Rajiv Gandhi Equity Savings Scheme (Rgess), Mutual Fund Notification

Notification Dated 23rd November, 2012

Summary And Details of  Rajiv Gandhi Equity Saving Scheme (RGESS)

Eligible securities: New investment made in the BSE-100 or CNX-100 by the Bombay Stock Exchange and the National Stock Exchange, equity shares of public sector enterprises, Units of Exchange Traded Funds (ETFs), Mutual Fund Scheme those investing into Initial Public Offer of a public sector undertaking wherein the government shareholding is at least fifty-one per cent and Public offer of BSE-100 or CNX-100 & public sector enterprises

Eligible Investor: Any individual who has not opened a demat account and has not made any transactions in the derivative segment as on the date of notification of the Scheme and whose gross total income for the financial year in which the investment is made under the Scheme is less than or equal to ten lakh rupees.

Eligible Amount: The new retail investor may make any amount of investment in the demat account but the amount eligible for deduction, under the Scheme shall not exceed fifty thousand rupees

Holding Period of Securities: The period of holding of eligible securities shall be three years. First Year of the holding period is fixed lock-in period and the period of two years will be the flexible lock-in period in which retail investor shall be permitted to trade the eligible securities but demat account under the Scheme is compliant for a cumulative period of a minimum of two hundred and seventy days during each of the two years, the demat account shall be considered compliant for the number of days where value of the investment portfolio of eligible securities , within the flexible lock-in period, is equal to or higher than the amount claimed as investment for the purposes of deduction under section 80CCG of the Act

 

 

Details about Rajiv Gandhi Equity Savings Scheme, 2012

In exercise of the powers conferred by sub-section (1) of section 80CCG of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby makes the following Scheme, namely Rajiv Gandhi Equity Savings Scheme, 2012.:-

 

Objective of Scheme.-The objective of the Scheme is to encourage the savings of the small investors in domestic capital market.

Eligible securities means any of the following :-

(a) equity shares, on the day of purchase, falling in the list of equity declared as “BSE-100″ or ” CNX-100″ by the Bombay Stock Exchange and the National Stock Exchange, as the case may be;

(b) equity shares of public sector enterprises which are categorised as Maharatna, Navratna or Miniratna by the Central Government;

(c) Units of Exchange Traded Funds (ETFs) or Mutual Fund (MF) schemes with Rajiv Gandhi Equity Savings Scheme (RGESS) eligible securities as underlying, as mentioned in sub-clause (i) or sub-clause (ii) above, provided they are listed and traded on a stock exchange and settled through a depository mechanism;

(d) Follow on Public Offer of sub-clauses (i) and (ii) above;

(e) New Fund Offers (NFOs) of sub-clause (iii) above;

Initial Public Offer of a public sector undertaking wherein the government shareholding is at least fifty-one per cent. which is scheduled for getting listed in the relevant previous year and whose annual turnover is not less than four thousand crore rupees during each of the preceding three years; (vi) ” financial year” means a year commencing on the 1st day of April and ending on the 31stday of March;

New Retail Investor” means the following resident individuals:-

(a) any individual who has not opened a demat account and has not made any transactions in the derivative segment as on the date of notification of the Scheme;

(b) any individual who has opened a demat account before the notification of the Scheme but has not made any transactions in the equity segment or the derivative segment till the date of notification of the Scheme,

and any individual who is not the first account holder of an existing joint demat account shall be deemed to have not opened a demat account for the purposes of this Scheme

Eligibility .- The deduction under the Scheme shall be available to a new retail investor who complies with the conditions of the Scheme and whose gross total income for the financial year in which the investment is made under the Scheme is less than or equal to ten lakh rupees.

5. Procedure at time of opening demat account.-The new retail investor shall follow the following procedure at the time of opening or designating a demat account :-

 

(a) the new retail investor shall open a new demat account or designate his existing demat account for the purpose of availing the benefit under the Scheme;

(b) the new retail investor shall submit a declaration in Form A to the depository participant who will forward the same to the depository for verifying the status of the new retail investor;

(c) the new retail investor shall furnish his Permanent Account Number (PAN) while opening the demat account or designating the existing account as a Rajiv Gandhi Equity Savings Scheme eligible account, as the case may be.

 

6. Procedure for investment under Scheme.- A new retail investor shall make investments under the Scheme in the following manner :-

(a) the new retail investor may make investment in eligible securities in one or more than one transactions during the year in which the deduction has to be claimed;

 

(b) the new retail investor may make any amount of investment in the demat account but the amount eligible for deduction, under the Scheme shall not exceed fifty thousand rupees;

 

(c) the eligible securities brought into the demat account, as declared or designated by the new retail investor, will automatically be subject to lock-in during its first year, as per the provisions of paragraph 7, unless the new retail investor specifies otherwise and for such specification, the new retail investor shall submit a declaration in Form B indicating that such securities are not to be included within the above limit of investment;

 

(d) the new retail investor shall be eligible for a deduction under sub-section (1) of section 80CCG of the Act in respect of the actual amount invested in eligible securities , in the first financial year in respect of which a declaration in Form B has not been made, subject to the maximum investment limit of fifty thousand rupees;

 

(e)the new retail investor who has claimed a deduction under sub- section (1) of section 80CCG of the Act, in any assessment year, shall not be allowed any deduction under the Scheme for any subsequent assessment year;

 

(f) the new retail investor shall be permitted a grace period of three trading days from the end of the financial year so that the eligible securities purchased on the last trading day of the financial year also get credited in the demat account and such securities shall be deemed to have been purchased in the financial year itself;

 

(g) the new retail investor may also keep securities other than the eligible securities covered under the Scheme in the demat account through which benefits under the Scheme are availed;

 

(h) the new retail investor can make investments in securities other than the eligible securities covered under the Scheme and such investments shall not be subject to the conditions of the Scheme nor shall they be counted for availing the benefit under the Scheme;

 

(i) the investment under the Scheme shall consist of all eligible securities covered under the Scheme that are initially bought by the investor under the Scheme or that are bought subsequently by the investor as per the provisions of the Scheme;

 

(j) the deduction claimed shall be withdrawn if the lock-in period requirements of the investment are not complied with or any other condition of the Scheme is violated.

