The Finance (No.2) Act, 2019 introduced section 269SU in the Income-tax Act, 1961 (‘Act’), wherein businesses with turnover exceeding INR 50 crores were required to provide the facility to customers for making payment through prescribed electronic modes from 1 November 2019.
The additional electronic modes were recently notified by the CBDT vide Notification No. 105/2019 dated 30th December, 2019.
The notification introduced Rule 119AA to the Income-tax Rules, 1962 wherein in addition to the existing electronic modes of payment the following three electronic modes of payment were prescribed:
|1||Debit Card powered by RuPay|
|2||Unified Payments Interface (UPI) (BHIM-UPI); and|
|3||Unified Payments Interface Quick Response Code (UPI QR Code) (BHIM-UPI QR Code)).|
Further, the CBDT vide Circular No. 32/2019 dated 30th December, 2019 clarified that the prescribed additional modes of electronic payment are required to be installed and operationalized on or before 31st January 2020.
Failure in the said installation and operationalization would attract a penalty of Rupees Five thousand per day as per the provisions of Section 271DB of the Act.
Changes in Income tax return for AY 2020-21
As per recent notification issued by the CBDT, there are certain significant changes that have been made in:
- ITR form 1 (applicable for resident individual assessees with income up to Rs. 50 Lakhs), and
- ITR form 4 (applicable for assessees opting for presumptive taxation of income).
Additional details to be disclosed in ITR 1:
- TAN of employer
- Name, Aadhar and PAN of the tenant in both ITR 1 and ITR 4 (i.e., in case the assessee earns rental income).
Additional details to be disclosed in ITR 4:-
- Passport Number, if holding an Indian passport. We would suggest you send us the passport expiry date also to determine the validity of the passport.
- Particulars of Cash and Bank transactions relating to presumptive business: –
|Particulars||Cash||Bank (aggregate amount of all bank accounts)|
|Receipts during the financial year|
|Payment/Withdrawal during the financial year|
Acceptance of payment through prescribed electronic modes
In order to achieve the mission of the Government to move towards a cashless economy, to reduce generation and circulation of black money and to promote digital economy, the Government proposed to insert a new section 269SU in the Income Tax Act, 1961.
Analysis of section 269SU:
|Applicable From||1st November, 2019|
|Eligible Assessee||Every person|
|Eligibility condition||Turnover or Gross receipts in business should exceed Rs. 50 cr. in immediately preceding Financial year.|
|Provision||Eligible assessee shall mandatorily provide a facility for accepting payment|
through electronic mode of payment.
|Non-compliance||Non-compliance shall attract penalty of a sum of Rs 5000 per day, for every day during which such non-compliance continues.|
Important pointers of the Taxation Laws (Amendment) Ordinance, 2019
With a view to provide the much needed stimulus to corporates and push economic growth, the Taxation Laws (Amendment) Ordinance, 2019 has been promulgated by the President of India. The aim of the ordinance is to give certain tax benefits to corporates and to withdraw the enhanced surcharge from certain income arising from investment in capital market.
The salient features of these amendments are as under: –
- From Financial Year 2019-20, domestic companies will have an option to pay income tax at 22% plus applicable surcharge and cess provided that they do not avail any exemptions/incentives (Section 115BAA).
- New domestic manufacturing companies incorporated on or after 1st Oct 2019 but before 31st March 2023 will have an option to pay tax at 15% plus applicable surcharge and cess provided that they do not avail any exemptions/incentives (Section 115BAB).
- Further, in order to provide relief to companies which continue to avail exemptions/incentives, the rate of Minimum Alternate Tax has been reduced from existing 18.5% to 15%. However, No MAT on companies opting for benefits of Section 115BAA and 115BAB
- Taxation Laws (Amendment) Ordinance, 2019 introduces a new surcharge of 10% which shall be charged from a company opting for taxability under Section 115BAA or Section 115BAB. Such surcharge shall be levied irrespective of the total income of the company.
- The enhanced surcharge as introduced in Budget, 2019 will not be applicable on capital gain arising on sale of equity share in a company or a unit of an equity-oriented fund or a unit of a business trust liable for securities transaction tax, in the hands of an individual, HUF, AOP, BOI, AJP.
