TDS and TCS in Swing mode for Transactions of Purchase or Sale of Goods

Finance Act 2020 introduced Section 206C(1H), where a person who is a seller and receives consideration for the sale of goods of value or aggregate value which exceeds Rs 50 lakhs in the previous year shall, at the time of receipt of money, collect TCS at the rate of 0.1% of the value exceeding Rs 50 lakhs.

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Tax Exemption and Extension in Timelines of Compliances under Income Tax

Many taxpayers have received financial help from their employers and well-wishers for meeting their expenses incurred for treatment of COVID-19. In order to ensure that no income tax liability arises on this account, it has been decided to provide income-tax exemption to the amount received by a taxpayer for medical treatment from employer or from any person for treatment of COVID-19 during FY 2019-20 and subsequent years.

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Understanding Residential Status from Tax View Point

Income Tax Act, 1961 of India applies to all persons having income earned or accrued in India. However, its applicability differs basis the residential status of a person. The residential status as stated in Income Tax Act should not be considered as a synonym for citizenship of India.

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Cost Inflation Index for FY 2021-22

CBDT has notified the Cost Inflation Index for Financial Year 2021-22 vide Notification No. 73/2021 dated 15th June, 2021. The Cost Inflation Index for FY 2021-22 relevant to AY 2022-23 & subsequent years is 317.

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Relaxation in e-filing of Income Tax Forms 15CA/15CB

For any foreign remittance, taxpayers are required to upload the Form 15CA along with the Certificate from a Chartered Accountant in Form 15CB on the income tax portal before submitting the copy to the authorized dealer.

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Applicability of TDS on Cash Withdrawals

CBDT introduced a new section in the Income Tax Act, w.e.f.1st September 2019, to bring in transactions of cash withdrawals under the tax net. According to Section 194N, all the Banks to which Banking Regulation Act applies, a Co-operative Society and a post office shall be responsible to deduct TDS, if any person withdraws cash from the account/s maintained with them, being the amount or aggregate of amounts exceeding rupees one crore during the financial year.

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Taxability where the Stamp Duty Value is higher than the Sale Consideration

Income Tax Act has broadly defined taxability of income under five heads of Income. One of them is Capital Gain, where gains arising out of sale of capital assets are taxable in the hands of the seller of the capital asset. However, with the intention of tax evasion, assesses started entering into an agreement with the buyer, where the sale value declared by the seller is less than the actual sale consideration. This led to loss of tax to the government, and thus to avoid this, section 50C and Section 56 (2)(x) was introduced as two sides of a coin. Section 50C states taxability of such cases in the hands of the seller while Section 56 (2)(x) specifies about the taxability of such transactions in the hands of the buyer.

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