corporate taxes

August 2021

The Finance Ministry has announced an extension of the deadlines for e-filings of various income tax returns forms that come under the ambit of the Income-Tax Act, 1961. This comes after taxpayers had reported difficulties in the filing of these forms online. The Government had previously extended the deadlines for filing income tax returns (ITR) earlier this year so as to give taxpayers some form of relief amidst the ongoing pandemic. please refer to the circular here.

Government of India passed Taxation Laws (Amendment) Act 2021 in Parliament earlier this month offering a settlement of the retrospective cases pertaining to the 2012 legislation on the offshore indirect transfer of Indian assets. The Central Board of Direct taxes has now released the much-awaited draft rules for the legislation pertaining to the withdrawal of retrospective amendment in taxation concerning many entities. The rules are open for comments by September 4, 2021. Do share comments if any with @Shweta Kathuria by September 3, 2021

June 2021

OECD releases an international framework “Multilateral Competent Authority Agreement on Automatic Exchange of Information on Income Derived through Digital Platforms which is meant to enable the jurisdictions to exchange information, even where the receiving jurisdiction has not implemented the “Model Rules for Reporting by Platform Operators with respect to Sellers in the Sharing and Gig Economy” (Model Rules) approved by the OECD/G20 BEPS Inclusive Framework. Click here to read OECD’s Model Reporting Rules for Digital Platforms: International Exchange Framework and Optional Module for Sale of Goods.

In light of the current COVID second wave several issues have emerged for our companies with regards to Corporate taxes. Given this Forum is planning to submit a detailed note to CBDT with detailed issues and recommendations.

May 2021

In a recent notification, Central Board of Direct Taxes has laid down valuation rules for computing fair market value of an undertaking transferred under “slump sale”. Please refer to the notification here.
Central Board of Direct taxes has through a notification provided exemption to eligible foreign investors investing in the specified securities and non-resident investors/unit holders of Category III Alternative Investment Funds (AIFs) which are set-up in International Financial Services Centre (IFSC) from the requirement of obtaining a Permanent Account Number (PAN) (i.e. the Indian tax identification number) subject to satisfaction of prescribed conditions. The Notification is effective from 4 May 2021. Please access the notification here.

Central Board of Direct Taxes has issued a press release on the launch of new e-filing Portal of the Income Tax Department on June 7, 2021 and non-availability of e-filing services from June 1 to June 6, 2021. Please refer to the press release here.

In light of the current COVID second wave several issues have emerged for our companies with regards to Corporate taxes. Given this Forum is planning to submit a detailed note to CBDT with detailed issues and recommendations.

March 2021

Finance Act 2020 introduced new provisions with effect from tax year 2020-21 to tax: (a) employer’s contributions to PF, Superannuation, NPS in excess of INR 7,50,000 in a year and (b) annual accretions on such excess contributions to be computed as per the captioned. In relation to the same, the rules for computing the annual accretion on excess contribution were notified on 5 March 20211 with effect from 1 April 2021. On the basis of inputs received from our members Forum submitted a request to discuss concerns on the rules.

The Finance Bill, 2021 was presented by the Hon’ble Finance Minister (FM) Nirmala Sitharaman on 1 February 2021. In the wake of the representations received from various stakeholders, several amendments were introduced to the Finance Bill 2021. The amendments are intended to address ambiguities arising from the wordings of proposals as contained in the Bill. Key tax amendments are as below:

