Transcript Practical Issues in Wealth tax Assessments

Presented By
CA Swatantra Singh,
B.Com , FCA, MBA
Email ID: [email protected]
,
www.caindelhiindia.com,
www.carajput.com
New Delhi , 9811322785
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Introduction
Scope and Purpose
Computation
Taxable Assets
Practical Issues:
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Taxability of Assets
Indian Repatriates
Valuation of Assets
Challenges
Wealth tax planning
Filing of Wealth tax returns
For the Financial year 2008-09:
- Estimated tax collection of Rs 400 crores
- Estimated tax collection cost of Rs 174 crores
Projections for the Financial 2009-10:
- Projected tax collection of Rs 425 crores
- Projected tax collection cost of Rs 216 crores
For every rupee spent, the Government earns Rs 1.97 of wealth tax.
**Source: The Economic Times dated 8th April 2009
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For every Re spent, the Government collects
Rs 60 of income tax (all categories)
For every Re spent, the Government collects
Rs 701 of corporate income tax
Cost of collection (Direct Taxes) in other
countries:
◦ Britain
◦ Germany
◦ Australia
:
:
:
1.53%
2.35%
1.15%
Nomenclature
Country
Solidarity tax on Wealth
France
Wealth tax
Greece, Norway, Switzerland and
Netherlands
Property tax
US
Note:
 In Austria, Denmark, Germany, Finland,
Iceland, Spain and Luxembourg wealth tax
was abolished during the last decade
 The concept of Wealth tax does not exist in
Belgium and Great Britain.
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Conceptually wealth tax is a levy on
unproductive “assets” held by an assessable
person.
For the purpose of wealth tax the taxable
persons can be broadly classifed as:
◦ Direct Assessees: Persons directly assessable to
wealth tax
◦ Indirect Assessees: Persons indirectly assessable to
wealth tax
Direct Assessees
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Indirect Assessees
Individual
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Firm
HUF
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AoP : Sec 21AA
Company
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Trust (which is not into
religious or charitable
activities): Sec 21A
Assessee
Residential Status
Individual – Citizen Resident and ordinary resident
Assets in
Debts in
Assets
Debts outside
India
India
outside India
India
Included
Deductible
Included
Deductible
any Indian Citizens: Non resident or not Included
Deductible
Not included
Not Deductible
Included
Deductible
Included
Deductible
Non resident or not ordinary Included
Deductible
Not included
Not Deductible
of India
Individual
–
other case including ordinary resident
foreign national who Foreign Nationals: Resident or non
is
a
resident
and resident.
ordinary resident
Resident and ordinary resident
HUF
resident
Resident
Included
Deductible
Included
Deductible
Non Resident
Included
Deductible
Not included
Not Deductible
Company
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Debts owed in India:
◦ If it is repayable in India or
◦ If the debtors is in India
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Assets outside India are not assessable to
wealth tax in the case of foreign nationals
Debts incurred outside India in relation to
assets located in India shall be deductible for
all categories of assessees.
Sec.3 Wealth tax shall be charged to every
individual, H.U.F, Trust and company @ 1% of the
amount by which net wealth exceeds Rs.30.00
Lacs as on corresponding valuation date i.e last
day of financial year.
Note assets must
belong on last movement of valuation date.
 Sec.45 –Act not apply to any company registered
u/s 25 of company act, any social club, political
party, co-operative society or any mutual fund
specified in sec 10(23D) of income tax act.
Note: No education cess on wealth tax.
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(A) Value of assets belonging to
assessee as on valuation date
(Assets as per sec. 2(ea)
xxxx
 (B) Deemed assets (Sec.4)
xxxx
 (C) Exempt Assets (Sec.5)
xxxx
Gross Wealth
A+B-C
xxxx
Less: Liabilities incurred on assets
included in wealth.
xxxx
Net Wealth
xxxx
Value as per schedule III read with sec.7 of
wealth tax act.