 

7. Period of holding requirements. –

(1) The period of holding of eligible securities shall be three years to be counted in the manner detailed hereunder.

(2) All eligible securities are required to be held for a period called the fixed lock-in period which shall commence from the date of purchase of such securities in the relevant financial year and end one year from the date of purchase of the last set of eligible securities (in the same financial year) on which deduction is claimed under the Scheme.

(3) The new retail investor shall not be permitted to sell, pledge or hypothecate any eligible security during the fixed lock-in period.

(4) The period of two years beginning immediately after the end of the fixed lock-in period shall be called the flexible lock-in period.

(5) The new retail investor shall be permitted to trade the eligible securities after the completion of the fixed lock-in period subject to the following conditions:-

(a) the new retail investor shall ensure that the demat account under the Scheme is compliant for a cumulative period of a minimum of two hundred and seventy days during each of the two years of the flexible lock-in period as laid down hereunder:-

 

(A) the demat account shall be considered compliant for the number of days where value of the investment portfolio of eligible securities , within the flexible lock-in period, is equal to or higher than the amount claimed as investment for the purposes of deduction under section 80CCG of the Act;

(B) in case the value of investment portfolio in the demat account falls due to fall in the market rate of eligible securities in the flexible lock-in period, then notwithstanding sub clause(A), –

(i) the demat account shall be considered compliant from the first day of the flexible lock-in period to the day any such eligible securities are sold during this period;

(ii) where the assessee sells the eligible securities mentioned in sub-clause (B) from his demat account, he shall have to purchase eligible securities and the said demat account shall be compliant from the day on which the value of the investment portfolio in the account becomes –

(I) at least equivalent to the investment claimed as eligible for deduction under section 80CCG of the Act or;

(II) the value of the investment portfolio under the Scheme before such sale,

whichever is less.

(6) The new retail investor’s demat account created under the Scheme shall, on the expiry of the period of holding of the investment, be converted automatically into an ordinary demat account.

(7) For the purpose of valuation of investment during the flexible lock-in period, the closing price as on the previous day of the date of trading, shall be considered.

(8) While making the initial investments upto fifty thousand rupees, the total cost of acquisition of eligible securities shall not include brokerage charges, Securities Transaction Tax, stamp duty, service tax and all taxes, which are appearing in the contract note.

(9) Where the investment of the new retail investor undergoes a change as a result of involuntary corporate actions like demerger of companies, amalgamation, etc. resulting in debit or credit of securities covered under the Scheme, the deduction claimed by such investor shall not be affected.

(10) In case of voluntary corporate actions like buy-back, etc. resulting only in debit of securities, where new retail investor has the option to exercise his choice, the same shall be considered as a sale transaction for the purpose of the Scheme.

(11) The Securities and Exchange Board of India established under section 3 of the Securities and Exchange Board of India Act, 1992 (15 of 1992) shall notify the corporate actions, referred to in sub-paragraph (9), allowed under the Scheme in this regard.

8. If the new retail investor fails to fulfil any of the provisions of the Scheme, the deduction originally allowed to him under sub-section (1) of section 80CCG of the Act for any previous year, shall be deemed to be the income of the assessee of such previous year and shall be liable to tax for the assessment year relevant to such previous year.

 

9.     (1) The depository shall certify the new retail investor status of the assessee at the time of designating his demat account as demat account for the purpose of the Scheme.

(2) The depository participant shall furnish an annual statement of the eligible securities invested in or traded through the demat account to the demat account holder.

10. The depository shall provide a consolidated statement of details in the electronic format, as specified in Form C, on all the Rajiv Gandhi Equity Savings Scheme beneficiaries to the Director General of Income Tax (Systems) or any other person authorised by him, within a period of thirty days from the end of the relevant financial year.

 

11. For the purpose of paragraph 10, the Director General of Income Tax (Systems) shall determine the procedures, formats and standards for furnishing of the report in electronic format in Form C by the depositories.

 

12. Assessees shall be liable to submit the relevant records to the income-tax authorities for verification, as and when required.

Form A

[See paragraph 5(b)]

Declaration to be submitted by the investors to the depository participants for availing the benefits under the Rajiv Gandhi Equity Savings Scheme.

Name of the Investor:

(first holder)

Address of the investor:

Permanent Account Number (PAN):

1. It is hereby certified that* —

 

(a) I do not have a demat account and I have not traded in any derivatives.

(b) I have demat account no _________________ in ____________________ depository participant but I have not traded in any equity shares or derivatives in this account.

(c) I have a joint demat account no _________________ in ____________________ depository participant but I am not the first account holder.

2. I hereby declare that I have read and understood all the terms and conditions of the Rajiv Gandhi Equity Savings Scheme.

3. It is hereby verified that I am an eligible new retail investor for availing the benefits under the Rajiv Gandhi Equity Savings Scheme.

4. I undertake to abide by all the requirements and fulfill all obligations under the Scheme, and will comply with all the terms and conditions of the Scheme.

5. I understand that, in case I fail to comply with any condition specified in the Scheme, the benefits availed there under will be withdrawn and the tax shall be payable by me accordingly.

 

Signature of the Investor

Place:

Date:

* Tick which ever is appropriate.

Form B

[See paragraph 6(c) and (d)]

Declaration to be submitted by the new retail investor to the depository participant on purchase of eligible securities.

