Mar 312016
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Greetings from Antworks Education Institute!



Friday, 15th April 2016

Date: 15th April 2016
Time: 9:30 am to 6:00 pm
Venue: Hotel Suba International, Plot No. 211
Sahar Road, Opp. Cigarette Factory
Chakala, Andheri East, Mumbai – 400099
  • GST Framework Concepts and How to carry out impact study
  • GST Framework and Information Technology Set-up requirements
  • Understand the fine details and art of filing correct ST-3 returns
  • Understand the current Issues relating Cenvat Credit
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  • Service providers and manufacturing availing CENVAT credit
  • Exporters of services, users of services provided in India or Abroad
  • Senior auditors and financial professionals / consultants
  • Practicing CA, CS, CMA and other related professionals
  • IT Team members of the company
  • Overview of the Proposed New Legislation
  • Learn how to undertake impact study
  • Ways to integrate into the new regime
  • Re-defining the compliance tax systems / mechanisms
  • Understanding the latest CENVAT issues
  • Solving issues faced during filing of Service Tax Return


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Mar 182016

Wages and contributions

The Contents of section 2(b) of EPF & MP Act are as under:

“Basic Wages” means all emoluments which are earned by an employee while on duty or on leave or on holidays with wages in either case in accordance with the terms of the contract of employment and which are paid or payable in cash to him,

But does not include

  • The cash value of any food concession
  • Any dearness allowance (that is to say, all cash payment by whatever name called paid to an employee on account of a rise in cost of living),
    1. House rent allowance
    2. Overtime allowance
    3. Bonus
    4. Commission
    5. Or any other similar allowance payable to the employee in respect of his employment or work done in such employment
  • Any presents made by the employer

 Further, as per sec 6 of the act-

The contribution which shall be paid by the employer to the fund shall be ten percent of the basic wages, dearness allowance and retaining allowance for the time being payable to each of the employee.

Explanation 1 – For the purpose of this section, dearness allowance shall be deemed to include also the cash value of any food concession allowed to employee.

Explanation 2 – Retaining allowance means an allowance payable for the time being to an employee of any factory or other establishment during any period in which establishment is not working for retaining his service.

Thus, from the above it may be concluded that employers are liable to pay contribution on following sub heads of salary –

– Basic salary / wages
–  Dearness allowances
–  Cash value of food concession
–  Retaining allowances

 Further, following aspects shall be considered before calculating provident fund payable:

  1. The amount must be actually earned by employee while he is actually on duty.
  2. The amount must be paid to someone who was on duty.
  3. Must be payable to all employees of a concern in general and not few employees or group of employees of the concern
  4. Payment should not be ad-hoc payment.

The treatment of different components of salary under provident fund act is given below:

S. No. Components of salary Inclusion / Exclusion for calculation of contribution
1. Reward for good work in lieu of overtime Included
2. Extra leaf price is paid to workers in tea gardens over and above the normal daily wages for working beyond normal duty hours Included
3. Part of the wages given as time wage and another part as a piece rate wages Included
4. Arrears of wages with retrospective effect arising out of the award under ID Act Included
5. Ad-hoc lump sum interim payment pending the settlement of their demand for increase in wages Included
6. Transport allowance (Paid universally to all the employees) Included
7. Attendance incentive (Paid universally to all the employees) Included
8. Special allowance being paid to all employees Included
9. Housing and medical subsidies when employer fails to show that these subsidies were toward housing and medical facility Included
10. Leave Encashment Included
11. Payments made in lieu of notice for termination of service Excluded
12. Payments made u/s 33(2)(b) of Industrial Disputes act Excluded
13. Food concessions / discounts Excluded
14. House rent allowance Excluded
15. Overtime allowance Excluded
16. Bonus including production bonus Excluded
17. Commission Excluded
18. Food allowance given under settlement Excluded
19. Lump sum payment in lieu of arrears of revised wages and HRA under an agreement Excluded
20. Washing allowance Excluded
21. Commission to C&F agent Excluded
22. Lay off compensation Excluded
23. Employee terminated is reinstated and paid back wages Excluded

Mar 162016

TDS deducted but not deposited – Demand against Deductee

What the rule says?

