New tax rule to usher in clarity on TDS credit

Tax relief

The new CBDT rule has now settled the position that a person who is liable to pay the tax should be eligible for the TDS credit

Joint owners in shares, deposits or property could now have the right to claim

K.R. Srivats

New Delhi, March 20 Tax deducted at source (TDS) credit can now be availed by persons other than the deductees. This has been clearly articulated by the Central Board of Direct Taxes (CBDT) in a new rule on TDS credit availment.

Bringing relief and certainty to taxpayers, the CBDT has also spelt out the situations and the procedure through which the tax credit will be made available for persons other than deductees.

The credit for TDS will be allowed to persons other than the deductees only in cases where the relevant income is assessable to income tax in the hands of such other person. The new CBDT rule has now settled the position that a person who is liable to pay the tax should be eligible for the TDS credit, say tax experts.

To illustrate this point, consider a situation of winnings from a raffle going to a minor. The tax is deducted before the payment is made to the minor. Under the clubbing provisions of income tax, the income of the minor gets clubbed with those of the parent and gets taxed at the latter’s hands.

As the TDS certificate is in the name of the minor (deductee being the minor), tax authorities at the ground level often deny TDS credit to the parent even though the incomes are clubbed and assessed in the hands of the parent. Now, the CBDT has made it clear that tax credit has to be granted to the parent (the person in whose hands the income is assessable).

Similarly, in a situation where the deductees are joint owners of shares, property and deposits, the CBDT has now said that the TDS credit would be available to the respective joint owners in proportion of their ownership of the asset. Hitherto, no mechanism was available by which all the joint owners in shares, deposits or property could have the right to claim TDS credit.

“The latest CBDT rule on credit for TDS will bring clarity at the ground level. They have gone by the principle that the person who pays the tax should get the tax credit,” Mr Jayesh Thakur, Associate Director, PricewaterhouseCoopers told Business Line.

Till date, tax officers were taking different views on the eligibility for tax credit in situations where the income is assessable to tax in the hands of persons other than the deductee. Hitherto, assessees were often required to go up to the High Courts to get benefit of the TDS credit, point out tax experts.

Trusts, partnership firms

The CBDT has also brought clarity and certainty to the eligibility for availment of TDS credit in respect of trusts, partnership firms and Association of Persons (AOP).

In situations where the deductee is a Trust and the income is assessable in the hands of trustees, the TDS credit should be granted to the trustee. Similarly, where the deductee is partner or karta of a Hindu Undivided Family (HUF) and the income is assessable as the income of firms or the HUF, the TDS credit would have to go to the partnership firm/HUF.

Where the deductee is the Association of Persons (AOP) and the income is assessable in the hands of the members, the CBDT has made it clear that the TDS credit should go to the members of AOP.

The procedure: For persons other than the deductee to get the TDS credit benefit, the deductees are required to file a declaration with the deductor. The declaration should have details of the other person (i.e. the person to whom tax credit is to be given) like name, PAN, payment or credit in relation to which tax credit is to be given and the reason for giving credit to such person.

The deductor would report tax deduction in the name of such other person to the tax authority. The TDS certificate could also be issued in the name of the person other than the deductee.

In Budget 2008-09, the Government decided that the system of allowing credit to the assessee for TDS/Tax collected at source (TCS) needs a certain degree of flexibility considering the ongoing technological and business process changes.

Instead of providing rigorous conditions regarding the method of giving credit for TDS in the Income Tax Act itself, the Government decided to do this through the rules. That promise has now been implemented by CBDT by bringing the necessary rule for this purpose.

Govt abolishes banking transaction tax

New Delhi, Apr 1 (PTI) Taxpayers will not have to pay levy on withdrawal of cash from banks with the government withdrawing the Banking Cash Transaction Tax (BCTT) from today.
The government had introduced 0.1 per cent BCCT in 2005 on cash withdrawals of more than Rs 50,000 (individuals) and Rs 1,00,000 for others in a single day from non-savings bank account maintained with any scheduled bank.

The tax has been withdrawn from April 1 following an announcement made by the then Finance Minister P Chidambaram in his budget speech for 2008-09, sources said.

In his Budget speech, Chidamabram had said, "The BCTT has served a very useful purpose in enlarging the information system of the Income Tax Department. Since the information is also being gathered through other instruments introduced in the last few years, I propose to withdraw this tax with effect from April 1, 2009." The levy was introduced in 2005 to track unaccounted money and trace its source and destination.