To

Depository participant

Address

It is hereby informed that I have demat account no _________________ in ____________________ depository participant and the following securities

(a)

 

(b)

(c)

(d)

(e) purchased in the aforesaid demat account on ______________are not to be included as investment for the purpose of the Rajiv Gandhi Equity Savings Scheme.

 

Signature

Name of the Investor:

(first holder)

Address of the investor:

Permanent Account Number (PAN):

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Condition for Approval for Scientific Organization

Organization is treated as approved scientific organisation under Income Tax Act, if it fulfills the following conditions, namely:-

 (i)  The sums paid to the approved organization shall be utilized for scientific research;

(ii)  The approved organization shall carry out scientific research through its faculty members or its enrolled students;

(iii) The approved organization shall maintain separate books of account in respect of the sums received by it for scientific research, reflect therein the amounts used for carrying out research, get such books audited by an accountant as defined in the Explanation to sub-section (2) of section 288 of the said Act and furnish the report of such audit duly signed and verified by such accountant to the Commissioner of Income-tax or the Director of Income-tax having jurisdiction over the case, by the due date of furnishing the return of income under sub-section (1) of section 139 of the said Act;

(iv) The approved organization shall maintain a separate statement of donations received and amounts applied for scientific research and a copy of such statement duly certified by the auditor shall accompany the report of audit referred to above.

Under the following conditions Central Government shall withdraw the approval from scientific organisation if:-

(a)  fails to maintain separate books of account referred to in sub-paragraph (iii) of paragraph 1; or

(b)  fails to furnish its audit report referred to in sub-paragraph (iii) of paragraph 1; or

(c)  fails to furnish its statement of the donations received and sums applied for research in social science or statistical research referred to in sub-paragraph (iv) of paragraph 1; or

(d)  ceases to carry on its research activities or its research activities are not found to be genuine; or

(e)  ceases to conform to and comply with the provisions of clause (iii) of sub-section (1) of section 35 of the said Act read with rules 5C and 5E of the said Rules.

Exemptions on Interest on Bonds/Debentures on Issue Tax-Free, Bonds during F.Y. 2012-13 under Section 10(15) Notification No. 46/2012, Dated 6-11-2012

In exercise of the powers conferred by item (h) of sub-clause (iv) of clause (15) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby authorises the entities mentioned in column (2) of the following Table to issue, during the financial year 2012-13. tax-free, secured, redeemable, non-convertible bonds, aggregating to amounts mentioned in column (3) of the said table, subject to the conditions specified hereunder:-

(aEligibility.– The following shall be eligible to subscribe to the bonds:-

 (i)  Retail Individual Investors (RII);

(ii)  Qualified Institutional Buyers (QIBs);

(iii)  Corporates;

(iv)  High Net Worth Individuals (HNIs);

(bTenure of bonds.- (i) In the case of India Infrastructure Finance Company Limited (IIFCL), the tenure of the bonds shall be for ten, fifteen or twenty years;

(ii) in other cases, the tenure of the bonds shall be for ten or fifteen years ;

(cPermanent Account Number.- It shall be mandatory for the subscribers to furnish their Permanent Account Number to the issuer;

(dRate of interest.- (i) There shall be a ceiling on the coupon rates based on the reference Government security (G-sec) rate;

(ii) The reference G-sec rate would be the average of the base yield of G-sec for equivalent maturity reported by Fixed Income Money Market and Derivative Association of India (FIMMDA) on a daily basis (working day) prevailing for two weeks ending on Friday immediately preceding the filing of the final prospectus with the Exchange or Registrar of Companies (ROC) in case of public issue and the issue opening date in case of private placement;

(iii) The ceiling coupon rate for AA rated issuers shall be the reference G-sec. rate less 50 basis points in case of Retail Individual Investors (RII); and reference G-sec rate less 100 basis points in case of other investor segments, like Qualified Institutional Buyers (QIBs), Corporate and High Net Worth Individuals (HNIs);

(iv) In case the rating of the issuer entity is above AA, a reduction of 15 basis points shall be made in the ceiling rate, as compared to the ceiling rate for AA rated entities [as given in clause (iii)] ;

(v) These ceiling rates shall apply for annual payment of interest and in case the schedule of interest payments is altered to semi-annual, the interest rates shall be reduced by 15 basis points;

(vi) The higher rate of interest, applicable to retail investors, shall not be available in case the bonds are transferred, except in case of transfer to legal heir in the event of death of the original investor;

(eIssue expense and brokerage.- (i) In the case of private placement, the total issue expense shall not exceed 0.2% of the issue size and in case of public issue it shall not exceed 0.5% of the issue size;

(ii) The issue expense would include all expenses relating to the issue like brokerage, advertisement, printing, registration etc.;

(iii) The brokerage, in cases of different categories, shall be limited to the following ceilings :-

 (I)  QIB – 0.05%

(II)  Corporates-0.1%

(III)  HNI – 0.15%

(IV)  RII – 0.75%;

(fPublic issue.- (i) At least 75% of the aggregate amount of bonds issued by each entity shall be raised through public issue;

(ii) 40% of such public issue shall be earmarked for retail investors;

(gPrivate placement- (i) While adopting the private placement route to issue the bonds, each entity shall adopt the book building approach as per the Regulations 11 of the Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008, wherein bids shall be sought on the coupon rate subject to a ceiling specified by the entity and the allotment shall be made at the price bid;

(ii) The bonds shall be paid for and issued at a premium but with a fixed coupon so that the instrument can be traded under a single International Securities Identification Number (ISIN) and the yield shall be worked based on the price quoted and then allotment shall be done for best price (lowest yield);

(iii) The ceiling rate of the interest shall either be equal to or lower than the rate mentioned in paragraph (d);

