Declaration of Undisclosed Foreign Income and Assets

The Central Board of Direct Taxes (CBDT) introduced a tax compliance provision related to the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 on 6th July, 2015 and notified The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Rules, 2015.

The last date for Compliance provisions for undisclosed foreign income and assets declared by CBDT is   30th September, 2015. 

Before the last date i.e. 30.09.2015, a person may make a declaration in respect of an undisclosed foreign income and asset located outside India.

Last date for payment of Tax and Penalty for the same, if any, declared before 30th September, 2015 is 31st December, 2015.

Points Relating to Declaration of Foreign Assets:-

• If asset is purchased from Income which is already taxed, then no need of declaration.
• If asset is purchased from Income which not been charged to tax, then there is a need of declaration.
• If asset is acquired from corrupt sources, assessee cannot declare his asset under chapter VI. Such declaration shall be void.
• If a part of foreign assets is acquired from undisclosed income and part from disclosed income, then declaration may be made for the part which is from undisclosed income.
• If a person being non-resident in India acquired or created a foreign asset out of income which is not chargeable to tax in India, such asset shall not be an undisclosed asset under the Act.
• If the government bars a person to make declaration about a particular foreign undisclosed asset, he is not eligible to make a declaration. He can only declare other assets.
• The declarant cannot disclose such foreign assets which have already been assessed by the tax authorities, or the matter is pending before an appellate authority.
• In case of a survey conducted by the tax authorities on a person, the person cannot make declaration under chapter VI in respect of undisclosed assets acquired in previous year in which survey is conducted. However, he is eligible to make declaration for those assets which are acquired in any other previous year.
• Where any undisclosed assets are not taxed in the survey or search, then such assets are eligible for declaration.
• It is not required that the person should hold such undisclosed foreign asset at the time of making declaration.
• Owner and beneficial owner both are eligible for filing declaration under section59.

Other Important Points: 

• If a company has a foreign undisclosed asset, it can file declaration, but the directors of the company shall not be liable under the Income-Tax Act, Wealth-Tax Act, FEMA, Companies Act and the Customs Act in respect of declaration made in the name of the company.
• If a declarant sells such assets in future, then he shall be liable for capital gains. 
• Since the asset will be taxed at its fair market value, the cost of acquisition for the purpose of Capital Gains shall be the said fair market value and the period of holding shall start from the date of declaration of such asset under Chapter VI of the Act.
• If notice is served to declarant u/s 142/ 143(2)/ 148/ 153A/ 153C of Income Tax Act and the proceeding is pending before the assessing officer in the year in which such assets are acquired, the assessee can voluntarily declare foreign assets which have been acquired during other years for which no notices under above referred sections have been issued. 
• If an asset was acquired before the commencement of the Act and no declaration is made under chapter VI, such assets shall be deemed to have been acquired in the year in which they came to the notice of the assessing officer. If any information of an undisclosed foreign asset acquired earlier, say in the year 1975, for $100,000 comes to the notice of an Assessing Officer later, say in the year 2020, when its value becomes, say, $5 Million, the liability under the Act amounting to 120 percent of the fair market value of the asset on the valuation date may arise in the year 2020, besides prosecution and other consequences.
• If a property is received in inheritance, then legal representative shall file a declaration of undisclosed assets.
• A person resident in India, if having foreign bank account, and has acquired any assets outside India which is undisclosed, then he must have to declare such asset under chapter VI because it must be taxed in India.
• After the declaration is made, the Principal Commissioner will enquire whether any information has been received by the competent authority in respect of the asset declared. Apart from this, no other enquiry will be conducted by him at the time of declaration.
• A Person is not eligible to file declaration if any search and seizure is initiated against him and the time for issuance of notice under section 153A has not expired, or even if notice is not served. Declaration may be made if assets are acquired in any previous year relevant to the assessment under section 153(A).

Contributed by:

Ms. Tanya Gagneja

Sandeep Ahuja & Co.

E- Filing of Income Tax Returns for Asst Year 15-16

The Income Tax Department has declared the Forms for E- Filing of Income Tax Returns for Assessment Year 2015-16 from 01.07.2015

Income Tax Return forms 1- SAHAJ, 2, 2A and 4S- SUGAM for AY 2015-16 has been given by the Income Tax Department and e-filing of these return forms has been enabled on the e-filing website-  https://incometaxindiaefiling.gov.in/

 ITR 1-SAHAJ, 2 and 2A can be used by an individual or HUF whose income does not include income from business & Profession.

