TDS on Salary for FY 2018-19 – Major/important Points to Remember

CBDT’s Circular No. 1 of 2019 dated 01.01.2019– Major/important Points to Remember

The CBDT has issued circular No. 1 on 01.01.2019 in respect of the Deduction of tax at Source from Salaries u/s 192 of the Income Tax Act, 1961. Some of the major / important points to remember are;

1. Standard Deduction u/s 16(ia).

Standard deduction of Rs.40,000/- has been introduced u/s 16(ia) in lieu of the the following

• Conveyance Allowance – u/s 10(14) r.w.r 2BB and
• Reimbursement of Medical Expenses – Rs.15,000/- – clause (v) to the 1stprovisio of sub-section 2 to section 17.

Note: Up to AY 2018-19, reimbursement of medical expenses up to Rs.15,000/- was not included in ‘Salary’ at all, since the same is not a perk as per section 17(2).  Now the same needs to be included in ‘Salary’.

2. Surcharge on Income Tax:

Total Income >50 Lakhs but less than Rs. 1 Crore – @ 10%

Total Income > Rs. 1 Core – @ 15%

3. “Health and Education Cess” shall be levied at the rate of 4% of income tax including surcharge wherever applicable, No marginal relief shall be available in respect of such cess.

4. DDOs Shall obtain documents – section 192(2D) r.w.r.26C: DDOs shall obtain from the assessee evidence or proof or particular of claims such as House rent Allowance (where aggregate annual rent exceeds one lakh rupees); Leave Travel Concession or Assistance etc , Deduction of interest under the head ‘Income from house property’ and deduction under Chapter VI-A as per the prescribed form 12BB laid down by Rule 26C of the Rules.

5. In respect of interest under income from house property DDOs to obtain following details/evidences in respect of Interest deductible.

• Interest payable or paid
• Name of the lender
• Address of the lender
• PAN of the lender
• Note:PAN of the lender being financial institution or employer is mandatory if it is available with the employee however in case of other lender obtaining of PAN is mandatory by the DDO.
• 
  
• 5. Salary Paid in Foreign Currency:

6. For the purposes of deduction of tax on salary payable in foreign currency, the value in rupees of such salary shall be calculated at the “Telegraphic transfer buying rate” of such currency as on the date on which tax is required to be deducted at source ( see Rule 26).

7. Compulsory Requirement to furnish PAN by employee (Section 206AA):

• If employee (deductee) fails to furnish his/her PAN to the deductor , the deductor has to deduct the tax at higher of the following rates:
• at the rate specified in the relevant provision of this Act; or
• at the rate or rates in force; or
• at the rate of twenty per cent.

Particulars	TDS %
a. Total Income is below the taxable limit	NIL
b. Total Income is above the taxable limit and the average  rate of Tax is less than 20%	20%
c. Total Income is above the taxable limit and the average rate of Tax is more than 20%	At the average rate of Tax

Note: Health and Education cess @ 4% is not to be deducted, in case the tax is deducted at 20% u/s 206AA of the Act

8. Matters pertaining to the TDS made in case of Non Resident:

• Where Non-Residents are deputed to work in India and taxes are borne by the employer, if any refund becomes due to the employee after he has already left India and has no bank account in India by the time the assessment orders are passed, the refund can be issued to the employer as the tax has been borne by it [Circular No. 707 dated 11.07.1995].
• In respect of non-residents, the salary paid for services rendered in India shall be regarded as income earned in India. It has been specifically provided in the Act that any salary payable for rest period or leave period which is both preceded or succeeded by service in India and forms part of the service contract of employment will also be regarded as income earned in India.

9. DDOs cannot consider any deduction u/s 80G, even if it is paid through the employer. Employees have to claim the same by themselves while filing the return of income

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GST rate on food & beverage supply services by educational institution

Circular No. 85/04/2019-GST

No. 354/428/2018-TRU
Government of India
Ministry of Finance
Department of Revenue
Tax research Unit
****

Room No. 156, North Block,
New Delhi, the 1st January, 2019

To,

The Principal Chief Commissioners/ Chief Commissioners/ Principal
Commissioners/ Commissioner of Central Tax (All) /
The Principal Director Generals/ Director Generals (All)

Madam/Sir,

Subject: Clarification on GST rate applicable on supply of food and beverage services by educational institution- reg.

