Step-by-step guide for filing income tax returns online

Step-by-step guide for filing income tax returns online With new income tax return forms now notified, here is a step-by-step guide for filing income tax returns. Income tax return filing may seem like a big deal for the beginners. However, following sequential steps would make the task easy. July 31st is the last date for filing income-tax return for salaried assessee. 1. Preparing statement of income: First & foremost, assessee should prepare the statement of income by incorporating all the income including FD/SB Interest, exempt income details, capital gain, salary/rental income, loss brought forward & carried forward, investment eligible for deduction etc. Once income statement is ready, taxpayer should compute the tax & if there is any balance tax liability after considering TDS/advance tax paid, then pay it along with interest, if any. One should verify the tax details by downloading Form No. 26AS from incometaxindia.gov.inwhich shows all the details like TDS & other taxes paid in the relevant year. 2. Select correct ITR forms for filing: Before filing, taxpayer should ascertain the correct ITR forms in which return has to be filed. Make sure that the correct form is chosen for filing. If the wrong form is selected, it will be considered as a failure to file returns by the IT department. For salaried taxpayer & other taxpayers who don’t have any business income, ITR-1 or 2 is applicable. Procedure for filing the returns: I] Whether to file online or physically?: Now, most of the returns are required to be filed online in electronic mode only and the paper filing is restricted in following two cases only. 1. Very Senior Citizens of the age of 80 years or more at any time during the previous year. 2. Individual/HUF filing ITR 1/ ITR 4 not having a refund claim in the return & total income is not more than Rs. 5,00,000 II] Procedure for paper filing: One can take the printout of the ITR form from the above mentioned website. After filling all the relevant details like personal information, income details, tax deposit details in the hard copy, one can sign & submit the same with the jurisdictional assessing officer. The receiving office at the income tax office will stamp your acknowledgement and give a copy back to you. Assessee is not require to submit any other supporting documents with the tax return. Taxpayer may check the tax jurisdiction by logging at the above quoted income-tax department website. III] Procedure for filing return online: a] The online filing process starts by clicking the ‘register’ link at income-tax e-filing website incometaxindiaefiling.gov.in. For registration, one has to provide personal details like PAN, name as per the PAN card, father’s name, date of birth, email address and contact number. The website provides required flow to complete the registration process. b] Download the applicable return preparation form from the website and fill in the personal information and income-related details in the downloaded form. To ensure that all columns in the return form are file in properly, there is a process to validate the information by clicking on the ‘validate’ button on the last sheet. c] On successful validation, access the ‘generate XML’ link in the tax return software and save the generated XML file. It is the XML file which is upload on the e-filing website. An acknowledgement form in ITR-V is generate on successful e-filing. d] If the return is filed without using digital signature & without mentioning aadhar card, taxpayer would be required to take the print out of ITR-V, sign it in blue ink and dispatch it by ordinary/speed post to the Central Processing Centre (CPC), Bangalore within 120 days of uploading the return. On receipt of the signed ITR-V, tax department will send an email acknowledging the receipt of the ITR-V at the email id mentioned in the return form. There is no need to send ITR-V in the local office of the income-tax department. It may be noted that ITR-V is a password protected document & the password is PAN and date of birth in small case in continuation. [Using aadhar number is optional as of now. The government has come up with an idea of dispensing with the formality of forwarding the duly signed ITR-V form to CPC, Bengaluru, if the taxpayer provides with the Aadhaar number at the time of filing].