.ITR 4S- SUGAM can be used by an individual or HUF whose income includes business income which is assessable on presumptive basis.

Taxpayers are requested to e-file their returns early to avoid the rush closer to the last date of filing.

Criteria for selecting the appropriate Income Tax Return Form

There are different forms for filing of Income Tax returns to be filed with income tax department whether Online or Offline. The due date for filing income tax return for the Assessment year 2015-16 is extended up to 31st  August 2015,

There is criteria for selection appropriate form for filing of Income Tax Return by an assessee :

·         An Individual can file ITR-1 if has income from  :

 a) Salary or pension

b) Income from only one House Property whether Self occupied or let out

c) Income from Other Sources.

·         An Individual or HUF can file ITR-2  if income includes income from:

a) Salary or Pension

b) More than one House Property

c) Other Sources  

d) Capital Gain.

·         An Individual or HUF can file ITR-2A  if income includes income from:

a)Salary or  Pension

b)New House property

c) Other Sources

d) Does not include income from Capital Gain

e) Does not include Income from Business or Professional

f) Does not have any asset outside India

g) Does not have any income from outside India

            

However till date Income Tax department has not released other forms for Income tax Returns and as per last year the following forms are yet to be released:

ITR -3 – Return by an Individual or HUF having Business Income as Partner from a firm but their total income does not include any other Business or professional Income

ITR -4 – Return of Income by individual or HUF whose income includes income from Business or Profession.

ITR -5 – Return of Income by a firm having Business Income or income from any other sources.

ITR -6 – Return of Income by a Company

ITR-7 – Return of Income by TRUST, Society or AOP

Obligation to file Income Tax Return

An individual whose total income exceeds the minimum taxable limit ( before allowing deductions under Chapter VI-A of the Income-tax Act)  is under obligation to furnish his return of income.

The maximum amount not chargeable to income tax in case of different categories of individuals is as follows:-

Sl.No.                     Category                                                                                                             Amount (in Rs.)

1              Individuals below the age of 60 years                                                                                          2,50,000

2.             Resident Individuals, above the age of 60 years but less than

                 eighty years.                                                                                                                                    3,00,000

3.              Resident individuals, above  the age of 80 years                                                                      5,00,000

Important Points  to remember before furnishing of  Income tax Return

1)      Furnish Aadhar Card Number in the Income Tax Return but it is not mandatory.

2)      Details of all the Saving and Current Bank Account  with Bank Name, IFSC Code, Name of Joint    Holder if any, Account Number, Type of Account Etc.

Details of dormant accounts not operational for last three years are not required to be furnished.

3)     It is mandatory to furnish Foreign Bank A/C Number and income from financial Interest in any entity outside India,

4)      Details of foreign travelling shall not be reported but Passport No is to be reported.

5)      Date of Formation by HUF is required to be reported.

6)      If Taxpayer has agriculture income exceeding Rs.5000/- the return shall be filed in ITR-2 or ITR-2A as the case may be.

7)      In Case of any refund claim it is mandatory to file return of income by electronically,

8)      Reporting of amount that has remained unutilized in capital Gain and yet to be invested.

9)      Details of Income taxable under DTAA.

10)   Agricultural Income has to be reported in the form as Gross receipt separate and expenses separate and not as net agriculture income.

11)    Distinction between heavy and light good Carriages removed and Computed at a uniform rate of Rs 7500 P.M for any goods Carriage.

Examples for choosing form no.ITR 1/2/2A

Que : If a person is having Salary Income and Income from One House Property which form he has to file ?

Ans :     In case the Assessee has salary income & income from one house property ITR1 shall be filed. But there should not be any capital gain income and the house should not be the newly purchased during the year.

Que : If a person is having Salary Income and Income from more than One House Property which form he has to file ?

Ans : In case the Assessee has salary income & income from more than one house property ITR-2 shall be filed.

Que : If assessee has Income from winning from Lottery which form he has to file in case he has no other income other than income from Salary.

Ans : In case the Assessee has salary income & income from winning of lottery or gambling  ITR-2 shall be filed.

Que : If a person is having Salary Income and Income from agriculture less than Rs.5000/- which form he has to file ?

