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Amnesty Under Taxation Laws (Second Amendment) Act 2016: A Study

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Shri. K. C. Singhal, former Vice President of the ITAT, has conducted an expert analysis of the Pradhan Mantri Garib Kalyan Yojna 2016, inserted by the Taxation Laws (Second Amendment) Act 2016, to provide amnesty to persons offering their undisclosed cash holdings to tax. The analysis covers all the important aspects of the Scheme and provides succinct answers to frequently asked questions by taxpayers and tax professionals

Introduction

After demonetization of high denomination notes, the Central Govt. has introduced a fresh Amnesty Scheme whereby any person, having undisclosed income in the form of cash or deposits with specified entity, can declare the same before the specified authority within the specified time subject to fulfillment of the conditions specified in the provisions of Sections 199A to 199R of Finance Act 2016. Before analyzing the aforesaid relevant provisions, it would be appropriate to refer to the salient features of the scheme.

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Demonetisation: Tax And Legal Issues

The Chamber of Tax Consultants organized a public meeting in which several important issues relating to the tax and legal implications of demonetisation were discussed. The eminent tax experts who addressed the gathering also answered several questions of the audience. The videos of the meeting together with a transcript of the discussions is available for perusal. The discussion and the advice of the experts will prove invaluable to all tax payers and professionals who are grappling with the complexities of the demonetisation scheme

DEMONETISATION – TAX & LEGAL ISSUES

Mr. V. Sridharan & Dr. K. Shivaram (Senior Advocates), C.A. Pradip Kapasi and C.A. Dr. Dilip Sheth, Panel Moderator – C.A. Jayant Gokhale

Held on 7-12-2016 at KC College, Fort

Attendance – over 700 Professionals and Others Summary for Public Benefit

— Summary by Sashank Dundu, Advocate

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Taxation Of High Value Currency Notes Demonetized

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CA P. N. Shah, an eminent tax expert, has conducted a critical analysis of the Taxation (Second Amendment) Bill, 2016. He argues that while the Bill provides welcome clarity as to the taxation of, and the levy of penalty on, the deposit of unaccounted cash, declarants may face draconian consequences under the laws relating to Benami transactions, money laundering, foreign exchange etc. He urges the Government to issue appropriate clarifications so that all uncertainties are removed and demonetization becomes a rousing success

I. BACKGROUND:

1.1 On 8th November, 2016, the Central Government demonetized Rs. 500/1000 Currency Notes (Old Notes). New Currency Notes of Rs. 500/2000 have been issued to replace the old Currency Notes. Old Currency Notes of Rs. 500/1000 can be deposited in the bank account of the person holding such old notes between 10th November to 30th December, 2016. Once the old notes are deposited in the Bank Account of the person he will have to explain the source of such deposit to the Income tax Authorities during the course of his assessment proceedings. The Government has recognized in its public announcements that an Individual or HUF may be holding some such old notes out of their savings and kept them for household needs. Therefore, a public assurance has been given that the Income tax Department will not inquire about the source of such deposits if the total deposit during the above period is less than Rs. 2.5 lakhs.

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Impact Of The Taxation Laws (Second Amendment) Bill, 2016

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Dr. Raj K. Agarwal & Dr. Rakesh Gupta have explained the salient terms of the Taxation Laws (Second Amendment) Bill, 2016 which sees to assess the deposit of unaccounted high denomination notes in the bank and also to levy penalty thereon. The experts have expressed concern that the terms of the proposed law may discourage those who want to come clean. They have suggested that the Government should adopt a constructive, pragmatic and forward looking approach rather than being punitive

Demonetization of high value currency with effect from 9.11.2016 flummoxed those who were hoarding such currency in abundance. Obviously, it was unaccounted cash. Caught by surprise, such persons thought of declaring such amount as current year’s income by paying tax @ 30% plus surcharge. But government made its intention clear that such declarations would attract penalty of 200%.