(iv) While calling for bids, there shall be no limit on the number of arrangers who can bid for the issue;

(v) The issue size shall be limited to rupees five hundred crores for each tranche;

(hRepayment of bonds.- (i) The issuer entity shall submit a financing plan to the Ministry of Finance to demonstrate its ability to repay the borrowed funds once the repayment becomes due;

(ii) This financing plan shall be submitted to the Infra-Finance Section, Infrastructure and Investment Division, Department of Economic Affairs, Ministry of Finance, within three months of closure of the issue, duly supported by a resolution of the respective entity’s Board of Directors;

(iSelection of merchant bankers.- Merchant bankers shall be selected through competitive bidding process wherein the only technical criteria for pre-qualification shall be the total funds mobilised through public issue of debt and equity together over the past five years and after pre-qualification, the final selection shall be based on financial bids;

(j)  The benefit under the aforesaid section 10 shall be admissible only if the holder of such bonds registers his, her or it’s name and the holding with the entity.

Table

S. No. (1)

Entities (2)

Aggregate amount of bonds
(3)

1.

National Highways Authority of India

Rs. 10,000 crores

2.

Indian Railway Finance Corporation Limited

Rs. 10,000 crores

3.

India infrastructure Finance Company Limited

Rs. 10,000 crores

4.

Housing and Urban Development Corporation Limited

Rs. 5,000 crores

5.

National Housing Bank

Rs. 5,000 crores

6.

Power Finance Corporation

Rs. 5,000 crores

7.

*[Rural Electrification Corporation Limited]

Rs. 5,000 crores

8.

Jawaharlal Nehru Port Trust

Rs. 2,000 crores

9.

Dredging Corporation of India Limited

Rs. 500 crores

10.

Ennore Port Limited

Rs. 1,000 crores

Explanation.– For the purposes of this notification,-

(i)  Qualified Institutional Buyers shall have the same meaning as assigned to them in the Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines, 2000.

(ii)  Retail Individual Investors means those individual investors, Hindu Undivided Family (through Karta), and Non Resident Indians (NRIs), on repatriation as well as non repatriation basis, applying for upto Rs. ten lakhs in each issue ; and individual investors investing more than Rs. ten lakhs shall be classified as High Net Worth Individuals.

(iii)  The bonds issued to NRIs shall be subject to the provisions of Notification No. FEMA 4/2000-RB dated 3rd May, 2000 and Notification No. FEMA 20/2000-RB dated 3rd May, 2000, issued under clause (b) of sub-section (3) of Section 6 and Section 47 of the Foreign Exchange Management Act, 1999, as amended from time to time.

(iv)  The credit rating referred to in paragraph (d) of this notification shall mean the credit rating, as assigned by a credit rating agency which is approved by the Securities and Exchange Board of India as well as the Reserve Bank of India and where an entity has been rated differently, by more than one rating agency, the lower of the two ratings shall be considered.

Posting Policy for Posting of Officers in the Directorates of International Taxation & Transfer Pricing Notification Dated 30-11-2012

This notification issues in supersession of the notification of even number dated December 15, 2010 and will apply to all future postings in the Directorates of International Taxation & Transfer Pricing with immediate effect.

2. The Department’s Annual General Transfer Pricing Policy shall apply for selection of officers for being posted in the Directorates of International Taxation &. Transfer Pricing subject to the condition that:

(a)  Assistant Commissioner of Income Tax/Deputy Commissioner of Income Tax with minimum 3 year’s in the field preferably with experience in corporate assessment shall be considered for posting in the Directorates as Assistant Commissioner of Income Tax/Deputy Commissioner of Income fax.

(b)  Joint Commissioner of Income Tax/Additional Commissioner of Income Tax with minimum 3 years service in the grade shall be considered for posting in the Directorates as Joint Commissioner of Income Tax/Additional Commissioner of Income Tax.

(c)  Preference may be given to the officers having specialized knowledge and experience in the field of international taxation and transfer pricing.

3. The normal tenure of posting of an officer in these Directorates would be three years. However, the officer would be eligible for posting in FT&TR division or Income Tax Overseas Units before completion of his/her stay of three years.

4. The tenure of three years would not apply in case of promotion or deputation.

5. While the normal tenure of posting will be three years, an officer may be retained beyond the three year period and up to a maximum of five years depending on the suitability of the officer, administrative requirement and willingness of the officer.

6. Postings in the Directorates shall be made by the approving authority prescribed in the existing Annual General Transfer Policy.

7. This issues with the approval of the Finance Minister.

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Exemptions on Interest on Tax-Free Bonds During F.Y. 2012-13 –Corrigendum Under Section 10(15)(iv) Notification No. 50/2012, Dated 15-11-2012

In the notification of the Government of India in the Ministry of Finance, Department of Revenue, (Central Board of Direct Taxes) number S.O. 2685(E), dated the 6th November, 2012 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (ii), dated the 6th November, 2012, in the table, for “Rural Electrical Corporation”, read “Rural Electrification Corporation Limited”.

Deductions of Profits and Gains from Industrial Undertakings Engaged In Infrastructure Development under Section 80-Ia, Notification No. 47/2012 Dated 6-11-2012

Whereas the Central Government in exercise of the powers conferred by clause (iii) of sub-section (4) of section 80-IA of the Income-tax Act, 1961(43 of 1961)(hereinafter referred to as the said Act), has framed and notified a scheme for industrial park, by the notification of the Government of India in the Ministry of Finance (Department of Revenue, Central Board of Direct Taxes) vide number S.O. 51(E), dated the 8th January, 2008 and amended vide number S.O. 1605(E) dated 2nd July, 2008;

2. And whereas M/s. Ferani Hotels Pvt. Ltd. having its registered address at B, 2nd Floor, 623 Linking Road, Khar (W), Mumbai has developed an Industrial Park at Bldg. Nos. 1, 4, 11, 14 & 21, 327A/4A(pt.), Malad, Mumbai Suburban District, Maharashtra.

