Clarification in the Latest Circular from CBDT

The latest circular from CBDT (Central Board of Direct Taxes) clarifies, based on a High Court decision, that service need not be deducted on the Service Tax component.

Thus, your cllients should now pay you higher to that extent. Correspondlngly, you need to deduct lower TDS to a similar extent.

An example:

Ensure you follow this and also make sure your clients pay you accordingly. The link to the circular is here.

Note that, for now, this is applicable only if Service Tax is charged seprately for professional / techincal services.

The due date for filing of returns for all other than salaried individuals & HUF is extended to 31st October, 2006; from 31st July, 2006.

In addition, returns can now be designated post offices. The full list of post offices that have started accepting returns from 26 July, 2006 is here. Use this link to search for post offices near you.

More updates on the Credit Policy Review to follow.

SEBI has vide circular no SEBI/CFD/DIL/DIP/18/2006/1 amended the SEBI (DIP) Guidelines, 2000 for ensuring ECS refunds in 15 centres. Details are available in my earlier post / newsletter on this subject.

DP’s are now required to update the MICR code and other bank details of the applicants in their databases to ensure proper refunds through ECS mode. In view of this, the two depositories (NSDL and CDSL) are required to instruct DP’s to comply with this requirement.

At the same time the DP’s are required to suitably amend their bye-laws, rules and regulations for smooth implementation. DP’s are also required to communicate to SEBI the implementation status in the Monthly Development Report.

Full Text of this circular is available here.

The Central Government has vide notifications 222/2005 to 225/2005 and 227/2005 notified the following instruments / schemes as being eligible for section 80C from the Assesment Years 2006-07.

1. Provident Fund established under the Public Provident Fund Scheme, 1968
2. National Savings Certificates (VIII Issue)
3. ULIP [Dhanraksha 1989] issued by the LIC MF
4. Specific Schemes of the LIC [ New Jeevan Dhara, New Jeevan Dhara-I and New Jeevan Akshay, New Jeevan Akshay-I and New Jeevan Akshay-II Plans]
5. UTI Retirement Benefit Pension Plan

Note that this does not per se cover the ELSS [Equity Linked Saving Schemes] of other Mutual Funds. A clarification on this is awaited.

The CDBT has also issued a separate notifcation 226/2005 ‘Equity Linked Saving Schemes, 2005’. I’ll be posting my comments these separately tommorrow.

All the Notifications are available on the CBDT website. Click here for quick reference.

technorati tag: Direct Taxation, Saving, Notification, Capital Market

The CDBT has, vide Circular No. 220/1/2005-IT,A-II, extended the due date for obtaining tax audit report u/s 44AB and for filing returns of incomes from 31st October, 2005 to 31st March, 2006 for the state of Jammu & Kashmir.

technorati tag: Direct Taxation, Finance

The CBDT, in exercise of its powers under section 119 of the Income Tax Act, 1956, all IT authorities have beendirected to make arrangements for accepting the returns of income on 29th and 30th October, 2005 (being Saturday & Sunday). The due date for filing of return of income within the meaning of Explanation 2(a) and (b) to Section 139(1) of the Income Tax Act, 1961 is 31st October, 2005.

technorati tag: Direct Taxation, Finance

The following is a link to the Explanatory Notes on the provisions relating to Fringe Benefit Tax released by the CBDT vide Circular No. 8/2005.

In addition to some explanatory notes, this circular also has a list of 100+ FAQ’s on FBT.

Circular No. 8/2005 can be viewed here.

technorati tag: Taxation, Finance