EPF withdrawal amount: Taxation

• If a salaried employee opts for withdrawal after continuous service of five years or above, there will be no TDS deduction on the amount.
• It is important to note that if withdrawal is made before the completion of five years of continuous service, the amount withdrawn will be taxable.
• According to new EPF rules announced by the finance minister in budget for financial year 2015-16, EPF withdrawal (taxable) will attract TDS deduction at the rate of 10% (in cases of registered PAN) or up to a maximum of 30% (in cases of unregistered PAN). However, no TDS will be deducted if the withdrawal amount is under Rs.30,000.
• It is important to note that an individual can submit form 15G during the time of withdrawal if his or her income is less than the basic exemption limit even after the addition of the provident fund withdrawal amount. If a subscriber does not submit his or her PAN, TDS will be deducted at 34% on his or her withdrawn amount. If salaried persons want to avoid TDS, they can submit form no. 15H (senior citizens) or 15G for amount up to Rs.3 lakh and Rs.2.5 lakh respectively (both the said forms are declaration forms which can be used by employees whose income is less than the taxable amount).
• It is important to note that there will be no TDS deduction in cases of transfer of a provident fund account and termination of an employment contract as a result of failing health (employee), cessation/discontinuation of a business venture (employer) or any other cause which may not be in the domain of an employee.

​

Poonam Jain

Chartered Accountant

​Email: poonam.ca.jain@gmail.com

TDS RATE CHART FY 2016-17 AY 2017-18

TDS RATE CHART FY 2016-17 AY 2017-18 (%)
Sec	Nature of Payment	Cut off (Rs.)	Indi/HUF	Others
192	Salaries	-	Avg rates	NA
192A	Premature withdrawal from EPF	30000 (50000)	10	NA
193	Interest on securities	10000	10
194	Dividends	2500	10
194A	Interest Banks/Other	10000/5000	10
194B	Winning from Lotteries	10000	30
194BB	Winnings from Horse Race	5000 (10000)	30
194C	Contractor-Single/Yearly	30K/75K(1Lakh)	1	2
	Transporter(44AE) Declaration with PAN	As above	-	-
194D	Insurance Commission	20000 (15000)	10(5 %)
194DA	Life insurance policy	100000	2 (1%)
194EE	NSS	2500	20 (10%)	NA
194G	Commission /Lottery	1000(15000)	10(5%)
194H	Commission / Brokerage	5000 (15000)	10(5%)
194I	Rent Land  and  Building F&F	180000	10
194I	Rent-Plant/Machinery/equipment	180000	2
194IA	Immovable property	50 Lakh	1
194J	Professional Fees	30000	10
194LA	Immovable Property	2 Lakh (2.5 Lakh)	10

Entries in Red color are applicable wef 01.06.2016

Depreciation – Section 32

• There are two conditions for claiming depreciation 
• There should be asset in the block 
• There should be a value(wdv) in the block 
• No depreciation can be claimed on the sale of depreciable asset irrespective of the date of Sale
• Section 50 for computation of capital gains in case of depreciable assets Notwithstanding anything contained in clause (42A) of section 2, where the capital asset is an asset forming part of a block of assets in respect of which depreciation has been allowed under this Act or under the Indian Income-tax Act, 1922 (11 of1922), the provisions of section 48 and section 49 shall be subject to the following modifications :- 
•  where the full value of the consideration received or accruing as a result of the transfer of the asset together with the full value of such consideration received or accruing as a result of the transfer of any other capital asset falling within the block of the assets during the previous year, exceeds the aggregate of the following amounts, namely:-
•  a. Expenditure incurred wholly and exclusively in connection with such transfer or transfers; 
• b. The written down value of the block of assets at the beginning of the previous year; and 
• c. The actual cost of any asset falling within the block of assets acquired during the previous year, such excess shall be deemed to be the capital gains arising from the transfer of short-term capital assets;
• Where any block of assets ceases to exist as such, for the reason that all the assets in that block are transferred during the previous year, the cost of acquisition of the block of assets shall be the written down value of the block of assets at the beginning of the previous year, as increased by the actual cost of any asset falling within that block of assets, acquired by the assessee during the previous year and the income received or accruing as a result of such transfer or transfers shall be deemed to be the capital gains arising from the transfer of short-term capital assets.