Bar against direct demand on assessee.

  1. Where tax is deductible at the source under the foregoing provisions of this Chapter, the assessee shall not be called upon to pay the tax himself to the extent to which tax has been deducted from that income.

What is TDS?

Under the tax recovery scheme of “Tax Deduction at source” or TDS, person responsible for making payment of income, covered by the scheme, is responsible to deduct tax at source and deposit the same to the government.

The position of amount deducted as TDS under income tax act is as below:

  1. The TDS so deducted is part of the total gross income of the assessee.
  2. The recipient of income – though gets only the net amount – is liable to tax on the gross amount.
  3. Thus, amount deducted at source is subtracted against the assessee final tax liability. This facility is know as – “Credit of tax deducted” and available in the following manner:
    • Credit of tax deducted and paid to the central government, shall be given to the deductee for the assessment year for which such income is offer for assessment.
    • Where income is assessable over a number of years, credit for the tax deducted at source shall be allowed across those years in the same proportion in which the income is assessable to tax.
    • If the income is assessable in the hands of a person other than the deductee, then credit will be given to such other person.

Position of recipient of income after he receives TDS deducted income from payer:

Depending upon the circumstances of the case position of the receiver of income may be any of the following:

  • No TDS have been deducted on his he received
  • TDS have been deducted but no TDS certificate is issued to the assessee
  • The person who has issued tax deduction certificate has been refunded tax
  • TDS certificate has been issued but same is not appearing in Form No 26AS
  • The TDS deductor has not remitted tax deducted to the government
  • Deductor has not paid TDS but deductee has correctly paid tax on his total income.

Case 1: No TDS have been deducted-

In case deductor had not deducted TDS than there is no problem. Receiver of income shall compute tax liability in normal manner and pay his liability to central government.

Case 2: TDS have been deducted but no TDS certificate is issued to the assessee-

In view of section 205, under no circumstances, assessee is liable to make payment of any tax to the extent to which such tax had been deducted at source by the person paying income to the assessee. Hence income tax authorities cannot recover tax from the assessee.

Case 3: Tax has been refunded to the payer-

As assessee (from whose receipts tax has been deducted at source and who is also in possession of Form No 16/16A) must get credit of tax deducted at source and such credit cannot be decline merely on the ground that person who has issued tax deduction certificate has been refunded tax which he has deposited with the government.

Case 4: Tax credit is not appearing Form No 26AS:

This case may occur due to any mistake in filling return by deductor or in case PAN no is not furnished to him. If tax is deducted and TDS certificate in Form No 16/16A/16B is issued, credit of TDS can not be denied to the recipient solely on the ground that such credit does not appear in Form No 26AS.

Case 5: The TDS deductor has not remitted tax deducted to the government

Under such circumstances receiver of income will not have any control on the deductor to see if the tax deducted from his payment has been ultimately remitted to the government or not.

Thus, department does not have the option against the recipient but to allow him the credit. Means receiver of income shall be allowed to deduct TDS amount from his tax liability.

However, department may proceed against the deductor by holding him assessee in default.

Case 6: Deductor has not paid TDS but deductee has correctly paid tax on his total income (without claiming tax credit)

Where recipient of income has already paid taxes on amount received from deductor, department once again cannot recover tax from deductor on the same income by treating deductor to be assessee in default.

However, in the case of default, the payment of interest is mandatory for the period of delay caused by the omission for the tax to reach the government.