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Digest Of Important Judgements On Transfer Pricing, International Tax And Domestic Tax (October 2016)

Sunil-Lala

Shri Sunil Moti Lala, Advocate has prepared a compilation of 105 Important judgments on transfer pricing (33 cases), International Tax (6 cases) and Domestic Tax (66 cases) reported in October 2016. The author has meticulously and systematically classified the judgments into various categories to enable ease of reference. A PDF copy of the digest is available for download. He has also given the appeal numbers in all cases so as to enable the judgements to be retrieved from the website of the respective Court or Tribunal. The digest will prove invaluable to all practitioners of taxation law.

The Digest comprises of all the important judgements dealing with transfer pricing, international taxes and domestic taxation laws. A brief head note is given for each case. The Digests for the earlier periods are available here

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Pradhan Mantri Garib Kalyan Yojana: Last Call To Tax Evaders To Come Clean

Rahul-Sarda

Advocate Rahul Sarda has made a critical analysis of the provisions of the the Taxation Laws (Second Amendment) Bill, 2016 which proposes to tax unaccounted deposits of cash in the wake of the demonetization scheme. He has identified certain shortcomings in the legislative proposals and given pointers on how they can be rectified

I. Introduction

Amidst the Opposition-lead protests over demonitisation of high denomination currency notes (HDNs) ensuring little or no business being transacted by Parliament in its current winter session till now, on 28th November, 2016, the Hon’ble Minister of Finance and Corporate Affairs moved the Taxation Laws (Second Amendment) Bill, 2016 in the Lok Sabha proposing certain amendments to the Income-tax Act, 1961 (the “IT Act”) and to the Finance Act, 2016 (the “Finance Act”).

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Analysis of The Taxation Laws (Second Amendment) Bill, 2016

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CA Gautam Baid has prepared a bird’s eye-view review of the Taxation Laws (Second Amendment) Bill, 2016 in which he has identified all the core points that all tax professionals and tax payers have to be aware about

Analysis of The Taxation Laws (Second Amendment) Bill, 2016

Amendment to Income Tax Act, 1961

– Tax payable u/s 115BBE increased from 30% to 60% (Income assessable u/s 68, 69, 69A, 69B, 69C or 69D)

– Surcharge on income taxable u/s 115BBE @ 25% of tax payable
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Levy Of Penalty On Deposit Of Unaccounted Cash U/s 270A Of The Income-Tax Act: Opinions Of Two Eminent Experts

CA Jaiprakash Bairagra and CA Paras Dawar have written separate articles in which they have considered the question whether penalty under section 270A of the Income-tax Act, 1961 can be levied in a case where a person has deposited his unaccounted cash in his bank account and paid due tax thereon in the return of income for AY 2017-16. Both learned experts have given cogent reasoning in support of their respective conclusions

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Penalty For Cash Deposit In Banks Declaring As Unaccounted Income?

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Dr. Raj K. Agarwal & Dr. Rakesh Gupta have dealt with the controversial question whether the deposit of unaccounted high denomination notes in the bank can attract penalty under section 270A of the Income-tax Act, 1961 even though the said deposit is offered to tax in the return of income. The experts have explained the entire controversy in the proper perspective

Recently introduced Demonetization whereby currency notes of Rs. 500 and Rs. 1000/- have been declared as invalid legal tender with effect from 9.11.2016 is most likely to witness huge cash deposits in bank accounts within the window period expiring on 30.12.2016. Media reports have appeared attributed to Government sources that in case substantial amount of cash is deposited in banks declaring it as current year’s unaccounted income and applicable tax @30% plus surcharge etc. is paid, still penalty @200% of the tax can be imposed as per provisions of section 270A of the Income Tax Act, 1961.

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A Comprehensive Guide To The law Of Reopening Of Assessments Under Sections 147 To 153 Of The Income-tax Act, 1961

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Advocate Ajay Singh has conducted a meticulous assessment of the entire law in sections 147 to 153 of the Income-tax Act relating to the reopening of assessments. He has explained the entire procedure in a systematic manner and also cited all the important judgements on the issue. The Guide is an imperative read for all taxpayers and professionals

The scope and effect of a reopening of assessment is still shrouded in mystery even after various judgments of the Supreme Court and High courts. Reassessment is one of the distinguishing weapons in the armoury of the Department, empowers the Assessing Officer to assess, reassess or recompute income, turnover etc, which has escaped assessment. A number of intricate issues crop up during the reassessment proceedings. Some of the issues are been dealt with hereunder:

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