Vistra India Update 402

INCOME TAX

1. CBDT extends various due dates for compliance under Income-tax Act, 1961.

The Central Board of Direct Taxes (CBDT) has extended the various due dates, which were extended, to June 30, 2020, by the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020. Due date for furnishing revised/belated ITR for AY 2019-20 extended to July 31, 2020 

4 Extension of due date for linking of PAN with Aadhaar has not been mentioned in the Notification. However, CBDT press release, dated 24-06-2020, provides that the date for linking of Aadhaar with PAN would be extended to 31-03-2021.

5 The Govt. has extended the due date for linking of PAN with Aadhaar. However, no amendment has been made in Rule 114AAA which provides that if an assessee fails to link his PAN with Aadhaar by 31-03-2020, the PAN shall become inoperative.

6 Notification mentions that the due date has been extended in case of Section 54 or 54GB only. However, the press release dated 24-06-2020 provides that the due date has been extended in case of Sections 54 to 54GB.

7 No further extension has been given in these dates. The Press release dated 24-06-2020 provides that necessary legislative amendments in this regard shall be moved in due course of time.

8 The Press release dated 24-06-2020 provides that the necessary legislative amendments in this regard shall be moved in due course of time.

Click to view the circular

2.    CBDT issues Notification to Allow Exemptions for Section 115BAC

CBDT has issued N/No. 38/2020 under section 115BAC(2) of the Income Tax Act, 1961 to allow certain exemptions under section 14 and to disallow certain exemptions from the valuation of perquisites to a salaried individual who has opted the option under section 115BAC(5).

A new sub-rule (3) is inserted in Rule 2BB to allow the following exemptions to a salaried individual who has exercised option under sub-section (5) of section 115BAC under Rule 2BB-

“(3) Notwithstanding anything contained in sub-rule (1) and (2), an employee, being an assessee, who has exercised option under sub-section (5) of section 115BAC shall be entitled to exemption only in respect of the allowances mentioned in sub-clauses (a) to (c) of sub-rule (1) and at serial no.11 of the Table below sub-rule (2) to the extent and subject to the conditions, if any, specified therein.”;

1. Exemptions mentioned in Rule 2BB(1)(a), (b) (c) -

(a) any allowance granted to meet the cost of travel on tour or on transfer.
(b) any allowance, whether, granted on tour or for the period of journey in connection with transfer, to meet the ordinary daily charges incurred by an employee on account of absence from his normal place of duty.
(c) any allowance granted to meet the expenditure incurred on conveyance in performance of duties of an office or employment of profit.

Provided that free conveyance is not provided by the employer.

 
2. Exemption mentioned in Rule 2BB(2)-

Transport allowance granted to an employee, who is blind or deaf and dumb or orthopaedically handicapped with disability of lower extremities, to meet his expenditure for the purpose of commuting between the place of his residence and the place of his duty.

This exemption is applicable to the whole of India and is restricted to Rs. 3,200 p.m.

II. A new second proviso is inserted in Rule 3(7)(iii) to disallow the following exemption to a salaried individual who has exercised option under sub-section (5) of section 115BAC-

In rule 3, in sub-rule (7), in clause (iii), after the proviso, the following proviso shall be inserted, namely:—

“Provided further that the exemption provided in the first proviso in respect of free food and nonalcoholic beverage provided by such employer through paid voucher shall not apply to an employee, being an assessee, who has exercised option under sub-section (5) of section 115BAC.”.

3. No exemption for free food and non-alcoholic beverage provided by such employer through paid voucher

Rule 3 deals with valuation of perquisites. Rule 3(7)(iii) provides for valuation of perquisites for free food and non-alcoholic beverages provided by the employer to an employee. The value of such perquisite shall be the amount of expenditure incurred by such employer and shall be reduced by the amount, if any, paid or recovered from the employee for such benefit or amenity. 

Click to view the circular

3.    CBDT issues Corrigendum to Notification No 35/2020 dated 24.06.2020: 

In N/No. 35/2020 – 

(i)    in line 30, for “section 54 or 54GB” read “sections 54 to 54GB”;

(ii)    in line 35, for “sub-clause (i)” read “sub-clause (i) of clause (c)”.

Click to view the circular

4.    Prescribed class of persons for the purpose of section 50CA.

New Income Tax Rule 11UD- Prescribed class of persons for the purpose of section 50CA i.e to whom provisions of section 50CA shall not apply to transfer of any movable property, being unquoted shares, of a company and its subsidiary and the subsidiary of such subsidiary by an assessee in certain circumstances.

