Executive Summary

Income Tax

  • Cost inflation Index (CII) under section 48 for financial year 2024-25
  • Exemption under section 10 (46) of Income of Tamil Nadu Water Supply and Drainage Board subject to few conditions.
  • CBDT releases new functionality in AIS For Taxpayers.
  • CBDT issues guidelines for compulsory selection of Income-tax Returns (ITRs) for complete scrutiny during FY 2024-25

 

Goods And Service Tax (GST)

  • Advisory on launch of E-Way Bill 2 Portal
  • Information from manufacturers of Pan Masala and Tobacco taxpayer

 

Companies Act 2013/ Other Laws

  • Relaxation of Additional Fees and Extension of Last Date of Filing of Form No. LLP BEN 2 and LLP Form No. 4D under the Limited Liability Partnership Act, 2008
  • RBI decides to regularize prior issuance of partly paid units by AIFs to non-residents via compounding under FEMA
  • SEBI strengthens risk management framework for Clearing Corporations (CCs);
  • SEBI updates Investor Charter for stock exchanges and depositories to include new services and guidelines
  • Master Circular for Issue and Listing of Non-convertible Securities, Securitised Debt Instruments, Security Receipts, Municipal Debt Securities and Commercial Paper

Income Tax

Income Tax

  • Cost inflation Index under section 48 For Financial Year 2024-25
  • In exercise of the powers conferred by clause (v) of the Explanation to section 48 of the Income-tax Act, 1961, the Central Government hereby makes the following further amendments in the notification published in the Gazette of India, Extraordinary, Part II, section 3, sub-section (ii) number O. 1790(E), dated the 5th June, 2017, namely: —
  • In the said notification, in the Table, after serial number 23 and the entries relating thereto, the following serial number and entries shall be inserted, namely: –

 

TABLE

 

Sl. No. Financial Year Cost Inflation Index
(1) (2) (3)
“24 2024-25 363″

 

  • This notification shall come into force with effect from the assessment year 2025-26 and subsequent assessment years.

 

  • Exemption under section 10 (46) of Income of Tamil Nadu Water Supply and Drainage Board subject to few conditions.

 

  • In exercise of the powers conferred by clause (46) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies for the purposes of the said clause, ‘Tamil Nadu Water Supply and Drainage Board, Chennai’ (PAN: AAALT0834F), a Board constituted under the Tamil Nadu Water Supply and Drainage Board Act, 1970 (Tamil Nadu Act of 1971), in respect of the following specified income arising to the said Board, namely: —
  • Water charges for supply of water to recover the maintenance cost.
  • Centage charges received from local bodies work like water supply scheme and sewerage scheme to compensate for establishment charges.
  • Investigation and Detailed Project Report preparation charges for water supply and drainage scheme for establishment charges.
  • Interest earned on Bank Deposits.
  • This notification shall be effective subject to the conditions that Tamil Nadu Water Supply and Drainage Board, Chennai-

 

  • shall not engage in any commercial activity.
  • its activities and the nature of the specified income shall remain unchanged throughout the financial year(s); and
  • shall file return of income in accordance with the provision of clause (g) of sub-section (4C) of section 139 of the Income-tax Act, 1961.
  • This notification shall be applicable from AY 2024-25 to AY 2028-29.

 

  • CBDT Releases new functionality in AIS For Taxpayers

In AIS, taxpayers have been provided with a functionality to furnish feedback on every transaction displayed therein. This feedback helps the taxpayer to comment on the accuracy of the information provided by the Source of such information. In case of wrong reporting, the same is taken up with the Source for their confirmation, in an automated manner. It may be noted that information confirmation is currently made functional with regard to information furnished by Tax Deductors /Collectors and Reporting Entities.

 

The Central Board of Direct Taxes (CBDT) has now rolled out a new functionality in AIS to display the status of information confirmation process. This will display whether the feedback of the taxpayer has been acted upon by the Source, by either partially or fully accepting or rejecting the same. In case of partial or full acceptance, the information is required to be corrected by filing a correction statement by the Source. The following attributes shall be visible to the taxpayer for status of Feedback confirmation from Source.

  • Whether Feedback is shared for confirmation: – This will let the taxpayer know if the feedback has been shared with the Reporting Source for confirmation or not.
  • Feedback Shared on: – This will let the taxpayer know the date on which the feedback has been shared with the Reporting Source for confirmation.
  • Source responded on: – This will let the taxpayer know the date on which the Reporting Source has responded on the feedback shared with it for confirmation.
  • Source response: – This will let the taxpayer know the response provided by the Source on the taxpayer’s feedback.

 

  • The CBDT has issued parameters and procedures for compulsory selection of ITRs during FY 2024-25, in below cases.

 

  • Cases pertaining to Survey u/s 133A of the Income-tax Act
  • Cases pertaining to Search & Seizure
  • Cases in which notice u/s 142(1) of the Income-tax Act has been issued, but no ITR has been furnished
  • Cases in which notice u/s 148 has been issued,
  • Cases relating to to registration / approval of charitable trusts / institutions claiming tax exemption
  • Cases involving addition in an earlier Assessment Year on a recurring issue of law / fact
  • Cases relating to specific information regarding tax evasion

 

Goods and Services Tax

GST

  • Advisory on launch of E0way Bill 2 Portal:

GSTN is pleased to inform that NIC is releasing the E-Way Bill 2 Portal (https://ewaybill2.gst.gov.in) on 1st June 2024. This portal ensures high availability and runs in parallel to the e-way Bill main portal. The e-way bill 2 portal synchronizes the e-way bill details with main portal within a few seconds. The highlights of the portal are as follows-:

  • Presently, E-Way Bill 2 Portal provides the critical services of E-Way Bill system, and gradually it will be extended with other services of e-way bill system.
  • E-Way Bills can be generated and updated on the E-Way Bill 2 Portal independently.
  • E-Way Bill 2 portal provides the web and API modes of operations for e-way bill services.
  • The taxpayers and logistic operators can use the E-Way Bill 2 portal with the login credentials of the main portal.
  • The taxpayers and logistic operators can use the E-Way Bill 2 portal during technical glitches in e-way bill main portal or any other exigencies.
  • The Criss-Cross operations of printing and updating of Part-B of E-Way Bills can be carried out on these portals. That is, updating of Part-B of the E-Way bills of portal 1 can be done at portal 2 and vice versa.
  • In case E-Way Bill main portal is non-operational because of technical reasons, the Part-B can be updated to the E-Way Bills, generated at Portal 1, at portal 2 and carry both the E-way Bill slips.
  • For further details, please visit the e-way bill portals.

 

  • Information from manufacturers of Pan Masala and Tobacco taxpayers:

The government had issued a notification to seek information from taxpayers dealing in the goods mentioned therein vide Notification No. 04/2024 – Central Tax dated 05-01-2024. Two forms have been notified vide this notification namely GST SRM-I and GST SRM-II. The former pertains to registration and disposal of machines while the later asks information on inputs and outputs during a month.

To begin with, facility to register the machines have been made available on the GST Portal to file the information in Form GST SRM-I. All taxpayers dealing in the items mentioned in the said notification may use the facility to file the information about machines. Form GST SRM-II will also be made available on the portal shortly.

 

MONTHLY NEWS & UPDATES FOR FEBRUARY 2024

  • Relaxation of additional fees and extension of last date of Filing of Form No. LLP Ben 2 and LLP form no. 4D under The Limited Liability Partnership Act, 2008

The Ministry of Corporate Affairs (MCA) has notifed that relaxation of additional fees and extension of last date of filing of Form No. LLP BEN-2 and LLP Form No. 4 under the Limited Liability Partnership Act, 2008 in the view of transition of MCA-21 from version- to version-3. These forms shall be filed without any addition fees upto July 01, 2024.

 

MONTHLY NEWS & UPDATES FOR FEBRUARY 2024

  • RBI decides to regularize prior issuance of partly paid units by AIFs to non-residents via compounding under FEMA

The Reserve Bank of India (“RBI”) vide its circular dated May 21, 2024 (“Circular”) has required that issuance of partly paid-up units by Alternative Investment Funds (“AIFs”) to foreign investors prior to March 14, 2024, should be regularised through compounding under Foreign Exchange Management Act, 1999 (“FEMA”). Compounding by RBI is prescribed for the contravention of foreign exchange regulations as per Foreign Exchange (Compounding Proceedings) Rules, 2000, and involve payment of a fees. In many instances, compounding requires payment of a monetary penalty to RBI.

 

Compliance Calendar - February 2024

  • SEBI strengthens risk management framework for Clearing Corporations (CCs)

SEBI has reviewed the existing collaterals accepted by CCs and specified the prudential norms for exposure of CCs. As per the amended norms units of growth plan of overnight mutual fund schemes shall be accepted as Cash Equivalent by CCs with a haircut of 5%. Earlier, a limit of 10% was specified. The 10% haircut remains unchanged for other overnight mutual fund plans. Further, the Prudential Norms for Exposure of CCs has also been specified. The circular shall be effective from 01st Aug, 2024.

 

  • SEBI updates Investor Charter for stock exchanges and depositories to include new services and guidelines

In November 2021, SEBI formulated the Investor Charter for Depositories/ Depository Participants (DPs) and Stock exchanges. It contains information on services provided to investors, such as grievance redressal mechanisms, rights and obligations of investors, etc. With the recent introduction of the Online Dispute Resolution (ODR) platform and SCORES 2.0 by SEBI, the Investor Charter has been updated to incorporate these new services.

 

  • Master Circular for Issue and Listing of Non-convertible Securities, Securitised Debt Instruments, Security Receipts, Municipal Debt Securities and Commercial Paper

The Securities and Exchange Board of India has consolidated all the applicable circulars/ directions at one place which are applicable for for Issue and Listing of Non-convertible Securities, Securitised Debt Instruments, Security Receipts, Municipal Debt Securities and Commercial Paper, till May 21, 2024.

 

Monthly Compliance Calendar

Disclaimer: Information in this note is intended to provide only a general update of the subjects covered. It is not intended to be a substitute for detailed research or the exercise of professional judgment. KNM accepts no responsibility for loss arising from any action taken or not taken by anyone using this publication. Updates are for    the period 30.05.2024.

 

 

Executive Summary

Income Tax

  • Clarification on Time Limit for verification of return of income after uploading.
  • Notification of Donations to certain funds, charitable institutions, etc under Section 80G of Income Tax Act, 1961
  • Partial Modification of Circular No. 3 Of 2023, Dated 28-3-2023 regarding consequences of PAN becoming inoperative as per Rule 114AAA of the Income-Tax Rules, 1962
  • Section 10(46) of The Income-Tax Act, 1961 – Exemptions – Statutory Body/Authority/Board/Commission – Notified Body or Authority
  • Extension of Due Date for filing of Form 10A/10AB.

Goods And Service Tax (GST)

  1. Advisory Self Enablement For E-Invoicing
  2. Advisory on Reset and Re-filing of GSTR-3B of some taxpayers
  3. Advisory: Auto-populate the HSN-wise summary from e-Invoices into Table 12 of GSTR-1
  4. Section 148 of the Central Goods and Services Tax Act, 2017 – Special Procedure for certain processes – Special Procedure to be followed by Registered Person engaged in manufacturing Notified Goods

Companies Act 2013/ Other Laws

  1. RBI issues revised master circular on ‘Bank Finance to Non-Banking Financial Companies (NBFCs)

 

  1. SEBI Amends Alternative Investment Funds Regulations, 2012 | Introduces a New Regulation w.r.t ‘dissolution Period’.

 

  1. SEBI has removed the requirement to publish text on Contract Note with respect to Fit and Proper status of shareholders.

Income Tax

Income Tax

  • Clarification Time limit for verification of return of Income after uploading.
  1. The notification was issued by the DGIT(Systems) specifying the time limit for verification of Income Tax Return (ITR) as 30 days from the date of transmitting the data of ITR electronically.

It is clarified that:

  • Where the return of income is uploaded and e-verification/ITR-V is submitted within 30 days of uploading – In such cases the date of uploading the return of income shall be considered as the date of furnishing the return of income.
    • Where the return of is uploaded but e-verification or ITR-V is submitted after 30 days of uploading – In such cases the date of e-verification/ITR-V submission shall be treated as the date of furnishing the return of income and all consequences of late filing of return under the Act shall follow, as applicable.
    1. The duly verifed ITR-V in prescribed format and in the prescribed manner shall be sent either through ordinary or speed post or in any other mode to the following address only:

    Centralised Processing Centre,

    Income Tax Department,

    Bengaluru – 560500, Karnataka.

    1. The date on which the duly verified ITR-V is received at CPC shall be considered for the purpose of determination of the 30 days period from the date of uploading of return of income.

     

     

    1. It is further clarified that where the return of income is not verified within 30 days from the date of uploading or till the due date for furnishing the return of income as per the Income-tax Act, 1961 – whichever is later – such return shall be treated as invalid due to non-verification.
    2. This notification will come into effect from 1-4-2024.
    • Section 80G of Income Tax Act, 1961- Deductions- Donations to certain funds, charitable institutions, etc.

    In the exercise of the powers conferred by clause (b) of sub-section (2) of section 80G of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies “Shree Ramanuj Kot Laxmi Venkatesh Mandir” managed by Shree Ramanuj Kot Trust, Indore, Madhya Pradesh (PAN: AAATR0970L) to be place of historic importance and a place of public worship of renown throughout the state of Madhya Pradesh for the purposes of the said section.

     

    The Notification will be valid only for the renovation or repair of the “Shree Ramanuj Kot Laxmi Venkatesh Mandir” to the extent of Rs. 1,63,06,311/-(Rupees One Crore Sixty-Three Lakhs Six Thousand Three Hundred and Eleven only) and will cease to be effective after the said amount has been collected or on 31-3-2029, whichever is earlier

    • Partial Modification of Circular No. 3 of 2023, Dated 28-03-2023 in regard to consequences of PAN become in operative as per Rule 114AAA of the Income Tax Rules

    In partial modification and in continuation of circular no. 3 of 2023 hereby specifies that for the transactions entered into upto 31-03-2024 and in cases where the PAN becomes operative (as a result of linkage with Aadhaar) on or before 31-05-2024, there shall be no liability on the deductor/collector to deduct/collect the tax under section 206AA/206CC, as the case maybe, and the deduction/collection as mandated in other provisions of Chapter XVII-B or Chapter XVII-BB of the Act, shall be applicable.

     

    • Section 10(46) of The Income-Tax Act, 1961 – Exemptions – Statutory Body/Authority/Board/Commission – Notified Body or Authority
    1. In exercise of the powers conferred by clause (46) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies for the purposes of the said clause, ‘Kerala Autorickshaw Workers Welfare Fund Scheme, Kollam’ (PAN: AAATK3080E), a Board constituted by the Government of Kerala, in respect of the following specified income arising to the said Authority, namely: —
    • Grant received from the State Government of Kerala.
    • Contribution received from the workers registered as members in the Scheme.
    • Contribution received from self-employed persons and employers for workers, registering as members of the Scheme.
    • Registration Fees
    • Interest earned on Bank Deposits.
    1. This notification shall be effective subject to the conditions that Kerala Autorickshaw Workers Welfare Fund Scheme, Kollam, –
    • shall not engage in any commercial activity.
    • activities and the nature of the specified income shall remain unchanged throughout the financial years.
    • shall file return of income in accordance with the provision of clause (g) of sub-section (4C) of section 139 of the Income-tax Act, 1961.
    1. This notification shall be applied from assessment year 2024-25 to 2028-29.
    • Extension of Due Date for filing of Form 10A/10AB.

    CBDT extends the due date for filing of Form 10A/10AB under the Income Tax Act, 1961 up to 30th June 2024 in respect of certain provisions of section 10(23C)/ section 12A/ section 80G/ and section 35 of the Act.

Goods and Services Tax

GST

 

  • Self-Enablement For E- Invoicing:

 

The Central Government, on the recommendations of the Council, introduced that if your turnover exceeds INR 5 crores in the financial year 2023-2024, you will be required to start e-Invoicing from the next financial year, i.e., from 1st April 2024 onwards. It may also be noted that the same is applicable if the threshold is crossed in any of the proceeding financial years too.

 

For those who meet the notification criteria but have not yet been enabled on the portal, you can self-enable for e-Invoicing by visiting https://einvoice.gst.gov.in and start reporting through any of the 4 new Invoice Registration Portals (IRPs) – from e-Invoice IRP 3 to e-Invoice IRP 6.

 

  • Reset and Re-filing of GSTR-3B of some taxpayers:

This has reference to the facility for re-filing of GSTR-3B for some of the taxpayers. It was noticed that there were discrepancies in the returns of some taxpayers during the filing process between the saved data in the GST system and filed data in the fields of ITC availment and payment of tax liabilities. The matter was examined and deliberated by the Grievance Redressal Committee of the GST Council and as a facilitation measure the Committee decided that these returns shall be reset, to give opportunity to such taxpayers to correct the discrepancy.

Accordingly, only the affected taxpayers have been communicated on their registered email-ids and the affected returns are visible on their respective dashboards for the purpose of refiling with the correct data. The taxpayers who have received such communication are requested to visit their dashboard and re-file their GSTR-3B within 15 days of receipt of such communication.

 

 

 

  • Auto-populate the HSN-wise summary from e-Invoices into Table 12 of GSTR-1

There is a new feature to auto-populate the HSN-wise summary from e-Invoices into Table 12 of GSTR-1 is now available on the GST portal. This allows for direct auto-drafting of HSN data into Table 12 based on e-Invoice data. The HSN-wise summary data auto-populated into Table 12 is intended for your convenience. Before its submission, kindly ensure to reconcile the data with records.

Any discrepancies or errors should be manually corrected or added to Table 12 before final submission.

 

  • Section 148 of the Central Goods and Services Tax Act, 2017 – Special Procedure for certain processes – Special Procedure to be followed by Registered Person engaged in manufacturing Notified Goods

In exercise of the powers conferred by section 148 of the Central Goods and Services Tax Act, 2017, the Central Government, on the recommendations of the Council, hereby makes the following amendments in the Notification No. 4/2024-Central Tax, dated the 5th January, 2024 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (ii), namely: —

 

In the said notification, in para 4, for the words and letters “1st day of April, 2024”, the words and letters “15th day of May, 2024” shall be substituted.

 

This notification shall come into force from the 1st day of April 2024.

