filing of income tax return ay 2018-2019 2nd july, 2018€¦ · individual/ huf case i-accounts...

FILING OF INCOME TAX RETURN

AY 2018-2019

2ND JULY, 2018

BCAS LECTURE MEETING

Index

Sr. No Particulars

1 Who is required to file Return of Income in India?

2 Mode of Submission

3 Applicable Return of Income for various types of

assessee

4 Filing Process with YOY comparison of the

Income Tax Return

5 Common changes in ITR for AY 1819

6 A Word of Caution

Who is required to file the return of income in India?

Particulars Assessee Type Threshold

Limit

Gross Total Income including

Capital Gain u/s 10(38)

But without claiming deduction

u/s 10A,10B,10BA,80C to

80U).

Individual/HUF 2,50,000

Individual/HUF

(Senior Citizens)

3,00,000

Individual/HUF

(Super Senior

Citizens)

5,00,000

Mandatory to file Return of

Income if there is an asset

outside India or signing

authority in any account outside

India or financial interest in an

entity outside India.

Resident

Individuals

(Not applicable to

RNORs)

-


Particulars Assessee Type


Income regardless of

Income/Loss.

Company/Firm


Income if you want to carry

forward loss

Belated Return - Loss from

House Property and

Unabsorbed Depreciation

allowed to be c/f

Any assessee


Particulars

Any person deriving income from property held under trust for

charitable/religious purposes without claiming exemption u/s 11/12

exceed the exemption limit

If income of the political party without claiming exemption u/s 13A

exceeds exemption limit

If total income of the assessee specified u/s 10(21)to 10(24)(a)/(b)

without claiming exemption under the sections mentioned exceeds

exemption limit

Any university/college/other institution u/s 35(1)(ii)/(iii) are required

Business Trust u/s 139(4E) and Investment fund u/s 139(4F)

• Annual Information Return (AIR) of 'high value

financial transactions' is required to be furnished under

section 285BA of the Income-tax Act, 1961 by 'specified

persons' in respect of 'specified transactions' registered or

recorded by them during the financial year.

• What is this?

• What is your duty? As per the Law and Practical problems

• CASS/ITBA – ITD – Source of transactions entered by

you


Mode of submission

Person Conditions Mode of furnishing

return

Individual/

HUF

Case I-Accounts required to be audited u/s

44AB

Electronically with

digital return

Case 2- Return is submitted in ITR 1/ITR 4

and the individual/HUF satisfies at least one

of the following two conditions:-

-individual is a super senior citizen

- total income of the individual/HUF does not

exceed Rs.5 lakh and no refund is claimed in

the ROI.

-Electronic mode in

case 3

- Paper format

-Case 3-Any other case Return can be

submitted by using

any one of the

following modes:-

A. Electronically

under digital

signature.

Mode of submission

Person Conditions Mode of furnishing

return

Individual/HUF -Case 3-Any other case B- Through electronic

verification code.

C. Submitting ITR V

to Bengaluru

Company -Case 4- Any company -Electronically with

digital return

Person required

to furnish in

ITR-7

-Case 5-Political Party

-Case 6- Any other case

Electronically with

digital return

-Electronic mode give

in Case 3

Firm, LLP or

any person (not

mentioned to

furnish return in

ITR-5

- Case 7- Accounts are required to be

audited u/s 44AB

-Case 8- Any other case

-Electronically with

digital return

-Electronic mode give

in Case 3

Journey before and now….

• CBDT notified Income Tax Returns on 05th

April,2018.

• CPC released ITR 1 on 14.4.18 and rest of the

ITRs between 10th to 26th May.

• TDS Returns due date 31.05.2018 hence Form

26AS were updated only after 10.06.2018 onwards

ITR’s notified for A.Y.2018-2019 - Applicability

ITR 1 Applicability Non Applicability

Individual(Not

HUF) , if his total

income includes

• Salary/Pension.

• Income from 1 House

property

•Income from other

sources (Except income

from lottery, race horses,

dividend income in

excess of Rs.10 lakhs or

unexplained income as

per Sec. 115BBE)

• NR/RNOR’s.

• ROR=TIncome > 50lakhs.

• Income more than 1 house

property or if there is b/f

loss or to be c/f loss.

• ITR 1 will direct you to use

ITR 2 anyway

• Agricultural Income more

than Rs.5,000/-

•Income from any source

outside India.

