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  • Oct 23, 2021
  • New income tax portal will not be available for 12 hours this weekend

    If you were planning on filing your income tax return (ITR) this weekend using the tax department's new tax filing portal, then you should know the website will not be available for a certain amount of time between Saturday and Sunday. As per a ticker on the new income tax portal, "Alert: Website will not be accessible due to scheduled maintenance activity from Saturday 23rd Oct 10.00PM to Sunday 24th Oct 10.00AM IST".

    Due to this downtime, you will not able to access the e-filing portal to file your ITR, register yourself as legal heirs, register your digital signature for verification of tax return, check information regarding or download your Form 26AS etc.

  • Oct 22, 2021
  • CBDT issues refunds of Rs 92,961 cr to 63.23 lakh taxpayers

    The Central Board of Direct Taxes (CBDT) has issued refunds of over Rs 92,961 crore to more than 63.23 lakh taxpayers from April 1 to October 18, the Income Tax Department said on Thursday.

    "CBDT issues refunds of over Rs 92,961 crore to more than 63.23 lakh taxpayers from April 1, 2021 to October 18, 2021. Income tax refunds of Rs. 23,026 crore have been issued in 61,53,231 cases and corporate tax refunds of Rs. 69,934 crore have been issued in 1,69,355 case," the Income Tax department tweeted.

    The department said the amount includes 32.49 lakh refunds of Assessment Year (AY) 2021-22 amounting to Rs 2498.18 crore.

    Meanwhile, the direct taxes watchdog on September 22, had issued refunds of over Rs 74,158 crore to more than 45.25 lakh taxpayers between April 1 and September 20. Then, Income tax refunds of Rs 18,873 crore were issued in 43,68,741cases and corporate tax refunds of Rs 55,285 crore were issued in 1,55,920 cases.

    The amount at the time included 17.45 lakh refunds of AY 2021-22 amounting to Rs 1350.4 crore.

  • Oct 19, 2021
  • Global tax deal to hurt Indians who moved trusts to the UAE

    Several rich Indians who moved family trusts and holding entities to Dubai and Abu Dhabi amid the Covid-19 pandemic are now reaching out to their advisers fearing additional taxes, following the new global tax deal of the Organisation for Economic Co-operation and Development (OECD) and UAE's plans to introduce more taxes.

    After all major countries including the UAE signed OECD's global tax deal, the fear is that the country will introduce corporate tax of at least 15% across the board that will even apply to income of holding trusts and entities.

    Many businessmen had created intermediary companies based in these countries so that the operations could be handled from there, and they could avail of tax benefits due to UAE's liberal tax regime.

    Some of them had even started "creating fact patterns" so that they don't get stuck with tax and other regulatory issues. These fact patterns, highlighting historical transactions and structures, are aimed at demonstrating that the move was not undertaken to save taxes but due to other genuine reasons.

  • Oct 16, 2021
  • Over 2 crore ITR filed; new portal substantially stabilised: CBDT

    The income tax department on Thursday stated that a number of technical issues in the new income tax portal have been resolved and the performance of the portal has substantially stabilised. With this, over two crore income tax returns (ITRs) have been filed so far for the financial year 2020-21.

    “The e-filing portal of the Income Tax Department (www.incometax.gov.in) has marked receipt of more than 2 crore Income Tax returns as on 13th October 2021. The new portal was launched on 7th June, 2021 and in the initial period taxpayers had reported glitches and difficulties in the functioning of the portal. A number of technical issues have since been resolved and the performance of the portal has substantially stabilised,” it said.

    The new income tax portal, http://www.incometax.gov.in, which was launched on June 7, has been facing glitches since its launch. The Finance Ministry had on August 23 “summoned” Infosys CEO Salil Parekh to explain the issues resulting in disruption of the portal developed by the software major. In the meeting with Parekh on August 23, Finance Minister Nirmala Sitharaman had expressed “deep disappointment” over persisting glitches for more than two months after portal launch and has given a deadline of September 15 to Infosys to resolve the issues.

  • Oct 16, 2021
  • Govt notifies rules to settle Vodafone retrospective tax case

    The government has notified a fresh set of rules to facilitate settlement of the retrospective tax dispute with British telecom giant Vodafone Plc.

    The Central Board of Direct Taxes on October 13 notified ‘Relaxation of Validation (Section 119 of the Finance Act, 2012) Rules, 2021’, prescribing the forms and conditions for the declaration to be filed by the company for settling its case.
    After enacting a law to scrap any tax demand levied on companies using the controversial 2012 amendment to the Income Tax Act, the government on October 2 notified rules for settling such cases.

    The government has promised to refund any tax collected using such law but without any interest and subject to companies agreeing to withdraw all pending legal proceedings.

