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FILING OF INCOME TAX RETURN
AY 2018-2019
2ND JULY, 2018
BCAS LECTURE MEETING
Index
Sr. No Particulars
1 Who is required to file Return of Income in India?
2 Mode of Submission
3 Applicable Return of Income for various types of
assessee
4 Filing Process with YOY comparison of the
Income Tax Return
5 Common changes in ITR for AY 1819
6 A Word of Caution
Who is required to file the return of income in India?
Particulars Assessee Type Threshold
Limit
Gross Total Income including
Capital Gain u/s 10(38)
But without claiming deduction
u/s 10A,10B,10BA,80C to
80U).
Individual/HUF 2,50,000
Individual/HUF
(Senior Citizens)
3,00,000
Individual/HUF
(Super Senior
Citizens)
5,00,000
Mandatory to file Return of
Income if there is an asset
outside India or signing
authority in any account outside
India or financial interest in an
entity outside India.
Resident
Individuals
(Not applicable to
RNORs)
-
Who is required to file the return of income in India?
Particulars Assessee Type
Mandatory to file Return of
Income regardless of
Income/Loss.
Company/Firm
Mandatory to file Return of
Income if you want to carry
forward loss
Belated Return - Loss from
House Property and
Unabsorbed Depreciation
allowed to be c/f
Any assessee
Who is required to file the return of income in India?
Particulars
Any person deriving income from property held under trust for
charitable/religious purposes without claiming exemption u/s 11/12
exceed the exemption limit
If income of the political party without claiming exemption u/s 13A
exceeds exemption limit
If total income of the assessee specified u/s 10(21)to 10(24)(a)/(b)
without claiming exemption under the sections mentioned exceeds
exemption limit
Any university/college/other institution u/s 35(1)(ii)/(iii) are required
Business Trust u/s 139(4E) and Investment fund u/s 139(4F)
• Annual Information Return (AIR) of 'high value
financial transactions' is required to be furnished under
section 285BA of the Income-tax Act, 1961 by 'specified
persons' in respect of 'specified transactions' registered or
recorded by them during the financial year.
• What is this?
• What is your duty? As per the Law and Practical problems
• CASS/ITBA – ITD – Source of transactions entered by
you
Who is required to file the return of income in India?
Mode of submission
Person Conditions Mode of furnishing
return
Individual/
HUF
Case I-Accounts required to be audited u/s
44AB
Electronically with
digital return
Case 2- Return is submitted in ITR 1/ITR 4
and the individual/HUF satisfies at least one
of the following two conditions:-
-individual is a super senior citizen
- total income of the individual/HUF does not
exceed Rs.5 lakh and no refund is claimed in
the ROI.
-Electronic mode in
case 3
- Paper format
-Case 3-Any other case Return can be
submitted by using
any one of the
following modes:-
A. Electronically
under digital
signature.
Mode of submission
Person Conditions Mode of furnishing
return
Individual/HUF -Case 3-Any other case B- Through electronic
verification code.
C. Submitting ITR V
to Bengaluru
Company -Case 4- Any company -Electronically with
digital return
Person required
to furnish in
ITR-7
-Case 5-Political Party
-Case 6- Any other case
Electronically with
digital return
-Electronic mode give
in Case 3
Firm, LLP or
any person (not
mentioned to
furnish return in
ITR-5
- Case 7- Accounts are required to be
audited u/s 44AB
-Case 8- Any other case
-Electronically with
digital return
-Electronic mode give
in Case 3
Journey before and now….
• CBDT notified Income Tax Returns on 05th
April,2018.
• CPC released ITR 1 on 14.4.18 and rest of the
ITRs between 10th to 26th May.
• TDS Returns due date 31.05.2018 hence Form
26AS were updated only after 10.06.2018 onwards
ITR’s notified for A.Y.2018-2019 - Applicability
ITR 1 Applicability Non Applicability
Individual(Not
HUF) , if his total
income includes
• Salary/Pension.
• Income from 1 House
property
•Income from other
sources (Except income
from lottery, race horses,
dividend income in
excess of Rs.10 lakhs or
unexplained income as
per Sec. 115BBE)
• NR/RNOR’s.
• ROR=TIncome > 50lakhs.
• Income more than 1 house
property or if there is b/f
loss or to be c/f loss.
• ITR 1 will direct you to use
ITR 2 anyway
• Agricultural Income more
than Rs.5,000/-
•Income from any source
outside India.