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As per Circular No 3 dated 28.09.1957 as amended by Circular
No 392 dated 24.08.1984
Asset
When located in India
Tangible Immovable property
If the property lies in India
Rights or interests in or over
immovable property (otherwise
than by way of security)
If the immovable property lies in
India
Benefits arising out of
immovable property
If the immovable property lies in
India
Rights or interests in or over a
movable property (otherwise
than by way of security)
If the movable property lies in
India. Goods on high seas cannot
be considered to be in India – CWT
vs Consolidated Pneumatic Tools
Co Ltd – Supreme Court. (1971)
81 ITR 752
Aircrafts/ Boats/Yachts
If it is registered in India
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Company registered u/s 25 of the Companies
Act (non profit organizations)
Co operative society
Social club
Political party
Mutual fund u/s 10(23D) of the Income tax
Act
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1% on taxable wealth in excess of Rs 15 lacs
Exemption limit of Rs 15 lacs is applicable to
all category of assessees
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No surcharge levy on wealth tax
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No cess levy on wealth tax
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Buildings
Cash in Hand
Boats, Yachts & Aircrafts
Jewellery, bullion, furniture, utensils etc made
of precious metals
Urban Land
Motor Cars
Please Refer to Annexure 1 for detailed
explanation on taxable assets.
ASSETS INCLUDES :BUILDINGS, CARS,
JEWELLERY, AIRCRAFTS,
SHIPS, YACTS, URBAN LAND
AND CASH
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(i) Any building or land appurtenant thereto means
house whether used for residential or commercial or
guest house purposes or farm house (situated with in
25 km from local limits of municipality.) or otherwise.
Not to include:
If used for business or profession carried on by assessee. If
assessee is partner in firm, even used for firm business is eligible
for not including in asset
If held as stock in trade.
Any commercial establishments or complexes.
Any residential property let out for 300 days or more in p.y
House (Residential) allotted (not let out) to (whole time) employee
or director or officer by COMPANY having gross annual salary (in
money terms whether taxable or not) of < 5 Lacs.
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(ii) Indian or Imported Motor Cars including jeep,
jonga, motor van but excluding bus, truck, delivery
van, ambulance, two wheelers or three wheelers etc.
Even if use for business or profession.
Not to include:
if held as stock or used for the business of running them on hire.
Note:
If leased out asset in the hands of leasing co.
If hire purchase asset in the hands of hire purchaser
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(iii) Jewellery (ornaments and semi precious or
precious stones) , bullion, furniture, utensils or any
other article made wholly or partly of gold, silver,
platinum or any precious metal.
Not to include if held as stock in trade.
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(iv) Boats, yachts, aircraft including helicopter exclude
ships.
Not to include:
if held as stock or used for commercial purpose (to be seen from license
granted by ministry of civil aviation.
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(v) Urban Land means situated in municipality whose
population > 10 thousand (Latest census figures
published before valuation date) or situated within 8
km (as central govt. notifies)form local limits of
municipality(vacant) Even if agriculture.
Not to include:
If held as stock for a period of 10 years from its acquisition date.
If occupied by building (approved).
If construction not permissible under any law for the time being in
force in area in which land situated. If for dispute not constructed
then asset.
if any unused land used by assessee for industrial purposes for a
period of 2 years from date of acquisition.
Note: Plot on land on which construction going on , till
completion of construction it is land after completion it is
building.
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(vi) Cash in hand in case of Individual or HUF
if more than 50 thousand. (whether recorded
or not) and in case of any other person if not
recorded it is asset but if recorded it is not an
asset even if it exceed 50 thousand.
