CAs Urge Govt To Provide Relief to Taxpayers during COVID-19 Pandemic
So severe has been the hardship caused to businesses by the unprecedented COVID-19 pandemic that several chartered accountants' (CAs') associations have taken the initiative to ask the government to save taxpayers from undue and unintended hardships under the Income-tax (I-T) Act. CA associations from across the country have written to finance minister Nirmala Sitharaman to grant relief to taxpayers from provisions of tax collection at source (TCS) under Section 206C(1H) of the I-T Act.
 
The CAs want the finance minister to extend timelines for filing tax returns under Section 139(1) of the I-T Act and also for filing transfer pricing audit report and, consequently, the ITR (income-tax returns) for such taxpayers, improving cash-flows with businesses and to provide relief to taxpayers from unwanted hardship.
 
They have asked for the due date for filing of returns for assessment year (AY) 2020-21 be extended to 31 March 2021 and the due date for filing the tax audit report be extended to 28 February 2021. This will also mean taxpayers availing moratorium will get an extended time for payment of interest and claiming the deduction under Section 43B of the Act in AY20-21.
 
The letter is signed by presidents of Bombay Chartered Accountants’ Society (BCAS), Chartered Accountants Association of Ahmedabad, Chartered Accountants Association of Surat, Karnataka State Chartered Accountants’ Association and Lucknow Chartered Accountants’ Society.  
 
A big issue that is hurting business badly is tax collected at source. Under an amendment by insertion of sub-section (1H) in Section 206C of the I-T Act, where a seller who receives any amount as consideration for sale of any goods of the value or aggregate of such value exceeding Rs50 lakh in any previous year shall at the time of receipt of such amount collect from the buyer, a sum equal to 0.1% of the sale consideration exceeding Rs50 lakh as income-tax.
 
However, assessees who are incurring huge losses cannot apply to the assessing officer for Nil/lower tax collection at source certificate under sub-section (9) of Section 206C of the Act. Tax collection at source in such cases results in blockage of funds, which is subsequently required to be claimed as refund by the assessees from the I-T Department.
 
Under section 206C (1) the TCS is to be collected from the amount payable by the buyer at the time of debiting this account or on its receipt from the buyer. Whereas under Section 206(1H) the TCS is to be collected from receipt of 'sale consideration' which phrase has not been defined anywhere. If one goes to sale of goods act, the sale consideration is simpliciter restricted to the consideration for the goods sold and will not include any taxes on sale, it added.
 
Sub-section (1H) of Section 206C of the Act provides for TCS while receiving payment for a sale Consequently, provisions of Section 206C(1H) is triggered on actual receipt of sales consideration which gives an impression that from 1 October 2020, the date from which the provisions of Section 206C(1H) becomes applicable, recovery of amounts outstanding as on 30 September 2020 would also come within the ambit of section 206C(1H) of the Act even though such sale, as per mercantile system of accounting followed by the seller, would have taken place before 1 October 2020.
 
Here is the representation sent by the CA associations to FM Ms Sitharaman...
 

 

  • Like this story? Get our top stories by email.

    User 

    COMMENTS

    m.prabhu.shankar

    1 month ago

    Excellent. Great. Great. More and more civil society members should start speaking out in the public on all the issues always irrespective of which govt is in the ruling.

    Nahom

    1 month ago

    Actions speak louder than words. Govt. seems to ride the Covid crisis by relying on large Indian companies who are proxies to Foreign Multinationals for transforming the Economy. Govt is ready to provide all incentives and low interest rate environment to this ultra top sector of the pyramid at the cost of the others. Govt thinks providing relief to bottom of the pyramid will be wasteful and will not provide benefits of economy of scale suitable for large Indian market. This would mean pauperisation of middle class and below.

    krish.queries

    1 month ago

    FMs response will be "I don't pay income tax, so Income Tax doesn't matter to me". Remember the
    FM comments on onion price rise

    S.SuchindranathAiyer

    1 month ago

    Can a mere appeal by Chartered Accountants get the bottomless greed of the Modi Sarkar for money to throw away on global "Multi Appeasement" Policies, to relent and actually see the reality they have pretended does not exist?