• Who wants to claim relief
u/s 90/91.
• Who has any assets
(including financial entity)
located outside India.
ITR 2 Applicability Non Applicability
Individual/HUF,
if his total income
includes:
• Salary/Pension.
• Income/loss from more
than 1 House property
• Income from capital
gains.
•Income from other
sources (Including income
from lottery or race horses.)
• Income chargeable to tax
under the head “Profit and
Gains from
Business/Profession”.
ITR 3
Individual/HUF
• All incomes covered
under ITR 2 &
•Income from
Business/Profession.
• Any person other than
Individual/HUF has no
income from
business/profession.
ITR’s notified for A.Y.2018-2019- Applicability
ITR 4 Applicability Non Applicability
Individual/HUF,
/Firm (other
than LLP) if
total income
includes:
• Presumptive Income
computed u/s
44AD,44ADA and 44AE.
• Salary/Pension.
• Income from House
Property
• Income from other sources
(Except income from
lottery, race horses,
dividend income in excess
of Rs.10 lakhs or
unexplained income)
• Income from
business/profession(includin
g speculative business).
• Income from agency
business or commission or
brokerage.
•Income chargeable to tax
under the head “Capital
Gains”.
• Income from any source
outside India.
• Who wants to claim relief
u/s 90/91.
• Who has any assets
(including financial entity)
located outside India.
ITR’s notified for A.Y.2018-2019 - Applicability
ITR 4 Applicability Non Applicability
ITR’s notified for A.Y.2018-2019 -Applicability
Note: ITR 4 has undegone a change as per the updated utilities on
CPC website w.e.f 29th June 2018
Assessee offering Income under Sec. 44AE (say, Transport) need to
give details per vehicle).
ITR’s notified for A.Y.2018-2019 - Applicability
ITR 5 Applicability Non Applicability
• Partnership Firm
•AOP/BOI
• For persons other than
-Individuals
- HUF
- Company
- Person filing Form ITR 7.
ITR 6 • Companies • Companies other than
those claiming exemption
under section 11.
ITR 7 • For persons including
companies required to
furnish return under
sections :-
-139(4A),139(4B),
139(4C)139(4D),139(4E)
and 139(4F)
ITR 1 – SAHAJ- Applicable for Income from Salary
,One House Property, Other Sources and Total Income
upto 50 lakhs - ONLY ROR
• PY all Individuals, but CY only ROR
• Now ,there is a requirement to furnish a break-up of salary
i.e. Allowances not exempt, Value of perquisites , Profit in
lieu of salary, Deductions u/s 16. Until now, these details
would appear only in Form 16 and the requirement to
disclose them in the return had never arisen.
• A break up of Income under House Property which was
earlier mandatory only for ITR -2 and other forms.
• Changes in utility 29.6.18- Deduction claimed u/s 16
cannot be more than Rs. 5000 in case of assessee is not a
government or a PSU employee. Intially, Rs. 2500.
• Whatever be the residential status of an
Individual/HUF, earning any source of
income apart from Business or Profession,
including Foreign Income/ having Foreign
assets, will file ITR 2
• Any Individual/HUF assessee earning
income from a partnership firm, now has to
file ITR-3 and not ITR -2 unlike AY 2017-18.
ITR 2 – Applicable for Individuals and HUFs
(R/RNOR/NR) not having income from profit and
gains of business or profession
• Due to the fact that Income from Partnership
will not have to be reported by
Individuals/HUFs in ITR 2, information
related to “Interest held in the assets of afirm or association of persons (AOP) as apartner or member thereof” in Schedule AL
(Assets and Liabilities), is now removed.
• To clarify Schedule AL is applicable to
assesses opting for ITR 2 & 3 who have total
Income exceeding Rs. 50 lakhs in a PY. AS &
LB not covered by BS & PL
ITR 2 – Contd…
ITR 3 – Applicable for Individuals and HUFs having
income from profit and gains of business or profession
• This ITR will cover any Individual/HUF whatever be the
residential status, disclosing income from all sources including
Income from Business and Profession.
• This ITR will not cover assessess offering Income on
Presumptive basis like Sec 44AD, 44ADA, BUT if you are an
assessee on presumptive income with Capital Gains, resort to
ITR 3.
• Attention -Under General Information, a box for applicability of
Section 115H has been inserted, which you may select for those
non residents who have become residents in the financial year for
which they are assessable and required to File a return u/s 139.