Representations have been received seeking clarification as to the rate of GST applicable on supply of food and beverages services by educational institution to its students. It has been stated that the words “school, college” appearing in Explanation 1 to Entry 7 (i) of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 give rise to doubt whether supply of food and drinks by an educational institution to its students is eligible for exemption under Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017 Sl. No 66, which exempts services provided by an educational institution to its students, faculty and staff.

2. The matter has been examined. Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017, Sl. No. 7(i) prescribes GST rate of 5% on supply of food and beverages services. Explanation 1 to the said entry states that such supply can take place at canteen, mess, cafeteria of an institution such as school, college, hospitals etc. On the other hand, Notification No. 12/2017-Central Tax (Rate), Sl. No. 66 (a) exempts services provided by an educational institution to its students, faculty and staff. There is no conflict between the two entries. Entries in Notification No. 11/2017-Central Tax (Rate) prescribing GST rates on service have to be read together with entries in exemption Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017. A supply which is specifically covered by any entry of Notification No. 12/2017-Central Tax (Rate) dated 28-06-2017 is exempt from GST notwithstanding the fact that GST rate has been prescribed for the same under Notification No. 11/2017-Central Tax (Rate) dated 28.06.20 17.

2.1 Supply of all services by an educational institution to its students, faculty and staff is exempt under Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, Sl. No. 66. Such services include supply of food and beverages by an educational institution to its students, faculty and staff. As stated in explanation 3 (ii) to Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 Chapter, Section, Heading, Group or Service Codes mentioned in column (2) of the table in Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 are only indicative. A supply is eligible for exemption under an entry of the said notification where the description given in column (3) of the table leaves no room for any doubt. Accordingly, it is clarified that supply of food and beverages by an educational institution to its students, faculty and staff, where such supply is made by the educational institution itself, is exempt under Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, vide Sl. No. 66 w.e.f. 01-07-2017 itself. However, such supply of food and beverages by any person other than the educational institutions based on a contractual arrangement with such institution is leviable to GST@ 5%.

3. In order to remove any doubts on the issue, Explanation 1 to Entry 7(i) of Notification 11/2017-Central Tax (Rate) dated 28.06.2017 has been amended vide Notification No. 27/2018-Central Tax (Rate) dated 31.12.2018 to omit from it the words “school, college”. Further, heading 9963 has been added in Column (2) against entry at Sl. No. 66 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.20 17, vide Notification No. 28/2018-Central Tax (Rate) dated 3 1.12.2018.

4. Difficulty, if any, in implementation of this Circular may be brought to the notice of the Board.

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Taxability of Gifts In India

GIFT TAX: The tax levied on the gifts that you have received in money or its worth and which is over and above a certain set limit by the Indian law is known as gift tax. Income tax on gifts helps regulate the gives which is given to you by a person who is not a close relative as per the definition of Income Tax Law of India. These gifts include tangible, intangible, movable and immovable assets which can be given voluntarily and without considering it in money or it’s worth. There are, however, some gifts which are exempt from taxes.

TAXATION OF GIFTS: SECTION 56(2) OF THE INCOME TAX ACT, 1961

Category I	Sum of money (gift in cash/cheque/draft) without consideration	Aggregate money received exceeding Rs. 50,000/-	Whole aggregate money is taxable
Category II	Immovable propertywithout consideration	Immovable property received and SDV exceeds Rs. 50,000	Stamp duty value is taxable
Category III	Immovable property with consideration	A.Y. 2018-19 SDV > consideration & (SDV- Consideration) >50,000 A.Y. 2019-20 SDV >105% of consideration & (SDV-Consideration) >50,000	(SDV- Consideration) is taxable
Category IV	Movable property without consideration	Aggregate FMV of movable property exceeds Rs. 50,000	Whole aggregate FMV is taxable
Category V	Movable property with consideration	Aggregate (FMV- consideration) > 50,000	(Aggregate FMV – Consideration) is taxable

EXEMPTED GIFTS:

1. Any sum of money received (as gift) without consideration up to Rs. 50000/- in one year is not taxable.

2. Following receipts without consideration are exempt

a) Gifts received from ant relative

b) Gifts received on occasion of marriage of an individual

c) Gifts received under a will or by way of inheritance

d) Gifts received in contemplation of death of payer

e) Gifts received from local authority as defined in explanation to section 10(20)

f) Gifts received from educational or medical institution or fund etc. referred to u/s 10(23C)

g) Gifts received by any fund/ trust/ institution/ university/ other educational institution /hospital/ other medical institution referred to in sub-clause (iv) or (v) or (vi) or (via) of clause (23C) of section 10

h) Gift received by way of transactions not regarded as transfer under section 47(i)/ (iv)/(v)/(vi)/ (via)/ (viaa)/(vib)/(vic)/(vicb)/(vid)/(vii)

i) Gifts received from an individual by a trust created or established solely for the benefit of relative of the individual.

