10 Key highlights of Direct Tax Vivad se Vishwas Bill, 2020.
Click here to read 10 Key highlights of the Direct Tax Vivad se Vishwas Bill 2020.
Copy of Vivaad se Vishwaas Bill as introduced in Lok Sabha
Click here to read and download copy of the Bill.
Pursuant to announcement of the 'Vivad se Vishwas Scheme' by the FM in the budget speech 2020, Govt. seeks data of pending litigations at High Court level as on 31st January 2020 for the purpose of implementation of the said scheme; Govt. seeks details of the assessee name, his PAN, disputed demand, relevant AY along with details of the AO/Pr.CIT in charge for such litigation as also whether the litigation is preferred by the Department or the assessee; States that the requisite data may be compiled and sent in soft copy as an excel file latest by 14th February 2020.
Click here to read and download the Govt. communication in this regard.
Finance Minister Mrs. Nirmala Sitharaman’s first Budget of the new decade has evoked mixed reactions among India’s taxpaying junta. Interspersed with some feel-good decisions such as lowering personal income-tax rates, further benefit to start-ups etc. were some bold measures like abolishment of Dividend Distribution Tax (DDT), introducing a new ‘Tax Dispute Resolution Scheme’, taxing stateless persons etc. The craftily articulated 100+ amendments have definitely sent the tax fraternity into a tizzy as professionals interpret every nuanced sentence of FM’s speech and decode the impact of every amendment, big or small!
In a webinar conducted on Saturday by Taxsutra in conjunction with Dhruva Advisors LLP and International Tax Review, former CBDT member, convener of DTC task force and a leading voice in the world of International Tax Mr. Akhilesh Ranjan shared his insightful views on Budget 2020 proposals.
Click here to read what Mr. Ranjan had to say about the Budget in general and some of the key proposals in the Finance Bill including the controversial Residence clause changes!
Tax litigation has been an area of keen interest for both the Government and all the stakeholders associated with. In the Budget speech, while presenting the Union Budget for 2020, FM Nirmala Sitharaman said “In continuation of the reform measures already taken so far, the tax proposals in this budget will introduce further reforms to stimulate growth, simplify tax structure, bring ease of compliance, and reduce litigations.” To this effect, in her speech, FM has proposed the ‘Vivad Se Vishwas’ Scheme whereunder a taxpayer would get a complete waiver of interest and penalty provided he pays the disputed tax amount by 31st March, 2020 (30th June, 2020 with payment of some additional amount).
The Finance Bill 2020 proposes over 100 amendments to the existing Income Tax Act. The Bill proposes some amendments, which could have the effect of overruling quite a few Court and Tribunal decisions. In this regard, Taxsutra Editorial Team has compiled a list of case-laws that are likely to be impacted/ overruled/confirmed if the amendments take effect.
To read and download the insight titled, “Direct Tax Rulings Overruled/ Impacted / Confirmed by Finance Bill, 2020”, subscribers of Taxsutra's Realtime Portal may click here and subscribers of Taxsutra's Transfer Pricing Portal may click here.
Key Direct Tax Proposals of Finance Bill 2020
To read the incisive analysis of the Finance Bill 2020, subscribers of Taxsutra's Realtime Portal may click here and subscribers of Taxsutra's Transfer Pricing Portal may click here
Finance Bill, 2020 proposes October 31st due-date for companies and for other persons to whom tax audit applies, as against the present September 30th deadline; Also if firm is liable to tax-audit, due date of all partners including non-working partners would be same as Firm's due date, earlier only working partner due date was same; Accordingly, Bill proposes suitable amendments in Sec. 139(1) Explanation 2(a);
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10 Key Direct tax proposals in Finance Bill, 2020
Click here to read 10 Key Direct tax proposals.
Finance Bill, 2020 proposes to defer the applicability of SEP to AY 2022-23 “since discussion on this issue is still going on in G20-OECD BEPS project”, proposes to omit current SEP provisions.
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Click here to read the CBDT Press release.
Finance Bill proposes major amendments to Sec 6 on residential status with respect to individual assessees; In case of extension of 60 days stay to 182 days in cases where Indian citizens leave India for employment etc., proposed provision reduces 182 days period to 120 days; Further Indian citizen who is not taxable in any other country by reason of domicile, residence etc. would be deemed to be a resident of India; In case of resident but not ordinarily resident person (RNOR), amendment replaces earlier conditions with new condition to the effect that such individual or manager of HUF 'has been a non-resident in India in seven out of the ten previous years preceding that year'; Amendments largely in line with recommendations of DTC Task Force.