Includes:
 Any building or land appurtenant thereto
whether used for residential, commercial,
guest house etc
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Any farm house if situated within 25 kms
from local limits of any municipality or
cantonment board
Excludes:
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House meant exclusively for residential purposes occupied by an
employee/ officer/director of a company, having a gross salary of
less than Rs 5 lacs
House held as stock in trade by the assessee
Any house occupied by the assessee for the purpose assessee’s
business or profession
Any residential property let out for less than 300 days in the
previous year
Any property in the nature of commercial establishments or
complexes
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Includes all motor cars whether Indian or
Foreign
Excludes:
◦ Cars held as stock in trade
◦ Cars used by the assessee in the business of
running them on hire
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Includes jewellery, bullion, furniture, utensils
or any other article made wholly or partly of
gold, silver, platinum or any other precious
metal or any alloy containing one or more of
such precious metal
Excludes assets held as stock in trade
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Includes all categories of Yachts, boats and
aircrafts
Excludes those yachts, boats and aircrafts
used for commercial purposes
Urban land means land situated:
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In any municipality or cantonment which has
a population of not less than 10,000 as per
latest available census prior to the valuation
date.
Within 8 kms
cantonment
from
an
municipality
or
Excludes:
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Land on which construction is not possible
Land on which building has been constructed with
approval of the appropriate authority
Unused land held by the assessee for industrial
purposes for a period of 2 years from the date of
acquisition
Land held as stock in trade for a period of 10 years
from the date of acquisition
1)
2)
3)
4)
5)
Assets transferred to wife without consideration or adequate
consideration but not in connection with agreement to live
apart.
Assets transferred to sons wife without adequate consideration
Assets transferred to a person or association of person without
adequate consideration for the direct or indirect or immediate
or deferral benefit of the person who transferred or his/her
spouse or his/her son’s wife.
A person who is holder of impartibly estate.
Assets held by minor including step or adopted child but not
being a married daughter
Exceptions: Disable minor (80U sec) or assets acquired by
minor from manual work income or his skill, talent, specialized
knowledge and experience.
Note: Assets of minor to be included in wealth of parent whose net
wealth is more excluding this minor’s wealth if marriage of
parents subsist otherwise person who maintains child.
Once included in once parent wealth it continues unless A.O
satisfy that necessary to change after giving opportunity of being
heard.
6) Assets transferred otherwise than irrevocable transfer (i.e which
is revocable after 6 years or which is not revocable during life
time of transferee and under which transferor derives no direct
or indirect benefit during transfer period ).
Note: No power to revoke during irrevocable transfer if power
arise it will be deemed asset for transferor. Actual revocation not
necessary
7) Interest of partner of firm or member of AOP other than cooperative society. (Minor partner interest in parents income.)
Conversion by individual his self acquired property into
joint family property without adequate consideration
Note: if on partition of family, out of assets transferred by
individual, share received by spouse that to be deemed
asset for individual (Assume it is indirect transfer)
8)
Member of cooperative housing society (Asset is house
allotted form allotment date)Amount payable under such
scheme is deducted as debts owned in relation to asset.
9)
Building or Right in building (not land) acquired in
following cases:
a) On lease for a period of 12years or more (excluding
right from period not > 1 year)
b) Possession obtained in part performance of contract
u/s 53A of Transfer of property Act.
Note: Building on lease for 12 years or more for right more
that 1 year also included in real owner wealth hence
double taxation.
10) Gift by book entries unless AO satisfy money’s actual
delivery.
7)
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If properties are assets as on valuation date then
it is to be clubbed in transferor wealth even if
these were not assets at time of transfer.
Relationship must exist at time of transfer and
also as on valuation date.
Accretions to Assets in transferee hand will not
be clubbed with transferors wealth.
Case::: Minor earn from skills….> buy
house….>give it on rent….> with rent income
buy car then this car is to be clubbed with
parents wealth.
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(i) Any property (in India or outside India) held under
trust or under legal obligation for any public purpose
of charitable or religious nature in India.
Note:
Exemption is available for business assets only when
such business in incidental and separate books maintained.
If trust deed provides that property can also be used for
other than charitable or religious purposes then exemption
not available.
