Changes in Income tax in Dec 19

Nageswara Rao Jammigumpula , Last updated: 09 January 2020
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Objective: The objective of this document is to summarize all the updates of Income Tax (Notifications, Circulars, other amendments and updates) in one place. The same are being summarized below.

1. CBDT amended Form No.10DA to be obtained from CA for claiming deduction towards additional employee cost u/s 80JJAA[1]

a. Sec 80JJAA:

Additional deduction for cost in respect of employment of new employees

S.No	Particulars	Remarks
	Eligible Assessee	Gross total income includes income from PGBP & subject to tax audit u/s 44AB
	Amount of deduction	30% of additional employee cost for each year for a period of 3 years from the year in which it is incurred (For e.g. additional employee cost for FY 2018-19 is Rs.20 lacs. Deduction for FY 2018-19 - Rs.6 lacs, FY 2019-20 - Rs.6 lacs & FY 2020-21- Rs.6 lacs)
	Additional employee	Means an employee employed during the year and such employment increases the total number of employees existing as on the last day of the preceding year Total emoluments to an employee should not be more than Rs.25K per month Should be in employment for 240 days (150 days for assessee engaged in manufacturing of apparel/footwear/leather products) or more during the year Should participate in the recognised provident fund
	Additional employee cost (in the case of existing business)	Total emoluments paid/payable to additional employees employed during the year
	Additional employee (in the first year of a new business)	Total emoluments paid/payable to employees employed during the year
	Emoluments	Any sum paid/payable to an employee for employment but does not include; Any contribution to pension/provident/any other fund for the benefit of employee under any law Any lump-sum payment at the time of termination of his service/superannuation/voluntary retirement such as gratuity, leave encashment, voluntary retrenchment benefits etc.,
	Deduction in respect of employees employed during the year for less than 240/150 days but is employed for 240/150 days in the next year	These employees shall be deemed to be employed in the next year and the provisions of this section apply accordingly
	Others	No deduction if payment to employees made otherwise than by an a/c payee cheque/bank draft or use of electronic clearing system through a bank account No deduction if there is no increase in the number of employees compared to employees existing as on the last day of the preceding year Report in Form No.10DA to be obtained from CA and to be furnished along with income tax return

b. Changes made in the amended Form No.10DA

Amended form takes in to consideration the below aspects which was not covered by old form;

Deduction towards additional employee cost in respect of employees employed during the year for less than 240/150 days but is employed for 240/150 days in the next year
Details of amount of deduction for last two years

2. Certain additional electronic modes were prescribed by CBDT which are mandatorily to be facilitated by persons having business turnover of more than Rs.50 crore for accepting payments[2]

Sec 269SU - Acceptance of payments through prescribed electronic modes

To promote digital economy and move towards a less-cash economy, a new section - 269SU was inserted vide Finance Act 2019 w.e.f. 01-Nov-2019

S No	Particulars	Remarks
	Provision (Sec 269SU)	Specified person shall mandatorily provide facilities for accepting payments through the prescribed electronic modes, in addition to other electronic modes
	Specified Person	Every person having a business turnover of more than Rs.50 crore during the preceding previous year (For e.g. turnover during the FY 2019-20 > Rs.50 crores, during the FY 2020-21 this section applicable)
	Prescribed electronic modes (Rule 119AA - Inserted through notification)	RuPay Debit Card Unified Payments Interface (UPI) (BHIM-UPI) - e.g. Google Pay, Paytm, PhonePe etc., Unified Payments Interface Quick Response Code (UPI QR Code) (BHIM-UPI QR Code)
	Non-compliance (i.e. fails to provide facilities for accepting payments through prescribed electronic modes)	Liable to pay penalty of Rs.5K for every day of such failure. However, such penalty will not be applicable if there are good and sufficient reasons for such failure.
	Effective date for providing facilities for accepting payments through prescribed electronic modes	CBDT clarified vide circular No.32/2019 dated 30-Dec-2019 that prescribed electronic modes were notified dated 30-Dec-2019 and therefore, w.e.f. 01-Jan-2020, the specified person must provide such facilities. Further it is clarified that, in order to allow sufficient time to install and operationalize the such facilities, penalty shall not be levied if the specified person installs and operationalizes such facilities on or before 31-Jan-2020. If, he fails to do so, he shall be liable to pay a penalty from 01-Feb-2020.

