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Procedure of Service Tax Refund / Exemption to SEZ

Department of Revenue, Tax Research Unit of Government of India, Ministry of Finance has issued a Notification No. F. No. B1/6/2013-TRU dated 25th November, 2014 regarding latest procedure of Service Tax Refund / Exempt to SEZ.  The Notification is as under :

F.No.B1/6/2013-TRU
Government of India
Ministry of Finance
Department of Revenue
Tax Research Unit
North Block, New Delhi

25th November, 2014

To,
Chief Commissioners of Central Excise and Service Tax (All),
Commissioners of Service Tax (All),
Commissioners of Central Excise and Service Tax (All).

Madam/Sir,

Subject: Procedure of service tax refund/exemption to SEZreg.

Certain representations have been received through Ministry of Commerce raising the issue that SEZ unit or developer has to approach two authorities (the SEZ authority and with the Jurisdictional Service Tax authority) for upfront exemption under notification No. 12/2013 dated 01.07.2013 as amended.

2. The issue has been examined. The procedure prescribed under the notification No. 12/2013 dated 01.07.2013 as amended is for proper accounting and monitoring of benefit availed by SEZ Unit and developer under the exemption. Further compliance verification at the service provider’s end (in domestic tariff area) would only be feasible if an institutional mechanism for accounting and verification procedure is in place.  However, SEZ units and developer may, if they so desire, route their application for issuance of authorization by department through the specified officer of SEZ instead of submitting directly to the department. Similarly SEZ units and developer, may also route quarterly statement in Form A-3 through the specified officer in the SEZ.  Notification No. 12/2013 dated 01.07.2013 as amended does not put any restriction in this regard.

3. Accordingly the field formations should not object if such requests/intimations are routed through the specified officer in the SEZ.

Dr. Abhishek Chandra Gupta
(Technical Officer, TRU)

Copy to: 1. Director General (Service Tax), Director General (Audit).
         2. Director General (Export Promotion).
         3. Joint Secretary (Customs)

Income Tax Returns and Information provided to Tax Authorities are exempt from disclosure under RTI Act.

Income-tax retruns and information provided to Income Tax Authorities by assessee are confidental and not required to be placed in pubic domain; given nature of income-tax returns and information necessary to support same, it would be exempt under section 8(1)(j) of Right to Information Act, 2005 in respect of individual and unincorporated assessees

In cases of widely held companies most information relating to their income and expenditure would be in public domain and it is only confidential information that would be exempt from disclosure under section 8(1)(d) of 2005 Act

Information furnished by an assessee in income-tax return can be disclosed only where it is necessary to do in public interest and where such interest outweighs in importance, any possible harm or injury to assessee or any other third party, however, information furnished by corporate assessees that neither relates to another party nor is exempt under section 8(1)(d) of 2005 Act can be disclosed

Sournce: www.taxmann.com

Interest U/s. 234A on Income Tax Returns filed till extended due date of 30.11.2014.

Due Date for filing of return of Income for Assessment Year 2014-15 Extended from 30th September, 2014 to 30th November, 2014 in Specified Cases

The CBDT had issued the notification no. F.No.153/53/2014-TPL (Pt.I) dated 26.09.2014 extending the due date to comply with the judgments of various high courts, such as Gujarat, Bombay, Andhra Pradesh and Madras.

High Courts have earlier held that As the due date for filing of the tax audit report was extended till November 30 (due to late Introduction of several changes in Form 3CD), it was logical to also extend the due date for filing of the I-T return also to November 30.

During hearing on the appeal on 22.09.2014 Honourable Gujarat High Court has directed the CBDT to extend the due date for filing of return of income to 30.11.2014 for A.Y. 2014-15 for all purposes, inter-alia, carry forward of losses, allowability of deductions under Sections 80-IA, 80-IB, 80-IC, 80-ID and other sections which requires return to be filed before due date. However, such extension has been granted subject to charge of interest under Section 234A (For delay in filing of Return of Income) for the period commencing from 01-10-2014 and up to the actual date of filling the return of income. Interest under section 234A will not be levied if taxpayer covered under tax audit provisions pays the tax on or before 30.09.2014 despite filing of return after 30.09.2014.