• Section 115H specifically allows for the
continuation of benefit against the investment
income derived from foreign exchange asset
to the NRI though he becomes a resident
later.
• After the enforcement of Goods & Services
Tax, the new ITR forms have introduced new
columns to report GST details (applicable also
for ITR 5 and 6).
ITR 3 – Contd…
A Close look at the GST applicable field and it’s
impact
• Schedule P&L – CGST, SGST, IGST & UGST
received or receivable in respect of goods/services
supplied (Credits) and paid/payable (debits)
• Schedule OI – only applicable to those assessee to
whom Section 44AB applies, you will need to
mention the refund of GST which is not credited
to P&L account. + Separate bifurcation of
amounts of credit as at 31st March of the FY – for
CGST, SGST, IGST & UGST.
ITR 3 – Contd….
ITR 4 – Applicable for Presumptive Income from
Business and Profession – No Capital Gains - no
exempt agricultural income of more than INR 5,000 –
No Sch. FA & FSI
•Income from Salaries/House Property – disclosed with
bifurcation – as explain in ITR 1
• There is an additional requirement to quote GSTR No.
and turnover/gross receipts as per GST return filed
• Mismatch can arise while reporting gross receipts
mentioned under Computation of Income under 44AD
and/or 44ADA
• Particulars of Financial Information – Mandatory
fields: Creditors, inventories, debtors & cash!!!
ITR 4 – Contd…
ITR 6 – Applicable for Companies other than
companies claiming exemption under section 11
• The financial statements of the company if drawn up in
compliance to the Indian Accounting Standards specified in
Annexure to the companies (Indian Accounting
Standards)Rules,2015 – Gen. Info & MAT
• 2 Types of BS/P&L – Incase of company following Ind AS
– retained earnings and related groupings – required to fill
Other Comprehensive Income in P&L (making it 45 page
long)
• The new ITR 6 requires every unlisted company to provide
details of all beneficial owners who are holding 10% or more
voting power (directly or indirectly) at any time during the year
2017-18. viz., the name, address, percentage of shares held and PAN.
•PY - only for Shareholders more than 10% voting power were
required the same. – Who is a Beneficial Owner…
ITR 6 – Contd……
• Depreciation schedule has undergone a change
due to changes in rates, which now allow
maximum upto 40%. New columns have also
been inserted to enable the entities to claim
proportionate depreciation in the event of
business re-organisation, i.e., demerger,
amalgamation.
• Disallowance to be made in respect of
depreciation under section 38(2) if an asset is not
exclusively used for business purpose must be
shown separately from AY 1819.
WHO IS A BENEFICIAL OWNER?
• Beneficial Owner refers to the
person who enjoys the right of
ownership of the shares irrespective
of the title.
• He could be the person who
actually enjoys the right of
ownership but the name is not
reflected on the register of
members.
ITR 6 – Contd…..
• CSR expenditures are mandatory under the Companies Act, 2013 and
these are not deductible u/s 37(1). Companies covered u/s 135 of
Companies Act 2013 are required to disclose CSR expenditure in its
Board’s report. A new column has been inserted in ITR Form 6 to
provide details of apportionments made by the companies from the net
profit for the CSR activities – P&L of ITR and Schedule OI
•Following details in respect of transactions with a registered or
unregistered supplier under Schedule GST:a. Transactions in exempt goods or services.
b. Transactions with composite suppliers.
c. Transaction with registered entities and total sum paid to them.
d. Transaction with unregistered entities. (after 1.7.17)
•Schedule FD - foreign payments/receipts towards capital and revenue
nature in INR.
Both GST and FD schedule mandatory for companies not liable for
tax audit.
ITR 7 – Applicable for persons including companies
required to furnish return u/s
139(4A),139(4B),1394(C),139(4D)or 139(4F)
•Form ITR 7 require to disclose following additional information:
a. Aggregate annual receipts of the projects/institutions
b. Date of registration or approval granted to the trust by the IT authority-
to be mentioned separately as per Notified forms, but the utility has
clubbed in with details of projects run by the Trust.
• In case the trust has modified the Trust deed on the basis of changes in
Objects/activities based on which previous registration was granted, a fresh
registration shall have to be applied u/s 12A – applicable for registration.
