INCOME TAX AMENDMENTS FOR PE2 REQUIRED

pramod

accountant

23 Points Joined August 2008

Hi pls send me amendments for Nov 08 exams.

Prince

Accounts

27 Points Joined May 2008

Originally posted by :Guest
"	Hi pls send me amendments for Nov 08 exams.	"

Dear Shammi/Pranav

please find the necessary attachments.

Regards,

Prince

CA Shammi Prabhakar

Managing Director

2076 Points Joined July 2008

HI

thanx 4 ur reponse. but i m still confused.....

I am giving here some amendments........

please tell me these are applicable for PE2 or not..

AMENDMENTS APPLICABLE FOR NOV 2008

Note – Page No. given in these amendments belong to 8^th edition of Income Tax notes by CA. Ajay Jain

1. Perquisites taxable in the hands of employees (Pg-25)

Perquisites taxable in the hands of employees

The value of following facilities provided by an employer, who is NOT LIABLE to pay fringe benefit tax under chapter XII-H (i.e. Individual, HUF, Charitable trust, Political parties), shall be taxable in the hands of employee, calculated in the following manner:-

(i) Value of travelling, touring, accommodation and any other expense on holiday

Actual expenditure incurred by employer shall be taxable.

However if

(a) the facilities are maintained by the employer and not available to all employees uniformly

the value at which such facilities are offered by other agencies to public shall be taxable.

(b) If the official tour is extended as a vacation the value shall be taken only for the extended period

(c) If any member of household accompany the employee on official tour

the value shall be expenditure incurred on such member of household.

Note: The above rules are not applicable to LTC.

(ii) Personal journey for employees of transport undertakings- The value shall be

the amount at which such services are offered by the undertaking to the general public.

However nothing in this provision shall apply to the employees of an airline or the Railways.

(iii) Gift, voucher or token

The amount of such gift shall be taxable as perquisite.

However nothing shall be taxable if value of such gift in aggregate during the previous

year is upto Rs. 5,000

CBDT has clarified that

- the amount only in excess of Rs. 5,000 shall be taxable

- if gift is by of cash or by way of gift voucher/cheque convertible in cash, then entire amount shall be taxable.

(iv) Free Meals

Actual expenditure incurred by employer shall be taxable.

However nothing shall be taxable in the following cases

(a) Tea or snacks provided during office hours.

The board has clarified that tea includes coffee, soft drink and other non-alcoholic beverages.

(b) Free Meals - during office hours –

· at the office premises or

· through paid vouchers which are not transferable and usable only at eating joints

(The value in both the above cases should not exceed Rs. 50 per meal. The amount only in excess of Rs. 50 shall be taxable. )

· in a remote area or offshore installation

(v) & (vi) Credit card or club expenditure

(a) If expenditure are wholly and exclusively for official purpose – Nothing is taxable, if

(1) complete details of such expenditure which may include the date, nature and necessity of the expenditure, is maintained.

(2) Employer certifies that such expenditure was exclusively for official purposes

(b) In other cases – the actual expenditure incurred by the employer shall be taxable.

Notes:

(a) The expenditure includes membership, annual or periodical fees.

(b) If the employer has obtained corporate membership of the club , the initial fees paid for acquiring such membership shall not be taxable.

(c) Expenditure on use of health club, sport and similar facilities provided uniformly to all employees, shall not be taxable.

(viii) Valuation of motor Car

Owned or hired by employer owned by employee

and used and used

exclusively for exclusively for partly offical and exclusively for partly offical and fully

official purpose private purpose partly personal official purpose partly personal for

private

Nil if specified Actual expenditure use

il if specified Runn. & main- Actual Runn. & main expenses by Documents Less: 1,200/1,600

Documents Chauffeur - Actual maintained Less: 600 Rs. for actual

maintained Wear & Tear 10%p.a. of employer employee chauffeur amount

cost Or (Rs. 600 for any

hire charges Upto 1.6 ltrs Upto 1.6 ltrs other vehicle)

cubic capacity cubic However if

Rs. 1,200 p.m. capacity actual expen.

Rs. 400 p.m. for official purpose

Exceeding 1.6 ltrs Exceeding is more than the

Rs. 1,600 p.m. 1.6 ltrs limits then actual

Rs. 600 p.m. expenditure can be

Add Rs. 600 p.m. if chauffeur is also provided. deducted by maintaining

specified documents

Notes:

(i) Specified documents

1. The employer has maintained complete details of journey undertaken for official purpose which may include date of journey, destination, mileage and the amount of expenditure incurred thereon

2. The employer gives a certificate that expenditure was incurred wholly and exclusively for official purposes.

(ii) If employee has been provided with more than one car, which are not used exclusively for official purposes then

(a) value of one car shall be 1,200 or 1,600 Rs. + Rs. 600 p.m. for driver (if any) as the case may be and

(b) the value of other cars shall be as if they are used exclusively for personal purposes.

2. The following Sections have been deleted from the chapter of Assessment Procedure & Appeal :-

S. No	Section	Page No.
1	Self assessment u/s 140A	118
2	Notice to file return and A/c’s u/s 142(1)	119
3	Special Audit Section 142(2A) to 142(2D)	119
4	Summary assessment u/s 143(1)	119
5	Scrutiny assessment u/s 143(2) & (3)	120
6	Best Judgment Assessment u/s 144	120
7	Income Escaping Assessment u/s 147	120
8	Service of notice u/s 148	121
9	Time limit & Exceptions to the time limit u/s 149(1)	121
10	Sanctions for issue of notice u/s 151	122
11	Rates of Tax u/s 152	122
12	Time limit for Completion of Assessment u/s 153	122
13	Rectification of mistake u/s 154	124
14	Appeals to Commissioner (Appeals) u/s 246A	125
15	Procedure for filing Appeal u/s 249	125
16	Procedure in hearing appeal u/s 250`	125
17	Powers of the commissioner u/s 251	126
18	Appeal to ITAT u/s 253	126
19	Order of ITAT u/s 254	126
20	Appeals to High Court u/s 260A	126
21	Appeal to Supreme Court u/s 261	126
22	Revision of orders prejudicial to revenue u/s 263	127
23	Revision of orders prejudicial to assessee u/s 264	127