Anita Sumanth, advocate, representing the All India Federation of Tax Practitioners, and an individual petitioner, G Baskar, submitted to the Madras high court that the levy of interest under section 234A of the Income Tax Act,1961 is unjustified and against the provisions of the law. If the penalty was levied, the purpose of extending the due date of filing the I-T return itself was defeated. She submitted that the Gujarat high court order relating to levy of interest under section 234A was only a suggestion or a concession, it was not an interpretation of law and it was opposed to statutory provisions.

Based on the submissions, the Madras high court granted an interim stay on the levy of interest. It held, “I-T returns shall be accepted by tax authorities without insisting upon any payment of interest under section 234A.”


Income Tax Exemption Limit may rise from Rs. 2.5 to 3.5 or 4 Lakh in next Fin. Year - Arun Jaitley

NEW DELHI: Finance minister Arun Jaitley on Saturday said that he does not favour burdening the salaried and middle-class with more taxes but would go after the evaders in widening the net.

In fact, he would encourage more money being put in the pockets of tax payers that will lead to spending and collection of more indirect taxes.

"This widening of the tax base. What does it mean? I pay the same indirect tax as my attendant. Our volume of consumption may be different. So everybody is paying indirect taxes.

"And literally almost half your taxes are indirect taxes today. He pays excise, he pays customs duty, he pays service tax. Now as far as income tax is concerned, to bring those who evade tax is widening the tax net, I am all for it," the minister said in an interaction with PTI journalists at PTI headquarters.

He was replying to a question on whether his budget would look at widening the tax base to maximise revenue.

Jaitley, who will be presenting his first full fledged budget in February, said that in his last budget he had increased the tax exemption limit from Rs 2 lakh to Rs 2.5 lakh and would even raise it further if he had more money.

"After all what are we talking about Rs 2.5 lakh today means, taking all the deductions which we have given, somebody up to Rs 3.5-4 lakh does not have to pay tax. So we have reached the situation broadly.

"One earning Rs 35,000-40,000 per month, if the person puts some money for savings, (he) won't have to pay tax. But people falling in this bracket say that they don't save anything with salary of Rs 35,000-40,000 (with) the present cost of living, the transport cost, the fees of children and so on," Jaitley said.

Therefore, the minister said, he was against reducing the exemptions to widen the tax net. "Then that's not my approach," he added.

"So I am quite willing, if I had my way and I had more money in my pocket, I would like to expand. But today the revenue position is challenging. Last time I gave several concessions, which were actually beyond my means.

"But it's all fine to bring those who evade tax under the tax net. But to bring this vulnerable section into the tax net, that can't be the policy today. In fact if you put additional money in their pockets and allow them to spend, then I collect correspondingly more indirect taxes so I will rather encourage more economic activity."

On black money within the country, he said: "It is huge quantity and more easily traceable. Because you go to real estate, you go to land, you go to mining, you go to jewellery, you go to luxury goods, you will find the domestic (black money). You go to educational institutions, you will find it there. Therefore to trace out the buyers and the recipients is also easy."

Taxpayee can revise income tax return within the given time limit

If you suddenly realize that you missed reporting an income or deduction when you filed your income tax return (ITR) for the previous fiscal, you have the option of filing a revised return. To be able to do this, you should have filed the original return before the due date, 31 July

When to file a revised return If you discover any omission or any wrong statement in your original return, you can re-file ITR with modifications. For instance, you may have forgotten to claim tax benefit for a donation made to a charitable organization that qualifies for a deduction under section 80G, or to add the interest earned from one of your savings account to your total income. In such cases you can file a revised return stating the changes. As per section 139(5) of the Income-tax Act, 1961, the revised return can be filed before the expiry of one year from the end of the relevant assessment year or before the completion of assessment by the income tax department, whichever is earlier. So, for instance, if you have already filed your return for financial year 2013-14 (FY14) before the due date, 31 July 2014, but want to make modifications, you can file a revised return till 31 March 2016. However, if the income tax department has already completed the assessment of your return, then you cannot file a revised return. So, if you missed some information then file a revised return at the earliest to avoid interest or penalties.