(ii)
(iii)
(iv)
Interest in co-parcenary property of HUF.
Any one building in occupation (i.e own possession
but not let out) of Ruler which was declared by C.G
as his official residence.
Heirloom jewellery (kept permanently in india
and in original shapes) in possession of Ruler
not being his personal property.
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(v) An Indian citizen or person of indian origin who was
Non Resident and who has returned to India with intention
of permanently residing in India, then the money and assets
brought to India and value of assets acquired out of money
sent from abroad and NRE account within one year
immediately preceding his date of return and assets
acquired after coming back out of such money shall be
exempt for a period of 7 successive A.Y. commencing with
A.Y next following date on which he returned.
Note: If Assessee brought assets (not money)from o/s India and convert them into
other assets in India, Assets converted in India will also be eligible for exemption.
As per Kerla high court decision.
(vi) Any one house (may be let out, Residential,
commercial, farm house, self occupied, or Guest house etc.)
or part of a house or a plot of land (land area 500 Sq. Mt.or
less) belonging to Individual or HUF.
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Note: If exemption under sub sec. (iii) then no expemption to ruler under sub
section (vi)
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Debt owned on the valuation date by assessee on
assets included in wealth are deductible.
Note: If assets included but exempted u/s 5 then
debt owned not deductible.
Even if value of assets are less, whole amount of debt
is deductible.
Debts outside India is deductible if such debts have
been incurred to acquired assets in India included in
Wealth.
If debt is on asset and non asset and it is not possible
to compute debt for asset then use following formula
to calculate debt for asset
Total Debt X Actual cost of asset / Actual cost of
asset and non asset togeather.
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In case of Individual or HUF who is Non
Resident or Not ordinarily resident.
Company which is non resident
Individual who is non citizen of India
 During the year ending on valuation date,
Assets located outside India and debts on such
(even if debts in India) shall not be included for
wealth calculation.
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Property held under trust for charitable and
religious purposes in India
Interest in the coparcenary property of the HUF
One official residence of a Ruler
Heirloom jewellery of an erstwhile Ruler
Money and assets brought into India by citizen of
India or persons of Indian origin for 7
assessment years
One house or part of a house or plot of land not
exceeding 500 sq mts for an individual or HUF
assessee
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Ships
Farm house located beyond 25 kms from any
municipality or cantonment
Cars owned by cab operators and tourist cars
Antique furniture not containing any precious
or semi precious stones or metals
Paintings , sculptures and other similar
works of art
Archeological possessions
Computers, laptops and other gadgets
Two wheelers, trucks, buses and lorries
Assets
 Building or Land
Appurtenant thereto
 Assets of Business
 Interest in Firm/AOP
 Jewellery
 Urban Land, Cars,
Yachts, Aircrafts,
Boats.
Rule numbers
 3 to 8
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14
15,16
18,19
20
Even Valuation Officer has to follow Schedule III.
For Valuation of Building or Land appurtenant thereto
Sec. 7 also relevant.
If property acquired or constructed after 31/03/1974a) Net Maintainable Rent X Capitalization Factor
b) Total cost of acquisition or construction and cost of
improvements
a or b which ever is higher.(Rule 3,4,5)
If before 01/04/74 then only ‘a’ condition.
Exception- For one house exclusively used by assessee for
his own residence throughout p.y and whose costs
(Acquisition or construction and improvement) not exceed
25 Lacs (50 Lacs for metro cities) only condition ‘a’. (Sec.7
(discussed later) exemption can also be used for this same
house)
Add: Adjustment of unbuilt area of plot of land (Rule 6)
Less: Adjustment of unearned increase in value of land (Rule
7)
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Capitalization factor:
If property is on freehold land
If on leasehold land and unexpired
period of lease on valuation date is
50 years or more
If on leasehold land and unexpired
period of lease on valuation date is
less than 50 years
Net Maintainable Rent (NMR):
12.50
10.00
8.00
Gross Maintainable Rent (GMR)
Less 15% of GMR
Less
Municipal Taxes (Accrual basis) whether borne
by tenant or assessee.
