| Table of Contents |
| 1. |
Due Dates for Income Tax Compliance – July 2022 |
| Circulars |
| 2. |
Guidelines for removal of difficulties under sub-section (2) of section 194R of the Income tax Act, 1961 |
| 3. |
Guidelines for removal of difficulties under sub-section (6) of section 194S of the Income-tax Act, 1961 |
| Notifications |
| 4. |
CBDT notifies 331 as Cost Inflation Index for FY 2022-23. |
| 5. |
Compliance Check Functionality for Section 206A8 & 206CCA of Income-tax Act 1961 |
| Other Matters |
| 6. |
Calcutta HC Judgement for Swati Bajaj and Others – different angle of looking into penny stock matter |
1. Due Date for Income tax Compliance (June2022)
| 7th July 2022 |
Deposit of TDS/ TCS deducted/collected for the month of June, 2022 |
| 15th July 2022 |
Issue of TDS Certificates for tax deducted in the month of May, 2022 on:
• Transfer of Immovable property (S.194-IA);
• Payment of Rent for use of Land or Building (S. 194-IB);
• Payment by Individuals/ HUF for carrying out any work, brokerage, professional fee above 50 lakhs (S. 194M). |
| 15th July 2022 |
Filing of TCS return for the quarter ending 30 June, 2022. |
| 30th July 2022 |
Furnishing of TDS Return (challan-cum-statement) in respect of tax deducted in the month of June, 2022 on:
• Transfer of Immovable property (S.194-IA);
• Payment of Rent for use of Land or Building (S. 194-IB);
• Payment by Individuals/ HUF for carrying out any work, brokerage, professional fee above 50 lakhs (S. 194M) |
| 31st July 2022 |
Filing of TDS return for the quarter ending June 30, 2022 |
| 31 July 2022 |
Return of income for the assessment year 2022-23 for all assessee other than assessee whose books of account are required to be audited or partner of a firm whose accounts are required to be audited |
CIRCULARS
2. Guidelines for removal of difficulties under sub-section (2) of section 194R of the Incometax Act, 1961
| Section 194R |
|
| Nature of transaction |
• Providing benefit or perquisite.
• Benefit or perquisite arise in the course of Business/Profession by such resident
• May be in cash or kind |
| Recepient |
Resident |
| Rate of tax |
10% |
| Monetary limit |
Value or aggregate of value of such benefit or perquisite exceeding Rs. 20,000 during the financial year. |
| Non applicability (Deductor) |
Individual/ HUF having gross receipts from business or profession not exceeding Rs. 1 crores or Rs. 50 lakhs respectively in PFY. |
Illustrations of Benefits/Perquisites, on which liability shall not arise u/s 194R:
• Sales discounts, Cash discounts or Rebates allowed to customers
• When seller offers 2 items free with Purchase of 10 items.
• Expenditure of dealer/ Business conference to educate dealers/customers
about new or better products of the company or obtaining orders or teaching sales technique or addressing queries or reconciliation of Accounts.
• Benefit / perquisite provided to Government entity (like Government hospital) not carrying on business or profession.
• Reimbursement of OPEs incurred during the course of rendering services, if invoices are in the name of the clients.
• Dealer / business conference, in a case where the dealer/business conference is held with the prime object to educate dealers/ customers. |
Illustrations of Benefits/Perquisites, on which liability for TDS shall arise u/s 194R:
• Incentives (other than discount, rebate) such as Car, TV, Computers, Gold coin, MobilePhone etc.
• Trip sponsored for Recipient and his/her relative upon Target achievements.
• Free tickets for an event.
• Free medical samples to medical practitioners.
• Products given to Social Media Influencer and which are retained by them.
• Reimbursement of out-of-pocket expenses, when Invoice is not in the name
of the Payer company.
• Dealer/Customer Conference, if in the nature of incentives for achieving
• particular targets. Any benefit extended over and above the purpose of the conference like expenses incurred on leisure or on family members and so on, will be
covered.
• Expenses attributable to leisure trip or component, even if incidental to
dealer/Business conference for educational purpose.
• Expenditure on participants of Dealer/Business conference for prior stay or
overstay beyond the dates of Conference. |
Valuation of the perquisites –
• must be the fair market value or the purchase price of the products or sale price of the products, as the case may be. |
3. Guidelines for removal of difficulties under sub-section (6) of section 194S of
the Income-tax Act, 1961
| 194S |
|
| Deductor |
Person who is responsible for paying to any resident any sum by way of consideration for transfer of VDA |
| Tax Rate |
1% |
| Taxable value |
“Net” consideration after excluding GST/charges levied by the deductor for rendering service |
| Monetary Limits |
• Value or aggregate value of the consideration for transfer of VDA exceeds Rs. 50,000 during the financial year in case of consideration being paid or payable by a specified person.
• Rs. 10,000 in other cases. |
*In a peer to peer (i.e. direct buyer to seller) transaction, the buyer (i.e person paying the consideration) is required to deduct tax under section 194S of the Act. However, if the transaction is taking place on or through an Exchange there is a possibility of tax deduction requirement under section 194S of the Act at multiple stages. In this regard, the prescribed mechanism shall be adopted by the Exchange.
*For FY 2022-23, though section will be applicable from 1 July 2022, threshold of Rs. 50,000 or Rs. 10,000 is to be computed.
Circular No. 13 of 2022
Notifications
4. CBDT notifies 331 as Cost Inflation Index for FY 2022-23.
Cost inflation index of year of acquisition and transfer is required while determining cost of acquisition to calculating long-term capital gain for income tax purpose.
[Notification No. 62 /2022/F. No. 370142/20/2022-TPL]
Judicial Pronouncements
5. Calcutta HC Judgement for Swati Bajaj and Others – different angle of looking into penny stock matter Recently when ITAT has given relief to certain shareholders (Swati Bajaj and Others), revenue challenged the said order before Calcutta HC. Calcutta HC allowed Revenue’s appeal on penny stock matters and set aside the ITAT order with some important remarks which might be helpful in handling penny stock matters in future. Relevant paras of Judgement are reproduced below.The genuinity of unreasonable rise in the price of the shares of penny stock over a short period needs to be established, and the onus is on the assessee to do so as mandated in Section 68 of the Act. That onus is not discharged by merely citing the opinions of an expert who issued a buy call on the penny stocks. Nor is it discharged by the assessee being a regular investor who has also earned profits from blue-chip stocks when the claim for long-term capital gains is limited to the profits from the sale of penny stocks which saw huge unreasonable price rises in just over a year
• The assessee cannot dispute that the shares of the companies he has dealt with were insignificant in value before their trading. If such is the situation, it is the assessee who has to establish that the price rise was genuine, and consequently, he is entitled to claim LTCG on such a transaction.
• Until and unless the initial burden cast upon the assessee is discharged, the onus does not shift to the revenue to prove otherwise. The assessee cannot say that his claim has to be examined only based upon the documents produced by him, namely bank details, the purchase/sell documents, the details of the Demat Account, etc . The onus is on the assessee to prove the creditworthiness of the companies whose shares the assessee has dealt with, the genuineness of the price rise, which is undoubtedly alarming that too within a short span of time..
• Merely because the assessee had invested in other blue-chip companies had earned profit or incurred loss cannot validate the tainted transactions.
[IA NO. GA/2/2022 IN ITAT/6/2022 PRINCIPAL COMMISSIONER OF INCOME TAX FIVE, KOLKATA VERSUS SWATI BAJAJ…………]