GIFT BY HUF TO ITS MEMBERS

GIFT BY HUF TO ITS MEMBERS

Receipts by members from H.U.F:- any sum received by an assessee in his capacity as a member of a H.U.F is exempt from tax to avoid double taxation as H.U.F is also assessable separately on its income in its own capacity. The sum should be received in the capacity as a member of an H.U.F. I the recipient is not a member of the H.U.F., he cannot claim the exemption. The sum should be received either out of the income of the H.U.F or out of the income of imputable estate owned by the H.U.F under section 10(2).

The ownership of impartible estate through belongs to the joint family but the income there from belongs solely and absolutely to the holder of the estate. The holder of the estate is assessable as an individual in respect of the estate income. The senior most male member succeeds to the impartible estate by law of primogeniture but the junior male members may have the right to maintenance out of the income from the impartible estate. Hence the exemption has been provided if any sum is received by the member of HUF out of the income from impartible estate.

Position of member in HUF:- only those members of the HUF can claim exemption who can either claim a share of partition or who are entitled to maintenance under Hindu law and thus have an interest in the joint income of the HUF[Kadar narian singh vs. CIT(1938) 6 ITR 157.

Conversion of separate property into HUF property cannot be exempt: - where a member of the HUF coverts his separate property into HUF property after 31 December 1969 without adequate consideration, the income of such property is included in the total income of such member under section 64(2) of income tax act. No exemption can be claimed for such income.

Due Dates of Advance Tax for AY 2017-18

Advance tax (Section 208, 209 & 211)

Advance tax is payable on all income during the financial year in every case where the amount of such tax payable by an assessee during that year is Rs. 10,000 or more. Following is chart showing Advance Tax Liability for the A.Y. 2017-18:

Advance Tax Liability for All Assessee (other than covered under section 44AD of the I.T. Act 1961)

Due Date	Installment Payable
On or before 15th Jun, 2016	Not less than 15% of advance tax.
On or before 15th  Sep, 2016	Not less than 45% of advance tax as reduced by the amount paid in the earlier installment.
On or before 15Th Dec, 2016	Not less than 75% of advance tax as reduced by the amount paid in the earlier installments.
On or before 15Th Mar, 2017	The whole amount (100%) of advance tax as reduced by the amount paid in the earlier installments.

Advance Tax Liability for Assessee covered under section 44AD of the I.T. Act 1961

Due Date	Installment Payable
On or before 15th Jun, 2016	—
On or before 15th  Sep, 2016	—
On or before 15Th Dec, 2016	—
On or before 15Th Mar, 2017	The whole amount (100%) of advance tax as reduced by the amount paid in the earlier installments.

Note:

1.     Resident individuals who are over 60 years of age and do not have income chargeable under the head ‘Profits and Gains of Business or Profession’ are not required to pay advance tax.

2.     Any amount paid by way of advance tax on or before 31st March shall also be treated as advance tax paid during financial year ending on that day

3.     Deduction under Chapter VIA are allowable while computing liability of advance tax.

4.     TDS is to be reduced from total tax liability of assessee and then specified percentage be calculated of advance tax.

CA Poonam Jain

poonam.ca.jain@gmail.com

DUE DATES FOR FILING 15G/15H ONLINE BY PAYER

F.No. DGIT(S)/CPC(TDS)/DCIT/15GH/2016-17/4539

Government of India

Ministry of Finance

Central Board of Direct Taxes

Directorate of Income-tax (Systems)

New Delhi.

Notification No 9/2016

New Delhi, 9th June, 2016

Subject: Simplification of procedure for Form No. 15G & 15H – Clarifications – reg

Representations have been received for clarification on the following issues:

(a) Due date for quarterly uploading of 15G/H declarations by payers on e-filing portal,

(b) The manner for dealing with Form 15G/15H received by payer during the period from 01.10.2015 to 31.03.2016.

4. In this regard, it is hereby specified that:

(a) The due date for quarterly furnishing 15G/15H declarations received by payer from 01.04.2016 onwards shall be as given below:

Sl. No.	Date of ending of the quarter of the financial year	Due Date
1.	30th June	15th July of the Financial Year
2.	30th September	15th October of the Financial Year
3.	31st December	15th January of the Financial Year
4.	31st March	30th April of the Financial Year immediately following the financial year in which declaration is made.

(b) The payer shall furnish 15G/15H declarations received during the period from 01.10.2015 to 31.03.2016 on e-filing portal (http://incometaxindiaefiling.gov.in) in the given format on or before 30th June, 2016.

(PS. Thuingaleng)

Dy. Commissioner of Income-tax (CPC-TDS)

O/o The Pr. Director General of Income Tax (Systems)

Source: Income Tax