Maintenance charges paid directly to the service provider can not be treated as “Rent” in the hands of owner

Maintenance charges paid directly to the service provider can not be treated as “Rent” in the hands of owner Vinod Arora, New Delhi vs Department Of Income Tax Income Tax Appellate Tribunal – Delhi Vinod Arora, New Delhi vs Department Of Income Tax ITA NO. 827/Del/2012 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “H”, NEW DELHI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI C.M. GARG, JUDICIAL MEMBER I.T.A. No. 827/Del/2012 A.Y. : 2008-09 ADIT, CIR.1(1) (Int. Taxation), vs. Mr. Vinod Arora, 204, Drum Shape Bldg., B-27, Mayfair Garden, I.P. Estate, New Delhi – 110 016 New Delhi – 110 002 (PAN/GIR NO. : AACPA9466A) (Appellant ) (Respondent ) Assessee by : Sh. Sunil Goel, Suhel Goel, CA’s Department by : Sh. Pirthi Lal, Sr. D.R. ORDER PER SHAMIM YAHYA: AM This appeal by the Revenue is directed against the order of the Ld. Commissioner of Income Tax (Appeals)-XXIX, New Delhi dated 14.10.2011 pertaining to assessment year 2008-09. The grounds raised read as under:- “i) On the facts and in the circumstances of the case, the Ld. Commissioner of Income Tax (A) has erred in holding that the interest income earned by the assessee amounting to ` 2,64,172/- was taxable at the rate of 12.5% under the India UAE DTAA instead of at the rate of 40% under the Income Tax Act, failing to ITA NO. 827/Del/2012 appreciate that no tax residence certificate has been produced by the assessee. ii) On the facts and in the circumstances of the case, the Ld. Commissioner of Income Tax (A) has erred in holding that the short term capital gains amounting to ` 84,66,054/- were not taxable in India in terms of Article 13(3)of the India UAE DTAA. Failing to appreciate that there was not double taxable in the assessee’s case as UAE has not tax regime and the impugned short term capital gains would not be taxable in UAE. iii) On the facts and in the circumstances of the case, the Ld. Commissioner of Income Tax (A) has erred in holding that while computing the annual value of the house property, the assessee is eligible to claim the deduction of ` 22,888/- on account of maintenance charges paid to the cooperative society, failing to appreciate that the Act dopes not provide for any further deduction on account of repair and maintenance, over and above the standard 30% deduction provided u/s. 24 of the Act. iv) The appellant craves to add, amend, modify or alter any grounds of appeal at the time or before the hearing of the appeal.” Apropos issue of interest income earned by the assessee amounting to ` 2,64,172/-. ITA NO. 827/Del/2012 The assessee was resident of Dubai and was holding UAE resident’s permit/ visa. The assessee had earned interest income of ` 2,64,172/- during the year under appeal. Assessee offered the interest to tax @ 12.5% under Article 11(2)(b) of Indo-UAE Double Taxation Avoidance Agreement (DTAA). However, Assessing Officer relied upon the assessment order for the assessment year 2007-08 and held that the assessee was not eligible for the benefit of DTAA and taxed the interest income at the normal rate of 40% under the Income Tax Act, 1961. While disallowing the claim of the assessee the Assessing Officer observed that the assessee was not able to produce the tax residency certificate of UAE and the documents filed by it, i.e. the copy of the passport and driving license, were not sufficient evidence to establish that the assessee was a resident of UAE. Upon assessee’s appeal Ld. Commissioner of Income Tax (A) noted that the same issue was considered by the Ld. Commissioner of Income Tax (A) in assessee’s own appeals for assessment years 2006- 07 & 2007-08 and the appeals were allowed in this regard. While allowing the relief to the assessee, the Ld. Commissioner of Income Tax (A) in this regard referred to Circular No. 734 dated 24.1.1996 issued by the CBDT, wherein it was clarified as under:- “2. The Board in its Circular No. 728 (F.No. 500/12/95-FTD) dated 30.10.1995 have already clarified that in case of a remittance to a country ITA NO. 827/Del/2012 with which a Double Taxation Avoidance Agreement is in force, tax should be deducted at the rates provided in the Finance Act of the relevant year or at the rates provided in the DTAA, whichever is more beneficial to the assessee. Once again it is clarified that in respect of payments to be made to the Non-resident Indians at UAE, tax at source must be deducted at the following rates: ii) Interest – (b) 12-1/2% of the gross amount of the interest in all other cases.” Considering the above, Ld. Commissioner of Income Tax (A) held that wordings of the circular are clear and unambiguous. In case of Non-resident Indians at UAE, tax on interest income is required to be deducted at source at the rate of 12-1/2% of the gross amount of interest. Hence, Ld. Commissioner of Income Tax (A) decided the issue in favour of the assessee and directed the Assessing Officer to tax the interest income of the assessee @ 12.5% in terms of Article 11(2)(b)of the Indo-UAE DTAA. Against the above order the Revenue is in appeal before us. We have heard the rival contentions in light of the material produced and precedent relied upon. We find that assessee in this case is a UAE resident. The DTAA with the UAE mandates