Order under section 119(1) of the Income-tax Act, 1961 regarding exemption from the TDS provisions under section 197 read in conjunction with section 10(26BBB) of Income-tax Act, 1961 CIRCULAR NO. 7/2008, DATED 1-8-2008
In exercise of the powers conferred under sub-section (1) of section 119 of Income-tax Act, 1961, Central Board of Direct Taxes hereby directs that corporations which are established by a Central, State or Provincial Act for the welfare and economic upliftment of ex-servicemen and whose income qualifies for exemption from income-tax under section 10(26BBB) of the Income-tax Act, 1961, are hereby given exemption from Tax Deduction/Collection at Source on their receipts. 2. This exemption shall not absolve such organisation from their statutory obligation of deducting TDS on all contractual payments made by them to other parties including sub-contractors etc. 3. This exemption shall be valid for 3 years from the date of issue of this order. 4. After the end of 3 years, all the Chief Commissioners of Income-tax will send their feedback to the CBDT on the benefits and, or shortcomings observed in the working so as to enable a review and further decision by the Board in the matter .
 
NEW RETURN FORMS FOR THE ASSESSMENT YEAR 2008-09 - AND MATTERS CONNECTED THERETO CIRCULAR NO. 6/2008, DATED 18-7-2008

The Central Board of Direct Taxes, vide notification S.O. No. 752(E), dated 28.3.2008 have notified return forms for the assessment year 2008-09. With a view to enabling tax payers to file returns in the electronic mode, these returns (except ITR-7) have been made annexure-less. The instructions for filling up the return forms clearly stipulate that "No document (including TDS/TCS certificate, report of audit) should be attached to this form. Official receiving the return has been instructed to detach all documents enclosed with this form and return the same to the assessee..

2. It has come to the notice of the Board that in spite of the directions contained in the Instructions for filling the return forms, the practice of accepting returns, along with annexures is still continuing. This practice goes against the expressed policy of the Government and is not in consonance with the legal provisions. Therefore, it is emphasized that Chief Commissioners of Income Tax must ensure strict compliance with the provisions of law. It may be reiterated that all annexures accompanying the income tax return forms should be detached and returned to the tax payers by the receiving official.

3. Further, while processing such returns under section 143(1), the credit for tax deducted at source (TDS)/Tax Collected at Source (TCS) shall be allowed on the basis of details furnished in the relevant schedules of the return forms subject to Instruction No.6/2008 dated 18th June, 2008 issued by the Central Board of Direct Taxes in respect of assessment year 2007-08 or any similar instructions as may be issued for assessment year 2008-09. No disallowance of claim for TDS/TCS shall be made by the Assessing Officer only on the ground that the TDS/TCS certificates have not been filed along with the return of income or Form ITR-V. The same procedure shall also apply in respect of challans relating to Advance Tax and Self Assessment Tax.

4. Assessees are advised to retain with themselves all annexures relating to computation of income, TDS/TCS certificates, counterfoil of challans relating to payment of advance tax and self assessment tax, audit reports and any other document which they would have otherwise liked to file in support of their claims. The original documents and certificates may be produced by them as and when called for by the Assessing Officer.

5. Instances have also come to the knowledge of the Board that ITR-V verification form are being received without giving them a Receipt Number. Since ITR-V verification form is an acknowledgement, the same should be received by giving a Return Receipt Number, as if it were a return. Separate counters may be set-up to receive such ITR-V verification forms. These ITR-V verification forms should be kept in safe custody.

 
MANDATORY E-PAYMENT OF TAXES CIRCULAR NO. 5/2008, DATED 14-7-2008

The Central Board of Direct Taxes, vide notification S.O. No. 493(E), dated 13.3.2008 have notified the categories of taxpayers who are mandatorily required to electronically pay taxes on or after the 1st day of April, 2008. The taxpayers who are required to pay taxes by the prescribed mode are - (i) a company; and (ii) a person (other than a company), to whom provisions of section 44AB of the Income-tax Act, 1961 are applicable.

2 Further, payment of tax electronically has been defined to mean payment of tax by way of - (i) internet banking facility of the authorized bank: or (ii) credit or debit cards.

3. In this context, representations have been received from some of the foreign assessee highlighting the difficulties being faced by them in complying with the provisions with regard to mandatory e-payment of taxes. It has been pointed out by such foreign assessee that they do not have a presence in India and, therefore, are not able to meet the 'know your customer norms' of the banks. This has resulted in their inability to open bank accounts and make payment of taxes, through the electronic mode. Representations have also been received from the resident taxpayers highlighting difficulties in availing internet banking facilities of the authorized banks. A clarification has also been sought as to whether payment of tax deducted at source by a deductor will fall within the meaning of 'tax' for the purpose of the impugned notification.

4 With a view to facilitating electronic payment of taxes by different categories of taxpayers, it is hereby clarified that, - an assessee can make electronic payment of taxes also from the account of any other person. However, the challan for making such payment must clearly indicate the Permanent Account Number (PAN) of the assessee on whose behalf the payment is made. It is not necessary for the assessee to make payment of taxes from his own account in an authorized bank. Further, it is also clarified that payment of any amount by a deductor by way of Tax Deducted at Source (TDS) or Tax Collected at Source (TCS) shall fall within the meaning of 'tax' for the purpose of the rule 125 of the Income-tax Rules, 1962.

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