 

MONTHLY NEWS & UPDATES FOR FEBRUARY 2024

  • RBI issues revised master circular on ‘Bank Finance to Non-Banking Financial Companies (NBFCs)

 

RBI has issued the revised Master Circular on ‘Bank Finance to Non-Banking Financial Companies (NBFCs)’. This circular consolidates all instructions issued up to 23.04.2024. The purpose is to outline the RBI’s regulatory policy regarding the financing of NBFCs by banks. This circular applies to all Scheduled Commercial Banks (excluding RRBs). It highlights norms regarding bank finance to NBFCs registered with RBI, NBFCs not requiring registration and activities not eligible for bank credit.

 

Compliance Calendar - February 2024

  • SEBI Amends Alternative Investment Funds Regulations, 2012 | Introduces a New Regulation w.r.t ‘dissolution Period.’

SEBI has notified the SEBI (Alternative Investment Funds) (Second Amendment) Regulations, 2024. As per the amended norms, a new regulation 29B relating to the dissolution period has been inserted. It states that a scheme of an Alternative Investment Fund may enter a dissolution period in the manner and subject to the conditions specified by the Board. Further, SEBI has introduced definitions of ‘dissolution period’ and ‘encumbrance’ under Regulation 2 of existing regulations.

 

  • SEBI has removed the requirement to publish text on Contract Note with respect to Fit and Proper status of shareholders.

SEBI vide circular dated April 24, 2024, in order to promote ease of doing business has removed the requirement to publish text on Contract Note with respect to Fit and Proper status of shareholders. In lieu of text only a reference of the applicable regulation regarding fit and proper status of shareholders needs to be made part of the contract note.

 

Monthly Compliance Calendar

Disclaimer: Information in this note is intended to provide only a general update of the subjects covered. It is not intended to be a substitute for detailed research or the exercise of professional judgment. KNM accepts no responsibility for loss arising from any action taken or not taken by anyone using this publication. Updates are for    the period 30.04.2024.

 

Executive Summary

 

Income Tax

  • Section 10(46) of the Income-Tax Act, 1961 – Exemptions – Statutory Body/Authority/Board/Commission – Notified Body or Authority.
  • Opening Of Income Tax Offices on Holidays to Facilitate Pending Departmental Work
  • Section 35(1)(ii) of the Income Tax Act 1961- Scientific Research expenditure – approved scientific research association/institution.
  • Section 194S of the Income Tax Act, 1961- Deduction of Tax at Source- payment on transfer of virtual digital asset.
  • Section 10(22B) of the Income tax Act, 1961- Exemptions – News Agency.
  • Revision of Interest rates for small savings scheme.
  • DTAA between the Republic of India and Kingdom of Spain.
  • No deduction of tax under section 80LA

 

Goods And Service Tax (GST)

 

  • Advisory on GSTR-1/IFF Introduction of New 14A and 15A tables.
  • Advisory on Integration of E-Waybill system with New IRP Portal.
  • Instances of Delay in registration reported by some Taxpayers despite successful Aadhar Authentication.

Companies Act 2013/ Other Laws.

 

  • SEBI issues safeguards to address investors’ concerns regarding transfer of securities in demat mode.

 

  • Master Direction on NBFC – Housing Finance Company (Reserve Bank) Directions, 2021

 

  • Section 10(46) of the Income-Tax Act, 1961 – Exemptions – Statutory Body/Authority/Board/Commission – Notified Body or Authority.

 

 

 

  1. In exercise of the powers conferred by clause (46) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies for the purposes of the said clause, ‘Uttar Pradesh Real Estate Regulatory Authority’ (PAN AAAGU0671E), an Authority constituted by the State Government of Uttar Pradesh, in respect of the following specified income arising to that Authority, namely: —

(a) Amount received as Grant-in-aid or loan/advance from Government

(b) Fee/penalty received from builders/developers, agents or any other stakeholders as per the provisions of the Real Estate (Regulation and Development) Act, 2016

(c) Fee received under Right to Information Act, 2005; and

(d) Interest earned on bank deposits.

  1. This notification shall be effective subject to the conditions that Uttar Pradesh Real Estate Regulatory Authority, –

(a) shall not engage in any commercial activity.s

(b) activities and the nature of the specified income shall remain unchanged throughout the financial years

(c) shall file return of income in accordance with the provision of clause (g) of sub-section (4C) of section 139 of the Income-tax Act, 1961.

 

  1. This notification shall be deemed to have been applied from the Assessment Year 2021-2022.

And

  1. In exercise of the powers conferred by clause (46) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies for the purposes of the said clause, ‘Karnataka Urban Water Supply and Drainage Board’ (PAN: AAATK5837F), a Board constituted under the Karnataka Urban Water Supply and Drainage Board Act, 1973 (Karnataka Act No. 25 of 1974), in respect of the following specified income arising to that Board, namely:—

(a) Establishment, administrative, supervision, water charges and rent collected as per the Karnataka Urban Water Supply and Drainage Board Act, 1973 (Karnataka Act No. 25 of 1974)

(b) Forfeiture of earnest money deposit as per the Karnataka Urban Water Supply and Drainage Board Act, 1973 (Karnataka Act No. 25 of 1974);

(c) Penalty, Sale of Scrap, Storage charges and Survey charges as per the Karnataka Urban Water Supply and Drainage Board Act, 1973 (Karnataka Act No. 25 of 1974) and

(d) Interest earned on bank deposits.

  1. This notification shall be effective subject to the conditions that Karnataka Urban Water Supply and Drainage Board-

(a) shall not engage in any commercial activity

(b) activities and the nature of the specified income shall remain unchanged throughout the financial years; and

(c) shall file return of income in accordance with the provision of clause (g) of sub-section (4C) of section 139 of the Income-tax Act, 1961.

  1. This notification shall be deemed to have been applied from Assessment Year 2021-2022.

And

  1. In exercise of the powers conferred by clause (46) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies for the purposes of the said clause, ‘National Mission for Clean Ganga’, New Delhi (PAN AABAN3769K), an Authority constituted under the River Ganga (Rejuvenation, Protection and Management) Authority Order, 2016, in respect of the following specified income arising to that Authority, namely:

(a) Grants-in-Aid received from Government of India; and

(b) Interest earned on bank deposits.

  1. This notification shall be effective subject to the conditions that National Mission for Clean Ganga, New Delhi –

(a) shall not engage in any commercial activity;

(b) activities and the nature of the specified income shall remain unchanged throughout the financial years; and

(c) shall file return of income in accordance with the provision of clause (g) of sub-section (4C) of section 139 of the Income-tax Act, 1961.

  1. This notification shall be deemed to have been applied from Assessment Year 2021-2022.

 

  • Opening of Income Tax offices on holidays to facilitate pending departmental work.

The Financial Year 2023-24 closes on 31st March 2024, which is Sunday. Further, 30th March 2024 is a Saturday and 29th March 2024 is a closed holiday. Therefore, to facilitate completion of pending departmental work, all the Income Tax Offices throughout India shall remain open on 29th, 30th and 31st March 2024. This direction is issued for administrative convenience by the Central Board of Direct Taxes in exercise of powers conferred under section 119 of the Income-tax Act, 1961.

 

  • Section 35(1)(ii) of the Income Tax Act 1961- Scientific Research expenditure – approved scientific research association/institution.

 

  1. In exercise of the powers conferred by clause (ii) of sub-section (1) of section 35 of the Income-tax Act, 1961 (43 of 1961), read with Rules 5C and 5E of the Income-tax Rules, 1962, the Central Government hereby approves ‘National Forensic Sciences University, Gandhinagar‘ (PAN: AAALN3742Q), ‘Sardar Vallabhbhai National Institute of Technology’, Surat (PAN: AAAJS1184P) and ‘Indian Institute of Technology, Kharagpur’ (PAN: AAAJI0323G) under the category of ‘University, college or other institution’ for ‘Scientific Research’ for the purposes of clause (ii) of sub-section (1) of section 35 of the Income-tax Act, 1961, read with rules 5C and 5E of the Income-tax Rules, 1962.
  2. This Notification shall be applicable from Assessment Years 2024-25 to 2028-29.
  • Section 194S of the Income Tax Act, 1961- Deduction of Tax at Source-payment on transfer of virtual digital asset.

 

As per section 194S of the Income-tax Act, 1961, any person responsible for paying to any resident person any sum by way of consideration for the transfer of a virtual digital asset is required to deduct an amount equal to 1% of such sum as income tax thereon. Further, as per sub-rule (4D) of rule 31A, a specified person’ is required to report such deductions in a challan-cum-statement electronically in Form No. 26QE within thirty days from the end of the month in which such deduction is made.

It has come to the notice of the Central Board of Direct Taxes (‘the Board’) that specified persons who deducted tax under section 194S of the Act during the period from 1-7-2022 to 31-1- 2023, could not file Form No. 26QE and pay corresponding TDS on or before the due date, due to unavailability of Form No. 26QE. This has resulted in consequential levy of fee under section 234E and interest under clause (ii) of sub-section (1A) of section 201 of the Act. Further, the specified persons who deducted tax under section 194S during the period from 1-2-2023 to 28-2-2023 had insufficient time to file Form No. 26QE and pay corresponding TDS thereon.

To address the grievances of such specified persons, the Board has decided to extend the due date of filing of Form No. 26QE for specified persons who deducted tax under section 194S but failed to file Form No. 26QE. The due date is hereby extended to 30-5-2023 in those cases where the tax was deducted by specified persons under section 194S of the Act during the period from 1-7-2022 to 28-2-2023. Fee levied under section 234E and/or interest charged under section 201(1A) (ii) of the Act in such cases for the period up to 30-5-2023, shall be waived.

 

  • Section 10(22B) of the Income tax Act, 1961- Exemptions – News Agency.
  1. In exercise of the powers conferred by the clause (22B) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby specifies the “The Press Trust of India Limited, New Delhi” as a news agency set up in India solely for collection and distribution of news, for the purpose of the said clause for two assessment years 2022-23 to 2023-24.
  2. The notification is subject to the condition that the news agency applies its income or accumulates it for application solely for collection and distribution of news and does not distribute its income in any manner to its members.
  • Revision of Interest rates for small savings scheme.

The rates of interest on various Small Savings Schemes for the first quarter of FY 2024-25 starting from 1st April 2024 and ending on 30th June 2024 shall remain unchanged from those notified for the fourth quarter (1st January 2024 to 31st March, 2024) of FY 2023-24.

  • Modification made in DTAA between Republic of India and Kingdom of Spain

In the said notification, in the Convention annexed therewith between the Republic of India and Kingdom of Spain, in Article 13 relating to Royalties and Fees for Technical Services, for paragraph 2, the following paragraph shall be substituted, namely: –

“2. However, such royalties and fees for technical services may also be taxed in the Contracting State in which they arise and according to the law of that State, but if the recipient is the beneficial owner of the royalties or fees for technical services, the tax so charged shall not exceed ten per cent of the gross amount of royalties or fees for technical services.”.

Paragraph 2 of Article 13 of the said Convention, as amended by this notification, shall be applicable with effect from the assessment year 2024-25.

  • No deduction of tax under section 80LA:

In exercise of the powers conferred by sub-section (1F) of section 197A read with subsection (1A) and sub-section (2) of section 80LA of the Income-tax Act, 1961 (43 of 1961) (hereinafter referred as the Income-tax Act), the Central Government hereby notifies that no deduction of tax shall be made under the provisions of the Income-tax Act in respect of the payments made by any ‘payer’ to a person being a Unit of International Financial Services Centre, (hereinafter referred as ‘payee’), as specified in the notification.

 

  • GSTN Issues advisory on GSTR-1/IFF:

(Introduction of New 14A and 15A tables)

The Central Government, on the recommendations of the Council, as per notification No. 26/2022 introduced two new Table 14A and Table 15A in GSTR-1 to capture the amendment details of the supplies made through e-commerce operators (ECO) on which e-commerce operators are liable to collect tax under section 52 or liable to pay tax u/s 9(5) of the CGST Act, 2017.

Now, these tables have been made live on the GST common portal and will be available in GSTR-1/IFF from February 2024 tax period onwards. These amendment tables are relevant for those taxpayers who have reported the supplies in Table 14 or Table 15 in earlier tax periods.

 

 

 

  • GSTN Issues advisory on Integration of E-Waybill system with New IRP Portals –

GSTN announced the successful integration of E-Waybill services with four new IRP portals via NIC, enabling taxpayers to generate E-Waybills alongside E-Invoicing on these four IRPs across all six IRPs.

This new facility complements the existing services available on the NIC-IRP   portal, making E-Waybill services, along with E-Invoicing, available across all six IRPs.

 

  • Instances of Delay in registration reported by some Taxpayers despite successful Aadhar Authentication in accordance with Rule 8 and 9 CGST, Rules, 2017

The Central Government In accordance with Rule 9 of the Central Goods and Services Tax (CGST) Rules, 2017, pertaining to the verification and approval of registration applications, following is informed:

Where a person has undergone Aadhaar authentication as per sub-rule (4A) of rule 8 but has been identified in terms of Rule 9(aa) by the common portal for detailed verification based on risk profile, your application for registration would be processed within thirty days of application submission.

Necessary changes would also be made to reflect the same in the online tracking module vis-à-vis processing of registration application.

 

  • Master Direction on NBFC – Housing Finance Company (Reserve Bank) Directions, 2021

 

The Reserve Bank of India (the Bank), having considered it necessary in the public interest, and being satisfied that, for the purpose of enabling the Bank to regulate the financial system to the advantage of the country and to prevent the affairs of any Housing Finance Company (HFCs) from being conducted in a manner detrimental to the interest of investors and depositors or in any manner prejudicial to the interest of such HFCs, and in exercise of the powers conferred under sections 45L and 45MA of the Reserve Bank of India Act, 1934

 

  • SEBI issues safeguards to address investors’ concerns regarding transfer of securities in demat mode.

 

Market regulator Securities and Exchange Board of India (SEBI) has announced new safeguards on March 20, 2024, to address the concerns of the investors on transfer of securities in dematerialized (demat) mode. As per people privy to the matter, this has been done in order to prevent fraud by means of transferring shares from inactive demat account/accounts.

 

 

Executive Summary

 

Income Tax

  • Implementation of E-verification Scheme- 2021.
  • National savings Time Deposit (Amendment) scheme 2024
  • Sukanya Samriddhi Account (Amendment) Scheme 2024
  • The returns for AY 2020-21 which were not processed electronically can be processed by 31-01-2024, to claim refunds.
  • CBDT notifies income tax return forms for the Assessment Year 2024-25 well in
  • Section 90 of the Income tax Act, 1961- Double Taxation Relief- Agreement between Government of Republic of India and Government of Samoa for exchange of Information with respect of taxes.
  • Scientific Research Institution/Association approved Scientific Research Expenditure under Section 35(1)(ii) of the Income Tax Act, 1961.
  • Order has been passed regarding Remission and extinguishment of Tax Demand under Income Tax Act, 1961. Waiver of Income Tax Demands as per Interim Budget 2024 has been Capped at Rs.100,000.

Goods And Service Tax (GST)

 

  • Introduction of Consent Based Sharing of Information Furnished by Taxable Person through Notified System

 

Companies Act 2013/ Other Laws.

 

  • MCA operationalizes Central Processing Centre (CPC) for the Centralized Processing of Corporate Filings

 

  • Companies (Registration Offices and Fees) Amendment Rules, 2024 – Insertion Of Rule 10A

 

  • Relaxation of additional fees and extension of last date of filing of form no. LLP BEN-2 and LLP Form no. 4D under Limited Liability Partnership Act, 2008

 

  • Action against Paytm Payments Bank Ltd. under section 35A of the Banking Regulation Act, 1949

 

  • Insolvency and Bankruptcy Board of India amends The Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016

 

  • Enhancing Transparency and Stakeholder Engagement in Liquidation Process

 

  • SEBI has issued an advisory against Fraudulent Trading Schemes claiming to be offered to Indian residents by FPI’s.

 

  • Securities and Exchange Board of India (Employees’ Service) (Amendment) Regulations, 2024 – Amendment in Regulation 6 And Schedule

  • Implementation Of E-Verification Scheme- 2021

The income tax Department has identified certain mismatches between third-party information on interest and dividend income, and the income tax Return (ITR) filed by taxpayers. In many cases, taxpayers have not even filed their ITR.

To reconcile the mismatch, an on-screen functionality has been made available in the Compliance portal of the e-filing website https://eportal.incometax.gov.in for taxpayers to provide their response. At present, the information mismatches relating to Financial Years 2021-22 and 2022- 23 have been displayed on the Compliance portal. The taxpayers are also being made aware of the mismatch through SMS and emails as per details available from the Department.

It is clarified that the said communication is not a notice.

In case the taxpayer has disclosed the interest income in the ITR under the line item ‘Others’ in the Schedule OS, she/he need not respond to the mismatch pertaining to the interest income. The said mismatch shall be resolved on its own and will be reflected in the portal as ‘Completed’.

 

  • CBDT Introduced National Savings Time Deposit (Amendment) Scheme, 2024

 

In exercise of the powers conferred by section 3A of the government savings Promotion Act, 1873 (5 of 1873), the central government hereby makes the following scheme further to amend the national savings time deposit scheme, 2019, namely: –

  1. This Scheme may be called the National Savings Time Deposit (Amendments) Scheme, 2024.
  1. It shall be deemed to have come into force on the 1st day of January 2024.
  2. In the National savings time deposit scheme, 2019 (hereinafter referred to as the said scheme), in paragraph 7: –

(a) in sub-paragraph 1(E), for the words, figures and letters, “on or after 1st day of July, 2023”, the words, figures, letters and brackets “between the 1st day of July 2023 and 31st day of December 2023 (both days inclusive)” shall be substituted;

(b) The rate of interest as specified in the Table below shall be applicable to the deposit made on or after the 1st day of January 2024 under the Scheme.