DEFINITIONS:

1. Relatives: As per the Income tax act, the sum of money received from any of your relatives are fully exempt from tax. Here the “relatives” term defines by the Income Tax act as follows :

• Spouse of the individual
• Brother or sister of the individual
• Brother or sister of the spouse of the individual
• Brother or sister of either of the parents of the individual
• Any lineal ascendant or descendant of the individual
• Any lineal ascendant or descendant of the spouse of the individual
• Spouse of the person referred to in clauses (ii) to (vi).
• In case of a Hindu undivided family, any member thereof;

2. Immovable property

• being land or building or both
• Shares and securities,
• Jewelry,
• Archaeological collection,
• Drawings,
• Paintings,
• Sculptures,
• any work of art or

3. Only single transaction is considered for calculating threshold limit of Rs.50000/- in the case of immovable property received as a gift. Where as in other cases (cash or movable property) all transactions in financial year are taken into consideration for calculating threshold limit of Rs.50000/-.

4. Stamp Duty Value means the value adopted or assessed or assessable by any authority of the Central Government or a State Government for the purpose of payment of stamp duty in respect of an immovable property.

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GST Late fees should be returned to government ....!

The GST experts had not agreed with the introduction of late fees for delayed fees to be introduced during the GST, because the GST law was new and the laws of the late fees were not only strict but rather late fees. The amount was not related to the amount of tax paid by the dealer and due to which the tax payers did not have any tax demand. The law has absolute authority that the dealers who do not submit tax on time or offer fixed returns, punish them but the issue of late fees for GST is not so easy. GST was a new tax and the dealers should have been given time to prepare for it and in such a time the penal provisions should be slightly less strict but this process was not followed in GST and therefore, when the first returns of GST were introduced. 

 Since then, there was dissatisfaction with the provisions of this late fee in dealers, but the dealers did not offer GST Returns from time to time. It was also a huge handover of GST network which was not working properly since the beginning and even today the GST network Problems related to them have not ended. GST Returns still go to the last two to three days of filing returns, because the capacity of GST network is limited and the GST network has difficulty in lifting the returns in the last days.which are finally converted to GST dealers' late fees. Apart from this, dealers are unable to fill GST returns on time due to their reasons,and most of them fill their returns with late fees because the amount of late fees was increased day by day and thus they were honest Duty completed.

Now, according to a recent decision by the GST Council, the government has issued a Notification and has waived the late fees for those dealers who have not filled up the returns from July 2017 to September 2018 and are now welcome move as these dealers will also have some reasons for which these retiring from December 22, 2018 to 31 March 2019. Fill the middle. This is a returns will not be filled, but the dealers who follow their Returns Act. The decision for them has been filled with late fees, so clearly the discrimination seems to be complete.

Therefore, while doing justice to the government now, the late fees collected from these dealers should also be returned as the dealers who did not return the returns. They do not have to pay this late fee.

This will increase the confidence of GST dealers towards GST law and it will also be a fair decision. There should be a fair decision in this regard while keeping positive thinking about the GST Council's 32nd meeting, which is to be held on January 10, 2019.

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Meaning Of “INCOME” and Tax Treatement