3. Now, therefore, in exercise of the powers conferred by clause (iii) of sub-section (4) of section 80-IA of the said Act read with Rule 18C of the Income Tax Rules, 1962, the Central Government hereby notifies M/s. Ferani Hotels Pvt. Ltd. having its registered address at B, 2nd Floor, 623 Linking Road, Khar (W), Mumbai, has developed an Industrial Park at Bldg. Nos. 1, 4, 11, 14 & 21, 827A/4A(pt.), Malad, Mumbai Suburban District, Maharashtra being developed and being maintained and operated by the said undertaking, as an industrial park for the purposes of the said clause (iii) subject to the terms and conditions mentioned in the annexure to this notification.

Approved Scientific Research Associations/Institutions Under Section 35(1)(ii) Notification No. 45/2012, Dated 29-10-2012

Income Tax Department has notified that the National Institute of Ocean Technology, Chennai has been approved by the Central Government for the purpose of clause (ii) of sub-section (1) of section 35 of the Income-tax Act, 1961 [said Act], read with rules 5C and 5E of the Income-tax Rules, 1962 (said Rules), from assessment year 2011-12 onwards in the category of “Scientific Research Association”, engaged in research in science subject to the following conditions, namely:-

 (i)  The sums paid to the approved organization shall be utilized for scientific research;

(ii)  The approved organization shall carry out scientific research through its faculty members or its enrolled students;

(iii) The approved organization shall maintain separate books of account in respect of the sums received by it for scientific research, reflect therein the amounts used for carrying out research, get such books audited by an accountant as defined in the Explanation to sub-section (2) of section 288 of the said Act and furnish the report of such audit duly signed and verified by such accountant to the Commissioner of Income-tax or the Director of Income-tax having jurisdiction over the case, by the due date of furnishing the return of income under sub-section (1) of section 139 of the said Act;

(iv) The approved organization shall maintain a separate statement of donations received and amounts applied for scientific research and a copy of such statement duly certified by the auditor shall accompany the report of audit referred to above.

The Central Government shall withdraw the approval if the approved organization:-

(a)  fails to maintain separate books of account referred to in sub-paragraph (iii) of paragraph 1; or

(b)  fails to furnish its audit report referred to in sub-paragraph (iii) of paragraph 1; or

(c)  fails to furnish its statement of the donations received and sums applied for research in social science or statistical research referred to in sub-paragraph (iv) of paragraph 1; or

(d)  ceases to carry on its research activities or its research activities are not found to be genuine; or

(e)  ceases to conform to and comply with the provisions of clause (iii) of sub-section (1) of section 35 of the said Act read with rules 5C and 5E of the said Rules.

Deductions of Profits and Gains from Industrial Undertakings Engaged In Infrastructure Development under Section 80-Ia, Notification No. 48/2012 Dated 6-11-2012

Whereas the Central Government in exercise of the powers conferred by clause (iii) of sub-section (4) of section 80-IA of the Income-tax Act, 1961 (43 of 1961)(hereinafter referred to as the said Act), has framed and notified a scheme for industrial park, by the notification of the Government of India in the Ministry of Finance (Department of Revenue, Central Board of Direct Taxes) vide number S.O. 51(E), dated the 8th January, 2008 and amended vide number S.O. 1605 (E) dated 2nd July, 2008.

2. And whereas M/s. India Land and Properties Pvt. Ltd. having its registered address at Plot No. 14, 3rd Main Road, Ambattur Industrial Estate, Chennai-600058 has developed an Industrial Park at Indian Land Tech Park Tower AB and Tower C at Survey Nos. 195 part, 196 part, 197 part, 198 part, 199 part and 200 part of Mannurpet Village and 6 part, 7 part, 8 part and 10 part, of Athipet Village, Village Mannurpet and Athipet, Taluka Ambattur, District Thiruvallur, Tamil Nadu.

3. Now, therefore, in exercise of the powers conferred by clause (iii) of sub-section (4) of section 80-IA of the said Act read with Rule 18C of the Income Tax Rules, 1962, the Central Government hereby notifies M/s. India Land and Properties Pvt. Ltd. having its registered address at Plot No. 14, 3rd Main Road, Ambattur Industrial Estate, Chennai, has developed an Industrial Park at Indian Land Tech Park Tower AB and Tower C at Survey No. 195 part, 196 part, 197 part, 198 part, 199 part and 200 part of Mannurpet Village and 6 part, 7 part, 8 part and 10 part, of Athipet Village, Village Mannurpet and Athipet, Taluka Ambattur, District Thiruvallur, Tamil Nadu being developed and being maintained and operated by the said undertaking, as an industrial park for the purposes of the said clause (iii) subject to the terms and conditions mentioned in the annexure to this notification.

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Advance Pricing Agreement Scheme, Notification Issued on 30-8-2012

In exercise of the powers conferred by sub-section (9) of section 92CC read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:-

1. (1) These rules may be called the Income-tax (10th Amendment) Rules, 2012.

(2) They shall come into force on the date of their publication in the official Gazette.

2. In the Income-tax Rules, 1962 (hereafter referred to as the principal rules), –

(a)  after rule 10E, the following rule shall be inserted, namely.-

Advance Pricing Agreement Scheme means an advance pricing agreement entered into between the Board and the applicant, with the approval of the Central Government, as referred to in sub-section (1) of section 92CC of the Act.

Persons Eligible to Apply.—Any person who-

(i)  has undertaken an international transaction; or

(ii)  is contemplating to undertake an international transaction,

shall be eligible to enter into an agreement under these rules.