In short position in law is –


Mar 092016

Due dates for the Month of March 2016
Service Tax
– Service Tax payments by Companies for February
Central Excise
– Duty Payment for all Assessees other than SSI Units for February
Income Tax
– TDS Payment for February
Central Excise
– Monthly Return in Form ER-1 (Ann-12) for other than units availing SSI exemption for February
– Monthly Return in Form ER-2 (Ann-13) by 100% EOUs for February
– Montly information relating to principal units in Form ER-6 (Ann – 13AC) for specified assessees for April.
– Exports – Procurement of specified goods from EOU for use in manufacture of Export goods in Form Ann-17B for DTA units, procuring specified goods from EOU for manufacture of export goods.
– Proof of Exports in Form Ann.-19, once in a month for all exporters, exporting goods under Bond
– Export details in Form Ann.-20, for Manufacturing following simplified export procedure.
– Removal of excisable goods at concessional rate in Form Ann. -46 for Manufacturers receiving the excisable goods for specified use at concessional rate of duty in terms of Rules described in Col. 4.
Income Tax
– Advance Income Tax – Final Installment all assessees
Providend Fund
– PF Payment for February
– ESIC Payment for February
– MVAT Monthly Return for February (TAX>1000000/-). If paid in time additional 10 days for uploading e-return.
Service Tax
– Service Tax Payment by other than companies for January to March
– Service Tax Payment by companies for March
Profession Tax
– Monthly Return (covering salary paid for the preceding month) (Tax Rs. 50,000 or more)
– Annual Return (for Salary paid for the month from 1st March to 29th February < Rs. 50,000)
Central Excise
– Duty Payments for all assessees other than SSI Units for March
– Duty Payments for SSI Units in respect of goods cleared during January to March
– Particulars relating to clearances, electricity load etc., in Form Ann.-4 exceeding the limit of Rs. 90 lakhs of exempted clearances for small scale units availing exemption and whose turnover exceeds or has exceeded Rs. 90 lakhs in a financial year, as the case may be.
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Mar 022016

Budget Highlights relating to Income Tax

The provisions of Finance Bill, 2016 relating to direct taxes seeks to amend the Income-tax Act, 1961 (‘the Act’) , the Finance (No.2) Act, 2004, Finance Act, 2013 and Finance Act 2015, in order to provide for –

  1. Rates of Income-tax
  2. Widening of Tax Base and Anti-Abuse Measures
  3. Measures to Phase out deductions
  4. Measures to Promote Socio-economic Growth
  5. Relief and Welfare Measures
  6. Ease of doing Business & Dispute Resolution
  7. Rationalisation Measures

 A. Rates of Income-tax

  1. Tax slab rates will remain unchanged
  2. Surcharge is payable @ 12% in case total income exceeding Rs one crore rupees.
  3. The above surcharge is also applicable in case assessee who is liable to pay tax under Alternate Minimum Tax.
  4. For domestic company surcharge shall be 7% (for total income ranges between Rs one crore to 10 crore) or 12% (for total income > Rs 10 crore) as the case may be subject to marginal relief.
  5. For other corporate, surcharge shall be 2% or 5% as the case may be subject to marginal relief.
  6. Rates of education cess (2%) and Secondary and Higher Education Cess (1%) remains unchanged.
  7. Rates of TDS on insurance commission payable to resident non corporate assessee TDS shall be deducted @ 5%.
  8. Income of domestic company having total turnover up to Rs 5 crore shall be taxed @ 29% and other domestic company shall be taxed @ 30%.
  9. Optional taxation @ 25% to newly set up domestic company subject to conditions.
  10. Surcharge is made applicable to domestic company also. (7% or 12%)

 B. Additional Resource Mobilisation

  1. Dividend income > Rs 10 lacs shall be chargeable to tax in the hands of Individual, HUF & firm on Gross Basis in the hands of receiver of income also.
  2. STT on sale of an option in securities where option is not exercise shall be chargeable to tax @ 0.05%.
  3. Equalization levy of 6% on non resident specified service provider if aggregate consideration exceeds Rs 1 lacs.

C. Widening of Tax Base and Anti-Abuse Measures

  1. Seller shall collect TCS @ 1% from the purchaser of motor vehicle of value > Rs. 10 lacs, or other goods except bullion and jewellery and services > Rs 2 lacs.
  2. Provisions of sec 115AQ shall apply to any buy back of unlisted share undertaken by the company in accordance with the provisions of the law relating to the Companies and not necessarily restricted to section 77A of the Companies Act, 1956.
  3. Levy of additional levy in case of conversion of charitable institute into or merger with any non charitable or on transfer of assets of a charitable organisation on its dissolution to a non charitable institution.