•a. Date of change in objects (LY)
•b. Whether you have complied with the time lines for fresh
application?(CY)
•c. Whether Fresh registration has been granted u/s 12AA- procedure for
registration? (CY)
•d. Date of such fresh registration (CY)
Common changes in Income Tax Return Forms not
present in AY 1718 ITR
• Capital gains exemption u/s 54, 54B, 54EC, 54EE, 54F, 54GB
and 115F shall have to be separately mentioned with different
details for different exemptions. While availing exemption,
mention date of transfer of original capital asset
• In the case of capital gain arising on transfer of unquoted shares,
it would now be mandatory for the investors to obtain the
valuation report. To ensure that investors correctly report the
capital gains from unlisted shares, the new ITR Forms require the
taxpayer to provide figures of actual sales consideration and FMV
as determined by a Merchant Banker or CA.
• Alas! Notification 23/2018 dated 24th May, 2018 has removed
CA from valuation…
(applicable to all ITR except 1 & 4)
Common changes in Income Tax Return Forms not
present in AY 1718 ITR
• ‘Schedule OS’ to report any sum of money or any property
received by any assessee which is taxable u/s 56(2)(x)
crossing threshold of INR 50,000 with or without
consideration from specific parties- (ITR 2, 3, 5, 6 and 7)- Eg
• For those claiming Treaty benefit for Capital gains,
additional 5 details are required to be mentioned apart from
the 5 provided in previous ITR
•a. Rate as per treaty
•b. Rate as per Income tax
•c. Section of the Income-tax Act
•d. Applicable rate
• Lower of both the rates
Common changes in Income Tax Return Forms not
present in AY 1718 ITR
•In earlier ITR Forms, net impact of ICDS on the
profit was required to be reported in Part A of Schedule
OI (Other Information) but from AY 1819, increase
and/or decrease both due to ICDS will need to be
reported.
Common changes in Income Tax Return Forms not
present in AY 1718 ITR
•Under the Schedule TDS, there is also an additional field for
furnishing details of TDS as per Form 26QC for TDS on rent
u/s 194IB of the IT Act,1961 along with PAN of the
deductor, as TAN is not neccesary for such transactions.
•CBDT has changed nature of business codes for income tax
return forms from A.Y. 18-19. Before filing of Income tax
return ensure correct business sector along with correct
business code has been selected.
A WORD OF CAUTION TO AVOID ANY FILING ERRORS
LEGAL ASPECTS OF RETURN FILINGAY 2018-19
2ND July, 2018BCAS LECTURE MEETING
- C.A. Devendra H. Jain
RATES OF TAXES : AY 2018-19 No change in basic exemption limit
Tax rate for first slab upto Rs. 5 lacs reduced to 5% from 10%.
Other slab rates for Individuals, HUFs, AOP, BOI, AJP remain thesame.
Surcharge introduced for above assessees having income aboveRs. 50 lakhs but upto Rs. 1 crore @ 10% (exisiting surcharge@15% for total income above Rs. 1 crore to continue)
Rebate u/s 87A restricted to Rs. 2500 and for total income uptoRs. 3.5 lacs only.
Companies having turnover or gross receipts upto Rs. 50 crores inFY 2015-16 – tax rate reduced to 25%
SECTION 10(38) LTCG exemption on transfer of listed equity shares would not be
available if:
the transaction of acquisition of equity shares is entered into
on or after 1 October 2004; and
such acquisition is not chargeable to securities transaction tax
To protect exemption for genuine cases where the STT could not
have been paid, Central Government has vide Notification No.:
43/2017 dt. 5th June, 2017, notified certain acquisitions for
which the condition of chargeability of STT shall not apply. The
said notification is negatively worded and provides for cases
where exemption shall be denied in the absence of payment of
STT at the time of acquisition. Eg.: Cases of shares acquired in
preferential allotment or shares acquired in off market
transactions.
SECTION 10AA- CLARIFICATION
Clarificatory amendment has been made that:
the amount of deduction shall be allowed from the
total income of the assessee before giving effect to
the provisions of section 10AA;
and
the deduction in no case shall exceed the said total
income.
SECTION 11
• Under the existing provision, donations (except donations made out of accumulated income) by
a trust or institution to any other trust or institution is considered as application of income for
the purposes of its objects
• Proviso has been inserted that corpus donation made by a trust or institution to any other trust
or institution shall not be treated as application of income
CHARITABLE &RELIGIOUS TRUST
Exempt trust shall be required to obtain a fresh
registration in case of modifications in the objects after
initial registration has been granted
– an application to be made within 30 days of modification
Additional condition has been inserted in Section 12A - of
filing the return of income within the time prescribed u/s
139(1) for availing the exemptions under sections 11 and
12.