  • Definition of “liable to tax” modified to specifically provide that persons having an “income-tax liability” under the laws in force in a country shall be considered as liable to tax in such country.
  • Threshold for taxation of interest accruing on employees’ contribution to specified provident fund schemes increased from INR0.25m to INR0.5m where there is no employer contribution.
  •  Mechanism provided for reducing the existing goodwill from tax block of intangible assets pursuant to denial of depreciation on goodwill w.e.f. tax year 2020-21 onwards.
  • Provisions for taxing firm with respect to receipt of cash or specified assets by partners in connection with dissolution or reconstitution as proposed by FB 2021 revamped and streamlined.
  • Slump sale capital gains computation modified to consider fair market value of undertaking on date of transfer (to be prescribed by rules) as full value of consideration and cost of goodwill of business or profession at NIL (except where it is acquired by purchase from previous owner).
  • Relief from additional levy of Minimum Alternate Tax (MAT) in case of secondary adjustment or Advance Pricing Agreement (APA) entered by a taxpayer to apply only if the taxpayer has not utilized MAT credit in any subsequent tax years (TYs).
  • Non-Resident (NR) e-commerce operator not obligated to pay 2% equalisation levy (EL) on value of sale of goods owned by or services provided by residents or NRs having permanent establishment (PE) in India (to which such sale or provision is effectively connected) through digital platform of such e-commerce operator.
  • For the purpose of triggering the extended limitation period of 11 years from the end of relevant TY under the new reassessment regime proposed vide FB 2021, the term “asset” defined to include immovable property, shares and securities, loans and advances, and deposits in bank account.
  • Mandatory fee for delay in filing of tax return is reduced to INR 5,000 from INR 10,000.
  • New levy of fees up to INR 1,000 introduced for default in intimating Aadhaar number for taxpayers who are holding valid Permanent Account Number (PAN) as on 1 July 2017.

The central Board of Direct taxes has clarified that foreign portfolio investors (FPIs) will continue to enjoy 5 withholding tax on debt interest income. The clarification came after a few reports said that the concessional withholding tax rate of 5 per cent on interest income of FPIs has been withdrawn. The Central Board of Direct Taxes confirmed recently that the five per cent tax rate on interest income of FPIs will see no change. Please access the press release here

The Indian Finance Minister presented the Union Budget 2021 on February 1 2021. Key tax announcements made in the Budget which include some clarifications with respect to the equalization levy or the digital service tax and various other procedural changes. Most of the tax proposals will be applicable from April 1, 2021 unless otherwise specified. Please access the updates (here) and (here). On the basis of feedback received from our members, USISPF shared detailed submission as a post budget feedback to the Government on tax amendments.
Central Board of Direct Taxes has issued a circular which states that, where the Designated Authority passes an order to settle any direct tax dispute under Direct Tax Vivad Se Vishwas Act, 2020 (VSV), the tax authority shall pass consequential orders under the Income-tax Laws. Please refer to the circular here.
The provisions of the Income Tax Act, 1961 permit the tax authority, subject to certain conditions, to reopen a case for assessment where the tax authority has a reason to believe that income has escaped assessment. Generally, such reopening is permitted for a period up to seven years from the end of the relevant tax year which is it is sought to be reopened. In this regard, the CBDT has issued instructions directing that no cases other than the following categories of cases shall be considered for reopening in respect of tax year 2012-13 to 2016-17
The rapid outbreak of the novel coronavirus led to global lockdowns and caused massive interruptions of international flights, stranding the citizens in different countries, including several foreign nationals in India last year. In order to provide clarity on tax residency, the Central Board of Direct Taxes had issued Circular No 11, dated 8 May 2020, providing relief to individuals who came to India on a visit before 22 March 2020 and could not leave or depart on or before 31 March 2020, due to the COVID-19 pandemic and related travel restrictions. This Circular clearly defined the residency status of NRIs, expatriates, and other foreign nationals for Financial Year 2019-20 who arrived in India but could not return to their countries. Similar clarification was awaiting FY 2020-21. After receiving several representations from affected taxpayers, the CBDT has finally addressed this concern by issuing a fresh Circular No 2, on 3 March 2021. Please refer to the circular here.
Central Board of Direct Taxes has made further amendments in the computation of remuneration payable to fund manager u/s 9A. Forum had engaged with CBDT last year sharing industry suggestions. Please access the CBDT notification here

February 2021

Central Board of Direct taxes has further extended last date for completion of assessments/reassessments. Please refer to the notification here.

The Central Board of Direct Taxes extends the date of filing declaration under Direct Tax Vivad se Vishwas Act, 2020 (VsV) to March 31, 2021 and extends the dates of making payment under the third and fourth columns of table under Sec. 3 of VsV to April 30, 2021 and May 1, 2021, respectively. You can access the CBDT notification here.

Central Board of Direct Taxes has clarified on the scope of ‘penalties’ of Faceless Penalty Scheme, 2021 with immediate effect. The said notification excludes penalty imposable by: (i) Investigation Wing, (ii) Directorate of Income-tax (Intelligence & Criminal Investigation), (iii) Erstwhile Director General (Risk Assessment), (iv) Prescribed authorities for specified penalties. Please access the CBDT order here.