    Under the rules notified, companies are required to furnish a declaration to the I-T department withdrawing all legal proceedings against the government over the levy of retrospective taxes. They are also required to indemnify the government against any future claims and commit to not seek any damage.

    The first set of rules released earlier this month applies to companies such as Cairn Energy Plc of the UK which were slapped taxes after the 2012 amendment. These taxes were sought using Section 9 of the 2012 law.

    The case pertaining to Vodafone is different as taxes were sought from the company by validating an October 2010 order of the I-T department that sought Rs 11,218 crore in taxes from the British firm over its 2007 acquisition of Hutch-Essar through a deal in the Cayman Islands.

  • Oct 14, 2021
  • India to eventually gain from OECD global tax deal: CBDT

    India will stand to gain in term of tax revenues over the next few years thanks to the implementation of the OECD Inclusive Framework on Base Erosion and Profit Shifting from 2023 aimed at addressing the tax challenges arising from the digitalisation of the global economies, Central Board of Direct Taxes (CBDT) chairman JB Mohapatra told FE. However, tax experts were sceptical about the likely gains for India from the new regime in the medium term at least.

    India will continue with equalisation levy known as ‘google tax, which fetched about Rs 2,200 crore in FY21 and it is projected generate revenue of over Rs 3,000 crore in FY22 till the OECD framework is implemented, Mohapatra said. Besides EV, India will also have to abolish the special economic presence (SEP) brought in this year to target multinational enterprises (MNEs) with a large consumer base but escaping the tax net.

  • Oct 14, 2021
  • Income Tax portal seeing steady progress, says Infosys CEO Salil Parekh

    Under fire for technical glitches plaguing the new income tax return filing portal, Infosys CEO Salil Parekh on Wednesday said the new portal developed by his company is seeing “steady progress” and already 1.9 crore returns have been filed.

    He further said that taxpayers’ concerns are being “progressively addressed”.
    “We are seeing a steady progress on the income tax system. As of yesterday we had over 1.9 crore returns that have been filed using the new system. Today the income tax return Forms 1 to 7 are all functional. Most of the statutory forms are available on the system,” Parekh told reporters after the company’s results for the second quarter were announced.

  • Oct 13, 2021
  • Income tax dept exempts certain non-residents, foreign investors from filing I-T returns. Check details

    The income tax department has exempted certain non-residents and foreign investors from filing Income Tax Return (ITR) from 2020-21 onwards, a move aimed at easing compliance burden.

    Through a notification, the Central Board of Direct Taxes (CBDT) said non-residents (corporates/ otherwise) who do not earn any income other than income from investment in 'specified fund', being Alternate Investment Fund Category III located in International Financial Services Centres (IFSC) or GIFT city shall not be required to file ITR.

    Further, eligible foreign investors (non-residents who operate in accordance with SEBI instructions), who during the financial year, have only transacted in capital asset like Global Depository Receipts, Rupee Denominated Bonds, derivatives or other notified securities, listed on recognised stock exchange in IFSC, have also been exempted from ITR filing.

  • Oct 11, 2021
  • India may have to withdraw equalisation levy from Oct 8 if global minimum tax deal comes through

    India may have to withdraw digital services tax or the equalisation levy and give a commitment not to introduce such measures in the future if the global minimum tax deal comes through. In a major reform of the international tax system, 136 countries, including India, have agreed to an overhaul of global tax norms to ensure that multinationals pay taxes wherever they operate and at a minimum 15 per cent rate.

    However, the deal requires countries to remove all digital services tax and other similar measures and to commit not to introduce such measures in the future, as per the Organisation of Economic Cooperation and Development (OECD) implementation plan released late on Friday.
    “No newly enacted digital services taxes or other relevant similar measures will be imposed on any company from October 8 and until the earlier of December 31, 2023, or the coming into force of the MLC (multilateral convention),” the OECD said.
    The proposed two-pillar solution of the global tax deal consists of two components – Pillar One which is about reallocation of additional share of profit to the market jurisdictions and Pillar Two consisting of minimum tax and subject to tax rules.

  • Oct 09, 2021
  • OECD fixes minimum tax of 15% on MNCs from 2023

    Multinational corporations will be subject to a minimum tax of 15% from 2023, in a major reform of the international tax system finalised by the OECD on Friday.

    The framework, backed by 136 countries, including India, seeks to ensure a fair share of taxes for countries where multinationals and global digital companies such as Netflix, Google earn revenues from.

    "The landmark deal, agreed by 136 countries and jurisdictions representing more than 90% of global GDP, will also reallocate more than $125 billion of profits from around 100 of the world’s largest and most profitable MNEs to countries worldwide, ensuring that these firms pay a fair share of tax wherever they operate and generate profits, " the OECD said in a statement.