that interest income be taxed @ 12.5% under Article 11(2)(b)of the said ITA NO. 827/Del/2012 DTAA. Furthermore, Board Circular No. 728 referred hereinabove also supports the case of the assessee. We further find that Ld. Commissioner of Income Tax (A) has noted that in assessee’s own case for assessment year 2006-07 and 2007-08, the appeals were allowed in this regard. Ld. Departmental Representative could not controvert these submissions. Under the circumstances, we uphold the order of the Ld. Commissioner of Income Tax (A) on this issue and decide the issue in favour of the assessee. Apropos issue of short term capital gains On this issue Assessing Officer denied the benefit of Indo UAE DTAA to the assessee in respect of short term capital gains of ` 84,55,054/- and levied tax @ 10% alongwith the surcharge and education cess in accordance with the provisions of section 111A of the Act. Assessee claimed that since the assessee was a tax resident of UAE, the income from short term capital gains was not chargeable to tax in accordance with the provisions of Article 13(3)of the Indo-UAE DTAA. While rejecting the claim of the assessee, Assessing Officer relied upon the assessment order for 2007-08 wherein it was held that the benefit of Indo UAE Treaty was not available to the assessee as it was not liable to pay tax in the UAE on its income from short term capital gains. Upon assessee’s appeal Ld. Commissioner of Income Tax (A) noted that the said issue was considered by his predecessor in the appeal filed by the assessee for the assessment year 2007-08. While deciding this appeal his predecessor relied upon his own order dated 30.3.2010 in the case of Mustaq Ahmed Vakil in Appeals No. 269/06- 07, 104/07-08 and 71/08-09 wherein it was held as under:- ITA NO. 827/Del/2012 “I have carefully considered the points made by the Assessing Officer in the assessment order, submissions of the appellant and the various decisions relied upon by the appellant. The issue has been dealt with extensively by the AAR in its various orders. Two AAR rulings are in favour of the department. In the case of Cyril Eugene Pereira (239 ITR 650) it was held that as individuals do not pay tax in the UAE, the applicant Cyril Pereira was not a tax resident of the UAE and was not entitled to the beneficial provisions of the India-UAE tax treaty. In the case of Abdul Razak Memam, (146 Taxman 115) the AAR held that investors of the UAE have to pay Capital Gains tax on their investments in India. The AAR was of the view that DTAA between India and the UAE was not useful for the purpose since UAE does not have a tax regime. Two of the AAR’s rulings i.e. in the case of M.A. Rafique and Emirate Fertilizers Trading are in favour of the appellant. In M.A. Rafique (213 ITR 317), dated 23.12.1994, the AAR held that the applicant was eligible to the benefits of the India-UAE tax treaty and that the capital gains would not be subject to tax in India. The AAR observed – “That though there was no income tax or wealth tax on individuals in any of the UAE nations, the fact that a comprehensive agreement (tax treaty) was considered necessary in spite of a clear knowledge that there was no such tax on individuals in UAE could only mean that the agreement was intended to encourage the inflow of funds from Dubai and other Emirates to India for investment.” In the case of Emirates ITA NO. 827/Del/2012 Fertilizer Trading (192 CTR (AAR) 590), dated 27.10.2004, AAR has held that merely because there is no tax incidence in the other country, it does not imply that such income can be taxed in India and that under article 13(3) of the treaty capital gains realized by a UAE resident were taxable only in the UAE and not in India. Based on the provisions of the Income Tax Act, the AAR held, “The tax treaty has an overriding effect over the provisions of the I.T. Act. Thus, the capital gains arising to the UAE resident on sale of the shares of an Indian company cannot be taxed in India.” The Mumbai Tribunal in the case of Green Emirates Shipping and Travels (99 TTJ 988), dated 30.11.2005, after considering various rulings of the AAR and the judgement of the Hon’ble Supreme Court in Azadi Bachao Andolan held that ‘Liable to Tax’ in the Contracting State does not necessarily imply that the person should actually be liable to tax in that Contracting State by virtue of an existing legal provision but would also cover the cases where the other Contracting State has the right to tax such persons, whether or not such a right is exercised. The same Tribunal in the case of Meera Bhatia (2010-TIOL-46-ITAT-Mum) dated 29.10.2009 after relying on the Green Emirates Shipping case held that “It may result in double non-taxation but then we cannot be oblivious to the fact that double non taxation is also a fact of life, and tax sparings, which find place in several Indian tax treaties, are also a reality in international taxation.” ITA NO. 827/Del/2012 Keeping in view the above mentioned decisions, it is held that the benefit of the Indo-UAE tax treaty is available to the appellant and Article 13(3) of the Indo-UAE treaty is applicable in its case. This view gets further support from notification no. 282/2007-08 – FTD (F.No. 503/5/2004-FTD) dated 28.11.2007 whereby the treaty between India and UAE was amended and capital