed by Board circular No. 285, dated 21-10-1980.

2. Subsequent to issue of circular No. 285, new sections have been inserted under Chapter XVII-B of the Income-tax Act, 1961. References have been received by the Board regarding inclusion of these sections also for the purpose of issue of refund of excess amount of the TDS deducted/deductible.

3. In consideration of the above and in supersession of the circular No. 285, dated 21-10-1980, the Board prescribes the following procedure for regulating refund of amount paid in excess of tax deducted and/or deductible in respect of TDS on residents covered under sections 192 to 194LA of the Income-tax Act, 1961. This circular will not be applicable to TDS on non-residents falling under sections 192, 194E and 195 which are covered by circular No. 7/2007 issued by the Board.

4. The excess payment to be refunded would be the difference between:

    (i) the actual payment made by the deductor to the credit of the Central Government; and

    (ii) the tax deductible at source.

4.1 In case such excess payment is discovered by the deductor during the financial year concerned, the present system permits credit of the excess payment in the quarterly statement of TDS of the next quarter during the financial year.

4.2 In case, the detection of such excess amount is made beyond the financial year concerned, such claim can be made to the Assessing Officer (TDS) concerned. However no claim of refund can be made after two years from the end of financial year in which tax was deductible at source.

5. However, to avoid double claim of TDS by the deductor as well as by the deductee, the following safeguards must be exercised by the Assessing Officer concerned:

5.1 The applicant deductor shall establish before the Assessing Officer that:

  (i) it is a case of genuine error and that the error had occurred inadvertently;

  (ii) that the TDS certificate for the refund amount requested has not been issued to the deductee(s); and

  (iii) that the credit for the excess amount has not been claimed by the deductee(s) in the return of income or  the deductee(s) undertakes not to claim such credit.

5.2 Prior administrative approval of the Additional Commissioner or the Commissioner (TDS) concerned shall be obtained, depending upon the quantum of refund claimed in excess of Rupees One Lakh and Rupees Ten Lakh respectively.

5.3 After meeting any existing tax liability of the deductor, the balance amount may be refunded to the deductor.

6. In view of provisions of section 200A of the Income-tax Act prescribing processing of statement of TDS and issue of refund with effect from 1-4-2010, this circular will be applicable for claim of refunds for the period upto 31-3-2010.