Reference: Section 92CC of the income Tax Act, 1961

Advance pricing agreement

(1) The Board, with the approval of the Central Government, may enter into an advance pricing agreement with any person, determining the arm’s length price or specifying the manner in which arm’s length price is to be determined, in relation to an international transaction to be entered into by that person.

(2) The manner of determination of arm’s length price referred to in sub-section (1), may include the methods referred to in sub-section (1) of section 92C or any other method, with such adjustments or variations, as may be necessary or expedient so to do.

(3) Notwithstanding anything contained in section 92C or section 92CA, the arm’s length price of any international transaction, in respect of which the advance pricing agreement has been entered into, shall be determined in accordance with the advance pricing agreement so entered.

(4) The agreement referred to in sub-section (1) shall be valid for such period not exceeding five consecutive previous years as may be specified in the agreement.

(5) The advance pricing agreement entered into shall be binding—

 (a) on the person in whose case, and in respect of the transaction in relation to which, the agreement has been entered into; and

 (b) on the Commissioner, and the income-tax authorities subordinate to him, in respect of the said person and the said transaction.

(6) The agreement referred to in sub-section (1) shall not be binding if there is a change in law or facts having bearing on the agreement so entered.

(7) The Board may, with the approval of the Central Government, by an order, declare an agreement to be void ab initio, if it finds that the agreement has been obtained by the person by fraud or misrepresentation of facts.

(8) Upon declaring the agreement void ab initio,—

 (a) all the provisions of the Act shall apply to the person as if such agreement had never been entered into; and

 (b) notwithstanding anything contained in the Act, for the purpose of computing any period of limitation under this Act, the period beginning with the date of such agreement and ending on the date of order under sub-section (7) shall be excluded:

Provided that where immediately after the exclusion of the aforesaid period, the period of limitation, referred to in any provision of this Act, is less than sixty days, such remaining period shall be extended to sixty days and the aforesaid period of limitation shall be deemed to be extended accordingly.

(9) The Board may, for the purposes of this section, prescribe a scheme specifying therein the manner, form, procedure and any other matter generally in respect of the advance pricing agreement.

(10) Where an application is made by a person for entering into an agreement referred to in sub-section (1), the proceeding shall be deemed to be pending in the case of the person for the purposes of the Act.

 

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Centralised Processing Of Returns Scheme, 2011, Notification Issued On Dated 4-1-2012

In exercise of powers conferred by sub-section (1B) of section 143 of Income Tax Act, 1961 (43 of 1961), for the purpose of giving effect to the Centralised Processing of Returns Scheme, 2011 made under sub-section (IA) of section 143 of the said Act, the Central Government hereby directs that, the following provisions of the Act relating to processing of returns shall not apply or shall apply with such exceptions, modifications and adaptations as specified hereunder, namely: –

1. This notification shall come into force on the date of its publication in the Official Gazette.

2. The provisions of section 139 of the Act shall apply to returns received under Centralised Processing of Returns Scheme, 2011 subject to the following, namely :-

A. (i) All ITR-V (acknowledgement) forms duly verified shall be sent to the Centralised Processing Centre, either through ordinary or speed post, within such period of uploading the electronically filed return as may be specified by the Director General in this behalf.

(ii) The date of transmitting the data electronically shall be the date of furnishing the return if the Form ITR-V is furnished in the prescribed manner and within the specified period.

(iii) In case Form ITR-V furnished after the prescribed time is rejected on account of it being unsigned, illegible, mutilated, bad quality or not as per specification, it shall be deemed that the return in respect of which the Form ITR-V has been filed was never furnished and it shall be incumbent on the person to electronically file the return of income again and follow it up by submitting the new Form ITR-V.

(iv) The Form ITR-V shall be submitted at the address, in the mode and within the period or extended period specified in this behalf.

(v) The Commissioner Centre may, in order to avoid hardship in a case or class of cases, condone the delay in receipt of Form ITR-V.

(vi) The Centre may call for fresh Form ITR-V in special circumstances, where the Form ITR-V submitted earlier cannot be considered for technical reasons.

B. (i) If the original return of income is an electronically filed return, the revised return shall be filed through electronic mode only.

(ii) The Centre shall process only the revised return and no further action shall be taken on original return if it has not already been processed.

(iii) The Commissioner may declare-

(a) a return invalid for non-compliance of procedure for using any software not validated and approved by the Director General;

(b) a return defective under sub-section (9) of section 139 of the Act on account of incomplete or inconsistent information in the return or in the schedules or for any other reason.

C. (i) In case of a defective return, the Commissioner shall intimate this to the person through e-mail or by placing a suitable communication on the e-filing website.

(ii) A person shall comply with the notice regarding defective return by uploading the rectified return within the period of time mentioned in the notice.

(iii) The Commissioner may, in order to avoid hardship to the person, condone the delay in uploading of rectified return.

(iv) In case no response is received from the person in reply to the notice of defective return, the Commissioner may declare a return as not having been uploaded at all or process the return on the basis of information available.

D. (i) A person shall not be required to appear either personally or through authorised representative before the authorities at the Centre in connection with any proceedings.

(ii) Written or electronic communication from such person or authorised representative in the format specified by the Centre in this respect shall be sufficient compliance of the query or clarification received from the Centre.

3. The provisions of section 143 of the Act shall apply to all returns received under the Centralised Processing of Returns Scheme, 2011 subject to the following, namely:-

 (i) the sum payable to, or the amount of refund due to, the person shall be determined after credit of such Tax collected at Source (TCS), Tax Deducted at Source (TDS) and tax payment claims which can be automatically validated with reference to data uploaded through TDS and TCS statements by the deductors or the collectors, as the case may be, and tax payment challans reported through authorised banks in accordance with business rules laid out by the Centre in this regard;

(ii) an intimation shall be generated electronically and sent to the person by e-mail specifying the sum determined to be payable by, or the amount of the refund due to, the person;

(iii) any intimation to the person to pay any sum determined to be payable shall be deemed to be a notice of demand as per the provisions of section 156 of the Act and all other provisions of the Act shall be accordingly applicable.