    The two-pillar solution will be delivered to the G20 Finance Ministers meeting in Washington DC on 13 October, then to the G20 Leaders Summit in Rome at the end of the month.

    Countries are aiming to sign a multilateral convention during 2022, with effective implementation in 2023, it said.

  • Oct 07, 2021
  • View: Should India sign up to the global tax deal

    Recently, India re-affirmed its commitment to the OECD/G20 Inclusive Framework deal, along with 132 other countries, to address the tax challenges arising from the digitalization of the economy. Its claim that market jurisdictions deserve a right to tax a portion of the profits of a MNC has largely been accepted, with key details being negotiated currently. Along with other G24 nations, it also flagged that the allocation of taxes under the global deal should be meaningful.

    While tax collection is an important factor, tax policies and actions by tax authorities geared solely towards revenue collection have shown their pitfalls in recent days. The Government has had to roll back the retrospective application of indirect transfer taxes in the aftermath of favourable rulings obtained by Cairn. Further, policy goals of revenue collection should be assessed against the larger context of the Indian budget and revenue requirements. For instance, Mr. Tarun Bajaj, Revenue Secretary, stated recently that when India has a budget of more than Rs 30 lakh crores, an amount of Rs 5,000-10,000 crore is not that important. The fact that India collected close to Rs 2,000 crore in the last financial year through the equalisation levy should factor in the assessment between accepting the global deal versus continuing the unilateral equalization levy. In any event, Mr. Tarun Bajaj pointed out that India is not necessarily bound to lose revenue by signing up to the deal provided certain percentages of the profits is taxable by market countries.

  • Oct 05, 2021
  • Here's everything you should know about the global tax deal to be finalised on Oct 8

    Come Friday, representatives from 139 countries, accounting for over 90 per cent of global GDP, will be huddled in Paris to finalise a global tax deal which will give rights to countries, including India, to tax large digital players including Google, Facebook, Netflix, and Microsoft. The outline of the framework was finalised in July and a consensus-based agreement is expected on October 8 for the deal to come into effect from 2023.

    The OECD base erosion and profit shifting (BEPS) deal is intended to ensure that these large multinational digital entities pay more taxes in countries where they have customers or users regardless of where they operate from. Several internet companies operate out of low-tax jurisdictions, but do business in several others without having a physical presence and end up avoiding taxes. The deal will also ensure that countries will withdraw unilateral measures like equalization levy to tax these digital companies.

    The second part of the two-pillar package deal will see countries setting a global minimum corporate tax of 15 per cent.

    The meeting will be followed by a G20 finance ministers meet the following week, and a G20 summit at the end of October. Let’s take a look some of the key issues related to the deal

  • Oct 05, 2021
  • Multi-agency group led by CBDT chief to monitor probe into Pandora Papers cases

    The government on Monday ordered an investigation of cases pertaining to the ‘Pandora Papers’, the latest leak of offshore financial records. The probe will be monitored through a multi-agency group, headed by the Central Board of Direct Taxes (CBDT) chairman, with representatives from CBDT, enforcement directorate, the Reserve Bank of India and the Financial Intelligence Unit, the finance ministry said in a statement.

    On October 3, the International Consortium of International Journalists (ICIJ) came out with what is claimed to be a 2.94 terabyte data trove that exposes the offshore secrets of wealthy elites from more than 200 countries and territories, including India. The investigation is based on a leak of confidential records of 14 offshore service providers that provide professional services to wealthy individuals and corporations seeking to incorporate shell companies, trusts, foundations and other entities in low or no-tax jurisdictions.

  • Oct 05, 2021
  • Pandora papers: 'It's time to pursue lawyers and accountants who enable tax evasion', says offshore tax expert

    Many of the world's richest and most powerful people are in the spotlight once more for using secretive tax havens and corporate structures to hide wealth and avoid paying taxes.

    The Pandora papers is the third in a series of huge leaks of documents to the media following the Panama papers in 2016 and the Paradise papers in 2017 - and little seems to have changed in the interim.

    Those included so far in the new revelations include the leaders of the Czech Republic, Cyprus, Jordan and Ukraine, plus members of the ruling family in Azerbaijan and figures close to Vladimir Putin.
    In all, more than 100 billionaires are reportedly involved in the revelations, with transactions ranging from properties worth millions of pounds to slush funds and superyachts.

    We asked Professor Ronen Palan, a specialist in offshore tax havens at City, University of London, about the story so far.
    What are your initial thoughts?
    I'm afraid I'm not surprised by these papers. There's no evidence to suggest that the volume of transactions taking place through these offshore centres is declining, so the same financial structures that we heard about in the Panama and Paradise papers are still clearly being used.