gains on transfer of shares were made taxable in India w.e.f 1.4.2008 which means that the same were not taxable before 1.4.2008.” Ld. Commissioner of Income Tax (A) noted that the order of his predecessor in Mustaq Ahmed Vakil has been upheld by the ITAT, Delhi vide order dated 24.9.2010 in I.T.A. Nos. 3424, 3425, 3426/Del/2010 by holding as under:- “The Ld. Commissioner of Income Tax (A) has also followed the order of the Tribunal in the case of Green Emirate Shipping & Travels referred to above. Respectfully following the order of the Tribunal in the case of Ramesh Kumar Goenka, we do not find any reason to interfere in the order of Ld. Commissioner of Income Tax (A). All the three appeals filed by the Revenue are dismissed.” Considering the above, Ld. Commissioner of Income Tax (A) noted that it is not in dispute that the facts of the case are squarely covered by the ratio of decision of ITAT in the case of Mustaq Ahmed Vakil. Ld. Commissioner of Income Tax (A) further noted that the provisions of amended treaty are applicable in respect of income arising on or after 1.4.2008. Therefore, Ld. Commissioner of Income Tax (A) considered the precedent and held that benefit of Indo UAE ITA NO. 827/Del/2012 Treaty is available to the assessee and Short Term Capital Gains derived by him for shares/securities in India were not taxable in India in terms of Article 13(3)of the Indo-UAE tax treaty. Accordingly, Ld. Commissioner of Income Tax (A) decided the issue in favour of the assessee. Against the above order the Revenue is in appeal before us. We have heard the rival contentions in light of the material produced and precedent relied upon. We find that the identical facts were considered by the ITAT in the case of Mustaq Ahmed Vakil cited above. The tribunal decided the issue in favour of the assessee. These facts were not controverted by the Ld. Departmental Representative. Hence, we find that there is no infirmity in the order of the Ld. Commissioner of Income Tax (A). Accordingly, we hold that the benefit of Indo-UAE Treaty is available with the assessee and short term capital gains derived by him from sale of shares/ securities in India were not taxable in India terms of Article 13(3)of the Indo-UAE Tax Treaty. Apropos issue of claim of deduction of ` 22,888/- On this issue the assessee claimed deduction of ` 22,888/- paid to the cooperative society while computing the Annual Letting Value (ALV) of the property u/s. 23 of the Act. Assessing Officer rejected the claim of the assessee on the ground that deemed deduction of 30% of the net annual value u/s. 24 of the Act subsumes the repair and maintenance expenses of all kind and no further deduction was to be allowed while computing ALV of the residential house. ITA NO. 827/Del/2012 Before the Ld. Commissioner of Income Tax (A) assessee submitted that the impugned charges were paid by it towards common maintenance of the building including provision of lift, cleaning of common areas etc. provided by the society to the occupants of the flats. It was further submitted that under clause 3 of the agreement entered into by the assessee with the tenant, the rent paid by the tenant included charges paid to the society utilities, services etc. by the assessee on behalf of the tenant for availing such facilities. Assessee contended that while computing the rent received by it from the tenant, the amount of ` 22,888/- should have been excluded from the gross amount of the rent received by the assessee since it was only reimbursement of the utility charges paid by the assessee to the society on behalf of the tenant for the services enjoyed by the tenant. Assessee further relied upon the catena of case laws. 15.1 Considering the above, Ld. Commissioner of Income Tax (A) held that he agreed with the assessee that amount of service charges received by the assessee from the tenant should be netted, i.e. the rent received by the assessee from the tenant should be arrived at after reducing the amount of ` 22,888/-, being the reimbursement of service charges paid to the society by the assessee on behalf of the tenant for the services such as provision of lift, cleaning of commons areas etc., enjoyed by the tenant. Ld. Commissioner of Income Tax (A) further observed that the identical issue was considered by his ITA NO. 827/Del/2012 predecessor in assessee’s own appeal in assessment year 2007-08 and the issue was decided in favour of the assessee and it was held that services charges were not required to be reduced from the gross receipt received by the assessee arriving at the ALV. Considering the above Ld. Commissioner of Income Tax (A) held that the Assessing Officer is directed to allow the deduction of ` 22,888/- while computing the netted ALV of the house. Against the above order the Revenue is in appeal before us. We have heard the rival contentions in light of the material produced and precedent relied upon. We find that assessee has claimed a sum of ` 22,888/- was paid by it towards common maintenance of the building including the provision of lift, cleaning of common areas etc. provided by the assessee to the occupants of the flat. Thus, it is the assessee’s argument that while determining the rent receipt by it from the tenant, the amount of ` 22,888/- should have been excluded from the gross amount of the rent