Budget 2021 has proposed amendments in the scope and applicability of the equalization levy or the digital service tax and various other procedural changes. USISPF will share a detailed submission as post-budget feedback to the Government on such proposals.

The Central Board of Direct Taxes has notified Faceless Assessment (1stAmendment) Scheme, 2021 which seeks to amend Faceless Assessment Scheme, 2019. The amendment seeks to specify the procedure for Assessment under Faceless Assessment Scheme, 2019. Please refer to the notification here.

January 2021

Foreign Tax & Tax Research Division of CBDT has circulated a Breach Protocol prepared as per the international standards and approved by Information Security Committee (ISC) to all the offices of Income Tax Department (ITD) handling information exchanged under a treaty; The Protocol shall get triggered in the event of an incident of inappropriate access, disclosure, use of confidential information, or failure to safeguard data.

CBDT has vide a recent notification relaxed the requirement of remunerating fund managers of certain offshore funds in view of amended Rule 10V for availing the special taxation regime u/s. 9A. One of the conditions of section 9A is that the remuneration payable to the fund manager shall not be less than the amount as may be prescribed by the CBDT. Earlier in May 2020, the CBDT has prescribed rules for computing the minimum amount of remuneration payable to the fund manager by the fund for the purpose of section 9A. Please access the notification here.

The Central Board of Direct Taxes has released the Faceless Penalty Scheme, 2021. The penalty under this Scheme shall be imposed in respect of such territorial area, or persons or class of persons, or income or class of income or cases or class of cases, or penalties or class of penalties as may be specified by the Board. Please refer to the notification here.

CBDT launches an automated dedicated e-portal on the e-filing website to receive and process complaints of tax evasion, foreign undisclosed assets as well as complaints regarding benami properties, in an initiative to bring about enhanced ease of interaction with the Department, while strengthening its resolve towards e-governance. Please refer to the press release here

Foreign Tax & Tax Research Division of CBDT has circulated a Breach Protocol prepared as per the international standards and approved by Information Security Committee (ISC) to all the offices of Income Tax Department (ITD) handling information exchanged under a treaty; The Protocol shall get triggered in the event of an incident of inappropriate access, disclosure, use of confidential information, or failure to safeguard data. Please refer to the protocol here

October 2020

As part of the ongoing work to develop a solution to the tax challenges of the digitalisation of the economy, the OECD/G20 Inclusive Framework on BEPS is seeking public comments on the Reports on the Pillar One and Pillar Two Blueprints. Please access the reports here.
UN Committee of Experts on International Co-operation in Tax Matters (UN Committee) releases amended draft paper on New Article 12B  on  taxation of ‘Income from Automated Digital Services’ with commentary, revised by Drafting group based on the comments received. It also contains a short summary by the Co-Coordinators of the written and oral comments submitted by other members.  Please access the paper here.
CBDT notifies amendments in Tax Audit report in Form 3CD, TP audit report in Form 3CEB, Rule 5 relating to depreciation and ITR-6 for AY 2020-21 pursuant to the newly notified concessional tax regimes under Sections 115BAA [for companies], 115BAB [for manufacturing companies , 115BAC [reduced slab rates for individuals] and 115BAD [for co-operative societies], notifies  the Income-tax (22nd Amendment) Rules, 2020.; Also notifies Forms for exercise of concessional tax regimes u/s,  115BAC / 115BAD.Please access the notification here.

September 2020

CBDT further extends belated /revised return filing due-date for AY 2019-20 from September 30th to  November 30th. Please access the order here.
CBDT issues guidelines on applicability of TDS on E-commerce operators u/s. 194-O & TCS on sale of goods u/s. 206C(1H) applicable w.e.f. October 1st. guidelines clarifies on calculation of threshold, applicability on payment gateways, adjustment for sale return, discounts or indirect taxes and other issues. You would recall  that we as a Forum  had submitted draft FAQs on the TDS levy with CBDT. Some of our recommendations are considered as part of the guidelines released. Please access the guidelines here
The Prime Minister of India, Shri Narendra Modi, while launching platform for ‘Transparent Taxation – Honoring the Honest’ had said that faceless appeal under the Income-tax Act will be available across the country from 25-09-2020. Now, the Central Board of Direct Taxes (CBDT) has notified the Faceless Appeal Scheme, 2020 effective from 25-09-2020. Please access the notifications here.
Central Board of Indirect Taxes and customs issues notification extending the  time limit for compliance u/s 31(7) i.e. issuing invoices in case of goods being sent or taken out of India on approval for sale or return, which falls between  March 20, 2020 to  October 30, 2020 to October 31, 2020. Click here for the notification.

