Employees can claim exemption on conveyance allowance under new I-T regime
In a major relief for salaried taxpayers, the Central Board of Direct Taxes (CBDT) has said that under the new income tax regime, employees can claim for tax exemption on conveyance allowance received from their employers
 
The Income-tax (13th Amendment) Rules, 2020, which includes the provision, shall come into force from April 1, 2021 and shall accordingly apply in relation to the assessment year 2021-22 and subsequent assessment years.
 
The new optional tax regime was announced in this year's budget, wherein income tax rates would be lower for the individual taxpayers given they forgo deductions and exemptions such as investment in the insurance policy, NSC, PPF and others.
 
Rajat Mohan, Senior Partner at AMRG & Associates said: "CBDT has amended the income tax rules to allow certain exemptions to the employee in the new tax regime. These include allowances to cover travel costs on tour or transfers, ordinary daily charges incurred on account of absence from his normal place of duty and conveyance allowance."
 
He noted that initially in the new regime most of the allowances and exemptions were withdrawn and the department has made a change in the basic fundamental idea of the new regime.
 
"Though, this is a welcome move for many employees for whom these expenses are on behalf of the employer and shall not be taxed in the hands of the employee. However, this can be a beginning to a plethora of notifications and circulars making the new regime equally complicated as the old one. If more of these exemptions are introduced, the new regime will lose its cardinal nature of simplicity," Mohan added.
 
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.
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    COMMENTS

    ksrao34g

    6 days ago

    Yes, politicians introduce Acts to simplify matters, and bureaucrats make a mess of them by taking advantage of their discretion to make amendments. Their idea is, let us protect our bureaucratic brothers, never mind if the economy goes to hell. "If some other salary earners also benefit, that is the risk we have to take. If nobody else benefits, let them suffer. We have to take care of our (IAS)'I Am Safe' community and other cadres".

    GST Council's temporary relief measures for Covid-hit small businesses
    In a bid to provide relief to small businesses amid the coronavirus pandemic, the GST Council on Friday decided to halve the interest rate on late filing of GSTR-3B returns for the period of February, March and April 2020.
     
    The interest rate on late return filing will be 9 per cent from the usual 18 percent till September 30, 2020. The benefit will be available for small taxpayers with aggregate turnover of up to Rs 5 crore.
     
    For the three months, small taxpayers will not be charged any interest till the notified dates for relief and thereafter 9 per cent interest will be charged till September 30, a Finance Ministry statement said.
     
    "For small taxpayers (aggregate turnover upto Rs 5 crore), for the supplies effected in the month of February, March and April 2020, the rate of interest for late furnishing of return for the said months beyond specified dates (staggered upto 6th July 2020) is reduced from 18 per cent per annum to 9 per cent per annum till 30.09.2020," said the statement.
     
    The Council has also extended relief to small taxpayers for subsequent period of 2020 through waiver of late fees and interest if the returns in Form GSTR-3B for the supplies effected in the months of May, June and July are furnished by September 2020.
     
    It has also decided to reduce the late fee on the filing of GSTR-3B returns for the period between July 2017 and January 2020. The late fee has been capped at Rs 500, but interest will be charged at the existing rate on the due tax liability.
     
    Speaking to the media here after a GST Council meet through videoconference, Union Finance Minister Nirmala Sitharaman said that those entities with no tax liability will not have to submit the late fee for the period.
     
    For entities with tax liability but which have not filed returns or have filed returns late, the late fee has been capped at Rs 500 without interest. Interest will, however, be payable on the tax component at the applicable rate for delays.
     
    To facilitate taxpayers who could not get their cancelled GST registrations restored in time, the Council has provided an opportunity for filing of application for revocation of cancellation of registration up to September 30, 2020, in all cases where registrations have been cancelled till June 12, 2020.
     
    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.
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    COMMENTS

    mywopy

    3 weeks ago

    The GST council should ease their regulations even further to encourage the growth of budding small and medium sized service providing industry in this country.

    The GDP growth needs to be propelled by the service sector in this country.

    Dear FM and council, How about increasing the GST registration threshold limits or give a grace period for x number of years for first time entrants into the GST threshold in the service sector?

    We are facing an uncertain future regarding commerce and trade.

    New service providers with a prospect of growth in this country are wilfully holding back their business expansion, in the fear of being burdened by GST compliance threshold.

    Why not first encourage the budding entrepreneurs of this country to test the waters before burdening them with GST compliance and paperwork.

    GST Not Applicable on Salary Paid to Employee-Directors, Clarifies CBIC
    Trying to put an end to the misunderstanding on applicability of goods and services tax (GST) on renumeration paid to company directors, the Central Board of Indirect Taxes and Customs (CBIC) says, payment paid as salary and on which tax deducted at source (TDS) is levied, cannot be subjected to GST.
     
    In a circular, CBIC says, "...the part of director's remuneration, which are declared as salaries in the books of a company and subjected to TDS under Section 192 of the Income Tax (I-T) Act, are not taxable being consideration for services by an employee to the employer in the course of or in relation to his employment in terms of schedule III of the Central GST (CGST) Act, 2017."
     
    "It is further clarified that the part of employee director's remuneration which is declared separately other than salaries in the company's accounts and subjected to TDS under Section 194J of the I-T Act as fees for professional or technical services shall be treated as consideration for providing services, which are outside the scope of Schedule III of the CGST Act, and is therefore, taxable," the circular says.
     
    CBIC says, it has received various references from trade and industry seeking clarification whether the GST is leviable on director's remuneration paid by companies to their directors.
     
    Doubts have been raised as to whether the remuneration paid by companies to their directors falls under the ambit of entry in Schedule III of the CGST Act, or 'services by an employee to the employer in the course of or in relation to his employment' or whether the same are liable to be taxed.
     
    CBIC says the issue of remuneration to directors was examined under two different categories, directors who are not employee of the company and who are employee of the company. For both wholetime directors and independent directors the provisions in laws clearly state that they should not be an employee of the company. 
     
    Therefore, the board says, in respect of such directors who are not the employees of the said company, the services provided by them to the company, in lieu of remuneration as the consideration for the said services, are clearly outside the scope of Schedule III of the CGST Act and are therefore taxable. 
     
    "Accordingly, it is hereby clarified that the remuneration paid to such independent directors, or those directors, by whatever name called, who are not employees of the said company, is taxable in hands of the company, on reverse charge basis," the CBIC clarified.
     
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