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July 13 To July 19, 2019 u Taxmann’s Corporate Professionals Today u Vol. 45 u 62receipt of shares by the specified companies
or firms as a result of fresh issuance of
shares including by way of issue of bonus
shares, right shares and preference shares
by specified companies. However, on re-
consideration, said circular was withdrawn
on the observation that the matter relating to
interpretation of the term ‘receives’ as used
in the said provision was pending before
the judicial forums and stakeholders sought
clarifications on similar provisions of section
56 of the Act.
Subsequently, the CBDT vide Circular No.
3/2019 dated 21.01.2019 had again clarified
that any view expressed by the Board in
Circular No. 10/2018 shall be considered
to have never been expressed. The said
circular shall not be taken into account by
any Income-tax authority in any proceedings.
The Finance Minister, Smt. Nirmala Sitharaman
in the Parliament, has stated that only one
case was assessed in Delhi wherein Circular
10/2018 was taken into account during
assessment proceedings and appropriate
remedial measures to apply the Circular No.
3/2019 are being identified. Govt. educesr interestratesfor
small vingssa schemesby0.10%NOTIFICATION F.NO. 01/04/2016-NS, DATED
28-06-2019
The Govt. usually notifies interest rate for
Small Saving Schemes on quarterly basis
with the approval of the Finance Minister.
The rate of interest for second quarter of
Financial Year 2019-20 starting from July
1, 2019 and ending on September 30, 2019
has been announced. The Govt. has reduced
interest rate on various small saving schemes
by 0.10%.
Rate of interest in case of Sukanya Samriddhi
Account Scheme shall now be 8.4% instead of
8.5% as compared to first quarter of Financial
Year 2019-20. Similarly, the 5 year Senior
Citizen Saving Scheme will bear 8.6% interestrate for the second quarter of Financial Year
2019-20. However, there will be no change in
the rate of interest in case of saving deposits. Income earnedbyNRfromoff-shore
investmentsroutedthroughCategory
I/II sAIF nottaxableinIndia:CBDTCIRCULAR NO. 14/2019, DATED 03-07-2019
The incidence of tax arising from off-shore
investment made by a non-resident investor
through the AIFs would depend on status
of income of non-resident investor as per
provisions of section 5(2) of the Income-tax
Act, 1961. As per which the income of a
person who is non-resident, is liable to be
taxed in India if it is received or is deemed
to be received in India by or on behalf of
such person, or accrues or arises or is deemed
to accrue or arise to him in India.
Section 115UB determines the income and tax-
liability of investment funds & their investors.
As per the section, it shall be deemed that
the income from investment fund shall be
chargeable to income-tax in the same manner
as if it were the income accruing or arising
to or received by the non-resident investor,
had the investments made by the investment
fund been made directly by him and not
through the AIF.
The matter has been considered by the
Central Board of Direct Taxes (CBDT) and it
has been clarified that any income of Non-
resident investor from off-shore investments
routed through Category I or Category II
Alternate Investment Funds (AIFs), being a
deemed direct investment outside India by
NR investor, is not taxable in India under
section 5(2).
Further,loss arising from the off-shore investment
relating to non-resident investor, being an
exempt loss, shall not be allowed to be set-
off or carried forward and set off against
the income of the AIF.WEEKLY REVIEW