    Parliamentary panel for abolishing tax on LTCG from investments in startups
    The Standing Committee on Finance (2019-20) has recommended to the Centre to abolish tax on Long Term Capital Gains for all investments in startups which are made through collective investment vehicles (CIVs) such as angel funds, alternate investment funds (AIF), and investment LLPs.
     
    The committee in its report on "Financing The Startup Ecosystem" said the tax should be removed at least for the next two years to encourage investments amid the pandemic.
     
    "The Committee would like to strongly recommend that tax on Long Term Capital Gains be abolished for all investments in startup companies (as designated by DPIIT) which are made through collective investment vehicles (CIVs) such as angel funds, AIFs, and investment LLPs," it said.
     
    It suggested that after this 2 year period, the Securities Transaction Tax (STT) may be applied to collective investment vehicles (CIV) so that revenue neutrality is maintained.
     
    Investments by CIVs are transparently done and have to be done at fair market value, the Standing Committee said, adding that it is easy to calculate the STT associated with these investments.
     
    "This can be done in lieu of imposing LTCG on these CIVs and to make the taxation system fairer, less cumbersome, and transparent. This will also ensure that investments in unlisted securities are on par with investments in listed securities," it said.
     
    It has also recommended that there should be no punishing of domestic risk capital at any level, as the current tax disparity is proving advantageous to foreign capital through low tax jurisdictions and low taxes for fund management services.
     
    As per the panel, such a move will establish a level playing field for domestic investments in comparison to foreign investments and domestic listed in comparison to unlisted securities.
     
    The committee recommended that to encourage domestic investments in unlisted debt and equity securities, once the pandemic period concessions are lifted, CIV capital gains should always be taxed at the same rate as listed securities.
     
    Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
  • Like this story? Get our top stories by email.

    User 

    SC Dismissed Plea Against Bombay HC Order Rejecting Anticipatory Bail in GST Circular Trading: Report
    The Supreme Court has dismissed a special leave petition filed against an order of Bombay High Court that rejected anticipatory bail of the petitioner held guilty of circular trading in goods and services tax (GST), says a report from GSTSutra.com, a portal associated with Taxsutra.com
     
    As per the report, pursuant to the irregularities in return-filing, the HC had found the petitioner to have availed input tax credit (ITC) of Rs63.53 crore during July 2017 to September 2019 on invoices valued at Rs352.92 crore.
     
    Last month, while rejecting anticipatory bail of Ashok Kumar and Sheelam, who are husband and wife as well as partners of Sheela Sales Corp, the Bombay HC had ruled that to prevent tampering of evidence, GST officials can keep the accused in custody. 
     
    The HC said that the assessment is not a prerequisite for arrest under GST.
     
    The investigation in this matter revealed that after availing the ITC of Rs53.50 crore without any actual receipt of goods, Sheela Sales Corp has passed the tax credit of Rs53.50 crore to six firms. 
     
    GST department's main allegation against Ashok Kumar and Sheelam of Sheela Sales Corp was, all three were guilty of circular trading by claiming input tax credit on the materials never purchased and passing on such ITC to companies to whom they never sold any goods.
     
  • Like this story? Get our top stories by email.

    User 

    We are listening!

    Solve the equation and enter in the Captcha field.
      Loading...
    Close

    To continue


    Please
    Sign Up or Sign In
    with

    Email
    Close

    To continue


    Please
    Sign Up or Sign In
    with

    Email

    BUY NOW

    online financial advisory
    Pathbreakers
    Pathbreakers 1 & Pathbreakers 2 contain deep insights, unknown facts and captivating events in the life of 51 top achievers, in their own words.
    online financia advisory
    The Scam
    24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
    Moneylife Online Magazine
    Fiercely independent and pro-consumer information on personal finance
    financial magazines online
    Stockletters in 4 Flavours
    Outstanding research that beats mutual funds year after year
    financial magazines in india
    MAS: Complete Online Financial Advisory
    (Includes Moneylife Online Magazine)
    FREE: Your Complete Family Record Book
    Keep all the Personal and Financial Details of You & Your Family. In One Place So That`s Its Easy for Anyone to Find Anytime
    We promise not to share your email id with anyone