NO LIMIT ON CASH WITHDRAWL MORE THAN 2 LAKHS

 The CBDT has issued a press release dated 5th April 2017 by which it has provided important clarification regarding the restriction imposed on cash transaction by sections 269ST & 271DA inserted by the Finance Act 2017 to the Income-tax Act. These sections provide that no person (other than those specified therein) shall receive an amount of two lakh rupees or more (a) in aggregate from a person in a day; (b) in respect of a single transaction; or (c) in respect of transactions relating to one event or occasion from a person, otherwise than by an account payee cheque or account payee bank draft or use of electronic clearing system through a bank account. The CBDT has clarified that the said cash transaction limit of Rs 2 lakh will not apply to withdrawal of cash from banks, cooperative bank and post offices.

NRI - Guidelines for PAN applications

1.1 Whether it is mandatory for a non-resident Indian to have a PAN?

Every person who is required to file a return of income or intends to enter into an economic or financial transaction where quoting of PAN is mandatory must have a PAN.

Transactions in which quoting of PAN is mandatory are as follows:

 1.  Sale or purchase of a motor vehicle or vehicle other than two wheeled vehicles.

 2.  Opening an account [other than a time-deposit referred at point No. 7 and a Basic Savings Bank Deposit Account] with a banking company or a co-operative bank

 3.  Opening of a demat account with a depository, participant, custodian of securities or any other person with SEBI

 4.  Payment of an amount exceeding Rs. 50,000 to a Mutual Fund for purchase of its units

 5.  Payment of an amount exceeding Rs. 50,000 to a company or an institution for acquiring debentures or bonds issued by it.

 6.  Deposits of cash exceeding Rs. 50,000 during any one day with a banking company or a co-operative bank.

 7.  A time deposit of amount exceeding Rs. 50,000 or aggregating to more than Rs. 5 lakh during a financial year with -

  (i)  a banking company or a co-operative bank

 (ii)  a Post Office;

(iii)  a Nidhi referred to in section 406 of the Companies Act, 2013 or

(iv)  a non-banking financial company which holds a certificate of registration under section 45-IA of the Reserve Bank of India Act, 1934 to hold or accept deposit from public.

 8.  Payment of an amount aggregating to more than Rs. 50,000 in a financial year as life insurance premium to an insurer

 9.  A contract for sale or purchase of securities (other than shares) for amount exceeding Rs. 1 lakh per transaction

10.  Sale or purchase, by any person, of shares of a company not listed in a recognised stock exchange for amount exceeding Rs. 1 lakh per transaction.

11.  Sale or purchase of any immovable property for an amount exceeding Rs. 10 lakh or valued by stamp valuation authority referred to in section 50C of the Act at an amount exceeding ten lakh rupees.

1.2 Application for allotment of PAN:

A non-resident Indian ('NRI') can apply for PAN by submitting the Form No. 49A along with the requisite documents and prescribed fees at the PAN application center of UTIITSL or NSDL. He can also make an online application through the website of UTIITSL or NSDL.

1.3 Documents to be enclosed along with PAN application Form

NRI is required to submit the copy of passport (alongwith PAN application Form) as proof of identity. He is also required to submit any of the following documents (alongwith PAN application Form)as proof of address:

a) Copy of passport; or

b) Copy of the bank account statement in country of residence; or

c) Copy of NRE bank account statement (showing at least two transactions in last six months period and duly attested by Indian Embassy/Consular office/high commission or Apostille or by the manager of the bank in which the account is held. The applicant may be a joint holder).

1.4 Foreign address

A foreign address can be provided as residential and office address by NRIs applicants, if they do not have any Indian address of their own.

1.5 Fees

Fees for processing of PAN application shall depend on the communication address provided by the applicant. Fee for processing of PAN is Rs. 107 if the communication address is within India, and Rs. 994 (Application fees +dispatch charges) if the communication address is outside India.

1.6 Correction of Mistakes in PAN card

All guidelines as followed while filling fields of name, address, signature, etc., of PAN application form should also be followed while filling up form for 'Request for New PAN Card or/and Changes or Correction in PAN Data".