• Who wants to claim relief

u/s 90/91.

• Who has any assets

(including financial entity)

located outside India.


Individual/HUF,

if his total income

includes:

• Salary/Pension.

• Income/loss from more

than 1 House property

• Income from capital

gains.

•Income from other

sources (Including income

from lottery or race horses.)

• Income chargeable to tax

under the head “Profit and

Gains from

Business/Profession”.

ITR 3

Individual/HUF

• All incomes covered

under ITR 2 &

•Income from

Business/Profession.

• Any person other than

Individual/HUF has no

income from

business/profession.

ITR’s notified for A.Y.2018-2019- Applicability


Individual/HUF,

/Firm (other

than LLP) if

total income

includes:

• Presumptive Income

computed u/s

44AD,44ADA and 44AE.

• Salary/Pension.

• Income from House

Property

• Income from other sources

(Except income from

lottery, race horses,

dividend income in excess

of Rs.10 lakhs or

unexplained income)

• Income from

business/profession(includin

g speculative business).

• Income from agency

business or commission or

brokerage.

•Income chargeable to tax

under the head “Capital

Gains”.

• Income from any source

outside India.

• Who wants to claim relief

u/s 90/91.

• Who has any assets

(including financial entity)

located outside India.



ITR’s notified for A.Y.2018-2019 -Applicability

Note: ITR 4 has undegone a change as per the updated utilities on

CPC website w.e.f 29th June 2018

Assessee offering Income under Sec. 44AE (say, Transport) need to

give details per vehicle).



• Partnership Firm

•AOP/BOI

• For persons other than

-Individuals

- HUF

- Company

- Person filing Form ITR 7.

ITR 6 • Companies • Companies other than

those claiming exemption

under section 11.

ITR 7 • For persons including

companies required to

furnish return under

sections :-

-139(4A),139(4B),

139(4C)139(4D),139(4E)

and 139(4F)

ITR 1 – SAHAJ- Applicable for Income from Salary

,One House Property, Other Sources and Total Income

upto 50 lakhs - ONLY ROR

• PY all Individuals, but CY only ROR

• Now ,there is a requirement to furnish a break-up of salary

i.e. Allowances not exempt, Value of perquisites , Profit in

lieu of salary, Deductions u/s 16. Until now, these details

would appear only in Form 16 and the requirement to

disclose them in the return had never arisen.

• A break up of Income under House Property which was

earlier mandatory only for ITR -2 and other forms.

• Changes in utility 29.6.18- Deduction claimed u/s 16

cannot be more than Rs. 5000 in case of assessee is not a

government or a PSU employee. Intially, Rs. 2500.

• Whatever be the residential status of an

Individual/HUF, earning any source of

income apart from Business or Profession,

including Foreign Income/ having Foreign

assets, will file ITR 2

• Any Individual/HUF assessee earning

income from a partnership firm, now has to

file ITR-3 and not ITR -2 unlike AY 2017-18.

ITR 2 – Applicable for Individuals and HUFs

(R/RNOR/NR) not having income from profit and

gains of business or profession

• Due to the fact that Income from Partnership

will not have to be reported by

Individuals/HUFs in ITR 2, information

related to “Interest held in the assets of afirm or association of persons (AOP) as apartner or member thereof” in Schedule AL

(Assets and Liabilities), is now removed.

• To clarify Schedule AL is applicable to

assesses opting for ITR 2 & 3 who have total

Income exceeding Rs. 50 lakhs in a PY. AS &

LB not covered by BS & PL

ITR 2 – Contd…

ITR 3 – Applicable for Individuals and HUFs having

income from profit and gains of business or profession

• This ITR will cover any Individual/HUF whatever be the

residential status, disclosing income from all sources including

Income from Business and Profession.

• This ITR will not cover assessess offering Income on

Presumptive basis like Sec 44AD, 44ADA, BUT if you are an

assessee on presumptive income with Capital Gains, resort to

ITR 3.

• Attention -Under General Information, a box for applicability of

Section 115H has been inserted, which you may select for those

non residents who have become residents in the financial year for

which they are assessable and required to File a return u/s 139.

• Section 115H specifically allows for the

continuation of benefit against the investment

income derived from foreign exchange asset

to the NRI though he becomes a resident

later.

• After the enforcement of Goods & Services

Tax, the new ITR forms have introduced new

columns to report GST details (applicable also

for ITR 5 and 6).

