CA Online

I-T Dept Goes after Defunct Cos for Tax Frauds UNDER LENS Sends notices to reopen assessment against cos in marketing, realty space that no longer exist on suspicion of frauds or fund diversion The tax office is reopening old records of many companies that have wound up and no longer exist in the books of the government -something the revenue department has rarely done in the past. Former directors of such closely-held private companies, which have received tax notices along with the official liquidators, fear they could be suddenly saddled with unforeseen liabilities. While opening new private companies and shutting down old ones have often been a ploy to move unaccounted money, some of the companies set up to carry out bona fide businesses which subsequently failed have also come under the glare of the income tax department. Till now, the department has ty pically stayed away from companies to which it had issued nonobjection certificate prior to the winding process. But, it

Recent low inflation means you pay more capital gains tax Prices rising at a slower rate should be good news. But not if you have earned long-term capital gains. The consistent decline in inflation in the past 3-4 years means that long-term capital gains can no longer escape tax through indexation. Indexation takes into account the inflation during the holding period and accordingly adjusts the purchase price of certain assets. This upward revision in purchase price reduces the capital gains and brings down the tax liability. Between 2008 and 2012, consumer inflation was raging in double digits, which meant that debt fund investors were earning tax-free gains. In fact, the inflation was so high that they could book notional losses and adjust them against other taxable long-term capital gains. Someone who invested Rs 1 lakh in a debt fund on 1 April 2011 would have earned Rs 28,400 over the next three years. However, with the cost inflation index (CII) shooting up 9.3% during the sa

Jurisdiction-free I-T assessment of taxpayers on the anvil CBDT has constituted a special team of officers to prepare modalities to abolish the old system The Income Tax Department is working on a new system of jurisdiction-free assessment, where a taxpayer would be assessed by a taxman based in any part of the country as part of measures to reduce instances of corruption and harassment. Officials said the Central Board of Direct Taxes (CBDT), that frames policy for the tax department, has constituted a special team of officers to prepare modalities for this path- breaking initiative and abolish the age-old prevalent system of a taxpayer being assessed in a specific circle of the city or town where he or she is based. "This first-of-its-kind initiative will totally change the relationship and dealing between an assessee and his Assessing Officer (AO). The income tax returns, scrutiny cases and all other I-T related correspondence of a taxpayer will go to a officer chosen rando

GSTN reopens window for composition scheme The GST Network (GSTN) on Sunday said it has reopened the facility for small taxpayers with turnover of up to Rs 75 lakh to opt for composition scheme. Such small taxpayers will have time till September 30 to opt for the scheme, which offers easy compliance for business as returns are to be filed only quarterly. Taxpayers were earlier given time till August 16 to opt for composition scheme. But, only 10.86 lakh tax payers, out of total 85 lakh registered businesses opted for the scheme. In a statement, GSTN said the window will be open for those assessees who have migrated from the earlier excise/ service tax/VAT regime as well as for new registered taxpayers. "To make this facility available to all those who could not opt for Composition, the facility has been opened again," it said. The GST Council had last week decided to reopen the window for allowing taxpayers to opt for the scheme. Those who opt for composition scheme durin

GST Transitional Claims of Over Rs 1 Cr to be Scrutinised While tax collections in July were Rs 95,000 cr, transitional credit claims are Rs 65,000 cr As much as Rs 65,000 crore out of the nearly Rs 95,000 crore tax collections in July -the first month of GST -have been claimed as transitional credit by taxpayers, prompting the apex indirect taxes body the Central Board of Excise and Customs to order a scrutiny of all cases above Rs 1 crore.   The Goods and Services Tax (GST) regime, which kicked in from July 1, allows tax credit on stock purchased during the previous tax regime. This facility is available only up to six months from the date of GST rollout. The Central Board of Excise and Customs (CBEC), the body which deals with formulation and implementation of policy concerning the levy and collection of indirect taxes, in a letter dated September 11 has asked tax officials to verify GST transitional credit claims of over `1 crore. In the transitional credit form TRAN-1 filed

Driving Licences may be Linked to Aadhaar The government is planning to link driving licences with Aadhaar to curb duplicate and fake licences, IT minister Ravi Shankar Prasad said on Friday.He said he has spoken to transport minister Nitin Gadkari about the linkage. “We are planning to link driving licence to Aadhaar. I have had a word with Gadkari-ji regarding this,“ said Prasad, while speaking at Digital Haryana Summit 2017. “So digital identity confirms physical identity with the help of digital tech nology,“ he said. A transport ministry official said they may not be able to comment on it since it is a state matter and transport is not in the central list. “We'll only be able to comment after we consult the states. However, from our side, we're already getting the entire database of driving licence in the country on a common platform so that there's no duplication anymore,“ said the official. On Friday, the government of Haryana in association with IT industry bo

Tax authorities to scan transition credit claim of 162 companies As many as 162 companies, that have claimed the goods and services tax (GST) transitional credit of more than Rs 1 crore, are under the scanner of tax authorities. They would verify whether these claims are eligible. In the transitional credit form TRAN-1 filed by taxpayers along with their maiden returns for July, businesses have claimed credit of over Rs 65,000 crore for excise, service tax or VAT paid before the GST was rolled out from July 1. In view of such huge claims, the Central Board of Excise and Customs (CBEC) in a letter to chief commissioners said according to the GST law, carry forward of transitional credit is permitted only when such credit is permissible under the law. “The possibility of claiming ineligible credit due to mistake or confusion cannot be ruled out ,” CBEC said. CBEC asked the chief commissioners to send a report on the claims made by these 162 firms to it by September 20. The Business S