Meaning Of “INCOME” [ Section 2(24) ] The term “Income” includes not only what is received by using the property but also the amount saved by using it himself. Any thing which is convertible into income can be regarded as source of accrual of income. “ Income includes “ : Profit and Gains : For instance, Profit generated by a businessman is taxable as “Income”. Dividend : For instance, “Dividend” declared/paid by a company to a shareholders is taxable as “ income” in the hands of shareholders . Voluntary contribution received by a Trust : In the hands of a Trust, income includes voluntary contributions received by it. This rule is applicable in the following cases.. Such contribution is received by a trust created wholly or partly for charitable or religious purpose ; or Such contribution is received by a scientific research association ; or Such contribution is received by any fund or institution established for charitable purposes ; or Such contribution is received by any university or other educational institutions or hospital. Example : ABC Trust is created for public charitable purposes. On Dec, 15, 2008 it receives a sum of Rs.2 Lakh as voluntary contribution from a business house . Rs. 2 Lakh would be included in the income of the Trust. The value of any Perquisites or Profit in lieu of Salary taxable in the hand of employee. Example: Mr. You is employed by XYZ Ltd. He gets Rs.5,000 per month as conveyance allowance other than Salary .Rs. 5,000 per month is treated as “ Income”. Value of any Benefit or Amenity, whether convertible into money or not. Any Capital Gain taxable u/s 45 is treated as “Income” FEATURES OF “INCOME’ The following features of income can help a person to understand the concept of income. 1.    Definite Source : Income has been compared with a fruit of a tree or a crop from the field. Fruit comes from a tree and crop from fields. Thus the source of income is definite in both cases. The existence of a source for income is somewhat essential to bring a receipt under the charge of tax. 2.    Income must come from Outside : No one can earn income from himself. There can be no income from transaction between head office and branch office. Contributions made by members for the mutual benefit and found surplus cannot be termed as income of such group. 3.    Tainted Income : Income earned legally or illegally remains income and it will be taxed according to the provisions of the Act. Assessment of illegal income of a person does not grant him immunity from the applicability of the provisions of other Act. Any expenditure incurred to earn such illegal income is allowed to be deducted out of such income only. 4.    Temporary or Permanent : Whether the income is permanent or temporary, it is immaterial from the tax point of view. 5.    Voluntary Receipt : The receipts which do not arise from the exercise of a profession or business or do not amount to remuneration and are made for reasons purely of personal nature are not included in the scope of total income. 6.    Dispute regarding the Title : In case a person is receiving some income but his title to such receipts is disputed, it will not free him from tax liability. The receipt of such income has to pay tax. 7.    Income in Money or Money’s worth : The income may be in Cash or in kind. It is taxable in both cases. TAX TREATMENT OF “INCOME’ For the purposes of treatment of income for tax purposes it can be divided into 3 categories : A. Taxable Income : These incomes form part of total income and are fully taxable. These are treated u/s 14 to 69 of the Act. These are Salaries, Rent, Business Profits, Professional Gain, Capital Gain, Interest, Dividend, Winning from Lotteries, Races etc. B. Exempted Incomes : These incomes do not from part of total income either fully or partially . hence, No Tax is payable on such incomes. These incomes are given u/s 10(1) to 10(32) of the Act. C. Rebateable ( Tax Free) Incomes : These incomes form part of total income and are fully taxable. Tax is calculated on total income out of which a Rebate of Tax at average Rate is allowed . The Rebateable incomes given u/s 86 of the Act are : Share of income received by a member of an association of persons provided the total income of such AOP is assessed to tax at the rates applicable to an individual. Share of income received by a partner of a firm assessed as an association of persons (PFAOP) provided the total income of such PFAOP is assessed to tax at the rates applicable to an individual. Need any assistance than  https://www.taxdeal.in

CBIC extends due date for availing ITC of FY 2017-18

Government of India
Ministry of Finance
(Department of Revenue)
Central Board of Indirect Taxes and Customs

Order No. 02/2018-Central Tax

New Delhi, the 31st December, 2018

S.O.6428 (E).––WHEREAS, sub-section (4) of section 16 of the Central Goods and Services Tax Act, 2017 (12 of 2017) (hereafter in this Order referred to as the said Act) provides that a registered person shall not be entitled to take input tax credit in respect of any invoice or debit note for supply of goods or services or both after the due date of furnishing of the return under section 39 for the month of September following the end of financial year to which such invoices or invoice relating to such debit note pertains or furnishing of the relevant annual return, whichever is earlier;

                                                 AND WHEREAS, sub-section (3) of section 37 of the said Act provides that-

Any registered person, who has furnished the details under sub-section (1) for any tax period and which have remained unmatched under section 42 or section 43, shall, upon discovery of any error or omission therein, rectify such error or omission in such manner as may be prescribed, and shall pay tax and interest, if any, in case there is short payment of tax on account of such error or omission, in return to be furnished for such tax period:

Provided that no rectification of error or omission in respect of the details furnished under sub-section (1) shall be allowed after furnishing of the return under section 39 for the month of September following the end of the financial year to which such details pertain, or furnishing of the relevant annual return, whichever is earlier;

AND WHEREAS, the financial year 2017-18 was the first year of the implementation of the Goods and Services Tax in India and the taxpayers were still in the process of familiarising themselves with the new taxation system and due to lack of said familiarity-

(i) the registered persons eligible to avail input tax credit could not claim the same in terms of provisions of section 16 because of missing invoices or debit notes referred to sub-section (4) within the stipulated time;

(ii) the registered persons could not rectify the error or omission in terms of provisions of sub-section (3) of section 37 within the stipulated time,

as a result whereof certain difficulties have arisen in giving effects to the provisions of sub-section (4) of section 16 and sub-section (3) of section 37;

NOW, THEREFORE, in exercise of the powers conferred by section 172 of the Central Goods and Services Tax Act, 2017, the Central Government, on recommendations of the Council, hereby makes the following Order, to remove the difficulties, namely:––

1. Short title––This Order may be called the Central Goods and Services Tax (Second Removal of Difficulties) Order, 2018.-

2. In sub-section (4) of section 16 of the said Act, the following proviso shall be inserted, namely: –

“Provided that the registered person shall be entitled to take input tax credit after the due date of furnishing of the return under section 39 for the month of September, 2018 till the due date of furnishing of the return under the said section for the month of March, 2019 in respect of any invoice or invoice relating to such debit note for supply of goods or services or both made during the financial year 2017-18, the details of which have been uploaded by the supplier under sub-section (1) of section 37 till the due date for furnishing the details under sub-section (1) of said section for the month of March, 2019.”.

3. In sub-section (3) of section 37 of the said Act, after the existing proviso, the following proviso shall be inserted, namely: ––

“Provided further that the rectification of error or omission in respect of the details furnished under sub-section (1) shall be allowed after furnishing of the return under section 39 for the month of September, 2018 till the due date for furnishing the details under sub-section (1) for the month of March, 2019 or for the quarter January, 2019 to March, 2019.”.

[F. No. 20/06/16/2018-GST]

(Dr. Sreeparvathy S.L.)

Under Secretary to the Government of India.

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Due date of GSTR 8 for October to December 2018 extended to 31.01.2019

Due date for furnishing the GSTR 8 statement for the months of October, November and December, 2018 shall be 31stJanuary, 2019 –  Order No. 04/2018-Central Tax dated 31st December, 2018.

Government of India
Ministry of Finance
(Department of Revenue)
Central Board of Indirect Taxes and Customs

Order No. 04/2018-Central Tax

New Delhi, the 31st December, 2018

S.O. 6430(E).—WHEREAS, sub-section (4) of section 52 of the Central Goods and Services Tax Act, 2017 (12 of 2017) (hereafter in this Order referred to as the said Act) provides that every operator who collects the amount specified in sub-section (1) shall furnish a statement, electronically, containing the details of outward supplies of goods or services or both effected through it, including the supplies of goods or services or both returned through it, and the amount collected under sub-section (1) during a month, in such form and manner as may be prescribed, within ten days after the end of such month;

AND WHEREAS, certain operators, were unable to obtain registration because of technical issues being faced by them on the common portal but they collected the amount for the months of October, November and December 2018, as a result whereof, the statement under sub-section (4) of section 52 of the said Act could not be furnished and because of that certain difficulties have arisen in giving effect to the provisions of the said sub-section;

NOW, THEREFORE, in exercise of the powers conferred by section 172 of the Central Goods and Services Tax Act, 2017, the Central Government, on recommendations of the Council, hereby makes the following Order, to remove the difficulties, namely: ––

1. Short title. ––This Order may be called the Central Goods and Services Tax (Fourth Removal of Difficulties) Order, 2018.

2. In section 52 of the Central Goods and Services Tax Act, 2017, in sub-section (4), the following Explanation shall be inserted, namely: ––

“Explanation: – For the purposes of this sub-section, it is hereby declared that the due date for furnishing the said statement for the months of October, November and December, 2018 shall be the 31st January, 2019.”.

[F. No. 20/06/16/2018-GST]

Dr. SREEPARVATHY S.L., Under Secy.

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