 

S.No. Category of Account Rate of Interest (per cent. Per annum)
1. One-Year 6.9
2. Two-Years 7.0
3. Three-Years 7.1
4. Five-Years 7.5

 

  • Sukanya Samriddhi Account (Amendment) Scheme 2024

In exercise of the powers conferred by section 3A of the Government Savings Promotion Act, 1873 (5 of 1873), the Central Government hereby makes the following Scheme further to amend the Sukanya Samriddhi Account Scheme, 2019, namely: –

 

  1. a) This Scheme may be called the Sukanya Samridhi account (Amendment) Scheme, 2024.
  2. b) It shall be deemed to have come into force on the 1st day of January 2024.
  3. In the Sukanya Samriddhi Account Scheme, 2019, in paragraph 5: –
  4. in sub-paragraph (1B), for the words, figures and letters, “on or after the 1st day of April, 2023”, the following words, figures, letters and brackets “between 1st day of April 2023 to 31st day of December 2023 (both days inclusive)” shall be substituted;
  5. The deposits made in the account on or after the 1st day of January 2024 and the balances at the credit of the account shall earn interest at the rate of 8.2 per cent. per annum.

 

  • The returns for AY 2020-21 which were not processed electronically can be processed by 31-01-2024, in order to claim refunds.

 

  1. The Central Board of Direct Taxes (Board) vide its orders under section 119 of the Income-tax Act, 1961 (Act), dated 16-10-2023 and 1-12-2023 on the captioned subject relaxed the time prescribed in second proviso to sub-section (1) of Section 143 of the Act. It was directed that all returns of income validly filed electronically up to Assessment Year 2020-21 with refund claims, which could not be processed under sub-section (1) of the Section 143 of the Act, and which had become time barred, should be processed by 31-1-2024, subject to the conditions/ exceptions specified therein.

 

  1. The matter has been re-considered by the Board in view of pending taxpayer grievances related to the issue of refunds. To mitigate the genuine hardship being faced by the taxpayers on this issue, Board, by virtue of its earlier orders under section 119 of the Act dated 16-10-2023 and 1-12-2023, supra, hereby further extends the time mentioned in the para no. 2 of these orders till 30-4-2024 in respect of returns of income validly filed electronically up to AY 2020-21. All other contents of the said orders u/s 119 of the Act will remain unchanged.

 

  1. This may be brought to the notice of all necessary compliance.

 

  • CBDT notifies income tax return forms for the Assessment Year 2024-25 well in

For AY 2024-25 Income Tax Forms (ITR Forms)-2, 3 and 5 have been notified. In addition to this ITR Form-6 has been notified for AY 2024-25. Earlier, ITR-1 and ITR-4 for the A.Y. 2024-25 were notified vide Notification No. 105 of 2023 dated 22.12.2023. All ITR Forms 1 to 6 have since been notified and will come into effect from 1st April 2024.

  • Section 90 of the Income tax Act, 1961- Double Taxation Relief- Agreement between Government of Republic of India and Government of Samoa for exchange of Information with respect of taxes.

Whereas an agreement between the Government of Republic of India and Government of Samoa for exchange of information with respect to taxes, was signed at Apia, Samoa on 12th day of March, 2020, the said Agreement came into force on the 12th day of September, 2023, being the date of the later of the notifications of the completion of the procedures required by the respective laws of the contracting states for entry into force of the said Agreement, in accordance with paragraphs 1 and 2 of Article 12 of the said Agreement,

 

Paragraph 2 of Article 12 of the said Agreement provides that the Agreement shall have effect forthwith after the date of entry into force.

 

Now, therefore, in exercise of the powers conferred by sub-section (1) of section 90 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies that all the provisions of the said Agreement, as annexed hereto, shall be given effect to in the Union of India

  • Scientific Research Institution/Association approved Scientific Research Expenditure Under Section 35(1)(Ii) of the Income Tax Act, 1961.

In exercise of the powers conferred by clause (ii) of sub-section (1) of section 35 of the Income-tax Act, 1961 (43 of 1961), read with Rules 5C and 5E of the Income-tax Rules, 1962, the Central Government hereby approves ‘M/s Prayoga, Bengaluru (PAN: AACTP9202D) as ‘Other Institution’ and Panjab University, Chandigarh under the category of ‘University, College or Other Institution’ for ‘Scientific Research’ for the purposes of clause (ii) of sub-section (1) of section 35 of the Income-tax Act, 1961, read with rules 5C and 5E of the Income-tax Rules, 1962.

This Notification shall apply with effect for Assessment Years 2024-25 to 2028-29.

 

  • Order has been passed regarding Remission and Extinguishment of Tax Demand Under Income Tax Act, 1961.

In Budget, there is a proposal to remit and extinguish the following claims to revenue, being tax -demands under which are outstanding as on 31st January, 2024 in respect of taxpayers/ assessee

Assessment Year/s (A.Y.) to which the entries of outstanding tax demands as on 31st January 2024 pertain Monetary limit of entries of outstanding tax demands which are to be remitted and extinguished.

                    (in Rupees)

Upto A.Y. 2010-11 Each demand entry up to Rs. 25,000/-
A.Y. 2011-12 to A.Y. 2015-16 Each demand entry up to Rs. 10,000/-

 

This is expected to give relief to 10 million taxpayers. However, the total waiver is limited to a maximum of Rs. 1,00,000 per taxpayer (PAN). If the aggregate of all outstanding demands exceeds Rs. 1,00,000 for a taxpayer or entity, the waiver will be limited to eligible demands totalling ₹1,00,000 or less, with the remaining demands still applicable. No refunds can be claimed against the demands being waived off.

Introduction of Consent Based Sharing of Information Furnished by Taxable Person through Notified System (Notification No. 6/2024 Date:22-2-24)

The Central Government, on the recommendations of the Council, hereby notifies: “Public Tech Platform for Frictionless Credit” as the system with which information may be shared by the common portal based on consent under

sub-section (2) of Section 158A of the Central Goods and Services Tax Act, 2017 (12 of 2017).

“Public Tech Platform for Frictionless Credit” means an enterprise-grade open architecture information technology platform, conceptualized by the Reserve

Bank of India as part of its “Statement on Developmental and Regulatory Policies” dated the 10th August, 2023 and developed by its wholly owned subsidiary, Reserve Bank Innovation Hub, for the operations of a large ecosystem of credit, to ensure access of information from various data sources digitally and where the financial service providers and multiple data service providers converge on the platform using standard and protocol driven architecture, open and shared Application Programming Interface (API) framework.

 

 

  • MCA operationalizes Central Processing Centre (CPC) for Centralized Processing of Corporate Filings

12 forms/applications will be processed at CPC from 16.02.2024; followed by other forms from 01.04.2024 onward. CPC will process applications in time-bound and faceless manner on the lines of Central Registration Centre (CRC) and Centralized Processing for Accelerated Corporate Exit (C-PACE).

 

 

  • Companies (Registration Offices And Fees) Amendment Rules, 2024 – Insertion Of Rule 10a

The Ministry of Corporate Affairs vide Notification No. G.S.R. 107(E) dated February 15, 2024 notified the Companies (Registration Offices and Fees) Amendment Rules, 2024, effective from February 16, 2024. A new rule, 10A, is added to the Companies (Registration Offices and Fees) Rules, 2014, establishing a Central Processing Center. This Center, under section 396 of the Companies Act, 2013, is tasked with examining all applications, e-Forms, or documents for approval or registration by the Registrar.

 

The Registrar at the Central Processing Center must make decisions within 30 days of filing, excluding cases requiring approval from higher authorities. This rule grants the Central Processing Center jurisdiction over various filings, including resolutions, share capital alterations, name change applications, and conversions of company types.

 

Multiple filings at once will be handled collectively by the Center, ensuring uniformity in processing. However, the rule clarifies that it does not grant the Center authority under section 399 of the Companies Act, leaving the Registrar with territorial jurisdiction to exercise those powers. This amendment aims to streamline the registration process and centralize decision-making for specified filings across India.

 

  • Relaxation of additional fees and extension of last date of filing of form no. LLP BEN-2 and LLP Form no. 4D under Limited Liability Partnership Act, 2008

LLPs may file Form No. LLP BEN-2 and LLP Form No.4D without paying any additional fees up to 15.05.2024.

The two forms shall be made available in version -3 for the filing purpose w.e.f 15.04.2024

 

 

  • Action against Paytm Payments Bank Ltd. under section 35A of the Banking Regulation Act, 1949

 

The Reserve Bank of India, in exercise of its powers under Section 35A of the Banking Regulation Act, 1949, had put certain business restrictions on Paytm Payments Bank Ltd (PPBL or the bank), vide Press Releases dated March 11, 2022 and January 31, 2024. Keeping in view the interest of customers (including merchants) of PPBL who may require a little more time to make alternative arrangements and the larger public interest, the Reserve Bank of India under section 35A of the Banking Regulation Act, 1949 in partial modification of the earlier Directions dated January 31, 2024 has issued certain directions.

 

  • Insolvency and Bankruptcy Board of India amends The Insolvency and Bankruptcy Board of India (Insolvency Resolution Process fr Corporate Persons) Regulations, 2016

The Insolvency and Bankruptcy Board of India notified the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Amendment) Regulations, 2024 (Amendment Regulations) on 15th February, 2024 to streamline the corporate insolvency resolution process.

 

  • Enhancing Transparency and Stakeholder Engagement in Liquidation Process

 

Circulation of progress reports to stakeholders is hereby directed that the liquidator shall also share the progress reports with the members of the Stakeholders’ Consultation Committee (SCC) after receiving a confidential undertaking.

Preparation of preliminary report

It is hereby directed that the liquidator shall seek suggestions/observations of the members of the SCC while preparing the Preliminary Report under regulation 13 and finalise the Preliminary Report after considering such suggestions/observations, and after that, submit it to the AA, Board and members of SCC.

Sharing of the final report, Form H, and process closure/dissolution order with IBBI

It is hereby directed that the liquidator shall submit a copy of Form H along with the final report filed before the Adjudicating Authority as per Regulation 45, and the order for process.

 

 

  • SEBI has issued an advisory against Fraudulent Trading Schemes claiming to be offered to Indian residents by FPI’s.

SEBI has cautioned investors of some fraudulent entities that were offering resident Indian investors trading opportunities that would be on a par with foreign funds. This is not possible under current rules and investors should be careful of such offers, as fraudsters were enticing victims through online trading courses, seminars, and mentorship programs in the stock market through messaging platforms like WhatsApp and Telegram, as well as live broadcasts. These fraudsters are “Posing as employees or affiliates of Sebi-registered FPIs, they coax individuals into downloading applications that purportedly allow them to purchase shares, subscribe to IPOs, and enjoy ‘institutional account benefits’, all without the need for an official trading or demat account. There is no provision for an ‘institutional account’ in trading, and direct access to the equities market requires investors to have a trading and demat account with a Sebi-registered broker/trading member and DP respectively. Sebi has not granted any relaxations to FPIs regarding securities market investments by Indian investors.” Sebi urged investors to exercise caution and to steer clear of any social media messages, WhatsApp groups, Telegram channels or apps claiming to facilitate stock market access through FPIs or FIIs registered with it.

 

  • Securities and Exchange Board of India (Employees’ Service) (Amendment) Regulations, 2024 – Amendment in Regulation 6 And Schedule

Securities and Exchange Board of India (Employees’ Service) (Amendment) Regulations, 2023 modifies the Securities and Exchange Board of India (Employees’ Service) Regulations, 2001. In the Schedule of the 2001 regulations, in the Table, column 3, there is an insertion of additional qualification requirements for officers in the Legal Stream in Grade ‘A.’ The new requirement specifies that, in addition to the qualifications already specified for the Legal Stream, two years of post-qualification experience as an Advocate (including as an associate in an Advocate’s or Solicitor’s Office or Law Firm) after being enrolled under the Advocates Act, 1961, is a desirable qualification.

 

 

Disclaimer: Information in this note is intended to provide only a general update of the subjects covered. It is not intended to be a substitute for detailed research or the exercise of professional judgment. KNM accepts no responsibility for loss arising from any action taken or not taken by anyone using this publication. Updates are for   the period till 28.02.2024

 

Executive Summary

Income Tax

CBDT extends the Time Limit for processing validly filed income tax returns with refund claims up to assessment year 2017-18 until January 31, 2024.
➢ Guidelines Prescribed by CBDT for withholding Tax u/s 194-O.
➢ CBDT has notified ITR-1 and ITR-4 for Assessment Year 2024-25
➢ Central Government notifies Godavari River Management Board of Hyderabad for exemption in exercise of the powers conferred by clause (46) of section 10 of the Income-tax Act, 1961.
➢ Sovereign Gold Bond Scheme 2023-24 (Series III) will be opened for subscription during the period December 18-22, 2023.
➢ PowerGrid Infrastructure Investment Trust to be recognized as a mode for continuity of tax exemption for Charitable Trust and Institution
➢ The CBDT vide Notification No. 106/2023 dated December 27, 2023, notified an exemption to Ravenna Investments Holding B.V for pension funds under section 10(23FE) of the Income Tax Act, 1961.
➢ The government has revised the rate of Interest for the Small Savings Scheme with the approval of the competent authority.
➢ CBDT has notified the Income-tax (Twenty-Ninth Amendment) Rules, 2023, to amend Rules 10TA and 10TD for revising the definition of intra-group loans and circumstances in which they are treated as Safe Harbour.

Goods And Service Tax (GST)

➢ Extension of due date of GSTR 3B for the month of November 2023.
➢ Government issued time limit for issuing order under sec 73.
➢ GSTN issues advisory for pilot project of biometric-based Aadhaar authentication and document verification
➢ Advisory related to amnesty for taxpayer who missed to file appeal for the order passed on or before 31st march 2023.
➢ GSTN has given advisory on Two factor authentication (2FA).

Companies Act 2013/ Other Laws

➢ Mandatory Pre-Requisite For E-filing Matters in NCLT
➢ Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2023
➢ RBI modifies MSME lending norms
➢ RBI issues revised instructions for inoperative accounts/unclaimed deposits in Banks
➢ Employees’ State Insurance (Central) Amendment Rules, 2023
➢ Filing of Announcements Related to Loss of Share Certificate, Issue of Duplicate Share, Certificate Closure of Trading Window and CIRP- NSE
➢ SEBI (Listing Obligations and Disclosure Requirements) (Seventh Amendment) Regulations, 2023
➢ SEBI (Issue of Capital and Disclosure Requirements) (Third Amendment) Regulations, 2023

INCOME TAX

➢ CBDT extends the Time Limit for Processing Validly Filed Income Tax Returns with Refund Claims up to Assessment Year 2017-18 until January 31, 2024

Central Board of Direct Taxes (Board) vide its order under section 119 of the Income-tax Act,1961 dated July 05, 2021 and September 30, 2021 on the captioned subject relaxed the timeframe prescribed in second proviso to subsection (1) of Section 143 of the Act. It was directed that all validly filed returns up to Assessment Year 2017-18 with refund claims, which could not be processed under section 143(1) of the Act and which had become time barred, should be processed by November 30, 2021, subject to the conditions exceptions specified therein.
The matter has been re-considered by Board in view of pending taxpayer grievances related to issue of refund. To mitigate the genuine hardship being faced by the taxpayers on this issue, Board, by virtue of its power under section 119 of the Act and in partial modification of its earlier order under section 119 of the Act dated July 05, 2021 and September 30, 2021, supra, hereby further extends the time frame mentioned in the para no. 2 of the order dated September 30, 2021 till January 31, 2024 in respect of returns of income validly filed electronically. All other contents of the said order u/s 119 of the Act dated July 05, 2021 will remain unchanged.

Above relaxation shall not be applicable to the following returns:
(i) returns selected in scrutiny
(ii) returns remain unprocessed, where either demand is shown as payable in the return or is likely to arise after processing it
(iii) returns remain unprocessed for any reason attributable to the assessee.

➢ Guidelines Prescribed by CBDT for withholding Tax u/s 194-O.

The guidelines contemplate following situations and explains in detail how section 194- O would operate in such cases, including illustrations.
• In case of a platform or network ( e.g., the open network for digital commerce) wherein multiple ECOs are participating in a single transaction of sale of goods / services through the platform / network. For example, there could be a buyer side ECO involved in buyer side functions and a seller side ECO involved in seller side functions.
Example 1 – Where the seller-side ECO is not the actual seller of goods / services. In this situation, withholding of tax u/s 194-O is required to be done by the seller side ECO who finally makes the payment to the seller. The seller-side ECO would file the requisite withholding tax return in Form 26Q and issue certificate to the seller in Form 16A.
Example 2 – Where the seller-side ECO is the actual seller of goods / services. In this situation, withholding of tax u/s 194-O is required to be done by the ECO which finally makes the payment to the seller for goods / services sold, which in the case mentioned below is ECO-2. The ECO 2 would file the requisite withholding tax return in Form 26Q and issue certificate to the seller in Form 16.
• ECOs may be levying convenience fees or charging commission for each transaction and seller might levy logistics and delivery fees for the transaction. Payments may also be made to the platform or network provider for facilitating the transaction. Whether these would form part of ‘gross amount’ for the purpose of withholding tax u/s 194-O of the Act?
• How will GST, various state levies and taxes other than GST (such as Value Added Tax / Sales tax / Excise duty / Central Sales Tax) be treated when calculating ‘gross amount’ of sale for the purpose of section 194-O?
• How will adjustment for purchase -returns take place?
• How will discounts given by seller as an E -Commerce Participant or by any of the multiple ECOs be treated while calculating ‘gross amount’ for the purpose of section 194-O?

➢ CBDT has notified ITR-1 and ITR-4 for Assessment Year 2024-25
CBDT has notified ITR1 SAHAJ and ITR4 SUGAM for Assessment Year 2024-25 for filing return for Financial Year 2023-24.

➢ Central Government notifies Godavari River Management Board of Hyderabad for exemption in exercise of the powers conferred by clause (46) of section 10 of the Income-tax Act, 1961.
Central Government in pursuance of section 85 of the Andhra Pradesh Re-Organization Act, 2014, in respect of the following specified income arising to the said Authority, as follows:
(a) Grants/Subsidies received from CG and from the SG of Andhra Pradesh and Telangana and
(b) Interest from bank deposits, including savings account.

Above notification shall be effective subject to the conditions that Godavari River Management Board, Hyderabad-
(a) shall not engage in any commercial activity;
(b) activities and the nature of the specified income shall remain unchanged throughout the financial years; and
(c) shall file return of income in accordance with the provision of clause (g) of sub- section (4C) of section 139 of the Income-tax Act, 1961.
This notification shall be deemed to have been applied for assessment years 2020-21 to 2023-2024.