ITR 3 – Contd…

A Close look at the GST applicable field and it’s

impact

• Schedule P&L – CGST, SGST, IGST & UGST

received or receivable in respect of goods/services

supplied (Credits) and paid/payable (debits)

• Schedule OI – only applicable to those assessee to

whom Section 44AB applies, you will need to

mention the refund of GST which is not credited

to P&L account. + Separate bifurcation of

amounts of credit as at 31st March of the FY – for

CGST, SGST, IGST & UGST.

ITR 3 – Contd….

ITR 4 – Applicable for Presumptive Income from

Business and Profession – No Capital Gains - no

exempt agricultural income of more than INR 5,000 –

No Sch. FA & FSI

•Income from Salaries/House Property – disclosed with

bifurcation – as explain in ITR 1

• There is an additional requirement to quote GSTR No.

and turnover/gross receipts as per GST return filed

• Mismatch can arise while reporting gross receipts

mentioned under Computation of Income under 44AD

and/or 44ADA

• Particulars of Financial Information – Mandatory

fields: Creditors, inventories, debtors & cash!!!

ITR 4 – Contd…

ITR 6 – Applicable for Companies other than

companies claiming exemption under section 11

• The financial statements of the company if drawn up in

compliance to the Indian Accounting Standards specified in

Annexure to the companies (Indian Accounting

Standards)Rules,2015 – Gen. Info & MAT

• 2 Types of BS/P&L – Incase of company following Ind AS

– retained earnings and related groupings – required to fill

Other Comprehensive Income in P&L (making it 45 page

long)

• The new ITR 6 requires every unlisted company to provide

details of all beneficial owners who are holding 10% or more

voting power (directly or indirectly) at any time during the year

2017-18. viz., the name, address, percentage of shares held and PAN.

•PY - only for Shareholders more than 10% voting power were

required the same. – Who is a Beneficial Owner…

ITR 6 – Contd……

• Depreciation schedule has undergone a change

due to changes in rates, which now allow

maximum upto 40%. New columns have also

been inserted to enable the entities to claim

proportionate depreciation in the event of

business re-organisation, i.e., demerger,

amalgamation.

• Disallowance to be made in respect of

depreciation under section 38(2) if an asset is not

exclusively used for business purpose must be

shown separately from AY 1819.

WHO IS A BENEFICIAL OWNER?

• Beneficial Owner refers to the

person who enjoys the right of

ownership of the shares irrespective

of the title.

• He could be the person who

actually enjoys the right of

ownership but the name is not

reflected on the register of

members.

ITR 6 – Contd…..

• CSR expenditures are mandatory under the Companies Act, 2013 and

these are not deductible u/s 37(1). Companies covered u/s 135 of

Companies Act 2013 are required to disclose CSR expenditure in its

Board’s report. A new column has been inserted in ITR Form 6 to

provide details of apportionments made by the companies from the net

profit for the CSR activities – P&L of ITR and Schedule OI

•Following details in respect of transactions with a registered or

unregistered supplier under Schedule GST:a. Transactions in exempt goods or services.

b. Transactions with composite suppliers.

c. Transaction with registered entities and total sum paid to them.

d. Transaction with unregistered entities. (after 1.7.17)

•Schedule FD - foreign payments/receipts towards capital and revenue

nature in INR.

Both GST and FD schedule mandatory for companies not liable for

tax audit.

ITR 7 – Applicable for persons including companies

required to furnish return u/s

139(4A),139(4B),1394(C),139(4D)or 139(4F)

•Form ITR 7 require to disclose following additional information:

a. Aggregate annual receipts of the projects/institutions

b. Date of registration or approval granted to the trust by the IT authority-

to be mentioned separately as per Notified forms, but the utility has

clubbed in with details of projects run by the Trust.

• In case the trust has modified the Trust deed on the basis of changes in

Objects/activities based on which previous registration was granted, a fresh

registration shall have to be applied u/s 12A – applicable for registration.