SUB-SECTION 5 OF SECTION 23
A new provision has been introduced to exempt notional
income from house property held as stock in trade, where
the property or any part is not let out during the whole or
part of the year.
The said exemption will be provided only for the period upto
one year from the end of the financial year in which
certificate of completion of construction of the property is
obtained from the competent authority.
SET OFF OF LOSS FROM HOUSE PROPERTY
• New sub-section (3A) inserted in Section 71
• Restriction on set-off of loss under the head “Income from House Property” to Rs. 2 Lacs
against income assessable from other head of income.
• Restriction not w.r.t Intra – head adjustment
• Applicable to all categories of assessees
• Applicable even in respect of losses from LOP.
CHANGES IN DEPRECIATION
Any expenditure incurred on acquisition of any asset
shall be ignored for the purpose of determination of
actual cost if payment(s) exceeding Rs.10,000 is made
in a day otherwise than by an account payee cheque/
draft or use of ECS through a bank account.
• Vide Notification No.: 103/2016 dated 07/11/2016,
the maximum rate of depreciation, is restricted to 40%
for all assessee.
SECTION 40A(3) & 40A(3A)
Section 40A(3) amended to reduce the present threshold
towards cash payments to a person in a single day to
Rs.10,000 from Rs.20,000.
It has also been amended to reduce the existing threshold
to Rs.10,000 from Rs.20,000 for expenditure claimed in a
year, but cash payments made in any subsequent year
[Section 40A(3A)]
Specified mode of payment expanded to include use of
ECS through a bank account.
SECTION 43B- INTEREST TO CO-OP. BANKS
• any sum payable by the assessee as interest on any loan or advances from a co-operative bank( other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank) shall be allowed as deduction ifit is actually paid on or before the due date of furnishing the return of income of therelevant previous year.
MAINTAINANCE OF BOOKS & AUDIT
• Section 44AA - In the case of individuals and HUF
carrying on business or profession (other than
persons engaged in legal, medical, etc.), the
threshold limits increased for maintenance of books
to:
– income exceeding Rs. 2.5 lakhs (earlier Rs. 1.20 lakhs); and
– total sales/ turnover/ gross receipts exceeding Rs.25 lakhs
(earlier Rs.10 lakhs)
Section 44AB – The limit of turnover/gross receipts for Eligible
assessee opting for Section 44AD raised from Rs. 1 Crore to
Rs. 2 Crore.
JOINT DEVELOPMENT AGREEMENT-SECTION 45(5A)
• Year of taxability of capital gains has been a matter of litigation in case
of joint development agreements(JDA)
• A new charging provision is introduced (ss. 5A) in case of individual or
HUF entering into the JDA, capital gains would be chargeable in the
previous year in which the certificate of completion is issued by the
competent authority
• Stamp duty value of his share in the project on the date of issuance of
the said certificate as increased by any monetary consideration received
will be full value of consideration
• The above benefit would not be available if assesse transfers his share
in the project on or before the date of issue of said certificate. In this
case, capital gains will be taxed in the year of such transfer as per the
general provisions.
• Further, an amendment is made towards withholding tax at the rate of
10% from the monetary consideration payable to a resident (S. 194IC)
• Cost of acquisition of the share in the project in the hands of the land
owner shall be the amount which is deemed as full value of
consideration, i.e. stamp duty value.
CONVERSION OF PREFRENCE TO EQUITY SHARE
• Conversion of preference share of a company into
equity share of that company will not be regarded as
transfer [Sec. 47(xb)].
• In determining the period of holding of such equity
shares, the period of holding of the preference
shares shall be included.
• The cost of acquisition of the preference shares
would be regarded as cost of acquisition of equity
shares.
SECTION 2(42A) & 49
• Period of holding (POH) of immovable property
– being land or building or both, reduced from 36 months
to 24 months to qualify as long term capital assets
• Consolidation of 'plans' within a 'scheme' of mutual
fund –
- POH of the units of consolidated plan shall include the
POH for which the units in consolidating plan of mutual
fund scheme were held
- Cost of acquisition of the units in the consolidated plan
shall be the cost of units in consolidating plan of mutual
fund scheme
BASE YEAR FOR INDEXATION
• Base year shifted from 1981-82 to 2001-02
• Therefore in case of capital assets acquired before
01.04.2001, FMV as on 1.4.2001 can be substituted
for cost of acquisition.
