Tax & Regulatory Updates: January 2020
Direct Tax Updates
CBDT proposes amendment in Income-tax Rules 1962 by inserting new rule 29BA and Form 15E.
Section 195 of the Income-tax Act had been amended to empower CBDT to prescribe the form and manner of filing of application to Assessing officer to determine the appropriate proportion of such sum upon which tax shall be liable to be deducted u/s 195. Further, CBDT was also empowered to specify a class of persons or cases who shall make an application to AO to determine the amount upon which tax shall be deducted. In this regard, CBDT now proposes to amend income tax rules by inserting rule 29BA, wherein Form 15E has been introduced to make an application to AO for determining above-said sum.
Insertion of rule 119AA and Prescribed Electronic modes of accepting payments under section 269SU
CBDT seeks to insert rule 119AA vide notification dated 30th December 2019, wherein every person carrying on business, if his total sales, turnover or gross receipts in the financial year exceeds Rs. 50 crores, shall provide facility for accepting payment through electronic modes (namely Debit Card powered by RuPay, Unified Payments Interface (UPI) (BHIM-UPI), and Unified Payments Interface Quick Response Code (UPI QR Code) (BHIM-UPI QR Code)) in addition to other electronic modes
Clarification regarding acceptance of payment through prescribed Electronic modes by the specified person.
In Circular no. 32 /2019, CBDT has clarified regarding acceptance of payment through prescribed electronic modes by the person having a business turnover of more than Rs 50 Crore under rule 119AA. Further, they clarify that no charges should be imposed on payer making payment, or a beneficiary receiving payment by bank or any other service provider including the MDR (Merchant Discount Rate) on or after 01st January 2020. In connection to this, section 271DB has been inserted to levy penalty of Rs. 5000 per day in case of failure to comply with above provisions. In view of the difficulties faced by the taxpayer to install and operationalise the facility, CBDT clarify that such penalty shall not be levied if the specified persons installs and operationalises these facilities on or before 31" January, 2020 but will apply from 01st February onwards.
CBDT proposes manner of calculating remuneration to eligible fund manager under section 9A of Income Tax Act, 1961
CBDT issued draft notification dated 05th December 2019 to amend the Rule 10VA s with respect of Fund Manager Regime u/s 9A of the IT Act requiring general public and stakeholder’s inputs by 19th December 2019. The said rule is providing the manner of calculation of remuneration to be paid to fund manager. Proposed Rule further requires the fund manager to obtain a report from Accountant in new form 3CEJA regarding fulfilment of certain conditions by an eligible investment fund.
PAN and Aadhaar linking date extended till 31.03.2020
CBDT further extends the due date of PAN and Aadhaar linking from 31st December’19 to 31st March’20.
Extension of time limit for filing of response to notices issued under section 142(1) under E-assessment
For providing the relief to taxpayers and the ease of compliance with respect to e-Assessment proceedings under the e-assessment scheme, the time limit of filing the response to notices issued under section 142(1) has been extended to 10/01/2020 or time given under such notices whichever is later.
Govt. notifies new schemes related to PPF, NSC, SCSS, KVP, etc. and withdraws old rules.
The central government has notified new schemes related to the Government Savings Promotion Act, 1873. The old rules under previous schemes were rescinded and new schemes were issued in place of them. The rescinded schemes are namelythe Post Office Savings Accounts Rules, 1981; the National Savings Time Deposit Rules, 1981; the National Savings Recurring Deposit Rules, 1981 etc. Such schemes has been replaced with the new schemes, namely The Post Office Savings Accounts Rules, 2019; National Savings Certificate Rules, 2019; the Senior Citizens Savings Scheme Rules, 2019 Public Provident Fund Scheme, 2019 etc.
Extension of the due date of payment of tax deducted at source under 194M of the Act, under section 119(2).
CBDT vide circular no. 3 in respect of Section 194M (Person required to pay commission/brokerage to resident individual/HUF for any work in pursuance of contract) extended the due date for payment of TDS and furnishing challan cum statement in Form 26QD from 31st October 2019 and 30th November 2019 to 31st December 2019.Consequently, the due date of furnishing certificate of tax deduction in Form 16D has been extended for the above-mentioned months to 15th January, 2020.
Extension of due date of December Instalment of Advance Tax payment for taxpayers in the North Eastern States.
The last date for payment of 3rd instalment of advance tax under section 119(2)(a) of the income tax act for the FY19-20 was extended from 15th December’19 to 31st December’19 due to disruption in internet services in the North-Eastern States of Assam, Tripura, Arunachal Pradesh, Meghalaya, Nagaland, Manipur and Mizoram
Companies Act Updates
Relaxation of additional fees and extension of last date of filing Form BEN-2 and BEN-1 under Companies Act, 2013
The date of Filing form BEN-2 has been extended upto 31.03.2020 and the date for filing form BEN-1 to be construed accordingly. After expiry of the mentioned period, additional fees shall be applicable
Foreign Exchange Management Act (FEMA) Updates
Extension of relaxation on the guidelines to NBFCs on securitisation transactions.
The relaxation of Minimum Holding Period (MHP) requirement for originating NBFCs, in respect of loans of original maturity above 5 years provided to receipt of repayment of six monthly instalments or two quarterly instalments (as applicable) with the prudential Minimum Retention Requirement (MRR) requirement been extended till June 30, 2020.
Foreign Exchange Management (Export of Goods and Services) (Amendment) Regulations, 2019 has been notified with effect from December 09, 2019.
Clause ea of Regulation 4 of principal regulation with respect to exemption for declaration of exports has been revised as follows:
“(ea) re-export of leased aircraft/ helicopter and/or engines/auxiliary power units (apus) re-possessed by overseas lessor and duly de-registered by the Directorate General Of Civil Aviation (DGCA) on the request of Irrevocable Deregistration And Export Request Authorisation (IDERA) holder under ‘cape town convention’ subject to permission by DGCA/ministry of civil aviation for such export/s.”
Securities and Exchange Board of India (SEBI) Updates
Filing of Offer Documents under Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 Issue of Depository Receipts has been updated as on December 11, 2019
In partial modification of the above referred circular, it has been decided that the draft offer documents in respect of issues of size upto `750 crores shall be filed with the concerned regional office of the Board under the jurisdiction of which the registered office of the issuer company falls. Merchant Bankers are accordingly advised to file the draft offer documents / offer documents with the concerned office of the Board
SEBI has introduced a common format for reporting of Statement of Deviation or Variation for proceeds of public issue, rights issue, preferential issue, Qualified Institutions Placement (QIP) etc. required as per Regulations 32(1), 32(2) and 32(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘SEBI LODR Regulations’).
As per Regulations 32(1), 32(2) and 32(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘SEBI LODR Regulations’), a listed entity is, inter alia, required to submit to the stock exchange, a statement of deviation or variation, pursuant to review by the audit committee, on a quarterly basis for public issue, rights issue, preferential issue etc. indicating, deviations, if any, in the use of proceeds of public issue, rights issue, preferential issue etc. and Øthe category wise variation between projected utilization of funds and the actual utilization of funds. Hence, for the purpose of compliance with 32(1), 32(2) and 32(3) of the SEBI LODR Regulations, listed entities shall follow the format introduced by SEBI.