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Lease deed, power bill etc may be needed for claiming HRA rebate For as long as anyone can remember, producing fake property rent receipt, often from parents and relatives, has been an easy way to lower tax burden.Such cavalier disregard for tax rule was overlooked by most employers as well as taxman, who possibly felt it was a minor transgression. Perhaps, not anymore. The income tax department now has good reason to insist on proof from the tax payer showing that he is indeed a genuine tenant, staying in the property in question. A salaried employee receiving `house rent allowance' from the employer could escape paying tax on at least 60% of this amount by generating sham rent receipt. However, according to a recent tribunal ruling, the assessing officer can now demand proof -such as leave and licence agreement, letter to the housing co-operative society informing about the tenancy , electricity bill, water bill etc. -in allowing a lower taxable income as computed by a

Rush to tax consultants for a way around; fear their privacy may be compromised Expatriates living in India would often complain about heat, food and dirt. Applying, registering and getting an Aadhaar card might just extend the list of woes with another mandatory tryst with India's famed red tape. Many expatriates would be required to obtain an Aadhaar number. The Finance Act, 2017 has made it mandatory to enrol for Aadhaar to file tax returns in India or apply for a PAN or keep the existing PAN active effective July 1. This applies to those who are eligible for Aadhaar and under the Aadhaar Act, anyone who is in India for more than 182 days in aggregate in the past 12 months becomes eligible to obtain Aadhaar, experts said. The possibility of giving out details including biometric ones has caused panic among the expat community. “Many expats have reached out to us and sought clarity around whether they require getting Aadhaar card for filing income tax returns in India

Those buying goods at prices lower than prevalent market rates in exchange offers for older items,apractice popular in the consumer durables and electronics sectors, might have to shell out more in the goods and services tax (GST) regime. For instance,anew phone handset is sold for ~20,000 in exchange for an older one. But, the price of the new handset, without the exchange offer, is ~24,000. Then, the GST would be levied on the higher amount; at present, valueadded tax (VAT) is applicable on the cash component. Also, traders, dealers and distributors who have transition stock when the GST is rolled out might not get the full refund for central taxes already paid. This is likely to affect dealers of aerated drinks, luxury cars, cigarettes, and pan masala. These goods will be taxed at the peak rate of 28 per cent. The rules became clear after the Central Board of Excise and Customs (CBEC) on Sunday issued draft rules on composition, valuation, transition and input tax credit

Union Minister of State for Finance Arjun Ram Meghwal on Sunday expressed confidence that the goods and services tax(GST) will roll out from July 1.“100 percent GST will be implemented from July 1,” Meghwal said when asked on the GST roll out. “In the last meeting four rules had been approved and the next meeting is in Srinagar,” he said. The Business Standard New Delhi, 03rd April,2017

The Supreme Court (SC) ruled last week that the premium collected by a company on its subscribed issued share capital is not part of "capital employed in the business of the company" and it would not be entitled to claim income tax deduction on that amount received from shareholders. The SC said so while dismissing the appeals titled Berger Paints India Ltd vs CIT. Earlier, the Income Tax Appellate Tribunal and the Delhi High Court had held the same view, interpreting Section 35D of the I-T Act. The company had unsuccessfully argued that it hadissued shares on a premium which was a part of the capital employed in their business and therefore eligiblefor deduction under section 35D. The Business Standard New Delhi, 03rd April,2017

Credit to be given once Central GST is paid on supply and companies give proof of purchase Companies can get credit of up to 40% of their goods and services tax liability against excise duty already paid on stocks lying with traders or retailers when GST is rolled out. According to the latest set of rules put out by the government, credit would be given once the central GST has been paid on the supply and the applicant has provided evidence of purchase of these goods.The company would not need to provide any duty paid document. The new set of rules defines transition for companies, dealers and retailers that will have stocks, with taxes paid under the previous regime, when the country switches to GST. Experts, however, said the amount of deemed credit of 40% of tax payable could be quite low in a few cases, particularly for sectors where the existing rate of excise duty is high, like automobile. Further, for products that attract a higher GST rate of 28%, the loss due to

MONETARY POLICY REVIEW Focus will be on squeezing excess liquidity from the banking system, say economists THE SURGE IN CASH DEPOSITS FOLLOWING DEMONETISATION HAS RESULTED IN LIQUIDITY RISING TO Rs 4 L CR IN MARCH FROM Rs 2 L CR IN JANUARY  The Reserve Bank of India (RBI) will focus on squeezing excess liquidity from the banking system in its monetary policy meeting on April 5-6 while keeping policy rates unchanged and retaining its neutral stance, according to a Mint survey.  The surge in cash deposits following demonetisation resulted in liquidity rising to Rs 4 lakh crore in March from  Rs  2 lakh crore in January. Announcing the February 8 policy, RBI said surplus liquidity should decline with progressive re-monetisation, but the abundant liquidity with banks is now expected to persist into the early months of fiscal 2017-18. “We don’t expect any change in the monetary policy stance as growth-inflation dynamics haven’t changed much since February. The main focus