- The enhanced surcharge shall also not apply to capital gains arising on sale of any security including derivatives, in the hands of Foreign Portfolio Investors (FPIs).
- In order to provide relief to listed companies which have already made a public announcement of buy-back before 5th July 2019, it is provided that tax on buy-back of shares in case of such companies shall not be charged.
Income Tax Notifies higher depreciation on certain category of Vehicles
CBDT under vide notification no. 69/2019/ F. No. 370142/17/2019-TPL dated 20 September 2019, has enhanced the depreciation rates applicable to motor cars / motor buses / motor lorries / motor taxis purchased during the period 23 August 2019 to 31 March 2020.
The existing and new notified rates of depreciation are tabulated hereunder:
|Existing rates||Acquired & Put to use between|
23 August 2019 to 31 March 2020
|1||Motor cars, other than those used in a|
business of running them on hire
|2||Motor buses, motor lorries and motor taxis used in a|
business of running them on hire
Cess and Surcharge on TDS based on section 206AA
Gist of 206AA
As per Income Tax Act, TDS is to be deducted for certain payments to be made at the rates as specified. However, in case the payee is unable to furnish PAN, the tax shall be deducted at the higher of the following rates:
- at the rate of 20% or
- at the rate specified in the relevant provision of this Act or
- at the rates specified in Finance Act in force.
In case the payee is Non-Resident
- If the TDS is being deducted under normal provisions of Income Tax Act in case of a non-resident payee, then cess and surcharge shall be levied.
- Please note that where the payment is being made to a Non-Resident and the rate of TDS is 20% as above, then no cess and surcharge shall be levied.
Fees for Delayed filling of return Under Section 139(1)
The following fees shall be imposed u/s 234F for delay in furnishing return.
|Income||Date Of Furnishing||Amount of Fee|
|Up to Basic Exemption Limit||After due date u/s 139(1)||Nil Fee|
|Basic Exemption Limit to 5,00,000||After due date u/s 139(1)||Fee of Rs 1,000|
|Above 5,00,000||Before 31st December of the Assessment Year||Fee of Rs 5,000|
|After 31st December of the Assessment Year||Fee of Rs 10,000|
CBDT instruction on conduct of assessment proceedings through ‘E-Proceedings’ facility
The CBDT has issued an instruction dated August 20, 2018 for the conduct of assessment proceedings through the E-proceedings facility during the year 2018-19.
In all the assessment cases u/s 143(3), proceedings shall be conducted electronically.
E-proceedings NOT mandatory in the following cases: –
· Assessment in case of search or requisition, or in the hands of any other person, re-assessment and best judgement.
· In set-aside assessments
· Assessment framed in non- Permanent Account Number (PAN) cases.
· ITR was filed in paper mode
· In case where substantial hearing had already taken place in the conventional mode.
Amendment in PAN Application Form
CBDT vide draft notification dated August 31, 2018 has notified the amendment in permanent account number (PAN) application Form (Form 49A and Form 49AA).
At present, providing Father’s name in the PAN application Forms is mandatory, however the applicant has been given option to select name of either father or mother, which the applicant may like to be printed on PAN card.
However, post this amendment, providing father’s name shall not be mandatory in PAN application Forms, where mother is the single parent. In such cases where the applicant opts not to provide fathers name, mother’s name is to be compulsorily furnished.
Revision of monetary limits for filing of appeals by the Department
The Central Board of Direct Taxes vide Circular No. 3/2018 dated 11th July, has revised the monetary limits for filing of appeals by the Department before Income Tax Appellate Tribunal, High Courts and SLPs/appeals before Supreme Court.
Henceforth, appeals/ SLPs shall not be filed in cases where the tax effect does not exceed the monetary limits given hereunder:
|S. No.||Appeals/ SLPs in Income-tax matters||Monetary Limit (Rs.)|
|1||Before Appellate Tribunal||20,00,000|
|2||Before High Court||50,00,000|
|3||Before Supreme Court||1,00,00,000|
It is clarified that an appeal should not be filed merely because the tax effect in a case exceeds the monetary limits prescribed above. Filing of appeal in such cases is to be decided on merits of the case.