•a. Date of change in objects (LY)

•b. Whether you have complied with the time lines for fresh

application?(CY)

•c. Whether Fresh registration has been granted u/s 12AA- procedure for

registration? (CY)

•d. Date of such fresh registration (CY)

Common changes in Income Tax Return Forms not

present in AY 1718 ITR

• Capital gains exemption u/s 54, 54B, 54EC, 54EE, 54F, 54GB

and 115F shall have to be separately mentioned with different

details for different exemptions. While availing exemption,

mention date of transfer of original capital asset

• In the case of capital gain arising on transfer of unquoted shares,

it would now be mandatory for the investors to obtain the

valuation report. To ensure that investors correctly report the

capital gains from unlisted shares, the new ITR Forms require the

taxpayer to provide figures of actual sales consideration and FMV

as determined by a Merchant Banker or CA.

• Alas! Notification 23/2018 dated 24th May, 2018 has removed

CA from valuation…

(applicable to all ITR except 1 & 4)



• ‘Schedule OS’ to report any sum of money or any property

received by any assessee which is taxable u/s 56(2)(x)

crossing threshold of INR 50,000 with or without

consideration from specific parties- (ITR 2, 3, 5, 6 and 7)- Eg

• For those claiming Treaty benefit for Capital gains,

additional 5 details are required to be mentioned apart from

the 5 provided in previous ITR

•a. Rate as per treaty

•b. Rate as per Income tax

•c. Section of the Income-tax Act

•d. Applicable rate

• Lower of both the rates



•In earlier ITR Forms, net impact of ICDS on the

profit was required to be reported in Part A of Schedule

OI (Other Information) but from AY 1819, increase

and/or decrease both due to ICDS will need to be

reported.



•Under the Schedule TDS, there is also an additional field for

furnishing details of TDS as per Form 26QC for TDS on rent

u/s 194IB of the IT Act,1961 along with PAN of the

deductor, as TAN is not neccesary for such transactions.

•CBDT has changed nature of business codes for income tax

return forms from A.Y. 18-19. Before filing of Income tax

return ensure correct business sector along with correct

business code has been selected.

A WORD OF CAUTION TO AVOID ANY FILING ERRORS

THANK YOU!!!

CA Divya Jokhakar

Partner

B.D. Jokhakar & Co.

Chartered Accountants

[email protected]

LEGAL ASPECTS OF RETURN FILINGAY 2018-19

2ND July, 2018BCAS LECTURE MEETING

- C.A. Devendra H. Jain

RATES OF TAXES : AY 2018-19 No change in basic exemption limit

Tax rate for first slab upto Rs. 5 lacs reduced to 5% from 10%.

Other slab rates for Individuals, HUFs, AOP, BOI, AJP remain thesame.

Surcharge introduced for above assessees having income aboveRs. 50 lakhs but upto Rs. 1 crore @ 10% (exisiting surcharge@15% for total income above Rs. 1 crore to continue)

Rebate u/s 87A restricted to Rs. 2500 and for total income uptoRs. 3.5 lacs only.

Companies having turnover or gross receipts upto Rs. 50 crores inFY 2015-16 – tax rate reduced to 25%

SECTION 10(38) LTCG exemption on transfer of listed equity shares would not be

available if:

the transaction of acquisition of equity shares is entered into

on or after 1 October 2004; and

such acquisition is not chargeable to securities transaction tax

To protect exemption for genuine cases where the STT could not

have been paid, Central Government has vide Notification No.:

43/2017 dt. 5th June, 2017, notified certain acquisitions for

which the condition of chargeability of STT shall not apply. The

said notification is negatively worded and provides for cases

where exemption shall be denied in the absence of payment of

STT at the time of acquisition. Eg.: Cases of shares acquired in

preferential allotment or shares acquired in off market

transactions.

SECTION 10AA- CLARIFICATION

Clarificatory amendment has been made that:

the amount of deduction shall be allowed from the

total income of the assessee before giving effect to

the provisions of section 10AA;

and

the deduction in no case shall exceed the said total

income.

SECTION 11

• Under the existing provision, donations (except donations made out of accumulated income) by

a trust or institution to any other trust or institution is considered as application of income for

the purposes of its objects

• Proviso has been inserted that corpus donation made by a trust or institution to any other trust

or institution shall not be treated as application of income

CHARITABLE &RELIGIOUS TRUST

Exempt trust shall be required to obtain a fresh

registration in case of modifications in the objects after

initial registration has been granted

– an application to be made within 30 days of modification

Additional condition has been inserted in Section 12A - of

filing the return of income within the time prescribed u/s

139(1) for availing the exemptions under sections 11 and

12.