Finance Bill proposes major changes to residence clause, brings 'stateless person' within tax ambit
Finance Bill proposes to amend Safe Habour/APA/DRP scope, specifies interest limitation carve-outs
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FM proposes new Direct Tax dispute resolution scheme 'Vivaad se Vishwaas' on the lines of Sabka Vishwaas scheme; Proposes waiver of interest & penalty provided the disputed tax amount paid by March, 2020; Scheme to remain open upto June 2020;Additional amount would have to paid after March 2020; I-T Act to be ameneded to enable faceless appeals similar to faceless assessment scheme.
FM proposes a new simplified personal income tax regime optional for the taxpayers; Proposes 10% tax rate for income between Rs. 5 lacs to Rs. 7.5 lacs; 15% tax rate for income between Rs. 7.5-10 lacs; 20% tax rate for income between Rs. 10-12.5 lacs; 25% for income between income between Rs. 12.5 lacs to 15 lacs; 30% for income above Rs. 15 lakhs; No exemptions and deductions to be claimed
FM proposes abolition of DDT and revert to classic tax system; Annual revenue forgone Rs. 25000 cr
One area which has seen a lot of tinkering over the decades in annual budget exercise is taxation of capital gains. DTC task force has proposed simplified capital gains tax regime, categorizing assets in 3 classes. The changes have been mainly capital gains tax rates for different classes of assets and holding period to determine whether the gains ought to be taxable as short term capital gain or long term capital gain.
Click here to read Taxsutra Group Editor Arun Giri's exclusive on Task Force's big ticket recommendations on Capital Gains tax regime.
The scourge of black money has probably been the biggest impediment to India's economic growth, as massive tax evasion, at the very least, leaves a big hole in govt. coffers. The DTC Task Force has identified some such provisions in the current Income tax Act, that according to it, are instruments of money laundering. To this effect, the Task Force in its report, makes a prominent mention of the Presumptive Taxation regime as one which is being abused to launder undisclosed income. The Task Force also finds Partnership firms’ income and profit declaration data quite unimpressive and proposes a big ticket change therein.
Click here to read Taxsutra Group Editor Arun Giri's exclusive on Task Force recommendations vis-a-vis Presumptive Taxation regime and taxation of Partnership Firms.
With Budget 2020 just around the corner, anticipations are at their peak. It is surely going to be a tightrope walk for Finance Minister Nirmala Sitharaman as she balances the onerous responsibility of addressing India’s perilous current economic slowdown on one hand, while also making sure to stay on course to achieve the Govt.’s ambitious dream of a “5 trillion dollar” economy by 2025! Though macro economic targets like stabilizing growth and inflation, reducing the shooting fiscal deficit to acceptable levels, and above all…generating adequate tax revenues in this dwindling environment to fund the ever increasing subsidy bill are topmost on the Govt.’s priority list, India Inc is still hoping for some radical tax proposals like DDT abolishment, rollback of LTCG, further relief for start-ups etc. Not to sideline, the Aam Aadmi’s lofty expectations of slashing of personal tax rates augmented by the massive corporate tax rate cut promulgated vide. the Ordinance last year!
While a nation of billion plus people are waiting with bated breath to see whether FM will deliver a speech full of razzmatazz on February 1, 2020, we ask some top tax stalwarts what, in their opinion, are the 5 key tax proposals that the FM needs to introduce in Budget 2020. Is the FM going to play safe or are we in for some surprises?
Click here to read what the experts have to say.
It is often said that the key driver for economic growth is "innovation". Countries across the world are therefore providing various incentives to encourage innovation and R&D under different Patent Box Regimes. India also stepped into the patent box regime by introducing Sec. 115BBF in 2016.
In this regard, the Taxsutra Editorial Team brings to you an incisive compilation throwing light on the Indian Patent Box Regime, followed by a detailed analysis of Patent Box Regimes in five European countries [i.e. Ireland, Belgium, United Kingdom, Switzerland & Netherlands]. The insight also culls out OECD compilation providing country-wise effective tax rates under their respective patent box regimes, along with OECD’s assessment thereon for over 25 countries.
Click here to access the compilation – ‘Unboxing the Patent Box Regime’.
Taxsutra Pre-Budget Special - ‘Aam Aadmi’s Saviour – Sec.80C... Over the Years’ and Personal Income Tax Rates in India - An Evolution'
As the Modi Government 2.0 braces itself to present its second budget on 01 February 2020, anticipations of the taxpayers continue to soar in the countdown to the D-Day [D-8] . Ever since our Finance Minister Mrs Nirmala Sitharaman doled out jaw-dropping tax concessions for corporates in September last year, the euphoria amongst the personal taxpayers that the FM shall loosen her purse strings for them is at an all-time high.
In this regard, the Taxsutra Editorial Team brings to you two incisive compilations on the Personal Income Tax front, which traces the history of ‘Aam Aadmi’s Saviour – Sec. 80C’ and evolution of personal income tax rates in India. The compilations also take you through the key changes in the past budgets impacting individual taxation and a list of the various incentive schemes that have been added to the exemption list over the years.