Ans : In case the Assessee has salary income & income from agriculture less than Rs.5000/- ITR 1 shall be filed.

Que : If a person is having Salary Income and Income from agriculture more than Rs.5000/- which form he has to file ?

Ans : In case the Assessee has salary income & income from agriculture more than Rs.5000/- ITR 2/2A  shall be filed.

Compliance Due dates for July, 2015

Date	Statutory Act	Applicable Form	Obligation
06/07/2015	Service Tax	Challan No.GAR-7	Last date for payment of Service Tax in case of companies for the month  June
06/07/2015	Central Excise	Challan No.GAR-7	Monthly-payment of Central Excise Duties for the previous month –For non SUI units
07/07/2015	Income Tax	Challan No.ITNS-281/17	Payment of TDS/TCS deducted/collected in June
07/07/2015	Income Tax	Form No.15G,15H, 27C	Submission of Forms received in May to IT Commissioner
10/07/2015	Excise	ER-1  & ER-2	Return for Non SSI assessees for June , Return for EOUs for June
10/07/2015	Excise	ER-6	Return by units paying duty > 1 crore (CENVAT + PLA) for June
15/07/2015	D-VAT	DVAT-20	Deposit of DVAT TDS for June
15/07/2015	Provident Fund	Electronic Challan Cum Return(ECR)	E-Payment of PF for June (Cheques to be cleared by 20th)
15/07/2015	Income Tax	TDS Returns Q1 26Q,24Q, 27EQ	TDS Returns for the quarter ended on 30.06.14
15/07/2015	ESI	ESI Challan	Payment of ESI of June
21/07/2015	D-VAT	D-VAT-20 & Central	Deposit of VAT & CST for Quarter ended on 30.06.2015
22/07/2015	D-VAT	DVAT – 43	Issue of DVAT certificate for deduction made in June
25/07/2015	D-VAT	Form 16 and CST 1	E- Return of VAT for Quarter ended on June, 2015 and monthly for June

Claim Income Tax Refunds for last six years

CBDT has issued a circular No.9/2015 on 9^th June,2015 for condonation of delay in tiling returns claiming refund and returns claiming carry forward & set off of loss. This Circular is containing guidelines for refunds of Income Tax and conditions for condonation of delay of claiming refunds and the procedure for such matters. Brief of the circular for the interest of assessee is as under: 

Ø  No condonation application for claim of refund/loss to be entertained beyond six years.

Ø  A condonation application to be disposed of within six months from the end of the month in which the application is received by the department.

Ø  In a case where refund claim consequent to a Court order, the period for which any such proceedings were pending before any Court of Law shall be ignored for 6 years calculation provided such condonation application is filed within six months from the end of the month in which the Court order was issued or the end of financial year whichever is later.

In case of returns claiming refund and supplementary claim of refund would be subject to the following further conditions;

Ø  The income of the assessce is not assessable in the hands of any other person under any of the provisions of the Income Tax Act,

Ø  No interest will be admissible on belated claim of refunds.

Ø  The refund is consequent to the excess of TDS/TCS  and/or excess advance tax payment and/or excess payment of self assessment lax as per the provisions of the Act.

In the case of an applicant who has made investment in 8% Savings (Taxable) Bonds, opting for scheme of cumulative interest on maturity but at the time of maturity tax at source has been deducted on the entire amount of interest  the time limit of six years for making such refund claims will not be applicable.

News Coverage of CA Sarthak Ahuja

Some of the leading newspapers of the country, including The Financial Express and Business Standard wrote about our Partner, CA Sarthak Ahuja, in the papers recently.

The text of the news coverage is as follows:

Sarthak Ahuja of Delhi has possibly become the youngest in India to have passed the chartered accountancy, company secretary, cost and management accountancy courses, as well as a graduate degree in bachelors of finance and investment analysis from the Shaheed Sukhdev College of Business Studies, University of Delhi, all by the age of 23.

Earlier, Pallavi Sachdeva of Delhi was the first to complete the CA, CS and CMA with a graduate degree from DU by 23 years of age, but Ahuja’s achievements have proven that men are no far behind.

What makes Sarthak’s achievement noteworthy is that he has cleared all of his exams in the first attempt without taking any coaching for any of the subjects in the courses of CA, CS and CMA.