• CII for : FY 2017-18 - 272
SECTION 50CA
– TRANSFER OF UNQUOTED SHARES
• New provision in case of transfer of unquoted shares
• Analogous to s. 50C
• If consideration is less than FMV, FMV shall be taken asfull value of consideration.
• The valuation mechanism is provided in Rule 11UAA.
• Rule 11UAA refers to Rule 11UA for the purpose ofdetermination of FMV – which is substituted w.e.f.01.04.2018 .
TAXATION OF GIFTS – PROVISIONS ENLARGED
• Erstwhile provisions of 56(2)(vii) & 56(2)(viia) - not
applicable from A.Y. 2018-119
• New clause (x) inserted in 56(2)
• Scope of the section widened - Recipient now to
include “Any Person”.
ADDITIONAL EXCEPTIONS IN SEC. 56(2)(X) VS. 56(2)(VII)• Provisions of Section 56(2)(x) shall not apply to any sum of money or any property received –
(VIII) from or by any trust or institution registered under Section 12A or Section 12AA
(X) from an individual by a trust created or established solely for the benefit of relative of the
individual.
SECTION -58 [IFOS-DEDUCTION]
• Inadmissible Deductions in computing Income from
Other Sources - Section 40(a)(ia) shall also be
applicable for expenses claimed under the head
IFOS.
REVISING ROI- 139(5)
• Time reduced to expiry of AY from existing period of 1 year from end of AY.
• Applicable from ROI for AY 2018-19 onwards.
SECTION 234F-FEE FOR DEFAULT IN FURNISHING
RETURN OF INCOME
(1) If a person required to furnish a return of income under section 139, fails to do so within the
time prescribed in sub-section (1) of said section, he shall pay, by way of fee, a sum of,—
(2) Effective for ROI of A.Y. 2018-19 and subsequent years.
(3) Consequential amendments in section 140A and 143(1).
(4) Penalty provision u/s 271F removed.
If Total Income </= Rs. 5,00,000/- Rs. 1,000/-
If Total Income > Rs. 5,00,000/- &
ROI furnished before 31st December of AY
Rs. 5,000/-
If Total Income > Rs. 5,00,000/- &
ROI furnished after 31st December of AY
Rs. 10,000/-
INTEREST U/S. 234A & JUDICIAL PRONOUNCEMENT
• Even if ROI is filed after due date, but if SA Tax is paid before due date of return filing then
Interest U/s. 234A is not leviable.
- CIT v. Pranay Roy [2009] 309 ITR 231 (SC)
• Vide Circular No. 2/2015, CBDT had clarified that no interest u/s. 234A will be charged on
the amount of SA Tax paid by assessee upto the due date of filing of return of income
MISCLLENEOUS AMMENDMENTS
• Section 115BBDA -Tax on dividend income exceeding Rs.10 Lakhs – extended to all assessees other thandomestic company, trust u/s 12AA, institutions u/s10(23C)
• Under section 80G, permissible donations made in cashreduced from 10,000 to 2,000.
• MAT and AMT credit extended to 15 years.
• 80CCD – even non salaried person can claim deduction upto 20% of GTI (subject to overall Rs. 1.50 lacs)
• 54EC extended to cover other notified bonds.
MARKED TO MARKET LOSS:
New clause (xviii) has been inserted in Sub-section (1) of
section 36, which provides for deduction of ‘marked to market
(MTM) loss or other expected loss’ as computed in accordance
with the ICDS notified.
Eg. As per ICDS-VI, MTM loss on derivative contract held for
Hedging purpose is allowed to be recognized. Accordingly it will
be allowed as deduction u/s. 36
As per newly inserted Sub-Section (13) to Section 40A, no
deduction/allowance of any ‘marked to market (MTM) loss or
other expected loss’ shall be allowed, except for those which
are allowable as per the provisions of Section 36(1)(xviii).
NEW SECTION- 43AA
Gain or Loss due to Change in foreign exchange rate, in all kind
of foreign exchange transaction
To be treated as Income or Loss and accordingly to be treated
in computation.