received by the assessee since it was only reimbursement of the utility charges paid by the assessee to the society on behalf of the tenant for the services enjoyed by the tenant. In our considered opinion, the view adopted by the Ld. Commissioner of Income Tax (A) is cogent one. We further note that Ld. Commissioner of Income Tax (A) has noted that assessee’s own case for A.Y. 2007-08, the said issue was decided in favour of the assessee by the Ld. Commissioner of Income Tax (A). ITA NO. 827/Del/2012 This fact was not controverted by the Ld. Departmental Representative. Under the circumstances, in the facts and circumstances of the case, we do not find any illegality or infirmity in the order of the Ld. Commissioner of Income Tax (A). Accordingly, we uphold the same. In the result, the appeal filed by the Revenue stands dismissed. Order pronounced in the open court on 31/8/2012. SD/- SD/- [C.M. GARG] GARG] [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER Date 31/8/2012 “SRBHATNAGAR” Copy forwarded to: – Appellant 2. Respondent 3. CIT 4. CIT (A) DR, ITAT TRUE COPY By Order, Assistant Registrar, ITAT, Delhi Benches

GST – Construction service - Actual land deduction?

GST – Construction service - Actual land deduction? - Shrikhand Business Solution Pvt Ltd. Valuation is the measurement of value on which any tax has to be paid. The typical construction contract is the composition of three components namely - Land or an undivided portion of land in case of apartments - Materials/goods like cement, steel etc., - Services like labour in construction, designing etc., Before GST is introduced, different indirect taxes were levied on the above mentioned three components. State government levied VAT on materials portion, the Central government levied service tax on service portion. Due to practical difficulties in arriving the exact value of each component and taxing such component by at full rate by the respective Government, every state VAT law used to provide the composition rates. Similarly, service tax law also used to prescribe the deemed valuation by way of abatements. After the introduction of GST w.e.f. 01.07.2017, the bifurcation of materials and service components are not warranted as such composite contracts are now fully deemed as services. However, with the presence of the third component i.e. sale of land which was kept outside the GST, need arises to prescribe the mechanism to identify the land value from the total amount received and taxing only the net of land value. For this reason, GST law (vide Notification No. 11/2017- Central tax (Rate) dated 28.06.2017 as amended provides that GST rate applicable is 18% on 2/3 rd of the total amount received which was formulated as (total amount received – 1/3 rd of such total amount which was deemed as land value). Thus, making the effective rate as 12% of the total amount received from the customer. The GST rates are referred as 18% while explaining the implications of actual deduction of land v. 1/3 rd deemed deduction of land, readers may note that w.e.f. 01.04.2019, the rate is revised to 7.5% (effective rate of 5%) in case of non-affordable residential apartments and 1.5% (effective rate of 1%) in case of affordable residential apartments subject prescribed conditions. The analysis would be relevant even after 01.04.2019 as there is no changes in the provisions for land deduction. For example, the amount received from the customer is 4,500/- per sq. ft then the GST shall be paid at 18% of 3,000 (4,500-1,500) which indirectly means 12% on 4,500. The 1,500 arrived as 1/3rd of 4,500 and same was deemed as value collected from customer towards the sale of land or an undivided portion of land. While providing the rate, the law, in fact, a delegated notification deemed that 1/3rd of the total amount is the amount collected towards the sale of land or an undivided portion of land. Now the question arises whether such deemed value of land is to be mandatorily followed? On a plain reading of the notification, the answer is yes, as the law provides for deemed value and has not given any scope to deduct the actual land thereby making the actual land value irrelevant while applying the above referred rate of 12%. Mandatory deduction towards land @1/3rd might be sufficient or even be on the higher side if the project is located in the suburban or rural areas. However, in the metros, premium or semi-premium localities where land value is almost 60-90% of the unit value, this deduction is not sufficient. The law should have provided the mechanism to reduce the value of land in the prescribed manner and it should have been left to the option of the builder to pay tax at the reduced rate of 12% if he is unable to value the land. In many southern States, traditionally builders execute two agreements - One is sale deed conveying the title of land (undivided portion in case of apartments). - Other is ‘construction agreement’ popularly known as work order which is entered to undertake the construction work on the land which was already conveyed to such customer through the above referred agreement There is a clear identification of consideration towards land but the GST law does not recognise these values to deduct from the total amount and uniformly fixes that land value as 1/3 rd . The readers may note