Though BCTT was not introduced with the intention of revenue generation, the levy, as per the revised estimates, contributed to the exchequer Rs 600 crore during 2008-09. The BCCT collection was Rs 550 crore for 2007-08.

permission to government servent to work as Arbitrator and accept fee/ honorarium therefore GOI OM Dt 21/10/2008

Inclusion of following items in the list of specilized works

Notification on TDS and TCS -PIB Release

The Board has amended the rules relating to Tax Deduction at Source (TDS) and Tax Collected at Source (TCS) vide Notification No. S.O.858 (E) dated 25th March 2009.

In this context, taxpayers are informed that the new Form 17 (the challan for payment of TDS and TCS) is applicable only for payment of tax deducted or collected at source on or after 1st April 2009. Therefore, in respect of any TDS or TCS made before the 1st April, 2009, the payment will continue to be made to the credit of the Central Government by using the challan in Form No. 281 (i.e. the old challan form) even after 31st March 2009.

The Central Board of Direct Taxes will shortly issue a detailed circular on the amended rules relating to TDS and TCS.

Nehruvian bravado haunts IAF’s vistas - Part I (Natteri Adigal)

“THE SARAS project will continue, we will not shelve it.” The heroic announcement of SK Brahmachari, Director General, Council of Scientific and Industrial Research (CSIR), has cheered faithful patriots, ever ready to puff up their chests in pride.

The announcement came shortly after the second prototype (PT-2) of the light transport aircraft (LTA) Saras crashed on the outskirts of Bangalore in early March. The 14-seater multi-role plane is being developed by ’expert’ science research VIPs at National Aerospace Laboratories (NAL), a CSIR outfit.

More than the monstrous sums squandered in the development, which has been going on since the early 1990s, the real tragedy was the loss of three young IAF officers. Test pilots Wg. Cdr. Praveen, Wg. Cdr. Deepesh Shah, and Test Engineer Squadron Leader Ilayaraja, who were on board the pre-doomed aircraft, died in the crash.

NAL chief AR Upadhyaya had taken the considered view that the accident must not hamper the program in India’s quest for beating the big names in the business. If Brahmachari, who met NAL ’scientists’ and relatives of the deceased pilots, is to be believed, the father of one of the pilots told him that completion of the Rs 200 crore project would be a fitting tribute to his son.

Whether it was true or not, it is this suicidal mindset - not just being prepared to become a martyr if needed but actually dying due to the ineptitude and criminal negligence of top bosses and utter mismanagement - that is being promoted by fake experts living in a Nehru era time warp.

A high-profile science babu who has dedicated his entire career (pushing files) to the country in one of the 37 research institutes governed by CSIR paid a typical homage saying, “These young officers have supported the test flying of the LTA, knowing fully well the risks involved with the experimental production. No great success can be achieved without paying the price.”

What he did not mention explicitly was that the price involved in fitting emergency equipment like ejection seats, mandatory when test flying unproven stuff, was too high compared to the cheap lives of passionate IAF officers in India!

This attitude came to the fore just one month previously in case of LTA’s compatriot LCA (Light Combat Aircraft) named Tejas. Air Commodore Rohit Varma, who heads the LCA flight testing at the National Flight Test Centre (NFTC), said, “Unlike other countries where test pilots are retired airmen, our test pilots are all serving pilots, bringing in contemporary experience of our operating environment!”

Countries which really want to develop such machines are idiots by implication because they believe that only highly experienced pilots will be able to take split-second decisions, often needed while facing situations that could not have been predicted! Apparently, the dare devilry or agility of pilots who have hundreds of flying hours left in them are not the attributes needed for this job.

NFTC bosses incidentally boast, “This centre has been set up entirely indigenously.” This is a sick Nehruvian mindset obsolete in an age when the concept ’global hubs’ is in vogue. Even far richer countries prefer to source such items in other countries in order to keep pace with advancements and to ensure quality and cost-effectiveness, rather than sink money in indigenization.

Rapid fire experts of India have come out with a brilliant idea to cut down the likely setback due to the fate of the PT-2, which was completely destroyed in the accident. The PT-1 aircraft will be modified and touted as the PT-3 by fitting the higher thrust Pratt and Whitney engines! Bring a donkey, present it as a horse and get a willing jockey to ride it! After all, any number of suckers are available to test-fly such make believe machines and become martyrs.

Of note, the PT-1 that had its first flight in May 2004, exceeded its empty weight target by almost a tonne. That is 25 per cent. Therefore, the PT-2, which first flew three years later than the PT-1 did (and crashed now), was fitted with the 1200 shp version of the original 850 shp engines, imported from Pratt & Whitney, Canada.