With the commencement of the monsoon session of the Parliament, the Government has introduced The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Bill, 2020 before the Lok Sabha , which seeks to replace the Ordinance. Thus, all the provisions of the Ordinance and subsequent Central Board of Direct Taxes (CBDT) notifications/press releases issued in connection thereto are now proposed to be incorporated/codified in the 2020.

August 2020

On 13 August 2020, the PM launched ‘Transparent Taxation’ platform encompassing faceless assessments, faceless appeals, etc. The PM stated that the faceless assessments/appeals will have technology driven interface (e.g. in case of scrutiny assessments, there will be random selection of cases and selection will not be limited to jurisdictional Assessing Officer). Please refer to the relevant notifications here.
CBDT has released a detailed MAP guidance for the benefit of taxpayers, tax practitioners, tax authorities and CAs of India & of treaty partners. MAP guidance is presented in 4 parts – A) Introduction & Basic, B) Access & Denial of Access to MAP, C) Technical issues and D) Implementation of MAP outcomes. Please refer to the guidance here.
CBDT inserts new Rule 114AAB notifying class or classes of persons to whom provisions of Sec. 139A for mandatory obtaining PAN shall not apply.  Refer to the notification here.

July 2020

A Memorandum of Understanding was signed between the Central Board of Direct Taxes (CBDT) and the Central Board of Indirect Taxes and Customs(CBIC), for data exchange between the two organizations. Please refer to the press release here.
OECD has published a progress report on Tax Cooperation for Development which highlights OECD’s work on building tax systems in developing countries, unlocking a range of tools, experience and expertise to meet the tax challenges of the 21st century. Please access the report here.
SEBI signs a formal Memorandum of Understanding with the Central Board of Direct Taxes (‘CBDT’) for data exchange, marking the beginning of a new era of cooperation and synergy between SEBI and CBDT. Please refer to the press release here.
  • CBDT further relaxes timeline for processing of ‘validly filed’ returns having refund claims beyond the prescribed time-line for sending intimation as per second proviso to Sec. 143(1). 
  • CBDT provides one-time relaxation for verification of e-filed tax returns for AYs 2015-16 to 2019-20, which are pending due to non-filing of the ITR-V form. Refer to the circular here
  • CBDT enables functionality to verify return filing compliance for the purpose of determination of tax withholding rate and threshold on cash withdrawals
  •  Central Board of Direct Taxes restarts proceedings under faceless scheme

June 2020

Central Board of Direct Taxes further extends tax compliance, other  due dates under the  Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020. Please refer to the notification here.
Pr. CCIT (International tax) announces jurisdictions of income tax authorities / AOs for ‘Equalisation levy’ purposes, pursuant to powers conferred under CBDT notification no. 20/2020 and Sec. 178 of Finance Act, 2016. here

May 2020

On 6 May 2020, the Indian Central Board of Direct Taxes (CBDT) issued a notification on amending its Mutual Agreement Procedure (MAP) rules (Amended MAP Rules). Please access the notification here.
For further details please reach us here

As part of the ongoing work to develop a solution to the tax challenges of the digitalisation of the economy, the OECD/G20 Inclusive Framework on BEPS is seeking public comments on the Reports on the Pillar One and Pillar Two Blueprints. Please access the reports here.

UN Committee of Experts on International Co-operation in Tax Matters (UN Committee) releases amended draft paper on New Article 12B  on  taxation of ‘Income from Automated Digital Services’ with commentary, revised by Drafting group based on the comments received. It also contains a short summary by the Co-Coordinators of the written and oral comments submitted by other members.  Please access the paper here.

CBDT notifies amendments in Tax Audit report in Form 3CD, TP audit report in Form 3CEB, Rule 5 relating to depreciation and ITR-6 for AY 2020-21 pursuant to the newly notified concessional tax regimes under Sections 115BAA [for companies], 115BAB [for manufacturing companies , 115BAC [reduced slab rates for individuals] and 115BAD [for co-operative societies], notifies  the Income-tax (22nd Amendment) Rules, 2020.; Also notifies Forms for exercise of concessional tax regimes u/s,  115BAC / 115BAD.Please access the notification here.