SUB-SECTION 5 OF SECTION 23

A new provision has been introduced to exempt notional

income from house property held as stock in trade, where

the property or any part is not let out during the whole or

part of the year.

The said exemption will be provided only for the period upto

one year from the end of the financial year in which

certificate of completion of construction of the property is

obtained from the competent authority.

SET OFF OF LOSS FROM HOUSE PROPERTY

• New sub-section (3A) inserted in Section 71

• Restriction on set-off of loss under the head “Income from House Property” to Rs. 2 Lacs

against income assessable from other head of income.

• Restriction not w.r.t Intra – head adjustment

• Applicable to all categories of assessees

• Applicable even in respect of losses from LOP.

CHANGES IN DEPRECIATION

Any expenditure incurred on acquisition of any asset

shall be ignored for the purpose of determination of

actual cost if payment(s) exceeding Rs.10,000 is made

in a day otherwise than by an account payee cheque/

draft or use of ECS through a bank account.

• Vide Notification No.: 103/2016 dated 07/11/2016,

the maximum rate of depreciation, is restricted to 40%

for all assessee.

SECTION 40A(3) & 40A(3A)

Section 40A(3) amended to reduce the present threshold

towards cash payments to a person in a single day to

Rs.10,000 from Rs.20,000.

It has also been amended to reduce the existing threshold

to Rs.10,000 from Rs.20,000 for expenditure claimed in a

year, but cash payments made in any subsequent year

[Section 40A(3A)]

Specified mode of payment expanded to include use of

ECS through a bank account.

SECTION 43B- INTEREST TO CO-OP. BANKS

• any sum payable by the assessee as interest on any loan or advances from a co-operative bank( other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank) shall be allowed as deduction ifit is actually paid on or before the due date of furnishing the return of income of therelevant previous year.

MAINTAINANCE OF BOOKS & AUDIT

• Section 44AA - In the case of individuals and HUF

carrying on business or profession (other than

persons engaged in legal, medical, etc.), the

threshold limits increased for maintenance of books

to:

– income exceeding Rs. 2.5 lakhs (earlier Rs. 1.20 lakhs); and

– total sales/ turnover/ gross receipts exceeding Rs.25 lakhs

(earlier Rs.10 lakhs)

Section 44AB – The limit of turnover/gross receipts for Eligible

assessee opting for Section 44AD raised from Rs. 1 Crore to

Rs. 2 Crore.

JOINT DEVELOPMENT AGREEMENT-SECTION 45(5A)

• Year of taxability of capital gains has been a matter of litigation in case

of joint development agreements(JDA)

• A new charging provision is introduced (ss. 5A) in case of individual or

HUF entering into the JDA, capital gains would be chargeable in the

previous year in which the certificate of completion is issued by the

competent authority

• Stamp duty value of his share in the project on the date of issuance of

the said certificate as increased by any monetary consideration received

will be full value of consideration

• The above benefit would not be available if assesse transfers his share

in the project on or before the date of issue of said certificate. In this

case, capital gains will be taxed in the year of such transfer as per the

general provisions.

• Further, an amendment is made towards withholding tax at the rate of

10% from the monetary consideration payable to a resident (S. 194IC)

• Cost of acquisition of the share in the project in the hands of the land

owner shall be the amount which is deemed as full value of

consideration, i.e. stamp duty value.

CONVERSION OF PREFRENCE TO EQUITY SHARE

• Conversion of preference share of a company into

equity share of that company will not be regarded as

transfer [Sec. 47(xb)].

• In determining the period of holding of such equity

shares, the period of holding of the preference

shares shall be included.

• The cost of acquisition of the preference shares

would be regarded as cost of acquisition of equity

shares.

SECTION 2(42A) & 49

• Period of holding (POH) of immovable property

– being land or building or both, reduced from 36 months

to 24 months to qualify as long term capital assets

• Consolidation of 'plans' within a 'scheme' of mutual

fund –

- POH of the units of consolidated plan shall include the

POH for which the units in consolidating plan of mutual

fund scheme were held

- Cost of acquisition of the units in the consolidated plan

shall be the cost of units in consolidating plan of mutual

fund scheme

BASE YEAR FOR INDEXATION

• Base year shifted from 1981-82 to 2001-02

• Therefore in case of capital assets acquired before

01.04.2001, FMV as on 1.4.2001 can be substituted

for cost of acquisition.