How to file a revised return You can revise returns filed online and offline. However, an online return can be revised only online, and an offline one can be revised offline. For an online revision, you need the acknowledgement number and date of filing of the original return. Log on to the e-filing website of the income tax department (www.incometaxindiaefiling.gov.in), and open the Excel file wherein you originally filed the return. Enable the macros, and then select the option of revised return. Then select section 139(5) instead of 139(1). Now you will be able to make changes. Don’t forget to mention the acknowledgement number and date of the original return. Once you have made the alterations, click on compute tax, generate an XML file by validating each sheet, and then upload this file. Once the revised return is filed, download the revised ITR- V or acknowledgement and sign it. You need to send both the original as well as the revised ITR-V by ordinary post or Speed Post to the Central Processing Centre in Bangalore.

There is no restriction on the number of times you can file a revised return, provided it is done within the prescribed time limit. Once you file a revised return, the original or the earlier filed returns shall be deemed to be withdrawn and substituted by the most recent revised return.

Refund and Return of TDS.

Refund of TDS :
In case of excess deduction of tax at source, claim of refund of such excess TDS can be made by the deductor. The excess amount is refundable as per procedure laid down for refund of TDS vide Circular No.2/2011 dt. 27.4.11 (which supersedes the earlier circular no.285 dt 21.10.1980 on this subject).  The difference between the actual payment made by the deductor and the tax deductible at source, will be treated as the excess payment made.

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.

In case, the deduction 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. However, for refund claims pertaining to the period upto March 31, 2009 may be submitted to the assessing officer (TDS) upto 31.3.2012.

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

  • it is case of genuine error and that the error had occurred inadvertently;
  • that the TDS certificate for the refund amount requested has not been issued to the deductee(s); and
  • 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 in excess of Rupees One Lakh and Rupees Ten Lakh respectively.

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

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.

Return of TDS :
A return of TDS is a comprehensive statement containing details of salary paid and taxes deducted thereon from the employees along with other prescribed details. For deductions made prior to 01.04.2005 every deductor was required as per the provisions of Section 206 (read with Rule 36A and 37) to prepare and deliver an annual return, of tax deducted at source in form no. 24. Such a return was to be prepared and signed by the following - (a) the DDO or the prescribed officer in case of a government office; (b) the principal officer in the case of every company; (c) the managing partner/ partners in the case of a firm; (d) managing trustee in the case of trust; (e) Karta in the case of HUF; (f) prescribed person in the case of a local authority/public body/association. However w.e.f. 01.04.2006 there is no requirement to file annual returns and instead Quarterly statements of T.D.S. are to be submitted in form 24Q by the deductors specified above. The quarterly statement of the last quarter in form 24Q as amended by notification no. 119 dated 12.05.2006, S.O. 704(E), shall be treated as annual return of T.D.S.

Income Tax Exemption Slab could be raised further - Finance Minister Arun Jaitely Informs

“I have no intention of burdening the salaried and middle classes by imposing heavy taxes on them. At the same time, I’m not going to let tax evaders get away. I’m going to bring them into the tax-payers circle,” Minister of Finance, Arun Jaitley said.

“Salaried middle class people are paying more in direct taxes. If you ask me, I’d suggest that their direct tax burden should be reduced and if you could ensure that they get their full salaries, they will spend more. You can thus collect the money from them through indirect taxes,” he said.

During the press meet organized by the PTI, he said that one has to encourage measures that increase money circulation among taxpayers. “This will ensure free spending and therefore bring in more revenue through indirect taxes. Both my assistant and I pay indirect taxes. But, since there is a difference in the amount of money that we spend, the amount of tax we pay on it differs. A major portion of the tax paid by us in this country is indirect tax. Taxes like production tax, customs taxes and duties, and service taxes belong to this category.

“In the current financial year, minimum tax slab has been increased from Rs. 2 lakhs to Rs. 2.5 lakhs. If the revenue to the Government increases, I’m ready to further increase the slab. A person who earns 35,000 to 40,000 per month will not have to pay taxes if he/she chooses certain saving schemes. This is the current status. I don’t believe in the concept that by decreasing the tax slab, one can bring more and more people into the tax-paying class. My intention is not to increase the tax burden on the salaried and the middle-class,” he said.