Click here to access the compilations titled 'Aam Aadmi's Saviour - Sec.80C.... Over the Years' and 'Personal Income Tax Rates in India - An Evolution'.
A new Income tax Law has been the dream of many a Finance Ministers and Governments for now exactly 30 years... albeit with little to show for it. The Kelkar Committee report 15 years ago & the subsequent draft of the new Direct Tax Code in 2008, was the closest India ever got to legislating a new Income tax Act... but things fell by the wayside each time it was attempted. Maybe it was just the enormity of the task... which was the case this time as well, as the Task Force assembled to take another shot at the cherry, was given the mandate to write afresh another Income tax Act in "consonance with the economic needs of the country..."
The ensemble Task Force constituted under the Convenorship of then CBDT Member Mr. Akhilesh Ranjan, presented its report to the Finance Minister 5 months ago but quite surprisingly the same has not been made public. The sense of bewilderment among many over the Government's sudden seeming indifference to the DTC report, might not be misplaced, given that the high powered Committee of external experts and senior IRS officers toiled for several thousand man-hours over 2 years and to the surprise of everyone, came out with a 'consensus' report spanning almost 200 pages, recommending radical changes in a new tax code. When one looks at some of the big ticket changes recommended by the Task Force and its rationale as explained by the Committee, the DTC comes across as a progressive tax regime that sits pretty alongwith some of the best written tax codes anywhere in the world.
The Task Force, armed with the sweeping mandate, seems to have delivered on the expectations if one were to judge them by the big-ticket changes they have proposed in the DTC report...
Click here to read Taxsutra Group Editor Arun Giri's exclusive piece on DTC Task Force's big ticket recommendations vis-a-vis personal tax rates, Residence vs Territorial system of taxation, definition of 'income', Residence rule and what should prevail - DTAA or Domestic Law?
In Part 2 of our DTC Exclusive, Taxsutra Group Editor Arun Giri writes on the Task Force's recommendations vis-a-vis Dividend Distribution Tax, overhaul of procedure to determine TDS withholding u/s 195, the 5 Heads of Income, Income Recognition Approach and how to solve the Previous Year - Assessment Year confusion.
Click here to read Part 2 of our DTC Exclusive, where Taxsutra Group Editor Arun Giri writes on the Task Force's recommendations vis-a-vis Dividend Distribution Tax, overhaul of procedure to determine TDS withholding u/s 195, the 5 Heads of Income, Income Recognition Approach and how to solve the Previous Year - Assessment Year confusion.
It is said that welcoming a New Year and a New Decade at that is always tinged with a dash of nostalgia. The last decade saw the global Transfer Pricing (TP) landscape being redefined by several OECD & UN led projects. Closer home, the Indian TP regulations have also evolved over the years, from the Finance Act, 2001 that introduced for the first time detailed TP Regulations in India to the more recent implementation of OECD’s Base Erosion and Profit Shifting (‘BEPS’) recommendations. The introduction of CbC Reporting in the 2016 Union Budget following the release of OECD's BEPS report on Action Plan 13, introduction of thin capitalisation rules and secondary adjustment provisions to keep in line with international best practices are just some examples of how the Indian TP regulations have kept abreast with the times.
In year 2020, India steps into the 20th year since the TP regulations were first introduced into the Income-tax statute and in this backdrop, Taxsutra takes you on a walk down memory lane to see how India’s Union Budgets in the last two decades have shaped its TP policies.
Click here to read the Insight titled “TP 2020 - How Union Budgets in the last 2 decades have shaped India’s TP policies”
Though there may still be over 2 weeks to go for the most anticipated “B-Day”, but our special coverage is starting the reverse countdown [D-18] to Finance Minister Nirmala Sitharaman's Budget Speech on Feb 1st. Not only tax professionals, but a nation of billion plus people are waiting with bated breath to see if Mrs. Sitharaman will seize the moment. Will the budget meet aam-aadmi's lofty expectations? Will the Govt. come out with any direct tax immunity scheme? Will there be further reliefs for start-ups and more measures towards achieving a cashless economy? Will the FM surprise us all with some radical proposals?
Though there is a lot of excitement in the air w.r.t the first budget of the new decade, one of the most important expectations especially by India Inc. is, “Will the Dividend Distribution Tax [DDT] be scrapped?”. Pertinently, even the DTC Task Force has recommended its scrapping, considering the consternation it has created amongst the corporates.
In this context, the Taxsutra Editorial Team has worked round-the-clock to bring to you a comprehensive, yet incisive maiden compilation of the "Pre-Budget" series, which provides a snapshot of DDT rates and its applicability [which has been widened over the last 5 years]. The compilation also throws light on the revenue contributed to the exchequer from DDT over a few years, as also highlights the key issues emerging from the said tax.
Click here to access the compilation - Snapshot of Dividend Distribution Tax.