➢ Sovereign Gold Bond Scheme 2023-24 (Series III) will be opened for subscription during the period December 18-22, 2023.
The Gold Bonds issued under this Scheme may be held by a Trust, HUFs, Charitable Institution, University or by a person resident in India, being an individual, in his capacity as such individual, or on behalf of minor child, or jointly with any other individual.

The issue price of the Bond during the subscription period shall be ₹6,199 per gram . The Government of India in consultation with the Reserve Bank of India has decided to allow discount of ₹50 per gram from the issue price to those investors who apply online and the payment is made through digital mode. For such investors the issue price of Gold Bond will be ₹6,149 per gram of gold.

Interest on the Gold Bonds shall commence from the date of issue and shall be paid at a
fixed rate of 2.50 percent per annum on the nominal value of the bond and the interest shall be payable in half-yearly rests and the last interest shall be payable along with the principal on maturity and these Gold Bonds shall be repayable on the expiration of eight years from the date of the issue of the Bonds.

➢ PowerGrid Infrastructure Investment Trust to be recognized as a mode for continuity of tax exemption for Charitable Trust and Institution

Charitable Trusts / Institutions enjoying Income-tax exemption u/s 11(5) of the Income- tax Act are required to invest their surplus funds in prescribed modes, such as savings certificates, post office savings, deposit in an account with a scheduled bank or co- operative society, units of Unit Trust of India, deposit in any public sector company of India, etc. the CBDT has added investment in units of PowerGrid Infrastructure Investment Trust as one of the recognised modes for continuity of tax exemption for such trusts / institutions.

➢ The CBDT vide Notification No. 106/2023 dated December 27, 2023, notified an exemption to Ravenna Investments Holding B.V for pension funds under section 10(23FE) of the Income Tax Act, 1961.

The notified funds are eligible to claim an exemption for eligible investments made in India on or before March 31, 2024, subject to following conditions.

i. The assessee shall file a return of income, for all the relevant previous years falling within the period beginning from the date in which the said investment has been made and ending on the date on which such investment is liquidated.

ii. the assessee shall furnish along with such return a certificate in Form No. 10BBC in respect of compliance with the provisions of clause (23FE) of section 10 of the Act.

iii. the assessee shall intimate the details in respect of each investment made by it in India during the quarter within a period of one month from the end of the quarter in Form No. 10BBB.

iv. the assessee shall maintain a segmented account of income and expenditure in respect of such investment which qualifies for exemption under clause (23FE) of section 10 of the Act;

v. the assessee shall continue to be regulated under the laws of the Government of the Netherlands;

vi. the assessee shall not have any loans or borrowings directly or indirectly, for the purposes of making investment in India and

vii. the assessee shall not participate in the day-to-day operations of investee but the monitoring mechanism to protect the investment with the investee shall not be considered as participation in the day-to-day operations of the investee and

viii. any other conditions as may be prescribed.
Violation of any of the conditions as stipulated in clause (23FE) of section 10 of the Act and this notification shall render the assessee ineligible for the tax exemption.

➢ Government has revised the rate of Interest for Small Savings Scheme with the approval of competent authority.
The rates of interest on various Small Savings Schemes for the fourth quarter of financial year 2023-24 starting from 1 st January, 2024 and ending on 31 st March, 2024 have been revised as detailed below:

 

➢ CBDT has notified the Income-tax (Twenty-Ninth Amendment) Rules, 2023, to amend Rules 10TA and 10TD for revising the definition of intra-group loans and circumstances in which they are treated as Safe Harbour.

Intra-group loan definition has been revised to include loans extended to “Associate Enterprise” rather than wholly owned subsidiaries and the condition for the loans to be advanced must be sourced in Indian Rupees has been omitted. The updated definition of intra-group loan is now stated as follows:

Intra-group loan means a loan advanced to an associated enterprise being a non-resident, where the loan

(i) is not advanced by an enterprise, being a financial company including a bank or a financial institution or an enterprise engaged in lending or borrowing in the normal course of business, and

(ii) does not include a credit line or any other loan facility which has no fixed term for repayment;
Rule 10TD has been amended to replace the conditions for safe harbor in the event of the advancement of intra-group loans denominated in a foreign currency. The reference to “CRISIL” credit rating has been omitted from Rule 10TD. Thus, the credit rating of any other entities can be used while determining Safe Harbour.

➢ As per Notification No. 56/2023 Dated 28 th December, 2023 – The Government, on the recommendations of the Council, hereby, extends the time limit specified under sub- section (10) of section 73 for issuance of order under sub-section (9) of section 73 of the said Act, for recovery of tax not paid or short paid or of input tax credit wrongly availed or utilized, relating to the period as specified below, namely: –

• For the financial year 2018-19, up to the 30th day of April, 2024;
• For the financial year 2019-20, up to the 31st day of August, 2024

➢ As per Notification NO. 55/2023 Dated 20 th December, 2023
The Commissioner, on the recommendations of the Council, hereby extends the due date for furnishing the return in FORM GSTR-3B for the month of November, 2023 till the twenty-seventh day of December, 2023, for the registered persons whose principal place of business is in the districts of Chennai, Tiruvallur, Chengalpattu and Kancheepuram in the state of Tamil Nadu

.
➢ The GSTN on has issued an advisory 1 st December 2023 for applicants of GST registration in the state of Andhra Pradesh, for pilot project of biometric-based Aadhaar authentication and document verification.
The functionality now also provides for the document verification and appointment booking process Once the applicant has applied to Form GST REG- 01, it will receive an email either of the following:

• A link for OTP based Aadhaar authentication, or
• A link for booking an appointment with GST Suvidha Kendra (GSK) for authentication/verification
If the applicant receives the link for OTP-based Aadhaar authentication as per above,

He/she can proceed with the application as per the existing process. however, If the applicant receives the link for booking appointment with GSK, he / she will be required to book the appointment to visit the designated GSK, using the link provided in the e-mail. Once the applicant gets the confirmation of appointment through e-mail, he / she will be able to visit the designated GSK as per the chosen schedule.

At the time of the visit of GSK, the applicant is required to carry the following details.
• Copy of confirmation e -mail (for booking of appointment)
• Details of jurisdiction as mentioned in the e -mail
• Aadhaar number
• Original documents that were uploaded with the application. The biometric authentication and document verification will be done at the GSK, for the individuals as per the GST application Form REG-01.

➢ The GSTN has issued the following advisory on 28 November 2023 the GST Council, in its 52nd meeting held in October 2023, recommended granting amnesty to taxpayers who could not file an appeal (u/s 107 of the CGST Act, 2017), against the demand order (u/s 73 or 74 of the CGST Act, 2017) passed on or before March 31, 2023, or whose appeal against the said order was rejected due to not being filed within the specified time limit.

• In compliance with this recommendation the government has issued notification No. 53/2023 on November 2, 2023.

• Considering the pre-requisite to deposit the admitted amount of tax, interest and penalty, it is the responsibility of the taxpayer to select the appropriate ledgers and make the payment correctly (the GST portal allows taxpayers to choose the correct mode of payment – electronic credit / cash ledger). An appeal filed without proper payment of tax, interest or penalty, may be rejected or dealt with as per the legal provisions

• In case taxpayer has already filed an appeal and wants it to be covered by the benefit of amnesty scheme, it would be required to make the differential payment to comply with Notification no. 53/2023. The payment should be made against the demand order using the ‘Payment towards demand’ facility available on the GST portal. The navigation step for making this payment is: Login >> Services >> Ledgers >> Payment towards Demand.

• Taxpayers who have previously filed an appeal, but it was rejected as time barred in APL-02 by the appellate authority, are entitled to refile the appeal. In case taxpayer faces any issue in re-filing of appeal, a ticket shall be raised on the grievance redressal portal (https://selfservice.gstsystem.in). The taxpayer shall select the category ‘Amnesty Scheme’ and the sub-category ‘Amnesty scheme- Issue in appeal filing’ while raising a ticket.

• If the appellate authority has issued a rejection order in APL-04 due to the application for appeal being time-barred, the taxpayer has to approach the respective appellate authority office well in advance to comply with the dates in the said notification. The appellate authority after checking the eligibility of the taxpayer for the amnesty scheme will forward the case to GSTN through the state nodal officer.

• For the APL 04 issued cases, no direct representations will be entertained by GSTN or through the grievance redressal portal. APL 04-issued cases have to be compulsorily forwarded through the state nodal officer.

• Post receiving the case from the state nodal officer, GSTN will enable the taxpayer to file an appeal against the concerned order.

➢ GSTN has issued an advisory on 1 December 2023 for implementation of 2FA on the GST portal nationwide starting 1 December 2023 onwards.
The 2FA helps in strengthening the login security in the GST portal. The initial rollout of 2FA has been successfully conducted in Haryana. In the 1st phase, 2FA will be implemented in Punjab, Chandigarh, Uttarakhand, Rajasthan and Delhi. The 2nd phase will include the remaining states across India. Taxpayers would need to provide a one-time password (OTP) post entering user ID and password. The OTP will be delivered to the primary authorized signatory’s mobile phone number and email address. Accordingly, taxpayers have been advised to keep their email addresses and mobile numbers of authorized signatories updated on the GST portal for receiving the OTP communication.

Companies Act, 2013/LLP Act, 2008

➢ Mandatory Pre-Requisite For E-filing Matters in NCLT

The National Company Law Tribunal has informed that all Litigants/Advocates/parties have to follow the pre-requisite outline on formatting, proper book marking Petition/Applications/Pleadings/Documents, electronic signature using e-sign, retention of originals, etc. at the time of e-filing in NCLT portal with effect from January 01, 2024.

RBI

➢ Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2023

The Reserve Bank of India has introduced Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2023 in supersession of Notification No. FEMA 14(R)/2016-RB dated May 02, 2016.
The core of the regulations addresses how residents in India can make or receive payments from individuals outside the country. It emphasizes the role of Authorised Banks and Authorised Persons. The provision allows residents to seek the Reserve Bank’s permission for specific transactions under the Act.

➢ RBI modifies MSME lending norms

The RBI has notified amendment in Paragraph 2.2 of the Master Direction- Lending to Micro, Small & Medium Enterprises (MSME) Sector. Now, it has been directed that for Priority Sector Lending (PSL) purposes, banks shall be guided by the classification recorded in the Udyam Registration Certificate (URC). All the MSMEs are required to register online on the Udyam Registration portal and obtain a ‘Udyam Registration Certificate’.

➢ RBI issues revised instructions for inoperative accounts/unclaimed deposits in Banks

The RBI issued revised guidelines w.r.t. inoperative accounts /unclaimed deposits in banks. The central banks called for steps to trace the customers of inoperative accounts or unclaimed deposits including their nominees or legal heirs for re-activation of accounts, settlement of claims, or closure. RBI also stressed a periodic review and measures to prevent fraud in such accounts. No charges must be levied for the activation of inoperative accounts.

LABOUR LAW

➢ Employees’ State Insurance (Central) Amendment Rules, 2023

The Ministry of Labour of Employment has issued a notification to further amend Employees’ State Insurance (Central) Rules, 1950 wherein, in Rule 29(2) Proviso, for the words “rupees five crores”, the words “rupees twenty–five crores” shall be substituted.

SEBI
➢ Filing of Announcements Related to Loss of Share Certificate, Issue of Duplicate Share, Certificate Closure of Trading Window, and CIRP- NSE

The National Stock Exchange of India has advised the listed entity to file the disclosures intimating the following announcements under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘SEBI LODR’) will be made available in XBRL format. with from December 09, 2023:

1. Loss of Share Certificate/Issue of Duplicate Share Certificate
2. Closure of Trading Window
3. Corporate Insolvency Resolution Process.

➢ SEBI (Listing Obligations and Disclosure Requirements) (Seventh Amendment) Regulations, 2023

The Securities and Exchange Board of India has amended the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

➢ SEBI (Issue of Capital and Disclosure Requirements) (Third Amendment) Regulations, 2023

The Securities and Exchange Board of India has amended the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018.

Monthly Compliance Calendar

 

 

 

 

 

Executive Summary

Income Tax

  • Section 115BAA of the Income-tax Act, 1961 allows the option to follow-concessional tax regime for domestic companies – Central Board of Direct Taxes(CBDT) condones delay in filing of Form 10-IC for Assessment Year (AY) 2021-22, till 31 January 2024.
  •  Direct Tax collections up to 9th October 2023 show gross collections are at. 11.07 lakh crore is 17.95% higher than the gross collections for the comparable period of last year.
  • Angel tax under section 56(2) (vii) of the Act shall not apply to Startup companies that have been recognized by the DPIIT.
  • CBDT amended 11UA rules for the valuation of equity shares and compulsory convertible preference shares (CCPS)
  • An audit report in the case of a fund or trust or institution or any university or other educational institution or any hospital or other medical institution, under clause (b)of the tenth proviso to clause (23C) of section 10, is required to be furnished inForm No. 10B / Form No. 10BB.
  • CBDT relaxed the timeframe prescribed in the second proviso to sub-section (1) of Section 143 of the Income Tax Act 1962.
  • Amendment in Income-tax Rules relating to obtaining & quoting PermanentAccount Number (PAN).
  • New reporting requirement (quarterly) in Form 15CD prescribed for outbound remittances to be made by the Unit of an International Financial Services Centre.
  • CBDT prescribes Form 10-IFA be submitted by taxpayers before the due date of filing Income-tax Return (ITR) u/s 115BAE by New Domestic manufacturing companies.
Goods & Services Tax (GST) & Customs
  • Addition of Supplies under section 15 of CGST Act,2017.
  • Special procedure for registration of Online Money Gaming Providers under GST.
  • Special drive against malpractices of claiming fake ITC.
  • Addition of services included in Exempt Services.
  • Restriction on refund of Unutilized ITC.
  • Changes in the definition of E-Commerce Operators.
  • Revision in prescribed GST rates.
Companies Act 2013/ Other Laws
  • Every Co. must designate a person to furnish information to ROC w.r.t beneficial interest in shares of the company.
  • MCA mandates Private Cos. except Small Cos. to issue securities only in De-platform within 18 months from Mar 31, 2023.
  • MCA amends LLP norms; mandates declaration of beneficial interest and keeping of register for partners.
  • Companies (Prospectus and Allotment of Securities) Second Amendment Rules,2023.
  • Ministry of Corporate Affairs notifies Companies (Incorporation) Third Amendment Rules, 2023.
  • Integration of MCA with National Single Window System.
  • RBI mandates private banks to have 2 whole-time directors, including MD & CEO, on their Boards.
  • RBI issues Master Direction on Interest Rate on Deposits.
  • SEBI extends the suspension of derivatives trade in 7 agro commodities by one more year i.e. till Dec 20, 2024.
  • IBBI issues a discussion paper on Strengthening the liquidation process.
  • Delhi Minimum Wages Notification (October 2023)

Income Tax

  • Section 115BAA of the Income-tax Act, 1961 allows the option to follow the concessional tax regime for domestic companies – Central Board of Direct Taxes (CBDT) condones delay in filing of Form 10- IC for Assessment Year (AY) 2021-22, till 31 January 2024

On consideration of the matter, to avoid genuine hardship for the domestic companies in exercising the option u/s 115BAA of the Act, CBDT in exercise of the powers conferred under section 119(2)(b) of the Act, hereby directs that:-

The delay in filing Form No. 10-IC as per Rule 21AE of the Rules for the previous year relevant to A.Y. 2021-22 is condoned in cases where the following conditions are satisfied:

(I) The return of income for the relevant assessment year has been filed on or before the due date specified under section 139(1) of the Act;

(ii) The assessee company has opted for taxation u/s 115BAA of the Act in item (e) of “Filing Status” in “Part A-GEN” of the Form of Return of Income ITR-6; and

(iii) Form No. 10-IC is filed electronically on or before 31.01.2024 or 3 months from the end of the month in which this Circular is issued, whichever is later.

  • Direct Tax collections up to 9th October 2023 show that gross collections are at Rs. 11.07 lakh crore which is 17.95% higher than the gross collections for the comparable period of last year.

Direct Tax collection, net of refunds, stands at Rs. 9.57 lakh crore which is 21.82% higher than the net collections for the comparable period of last year. This collection is 52.50% of the total Budget Estimates of Direct Taxes for FY 2023-24.

  • Angel tax under section 56(2) (vii) of the Act shall not apply to Startup Companies that have been recognized by the DPIIT and fulfill some mentioned conditions

Central Board of Direct Taxes (CBDT) issued a notification notifying that the provisions of clause (vii) of sub-section (2) of section 56 of the Act shall not apply to consideration received by a company for the issue of shares that exceed the face value of such shares, if the said consideration has been received from a person, being a resident, by a company which fulfills the following conditions

(i) Where The case of such a Startup Company is selected under scrutiny on the single issue of applicability of section 56 (2) (vii) of the Act, with no verification on such issues shall be done by the Assessing Officers during the proceedings u/s 143(2) or u/s 147/143(2) of the Act and contention of such recognized Startup Companies on the issue will be summarily accepted.

(ii) Where The case of such a Startup Company is selected under scrutiny with multiple issues including the issue u/s 56 (2) (vii) of the Act, the issue of applicability of section 56(2) (vii) of the Act shall not be pursued during the assessment proceedings of such a Startup Company. Due procedure be followed about other issues for which the case has been selected.

  • CBDT amended 11UA rules for the valuation of equity shares and compulsory Convertible preference shares (CCPS)

CBDT has notified the new Rule 11UA with the following significant changes viz-a-viz the draft amendment issued in May 2023 for public comments:

Bringing parity between the valuation of unlisted equity shares and CCPS (except for the NAV method which applies only to unlisted equity shares).

Clarifying the ambiguity on the window period of 90 days for the price matching facility There is no change in the safe harbor tolerance limit of 10% proposed in May 2023.

The new Rule 11UA is applicable from 25 September 2023 onwards. Applicability of the new Rule on shares issued between 1 April 2023 to 24 September 2023 may be disputed. Further, the new Rule may be disputed on some other grounds as well, such as why the 5 new methods of valuation are restricted to investment by non-residents only. This may create practical challenges and discrimination for resident investors even if the issue price is the same for both categories of investors.

  • Audit report in the case of a fund or trust or institution or any university or other educational institution or any hospital or other medical institution,  under clause (b) of the tenth proviso to clause (23C) of section 10, is required to be furnished in Form No. 10B / Form No. 10BB.