CBDT further extends belated /revised return filing due-date for AY 2019-20 from September 30th to  November 30th. Please access the order here.

CBDT issues guidelines on applicability of TDS on E-commerce operators u/s. 194-O & TCS on sale of goods u/s. 206C(1H) applicable w.e.f. October 1st. guidelines clarifies on calculation of threshold, applicability on payment gateways, adjustment for sale return, discounts or indirect taxes and other issues. You would recall  that we as a Forum  had submitted draft FAQs on the TDS levy with CBDT. Some of our recommendations are considered as part of the guidelines released. Please access the guidelines here

The Prime Minister of India, Shri Narendra Modi, while launching platform for ‘Transparent Taxation – Honoring the Honest’ had said that faceless appeal under the Income-tax Act will be available across the country from 25-09-2020. Now, the Central Board of Direct Taxes (CBDT) has notified the Faceless Appeal Scheme, 2020 effective from 25-09-2020. Please access the notifications here.

Central Board of Indirect Taxes and customs issues notification extending the  time limit for compliance u/s 31(7) i.e. issuing invoices in case of goods being sent or taken out of India on approval for sale or return, which falls between  March 20, 2020 to  October 30, 2020 to October 31, 2020. Click here for the notification.

With the commencement of the monsoon session of the Parliament, the Government has introduced The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Bill, 2020 before the Lok Sabha , which seeks to replace the Ordinance. Thus, all the provisions of the Ordinance and subsequent Central Board of Direct Taxes (CBDT) notifications/press releases issued in connection thereto are now proposed to be incorporated/codified in the 2020.

On 13 August 2020, the PM launched ‘Transparent Taxation’ platform encompassing faceless assessments, faceless appeals, etc. The PM stated that the faceless assessments/appeals will have technology driven interface (e.g. in case of scrutiny assessments, there will be random selection of cases and selection will not be limited to jurisdictional Assessing Officer). Please refer to the relevant notifications here.

CBDT has released a detailed MAP guidance for the benefit of taxpayers, tax practitioners, tax authorities and CAs of India & of treaty partners. MAP guidance is presented in 4 parts – A) Introduction & Basic, B) Access & Denial of Access to MAP, C) Technical issues and D) Implementation of MAP outcomes. Please refer to the guidance here.

CBDT inserts new Rule 114AAB notifying class or classes of persons to whom provisions of Sec. 139A for mandatory obtaining PAN shall not apply.  Refer to the notification here.

A Memorandum of Understanding was signed between the Central Board of Direct Taxes (CBDT) and the Central Board of Indirect Taxes and Customs(CBIC), for data exchange between the two organizations. Please refer to the press release here.

OECD has published a progress report on Tax Cooperation for Development which highlights OECD’s work on building tax systems in developing countries, unlocking a range of tools, experience and expertise to meet the tax challenges of the 21st century. Please access the report here.

SEBI signs a formal Memorandum of Understanding with the Central Board of Direct Taxes (‘CBDT’) for data exchange, marking the beginning of a new era of cooperation and synergy between SEBI and CBDT. Please refer to the press release here.

  • CBDT further relaxes timeline for processing of ‘validly filed’ returns having refund claims beyond the prescribed time-line for sending intimation as per second proviso to Sec. 143(1). 
  • CBDT provides one-time relaxation for verification of e-filed tax returns for AYs 2015-16 to 2019-20, which are pending due to non-filing of the ITR-V form. Refer to the circular here
  • CBDT enables functionality to verify return filing compliance for the purpose of determination of tax withholding rate and threshold on cash withdrawals
  •  Central Board of Direct Taxes restarts proceedings under faceless scheme

Central Board of Direct Taxes further extends tax compliance, other  due dates under the  Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020. Please refer to the notification here

Pr. CCIT (International tax) announces jurisdictions of income tax authorities / AOs for ‘Equalisation levy’ purposes, pursuant to powers conferred under CBDT notification no. 20/2020 and Sec. 178 of Finance Act, 2016. here

On 6 May 2020, the Indian Central Board of Direct Taxes (CBDT) issued a notification on amending its Mutual Agreement Procedure (MAP) rules (Amended MAP Rules). Please access the notification here

Subscribe to get our weekly updates

USISPF Home Tax Forum Members