• CII for : FY 2017-18 - 272

SECTION 50CA

– TRANSFER OF UNQUOTED SHARES

• New provision in case of transfer of unquoted shares

• Analogous to s. 50C

• If consideration is less than FMV, FMV shall be taken asfull value of consideration.

• The valuation mechanism is provided in Rule 11UAA.

• Rule 11UAA refers to Rule 11UA for the purpose ofdetermination of FMV – which is substituted w.e.f.01.04.2018 .

TAXATION OF GIFTS – PROVISIONS ENLARGED

• Erstwhile provisions of 56(2)(vii) & 56(2)(viia) - not

applicable from A.Y. 2018-119

• New clause (x) inserted in 56(2)

• Scope of the section widened - Recipient now to

include “Any Person”.

ADDITIONAL EXCEPTIONS IN SEC. 56(2)(X) VS. 56(2)(VII)• Provisions of Section 56(2)(x) shall not apply to any sum of money or any property received –

(VIII) from or by any trust or institution registered under Section 12A or Section 12AA

(X) from an individual by a trust created or established solely for the benefit of relative of the

individual.

SECTION -58 [IFOS-DEDUCTION]

• Inadmissible Deductions in computing Income from

Other Sources - Section 40(a)(ia) shall also be

applicable for expenses claimed under the head

IFOS.

REVISING ROI- 139(5)

• Time reduced to expiry of AY from existing period of 1 year from end of AY.

• Applicable from ROI for AY 2018-19 onwards.

SECTION 234F-FEE FOR DEFAULT IN FURNISHING

RETURN OF INCOME

(1) If a person required to furnish a return of income under section 139, fails to do so within the

time prescribed in sub-section (1) of said section, he shall pay, by way of fee, a sum of,—

(2) Effective for ROI of A.Y. 2018-19 and subsequent years.

(3) Consequential amendments in section 140A and 143(1).

(4) Penalty provision u/s 271F removed.

If Total Income </= Rs. 5,00,000/- Rs. 1,000/-

If Total Income > Rs. 5,00,000/- &

ROI furnished before 31st December of AY

Rs. 5,000/-

If Total Income > Rs. 5,00,000/- &

ROI furnished after 31st December of AY

Rs. 10,000/-

INTEREST U/S. 234A & JUDICIAL PRONOUNCEMENT

• Even if ROI is filed after due date, but if SA Tax is paid before due date of return filing then

Interest U/s. 234A is not leviable.

- CIT v. Pranay Roy [2009] 309 ITR 231 (SC)

• Vide Circular No. 2/2015, CBDT had clarified that no interest u/s. 234A will be charged on

the amount of SA Tax paid by assessee upto the due date of filing of return of income

MISCLLENEOUS AMMENDMENTS

• Section 115BBDA -Tax on dividend income exceeding Rs.10 Lakhs – extended to all assessees other thandomestic company, trust u/s 12AA, institutions u/s10(23C)

• Under section 80G, permissible donations made in cashreduced from 10,000 to 2,000.

• MAT and AMT credit extended to 15 years.

• 80CCD – even non salaried person can claim deduction upto 20% of GTI (subject to overall Rs. 1.50 lacs)

• 54EC extended to cover other notified bonds.

MARKED TO MARKET LOSS:

New clause (xviii) has been inserted in Sub-section (1) of

section 36, which provides for deduction of ‘marked to market

(MTM) loss or other expected loss’ as computed in accordance

with the ICDS notified.

Eg. As per ICDS-VI, MTM loss on derivative contract held for

Hedging purpose is allowed to be recognized. Accordingly it will

be allowed as deduction u/s. 36

As per newly inserted Sub-Section (13) to Section 40A, no

deduction/allowance of any ‘marked to market (MTM) loss or

other expected loss’ shall be allowed, except for those which

are allowable as per the provisions of Section 36(1)(xviii).

NEW SECTION- 43AA

Gain or Loss due to Change in foreign exchange rate, in all kind

of foreign exchange transaction

To be treated as Income or Loss and accordingly to be treated

in computation.

However, such Gain/Loss should be in accordance with

relevant ICDS (i.e. ICDS-VI)

Gain or Loss shall include:

(i) monetary items and non-monetary items;

(ii) translation of financial statements of foreign operations;

(iii) forward exchange contracts;

(iv) foreign currency translation reserves.