that there are advance rulings stating that though there exists separate agreement for sale of land/undivided share land, the GST shall be paid on the total value including the amount charged towards land thereby implying that deemed deduction of 1/3 rd is mandatory in all cases and actual value of land is to be ignored. In Re: Kara Property Ventures LLP 2019-TIOL-86- AAR-GST; In Re: Sanjeev Sharma 2018 (13) G.S.T.L. 395 (A.A.R. - GST) Whether such deeming value of land amounts to taxing the land component? Undoubtedly, the GST is not applicable on the sale of land. That being a case, the question is whether land can be subjected to GST indirectly through an artificial valuation of construction. More so considering the settled jurisprudence that one cannot achieve by indirect means what one is not permitted to do directly. Judicially, the Courts have permitted the Governments to prescribe a larger value not exclusively limited to the particular nature of the tax. in this regard, the decision of Hon’ble Apex court (larger bench) in case of Commissioner v. Grasim Industries Ltd 2018 (360) E.L.T. 769 (S.C.) held that measure of the levy will not be controlled by the nature of the levy. So long a reasonable nexus is discernible between the measure and the nature of the levy and measure/valuation would operate in their respective fields. When there is availability of actual value of land or can it be Challenged? Authors are of the view that the 1/3 rd deemed deduction of land can be challenged on the ground that Government can devise the formula for capturing the taxable portion of composite contract consists of both taxable (labour & materials) & non-taxable components (land) only when there is no bifurcation is available. It should not be made universal or apply in all cases of composite contracts. That is to say Government cannot override or ignore the identified components while providing for deemed valuation or so called formula. This is more specifically when the agreements/records of assessee clearly capture the taxable component. In this regard, ratio of Hon’ble supreme court decision in case of Wipro Ltd v. Assistant Collector Of Customs 2015 (319) E.L.T. 177 (S.C.) can be referred wherein it was held that “We are also of the opinion that when the actual charges paid are available and ascertainable, introducing a fiction for arriving at the purported cost of loading, unloading and handling charges is clearly arbitrary with no nexus with the objectives sought to be achieved. On the contrary, it goes against the objective behind Section 14 namely to accept the actual cost paid or payable and even in the absence thereof to arrive at the cost which is most proximate to the actual cost. Addition of 1% of free on board value is thus, in the circumstance, clearly arbitrary and irrational and would be violative of Article 14 of the Constitution. (Para 31) No doubt, rulemaking authority has the power to make Rules but such power has to be exercised by making the rules which are consistent with the scheme of the Act and not repugnant to the main provisions of the statute itself. Such a provision would be valid and 1% F.O.B. value in determining handling charges, etc., could be justified only in those cases where actual cost is not ascertainable. (Para 32) 34. In the present case before us, the only justification for stipulating 1% of the F.O.B. value as the cost of loading, unloading and handling charges is that it would help Customs authorities to apply the aforesaid rate uniformly. This can be a justification only if the loading, unloading and handling charges are not ascertainable. Where such charges are known and determinable, there is no reason to have such a yardstick. We, therefore, are not impressed with the reason given by the authorities to have such a provision and are of the opinion that the authorities have not been able to satisfy as to how such a provision helps in achieving the object of Section 14 of the Act. It cannot be ignored that this provision as well as Valuation Rules are enacted on the lines of GATT guidelines and the golden thread which runs through is the actual cost principle. Further, the loading, unloading and handling charges are fixed by International Airport Authority.” Further decision in case of Federation of Hotels & Restaurants Association of India v. UOI 2016 (44) S.T.R. 3 (Del.) wherein while dealing with the Rule 2C of service tax (determination of value) Rules, 2006 it was clearly held that “It also requires to be kept in mind that the ready reckoner formula is useful where an assessee does not maintain accounts in a manner that will enable the assessing authority to clearly discern the value of the service portion of the composite contract. It hardly needs emphasis that when during the course of assessment proceedings an assessee is able to demonstrate, on the basis of the accounts and records maintained by it for that purpose, that the value of the service component is different from that obtained by applying Rule 2C the assessing authority would be obliged to consider such submission and give a decision thereon.” The authors view therefore is that the actual deduction of land is permissible when it is supported by the sufficient evidence and the 1/3 rd deduction is not always mandatory and can be challenged.