There are two modes for filing this form: (1) Offline mode, i.e., submitting the application at the PAN application center of UTIITSL or NSDL, or (2) Making an online application through the website of UTIITSL or NSDL. The applicant has to submit the application along with the related documents and the prescribed fees.

1.7 Penalty for holding more than one PAN card

A person cannot hold more than one PAN. A penalty of Rs. 10,000shall be imposed under section 272B of the Income-tax Act, 1961 for having more than one PAN. If a person has been allotted more than one PAN then he should immediately surrender the additional PAN card(s).

1.8 Penalty for non-compliance with provisions relating to PAN

Section 272B provides for penalty in case of default by the taxpayer in complying with the provisions relating to PAN, i.e., not obtaining PAN, even though he is liable to obtain PAN or knowingly quoting incorrect PAN in any prescribed document in which PAN is to be quoted or intimating incorrect PAN to the person deducing tax or person collecting tax. Penalty of Rs. 10,000 under section 272B can be levied.

WHY WE SHOULD HAVE OUR I.T. FILE

In India, hardly two percent of population pays income tax. That means 98 percent of the people are not having their IT files. The government is keen on widening the tax base and has made it mandatory for certain categories of persons to file their It returns. On analysis, it has been noticed that large numbers of persons have fear psychosis about income tax. They apprehend, once the file is opened, it may cause a lot of hassles.

In earlier years, Tax Rates were also high. But now the scenario is fast changing. Tax rates have been lowered. W.e.f. financial year 2014-2015, i.e. A.Y. 2015-2016, the general exemption limit has been increased to Rs 2,50,000/- (earlier Rs 2,00,000/-) and Rebate in Tax under Section 87A has been increased to Rs 5,000/- for A.Y. 2017-18 (earlier from AY 2014-2015 to 2016-2017 Rs 2000/-). The provisions of section 56(2)(vii) relating to gifts were modified to cover specified gifts in kind w.e.f. 1.10.2009 and the same were further modified by the Finance Act-2010, Finance Act-2012 and Finance Act-2013. W.e.f. AY 2012-13 a new category of the tax payers of 80 years or more (super senior citizens) had been introduced with the exemption limit of Rs 5 Lakhs. It may also be noted that individuals as well as HUFs are required to file their Income Tax return (subject to some exemptions in case of salaried employees) if the Income before allowing Exemption u/s 10A, 10B or 10BA exceeds the exemption limit. The I.T. department over the past few years improved on computerization and has provided the online facility of E-filing of IT returns. The I.T. department has drastically changed the Assessment policy and how almost 98 percent returns are being accepted without any question. However, people may have a number of questions about starting a new I.T. file. This question is dealt hereunder:-

Now, It is not necessary to have taxable income to file a new income tax return. Now all the companies and the firms whether having taxable income or not, are obliged to file their Return of Income. It may also be noted that Individuals or HUFs etc are require to file their income tax return w.e.f. AY 2006-2007 (subject to some exemptions in case of salaried employees), if the income before allowing deductions under chapter VI-A and before allowing exemptions u/s 10A, 10B or 10BA, exceeds the exemption limit. 

Section 139(1C) has been inserted to provide w.e.f. 1.6.2011that the CBDT shall notify the  class of persons (like some salaried employees) who may not be required to furnish their IT returns if proper tax has been deducted at source by their employer.

Even in cases, where an Assessee is not required to mandatorily file an income tax return, it is advisable to have an IT file considering the following:-

1.    In case of salaried employees, at the time retirement, their savings is accumulated and when they acquire any property or make investment, the Income Tax Department may ask question to explain the same, which becomes quite difficult as by that time the accumulated funds may be the tune of several lakhs.

2.    Similarly, ladies get come gifts in cash or in kind on the occasion of marriage as well on other occasions. Such money is generally invested and in course of years, it is multiplied. At a later stage, when the accumulated amount becomes considerable, the Assessing officer may be reluctant in admitting the same and mat raise queries. In case of search or raid by IT Deptt, it becomes more difficult to convince the officers about the source and ownership of such money and other assets in case the person does not files his income tax return. It may be noted that in case of search, the income of previous year may be treated as undisclosed, if no return has been filed for the relevant assessment year and the due date for filing the return u/s 139(1) has expired.