The PT-3 was supposed to be a ’production-standard prototype’, targeting a 500-kg weight reduction, using advanced materials. It was expected to fly by 2009-end, pushing certification into 2010.

Courtesy: Merinews

Formation of Anamoly commitee at CSIR

ADOPTION OF GREEN BUILDING PARAMETERS (TERI) BY CPWD

Amendment in GCC 2008 dt 28.01.2009

Pay fixation of Medical officers in PB-4 MOF revised illustration

Grant of DR to pensioners w.e.f. 1/1/2009

Medical Checkup of canteen employees - Regarding.

Award Scheme for writing original books/reviews in Hindi on subjects pertaining to Income Tax, Excise and Customs, Service Tax and Narcotics

Government of India

Ministry of Finance

Department of Revenue

Subject: Ministry of Finance, Department of Revenue Award Scheme for writing original books/reviews in Hindi on subjects pertaining to Income Tax, Excise and Customs, Service Tax and Narcotics from 01.10.2008 to 30.09.2009

Books pertaining to Income Tax, Excise and Customs, Service Tax and Narcotics written or reviewed originally in Hindi during the period from 01.10.2008 to 30.09.2009 will be accepted for consideration in the Department of Revenue upto 20 October, 2009 for the following prizes:-

Scheme for Books written originally in Hindi

First Prize (one) - Rs. 25,000/-(Rupees twenty five thousand)

Second Prize (one) - Rs. 15,000/-(Rupees fifteen thousand)

Scheme for Book-review in Hindi

First Prize (one) - Rs. 8,000/-(Rupees eight thousand)

Second Prize (one) - Rs. 6,000/-(Rupees six thousand)

Eligibility

1) Should be a citizen of India.

2) The books should be written/reviewed during the period from 01.10.2008 to 30.09.2009.

General Terms

Persons participating in these schemes shall observe the following conditions and they will be governed by the following:-

I. Published books as well as manuscripts will be accepted under the scheme. The published books/manuscripts should have been published written during the prescribed period only.

II. Persons who are willing to send their books for consideration under the above-mentioned scheme are requested to send six copies of their books and two passport size photographs along with the enclosed proforma duly filled by 20 October, 2009 at the following address:-

Director (OL),

Ministry of Finance, Department of Revenue,

Room No. 264-A, North Block,

New Delhi – 110001

III. The books/manuscripts received in the Department shall not be returned.

IV. The books/manuscripts received after the last date shall not be entertained. The Department of Revenue shall not be responsible for any loss of book or delay in post.

V. The copyright of the awarded book shall remain with the writer.

VI. Only those books that have been written originally in Hindi will be accepted under this scheme.

VII. The book should not have been written under any other Government Scheme.

VIII. The book should not be a Hindi translation of book written in any other language or published earlier by the writer.

IX. In case the book has been awarded earlier by the Government of India or a Union Territory/State Government, a mention to this effect should be made in the application form.

X. In case the book/manuscript has been written by more than one person, the amount of prize money would be divided equally amongst them.

XI. The Department of Revenue has the exclusive right in the selection of person for the award.

XII. No correspondence regarding awarding of the prize or its process would be entertained.

XIII. The Department of Revenue has the exclusive right to make any change in the Scheme.

XIV. The Additional Secretary (Revenue)/Joint Secretary (Revenue) may forward the book to the Evaluation Committee for consideration.

XV. The awarded persons would get the prize money and a citation, which will have to be printed in the next edition of the book.

XVI. Information regarding the prize would be given well in advance by the Director (OL)

(Madhu Sharma)

Director (Official Language)

Telephone- 23095365

264-A, North Block, New Delhi

आयकर, उत्‍पाद शुल्‍क एवं सीमा शुल्‍क, सेवा कर तथा नारकोटिक्‍स से संबंधित विषयों पर हिन्‍दी में मौलिक पुस्‍तक लेखन योजना एवं पुस्‍तक समीक्षा योजना

(01 अक्‍तूबर,2008 से 30 सितम्‍बर, 2009 तक)

1. (क) लेखक का नाम:

(ख) पदनाम:

2. पुस्‍तक का नाम:

3. पुस्‍तक का विषय:

4. प्रकाशक का नाम, पता व प्रकाशन का वर्ष:

5. पुस्‍तक लिखने का कार्य सम्‍पन्‍न करने की तिथि(माह-वर्ष):

6. मैं एतद्द्वारा प्रमाणित करता/करती हॅू कि:-

(1) ------------------------------- पुस्‍तक मेरी मौलिक रचना है ।

(2) उक्‍त पुस्‍तक--------------------------------- के बीच में लिखी गई/प्रकाशित हुई है ।