3. CBDT further extended the due date for linking of Aadhaar with PAN from 31-Dec-2019 to 31-Mar-2020 [3]

4. National e-assessment centre has extended the time limit till 10-Jan-2020 for filing of response to notices issued u/s 142(1) up to 24-Dec-2019 under E-assessment Scheme, 2019

5. CBDT extended the due date for deposit of tax deducted u/s 194M (cash withdrawals) for the months of October & November, 2019 to 31-Dec-2019[4]

6. CBDT extended the due date for filing of income tax returns/tax audit reports for the AY 2019-20 till 31-Jan-2020 for all categories of income-tax assessees in the Union Territory of Jammu and Kashmir and Union Territory of Ladakh[5]

7. CBDT extended due date till 31-Jan-2020 for payment of tax, surcharge and penalty payable on undisclosed income declared under Income Declaration Scheme, 2016[6]

Persons who declared undisclosed income as per Income Declaration Scheme, 2016 and have not made payment of tax, surcharge and penalty on such income, can make such payment on or before 31-Jan-2020 along with 1% interest for every month or part of the month.

8. CBDT released draft Form No.15E (relating to application to A.O for determining the amount chargeable to tax out of total sum payable to non-resident u/s 195(2)) for public comments/suggestions[7]

Sec 195:

In respect of payment of any sum chargeable to tax in India in the hands of non-resident, payer shall deduct tax at the time of credit or payment, whichever is earlier, as per applicable rates.
However, if payer considers that the whole of such sum is not chargeable to tax, he may make an application to A.O to determine the appropriate portion of such sum so chargeable (i.e. Lower/Nil withholding tax certificate) and on the same tax shall be deducted.
An amendment was made by Finance Act 2019 to provide for online application (earliest it was manual) in the prescribed form and manner.
On dated 31-Dec-2019, CBDT released draft Form No.15E for public consultation. The comments/suggestions may be sent in word format through email to ustp13@nic.in on or before 15-Jan-2019.

9. CBDT designated Special Court (one or more first class magistrate) in the state of Himachal Pradesh for the purpose of trail of offences punishable under Chapter XXII (Offences & Prosecutions) of the Act and Sec 84 of Black Money (undisclosed Foreign Income & Assets) and Imposition of Tax Act, 2015 [8]

The Central Government may designate one or more first class magistrate courts as Special Court in consultation with the Chief Justice of the High Court for trail of offences punishable under Chapter XXII of the Income Tax Act, 1961.

Some of the offences punishable under Chapter XXII (Offences & Prosecutions) are mentioned below:

Fails to pay TDS to the Central Government (CG) under the provisions of Chapter XVIIB
Fails to pay TCS to the CG
Fails to pay Dividend Distribution Tax (DDT)
Fails to facilitate to inspect the books of account/other documents to the authorized officer u/s 132(1)(iib) - Search & Seizure

After consultation by CG with the Chief Justice of the Himachal Pradesh High Court, CBDT has notified Special Court in different areas in the state of Himachal Pradesh

10. Income-tax compliance calendar for the month of January, 2020

SI No	Due Date	Activity
	7th January	For deposit of TDS/TCS for the month of December, 2019
	15th January	For filing of Q3 (Oct-Dec) TCS returns of FY 2019-20 For issue of TDS certificate in Form No.16B for tax deducted u/s 194-IA (i.e. TDS on sale of property) in the month of November, 2019 For issue of TDS certificate in Form No.16C for tax deducted u/s 194-IB (i.e. TDS on rent) in the month of November, 2019 For issue of TDS certificate in Form No.16D for tax deducted u/s 194M (i.e. TDS on cash withdrawals) in the month of October & November, 2019
	30th January	For deposit of tax deducted u/s 194-IA on sale of property in the month of December, 2019 For deposit of tax deducted u/s 194-IB on rent payment by individual in excess of Rs.50K in the month of December, 2019
	31st January	For filing of Q3 (Oct - Dec) TDS returns of FY 2019-20

Thank you for the patient reading. Hope this document has added value to your knowledge.

The author can also be reached at jnr@cajvn.in

Disclaimer:

This document had been written to provide updates under Income Tax in a simple manner. The author shall not be responsible for any of the decision made based on the contents of this document.