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If property not let out- Fair Market Rent or annual value
as assessed by local authority if property falls in
jurisdiction of local authority.
If property let out- Annual Rent or Annual value of local
authority whichever more.
Annual Rent= Actual Rent X 12 / No of months for
which property let out.
Actual Rent (for property let out period)=
Actual rent received or receivable for property let out
period
+ 1/9th of Actual rent received or receivable for repair if
repairs borne by tenant
+ Taxes agreed to be borne by tenant (for property let out
period)
+ 15% interest (on monthly outstanding balances ignoring
part of month on Refundable or non refundable deposit
(other than advance rent for 3 or less months) from tenant,
reduced by interest actually paid to tenant on such if any
+ Lease premium or non refundable lease out deposit
divided by no. of years of lease (for property let out period)
+ Value of benefit received by assessee for leasing property
(for property let out period)
+ Any obligation of owner met by tenant (for property let
out period)
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Rule 6- Adjustment of unbuilt area of
plot if unbuilt area > specified area
Specified area (permissible unbuilt area)
is 70% of aggregate area (60% for metro
cities and 65% for some specified cities)
If % of unbuilt area less specified area
over aggregate area is◦ Upto 5% then no addition as per rule 6
◦ >5% but upto 10% then 20% of value as per
rule 3,4 and 5
◦ > 10% but upto 15% then 30%.....
◦ > 15% but upto 20% then 40%.....
◦ > 20% then rule 8 will apply above rules 3 to
7 not apply.
Rule 7-Adjustment for unearned increase=
If property is constructed on lease hold
land from govt. or govt. authority and
govt. is entitled to recover a specified
percentage of unearned increase in value
of land at time of transfer of property then
value as per 3,4,5 and 6 shall be reduced
by
a) 50%
b) Unearned increase value to be
recovered by govt.
whichever is less (a or b)
Unearned increase is Value of land on
valuation date as determined by govt. for
computing unearned increase less lease
premium paid or payable to govt.
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Rule 8 states that notwithstanding rule 3
to 7 the value of property shall be
estimated to be price it would fetch if sold
in open market on valuation date in the
opinion of Assessing Officer.
Rule 8 only if- difference b/w unbuilt and
specified area is >20% of aggregate area
or where property on lease hold land and
where lease expires within 15 years from
valuation date and lease deed not gave
option for renewal of lease. Or where
Assessing officer with prior approval of
joint commissioner is of opinion that it is
not practically possible to apply rule 3 to
7.
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Value of any one house (can apply different
house in next year) exclusively used by
assessee for residential purposes during p.y
may at assessee option taken to be:
a) value as per rule 3 to 7
OR
b) value as per rule 3 to 7 as on valuation
date next following the date assessee became
owner (date of construction completed if
constructed house) or value as on
31/03/1971 which ever later.
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A) Value of assets(Sec.2(ea)) as in balance
sheet.
B) Schedule III Value
If Value as per B above exceeds value as per A
above by >20% of value as per A then take
value as per B. otherwise value as per A.
A) Determine net wealth of firm/AOP/BOI as if it
were an assessee as per rule 14 without
exemption u/s 5.
 B) The portion of ‘A’ above, upto capital of the
firm/AOP/BOI should be allocated to
partners/members in capital contribution ratio.
 C) Balance of ‘A’ should be allocated in
dissolution ratio. If dissolution ratio not available
then in profit sharing ratio.
Note: If partner or member is minor distribute his
share also. After that, this minor share will be
clubbed accordingly in his/her parents wealth as
per clubbing rules discussed earlier
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If net wealth of firm includes sec.5 exempt
asset, then the exemption in respect of such
asset shall be available to member/partner in
dissolution ratio and in absence of dissolution
ratio, in profit sharing ratio.
