Let’s review 13 major developments in Tax & other laws of 2013
Arjuna (fictional character): Krishna, Year 2013 is coming to end and New Year 2014 will begin soon. Time passes so quickly! While discussing various issues on tax laws, we did not realize, when the year 2013 came to an end.
Krishna (fictional character): Arjuna, no one has control over Time. Time does not stop for anyone. Hence it is very essential to take out time for good deeds, as one does not know when his “Time” will come to end. One should take review of his deeds done in previous year and which are pending, so that same can be done in coming years. In the life’s books, good deeds are earning and bad deeds are losses. Keep in mind God keeps record of everyone’s deed.
Arjuna: As per Indian tax laws financial year starts from 1st April and ends on 31st March. Where as in many countries financial year and & calendar year are same i.e., starting from 1st January and ending on 31st December. In the calendar year 2013 major tax developments happened in India. Please elaborate them dear Krishna.
Krishna: Oh! Great! In the year 2013, there were many ups and downs in tax laws. Now let’s understand major THIRTEEN developments in tax laws joyfully:
1. In Income Tax new definition of Urban Agricultural land has been defined, which is a major change, so transactions of land should be done carefully.
2. Under Income tax act, new 1% TDS deduction on the purchase of immovable property of more than Rs. 50 Lakh has been introduced.
3. Salaried person if claiming exemption under House Rent Allowance and paying rent of more than Rs. 1 Lakh per year will now have to necessarily mention PAN of the landlord. Beware as it may affect many salaried tax payer and House owner in future.
4. Income Tax Department has also made e-filing of Tax Audit Report mandatory from this year. Further department has completed computerization, so that information of refund, etc. can be easily seen from incometaxindia.gov.in website by taxpayers himself. Further if the total income of the person is above Rs. 25 Lakhs then details of assets and liabilities will have to be mentioned in the Income Tax Return.
5. Under Income Tax Act from this year, if the transaction with specified relative or related parties, etc. above Rs. 5 crore incurred during financial year then report of Domestic Transfer Pricing is required to be submitted.
6. Due to decision of Honorable Supreme Court in the Vodafone case of Income Tax, on international level discussions and debate were held and Indian Tax laws were followed by many countries across the globe.
7. In this year Service Tax Department gave great benefit to taxpayers. The Department gave a gift to taxpayers by waiving interest and penalty from the year 2007 to 31st December 2012 through VCES (Voluntary Compliance Encouragement Scheme).Hence we may call this 2013 year as a “Service tax year”.
8. In this year new Companies Act has been enacted. Central government inserted and implemented important provisions in this act, which are having long lasting impact on corporate world of India.
9. In companies Act, the concept of “One Man Company” has been introduced. Many small taxpayers can now take the benefit of it.
10. Under Maharashtra Sales Tax Act, in this year Supreme Court gave the decision on imposition of VAT on builders and developers, due to which scope of VAT has increased.
11. Sales Tax department has caught tax evaders by cross checking TIN of purchases and sales. Due to this, general tax payers had to face problem. The department should understand intricacy of the genuine dealer and should issue VAT refund within time in such cases.
12. From this year Partnership Firm registration in Maharashtra State has been computerized. Now while registering partnership, all documents will have to be e-filed.
13. Now Local Body Tax Act has spread in all the municipal corporations of Maharashtra State in this year. Due to which local businessmen has to face many problems.
Arjuna: Krishna, Government increased its revenue by imposing new taxes or by amendments in old tax laws.
Krishna: In the year 2013 we have seen recession in all the sectors of business, whether it is Share market or property market. Further value of gold has also reached to high level. Value of Indian rupee was decreased substantially as compared with dollar. Inflation is rising. In this scenario government always tries to make changes in tax laws for increasing revenue.
Arjuna: How one should plan for New Year?
Krishna: Arjuna, we have seen some major 13 tax developments of 2013. To earn money, many persons make struggles and try different acts and evade taxes. These acts of evading taxes become habit. Even after earning required money, the habit of tax evasion continues. Person should analyze his earning; saving and good deeds of pervious year and in future should always strive to earn money with good deeds only. While planning for New Year, discussion with the family members is must, so that planning of house hold expenses, travel expenses, investments, savings, etc. can be done properly. Because if there is peace at home, than only one can carry his office or business work peacefully. Please remember that Money is very vibrant and it always falls short to all, then the person may be salaried or rich businessman. Time is Money. A person’s whole life is spent in “Collecting” Happiness and material things, but at the end he realizes that the person who ”Shared” happiness and things was really “a rich and happy person”. Wish you all a Very Happy and prosperous New Year.