However, such Gain/Loss should be in accordance with
relevant ICDS (i.e. ICDS-VI)
Gain or Loss shall include:
(i) monetary items and non-monetary items;
(ii) translation of financial statements of foreign operations;
(iii) forward exchange contracts;
(iv) foreign currency translation reserves.
NEW SECTION- 43CB
Profits/Gains form construction contract or a contract forproviding services shall be on the basis of percentagecompletion method, as specified in relevant ICDS
However for, contract for providing services:
- where duration is less than or equal to 90days – Projectcompletion method applicable (mandatory)
- Involving indeterminate number of acts over a specific periodof time – Straight Line method applicable (mandatory)
In following any of the above method, as applicable, -
contract revenue shall include retention money and
the contract costs shall not be reduced by any incidental incomein the nature of interest, dividends or capital gains.
RETROSPECTIVE SUBSTITUTION OF SECTION 145A
Valuation of Inventory: Lower of Cost or NRV, computed in
accordance with ICDS.
Valuation of Purchase/Sale/Inventory: Add up tax, duty, cess or
fee actually paid or incurred by the assessee to bring the goods
or services to the place of its location and condition.
Valuation of Unlisted and/or Unquoted securities(Being
Inventory) : Initial cost as recognized in accordance with ICDS
RETROSPECTIVE SUBSTITUTION OF SECTION 145A
• Quoted Securities should be valued at lower of Cost or NRV.
• Comparison of cost and NRV shall be done category-wise. (ICDS- VIII -Valuation of Securities)
• Securities are classified under following categories:
(a) Shares
(b) Debt
(c) convertible securities
(d) other securities
RETROSPECTIVE INSERTION OF SECTION 145B
• Interest received by an assessee on compensation or on enhanced compensation, shall be
deemed to be the income of the year in which it is received.
• The claim for escalation of price in a contract or export incentives shall be deemed to be
the income of the previous year in which reasonable certainty of its realisation is achieved.
• Income referred to 2(24)(xviii) [Govt. Grant/subsidy etc.] shall be deemed to be the income
of the previous year in which it is received, if not charged to income tax for any earlier
previous year.
SECTION 80AC
• Earlier deduction u/s. 80IA, 80-IA , 80-IAB, 80-IB,80-IC,80-ID, 80-IE was not allowed if the return of income isfurnished after the due date specified under section139(1)
• From A.Y.2018-19, the scope of section 80AC is extendedto provide that the benefit of deduction under the entireclass of deductions under the heading ‘C- Deductions inrespect of certain incomes’ ( which intra-alia includes - inaddition to above sections – S. 80JJA, 80JJAA, 80P, 80PA,80QQB and 80RRB) of Chapter VIA, shall not be allowedunless the return of income is filed by the due date u/s139(1).
SECTION 80 IAC – START-UPS
Definition of ‘eligible business’ altered and expanded to
provide that the benefit would be available if start-up is
engaged in innovation, development or improvement of
products or processes or services, or a scalable business
model with a high potential of employment generation or
wealth creation.
Benefit available to start-up incorporated on or after the
1st day of April 2019 but before the 1st day of April, 2021
Deduction available for 3 consecutive A.Y.s out of 7 years
beginning from the year of incorporation of start up.
MISCELLANEOUS:
Section 79: If change in share holding due to proceedings
under IBC, 2016 - no rejection of c/f & set-off of b/f loss.
Section 115BBE: Deduction/allowance/ set off will not be
allowed against any addition referred to in ‘Section 68 to
Section 69D’ if made by Assessing officer.
Section 115JB: In case of a company against whom corporate
insolvency resolution process has been admitted by the
adjudicating authority under IBC, 2016 - Unabsorbed
depreciation AND loss brought forward shall be allowed to be
reduced in computing book profit.
MISCELLANEOUS:
Section 140: In case of a company against whom corporateinsolvency resolution process has been admitted by theadjudicating authority under IBC, 2016 - return of income willbe verified by ‘insolvency professional appointed by suchauthority.
Section 276CC: Proviso to this section gives relief fromprosecution in case where tax payable on the total incomedetermined on regular assessment, as reduced by the advancetax, if any, paid, and any tax deducted at source, does notexceed three thousand rupees, however now such relief shallnot be available to company assessee.
ASSESSMENT PROCEEDINGS:
Addition of difference between 26AS or Form 16/16A and ROI
shall not be added during CPC processing. [143(1)].
(For returns for AY 2018-19 onwards)