Guidelines to File for Income Tax Returns

As the months of May arrive, the time to file for Income Tax Returns follows suit. Salaried individuals will have to collect Form 16 from their employers and Form 16A to file for tax deducted on other earnings apart from salary. Likewise, individuals who are self-employed with income through business also need to accommodate and finalise their yearly accounts. Tax filing experts suggest being prepared for filing for returns beforehand, to simplify things and not wait until the last minute. According to Section 139(1) of the Income Tax Act, 1961 of India, A ‘mandatory return’ is required to be filed by the following: Any company whether it is domestic, foreign, public or private. Any firm inclusive of unlimited liability partnership firm and LLP. Any individual whose total income within a financial year exceeds the basic exemption limit. Voluntary Return is referred to Income Tax Returns filed by an individual even when he / she is not required to do so. Voluntary Return is also considered as a valid return. These days the government simplified filing for Tax Returns for the citizens by introducing E-Filing Policy. E-filing is defined as filling for Income Tax Returns electronically. Through e-filing one have the option of either seeking help from a professional or registering online for the tax return from the comfort of one’s home. Why is filing for Income Tax Returns mandatory? Filing for Income Tax Returns is an obligation for everyone who earns a Gross Total Income (prior to any deductions under section 80C to 80U) exceeding Rupees 2,50,000 during the FY 2018-19.

PAN- Aadhaar linkage must for filing I-T returns: SC

PAN (permanent account number) is a 10-digit alphanumeric number issued to assessee by the Income Tax Department. Aadhaar is a unique 12-digit identification number issued to individuals by the Unique Identification Authority of India after storing their biometrics data. The UIDAI uses iris and fingerprint scans to obtain biometric data from an applicant and store it in a database. Linking Permanent Account Number (PAN) with Aadhaar or Unique Identity Number, a 12-digit personal identification number issued by the Unique Identification Authority of India is mandatory for filing of income tax return (ITR), the Supreme Court said in an order. “The aforesaid order was passed by the high court having regard to the fact that the matter was pending consideration in this court. Thereafter, this court has decided the matter and upheld the vires of Section139AA of the Income Tax Act. In view thereof, linkage of PAN with Aadhaar is mandatory,” the bench said. A bench comprising Justices A K Sikri and S Abdul Nazeer said the top court has already decided the matter and upheld Section 139AA the Income Tax Act. The top court’s direction came on an appeal filed by the Centre against a Delhi High Court order allowing two persons, Shreya Sen and Jayshree Satpute, to file Income Tax returns for 2018-19 without linking their Aadhaar and PAN numbers. The top court noted that with regard to Assessment Year 2018-19, it has been informed that the two petitioners had filed the Income Tax returns in terms of the orders of the High Court and the assessment has also been completed. To sum up, if you are a resident as per Aadhaar Act, make sure to obtain your Aadhaar number before filing your income tax return as the same needs to be quoted in your return as well as linked to your PAN. Deadline for linking of Aadhaar and PAN The linking of Aadhaar with PAN is a mandate for processing of returns. The extended deadline for linking the two was fixed at 30 June 2018 which has now been further extended to 31 March 2019. Given that the deadline has been extended, individuals who are yet to carry out the linking have got some additional time to carry out the linking.