Representations have been received regarding difficulties in filling details of persons who have made a ‘substantial contribution to the trust or institution’ by examining this matter it is hereby stated that for the purposes of providing details in (i) Form No. 10B in the Annexure, in row 41; and (ii) Form No. 10BB in the Annexure, in row 28, for the assessment year 2023-24:

(i) The aforesaid details (that is, of persons making substantial contributions) may be given for those persons whose total contribution during the previous year exceeds fifty thousand rupees;

(ii) details of relatives of such person, as referred to in (a) above may be provided, if available.

(iii) details of concerns in which such person, as referred to in (a) above, has substantial interest may be provided, if available.

  • CBDT relaxed the timeframe prescribed in the second proviso to sub-section (1) of Section 143 of the Income Tax Act 1962

Central Board of Direct Taxes (Board) vide its order under section 119 of the Income-tax Act, 1961 directed that all validly filed returns up to Assessment Year 2017-18 with refund claims, which could not be processed under sub-section (1) of the Section 143 of the Act and which had become time-barred, should be processed by 30-11-2021. The matter has been re-considered by the Board in view of pending taxpayer grievances related to issue of refund. To mitigate the genuine hardship being faced by the taxpayers on this issue,  Board, by virtue of its power under section 119 of the Act and in partial modification of its earlier order under section 119 of the Act hereby further extends the time frame dated 30-9-2021 till 31-1-2024 in respect of returns of income validly filed electronically.

  • Amendment in Income-tax Rules relating to obtaining & quoting Permanent Account Number (PAN)

The following amendment have been made in Prescribed rules -:

(i) Rule 114B of Income tax Rules, 1962 -:

(a) A company or partnership firm (including limited liability partnership) is not required to submit Form 60

(b) A foreign company who, does not have any income chargeable to tax in India; and does not have a permanent account number, and enters into any transaction referred to at Sl. No. 2 or 12 of the Table, in an IFSC banking unit, shall make a declaration in Form No. 60

(ii) In the principal rules, in rule 114BA, the rule lists following additional situations in which a person is not required to obtain PAN:

(a) where the person, making the deposit or withdrawal of an amount otherwise than by way of cash,

(b) Opening a current account not being a cash credit account as per clause of this rule, is a non-resident (not being a company) or a foreign company;

(c) the transaction is entered into with an IFSC banking unit; and

(d) such non-resident (not being a company) or the foreign company does not have any income chargeable to tax in India.

(iii) In the principal rules, in rule 114BB, after the proviso, the following shall be inserted, namely: – “Provided further that the provisions of this sub-rule shall not apply in a case

(a) where the person, making the deposit or withdrawal of an amount otherwise than by way of cash or opening a current account not being a cash credit account, is a non-resident (not being a company) or a foreign company;

(b) the transaction is entered into with an IFSC banking unit, and such non-resident (not being a company) or the foreign company does not have any income chargeable to tax in India.

  • New reporting requirement (quarterly) in Form 15CD prescribed for outbound remittances to be made by Unit of an International Financial Services Centre

With effect from 1 January 2024 onwards Unit in an IFSC is;

(a) Exempted from the requirement to submit Form 15CA (Part D) if the payment is not taxable in India.

(b) Required to submit information in new Form 15CD online every quarter in respect of outbound remittances to non-residents.

(c) Form 15CD has been duly prescribed by CBDT and contains details such as PAN, Tax Deduction Account No. (TAN), status of the Unit, contact details, details of the remittance, etc.

  • CBDT prescribes Form 10-IFA to be submitted by taxpayer before due date of filing Income-tax Return (ITR) u/s 115BAE by New Domestic Manufacturing Companies.

CBDT has prescribed Form 10-IFA being the application form required to be submitted by a co-operative society electronically, in order to be entitled for the lower tax rate prescribed u/s 115BAE.

Goods & Services Tax

As per Notification No.11/2023 Dated  29/09/2023  CG on the recommendation of the council hereby makes the further amendment in Notification No. 1/2017, Dated 28/06/2023

  • In Schedule IV, S.No.227A defines “Specified Actionable claims “in section 2(102A) of the CGST Act, 2017 means the actionable claim involved in or by way of—

(i) betting;

(ii) casinos;

(iii) gambling;

(iv) horse racing;

(v) lottery; or

(vi) online money gaming;

  • S.no. 228 and 229 and entries related to them shall be omitted.
  1. This notification shall come into force on the 1st day of October, 2023.

As per Notification No. 49/2023 Dated 29-09-2023

The Central Government, on the recommendations of the Council, notifies the

following supplies under section 15(5) of the Central Goods and Services Tax Act,

2017namely: —

  • supply of online money gaming;
  • supply of online gaming, other than online money gaming; and
  • supply of actionable claims in casinos.

This notification shall come into force on the 1st day of October, 2023.

Goods & Services Tax`

As per Notification No. 50/2023 Dated 29-09-2023

The Central Government, on the recommendations of the Council makes the following amendment in Notification no. 66/2017 -Central Tax, Dated 15/11/2017 –

In the section 148 of the Central Goods and Services Tax Act, 2017, with effect from the 1st October, 2023, after the words and figures “composition levy under section 10 of the said Act”, the words and figures “, other than the registered person making supply of specified actionable claims as defined in clause (102A) of section 2 of the said Act,” shall be inserted.

As per Notification No. 51/2023 Dated 29-09-2023

The following amendments have been made in prescribed rules under CGST rules 2017-

  • Every registered person either providing online money gaming from a place outside India to a person in India, shall file return in FORM GSTR-5A on or before the twentieth day of the month succeeding the calendar month or part thereof.
  • Form GST REG-10, shall be filled by “Application for registration of person supplying online money gaming from a place outside India to a person in India or for registration of person supplying online information and database access or retrieval services from a place outside India to a non-taxable online recipient in India.”
  • . The registration shall be granted in Form GST REG-06, subject to prescribed conditions and restrictions—
  • The value of supply includes-Supply of online money gaming and supply of online information and database access or retrieval services, or both.
  • In online money gaming, the tax invoice issued by the registered person to an unregistered person shall contain name of the State which shall be considered as the address on record of the recipient.
  • A person supplying online money gaming from a place outside India to a person in India may make the deposit in electronic cash ledger through international money transfer through Society for Worldwide Inter-bank

Financial Telecommunication payment network.`

As per Circular No. 24/2023 Dated 30-09-2023

It has been notified that all goods or services may be exported on payment of integrated tax on which the supplier of such goods or services may claim the refund of tax so paid. To implement above restrictions imposed on export of goods or services on payment of IGST, DG Systems CBIC has developed a backend functionality to restrict IGST refund route for the goods, changes have been made in the system of filing of shipping bills and during amendment, with respect to the commodities mentioned in the said notification. Since IGST refund is paid at shipping bills level, the checks have been enabled at shipping bill level.

As Per Notification No. 12/2023 Dated 19-10-2023 The CG on the recommendation of council makes the following further amendments in No. 11/2017-Central Tax (Rate), Dated 28-06-2017,

  • In the said notification, — “Provided further that where the supplier of input service in the same line of business charges central tax at a rate higher than 2.5%, credit of input tax charged on the input service in the same line of business in excess of the tax paid or payable at the rate of 2.5%, shall not be taken. The words “totalisator or a license to”, the words “licensing a” shall be substituted;

This notification shall come into force with effect from the 20th day of October, 2023.

As per Notification No. 13/2023 Dated 19-10-2023 The CG on recommendation of the council makes the following further amendments in power to grant exemption from tax – CGST exempt services amendment in notification no. 12/2017-central tax, dated 28-6-2017, define–

  • Services provided to a Governmental Authority by way of —

(a) water supply;

(b) public health;

(c) sanitation conservancy;

(d) solid waste management; and

(e) slum improvement and upgradation.

  • against serial number 6,7,8,9 in column (3), after the words “Department of Posts”, the words and brackets “and the Ministry of Railways (Indian Railways)” shall be inserted;

This notification shall come into force with effect from the 20th day of October, 2023

As per Notification No. 14/2023 Dated 19-10-2023 The CG on recommendation of the council makes the further amendment in levy and collection of tax – reverse charge on certain specified supplies of services – amendment in notification no. 13/2017-central tax (rate), dated 28-6-2017,

  • In the said notification, “Department of Posts” – “and the Ministry of Railways (Indian Railways)” and the words “Services supplied by the Central Government”, “[excluding the Ministry of Railways (Indian Railways)]” shall be inserted.

This notification shall come into force with effect from the20th October, 2023.

As per Notification No. 15/2023 Dated 19-10-2023 The CG on the recommendation of the council makes the following amendments in Notification No. 15/2017-Central Tax (Rate), dated 28-06-2017,

  • The refund of unutilized ITC now restricted to only those construction services of complex, building or a part thereof, which are intended for sale to a buyer and where the amount charged includes the value of land or undivided share in land.

This notification shall come into force with effect from the 20th day of October, 2023.

As per Notification No. 16/2023 Dated 19-10-2023 The Central Government, on the recommendations of the Council, hereby makes the following further amendments in the Notification No. 17/2017- Central Tax (Rate), dated 28-6-2017

  • In the said Notification- the words “omnibus or any other motor vehicle”, the words “or any other motor vehicle except omnibus” shall be substituted; and also inserted- services by way of transportation of passengers by an omnibus except where the person supplying such service through electronic commerce operator is a company.”;

This notification shall come into force with effect from the 20th day of October, 2023`

As per Notification No. 17/2023 Dated 19-10-2023 and Notification no.  18/2023, Dated 19-10-2023

  • GST on molasses reduced from 14% to 2.5%
  • GST on spirits for industrial use taxable @ 9%
  • GST on food preparation of millet flour in powder form containing at least
  • 70% millets by weight:
  • 2.5% pre-packaged and labelled form
  • 0% other than pre-packaged and labelled form

This notification shall come into force with effect from the 20th day of October, 2023.

As per Notification No. 19/2023 Dated 19-10-2023 The Central Government on recommendation of the council makes the following amendment in levy and collection of tax – reverse charge on certain specified supplies of goods – amendment in Notification No. 4/2017-central tax, dated 28-6-2017

The following entry shall be substituted “Central Government [excluding Ministry of Railways (Indian Railways)], State Government, Union territory or a local authority.”

This notification shall come into force with effect from the 20th day of October, 2023.

As per Notification No. 20/2023 Dated 19-10-2023 The Central Government on the recommendation of the council makes the further amendment in notification no. 5/2017-central tax (rate), dated 28-6-2017 refund of tax – notified supplies of goods in respect of which no refund of unutilized input tax credit shall be allowed where rate of tax on input is higher than rate of tax on output supplies. In case of supply of imitation Zari thread or yarn made out of metallized polyester film /plastic film, refund of unutilized ITC due to inverted duty structure shall not be available.

This notification shall come into force with effect from the 20th day of October, 2023.

Companies Act, 2013/LLP Act, 2008

Every Co. must designate a person for furnishing information to ROC w.r.t  beneficial interest in shares of company

The Govt. has notified the Companies (Management and Administration) Second Amendment Rules, 2023. As per the amended norms, every company must designate a person who shall be responsible for furnishing information, and extending cooperation in providing information to the Registrar or any other authorised officer regarding beneficial interest in shares of the company. Further, a company may designate a company secretary (CS), a KMP or every director, if there is no CS or KMP.

  • MCA mandates Private Cos. except Small Cos. to issue securities only in Demat form within 18 months from Mar 31, 2023

The Govt. has notified the Companies (Prospectus and Allotment of Securities) Second Amendment Rules, 2023. As per the amended norms, every private co. except small co. must issue the securities only in dematerialised form within 18 months from the closure of the FY i.e., march 31, 2023. Further, the company must facilitate the dematerialisation of all its securities in accordance with the provisions of the Depositories Act. These provisions shall not apply to Government Companies.

  • MCA amends LLP norms; mandates declaration of beneficial interest and keeping of register for partners

The Govt. has notified LLP (Third Amendment) Rules, 2023. As per the amended rules, a person whose name is entered in register of partners of LLP but doesn’t hold any beneficial interest in contribution must file a declaration to that effect in Form 4B within 30 days from the date on which his name is entered in the register. Further, every LLP must maintain a register of its partners in Form 4A from the date of its incorporation. The register must be kept at the registered office of LLP.

  • Companies (Prospectus and Allotment of Securities) Second Amendment Rules, 2023

Public companies that issued share warrants before the Companies Act, 2013, and have not yet converted them into shares face new requirements. Within three months of the rules coming into force, these companies must inform the Registrar about the details of these share warrants using Form PAS-7. Within six months, they must ask the bearers of the share warrants to surrender them and have the shares dematerialized in their accounts. The company must notify the bearers via Form PAS-8 on their website and publish the same notice in a vernacular newspaper and an English newspaper. If a bearer fails to surrender the share warrants within the specified time, the company is obligated to convert them into dematerialized form and transfer them to the Investor Education and Protection Fund. This change encourages transparency and ensures that share warrants are brought in line with modern dematerialization practices.

  • Ministry of Corporate Affairs notifies Companies (Incorporation) Third  Amendment Rules, 2023

Ministry of Corporate Affairs notifies Companies (Incorporation) Third Amendment Rules, 2023 namely by:

  1. Omission of “and may include such order as to costs as it thinks proper” in sub rule (9) of Rule 30.
  2. Insertion of Proviso stating “Provided further that where the management of the company has been taken over by new management under a resolution plan approved under section 31 of the Insolvency Bankruptcy Code, 2016 (31 of 2016) and no appeal against the resolution plan is pending in any Court or Tribunal and no inquiry, inspection, investigation is pending or initiated after the approval of the said resolution plan, the shifting of the registered office may be allowed.” They shall come into force with effect from 21st October, 2023.`
  • Integration of MCA with National Single Window System

Ministry of Corporate Affairs informs stakeholders that Ministry of Corporate Affairs has integrated with National Single Window System (NSWS) for the Incorporation of Companies and LLPs. Incorporation services can also be availed through NSWS portal.

RBI

  • RBI mandates private banks to have 2 whole-time directors, including MD & CEO, on their Boards

Given the growing complexity of the banking sector, it becomes imperative to establish an effective senior management team in the banks to navigate ongoing and emerging challenges. To address the issues and challenges, banks are advised to ensure the presence of at least two Whole Time Directors (WTDs), including the MD&CEO, on their Boards. While ensuring compliance to the above instructions, careful consideration shall also be given to meet the requirements under other applicable statutory/regulatory provisions.

  • RBI issues Master Direction on Interest Rate on Deposits

RBI has issued Master Directions on ‘interest rate on deposits’ whereby it has been decided that (i) the minimum amount for offering non-callable TDs may be increased from Rs. 15 lakh to Rs. 1 crore i.e., all domestic term deposits accepted from individuals for amount of Rs. 1crore and below shall have premature-withdrawal-facility and (ii) these instructions shall also be applicable for Non-Resident (External) Rupee (NRE) Deposit / Ordinary Non-Resident (NRO) Deposits.

SEBI

SEBI extends the suspension of derivatives trade in 7 agro commodities by one more year i.e. till Dec 20, 2024

Earlier, SEBI issued directions to stock exchanges having commodity derivatives segment in respect of suspension of trading in derivative contracts in 7 agro commodities for a period of one year. Thereafter, suspension was extended beyond December 20, 2022 i.e. till Dec 20, 2023. Now, SEBI has further extended the suspension of trading in these contracts for one more year i.e. till December 20, 2024.

Labour Laws

Delhi Minimum Wages Notification (October 2023)

The Labour Department of Delhi has issued an order with respect to revision of rates of minimum wages in the specified Scheduled Employments for the following category of workers with effect from October, 2023, namely:

  1. Un-skilled
  2. Semi-skilled
  3. Skilled
  4. Clerical and Supervisory Staff

IBBI

IBBI issues a discussion paper on Strengthening the liquidation process

To further strengthen the regulatory framework of the liquidation process in terms of accountability of the liquidator towards stakeholders, the IBBI has issued a discussion paper on “Strengthening the Liquidation Process”. The key proposals include the mandatory holding of a meeting of the Stakeholders Constitution Committee (SCC), mandating the liquidator to place a reason for liquidation costs exceeding estimates of liquidation cost before SCC etc.

Disclaimer: Information in this note is intended to provide only a general update of the subjects covered. It is not intended to be a substitute for detailed research or the exercise of professional judgment. KNM  acceptsno responsibility for loss arising from any action taken or not taken by anyone using this publication. Updates are till the period 26 October 2023.

 

Executive Summary

Income Tax

  • No Tds under Section 194-I shall be made on payment of lease rent or supplemental lease rent to a unit of an International Financial Services Centre
  • The CBDT has inserted new Rule 11UACA for the purpose of section 56 of the Income Tax Act, 1961
  • The CBDT has inserted new Rule 6ABBB and form 3AF for the purpose of section 35D of the Income-tax Act,
  • CBDT has made rules for the rate of exchange for the purpose of deduction of tax at source on income payable in foreign
  • CBDT has amended rules for the value of accommodation provided by the employer, for the purpose of sub-clauses (i) and (ii) of sub-section (2) of section 17 of the Income Tax Act, 1961
  • The Government has amended the National Saving Time Deposit Scheme, 2023
  • The Central Government has specified the zero-coupon bond for the purposes of the said clause (48) of section 2 of the said Act
Goods & Services Tax (GST) & Customs
  • CBIC Issue clarification regarding the applicability of GST on certain
  • Recommendation regarding the supply of goods through
  • Clarification regarding GST rates and clarification of certain
  • Recommendations of the Council regarding special procedure against the order passed under sections 73 and 74
  • A person exempt from filling Annual
Companies Act 2013/ Other Laws
  • Condonation of delay in filing various LLP forms- Recent relaxation by MCA
  • Companies (Incorporation) Second Amendment Rules, 2023
  • SEBI (Listing Obligations and Disclosure Requirements) (Third Amendment) Regulations, 2023
  • Securities and Exchange Board of India (Facilitation of Grievance Redressal Mechanism) (Amendment) Regulations, 2023
  • Securities and Exchange Board of India (Real Estate Investment Trusts) (Second Amendment) Regulations, 2023
  • Securities and Exchange Board of India (Foreign Portfolio Investors) (Second Amendment) Regulations, 2023
  • RBI Guidelines on Switching/Reset of Floating Interest Rate Loan
  • Mandating Additional Disclosures by Foreign Portfolio Investors (FPIs)

Income Tax

Insertion of Rule 11UACA (16th Amendment)

For the purpose of clause (xiii) of sub-section (2) of section 56, where any person receives at any time during any previous year any sum under a life insurance policy, then, the income chargeable to tax under the said clause during the previous year in which such sum is received shall be computed as per new Rule “11UACA”. Computation of income chargeable to tax under clause (xiii) of sub-section (2) of section 56-:

  • where the sum is received for the first time under the life insurance policy during the previous year (hereinafter referred to as first previous year), the income chargeable to tax in the first previous year shall be computed in accordance with the formula, A-B where – A = the sum or aggregate of the sum received under the life insurance policy during the first previous year; and B = the aggregate of the premium paid during the term of the life insurance policy till the date of receipt of the sum in the first previous year that has not been claimed as a deduction under any other provision of the Act;
  • where the sum is received under the life insurance policy during the previous year subsequent to the first previous year (hereinafter referred to as subsequent previous year), the income chargeable to tax in the subsequent previous year shall be computed in accordance with the formula C-D where – C = the sum or aggregate of the sum received under the life insurance policy during the subsequent previous year; and D = the aggregate of the premium paid during the term of the life insurance policy till the date of receipt of the sum in the subsequent previous year not being premium which – (a) has been claimed as deduction under any other provision of the Act, or (b) is included in amount ‘B’ or amount ‘D’ of this rule in any of the previous year or years.
Insertion of rule 6ABBB and Form No. 3AF; Substitution of Form No. 3AE.

