LAW DECODED

TDS means Tax deducted at Source. It is the amount withheld from payment of various kinds such as salary, contract payment, commission, etc. This withheld amount can be adjusted against your tax due.

Slump sale means the transfer of one or more business undertakings as a result of sale for consideration without assigning values to individual assets and liabilities.

FORM 27D Step1.                Bill received or payment to be made. Step2.                Send bill to CA. Step3.                CA will issue certificate in form 15CB mentioning rate of TDS. Step4.                On the basis of 15CB fill online 15CA. Step5.                Submit both 15CA/15CB to bank. Step6.                Bank makes payment Few important points keep in mind before deducting TDS: ü   Whether the income of foreigner is taxable in India , if answer is No, then no need to deduct TDS, just file form 15CA on income tax site To judge whether the Income is Taxable in India, one has to check the following things: ü   Section 9 of Income Tax Act 1961 ü   DTAA between India & foreign country PAN: Ordinarily in terms of Section 206AA of the IT Act, if a person entitled to receive any income on which withholding tax is deductible does not furnish a Permanent Account Number ("PAN") to the person responsible for deducting such ta

Making foreign payments are very frequent in nature, but before making any foreign payment you must keep in mind the compliances under various laws such as: 1. Under Income Tax Laws :  Section 195 of the Income Tax Act requires to deduct TDS if the sum payable is taxable in India. To know this you must check Section 5, 6 and 9 of the Income Tax Act along with section 195 to get the clear picture. Deciding at what rate you should deduct TDS , is also a crucial task. For this, you must check the DTAA [Double Taxation Avoidance Agreement] between India and the Country where you remitting the funds.  Apart from TDS liability and its TDS return filing, you must also intimate the tax authority by filing form 15 CA and 15 CB [CA Certificate] . However, there are certain notified transactions where you are not required to report such transactions [ Rule 37 BB of Income Tax Rules ]. The wording of section 195 is so wide that it covers almost each and every foreign payment barri

Notified jurisdiction means those countries which do not help India in tax information exchange u/s 94A. The purpose of this section to discourage the assessee to enter into transactions with the persons located in these notified jurisdictions. The Central Government has the power to notify any such country or territory outside India as Notified Jurisdictional Area. Earlier, Govt has notified “Cyprus” as a Notified Jurisdictional Area under section 94A but subsequently, Govt removes the name of “Cyprus” as a Notified Jurisdictional Area. Any transaction with a person located in NJA would be deemed to be an International transaction and accordingly all the provisions of transfer pricing to be attracted in case of such transaction. Few examples of such transactions: · Purchase or sale of tangible or intangible property or· Provision of services· Lending or borrowing of money or· Any other transaction having bearing on the profits, income, losses or assets of the assessee.The following

GAAR is an anti-tax avoidance rule which deters the tax evaders, from making the investment through tax-heaven countries like Switzerland, Luxemburg, Mauritius, and Cyprus etc. The Shome committee proposed the implementation of GAAR, but the provisions of GAAR has not been notified so far. The proposal to apply GAAR will be checked first by the Principal Commissioner of Income Tax / Commissioner of Income Tax and at the second stage by an Approving Panel headed by a judge of High Court. The stakeholders have been assured that adequate procedural safeguards are in place to ensure that GAAR is invoked in a uniform, fair and rational manner. Applicability of GAAR: As per GAAR provisions, an arrangement entered into by a taxpayer may be declared to be impermissible avoidance arrangement and consequences of tax arising shall be dealt as per GAAR provisions. Non-Applicability of GAAR: I. If at the time of sanctioning the arrangement, the court has explicitly and adequately

1. No change in the Tax rate for Individuals, but for the salaried taxpayer: standard deduction: Rs. 40000/- in lieu of conveyance & medical. 2. Tax exemption for farmer producer companies. 3. Real Estate: 50C/43CA: Hardship minimized 5% difference allowed. 4. Domestic Companies having a total turnover or gross receipts not exceeding 250 Cr during the FY 2016-17 shall be liable to pay tax @ 25% 5. Education cess is being increased from 3 to 4% and now known as Education and Health Cess 6. LTCG exemption u/s 10(38) in respect of listed STT paid shares being withdrawn. However, capital gain up to 31.01.2018 shall not be taxed. Further, the said LTCG shall be exempt up to 1 Lakh, beyond 1 lakh there shall be tax @ 10%. 7. Std deduction of Rs. 40,000 for salaried persons. However, Transport allowance and Medical reimbursement have been withdrawn.