1.    the Tribunal, on an application moved by the Central Government under section 241 of the Companies Act, 2013, has suspended the Board of Directors of such company and has appointed new directors nominated by the Central Government under section 242 of the said Act; and

2.    share of such company and its subsidiary and the subsidiary of such subsidiary has been transferred pursuant to a resolution plan approved by the Tribunal under section 242 of the Companies Act, 2013 after affording a reasonable opportunity of being heard to the jurisdictional Principal Commissioner or Commissioner.

Explanation. -For the purposes of this sub-rule, -
•    a company shall be a subsidiary of another company if such other company holds more than half in nominal value of the equity share capital of the company.
•    “Tribunal” shall have the same meaning assigned to it in clause (90) of section 2 of the Companies Act, 2013.

Click to view the circular

COMPANY LAW

5.    Companies (Meetings of Board and its Powers) Second Amendment Rules, 2020

Ministry of Corporate Affairs has amended Companies (Meetings of Board and its Powers) Rules, 2014 to extend the time limit up to 30th September 2020 for allowing the Board to hold Board meetings through video conferencing or other audio visual means for matters referred to in Rule 4 (1) of Companies (Meetings of Board and its Powers) Rules, 2014.

Click to view the circular

6.    Companies (Appointment and Qualification of Directors) Third Amendment Rules, 2020.

In view of current circumstances prevailing on account COVID-19 situation, Ministry of Corporate Affairs has amended Companies (Appointment and Qualification of Directors) Rules, 2014 to extend the time line for an individual appointed independent directors to apply online to the institute for inclusion of his name in the data bank to 10 months (instead of 7 months) from the date of commencement of Companies (Appointment and Qualification of Directors) Fifth Amendment Rules, 2019. 

Click to view the circular

7.    Clarification on Creation of Deposit Repayment Reserve.

Ministry of Corporate Affairs (MCA) has extended the time limit to comply with the following to 30th September, 2020

• Create Deposit Repayment Reserve of up to 20% deposits maturing during FY 2020-21 before 30th April, 2020
• Invest or deposit at least 15% of amount of debentures maturing in specified methods of investments or deposits before 30th April 2020

Click to view the circular

GOODS AND SERVICES TAX

8.    To provide relief by lowering of interest rate for a prescribed time for tax periods from February, 2020 to July, 2020

The CBIC vide Notification No. 05/2020-IGST dated 24th June,2020 has provided relief on the rate of interest per annum payable by the registered dealer who fail to furnish the returns in FORM GSTR-3B along with payment of tax for the period from February, 2020 to July, 2020.

Click to view the circular

9.    Extension of Due date of GST compliance

Previously CBIC vide Notification No. 35/2020- Central Tax, dated 03.04.2020 has extended the due date of compliance which falls during the period from the 20th day of March, 2020 to the 29th day of June, to 30th day of June, 2020.  Based on the recommendations of the Council the CBIC vide Circular No. 55/2020-Central Tax dated 27th June, 2020 has further extended the due date to 31st August 2020. 

Click to view the circular

CUSTOMS

10.    Publishing of rate of exchange for conversion of the foreign currency

The Central Board of Excise and Customs (CBEC) vide Notification No. 53/2020 - Customs (N.T.) notified the rate of exchange for conversion of the foreign currency into Indian currency or vice versa for Export and Import of goods, with effect from 19th of June 2020.

Click to view the circular

LABOUR LAWS 

11.    Employees State Insurance Corporation (ESIC) has made submission of mobile number and Bank account details as a pre-requisite and mandatory for registering the Insured Person (IP)

ESIC has issued a circular (Number: F.No. I-11/13/04/2020-ICT dated 29 June 2020) mandating the submission of mobile number and bank account details of the Insured persons with effect from 1 July 2020. The salient features of the circular are enumerated below:

a)    Mobile number and Bank account numbers have to be updated mandatorily for registering the new Insured persons under ESI.
b)    The employer has been given an option to update the Mobile number and Bank account number of existing insured persons.
c)    Effective from 1 July 2020, all cash benefits/claims reimbursements will be settled only if the correct Bank account details of the beneficially is available in the system.
d)    The manuals pertaining to the changes will be available soon on the ESIC website. 
e)    Hence with these changes, ESIC is ensuring that the insured persons receive benefits such as hospitalization, monetary benefits as applicable seamlessly without any hassle. 

Click to view the circular

12.    Facility provided to employees to update the Date of Exit under Employees Provident Fund Organization (EPFO) 

Employees Provident Fund Organization (EPFO) has outlined the process to facilitate members to update the Date of Exit in their portal. The process is given below:

• Members to log in http://unifiedportal-mem.epfIndia.gov.in  
• Go to tab- Manage-Mark exit, choose PF account number from Select employment dropdown.
• Enter the date of exit and reason of exit.
• Click request OTP and enter OTP sent on Aadhaar linked mobile number
• Select checkbox
• Click update and ok
• Date of exit updated successfully