 D. Measures to Phase Out Deductions

  1. Following incentives are phased out in prescribed manner:
    1. Sec 10AA- Special provision in respect of newly established units in Special economic zones (SEZ).
    2. 35AC-Expenditure on eligible projects or schemes.
    3. 35CCD-Expenditure on skill development project.
    4. Sec 80IA, 80IAB, 80IB
    5. Accelerated depreciation
    6. Sec 35(1) Sec 35(2AA) & 35(2AB) Deduction of expenditure on scientific research
    7. Sec 35AD & Sec 35CCC other specified incentives

 E. Measures to Promote Socio-economic Growth

  1. Exemption of income accruing or arising to a foreign company on account of storage of crude oil in a facility in India and sale of crude oil there from to any person resident in India
  2. Income of foreign company from display of uncut and unassorted diamond in special zone.
  3. Benefit of initial additional depreciation is extended to assess engaged in transmission of power
  4. Concessional rate of tax (10%) on royalty income of a person resident in India.
  5. Deduction of 100% profit earned by eligible start up before 01-04-2019.
  6. New sec 54EE to provide exemption of from capital gain if LTCG proceeds are invested in specified fund with a cap of Rs 50 lacs.
  7. 100% deduction of the profits of an assessee developing and building affordable housing projects.
  8. Benefit of deduction under section 80EE is increased to Rs 150,00/- for interest paid on loan taken upto Rs 35 lacs by first home buyers.
  9. 30% of salary paid in first year of new business shall be allowed as deduction.

 F. Relief and Welfare Measures

  1. Redemption of Sovereign Gold Bond shall not be regarded as transfer and thus exempted from capital gain.
  2. Indexation benefit is made available to Sovereign Gold Bond also.
  3. Exemption to capital gains arising in case of appreciation of rupee between DOI & DOR against the foreign currency in which investment was made in Rupee Denominated Bond.
  4. Relief under sec 80GG is raised from Rs 2000 per month to Rs 5000 per month.
  5. Exemption of interest and capital gains of investment made in Gold monetization scheme.
  6. Rebate u/s 87A is increased from Rs 2000 to Rs 5000.
  7. Deduction of interest paid on money borrowed of acquisition or construction of self occupied property is made available even if acquisition or construction is completed within 5 years from the end financial year in which capital is borrowed,
  8. Section 25A, 25AA and 25B is omitted.
  9. Unrealized rent or arrear of rent will be taxable in the year of receipt with a uniform deduction of 30%.

 G. Ease of doing Business & Dispute Resolution

  1. Exemption from Dividend Distribution Tax (DDT) on distribution made by an SPV to Business Trust
  2. Special taxation regime for off shore funds Section 9A are modified.
  3. Enabling provisions are made for implementing various provision of the act in case foreign company held to be resident in India.
  4. Gross receipts of professionals to be taxed @ 50% of total gross receipts.
  5. Increase in threshold limit of audit of professional from Rs 25 lacs to Rs 50 lacs.
  6. Increase in threshold of audit in case assessee claims that his profit from trading activity is less than 8% of gross receipts from Rs 1 crore to Rs 2 crore.
  7. Further, for the above trading partners expenditure on account salary remuneration interest etc. paid to partner shall not allowed to be deducted.
  8. Further, above assessee shall pay advance tax before 15 march.
  9. Requirement of furnishing PAN No by non resident is done away.
  10. The income declaration scheme 2016 is introduce to curb black money.

 H. Rationalisation Measures

  1. Grant and assistance etc. from central government for the purpose of corpus of a trust or institution shall not form part of total income.
  2. Payments made to railways for use of its assets are come under the ambit of sec 43B.
  3. Increase in thresh hold limit of TDS under various section.
  4. Forms 15G / 15H are made available for rental incomes also.
  5. Schedule of advance tax payment from now onwards will be same for all assessee except assessee who are covered under 44AD.
  6. Processing of all returns under section 143(1) made compulsory and many more.