In the Income-tax Rules, 1962 (hereinafter referred to as the principal rules), after rule 6ABBA, the following rule shall be inserted -:

  • Rule 6ABBB – Form of statement to be furnished regarding preliminary expenses incurred under section — (1) The statement containing particulars of expenditure required to be furnished under proviso to clause (a) of sub-section (2) of section 35D by the assessee shall be in Form No. 3AF for each previous year
  • Form No. 3AF shall be furnished to the Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems), as the case may be, or any person authorized by the Principal Director General of Income-tax (Systems) or Director General of Income-tax (Systems)
  • Form 3AF shall be furnished electronically
  • under digital signature, if the return of income is required to be furnished under digital signature
  • through electronic verification code in a case not covered under clause (i)
CBDT has made rules for the rate of exchange for the purpose of deduction of tax at source on income payable in foreign currency.

For the purpose of deduction of tax at source on any income payable in foreign currency, the rate of exchange for the calculation of the value in rupees of such income payable –

  • to an assessee outside India
  • to a Unit located in an International Financial Services Centre
  • by a Unit located in an International Financial Services Centre to an assesses in India, shall be the telegraphic transfer buying rate of such currency as on the date on which the tax is required to be deducted at source under the provisions of Chapter XVIIB by the person responsible for paying such income

 

CBDT has amended rules for the value of accommodation provided by the employer, for the purpose of sub-clauses (i) and (ii) of sub-section (2) of section 17 of the Income Tax Act, 1961.
  • In the Income-tax Rules, 1962, in rule 3, (i) for sub-rule (1), the following shall be substituted namely: The value of residential accommodation provided by the employer, for the purpose of sub-clauses (i) and (ii) of sub-section (2) of section 17, during the previous year shall be determined on the basis provided in the table given below:
S.No Circumstance Where accommodation is unfurnished Where accommodation is furnished
(1) (2) (3) (4)
(1) Where the accommodation is provided by the Central Government or any State Government to the employees either holding office or post in connection with the affairs of the Union or of such State. The license fee determined by the Central Government or any State Government in respect of accommodation in accordance with the rules framed by such Government is reduced by the rent actually paid by the employee.  

 

 

 

The value of perquisite as determined under column (3) and increased by 10% per annum of the cost of furniture (including television sets, radio sets, refrigerators, other household appliances, air- air-conditioning plant or equipment) or if such furniture is hired from a third party, the actual hire charges payable for the same as reduced by any charges paid or payable for the same by the

employee during the previous year.

(2)  

 

 

Where the accommodation is provided by any other employer and –

 

(a) where the accommodation is owned by the employer, or

 

 

 

 

 

 

 

(i) 10% of salary in cities having a population exceeding 40 lakhs as per 2011 census

 

 

 

 

 

The value of perquisite as determined under column (3) and increased by 10% per annum of the cost of furniture (including television sets, radio sets, refrigerators, other household appliances, air- air-conditioning plant or equipment or other similar appliances or gadgets) or if such furniture is hired from a third party, by the actual hire charges payable for the same as reduced by any charges paid or payable for the same by the employee during the previous year

(ii) 7.5% of salary in cities having a population exceeding 15 lakhs but not exceeding

40 lakhs as per 2011 census;

(iii) 5% of salary in other areas, in respect of the period during which the said

The accommodation was occupied by the employee during the previous year as reduced by the rent, if any, actually paid by the employee.

 

 

(b)where the accommodation is taken on lease or rent by the employer.

 

 

Actual amount of lease rental paid or payable by the employer or 10% of salary, whichever is lower, as reduced by the rent, if any, actually paid by the employee.

 

 

 

 

 

 

 

The value of perquisite as determined under column (3) and increased by 10% per annum of the cost of furniture (including television sets, radio sets, refrigerators, other household appliances, air- air-conditioning plant or equipment, or other similar appliances or gadgets) or if such furniture is hired from a third party, by the actual hire charges payable for the same as reduced by any charges paid or payable for the same by the employee during the previous year.

(3) Where the accommodation is provided by the employer specified in the serial number (1) or (2) in a hotel (except where the employee is provided such accommodation for a period not exceeding in aggregate fifteen days on his transfer from one place to another). Not applicable 24% of salary paid or payable for the previous year or the actual charges paid or payable to such hotel, which is lower, for the period during which such accommodation is provided as reduced by the rent, if any, actually paid or payable by the employee

 

  • Provided that nothing contained in this sub-rule shall apply to any accommodation temporarily provided to an employee working at a mining site an on-shore oil exploration site a project execution site, a dam site a power generation site, or an off-shore site –
    • which, having a plinth area not exceeding 1000 square feet, is located not less than eight kilometers away from the local limits of any municipality or a cantonment board; or
    • which is located in a remote area:
  • Provided further that where on account of his transfer from one place to another, the employee is provided with accommodation at the new place of posting while retaining the accommodation at the other place, the value of perquisite shall be determined with reference to only one such accommodation which has the lower value with reference to the Table above for a period not exceeding ninety days and thereafter the value of perquisite shall be charged for both such accommodations in accordance with the Table:
  • Provided also that where the accommodation is owned by the employer and the same accommodation is continued to be provided to the same employee for more than one previous year, the amount calculated in accordance with No. 2(a) or 2(b) shall not exceed the amount so calculated for the first previous year, as multiplied by the amount which is a ratio of the Cost Inflation Index for the previous year for which the amount is calculated and the Cost Inflation Index for the previous year in which the accommodation was initially provided to the employee.
No Tds under Section 194-I shall be made on payment of lease rent or supplemental lease rent to a unit of an International Financial Services Centre.

 In exercise of the powers conferred by sub-section (1F) of section 197A, read with clause (c) of sub-section (2) of section 80LA, of the Income-tax Act, 1961 the Central Government hereby specifies that no deduction of tax shall be made under section 194-I of the Income-tax Act on payment in the nature of lease rent or supplemental lease rent, as the case may be, made by a person (hereinafter referred as ‘lessee’) to a person being a Unit of an International Financial Services Centre (hereinafter referred as ‘lessor’) for the lease of a ship subject to the following-

  • The lessor shall,-
    1. furnish a statement-cum-declaration in Form No.1 to the lessee giving details of previous years relevant to the ten consecutive assessment years for which the lessor opts for claiming deduction under sub-sections (1A) and (2) of section 80LA of the Income-tax Act; and
    2. such statement-cum-declaration shall be furnished and verified in the manner specified in Form 1, for each previous year relevant to the ten consecutive assessment years for which the lessor opts for claiming deduction under sub-sections (1A) and (2) of section 80LA of the Income-tax Act.
  • The lessee shall,-
    1. not deduct tax on payment made or credited to lessor after the date of receipt of copy of statement- cum- declaration in Form No. 1 from the lessor; and
    2. also furnish the particulars of all the payments made to lessor on which tax has not been deducted in view of this notification in the statement of deduction of tax referred to in subsection (3) of section 200 of the Income-tax Act, read with rule 31A of the Income-tax Rules,
  • The above relaxation shall be available to the lessor only during the said previous years relevant to the ten consecutive assessment years as declared by the lessor in Form 1 for which deduction under section 80LA is being opted. The lessee shall be liable to deduct tax on payment of lease rent for any other year.
  • The Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems), as the case may be, shall lay down procedures, formats, and standards for ensuring secure capture and transmission of data and uploading of documents and the Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems) shall also be responsible for evolving and implementing appropriate security, archival and retrieval policies.
  • This notification shall come into force from the 1st day of September,
The Government has amended the National Saving Time Deposit Scheme, 2023

The Central Government hereby makes the following Scheme further to amend the National Savings Time Deposit Scheme, 2019, namely: —

    • In paragraph 7, (a) in sub-paragraph 1(D), for the words and figures, “on or after the 1st day of April 2023”, the words, figures, and brackets “between 1st April 2023 and 30th June 2023 (both days inclusive)” shall be substituted;
    • It shall be deemed to have come into force on the 1st day of July,
    • *1 (E)The rate of interest as specified in the Table below shall be applicable to the deposit made on or after 1st day of July 2023 under the Scheme
S.No Category Rate of Interest (p.a.)
1 One-year 6.9
2 Two-years 7.0
3 Three-years 7.0
4 Five-years 7.5*

 

The Central Government hereby specifies the bond as a zero coupon bond for the purposes of the said clause (48) of section 2 of the said Act, namely:-
S.No Particulars Details
(a) Name of the bond Ten-Year Zero-Coupon Bond of REC Ltd.
(b) Period of life of bond Ten years one month

 

(c) The time schedule of the issue To be issued on or before the 31st day of March of bond 2025;
(d) The amount to be paid on maturity or redemption of the bond 1 lakh rupees for each bond
(e) The discount Rs. 2517.85 crores
(f) The number of bonds to be issued Five lakh

 

Goods & Services Tax

  • As per Notification No.29/2023 Dated 31/07/2023 CG on the recommendations of the Council, hereby notifies the special procedure followed by a registered person or officer who intends to file an appeal against the order passed by the proper officer under section 73 or 74. Appeal against the order made in duplicate in the Form appended to this notification at ANNEXURE-1 and shall be presented manually within the time specified in sub-section (1) of section 107 and such time shall be computed from the date of issuance of this notification or the date of the said order, whichever is later: The appellant shall not be required to deposit any amount. An appeal filed under this notification shall be accompanied by relevant documents including a self-certified copy of the order and such appeal and relevant documents shall be signed by the person. Upon receipt of the appeal which fulfills all the requirements as provided in this notification, an acknowledgment, indicating the appeal number, shall be issued manually in FORM GST APL-02 by the Appellate Authority or an officer authorized by him on this behalf and the appeal shall be treated as filed only when the aforesaid acknowledgment is issued. The Appellate Authority shall, along with its order, issue a summary of the order in the Form appended to this notification as ANNEXURE-2.
  • As per Notification No.31/2023 Dated 31/07/2023 CG on the recommendations of the Council, hereby makes the following further amendment in the notification for Registration – Procedure For – Specified States or Union Territories Wherein Provisions of Sub-Rule (4b) Of Rule 8 Shall Not Apply – Amendment in Notification 27/2022. In the said notification, after the words, “State of Gujarat”, the words “and the State of Puducherry” shall be inserted.
  • As per Notification 32/2023 Dated 31/07/2023 CG on the recommendations of the Council, hereby exempts the registered person whose aggregate turnover in the financial year 2022-23 is up to two crore rupees, from filing annual return for the said financial year.
  • As per Notification 33/2023 Dated 31/07/2023 CG on the recommendations of the Council, hereby notifies “Account Aggregator” as the systems with which information may be shared by the common portal based on consent under section 158A of the Central Goods and Services Tax Act, 2017. Account Aggregator means a NBFC which undertakes the business of an Account Aggregator in accordance with the policy directions issued by the Reserve Bank of India under section 45JA of the Reserve Bank of India Act This notification shall come into force with effect from the 1st day of October 2023.
  • As per Notification 34/2023 Dated 31/07/2023 CG on the recommendations of the Council, hereby specifies the persons making supplies of goods through an electronic commerce operator and having an aggregate turnover not exceeding the amount which is liable for registration as per sec 22 of the said Act, such person is exempted subject to following conditions:
    • A person not making inter-state supply.
    • The person did not supply goods through ECOs in more than one
    • The person is required to have a PAN as per income tax
    • The person is required to declare on the portal their PAN and address of the business in which such person seeks to supply which shall be subjected to validation on the common portal.
    • Such persons have been granted enrolment numbers on the common portal on successful validation of the PAN.
    • A person shall not be granted more than one enrolment number in a state
    • No supply of goods shall be made unless the person is granted an enrolment number on the common portal.
  • As per Notification 36/2023 Dated 04/08/2023 CG on the recommendations of the Council, hereby notifies the ECOs who are required to collect tax as per sec 52 as the class of person who shall follow the following special procedure in respect of the supply of goods made through it by the person paying tax under sec 10.
    • Electronic commerce operator shall not allow any inter-state supply of goods through it
    • Electronic commerce operator shall collect TCS as per sec 52 of the said Act
    • Electronic commerce operator shall furnish the details of supplies of goods in GSTR-8 on the portal.
    • This notification shall come into force with effect from the 1st day of Oct
  • As per Notification 37/2023 Dated 04/08/2023 CG on the recommendations of the Council, hereby notifies the ECO it is required to collect Tax as per sec 52 as the class of person who follows the special procedure in respect of supply of goods made through it by the persons exempted from obtaining registration.
    • Electronic commerce operator shall allow the supply of goods through it by the said person only if an enrolment number has been allotted on the common portal to the said
    • Electronic commerce operator shall not allow any inter-state supply of goods through it by the said person
    • Electronic commerce operator shall not collect TCS of sec 52 in respect of supply of goods made through it by the said person
    • Electronic commerce operator shall furnish the details of supplies of goods in FORM GSTR-8.
    • Where multiple ECOs are involved in a single supply of goods through the ECO platform the ECO operator shall mean the electronic commerce operator who finally releases the payment to the said person for the said supply made by the said person through him.
    • This notification shall come into force with effect from the 1st day of October 2023.
  • As per Notification 41/2023 Dated 25/08/2023 CG on the recommendations of the Council, hereby makes the following further amendment in No 83/2020- Central tax dated the 10th Nov 2020 for extension of time limit for furnishing detail of outward supplies in form GSTR-1.

In the said notification, in the fourth proviso: —

  • For the words, letter and figure “tax periods April 2023, May 2023 and June 2023”, the words, letter and figure “tax periods April 2023, May 2023, June 2023 and July 2023” shall be substituted;
  • For the words, letters and figure “thirty-first day of July, 2023”, the words, letter and figure “twenty-fifth day of August, 2023” shall be substituted.
  • This notification shall be deemed to have come into force with effect from the 31st day of July, 2023.

 

  • As per Notification 42/2023 Dated 25/08/2023 CG on the recommendations of the Council, hereby makes the following further amendment in No.12/2023– Central Tax Dated the 24th May 2023 for furnishing of returns – extension of due date in or furnishing return in form GSTR-3B for registered persons having principal place of business in specified state.

In the said notification, in the first paragraph, in the fifth proviso: —

  • For the words, letter, and figure “month of April 2023, May 2023 and June 2023″ the words, letter, and figure ” months of April 2023, May 2023, June 2023 and July 2023″ shall be substituted;
  • For the words, letters, and figure “thirty-first day of July, 2023”, the words, letter, and figure “twenty-fifth day of August 2023” shall be substituted.
  • This Notification is deemed to have come into force with effect from 31st July 2023.

 

  • As per Notification 44/2023 Dated 25/08/2023 CG on the recommendations of the Council, hereby makes the following further amendment in No -26/2019 – Central Tax Dated the 28th June 2019 for furnishing of returns – extension of due date for furnishing tax deducted at source in form GSTR-7 by registered persons having principal place of business in specified state.

In the said notification, in the first paragraph, in the fifth proviso: —

  • For the words, letter, and figure “month of April 2023, May 2023 and June 2023″ the words, letter, and figure ” Month of April 2023, May 2023, June 2023 and July 2023″ shall be substituted;
  • For the words, letters, and figure “thirty-first day of July 2023”, the words, letter, and figure “twenty-fifth day of August 2023” shall be substituted.
  • This Notification is deemed to have come into force with effect from 31st July 2023.

 

  • As per Circular No.200/12/2023 Dated 01/08/2023 CBIC Issue clarification regarding GST rates and clarification of certain goods based on the recommendation of the GST council
    • In the meeting, it was clarified that the snack pellets are manufactured through the process of extrusion which covers goods with the description ‘Extruded or expanded products, savory or salted’, and thereby attract GST at the rate of 18%.
    • Supply of uncooked/un-fried extruded snack pellets will attract a GST rate of 5%. Extruded snack pellets in the ready-to-eat form will continue to attract 18%
    • As per the recommendation of the GST Council, GST on fish-soluble paste has been reduced to 5%.
    • As per the recommendation of the GST Council, GST on fish-soluble paste has been reduced to 5%.
    • As per the recommendation of the GST Council, it is hereby clarified that supply of raw cotton, including kala cotton, from agriculturists to cooperatives is a taxable supply, and such supply of raw cotton by agriculturist to the cooperatives (being a registered person) attracts 5% GST on reverse charge
    • GST on imitation zari thread or yarn known by any name in trade parlance has been reduced from 12% to 5%.
    • GST on embroidery or zari articles would attract a GST rate of 12%.
    • GST rate on all goods falling under heading 9021 would attract a GST rate of 5%.

However, it is clarified that no refund will be granted where GST has already been paid in any of the above cases.