NEW SECTION- 43CB

Profits/Gains form construction contract or a contract forproviding services shall be on the basis of percentagecompletion method, as specified in relevant ICDS

However for, contract for providing services:

- where duration is less than or equal to 90days – Projectcompletion method applicable (mandatory)

- Involving indeterminate number of acts over a specific periodof time – Straight Line method applicable (mandatory)

In following any of the above method, as applicable, -

contract revenue shall include retention money and

the contract costs shall not be reduced by any incidental incomein the nature of interest, dividends or capital gains.

RETROSPECTIVE SUBSTITUTION OF SECTION 145A

Valuation of Inventory: Lower of Cost or NRV, computed in

accordance with ICDS.

Valuation of Purchase/Sale/Inventory: Add up tax, duty, cess or

fee actually paid or incurred by the assessee to bring the goods

or services to the place of its location and condition.

Valuation of Unlisted and/or Unquoted securities(Being

Inventory) : Initial cost as recognized in accordance with ICDS

RETROSPECTIVE SUBSTITUTION OF SECTION 145A

• Quoted Securities should be valued at lower of Cost or NRV.

• Comparison of cost and NRV shall be done category-wise. (ICDS- VIII -Valuation of Securities)

• Securities are classified under following categories:

(a) Shares

(b) Debt

(c) convertible securities

(d) other securities

RETROSPECTIVE INSERTION OF SECTION 145B

• Interest received by an assessee on compensation or on enhanced compensation, shall be

deemed to be the income of the year in which it is received.

• The claim for escalation of price in a contract or export incentives shall be deemed to be

the income of the previous year in which reasonable certainty of its realisation is achieved.

• Income referred to 2(24)(xviii) [Govt. Grant/subsidy etc.] shall be deemed to be the income

of the previous year in which it is received, if not charged to income tax for any earlier

previous year.

SECTION 80AC

• Earlier deduction u/s. 80IA, 80-IA , 80-IAB, 80-IB,80-IC,80-ID, 80-IE was not allowed if the return of income isfurnished after the due date specified under section139(1)

• From A.Y.2018-19, the scope of section 80AC is extendedto provide that the benefit of deduction under the entireclass of deductions under the heading ‘C- Deductions inrespect of certain incomes’ ( which intra-alia includes - inaddition to above sections – S. 80JJA, 80JJAA, 80P, 80PA,80QQB and 80RRB) of Chapter VIA, shall not be allowedunless the return of income is filed by the due date u/s139(1).

SECTION 80 IAC – START-UPS

Definition of ‘eligible business’ altered and expanded to

provide that the benefit would be available if start-up is

engaged in innovation, development or improvement of

products or processes or services, or a scalable business

model with a high potential of employment generation or

wealth creation.

Benefit available to start-up incorporated on or after the

1st day of April 2019 but before the 1st day of April, 2021

Deduction available for 3 consecutive A.Y.s out of 7 years

beginning from the year of incorporation of start up.

MISCELLANEOUS:

Section 79: If change in share holding due to proceedings

under IBC, 2016 - no rejection of c/f & set-off of b/f loss.

Section 115BBE: Deduction/allowance/ set off will not be

allowed against any addition referred to in ‘Section 68 to

Section 69D’ if made by Assessing officer.

Section 115JB: In case of a company against whom corporate

insolvency resolution process has been admitted by the

adjudicating authority under IBC, 2016 - Unabsorbed

depreciation AND loss brought forward shall be allowed to be

reduced in computing book profit.

MISCELLANEOUS:

Section 140: In case of a company against whom corporateinsolvency resolution process has been admitted by theadjudicating authority under IBC, 2016 - return of income willbe verified by ‘insolvency professional appointed by suchauthority.

Section 276CC: Proviso to this section gives relief fromprosecution in case where tax payable on the total incomedetermined on regular assessment, as reduced by the advancetax, if any, paid, and any tax deducted at source, does notexceed three thousand rupees, however now such relief shallnot be available to company assessee.

ASSESSMENT PROCEEDINGS:

Addition of difference between 26AS or Form 16/16A and ROI

shall not be added during CPC processing. [143(1)].

(For returns for AY 2018-19 onwards)

ACKNOWLEDGEMENTS:

VARIOUS SPEAKERS, AUTHORS &

CA SHASHANK MEHTA

81

[email protected]

filing of income tax return ay 2018-2019 2nd july, 2018€¦ · individual/ huf case i-accounts...

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