As the business for CA, CS and CMA coaching continues to grow tremendously in India, Sarthak stands as an example of achieving such educational distinction through personal organized self study and hard work.

According to him, fear of these institutes’ curriculum drives most students to coaching institutes; whereas a simple attempt at studying from the institutes’ official study material, practice manuals, revisionary test papers and suggested answers is the key to cracking the exams.

Having secured an All India Rank 10 in the 2008 University of Delhi- Bachelor of Business Studies/Finance and Investment Analysis entrance examinations, Sarthak graduated with distinction in finance and investment analysis from the University of Delhi in 2011, passed his Company Secretary Finals in the December 2011 session, Cost and Management Accountancy in the December 2012 session, and cleared his Chartered Accountancy Final Exams in the November 2013 exam session.

Having won awards for all-round excellence in St. Columba’s School and a personality pageant at IIM-Ahmedabad’s college fest in 2011, Sarthak has also shown immense talent in writing and is far from the “nerd” image that many would expect him to project.

As a script-writer for his college street play society, he has written plays that have won awards at IIT-Kanpur and IIT-Mumbai. He is also the editor of a book on auditing published by Sultan Chand and Sons, and maintains a popular humor blog by the name of “My Life is a Jalebi” at www.sarthakahuja.com, which has over 2,00,000 hits.

Currently practicing as a chartered accountant in taxation and corporate laws, he is a regular speaker on topics like internet banking frauds, blogging and soft skills development at various institutes such as the Amity Law School and the Institute of Company Secretaries of India.

He also has a website called Career in Commerce (www.careerincommerce.com) through which he offers free career counseling to students of commerce in the country and inspires many to achieve their professional and academic goals at the earliest.

He can be contacted at 9953926562 or at sarthakahuja.mail@gmail.com

The web links to these mentions are as under:

http://www.business-standard.com/article/news-ani/at-23-sarthak-ahuja-possibly-youngest-indian-to-get-ca-cs-cma-degrees-115061900441_1.html

http://www.financialexpress.com/article/industry/jobs/at-23-sarthak-ahuja-possibly-youngest-indian-to-get-ca-cs-cma-degrees/87273/

https://in.news.yahoo.com/23-sarthak-ahuja-possibly-youngest-indian-ca-cs-090046918.html

http://www.aninews.in/newsdetail2/story220575/at-23-sarthak-ahuja-possibly-youngest-indian-to-get-ca-cs-cma-degrees.html

http://newsnow.in/news/at-23-sarthak-ahuja-possibly-youngest-indian-to-get-ca-cs-cma-degrees

http://www.newsreality.com/post/at-23-sarthak-ahuja-possibly-youngest-indian-to-get-ca-cs-cma-degrees.html

http://newsr.in/n/India/75538xxts/At-23-Sarthak-Ahuja-possibly-youngest-Indian-to.htm

Hindustan Times Interviews our Partner, CA Sarthak Ahuja

The Hindustan Times (HT City) interviewed our Partner, Mr. Sarthak Ahuja, on his achievement of having completed CA, CS and CMA along with his graduation in Finance & Investment Analysis all by the age of 23 years without any private coaching classes and solely through self-study. A brief extract of the interview was published in the newspaper today. The transcript of the same is as follows.

He is possibly the first Delhiite to ace three professional courses — Chartered Accountancy, Company Secretary and Cost and Management Accountancy — along with a graduation in Finance and Investment Analysis from Shaheed Sukhdev College of Business Studies, all in one go at the age of 23. Now a practising accountant, Sarthak Ahuja doles out free advice to studious fuchchas. With admission fever running high, Sarthak talks on study, play, sleep and time management.

What was your mantra for studies?

I think self-study helped me save a lot of time. I decided to not spend hours travelling to coaching centers and tuition classes. I would spend four hours studying just one subject daily. Taking up different subjects on different days of the week helped me break the monotony.

How would you manage your sleep cycle?

I maintained a strict sleep routine to stay in balance throughout the day. I avoided studying late at night because I wanted to maintain focus while giving exams. I ensured a balanced and healthy diet to keep up energy levels.

Your take on juggling play with studies.

The idea was to give extra-curricular activities just as much importance as academics. I maintain a humour blog, My Life is a Jalebi, and was also a part of dramatics and dance society in college. I was always hopping from one thing to another, one activity to next, one subject to the other … all this helped break the monotony of studying four courses in one go.