  • As per Circular 201/13/2023 Dated 01/08/2023 CBIC Issues clarification regarding the applicability of GST on certain services
    • Services supplied by the director of a company in his personal capacity such as renting of immovable property to the company or body corporate are subject to Reverse Charge Those services supplied by the director of the company or body corporate, which are supplied by him as or in the capacity of director of that company or body corporate shall be taxable under RCM in the hands of the company or body corporate.
    • Supply of food or beverages in the cinema hall is taxable as restaurant service. The cinema operator may run these refreshments or eating stalls/ kiosks/ counters or restaurant themselves or they may give it on contract to a third The customer may like to avail the services supplied by these refreshment/snack counters or choose not to avail these services. Further, the cinema operator can also install vending machines, or supply any other recreational service such as through coin-operated machines, etc. which a customer may or may not avail of. It is further clarified that where the sale of cinema tickets and supply of food and beverages are clubbed together, and such bundled supply satisfies the test of composite supply, the entire supply will attract GST at the rate applicable to the service of exhibition of cinema, the principal supply.

Companies Act, 2013

Condonation of delay in filing various LLP forms- Recent relaxation by MCA

The Ministry of Corporate Affairs in order to promote ease of doing business, through General Circular No. 08/2023 dated August 23 2023, has decided to grant a one-time relaxation in additional fees to the LLPs who could not file their forms within the due date and provide them an opportunity to update their filings and get their compliances done. Forms included in this scheme :

  • Form-3: Information pertaining to the LLP Agreement and any changes to it.
  • Form-4: Information pertaining to partners/designated partners including appointments, cessations, and other changes.
  • Form-11: The Annual Return of the
Companies (Incorporation) Second Amendment Rules, 2023

 The Ministry of Corporate Affairs vide notification dated 2nd August 2023 has issued the Companies (Incorporation) Second Amendment Rules, 2023. The Rules has revised Form No. RD-1 to be used by companies for filing applications to Central Government (Regional Director) for approval of Compromises, Arrangements, Amalgamations, and conversions.

 

RBI

RBI Guidelines on Switching/Reset of Floating Interest Rate Loan EMIs

 RBI has issued comprehensive lending guidelines from time to time with the intention of creating clarity, choice, and fairness in lending practices. These circulars and Master Directions pertain to Scheduled Commercial Banks (SCBs), Non-Banking Financial Companies (NBFCs), and Housing Finance Companies (HFCs). EMI loans form the cornerstone of these rules which aim to inform, empower, and provide viable loan repayment solutions throughout borrowers’ loan duration. Recently, RBI has issued guidelines to allow flexibility in interest rate offerings for borrowers paying EMIs under a floating rate.

SEBI

SEBI     (Listing     Obligations    and     Disclosure     Requirements)     (Third Amendment) Regulations, 2023

 Securities and Exchange Board of India (SEBI) introduced the Third Amendment to its Listing Obligations and Disclosure Requirements Regulations, 2023. The provisions are broadly applicable to all entities that wish to voluntarily delist non-convertible debt securities or redeemable preference shares. The latest regulations are aimed at Addressing the voluntary delisting process of non-convertible debt securities or non-convertible redeemable preference shares. Setting clear parameters on which entities can or cannot opt for voluntary delisting. Ensuring transparency, clarity, and protection for investors.

Securities and Exchange Board of India (Facilitation of Grievance Redressal Mechanism) (Amendment) Regulations, 2023

 The Securities and Exchange Board of India (SEBI), in its continuous effort to bolster investor protection and ensure fair market practices, released a significant notification on 16th August 2023. This notification revolves around the “Securities and Exchange Board of India (Facilitation of Grievance Redressal Mechanism) (Amendment) Regulations, 2023.” The aim is to streamline and expedite the process of resolving investor grievances across various domains falling under SEBI’s purview.

Securities and Exchange Board of India (Real Estate Investment Trusts) (Second Amendment) Regulations, 2023

 The Securities and Exchange Board of India (SEBI) has recently issued a notification on August 16, 2023, amending the Securities and Exchange Board of India (Real Estate Investment Trusts) Regulations, 2014. The amendments, known as the Securities and Exchange Board of India (Real Estate Investment Trusts) (Second Amendment) Regulations, 2023, bring notable changes to various aspects of real estate investment trusts. These changes aim to refine the regulatory framework, enhance investor protection, and facilitate smoother functioning of real estate investment trusts.

Securities and Exchange Board of India (Foreign Portfolio Investors) (Second Amendment) Regulations, 2023

The Securities and Exchange Board of India (SEBI) has released the Securities and Exchange Board of India (Foreign Portfolio Investors) (Second Amendment) Regulations, 2023. This amendment focuses on altering ownership and control criteria for foreign portfolio investors (FPIs), aiming to enhance transparency and regulatory compliance

 

OTHER LAWS

  • No Relaxation of IBBI Regulatory Fee in cases where the approved resolution plan
  • Mandating Additional Disclosures by Foreign Portfolio Investors (FPIs)

The Securities and Exchange Board of India has mandated additional disclosures by Foreign Portfolio Investors (FPIs) that require obtaining granular information of persons having any ownership, economic interest, or control in some objectively identified FPIs under the PML Act.

Disclaimer: Information in this note is intended to provide only a general update of the subjects covered. It is not intended to be a substitute for detailed research or the exercise of professional judgment. KNM accepts no responsibility for loss arising from any action taken or not taken by anyone using the publication. Updated are till the period 26 August 2023.

Executive Summary

Income Tax

  • No TDS Under Section 194 on dividend Income paid by a Unit of IFSC Engaged in Aircraft Leasing Business to a unit of IFSC engaged in the same
  • The Central Government has notified, “Yamuna Expressway Industrial Development Authority” under clause (46) of section 10 of the Income-tax Act,
  • CBDT has revised the maximum investment limit of the National Saving Certificate (NSC) from 4.5 lakhs to 9 lakhs for single accounts and Rs. 9 lakhs to 15 lakhs for Joint
  • The Government has specified SOP for making applications for re-computation of the total Income of a Co-operative Society engage in the business of manufacturing sugar in sub-section (19) of section 155 of the Income tax act,
  • The Central Board of Direct Taxes (CBDT) has issued guidance to provide clarifications in respect of information to be reported by Reporting Financial Institutions (RFIs) in respect of reportable accounts.
  • The Government has amended Government Savings Promotion General Rules, 2018, rules to promote savings among depositors subject to certain

Companies Act 2013/ Other Laws

  • The MCA department has shared the general circular no.07/2023 for the deactivation of the old user IDs in the V-2
  • includes ‘Goods and Services Tax Network’ under PMLA to enable sharing of data with ED.
  • SEBI directs MIIs to make joint efforts to develop a common ‘Online Dispute Resolution
  • SEBI prescribes a detailed framework for newly notified AIF “Corporate Debt Market Development ”
  • SEBI mandates all non-individual FPIs to provide Legal Entity Identifier (LEI) details to designated DPs.
  • No Relaxation of IBBI Regulatory Fee in cases where the approved resolution plan in respect of a Real Estate Project is from an Association or Group of Allottees.

Goods & Services Tax (GST) & Customs

  • Clarification regarding taxability of service provided by an office of an organization in one state to the office of that organization in another state, both being distinct person
  • Clarification on E-invoice when supply made to
  • Clarification on availability of ITC in respect of warranty replacement of parts and repair
  • Clarification on TCS liability in case of multiple
  • Clarification on the taxability of shares held in a subsidiary by holding co.

TDS Under Section 194 on dividend Income paid by a Unit of IFSC Engaged in Aircraft Leasing Business to a unit of IFSC engaged in the same business.

In exercise of the powers conferred by sub-section (1F) of section 197A, read with clause (34B) of section 10 of the Income-tax Act, 1961 (43 of 1961) (hereinafter the Income-tax Act), the Central Government hereby specifies that no deduction of income tax shall be made under section 194 of the Income-tax Act from any income in the nature of dividends paid by any unit of an International Financial Services Centre, primarily engaged in the business of leasing an aircraft (hereinafter referred to as the payer) to a company, being a Unit of an International Financial Services Centre primarily engaged in the business of leasing of an aircraft (hereinafter referred as the payee) subject to the following-

The payee shall, —

  • furnish a statement-cum-declaration in Form No. 1 to the payer giving details of the previous year relevant to the assessment year in which the dividend income eligible for exemption under clause (34B) of section 10 of the Income-tax Act is payable.
  • such statement-cum-declaration shall be furnished and verified in the manner prescribed in Form 1 for the previous year relevant to the assessment year in which the dividend income eligible for exemption under clause (34B) of section 10 of the Income-tax Act is payable.

The payer shall, —

  • not deduct tax on payment made or credited to the recipient of such dividend (payee) after the date of receipt of copy of statement-cum-declaration in Form 1 from payee; and
  • furnish the particulars of all the payments made to the recipient of such dividend on which tax has not been deducted in view of this Notification in the statement of deduction of tax referred to in sub-section (3) of section 200 of the Income-tax Act, read with the rule 31A of the Income-tax Rules, 1962. immovable;
  • The Central Government has notified, “Yamuna Expressway Industrial Development Authority” under clause (46) of section 10 of the Income-tax Act, 1961.

Central Government has notified ‘Yamuna Expressway Industrial Development Authority’, (PAN AAALT0341D), an authority constituted by the State Government of Uttar Pradesh, in respect of the following specified income arising to that Authority, namely: —

  • Grants received from the State Government;
  • Moneys received from the disposal of land, building and other properties, movable and
  • Moneys received by the way of rent & fees or any other charges from the disposal of land, building and other properties, movable and immovable;
  • The amount of interest earned on the funds deposited in the banks; and
  • The amount of interest/penalties received on the deferred payment received from the Allottees of various movable or immovable
  1. This notification shall be effective subject to the conditions that Yamuna Expressway Industrial Development Authority, —
    • shall not engage in any commercial activity;
    • activities and the nature of the specified income shall remain unchanged throughout the financial years; and
    • shall file return of income in accordance with the provision of clause (g) of sub- section (4C) of section 139 of the Income-tax Act, 1961.

 

  1. This notification shall be deemed to have been applied for the financial year 2018-19 to financial year 2022-23.

 

CBDT has revised maximum limit of National Saving Certificate (NSC) from 4.5 lakhs to 9 lakhs for single account and Rs. 9 lakhs to 15 lakhs for Joint account.

National Savings (Monthly Income Account) Scheme, 2019 has been amended through National Savings (Monthly Income Account) (Amendment) Scheme, 2023 and the maximum investment limit has been raised from ₹ four lakh fifty thousand to ₹ nine lakh for a single account and from ₹ nine lakh to ₹ 15 lakh for a joint account with effect from 1st April 2023. Likewise, Senior Citizen Savings Scheme, 2019 has been amended through Senior Citizens Savings (Amendment) Scheme, 2023 and the maximum investment limit has been raised from ₹ 15 lakh to ₹ 30 lakh.

 

The Government has specified SOP for making application for recomputation of total Income of Co-operative Society engage in business of manufacture of sugar in sub- section (19) of section 155 of Income tax act, 1961

To encourage co-operative movement in sugar sector, a new clause (xvii) was inserted to amend sub-section (1) of section 36 of the Income-tax Act to provide that the amount paid for purchase of sugarcane by the co-operative societies engaged in the manufacture of sugar at a price which is equal to or less than the price fixed by or fixed with the approval of the Government shall be allowed as deduction for computing business income of the sugar co-operative factories.

To extend the benefit of the abovementioned relief to all the applicable years, section 155 of the Act has been amended to insert a new subsection (19) vide Finance Act, 2023, w.e.f. 1st April 2023. It provides that in the case of a sugar mill cooperative, where any deduction in respect of any expenditure incurred for the purchase of sugarcane has been claimed by an assessee and such deduction has been disallowed wholly or partly in any previous year commencing on or before the 1st day of April, 2014, the Assessing Officer shall, on the basis of an application made by such assessee in this regard, recompute the total income of such assessee for such previous year.

In order to standardize the manner of filing application to the Jurisdictional Assessing Officer under sub-section (19) of section 155 of the Act and its disposal by the Jurisdictional Assessing Officer under the said section, following SOP has been outlined;

  • The applicant must be a “co-operative society”, as defined in sub-section (19) of section 2 of the Income-tax Act, engaged in the business of manufacturing of sugar. The co- operative society (referred to as “such co-operative society” hereinafter) seeking relief under sub-section (19) of section 155 of the Act should file an application to the Jurisdictional Assessing
  • The application by such co-operative society can be filed for A Y 2015-16 or any earlier assessment year (AY).
  • The Jurisdictional Assessing Officer may seek the following documents for the purpose of re-computation under sub-section (19) of section 155 of the Act:
    1. Computation of tax, audit report u/s. 44AB of the Act, audited Profit & Loss Account and Balance Sheet.
    2. Assessment Order/Appellate Order(s) of various appellate fora, as applicable, with respect to the disallowance made on account of excess price paid for purchase of sugarcane above the Statutory Minimum Price (SMP).
  • Notice of Demand issued under section 156 of the
  1. Challan of taxes paid, if
  2. Copy of Order(s)/Other legal instrument(s) regarding price fixation by Government based on which excess price was paid for purchase of sugarcane over and above Statutory Minimum Price (SMP).
  3. Documentary evidence regarding registration of co-operative society under State/Central Act.
  • Any other document as considered necessary by the Jurisdictional Assessing Officer for the purposes of re-computation of total income under sub-section (19) of section 155 of the Act.
  • The Jurisdictional Assessing Officer shall recompute the total income of such co- operative society under the provisions of sub-section (19) of section 155 read with section 154 of the Further, the rectification under sub-section (19) of section 155 r.w.s. 154 of the Act can only be made till 31.03.2027.
  • The Jurisdictional Assessing Officer shall pass an order under s. 155(19) r.w.s. 154 of the Act within a period of six months from the end of the month in which the application is received by

The Central Board of Direct Taxes (CBDT) has issued guidance to provide clarifications in respect of information to be reported by Reporting Financial Institutions (RFIs) in respect of reportable accounts.

 

The CBDT, in exercise of its powers under section 119 of the Income-tax Act, 1961, hereby issues the following clarification with respect to reporting of accounts other than U.S. reportable accounts.

 

  • Treaty Qualified Retirement Fund: –

A Treaty Qualified Retirement Fund is a non-reporting financial institution under sub-clause

(b) of clause (5) of Rule 114F of the Rules. However, under the Common Reporting Standard (CRS) which involves exchange of information in respect of reportable accounts other than U.S reportable accounts, a Treaty Qualified Retirement Fund is not treated as a Non-Reporting Financial Institution. It is clarified that a Treaty Qualified Retirement Fund shall not be treated as a non-reporting financial institution for the purposes of maintaining and reporting information in respect of any reportable account other than a U.S. reportable account defined in clause (11) of Rule 114F of the Rules.

  • Non-public fund of the armed forces: –

Under the CRS, a non-public fund of the armed forces is in the nature of an active non- financial entity (NFE). In view of this, it is hereby clarified that a non-public fund of the armed forces shall not be treated as a financial institution in case of any reportable account other than a U.S. reportable account defined under clause (11) of Rule 114F of the Rules.

  • Gratuity Fund: –

A gratuity fund is a non-reporting financial institution under sub-clause (c) of clause (5) of Rule 114F of the Rules, provided that it is also a financial institution under Rule 114F of the Rules. Gratuity funds which are only managed by either individual(s) and/or entity(ies)

 

that is not a financial institution, are not capable of being classified as a managed Investment Entity Rules. Hence, such gratuity funds will qualify as a passive non-financial entity as per clause (D) (i) of Explanation to clause 6 of Rule 114F of the Rules.

Generally, accounts held in gratuity funds will be treated as excluded accounts if they qualify as retirement or pension accounts as per clause h(i) of Explanation to clause 1 of the Rule 114F, subject to satisfaction of all the conditions laid out in that clause including, inter alia, the monetary limits in respect of contributions to the said funds.

However, accounts held in gratuity funds may also involve withdrawals conditioned on meeting specific criteria in circumstances beyond death, disability or retirement (e.g., gratuity funds that permit withdrawals upon resignation after a certain period of continuous service). Such accounts can be treated as excluded accounts under clause h(ii) of Explanation to clause 1 of the Rule 114F subject to satisfaction of all the conditions laid out in that clause including, inter alia, annual monetary limits in respect to contributions to the said funds.

In view of the above, in the event that a gratuity fund is a reporting financial institution, relevant accounts held with such a gratuity fund fulfilling the conditions specified in clause (h)(i) or h(ii) of the Explanation to clause 1 of Rule 114F of the Rules, will be treated as excluded accounts.

 

  • The Government has amended Government Savings Promotion General Rules, 2018, rules to promote savings among depositors subject to certain conditions.

In exercise of the powers conferred by Section 15 of the Government Savings Promotion Act, 1873, the Central government t hereby makes the following rules further to amend the Government Savings Promotion General Rules, 2018, namely: —

  • In the principal rules, in rule 14, after sub-rule (8), the following sub-rule shall be inserted, namely: — “(9) Non-resident Indians shall be eligible to be nominated as nominee subject to the condition that payment to such nominee/s shall be on non- repatriation
  • Sub-rule (6)- If a depositor dies and there is no nomination in force at the time of his death, and the probate of his will or letters of administration of estate or a succession certificate is not produced within six months from the date of death of the depositor to the Authorised Officer of the Accounts, then
  1. if the eligible amount in the account does not exceed Rupees five lakh, the Authorised Officer, for reasons to be recorded in writing, may pay the same to any person appearing to him as the rightful claimant and to his satisfaction to be entitled to receive the amount or to administer the estate of the on an application in Form-11 accompanied by the following documents; namely: —
    • Death certificate of the account holder;
    • Passbook or deposit receipt or statement of account in original;
    • Affidavit in Form-13;
    • Letter of disclaimer in Form-14;
    • Bond of Indemnity in Form-15; and
    • Identity proof of the legal heir;
  2. if the eligible amount in a deceased account is above Rupees five lakh, he amount shall be paid by the Accounts office to the claimant on submission of the probate of his will or letters of administration of estate or a succession certificate issued by the Court, or legal heir certificate issued by the revenue authority not below the rank of Tahsildar having jurisdiction along with the following documents; namely: —
    • Claim form;
    • Passbook or deposit receipt or statement of account in original;
    • Death certificate of the account holder; and
    • Identity proof of the legal heir;
  • As per Notification No.18/2023 Dated 17/07/2023 CG on the recommendations of the Council, hereby makes the following further amendment in No 83/2020-Central tax dated the 10th Nov 2020 for extension of time limit for furnishing detail of outward supplies in form GSTR-1

In the said notification, in the fourth proviso: — for the words, letter and figure “tax periods April 2023 and May 2023”, the words, letter and figure “tax periods April 2023, May 2023 and June 2023” shall be substituted; for the words, letters and figure “thirtieth day of June, 2023”, the words, letter and figure “thirty-first day of July, 2023” shall be substituted.