  • Oct 04, 2021
  • Retro tax settlement: Cos must indemnify govt; wait 5 months to get refund

    Companies such as Cairn Energy Plc and Vodafone Group of the UK will have to indemnify the Indian government against future claims in order to settle their retrospective tax cases, according to rules notified by the government to settle disputes arising from seeking back taxes.

    The Ministry of Finance on October 1 notified rules that when adhered to will lead to the government withdrawing tax demands raised using the 2012 retrospective tax law and any tax collected in enforcement of such demand is paid back.
    But the repayment, going by the timelines drawn in the rules, will take a minimum of 2-3 months.

    According to the rules, the companies will have to withdraw any pending litigation or proceeding before any forum against the levy of the retrospective tax and also give an assurance that they won’t pursue any further claims in the future.

    In addition, the companies and any other interested party will have to furnish an indemnity bond committing not to seek damage from the Indian government or its affiliates.

    Companies will have to file a declaration with the income tax authorities along with a board resolution or legal authorisation besides an indemnity bond, the rules said.

    According to the timelines drawn in the rules, the initial submission of an undertaking to withdraw all pending legal proceedings has to be done in 45 days. Thereafter the relevant Principal Commission of Income tax has to give a certificate accepting or pass an order rejecting the claim in 15 days from the receipt of the application.

  • Sep 30, 2021
  • I-T department asks taxmen to accept applications till September 30 for settlement before Interim Board

    The Income Tax department has issued an order asking taxmen to accept till September 30, applications for settlement of pending tax cases.

    The 2021-22 Budget, through the Finance Act, amended the provisions of the Income-Tax Act, 1961 to provide that the Income-tax Settlement Commission (ITSC) shall cease to operate from February 1, 2021.

    Further, it has also been provided that no application for settlement can be filed on or after February 1, which was the date on which the Finance Bill, 2021 was laid before the Lok Sabha.

  • Sep 27, 2021
  • CBDT notifies ‘safe harbour’ rates for transfer pricing

    The tax department has notified the ‘safe harbour’ rates for FY21 for calculation of transfer pricing by foreign companies in India. Generally, safe harbour is defined as circumstances in which the tax authority shall accept the transfer price declared by the taxpayer to be at arm’s length.

    The Central Board of Direct Taxes, via a notification, has extended the applicability of Safe Harbour Rules (SHR) to 2020-21.

    As per the notification, the rates under SHR applicable from 2016-17 to 2018-19, and later extended to 2019-20, will continue to apply for 2020-21 as well.

  • Sep 25, 2021
  • Taxation of Permanent Establishment (PE) in India: When it's applicable and its impact

    India has emerged as one of the world's fastest developing countries in recent years, with an increase in economic activity owing to huge influxes of international investments and technological collaborations. All this has increased the challenge of charging tax on foreign entities.

    The tax on foreign entities in India is based on different aspects such as place of income, source of income and presence of the entity in India. So with the increase of global business presence in India, the concept of PE has gained importance.

  • Sep 24, 2021
  • Do you have to report cryptocurrency investments as foreign assets in your income tax return?

    Most experts agree that gains or losses in cryptocurrency trading have to be reported in your income tax return (ITR). However, there is no clarity on whether the cryptocurrency investments have to be reported in ITR even if there has been no trading and no gains/losses from the same.

    As per current income tax laws, an individual is required to report all of his/ her foreign assets irrespective of his/her income level. So do you have to report your cryptocurrency investments while you file your ITR for the financial year 2020-21?

    What the income tax rules state
    Here is what the current income tax rules state about reporting of cryptocurrency holdings in your ITR:
    1) If an individual's net taxable income exceeds Rs 50 lakh, then he/she will have to report their assets and liabilities using Schedule AL of the ITR form.

    2) Similarly, if an individual is holding foreign assets such as investments in stocks listed in the US, then he/she has to report all his assets and liabilities irrespective of total income in a financial year. An individual having foreign assets or who is a beneficiary of any asset or having signing authority in any account located outside India is mandatorily required to file ITR even if his/her gross total income is below the basic income exemption limit.

  • Sep 24, 2021
  • Some e-filing glitches remain, working with I-T dept: Infosys

    Acknowledging that some users continued to experience difficulties on the Income Tax e-filing portal, IT major Infosys on Thursday said it was working “expeditiously” with the I-T department to further streamline end-user experience.

    “Even as it makes steady progress, Infosys recognises the ongoing challenges faced by some users and has engaged with more than 1,200 taxpayers directly to better understand their concerns. The company is focused on rapidly resolving these challenges while working closely with the Chartered Accountant community to ensure that a comprehensive set of user scenarios are supported and thoroughly tested before deployment,” the company said in the post.

    The Bengaluru-based technology services giant said over 30 million taxpayers had logged into the portal and have completed various transactions.