All about Income Tax Refunds - FAQs

From which date the refund banker has been implemented?
The refund banker has been implemented from January 24, 2007.

In which cities the refund banker has been implemented ?
The refund banker facility is operational for non-corporate taxpayers assessed all over India.

Who will send the refund to me?
The State Bank of India (SBI) is the refund banker to the Income Tax Department (ITD). The Cash Management Product department of SBI (CMP SBI) processes the refunds under the refund banker scheme. Details of refunds are forwarded to CMP SBI by the ITD. CMP SBI processes the refunds and sends the refund intimation to the taxpayer.

How will the refund be sent to me?
Refunds are generated in two modes i.e., ECS and paper . If the taxpayer has selected mode of refund as ECS (direct credit in the bank account of the taxpayer) at the time of submission of income return the taxpayer’s bank A/c (at least 10 digits ) and MICR code of bank branch and communication address are mandatory .

For taxpayers who have not opted for ECS refund will be disbursed by cheque or demand draft.

For generation of refund through paper cheque bank account no, correct address is mandatory.

How can I know the status of my refund?
The taxpayer can track the status of its refund from the Departmental Website www.incometaxindia.gov.in / 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's at toll free number: 18004259760 or email at: - .

If I have shifted my residence whom should I contact for updating my correspondence address for receipt of refund?
The tax payer should contact its Assessing Officer and inform about the change in the correspondence address.

If my bank account has been closed how will I get refund credit into the account?
In case of change or updation in the bank account number the taxpayer should provide the correct account number along with the MICR code where credit is to be effected to the Assessing Officer.

Whom do I contact if the refund dispatched has not been received?
The tax payer can contact its local post office with the speed post ref no displayed at the NSDL-TIN website

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 

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 

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:

  1. 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.
  2. Send a copy of the letter along with a copy of the refund cheque to your Assessing Officer.
  3. Retain a copy of the letter and refund cheque with you.

If somebody else’s refund cheque / advice is delivered to me what should I do?
You should contact SBI at the following address and return the refund cheque / advice.

Cash Management Product
State Bank of India
SBIFAST
31, Mahal Industrial Estate,
Off Mahakali Caves Road,
Andheri (East)
Mumbai - 400 093
Phone Number: 18004259760 or email at 

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 .

Whom should I contact for refund related queries?
For any refund related query the tax payer should contact Aaykar Sampark Kendra at 0124 2438000 or email at .

For refund related query/ or any modification in refund record relating to Return processed at CPC Bangalore, the CPC may be contacted by the taxpayer on 1-8004252229 or 080-43456700.

All about TDS on Rent u/s. 194-I - FAQs

1. What are the provisions relating to TDS on rent? From which date same are applicable?

   As per the Finance Act, 1994 the provisions of TDS on rent have been introduced w.e.f. 1.6.1994. The salient feature of Sec. 194-I are as under:-

i)   The provisions are applicable only in cases where the person making the payment of rent is an individual or HUF who is required to get his accounts audited u/s 44AB in the immediately preceding financial year (w.e.f. 1.6.2002) or any other person responsible for paying to a resident any income by way of rent. Prior to 1.6.2002 no individual or HUF was liable to deduct TDS from rent.

ii)  The TDS is required to be deducted in case the rent paid or payable to a particular person during a financial year exceeds Rs. 1,80,000 w.e.f.1.7.2010 (upto 30.6.2010 the limit was Rs. 1,20,000).

iii) A facility has also been provided to obtain a certificate from the Assessing Officer for deduction of income-tax at a lower rate or for no deduction of income-tax in appropriate cases by making application in From No.13.

iv)  For the purpose of this section rent means any payment by whatever name called, under any lease, sub-lease, tenancy or any other agreement or arrangement for the use of any land or building or factory building together with furniture, fixture, fittings and land appurtenant thereto. It will not be relevant whether the payee is the owner of the building or not?