(iv) The Commissioner may,-

(a)  adopt appropriate procedures for processing of returns; and

(b)  decide the order of priority for processing of returns of income based on administrative requirements.

(v) Wherever a return cannot be processed in the Centre for any reason, the Commissioner shall arrange to transmit such return to the Assessing Officer having jurisdiction for processing.

(vi) The Centre may call for such clarification, evidence or document as may be required for the purpose of facilitating the processing of return and all such clarification, evidence or document shall be furnished electronically.

4. The provisions of section 154 of the Act shall apply to all the returns received under the Centralised Processing of Returns Scheme, 2011 subject to the following, namely:-

 (i) An application for rectification shall be filed electronically to the Centre in the format prescribed and shall be processed in the same manner as an Income-tax return.

(ii) In case of error in processing due to an error in data entry or a software error or otherwise, resulting in excess refund being computed or reduction in demand of tax, the same will be corrected on its own by the Centre by passing a rectification order and the excess amount shall be recovered as per the provisions of the Act.

(iii) Where a rectification has the effect of enhancing an assessment or reducing the refund or otherwise increasing the liability of the person, an intimation to this effect shall be sent to the person electronically by the Centre and reply of the person shall be furnished through electronic mode only.

(iv) Where the rectification order results in a demand of tax, the order under section 154 of the Act passed by the Centre shall be deemed to be a notice of demand under section 156 of the Income-tax Act.

5. The provisions of section 245 of the Act shall apply to the returns covered under the Centralised Processing of Returns Scheme, 2011 subject to the following, namely:-

The set-off of refund, if any, arising from the processing of a return, against tax remaining payable shall be done by using the details of outstanding tax demand in respect of the person as uploaded onto the system of the Centre by the Assessing Officer.

6. (i) Where a return is processed at the Centre, the appeal proceedings relating to the processing of the return shall lie with Commissioner of Income-tax (Appeals) having jurisdiction over the Assessing Officer and any reference to the Commissioner of Income-tax (Appeals) in any communication from the Centre shall mean such jurisdiction of the said Commissioner.

(ii) Remand reports, giving effect to appellate order and any other reports to be furnished before the Commissioner of Income-tax (Appeals) shall be submitted by the Assessing Officer having jurisdiction as regards the person.

7. The provisions of section 282 of the Act shall apply to all returns received under the Centralised Processing of Returns Scheme, 2011 subject to the following, namely : –

(i)  The service of a notice or order or any other communication by the Centre may be made by :

(a)  sending it by post;

(b)  delivering or transmitting its copy thereof, to the person’s e-mail address by the Centre’s e-mail;

(c)  placing its copy in the my account menu of the person on the official website for e-filing of returns; or

(d)  any of the modes mentioned in section 282(1) of the Income-tax Act.

(ii) The date of posting of any such communication on the website, e-mail or other electronic medium shall be deemed to be the date of service.

(iii) The intimation, orders and notices shall be computer generated and need not carry physical signature of the person signing it.

8. The Director General may specify procedures and processes from time to time for effective functioning of the Centre in an automated and mechanised environment, including specifying the procedure and processes in respect of the following :-

(a) receipt and processing of electronic rectification applications in the Centre;

(b) the address or place, the mode and the period or the extended period within which the acknowledgement in Form ITR-V shall be accepted;

(c) validating any software used for e-filing the return;

(d) call centers to answer queries and provide taxpayer services which may include outbound calls to persons requesting for clarification to assist in the processing of their returns of income; and

(e) managing tax administration functions such as receipt, scanning, data entry, processing, issue of refunds, storage and retrieval of income-tax returns and documents in a centralized manner or receipt of paper documents through authorised intermediaries.

 

Reference: Section 143 of the income Tax Act, 1961

Assessment

(1) Where a return has been made under section 139, or in response to a notice under sub-section (1) of section 142, such return shall be processed in the following manner, namely:—

 (a) the total income or loss shall be computed after making the following adjustments, namely:—

  (i) any arithmetical error in the return; or

 (ii) an incorrect claim, if such incorrect claim is apparent from any information in the return;

 (b) the tax and interest, if any, shall be computed on the basis of the total income computed under clause (a);

 (c) the sum payable by, or the amount of refund due to, the assessee shall be determined after adjustment of the tax and interest, if any, computed under clause (b) by any tax deducted at source, any tax collected at source, any advance tax paid, any relief allowable under an agreement under section 90 or section 90A, or any relief allowable under section 91, any rebate allowable under Part A of Chapter VIII, any tax paid on self-assessment and any amount paid otherwise by way of tax or interest;

 (d) an intimation shall be prepared or generated and sent to the assessee specifying the sum determined to be payable by, or the amount of refund due to, the assessee under clause (c); and

 (e) the amount of refund due to the assessee in pursuance of the determination under clause (c) shall be granted to the assessee:

Provided that an intimation shall also be sent to the assessee in a case where the loss declared in the return by the assessee is adjusted but no tax or interest is payable by, or no refund is due to, him:

Provided further that no intimation under this sub-section shall be sent after the expiry of one year from the end of the financial year in which the return is made.