(3) मेरी उक्‍त पुस्‍तक का विषय मेरे द्वारा किए जा रहे/किए गए कार्य से संबंधित है।

दिनांक:- लेखक के हस्‍ताक्षर

Rate of DA increased by 10 % in Pre-revised scale w.e.f 1/1/2009

CSIR Purchase Rules of Goods & Services-2008 & CSIR & Purchase Manual of Best Practices-2008 (now avaliable on website)

Open access conference seeks to free research : Amulya Gopalakrishnan

New Delhi: When Newton famously remarked that if he had seen further than others, it was by “standing on the shoulders of giants”, he wasn’t just being modest. He was stating the simple fact that knowledge builds on previous knowledge, that the back and forth of ideas is vital for scientific achievement. Though the current proprietory publishing model is stacked against scholars, an emerging open access movement across the world aims to free scientific content - and India has big stakes in it.

A conference in New Delhi brought together open access evangelists including Prof. John Willinsky of Stanford University, Prof Leslie Chan of the University of Toronto, Prof Surendra Prasad of IIT Delhi, Dr D K Sahu of MedKnow Publications, and Narendra Kumar of CSIR.

Now, all research papers published from CSIR labs will be made open access, either by putting the full text on freely available institutional repositories or publishing directly in open access journals. Meanwhile, across the world, MIT has become the first university to throw open all its research papers through the online repository software DSpace.

Globally, academic tenure and promotion is traditionally linked to research published in reputed, peer-reviewed journals. These journals are owned by commercial behemoths like Springer and Reed Elsevier, who own stables of journals in various disciplines, and dictate terms to university libraries. But in recent years, journal prices have shot through the roof.

Now, after years of weary negotiation, and empowered by new digital infrastructure, universities are teaming up via free institutional repository systems, to pool and circulate their collective research. In India, institutes like NIT Rourkela have adopted super-archives like DSpace for another reason — to showcase their scientific output to global peers. “NIT doesn’t have the research legacy of IIT or IISC — they needed the visibility,” says NIT director Sunil Kumar Sarangi.

Such a knowledge commons is especially valuable to developing countries — for instance, in agricultural research or public health, it is inexcusable that countries which could benefit most from the scientific debate are left out of the loop, simply because of prohibitive pricing (some journals cost up to 20,000 dollars, annually). This only widens the gulf between the state of research here and the US or Europe.

Even research produced in India with our taxpayer money is sent to big-name commercial journals and all copyright signed away, putting it out of reach for the Indian scholarly community. But all that could change if open access journals become the norm. S K Sahu, who runs MedKnow publications (over 80 open access journals), also busted claims that content on such journals tends to vanish into the ether after a few years online.

Courtesy : Indian Express

Pension Anomaly- representation thereof

Interest on Sixth CPC arrears clarified

Interest on arrears of Sixth Central Pay Commission deposited by Government servants in their General Provident Fund (GPF) account has been clarified. The OM dated August 30, 2008 contained the guidelines on fixation of pay and payment of arrears apart from the instructions allowing employees to deposit the arrears in the GPF account. It was, however, not clear whether such arrears so deposited will earn interest or not.
In this connection, it is clarified that the OM dated August 30, 2008 does not specify otherwise and as such the amount of arrears deposited in the GPF account will earn interest. Such interest will be payable from the date of deposit in the GPF account. (Department of ExpenditureOMF. No. 1 / 1/ 2008 IC dated December 30, 2008)

SpecialCLto Central employees with disabilities granted

Special dispension in the form of Special Casual Leave granted to the Central Government employees with disabilities have been revised. According to the recommendations of the Sixth Central Pay Commission, the number of casual leave (CL) available for employees with disabilities should be 12 days as against 8 days for other employees. The government has decided that the additional benefit of 4 days leave is to be granted in the form of Special CL.
Accordingly, the Central government employees with disabilities as defined in the Persons with Disabilities (Equal Opport-unities, Protection of Rights and Full Participation) Act, 1995 are to be granted Special CL for four days in a calendar year for specific requirements relating to the disability of the official.
This order takes effect from September 1, 2008. (Department of Personnel and Training OM No. 25011 / 1 / 2008 Estt. (A) dated November 19, 2009)

Date of Next Increment - Clarification Dated 13th March 2009

Subject: Date of next increment in cases where Government servants are not able join posts in a particular grade pay on promotion/appointment on 1st of January of a year due to Sunday or Gazettd holiday -clarification rega:ding.