     W.e.f. asst. year 2007-08, the Taxation Laws (Amendment) Act, 2006 have enlarged the scope of rent for the purpose of Sec. 194I, so as to include machinery, plant and equipment, whether rented together with building or separately, irrespective of the fact whether they are owned by the payee or not?

v)   The rates of TDS on rent are as under:

Particulars
Rate upto 30.09.09
Rate w.e.f. 01.10.09
Use of any land, building, furniture or fittings
15% (when payee is individual or HUF) 20% in other cases.
10% for all assessees
Use of plant, machinery or equipment
10% (from 1.6.07 to 30.9.09) prior to 1.6.07 the rate was same as rent of land and building
2% for all assessees

a. At the rate specified under the Income Tax Act; or
b. At the rates in force; or
c. At the rate of 20%.

2. Will tax be deducted from service tax included in rent?

   Service tax paid by the tenant does not partake the nature of income of landlord. The landlord only acts as a collecting agency for Government for collection of service tax. Therefore tax deduction at source (TDS) under Sec. 194-I of the Income-tax Act would be required to be made on the amount of rent paid/payable without including service tax.

   Further No TDS on service Tax: As per circular 01/2014 dated 13.01.2014 TDS is not applicable on service tax part if service tax is shown separately.

3. What does the “rent” mean for the purpose of Sec. 194-I?

   “Rent” means any payment, by whatever named called, under any lease, sub-lease, tenancy or any other agreement or arrangement for the use of (either separately or together)any,-

   a. Land; or
   b. Building (including factory building); or
   c. Land appurtenant to a building (including factory building); or
   d. Machinery; or
   e. Plant; or
   f. Equipment; or
   g. Furniture; or
   h. Fittings,

whether or not any or all of the above are owned by the payee.

In other words, besides tax on land and building, tax shall now also be deductible for leasing out or hiring of machinery, plant, equipment, furniture and fittings whether given separately or together. Further, it shall be deductible whether or not any or all of the above are owned by the payee?

4. What are the circumstances under which no tax is to be deducted at source on rent as defined under Sec. 194-I ?

   No tax is required to be deducted at source under this section if the following conditions are satisfied:

   A) Where aggregate amount of rent does not exceed Rs. 180,000:- No tax is to be deducted if the aggregate amount of rent in the previous year does not exceed Rs. 180,000.

   B) Rent paid to the Government and certain entities:- No tax at source needs to be deducted from payments by way of rent made to Government and entities whose income is exempt from income-tax under clauses (20) and (20A) of Sec.10 of the Income tax Act.

   C) Certain entities required to file return under Sec. 139(4A) or 139(4C):- As per rule 28AB certain entities who are required to file return of income under Sec. 139(4A) or 139(4C) may apply in Form No. 13 for no deduction of tax at source provided certain conditions are satisfied.

   D) Certain entities whose income is unconditionally exempt under Sec. 10:- In case of certain entities whose income is unconditionally exempt under Sec. 10 and who source : www.trpscheme.com (As amended by Finance Act, 2013) are statutorily not required to file return under Sec. 139 there will be no requirement for TDS, since their income is any way exempt.

5. Where is the limit of Rs. 180,000 for non-deduction of tax at source applicable in case of each co-owner?

   Where the share of each co-owner in the property is definite and ascertainable, the limit of Rs. 180,000 will be applicable to each co-owner separately.

6. What are the provisions regarding low deduction or no deduction of tax on rent under Sec. 194-I ?

   Any person to whom rent is payable may make an application in Form No.13 to the Assessing Officer and obtain such certificate from him, as may be appropriate, authorizing the payer not to deduct tax or to deduct tax at lower rate.

   As per Sec. 206AA(4), w.e.f. 1-4-2010, no certificate under Sec. 197 for deduction of tax at Nil rate or lower rate shall be granted, unless the application made under that section contains the Permanent Account Number of the applicant.

7. What is method of taking credit of TDS on advance rent ?

   On advance rent pertaining to more than one financial year, the tax is deducted at source in the year of receipt of advance rent. The credit for TDS shall be allowed to the assessee in the same proportion in which such income from rent is offered for taxation for different assessment years, based on the single TDS certificate furnished for the entire advance rent.

   However, if the rent agreement gets terminated in a subsequent year or rented property is transferred and the balance advance is refunded to the transferee or the tenant, as the case may be, the credit for entire balance of TDS which has not been given credit, shall be allowed in the year of termination.

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