3.    The parties to whom a person may advance money by way of loan or deposit may also insist for Income Tax PAN to avoid inconvenience in their assessment.

4.     It has been made obligatory to mention PAN in respect of various monitory transactions, the scope of which has been enlarged vide various notifications by Govt.

5.       While making any investment in shares or debentures, one is required to mention the PAN.

6.   Some people may deduct Tax at source while paying amount as rent, Interest or commission etc. In case to get its refund (if you have income below taxable limit), one must have its IT file, Pan and file IT Return.

 7.       If one wants to travel abroad it is helpful if she/he is having and I.T. File.

## This Post is just a knowledge sharing initiative for mutual discussion and author does not intend to solicit any business or profession.

EXEMPTIONS FROM CAPITAL GAIN TAX (SEC 54 TO 54GB)

RESIDENTIAL STATUS OF AN INDIVIDUAL

[SEC.6(1) OF INCOME TAX ACT]

DIFFERENCE BETWEEN TRUSTS, SOCIETIES & SEC.8 PVT LTD COMPANY

Doing a Social work is good and important for betterment of society. Then why not doing it in a legal manner. In India Non-Profit making organizations can be registered as Trust, Society, Private Limited Non Profit Company (Section 8 Company). People usually consider them to be one and same. But No. There is huge difference between all three. All have their own Benefits, Drawbacks and legal existence. The following comparison table should help you in deciding which is better for you considering your objectives and circumstances.

BASIS OF DIFFERENCE	TRUST	SOCIETY		PVT LTD SEC-8 COMPANY
STATUTE / LEGISLATION	Indian Trust Act, 1882	Societies Registration Act, 1860	The Companies Act, 2013
MEMBERS ARE CALLED AS	Trustees	Members	Directors
MINIMUM NUMBER OF MEMBER REQUIRED	Two	Seven	Two
GEOGRAPHICAL AREA OF MEMBERS	Members can be from same state or city.	Should be from different states.	Can be from same state or city.
MINIMUM CAPITAL INVESTMENT REQUIREMENT	Can be registered with a minimum amount (say Rs 1,100/-)	Can be registered with a minimum amount (say Rs 1,100/-).	Minimum Capital Required Rs. 1,00,000/-.
MEMBERSHIP FEES FOR MEMBERS	No such option	Societies can keep a minimum fees for every Member	No such option
FAMILY MEMBERS	Can become Trustees	Registrar objects on family members becoming part of the Governing Body	Can become Director
GEOGRAPHICAL AREA OF ACTIVITY	All India	Normally, state wise registration. A separate registration for All India level is required.	Normally, state wise registration. Can work on All India Level.
MAIN DOCUMENTS	Trust Deed	1.       Memorandum of Association 2.       Rules and Regulations	1.       Memorandum of Association 2.       Articles of Association
AMENDMENTS IN MAIN DOCUMENTS	Easily done by Supplementary Trust Deed.	Relatively more difficult. Both Memorandum of Association and Rules and Regulations need to be changed	Relatively more difficult. Both Memorandum of Association and Articles of Association needs to be change.
NATURE OF CONTROL	One Man Control, i.e , Settler	Democratic system. Decisions are made by voting. Power struggle may ensue.	Decisions are made by Board of Directors
NAME OF ORGANISATION	Easily Available	A bit difficult to get the desired name	A bit difficult to get the desired name
WINDING-UP	Trust is generally irrevocable, Can not be wound-up.	Can be wound up if 3/5th of the members so desire	Voluntary Wind up or by Tribunal for some reasons. For voluntary wind-up consent of at least 3/4th of the members is required.
AFTER DISSOLUTION	If dissolved on certain conditions,  All the property is transferred to Trust having same objectives.	Upon dissolution and after settlement of all debts and liabilities, the funds and property of the society may not be distributed among the members. Rather, the remaining funds and property must be given or transferred to some other society having similar objects.	Upon dissolution and after settlement of all debts and liabilities, the funds and property of the company may not be distributed among the members of the company.  Rather, the remaining funds and property must be given or transferred to some other section 8 company having similar objects

I hope above table will help you in understanding basic differences among these three and choosing a right option as per your requirement.

## This Post is just a knowledge sharing initiative for mutual discussion and author does not intend to solicit any business or profession.