If firm has assets located outside India but
partner is non resident or not ordinary
resident or non citizen then following shall not
be included in partners net wealth:Such partner share as per 15 & 16 X
(Assets located outside India- Debts in respect
of such assets) / Net wealth of Firm.
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Valuation at price, it will fetch if sold in Open
Market as on valuation date.
Return should support a statement in O-8A form
if valuation not more than 5 lacs, otherwise
Report in O-8 from registered valuer for one year
and for next 4 subsequent A.Y new report not
required but same report shall be adopted even
if value of jewellery > 5 Lacs. Only Adjustment of
Market value of gold etc. or Adjustment of
acquisition or sale of jewellery required.
A.O can make reference to Valuation officer u/s
16A in respect of subsequent 4 A.Y
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Valuation at price, it will fetch if sold in Open
Market as on valuation date.
Restrictive covenants (Restrictive conditions
etc. on sale)to be ignored in determining
market value of Assets.
However, if property is attached by govt. etc.
then market value will be reduced.
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Procedure of Assessment under wealth tax is
almost similar to Income Tax Act.
Return below specified exemption limit i.e 30
Lacs deemed never furnished.
No Advance Tax and Education cess in wealth
Tax.
Wealth R/off to nearest 100 Rs.
Tax liabilities of deceased can be recovered
form legal representative upto estate
inherited. However, no penalty can be levied
on legal heir
.
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An assessee has an ancestral property
(residential house) which is located in a
village beyond 30kms from the Municipality
limits.
The value of the property as per Sch III is Rs
40 lacs.
Is the property assessable to wealth tax
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A firm of chartered accountants, operates out
of an apartment owned by one of its partners.
The value of the property is Rs 60 lacs.
The partner claims the property is being used
for profession hence it is not an asset for
wealth tax purposes.
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An employer has an employee scheme
whereby the employee would pay 20% of the
cost of a car and pay the balance with an
interest of 3% over five years.
The car would be used by the employee
however it would be owned by the employer
till the repayment of loan is complete.
In whose hands is the car assessable to tax?
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An assessee has 2 acres of land at Chennai
which is classified as “agricultural land” by
the local authorities.
The assessee claims that the property is not
assessable to wealth tax as it is agricultural
land. Discuss.
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An assessee purchased a piece of land on 1st
of Jan 2009 and started construction on the
property on 10th of February 2009.
The property was complete on 15th of July
2009.
Is this property a taxable asset for the
previous year 2008-09?
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Kingfisher Airlines is into operating
commercial aircrafts within and outside India.
During the year the company acquired an
aircraft for the exclusive use of its Chairman
Mr Vijay Mallya for Rs 150 crores. Is this asset
a taxable asset for wealth tax purposes?
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An assessee gifted a sum of Rs 10 lacs to his
spouse.
His spouse invested the amount towards
purchase of shares (Rs 4 lacs) and purchase
of an urban plot (Rs 6 lacs). The values of the
assets as on the valuation date were Rs 8 lacs
and 16 lacs respectively.
Determine the amounts to be clubbed.
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An assessee gifted 10000 shares of HLL to
his spouse.
She sold these shares in the market for Rs 20
lacs and invested in a house property.
The value of the house property on valuation
date is Rs 35 lacs. Discuss.
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An assessee gifted a property to his fiancé on
1st of December 2008.
They both got married on 28th February
2009. The value of the property on 31st of
March was Rs 35 lacs. Discuss.
.
Exemption u/s 5(v) is available provided:
 Assessee is an individual
 Assessee is a citizen of India or a PIO
 Assessee was ordinarily residing in a foreign
country
 Assessee has returned to India with an
intention to permanently reside in India
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The term “ordinarily residing” has not been
defined
Madras High Court in the case of Periannan vs
CWT has enunciated that:
◦ Ordinarily residing refers to residence of long
duration outside India
◦ A person for whom India is a permanent residence
cannot claim exemption under this section merely
by travelling abroad and residing abroad for a
period of one year and thereafter returning to his
own country
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Money
Value of assets brought into India
Value of assets acquired out of such money:
◦ Within one year prior to the date of return
◦ Any time after the date of return
Period of Exemption:
- 7 years including the year of return.