Explanation.—For the purposes of this sub-section,—

 (a) “an incorrect claim apparent from any information in the return” shall mean a claim, on the basis of an entry, in the return,—

  (i) of an item, which is inconsistent with another entry of the same or some other item in such return;

 (ii) in respect of which the information required to be furnished under this Act to substantiate such entry has not been so furnished; or

(iii) in respect of a deduction, where such deduction exceeds specified statutory limit which may have been expressed as monetary amount or percentage or ratio or fraction;

 (b) the acknowledgement of the return shall be deemed to be the intimation in a case where no sum is payable by, or refundable to, the assessee under clause (c), and where no adjustment has been made under clause (a).

(1A) For the purposes of processing of returns under sub-section (1), the Board may make a scheme for centralised processing of returns with a view to expeditiously determining the tax payable by, or the refund due to, the assessee as required under the said sub-section.

(1B) Save as otherwise expressly provided, for the purpose of giving effect to the scheme made under sub-section (1A), the Central Government may, by notification in the Official Gazette, direct that any of the provisions of this Act relating to processing of returns shall not apply or shall apply with such exceptions, modifications and adaptations as may be specified in that notification; so, however, that no direction shall be issued after the 31st day of March, 2012.

(1C) Every notification issued under sub-section (1B), along with the scheme made under sub-section (1A), shall, as soon as may be after the notification is issued, be laid before each House of Parliament.

(1D)
Notwithstanding anything contained in sub-section (1), the processing of a return shall not be necessary, where a notice has been issued to the assessee under sub-section (2).

(2) Where a return has been furnished under section 139, or in response to a notice under sub-section (1) of section 142, the Assessing Officer shall,—

  (i) where he has reason to believe that any claim of loss, exemption, deduction, allowance or relief made in the return is inadmissible, serve on the assessee a notice specifying particulars of such claim of loss, exemption, deduction, allowance or relief and require him, on a date to be specified therein to produce, or cause to be produced, any evidence or particulars specified therein or on which the assessee may rely, in support of such claim:

Provided that no notice under this clause shall be served on the assessee on or after the 1st day of June, 2003;

 (ii) notwithstanding anything contained in clause (i), if he considers it necessary or expedient to ensure that the assessee has not understated the income or has not computed excessive loss or has not under-paid the tax in any manner, serve on the assessee a notice requiring him, on a date to be specified therein, either to attend his office or to produce, or cause to be produced, any evidence on which the assessee may rely in support of the return:

Provided that no notice under clause (ii) shall be served on the assessee after the expiry of six months from the end of the financial year in which the return is furnished.

(3) On the day specified in the notice,—

  (i) issued under clause (i) of sub-section (2), or as soon afterwards as may be, after hearing such evidence and after taking into account such particulars as the assessee may produce, the Assessing Officer shall, by an order in writing, allow or reject the claim or claims specified in such notice and make an assessment determining the total income or loss accordingly, and determine the sum payable by the assessee on the basis of such assessment;

 (ii) issued under clause (ii) of sub-section (2), or as soon afterwards as may be, after hearing such evidence as the assessee may produce and such other evidence as the Assessing Officer may require on specified points, and after taking into account all relevant material which he has gathered, the Assessing Officer shall, by an order in writing, make an assessment of the total income or loss of the assessee, and determine the sum payable by him or refund of any amount due to him on the basis of such assessment:]

Provided that in the case of a—

 (a) research association referred to in clause (21) of section 10;

 (b) news agency referred to in clause (22B) of section 10;

 (c) association or institution referred to in clause (23A) of section 10;

 (d) institution referred to in clause (23B) of section 10;

 (e) fund or institution referred to in sub-clause (iv) or trust or institution referred to in sub-clause (v) or any university or other educational institution referred to in sub-clause (vi) or any hospital or other medical institution referred to in sub-clause (via) of clause (23C) of section 10,

which is required to furnish the return of income under sub-section (4C) of section 139, no order making an assessment of the total income or loss of such research association, news agency, association or institution or fund or trust or university or other educational institution or any hospital or other medical institution, shall be made by the Assessing Officer, without giving effect to the provisions of section 10, unless—

  (i) the Assessing Officer has intimated the Central Government or the prescribed authority the contravention of the provisions of clause (21) or clause (22B) or clause (23A) or clause (23B) or sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10, as the case may be, by such research association, news agency, association or institution or fund or trust or university or other educational institution or any hospital or other medical institution, where in his view such contravention has taken place; and

 (ii) the approval granted to such research association or other association or fund or trust or institution or university or other educational institution or hospital or other medical institution has been withdrawn or notification issued in respect of such news agency or fund or trust or institution has been rescinded :

Provided further that where the Assessing Officer is satisfied that the activities of the university, college or other institution referred to in clause (ii) and clause (iii) of sub-section (1) of section 35 are not being carried out in accordance with all or any of the conditions subject to which such university, college or other institution was approved, he may, after giving a reasonable opportunity of showing cause against the proposed withdrawal to the concerned university, college or other institution, recommend to the Central Government to withdraw the approval and that Government may by order, withdraw the approval and forward a copy of the order to the concerned university, college or other institution and the Assessing Officer:

Provided also
that notwithstanding anything contained in the first and the second proviso, no effect shall be given by the Assessing Officer to the provisions of clause (23C)
of section 10 in the case of a trust or institution for a previous year, if the provisions of the first proviso to clause (15)
of section 2 become applicable in the case of such person in such previous year, whether or not the approval granted to such trust or institution or notification issued in respect of such trust or institution has been withdrawn or rescinded

(4) Where a regular assessment under sub-section (3) of this section or section 144 is made,—

 (a) any tax or interest paid by the assessee under sub-section (1) shall be deemed to have been paid towards such regular assessment ;

 (b) if no refund is due on regular assessment or the amount refunded under sub-section (1) exceeds the amount refundable on regular assessment, the whole or the excess amount so refunded shall be deemed to be tax payable by the assessee and the provisions of this Act shall apply accordingly.

(5) Omitted by the Finance Act, 1999, w.e.f. 1-6-1999.