This notification shall be deemed to have come into force with effect from the 30th day of June, 2023.

  • As per Notification No.20/2023 Dated 17/07/2023 CG on the recommendations of the Council, hereby makes the following further amendment in the notification for furnishing of returns – extension of due date for furnishing return in form GSTR-3B for registered persons having principal place of business in Manipur for the quarter ending June, 2023 till the thirty- first day of July, 2023.
  • As per Notification No.21/2023 Dated 17/07/2023 CG on the recommendations of the Council, hereby makes the following further amendment in No -26/2019 – Central Tax Dated the 28thJune 2019 for furnishing of returns – extension of due date for furnishing tax deducted at source in form GSTR-7 by registered persons having principal place of business in specified state. In the said notification, in the first paragraph, in the fifth proviso-: For the words, letter and figure “month of April, 2023 and May 2023” the words, letter and figure “

 

Month of April 2023, May 2023 and June 2023″ shall be substituted; For the words, letters and figure ” thirtieth day of June, 2023″, the words, letter and figure ” thirty-first day of July,2023″ shall be substituted. This Notification deemed to have come into force with effect from 30th June 2023.

  • As per Notification No.19/2023 Dated 17/07/2023 CG on the recommendations of the Council, hereby makes the following further amendment in 12/2023– Central Tax Dated the 24thMay 2023 for furnishing of returns – extension of due date in or furnishing return in form GSTR-3B for registered persons having principal place of business in specified state. In the said notification, in the first paragraph, in the fifth proviso: —

For the words, letter and figure “month of April, 2023 and May 2023″ the words, letter and figure ” months of April 2023, May 2023 and June 2023 ” shall be substituted;

For the words, letters and figure “thirty-first day of May, 2023”, the words, letter and figure “thirty first day of July, 2023” shall be substituted. This Notification deemed to have come into force with effect from 30 June 2023.

 

  • As per Notification No.22/2023 Dated 17/07/2023 CG on the recommendations of the Council, hereby makes the following further amendment in No–73/ 2017 Central tax Dated the 29th December 2017 for levy of late fees -waiver of late fees payable for all registered person who failed to furnish GSTR-4 by due date. In the said notification, in the seventh proviso, for the words, letter and figure “30th day of June, 2023” the words, letter and figure “31st day of August, 2023” shall be substituted.

This notification shall be deemed to have come into force with effect from the 30th day of June, 2023.

  • As per Notification No.23/2023 Dated 17/07/2023 CG on the recommendations of the Council, hereby makes the following further amendment 3/2023 -Central Tax dated the 31st March 2023. for cancellation or suspension of registration – Specified procedure for revocation of cancellation of registration, In the said notification, for the words, letter and figure “30th day of June, 2023” the words, letter and figure “31st day of August, 2023” shall be substituted.

 

This notification shall be deemed to have come into force with effect from the 30th day of June, 2023.

  • As per Notification No.24/2023 Dated 17/07/2023 CG on the recommendations of the Council, hereby makes the following further amendment in No. 6/2023- Central Tax dated 31st March 2023 for non-filler of return – Assessment of – Deeming Withdrawal of best Judgement Assessment order in respect of specified registered person who follow special procedure to furnish return along with interest and late fees before 31/08/2023 amendment In the said notification, for the words, letter and figure “30th day of June, 2023” the words, letter and figure “31st day of August, 2023” shall be substituted.

This notification shall be deemed to have come into force with effect from the 30th day of June, 2023.

  • As per Notification No.25/2023 Dated 17/07/2023 CG on the recommendations of the Council, hereby makes the following further amendment in 7/2023 dated the 31st March 2023 for levy of late fees- waiver of late fees for furnishing annual return for FY 2022-23 onwards in respect of specified classes of registered person who fails to furnish said return by due date amendment. In the said notification, in the proviso, for the words, letter and figure “30th day of June, 2023” the words, letter and figure “31st day of August, 2023” shall be substituted.

This notification shall be deemed to have come into force with effect from the 30th day of June, 2023.

  • As per Notification No.26/2023 Dated 17/07/2023 CG on the recommendations of the Council, hereby makes the following further amendment in No. 8/2023 -Central Tax dated 31st March 2023 for levy of late fees -waiver of late fees in excess of five hundred for failure to furnish final return in form GSTR-10 by due date but furnish same between 30.06.2023 and 08.2023.

In the said notification, for the words, letter and figure “30th day of June, 2023” the words, letter and figure “31st day of August, 2023” shall be substituted.

This notification shall be deemed to have come into force with effect from the 30th day of June, 2023.

  • As per Circular No.192/04/2023 Dated 17/07/2023 CBIC Issue clarification on charging of interest under sec 50(3) of the CGST Act 2017 in case of wrong availment of IGST Credit and reversal thereof In case of wrong availment of IGST credit availed by registered person and reversal thereof for the calculation of interest under rule 88B CGST Rules, It is the total tax credit available in all three heads considered together to calculate interest and for determining the as to whether the balance below the amount of wrongly availed ITC of There will be no interest if during the time of availment and reversal the balance in credit ledger together is not fallen below the amount wrongly availed ITC even if IGST balance fallen below itself from the amount of wrongly availed ITC. But if amount of all three ledger in credit ledger fallen below the amount of wrongly availed ITC than it will attract interest as per section 50 of CGST Act.

Credit of compensation cess available in electronic credit ledger cannot be taken into account while considering the balance of electronic credit ledger for the purpose of calculation of interest.

  • As per Circular 194/06/2023 dated on 17/07/2023 Clarification on TCS liability under Section 52 of the CGST Act 2017 in case of multiple E-commerce operator in one transaction. In the current platform Eco collect the consideration from the buyer, deduct the TCS under section 52 of the CGST Act 2017.In a situation where multiple ECOs are involved in a single transaction of supply of goods and service or both and where the Supplier side Eco himself not a supplier of the said goods and services in this case the compliances under section 52 of CGST Act, including collection of TCS, is to be done by the supplier-side ECO who finally releases the payment to the supplier for a particular supply made by the said supplier through him.

In a situation where multiple ECOs are involved in a single transaction of supply of goods or services or both through ECO platform and the Supplier-side ECO is himself the supplier of the said supply, TCS is to be collected by the Buyer-side ECO while making payment to the supplier for the particular supply being made through it.

 

  • As per Circular 195/07/2023 Dated 17/07/2023 CBIC Issue clarification on availability of ITC in respect of warranty replacement of parts and repair services during warranty period.
  • Where the original equipment manufacturer offer warranty for the goods supplied and provide replacement of parts and repair services to customer without charging any consideration at the time of such replacement and repair than no further GST is chargeable but if any consideration is charged than GST will be payable on such supply. There is not any requirement for reversal of ITC in respect of such replacement of parts or supply of repair services.
  • In case replacement of parts and repair service is provided by distributor on behalf of manufacturer without any consideration than also no GST would be payable by distributor, If any consideration is charged by distributor than GST would be payable on such
  • In case distributor provide services to customer on behalf of manufacturer by using his stock or purchase from third party and issuance of Tax invoice to manufacturer than GST would be payable by distributor and manufacturer would also be eligible for ITC.
  • In case distributor provide services to customer on behalf of manufacturer by sending requisition to manufacturer for parts to be replaced and manufacturer provide such parts without any consideration than no GST would be charged for such supply.
  • There may be cases where the distributor replaces the part(s) to the customer under warranty out of the supply already received by him from the manufacturer and the manufacturer issues a credit note in respect of the parts so replaced, accordingly, the tax liability may be adjusted by the manufacturer, subject to the condition that the said distributor has reversed the ITC availed against the parts so replaced.
  • In case distributor provide services to customer on behalf of manufacturer without any consideration but charges from manufacturer for providing such supply by issuing tax invoice or debit note than such would be chargeable under GST and distributer eligible for ITC of the same.
  • Companies offer extended warranty to the customer which can be availed at the time of

 

supply or before the expiry of the standard warranty period in this case if manufacturer enter in agreement at the time of original supply than no GST would be chargeable separately as it already charged at the time of original supply however in case of customer enter after the original supply than it is separate contract and GST would be charged on it.

  • As per Circular 196/08/2023 Dated on 17/07/2023 CBIC Issue clarification on taxability of shares held in a subsidiaries co. by holding co. Securities are considered neither good nor services in terms of definition of goods under clause (52) of section 2 of CGST Act. This implies that the securities held by the holding company in the subsidiary company are neither good nor services. Further, purchase or sale of shares or securities, in itself is neither a supply of goods nor a supply of services. Therefore, the activity of holding of shares of subsidiary company by the holding company per se cannot be treated as a supply of services by a holding company to the said subsidiary company and cannot be taxed under GST.
  • As per Circular 198/10/2023 Dated on 17/07/2023 Clarification on issue pertaining to E-Invoice CBIC Clarifies that the registered person, whose turnover exceeds the prescribed threshold for generation of e-invoicing, is required to issue e-invoices for the supplies made to such Government Departments or establishments/ Government agencies/ local authorities/ PSUs etc under rule 48(4) of CGST Rules.
  • As per Circular No.199/11/2023 Dated 17/07/2023 CBIC Issue clarification regarding taxability of service provided by an office of an organization in one state to the office of that organization in another state, both being distinct person:
  • It is clarified that in respect of common input services procured by the HO from third party but attributable to both HO and BO, HO has an option either to follow ISD mechanism as per section 20 of CGST Act or issue Tax Invoice under section 31 of CGST Act to the concerned BO in respect of common input service procured of common input. In case HO distributes to BO through the ISD mechanism, HO is required to get itself registered mandatorily as an ISD. Similarly, HO can issue tax invoices to the BOs, only if the said services have actually been provided to the concerned Bos.
  • Computation of value in case of Full ITC available to BO There may be instances where HO may not be issuing invoice to the BOs with respect to such services, or the HO may not be including the cost of a particular component (such as salary cost of employees involved in providing said services) while issuing the invoice to BOs. Whether the HO is mandatorily required to issue invoice to BOs u/s 31 of CGST Act for such internally generated services, and / or whether the cost of all components (including salary cost of HO employees involved in providing said services) has to be included in the computation of value of services provided by HO to BOs when full ITC is available to the concerned
  • In respect of services supplied by HO to BOs, the value of services declared in the invoice by HO is deemed to be open market value of such services (for the purpose of calculation of GST), if the recipient BO is eligible for full The value so declared in the invoice shall be considered to be the open market value, irrespective of the fact whether cost of any particular component of such services, like employee cost, etc. has been included or not in the value of services in the invoice. Further, in such cases where full ITC is available to the recipient, if HO has not issued an invoice to the BO, the value of such services may be deemed to be declared as Nil by HO to BO, and may be deemed as open market value as per CGST Rules.
  • Full ITC is not available to BO Whether in such cases, the cost of salary of employees of HO involved in providing said services to the BOs, is mandatorily required to be included while computing the taxable value of the supply of services.
  • GSTN issue advisory for online compliance pertaining to liability / difference appearing in R1 and R3B (DRC-03) It is informed that GSTN has developed a functionality to enable the taxpayer to explain the difference in GSTR-1 & 3B return online as directed by the GST This feature is now live on the GST portal.

The functionality compares the liability declared in GSTR-1/IFF with the liability paid in GSTR-3B/3BQ for each return period. If the declared liability exceeds the paid liability by a predefined limit or the percentage difference exceeds the configurable threshold, taxpayer will receive an intimation in the form of DRC-01B.

Upon receiving an intimation, the taxpayer must file a response using Form DRC-01B Part

  1. The taxpayer has the option to either provide details of the payment made to settle the difference using Form DRC-03, or provide an explanation for the difference, or even choose a combination of both options

To further help taxpayers with the functionality, a detailed manual containing the navigation details is available on the GST portal. It offers step-by-step instructions and addresses various scenarios related to the functionality.

  • GSTN Issue advisory on E-invoice exemption declaration functionality now available on GSTN is pleased to inform you that the e-Invoice Exemption Declaration functionality is now live on the e-Invoice portal. This functionality is specifically designed for taxpayers who are by default enabled for e-invoicing but are exempted from implementing it under the CGST (Central Goods and Services Tax) Rules. The facility to report exemption declaration is purely for business facilitation purposes.
  • GSTN is pleased to inform that the functionality for geocoding the principal place of business address is now live for all States and Union territories. This feature, which converts an address or description of a location into geographic coordinates, has been introduced to ensure the accuracy of address details in GSTN records and streamline the address location and verification GSTN has successfully geocoded more than 1.8 crore addresses of principal places of business. Furthermore, all new addresses post- March 2022 are geocoded at the time of registration itself, ensuring the accuracy and standardization of address data from the outset.

The MCA department has shared the general circular no.07/2023 for the deactivation of the old user IDs in the V-2 portal.

It has come to the notice of this Ministry that many members of the three institutes viz. Institute of Chartered Accountants of India, Institute of Cost Accountants of India and Institute of Company Secretaries of India have created multiple user IDs while transacting on existing MCA21 V2 portal. For this, MCA has issued General Circular No. 07/2023 dated 12th July 2023 for Merger of Multiple User IDs in V-2 Portal with New User ID in V-3 and Deactivation of Old User ID in V-2 Portal.

Govt. includes ‘Goods and Services Tax Network’ under PMLA to enable sharing of data with ED

The Centre issued a notification to include the Goods and Services Tax Network (GSTN) under the ambit of the Prevention of Money Laundering Act (PMLA). With this, the GSTN is among those entities that have been mandated to share information with the Enforcement Directorate (ED) and the Financial Intelligence Unit (FIU) under the PMLA Act. These changes have been made under Section 66 of the PMLA, which provides for disclosure of information.

SEBI directs MIIs to make joint efforts to develop a common ‘Online Dispute Resolution Portal.

SEBI has directed market infrastructure institutions (MIIs) to set up and operate a common Online Dispute Resolution (ODR) portal. The portal will harnesses online conciliation and online arbitration for resolution of disputes arising in the Indian securities markets. The MIIs

i.e. stock exchanges, depositories and CCs will have to make joint efforts to develop and operationalize the ODR Platform. Also, this circular supersedes the earlier circulars issued by the Board relating to this.

 

SEBI prescribes detailed framework for newly notified AIF “Corporate Debt Market Development Fund”

 

SEBI has prescribed a detailed framework for the Corporate Debt Market Development Fund (CDMDF). The CDMDF shall comply with the Guarantee Scheme for Corporate Debt (GSCD) as notified by MoF. The CDMDF shall deal only in low duration G-sec, Treasury bills, Tri-party Repo on G-sec, guaranteed corporate bond repo with maturity not exceeding 7 days.

 

SEBI mandates all non-individual FPIs to provide Legal Entity Identifier (LEI) details to designated DPs

 

SEBI has mandated the requirement of providing Legal Entity Identifier (LEI) details for all non-individual FPIs. Currently, FPIs are required to provide their LEI details in the Common Application Form (CAF), used for registration, KYC and account opening of FPIs on a voluntary basis. Further, all existing FPIs that haven’t provided their LEIs to their DDPs must do so within 180 days from the date of issuance of this circular.This circular shall be effective from 27th July,2023.

No Relaxation of IBBI Regulatory Fee in cases where the approved resolution plan in respect of a Real Estate Project is from an Association or Group of Allottees

The regulatory fee under the (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, shall not be payable in cases where the approved resolution plan in respect of insolvency resolution of a real estate project is from an association or group of allottees in such real estate project.”

 

Monthly Compliance Calendar

 

Disclaimer: Information in this note is intended to provide only a general update of the subjects covered. It is not intended to be a substitute for detailed research or the exercise of professional judgment. KNM accepts no responsibility for loss arising from any action taken or not taken by anyone using this publication. Updates are till the period July 2023.

 

KNM Management

 

 

 

G.S.R. 438(E).––In  exercise  of  the  powers  conferred  by  clause  (iii)  of  Section  3  of  the  Government Securities Act, 2006 (38 of 2006), the Central Government hereby makes the Sovereign Gold Bond Scheme 2023-24

Who can hold these bonds-

The Gold Bonds issued under this Scheme may be held by a Trust, HUFs, Charitable Institution, University or by a person resident in India, being an individual, in his capacity as such individual, or on behalf of minor child, or jointly with any other individual

Minimum and maximum holding-

 The bonds will be issued in denominations of one gram of gold or multiples thereof. Provided that the minimum limit of subscription for the Bonds issued shall be of one gram and maximum limit of subscription per fiscal year shall be of four kg for individuals, four kg for Hindu Undivided Family (HUF) and 20 kg for trusts and similar entities notified by the Government from time to time

Nominal value: –

 The  nominal  value  of  Gold  Bonds  shall  be  in  Indian  Rupees  fixed  on  the  basis  of  simple  average  of closing price of gold of 999 purity, published by the India Bullion and Jewellers Association Limited, for the last 3 working days of the week preceding the subscription period.
The issue price of the Gold Bonds will be less than the nominal value by ₹50 per gram to those investors applying online and making the payment against the application through digital mode.

Interest

(i) The interest on the Gold Bonds shall commence from the date of issue and shall be paid at a fixed rate of 2.50 percent per annum on the nominal value of the bond. (ii)  The interest is  payable half-yearly and the last interest shall be payable along with the principal on maturity.

Redemption- (i) The Gold Bonds shall be repayable on the expiration of eight years from the date of the issue of the Bonds: www.taxmann.com

 

Loan against Bonds

  • The Gold  Bonds issued under this Scheme may be used as collateral security for availing any loan. Such loans could be granted by marking a lien on Gold Bonds appropriately.
  • The Loan to Value  ratio as applicable  to any ordinary  gold loan  mandated by the  Reserve  Bank of India shall also apply to the Bonds issued under this Scheme

Tax Treatment

The  interest received on the  Gold  Bond shall be taxable as per the provisions of the Income-tax Act, 1961 (43 of 1961). The capital gains tax arising on redemption of these bonds to an individual is exempted.

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