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An assessee being an Indian citizen returned
from Dubai after having served there for
almost 25 years during the previous year.
He bought 10 kgs of gold and a Rolls royce
car (estimated at Rs 1 crore) along with him.
Immediately on landing, he sold the gold in
the open market for a consideration of Rs 10
lacs per kg and invested the consideration
towards acquiring a piece of land in Chennai.
Fair market value of the land in Chennai on
valuation date is Rs 1.3 crores.
An assessee being an Indian citizen
purchased an urban land for Rs 3 crores out
of remittance from outside India on
01.01.2009.
 He returned to India with an intention to
permanently reside in India on 10.10.2009.
 Discuss the taxability of the Urban Land.
Issues for Consideration:
 Is the asset eligible for exemption u/s 5(v)
 For the previous year 08-09 is the assessee
eligible for exemption

.





No specific rules prescribed for valuation of
land
Guideline value may not be real indicator of
the market value of the property
Valuation of Property with huge vacant land
(rule 20)
Valuation of property under construction
(Karnataka jurisdiction)
Cost of valuation


Cars shown in the balance sheet are generally
valued on the basis of book value
Cars held by individuals not claiming
depreciation:
◦ Consider the estimated book value of the car
assuming depreciation was being claimed
◦ Consider the insured value.



Fair market value and realisation value could
be atleast 20% different
Where there is exchange of jewellery /
significant addition/deletion of jewellery it
makes it imperative for another valuation
certificate
Cost of valuation (also refer notification no
15/2009 dated 30/01/2009)
Situation
Maximum fees payable
On first Rs 5 lacs of value
0.50%
On the next Rs 10 lacs of value
0.20%
On the next Rs 40 lacs of value
0.10%
On the balance value
0.05%
Note:


Minimum fees payable per valuation shall be Rs
500
Where two or more assets are required to be valued
all such assets shall be deemed to constitute, a
single asset for the purposes of calculating the fees
payable.
To be discussed on the floor
.





Wealth tax returns to be filed in Form BA
Due date for filing is similar to 139(1) due
date
Delay is furnishing returns shall attract penal
interest @ 1% p.m – Sec 17B (similar to 234A)
Wealth tax is payable on before the due date
of filing
Belated Return can be filed within one year
from the end of the relevant assessment year.
Section
Nature of Default
Minimum
Penalty
Maximum
Penalty
INTEREST
17B
Non filing of returns within due date
Interest @ 1% for every month
or part thereof
31(2)
Non payment of amount specified in
notice u/s 30 within 30 days
Interest @ 1% for every month
or part thereof
PENALTIES
15B(3)
Non payment of Self Assessment Tax
or interest
Discretion of
AO
100% of Tax in
arrears
18(1)(ii)
Non compliance of notice without
reasonable cause
Rs 1000 for
each failure
Rs 25000 for
each failure
18(1)(iii)
Concealment of Wealth
100% of Tax
sought to be
avoided
500% of tax
sought to be
avoided
18A(1)
(a),(b),(c)
Failure to answer questions, sign
statements without reasonable cause
Rs 500 for
each failure
Rs 10000 for
each failure
Non furnishing in due time information
required u/s 38 without reasonable
cause
Rs 100 for
each day of
default
Rs 200 for
each day of
default
18A(2)
Presented By
CA Swatantra Singh, B.Com , FCA, MBA
Email ID: [email protected]
New Delhi , 9811322785,
www.caindelhiindia.com,
www.carajput.com
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